- SECOND IN A SERIES ON SOCIAL SECURITY DISABILITY PROGRAMS' CHALLENGES AND OPPORTUNITIES

[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]

SECOND IN A SERIES ON SOCIAL SECURITY
DISABILITY PROGRAMS' CHALLENGES AND
OPPORTUNITIES
=======================================================================

HEARINGS

before the

SUBCOMMITTEE ON SOCIAL SECURITY

of the

COMMITTEE ON WAYS AND MEANS
HOUSE OF REPRESENTATIVES

ONE HUNDRED SEVENTH CONGRESS

SECOND SESSION

__________

JUNE 11 AND 20, 2002

__________

Serial No. 107-86

__________

Printed for the use of the Committee on Ways and Means

U.S. GOVERNMENT PRINTING OFFICE
84-169 WASHINGTON : 2003
___________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512-1800
Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001

COMMITTEE ON WAYS AND MEANS

BILL THOMAS, California, Chairman

PHILIP M. CRANE, Illinois CHARLES B. RANGEL, New York
E. CLAY SHAW, Jr., Florida FORTNEY PETE STARK, California
NANCY L. JOHNSON, Connecticut ROBERT T. MATSUI, California
AMO HOUGHTON, New York WILLIAM J. COYNE, Pennsylvania
WALLY HERGER, California SANDER M. LEVIN, Michigan
JIM McCRERY, Louisiana BENJAMIN L. CARDIN, Maryland
DAVE CAMP, Michigan JIM McDERMOTT, Washington
JIM RAMSTAD, Minnesota GERALD D. KLECZKA, Wisconsin
JIM NUSSLE, Iowa JOHN LEWIS, Georgia
SAM JOHNSON, Texas RICHARD E. NEAL, Massachusetts
JENNIFER DUNN, Washington MICHAEL R. McNULTY, New York
MAC COLLINS, Georgia WILLIAM J. JEFFERSON, Louisiana
ROB PORTMAN, Ohio JOHN S. TANNER, Tennessee
PHIL ENGLISH, Pennsylvania XAVIER BECERRA, California
WES WATKINS, Oklahoma KAREN L. THURMAN, Florida
J.D. HAYWORTH, Arizona LLOYD DOGGETT, Texas
JERRY WELLER, Illinois EARL POMEROY, North Dakota
KENNY C. HULSHOF, Missouri
SCOTT McINNIS, Colorado
RON LEWIS, Kentucky
MARK FOLEY, Florida
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin

Allison Giles, Chief of Staff
Janice Mays, Minority Chief Counsel

______

SUBCOMMITTEE ON SOCIAL SECURITY

E. CLAY SHAW, Jr., Florida, Chairman

SAM JOHNSON, Texas ROBERT T. MATSUI, California
MAC COLLINS, Georgia LLOYD DOGGETT, Texas
J.D. HAYWORTH, Arizona BENJAMIN L. CARDIN, Maryland
KENNY C. HULSHOF, Missouri EARL POMEROY, North Dakota
RON LEWIS, Kentucky XAVIER BECERRA, California
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
hearing records of the Committee on Ways and Means are also published
in electronic form. The printed hearing record remains the official
version. Because electronic submissions are used to prepare both
printed and electronic versions of the hearing record, the process of
converting between various electronic formats may introduce
unintentional errors or omissions. Such occurrences are inherent in the
current publication process and should diminish as the process is
further refined.

C O N T E N T S

__________
Page
Advisories announcing the hearing................................
2, 3, 4..........................................................

WITNESSES

Social Security Administration, Martin Gerry, Deputy
Commissioner, Disability and Income Security Programs.......... 6
U.S. General Accounting Office, Robert E. Robertson, Director,
Education Workforce, and Income Security Issues................ 70
Social Security Advisory Board, Hon. Hal Daub, Chairman.......... 79

______

American Bar Association, Commission on Legal Problems for the
Elderly, John H. Pickering..................................... 199
American Federation of Government Employees, Social Security
General Committee, AFL-CIO, and National Council of SSA Field
Operations Locals, Witold Skwierczynski........................ 96
Association of Administrative Law Judges, and Social Security
Administration, Office of Hearings and Appeals, Milwaukee, WI,
Hon. Ronald G. Bernoski........................................ 175
Consortium for Citizens with Disabilities, Social Security Task
Force, Marty Ford.............................................. 154
Federal Bar Association, Social Security Section, and Social
Security Administration, Office of Hearings and Appeals,
Atlanta, GA, Hon. Kathleen McGraw.............................. 191
National Association of Disability Examiners, Jeffrey H. Price... 112
National Council of Disability Determinations Directors, Linda
Dorn........................................................... 121
National Council of Social Security Associations, Inc., and
Social Security Administration District Office, Hackensack, NJ,
Anthony T. Pezza............................................... 107
National Organization of Social Security Claimants'
Representatives, Nancy G. Shor................................. 161
National Treasury Employees Union, Chapter 224, and Social
Security Administration, Office of Hearings and Appeals,
Cleveland Heights, OH, James A. Hill........................... 168
Stapleton, David C., Cornell Center for Policy Research.......... 126
Verkuil, Paul, Benjamin N. Cardozo School of Law, Yeshiva
University, accompanied by Jeffrey Lubbers, Washington College
of Law, American University.................................... 203

SUBMISSIONS FOR THE RECORD

Federal Managers Association, Alexandria, VA, statement.......... 234
Public Employees Federation, New York, NY, Larry Jacks, statement 239
Robinson, Philip A., Framingham, MA, statement................... 240

SECOND IN A SERIES ON SOCIAL SECURITY DISABILITY PROGRAMS' CHALLENGES
AND OPPORTUNITIES

----------

TUESDAY, JUNE 11, 2002

House of Representatives,
Committee on Ways and Means,
Subcommittee on Social Security,
Washington, DC.
The Subcommittee met, pursuant to notice, at 3:33 p.m., in
room 1100 Longworth House Office Building, Hon. Mac Collins
presiding.
[The advisory, revised advisory, and revised advisory #2,
announcing the hearing follow:]

ADVISORY

FROM THE
COMMITTEE
ON WAYS
AND
MEANS

SUBCOMMITTEE ON SOCIAL SECURITY

Contact: (202) 225-9263
FOR IMMEDIATE RELEASE
June 4, 2002
No. SS-14

Shaw Announces Second in a Series of Hearings

on Social Security Disability Programs'

Challenges and Opportunities

Congressman E. Clay Shaw, Jr. (R-FL), Chairman, Subcommittee on
Social Security of the Committee on Ways and Means, today announced
that the Subcommittee will hold a hearing examining the Social Security
Administration's (SSA's) disability determination and appeals
processes. The hearing will take place on Tuesday, June 11, 2002, at
10:00 a.m., and will continue Tuesday, June 18, 2002, at 2:00 p.m., in
room B-318 Rayburn House Office Building.

In view of the limited time available to hear witnesses, oral
testimony at this hearing will be from invited witnesses only. However,
any individual or organization not scheduled for an oral appearance may
submit a written statement for consideration by the Committee and for
inclusion in the printed record of the hearing.

BACKGROUND:

Last year, the Subcommittee began a hearing series examining the
challenges and opportunities facing Social Security's disability
programs. In the first hearing of the series, the Subcommittee heard an
overview of these challenges from key stakeholders. Recommendations
generally focused on how to decrease processing times at all levels of
disability claims adjudication.

Consistently managing our Nation's largest disability determination
and appeals process and delivering timely, high-quality, and fair
service to disability applicants has become one of the SSA's greatest
challenges. The process of applying for Social Security and
Supplemental Security Income (SSI) disability benefits is complex and
fragmented, involving multiple State and Federal officials, and
consisting of an initial decision and up to three levels of
administrative appeals within the agency. Upon exhausting these
administrative remedies, the claimant may file an appeal in Federal
court. In addition, each step within the agency involves detailed
procedures for collecting and reviewing evidence and for decision-
making. Last year, it required an average of about 106 days to process
and issue a final decision for an initial claim for disability benefits
and about 308 days to process an appeal before an Administrative Law
Judge.

Moreover, due to the aging of the baby boomers, Social Security's
actuaries project that between now and 2010, the number of Social
Security Disability Insurance beneficiaries will increase by nearly 50
percent and the number of SSI recipients who are disabled will increase
by 15 percent. As a result, it is increasingly important for the agency
to clearly identify the resources it needs to effectively serve the
American people.

Aware of the long-standing problems within the disability
determination and appeals process, SSA has spent more than $39 million
attempting to develop and implement new initiatives to improve the
timeliness, accuracy, and consistency of its disability decisions and
spent an additional $71 million to develop an automated disability
claims process. Many of these initiatives, however, have been
ineffectual or have met with mixed results. Many reports, including
those issued by the Social Security Advisory Board and the U.S. General
Accounting Office, have outlined problems and provided recommendations
for improving SSA's disability determination and appeals process.

In announcing the hearing, Chairman Shaw stated: ``Individuals with
disabilities, already burdened by the challenges of their illness or
injury, are often in desperate need of benefits to replace lost income.
They deserve and should receive timely and accurate decisions through a
fair and understandable process. Our challenge is to thoughtfully and
carefully examine the disability determination and appeals process to
ensure it meets the needs of individuals with disabilities and their
families.''

FOCUS OF THE HEARING:

The Subcommittee will examine the reasons for delays, complexities,
and inconsistencies in the disability determination and appeals process
and explore recommendations for change.

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

Please Note: Due to the change in House mail policy, any person or
organization wishing to submit a written statement for the printed
record of the hearing should send it electronically to
[email protected], along with a fax copy to
(202) 225-2610, by the close of business, Tuesday, June 25, 2002. Those
filing written statements who wish to have their statements distributed
to the press and interested public at the hearing should deliver their
200 copies to the Subcommittee on Social Security in room B-316 Rayburn
House Office Building, in an open and searchable package 48 hours
before the hearing. The U.S. Capitol Police will refuse sealed-packaged
deliveries to all House Office Buildings.

FORMATTING REQUIREMENTS:

Each statement presented for printing to the Committee by a
witness, any written statement or exhibit submitted for the printed
record or any written comments in response to a request for written
comments must conform to the guidelines listed below. Any statement or
exhibit not in compliance with these guidelines will not be printed,
but will be maintained in the Committee files for review and use by the
Committee.

1. Due to the change in House mail policy, all statements and any
accompanying exhibits for printing must be submitted electronically to
[email protected], along with a fax copy to
(202) 225-2610, in Word Perfect or MS Word format and MUST NOT exceed a
total of 10 pages including attachments. Witnesses are advised that the
Committee will rely on electronic submissions for printing the official
hearing record.

2. Copies of whole documents submitted as exhibit material will not
be accepted for printing. Instead, exhibit material should be
referenced and quoted or paraphrased. All exhibit material not meeting
these specifications will be maintained in the Committee files for
review and use by the Committee.

3. Any statements must include a list of all clients, persons, or
organizations on whose behalf the witness appears. A supplemental sheet
must accompany each statement listing the name, company, address,
telephone and fax numbers of each witness.

Note: All Committee advisories and news releases are available on
the World Wide Web at http://waysandmeans.house.gov.

The Committee seeks to make its facilities accessible to persons
with disabilities. If you are in need of special accommodations, please
call (202) 225-1721 or (202) 226-3411 TTD/TTY in advance of the event
(four business days notice is requested). Questions with regard to
special accommodation needs in general (including availability of
Committee materials in alternative formats) may be directed to the
Committee as noted above.

***NOTICE--CHANGE IN TIME AND LOCATION***

ADVISORY

FROM THE
COMMITTEE
ON WAYS
AND
MEANS

SUBCOMMITTEE ON SOCIAL SECURITY

Contact: (202) 225-9263
FOR IMMEDIATE RELEASE
June 6, 2002
No. SS-14-Revised

Change in Time and Location for Second in a

Series of Hearings on Social Security Disability

Programs' Challenges and Opportunities

Congressman E. Clay Shaw, Jr. (R-FL), Chairman, Subcommittee on
Social Security of the Committee on Ways and Means, today announced
that the Subcommittee hearing on the Social Security Disability
Programs' Challenges scheduled for Tuesday, June 11, 2002, at 10:00
a.m., in room B-318 Rayburn House Office Building, will now be held at
3:30 p.m., in the main Committee hearing room, 1100 Longworth House
Office Building.

In addition, the continuation of the hearing scheduled for Tuesday,
June 18, 2002, at 2:00 p.m., in room B-318 Rayburn House Office
Building, will now be held at 3:30 p.m.

All other details for the hearing remain the same. (See
Subcommittee Advisory No. SS-14, dated June 4, 2002).

***NOTICE--CHANGE IN DATE AND TIME***

ADVISORY

FROM THE
COMMITTEE
ON WAYS
AND
MEANS

SUBCOMMITTEE ON SOCIAL SECURITY

Contact: (202) 225-9263
FOR IMMEDIATE RELEASE
June 14, 2002
No. SS-14-Revised #2

Change in Date and Time for Second in a Series

of Hearings on Social Security Disability

Programs' Challenges and Opportunities

Congressman E. Clay Shaw, Jr. (R-FL), Chairman, Subcommittee on
Social Security of the Committee on Ways and Means, today announced
that the Subcommittee hearing on the Social Security Disability
Programs' Challenges and Opportunities, previously scheduled for
Tuesday, June 18, 2002, will now take place on Thursday, June 20, at
10:00 a.m., in room B-318 Rayburn House Office Building.

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

Please Note: Due to the change in House mail policy, any person or
organization wishing to submit a written statement for the printed
record of the hearing should send it electronically to
[email protected], along with a fax copy to
(202) 225-2610, by the close of business, Friday, July 5, 2002. Those
filing written statements who wish to have their statements distributed
to the press and interested public at the hearing should deliver their
200 copies to the Subcommittee on Social Security in room B-316 Rayburn
House Office Building, in an open and searchable package 48 hours
before the hearing. The U.S. Capitol Police will refuse sealed-packaged
deliveries to all House Office Buildings.

All other details for the hearing remain the same. (See
Subcommittee Advisories No. SS-14, dated June 4, 2002, and No. SS-14-
Revised, dated June 6, 2002.)

FORMATTING REQUIREMENTS:

Note: All Committee advisories and news releases are available on
the World Wide Web at http://waysandmeans.house.gov.

Mr. COLLINS. The Subcommittee will come to order. Chairman
Shaw is at the airport and is on his way into the Capitol now.
So, he should be coming in most any time. We will enter his
statement into the record, unless he just wants to go through
it once he arrives.
[The opening statement of Chairman Shaw follows:]
Statement of the Hon. E. Clay Shaw, Jr., a Representative in Congress
from the State of Florida, and Chairman, Subcommittee on Social
Security
Today the Subcommittee will continue our in-depth examination of
the challenges and opportunities faced by Social Security's two
disability programs--Disability Insurance and Supplemental Security
Income.
Americans should have a reasonable expectation that Social Security
will fairly and efficiently process the more than three million
applications for disability benefits each year. The problem: They
don't.
In addition to hardships created by illness or injury, individuals
with disabilities also face a long, complex, and confusing process in
pursuing disability benefits for themselves and their families.
Sadly, this is not new. The agency has been working to get it right
since 1994, when they introduced plans to redesign the disability
claims process. The situation is now approaching the breaking point:
both disability and retirement claim workloads will grow dramatically
as baby boomers age. At the same time the agency expects to lose about
half of its experienced workforce to retirement.
According to the bipartisan Social Security Advisory Board, ``the
projected growth in the number of disability claimants threatens to
overwhelm a policy and administrative infrastructure that is already
inadequate to meet the needs of the public.''
An accurate and thorough analysis of how the disability programs
are working is urgently needed so that we can consider effective
changes in policy, resources, and administrative structure.
In our hearing series, we will focus in-depth on the disability
determinations and appeals decisions made by State disability examiners
and federal Administrative Law Judges. We welcome, for the first time,
the new Deputy Commissioner for Disability and Income Security
Programs, Martin Gerry. We will also hear from the Chairman of the
Social Security Advisory Board, the GAO, a researcher, and several
employee groups serving those with disabilities on the front lines
every day.
Social Security Commissioner Jo Anne Barnhardt recently testified
that the length of time it takes to process disability claims is
unacceptable. We couldn't agree more, and look forward to hearing more
about measures she has initiated to reverse this time lag.
If America's disabled workers must negotiate a morass of
inefficient, complex and confusing bureaucratic processes to obtain
benefits, then the essential safety net Social Security's disability
programs offer has failed. Each of us has the opportunity and the
responsibility to address existing problems within the disability
determination and appeals processes so that individuals with
disabilities and their families can receive the benefits so vital to
their economic security.

Mr. COLLINS. We will call on Mr. Matsui and see if he has
any words of wisdom for us.
Mr. MATSUI. I only have words of wisdom to thank you for
holding this hearing.
Mr. COLLINS. I like that. Short and sweet.
Our first witness will be Mr. Martin Gerry, Deputy
Commissioner for Disability and Income Security Programs.
Welcome, Mr. Gerry, and we are glad you are here, appreciate
your taking the time to come, and if you would like, your whole
statement will be entered into the record, and if you would
like to summarize your statement, we are ready.

STATEMENT OF MARTIN GERRY, DEPUTY COMMISSIONER, DISABILITY AND
INCOME SECURITY PROGRAMS, SOCIAL SECURITY ADMINISTRATION

Mr. GERRY. Thank you very much, Mr. Chairman.
Mr. Chairman and Members of the Subcommittee, thank you
very much for inviting me to testify today before this
Subcommittee regarding the Social Security Administration's
(SSA) efforts to improve the process used to determine
eligibility for benefits under the Social Security Disability
Insurance and Supplemental Security Income (SSI) programs. As
you know, the monthly disability benefits provided through
these programs represent an economic safety net for situations
that any of us might find ourselves in at some point during our
lifetime.
As Commissioner Barnhart testified before the Subcommittee
last month, the length of time that the disability claims
process can take is wholly unacceptable. The numbers of claims
do not simply represent case counts. They represent people who
need access to that safety net and are counting on the Social
Security Administration for help.
We are committed to and actively engaged in improving the
current disability determination process. To this end, my
written testimony addresses our initial efforts to improve
various aspects of that process. I would be pleased to
elaborate on any of the initiatives described in that testimony
and to answer any other questions, which you or other Members
of the Subcommittee might have.
[The prepared statement of Mr. Gerry follows:]
Statement of Martin Gerry, Deputy Commissioner, Disability and Income
Security Programs, Social Security Administration
Mr. Chairman and Members of the Subcommittee:

Thank you for inviting me today to discuss the Social Security
Administration's (SSA) efforts to improve the Social Security and
Supplemental Security Income (SSI) disability process. As you know, the
monthly disability benefits provided through these programs represent
an economic safety net for situations that any of us might find
ourselves in at some point during our lifetime. Few individuals have
private or employer-provided long-term disability insurance. But nearly
all American workers have Social Security.
As Commissioner Barnhart testified before you last month, the
length of time the disability claim process can take is unacceptable.
The numbers of claims do not simply represent case counts, they
represent people who need access to that safety net and also are
counting on us for help. Today I will focus my testimony on a
description of the disability determination process and our efforts to
improve it.
The Disability Determination Process
Most disability claims are initially processed through a network of
local Social Security field offices and State agencies (usually called
disability determination services or DDSs). Favorable determinations
(allowances) in most instances lead quickly to the payment of benefits.
Appeals of unfavorable determinations may be decided in the DDSs or by
administrative law judges or administrative appeals judges in SSA's
Office of Hearings and Appeals.
Social Security Field Offices
SSA representatives in the field offices usually obtain
applications for disability benefits, either in person, by telephone,
or by mail. The application and related forms ask for a description of
the claimant's impairment(s), names, addresses, and telephone numbers
of treatment sources, and other information that relates to the alleged
disability. (The ``claimant'' is the person who is requesting
disability benefits.)
The field office is responsible for verifying necessary non-medical
information requirements, which may include age, employment, marital
status, or Social Security coverage information. The field office sends
the case to a DDS for evaluation of disability.
State Disability Determination Services
The DDSs, which are fully funded by the Federal Government, are
State agencies responsible for developing medical and other evidence
and rendering the initial determination on whether the claimant is or
is not disabled or blind under the law.
The DDSs follow SSA rules on how to develop and evaluate medical
and vocational evidence. Usually, the DDS tries to obtain evidence from
the claimant's own medical sources first. If that evidence is
unavailable or insufficient to make a determination, the DDS will
arrange for an independent medical examination, called a consultative
examination (CE), at no cost to the claimant in order to obtain the
additional information needed. The claimant's treating source is the
preferred source for the CE; however, the DDS may also obtain the CE
from an independent source.
After completing its case development, the DDS makes the initial
disability determination. Generally, the determination is made by a
two-person adjudicative team consisting of a medical or psychological
consultant (who is usually a physician or psychologist) and a
disability examiner. If the adjudicative team finds that additional
evidence is still needed the consultant or examiner may recontact a
medical source(s) and ask for supplemental information.
The DDS also makes a determination whether the claimant is a
candidate for vocational rehabilitation (VR). If so, the DDS makes a
referral to the State VR agency.
After the DDS makes the disability determination, it returns the
case to the field office for appropriate action depending on whether
the claim is allowed or denied. If the DDS finds the claimant disabled,
SSA will complete any outstanding non-disability development, compute
the benefit amount, and begin paying benefits. If the claimant is found
not disabled, the file is retained in the field office in case the
claimant decides to appeal the determination.

Appeals Process

A person who is dissatisfied with an initial determination may
pursue an appeal through three administrative levels and the Federal
courts. The Act requires the Commissioner to provide a claimant the
opportunity for a hearing, and allows for filing of a civil action in
Federal court after the Commissioner's final decision. SSA's
regulations also provide a reconsideration review by the DDS prior to
the hearing before the administrative law judge (ALJ) and an
opportunity for final review by SSA's Appeals Council.
Generally, SSA's first administrative review for claimants--the
reconsideration--involves a de novo, or fresh review of the claim
(including any new evidence) by individuals who did not participate in
the original determination. The reviewers consider all of the evidence
and issue a reconsideration determination. There is no reconsideration
step in the 10 States in which SSA still has in place the prototype of
a revised disability process.
The second level of administrative appeal is a de novo hearing
before an ALJ who can call on medical or vocational experts, if needed,
to help evaluate the evidence. Usually the claimant obtains legal
representation at this point. Frequently, new evidence is introduced by
the claimant and his or her representative, often at the hearing
itself. Claimants are allowed to appear before the ALJ and to call
witnesses.
The final administrative appeal level is the Appeals Council, which
may grant, deny, or dismiss a request for review of the ALJ decision.
It will grant review if the ALJ decision contains an error of law, is
not supported by substantial evidence, involves a broad policy issue,
or if there appears to be an abuse of discretion by the ALJ. After an
Appeals Council action, if the claimant is still dissatisfied, the next
step is filing a civil action in Federal court.
Uniform Application of Policy
SSA strives to maintain and apply uniform standards at all levels
of administrative adjudication and review. SSA takes every opportunity
to emphasize to disability adjudicators in all locations and at all
levels the importance of following SSA rules to ensure that similar
cases are decided in a similar manner throughout the country. The
result of this program-wide emphasis has been, and continues to be,
more consistent application of Agency policy throughout the nation.
Without reservation, SSA remains committed to providing a fair and
consistent disability determination process throughout the United
States.

Efforts to Improve the Process

One of the first things that Commissioner Barnhart did after
assuming office was to form a group to develop a service delivery
budget to match up resource needs against the level of service we would
like to deliver. The group mapped the disability determination process
from the time a claimant first contacts SSA through the initial
determination and all levels of appeal.
Our preliminary analysis shows us that there is no one way to make
the disability determination process faster and better. It's going to
take many improvements--some large, some small--to take us where we
need to be. As the Commissioner testified last month, we have already
announced a number of steps to address the causes of delay in the
disability process.

Initial Determination Initiatives

As you are all well aware, SSA has engaged in a number of efforts
to redesign and improve the disability determination process by testing
a number of initiatives over the past several years. We carefully
reviewed the results of these initiatives to identify the elements that
show the most promise. Based on this review, we have decided to:

Grant greater decision making authority to DDS
disability examiners by extending single decisionmaker
authority nationwide to all DDSs;
Eliminate the formal claimant conference that was
tested as part of the disability Prototype; and
Extend elimination of the reconsideration step in the
States that have been doing the Prototype, while SSA gathers
additional information and considers alternative approaches to
a second-level appeal step.

Appeals Initiatives

The amount of time it takes for an individual to make his or her
way through SSA's appeals process has been a perennial concern. In an
effort to address this concern, the Office of Hearings and Appeals
(OHA) implemented a new workload process commonly referred to as the
Hearings Process Improvement initiative or HPI about two years ago.
Implementation of this initiative involved significant changes to the
way SSA processed the hearings workload, and the organizational
structure of our hearing offices. The initiative was intended to reduce
case processing times, improve productivity, and enhance the quality of
service to claimants.
However, while well intentioned, the initiative did not work. There
have been concerns that the HPI project has created even more
bottlenecks in the process that it was intended to fix. Simultaneously,
SSA's past inability to hire ALJs to make decisions at the hearing
level of the disability process compounded the unintended adverse
impact that HPI had on our ability to provide timely service.
Last year, former Acting Commissioner Larry Massanari formed a
group to look at the hearing process. Thanks to this timely analysis,
this spring the Commissioner announced decisions on short- and near-
term changes to the hearings process. We are required to bargain with
employee unions before we can implement some of these changes. We
certainly intend to meet that obligation in good faith and are working
to implement these important changes as soon as possible.
On a short-term basis, the Commissioner immediately set aside $6
million in overtime and other costs to help expedite the processing of
30,000 to 35,000 backlogged cases in OHA. In addition to expediting the
processing of these cases, this action signaled the importance the
Commissioner was placing on making program improvements.
In the near term, the Commissioner announced decisions to make
changes to the hearing process. The decisions include:

Including ALJs in early screening for on-the-record
decisions;
Developing a short form for fully favorable
decisions;
Allowing ALJs to issue fully favorable decisions from
the bench immediately after a hearing;
Creating a law clerk position; and
Expanding the use of technology in the OHA, including
the use of video teleconferencing, speech recognition and
digital recording of hearings.

Be assured, these are just the first steps that SSA will take to
meet the challenge of providing a timely, efficient, and high quality
hearing process.
Azdell Case
In regard to the hearing process it is important to remember that
since April 1999, due to litigation pending before the Merit Systems
Protection Board, (MSPB) SSA, with one special exception, has been
unable to hire new ALJs to replace those who have retired.
The name of the case is Azdell v. OPM. It was brought by a class of
individuals who have challenged the method that the Office of Personnel
Management (OPM) used to compute the veterans' preference in the
ranking of ALJ candidates. The MSPB has ruled in favor of the
plaintiffs in the case and against OPM. The MSPB ordered OPM to revise
the rankings.
With the interest of this subcommittee, we were able to bring on
board 126 new ALJs last October from a list of candidates that has been
(and continues to be) the subject of litigation. While these additional
ALJs will certainly help in addressing the backlogs, the continued
inability to replace ALJs who retire or leave has the potential to
seriously affect our ability to decide cases in the hearing offices.

e-DIB

Before I close, I would like to note one final initiative that will
improve the efficiency of both the initial determination and subsequent
appeals process. Simply put, SSA must accelerate its transition to an
electronic disability process (e-Dib), not just for the State
Disability Determination Services but also for the appeals offices. As
she stated here last month, Commissioner Barnhart is committed to the
creation of an electronic system to support the disability
determination and appeals process. I assure you that I share her
commitment to bring the process into the 21^st Century.
Accelerated e-Dib is a major Agency initiative that will move all
components involved in disability claims adjudication/review to an
electronic business process through the use of an electronic disability
folder. When the process is fully implemented, the Agency will no
longer create, mail and store paper disability folders. Through
interfaces with their existing case processing systems, components will
be able to work claims by electronically accessing and retrieving
information that is collected, produced and stored as part of the
electronic disability folder. Accelerated e-Dib will significantly
change the business process and the ways that components interact with
disability claims and will ensure that SSA has a robust platform to
manage and control increasing disability workloads.
Conclusion
Finally, I thank you, Mr. Chairman, Mr. Matsui, and all the members
of the Subcommittee, for your interest and offers to help as we move to
meet the challenges facing the Social Security Administration. We are
all aware that these go beyond our efforts to improve disability to
providing the service that Americans deserve as the baby boomers age;
ensuring the program's solvency; improving program integrity; and
accomplishing all these goals with the quality staff we will need.
I look forward to working with you all in the future.

Mr. COLLINS. I like them short and sweet, but that was a
little shorter and sweeter than I thought it was going to be.
In your opening statement, your remarks, Mr. Gerry, you
elaborate on the State Disability Determination Services (DDS).
We noticed that there is quite a variation from State to State
across the country in approvals for disability. Can you
elaborate on that some? I know they go from 31 percent in some
States, as high as 65 percent in others. There is quite a
variance. Can you elaborate on that some for us?
Mr. GERRY. Yes, Mr. Chairman. That is true. The current
fluctuation actually runs from about 27 percent in the low
State, which is Tennessee, to 61.3 percent, in the highest
State, which is New Hampshire. The average is about 38.7
percent. So, you are absolutely right. There is a significant
variation. This has been true for a substantially long period
of time. I served on the Disability Advisory Council 15 years
ago, and this issue was around at that point. These variations
have been with us for quite a few years in terms of the
programs.
Part of the answer--and I want to stress part--has to do
with the way in which we calculate these rates. Obviously the
total number of people who apply has something to do with the
total number of people who are allowed or disallowed. In some
States, the percentage of people in the State that apply for
benefits is quite a bit higher than it is in other States. That
accounts for some of the difference in rates.
In other words, if you start with the assumption that for
the most part disability is distributed evenly throughout the
American population, you would assume the rates would be
similar in every State. If, for example, twice as many people
per thousand in a State apply for benefits, then it wouldn't be
surprising that the rate of allowances might be lower in a
State where more people apply.
Now, that accounts for some of the difference, but we are
actively engaged. As the Commissioner testified last month, we
are still engaged in analyzing these variations. I think she
expressed some concern that the application rate won't explain
all of the variations. Working with our quality analysis
process and looking at the statistics we have--we are trying to
isolate other factors, if there are other factors that account
for these variations.
I can tell you from my own personal experience that some
States have actually gotten into the habit of sending people to
our offices for eligibility determinations as part of another
eligibility process. That tends to, of course, artificially
increase or decrease the rate of allowances by running people
through our process just in case they might be eligible for
benefits.
Again, I don't think that accounts for all the differences,
but the numbers are not quite as obvious. They don't tell the
whole story.
The other thing that is important, I think, is that
accuracy affects allowance rates. The real issue is how
accurate are the allowances made in different States? So
really, in terms of what we would be looking at, it is the
accurate allowance rate that we would want to explain any
differences in. Sometimes if you have significant numbers of
people who are being allowed or denied, and our review suggests
that these are not proper decisions, then that would tend to
influence data.
Mr. COLLINS. The States themselves are responsible for
developing the medical and other evidence dealing with
disability.
Mr. GERRY. Well, the States----
Mr. COLLINS. They draft their own guidelines, the States?
Mr. GERRY. No. We set forth the basic requirements for
making the disability determinations through a series of
documents, called the medical listings. There are other
documents that provide instructions to the States on how to go
about that. We do review the work of the States through our
quality assurance (QA) process.
So, it is true that the day-to-day routine in State
Disability Determination Services may vary somewhat, but it is
a Federal process. The basic rules are set by the Social
Security Administration. So, we should expect the process to be
applied generally uniformly throughout the country. If it
isn't, it is not because the States have separate rules for
making disability determinations.
Mr. COLLINS. Okay. Well, that was the next point. There
should be uniform standards.
Mr. GERRY. There should be and there are. Now, one of the
things that Commissioner Barnhart has done--and I think it has
been an important move in the right direction--is to change
organizationally how we develop our disability policy.
Historically, we have collocated in the Office of
Disability the rulemaking capability to develop the listings
and the various rules that apply to the program. While that has
had some direct linkage to the Disability Determination
Services, it has been quite removed from the Office of Hearings
and Appeals (OHA).
Over the last few years, under a title that I found
particularly mysterious called ``Process Unification,'' the
Agency has been trying to make much more compatible and
consistent the rules that are applied in the hearing and
appeals process with the rules that are applied in the
Disability Determination Service. They should be applying the
same rules. It is the same law.
We are setting up a new unit. This unit will be part of the
Agency component that I head, and that will set disability
policy across the Agency. So, it would apply equally to the
Office of Hearings and Appeals and to the DDSs. That is an
effort to try to be sure that the rules are consistent. We
shouldn't have to create a label, process unification, to
describe implementing the law fairly and consistently. That is
all it really means.
Mr. COLLINS. Moving on to another area, which I have had a
lot of correspondence and input from people involved in this
area in my district, or in Georgia, in particular. That is the
administrative law judges (ALJ). How are we coming with giving
them some assistance and helping with their processing of these
cases?
Mr. GERRY. Well, we have a substantial amount of work for
the administrative law judges, Mr. Chairman. We are providing
training for the new administrative law judges, the 126 that we
have hired. For the most part, we have an enormous amount of
work to do, and we are under a lot of strain. The backlogs have
grown, and productivity has not kept pace. I am not sure that
it could fully have kept pace, although we have been making
efforts to try to improve it. All in all, we are committed to
making the system work and doing whatever we need to do to
provide the resources that we can to support the process. The
workload of the Office of Hearings and Appeals is growing, and
because of the Azdell decision, we have had historically some
significant constraints on hiring new administrative law
judges.
We did have an initiative underway, covered in my
testimony, called the Hearings Process Improvement (HPI)
initiative. This initiative was an effort to try to speed up
and improve the outcomes of the process. The Commissioner went
through and reviewed a very careful analysis that was done by a
group appointed by Acting Commissioner Massanari. We have made
some major decisions to continue some portions of that
initiative, to discontinue others, and to introduce some new
elements to try to improve the hearing process.
We are now going through the process of meeting with the
unions to discuss these changes, and we are hoping to implement
these initiatives this summer. I would be happy to discuss any
of them, but they are pretty much outlined in my written
testimony.
Mr. COLLINS. Well, I was going to get to and ask the
question about the unions and how you are progressing with
that--so we appreciate that volunteer comment and testimony. I
think that shows some of the problems that the administrative
law judges have had in the past and some of their concerns.
Last year they moved toward organization. So, they need help.
We are glad that the Commissioner and you are looking at
helping those law judges. Mr. Matsui?
Mr. MATSUI. Thank you, Mr. Chairman.
Mr. Gerry, I want to thank you for taking this very
difficult job that you have. I know your background is one in
which you have been very involved with disability issues,
almost your entire professional career. So, we appreciate the
fact that you are there, and Commissioner Barnhart is where she
is as well. I think both of you working as a team will
hopefully solve this backlog of disability claims, and second,
streamline the process.
Last month the Commissioner came before us, as you
mentioned. She pretty much outlined her proposal. She wants to
make this a major priority in her tenure as the Commissioner.
You have outlined some of the recommendations that she intends
to deal with in your written testimony. So, can you give me an
idea of the timeline we are talking about--when she might be
ready or you might both be ready to submit to us some
legislative changes that you might think would be required in
order to implement your proposals?
Secondly, in reference to the timeline, if it is within the
next fiscal year, from October 1 on, would you be able to give
us an idea what we are looking at in terms of additional
dollars for both the transition and implementation? Then,
lastly, in terms of the overall cost of this? If you are not
prepared to do this, that is fine. Then obviously when you are,
we would want to get that information from you. I don't want to
have you make any recommendations or comments that are
premature because obviously this is a subject that we are all
concerned about. We are all interested in on the basis of doing
this right.
Mr. GERRY. Well, thank you, and thank you for your kind
comments, Mr. Matsui.
At this point, we don't have any specific legislative
proposals. The Commissioner set a timeframe and has asked me to
recommend changes that wouldn't necessarily involve
legislation, but it might. The timeline is late fall, so I
would expect that we will have something by December.
If at that point in time the Commissioner believes that we
should go ahead with legislative proposals, then we would
communicate those first, of course, to the Office of Management
and Budget as part of our usual process. We then would try to
move toward the Committee.
Of course, we don't have the details or any estimate of
cost, but the Commissioner wants recommendations by late fall.
Mr. MATSUI. Okay. I would imagine if it requires additional
sums of money, you probably would have to seek it in a
supplemental. It could be very difficult as we are experiencing
now, even with the current supplemental bill.
If you have any idea prior to that time before, obviously,
we are completed with the appropriations process, it would
help. Again, this is not to put you on the spot or anything of
that nature. It is really in order to make sure everybody's job
is easier, and we deal with these disability issues in the way
that I think all of us want to. So, if you could look at that,
and if it does make some sense that you can give us a better
idea before the fiscal year begins and before the
appropriations process is completed, it would be helpful.
Mr. GERRY. I would be happy to do that, Mr. Matsui. Again,
we would very much like to work with the Committee and the
staff on any proposals that we come up with. At this point, the
fairly major task we have is to come up with the
recommendations themselves.
Mr. MATSUI. Right. Thank you very much.
Mr. COLLINS. Thank you, Mr. Matsui.
You know, it is pleasing to hear that you are trying to
come up with ways to better the process without doing it
through legislation. I have often said that when you have to go
through the legislative process, Congress has a tendency to
mess up a two-car funeral. So, I know that it could probably
make a real mess out of some legislative action. A little piece
of advice: Do it within the budget that you already have funded
and appropriated for you. We have no more money for additional
funding. If you can't do it that way, do some rescissions and
make your numbers work. Mr. Ryan?
Ms. RYAN. Well, thank you.
Mr. Gerry, I just have two quick questions. One, in the
March 2002 Advisory Board Report, they stated that appealing
decisions is very costly to claimants, the Agency, and
ultimately to the taxpayer. In fact, their report states that
in 2001 a decision made at the ALJ level costs $2,157, but the
cost of an initial decision at a State Agency is about $583.
Many stakeholders have suggested closing the record at
various stages, so that the case does not change at every level
of appeal to save some dollars. I would just like your reaction
to that proposal? What are your thoughts on that?
Mr. GERRY. Well, thank you, Mr. Ryan. For me it is not a
new proposal. It has probably been around as long as the
discussion of this program. It is one that I think has pluses
and minuses, and that is what makes it difficult to answer.
There are a lot of advantages to closing the record, as you
point out, in terms of getting a common set of facts where you
could then get a more rapid decision about eligibility without
the facts changing.
On the other hand, the question is to what extent would
closing the record unfairly disadvantage an individual whose
condition is changing, and in some cases changing fairly
rapidly. That is the tradeoff.
In one sense, the record is closed probably now at the U.S.
district court level in many cases. Even though in theory it
might be closed at the administrative level, the district
courts tend to reopen a lot of these cases. That is an awfully
long time for the situation to continue without the record
being closed, so I think it is logical to try to close the
record earlier. We are certainly looking at this issue as a
major part of whatever we are going to recommend.
I just want to respond that if it were easy, I suppose
other people--there have been many other people who have tried
to solve these problems in the last 25 years--would have come
up with an easy solution. It is a tradeoff. People can file
separate claims. The other side of the closing-the-record issue
is that if you go ahead and close the record, it doesn't
preclude someone whose situation then changes fairly abruptly
from filing a separate claim. I think the question is really
how to do that? It is part of the larger question, I think,
rather than a separate question.
Once you figure out how you want to streamline the process
of reaching a decision, then maybe it is easier to discuss
where and how you would close the record. We are very much
aware that it has been studied not only by the Advisory
Committee I was on, but by many others. It will have to be part
of whatever we ultimately recommend to the Commissioner.
Ms. RYAN. Will you be recommending some changes to the
Commissioner soon?
Mr. GERRY. I think, as I responded to Mr. Matsui, our plan
is to have recommendations by late fall, so I would say by the
end of November, early December.
Ms. RYAN. One other issue that I hope that you respond to
is processing times. Claims to process, disability insurance
(DI) claims, I believe, in 2000 took over 100 days to process,
about 120 days for SSI claims. They have been going up since
1996. Those are the last data we have.
What are the processing times right now? How many
applications are pending at this time? Do you think you are
going to get these processing times down? Where are we right
now vis-a-vis where we just were in 2000?
Mr. GERRY. Well, I am happy to say the processing time
right now is 102.5 days, or lower than----
Ms. RYAN. On DI claims?
Mr. GERRY. That is right. The pending cases, 582,334. At
least it was--it can't be quite 34 right now. It must be 35 or
33, depending on something in the last 15 minutes. But that is
pretty close.
Ms. RYAN. Okay.
Mr. GERRY. I think we are doing better on processing times.
As the Commissioner pointed out--and I know she presented the
Subcommittee with that long chart showing all of the steps in
the process. Without making any structural changes, there is
only so much we can do on the processing times. I think we are
getting closer to what we can do without changing the process
itself. As she pointed out in her testimony, there are the
larger changes. There are also a series of small changes that
we are proceeding on that we think can get some of those days
reduced. We are going to reach a natural limit that is imposed
by the separate number of activities that are currently
described in that chart.
Ms. RYAN. One-hundred days to 102 days is about the same.
Clearly, the statute underlying requires you have so many
stages to go through. Will you be bringing forward more of a
comprehensive set of recommendations to get to both of these
issues, which are obviously related, so we can streamline these
things and save a little money in the process? Do you think
that within the existing statute you can come to us with some
recommendations on how to accomplish those things?
Mr. GERRY. I think the Commissioner has made it clear that
a major part of her mission and a major reason that she took
the job was to do that. My job, of course, is to recommend some
things to her, and what she ultimately goes forward with may be
different than what I recommend. I am committed, as she is, to
that process. That is why I took my job, the opportunity to
work with her on this effort. So, I am hoping that by late fall
we will have a set of recommendations for her. I am convinced
that she will act on them as quickly as she feels is
appropriate. I know it is a high priority for her.
Ms. RYAN. That is the point I am trying to make. We are
eager to see what you have to recommend. We want to see
progress made on these issues, and we are very much paying
attention to these. I yield.
Chairman SHAW. [Presiding.] Thank you. Mr. Doggett?
Mr. DOGGETT. Thank you, Mr. Chairman, and I would just kind
of continue the same line of questioning trying to understand
the timetable. We appreciated the testimony of the Commissioner
when she was here before previously. Of course, we are
impressed by the very long delays that are occurring,
recognizing that she has only been on that job for a relatively
short period of time, and yourself also, but trying to get an
idea of the timetable.
You are saying your recommendations on the short-term
changes to address these lengthy delays will go from you to her
by the fall?
Mr. GERRY. No. It wouldn't be the short-term changes. It
would be the major changes. Those recommendations would be
completed by the end of the fall. When she first took office,
she mentioned short-term initiatives.
Mr. DOGGETT. I see.
Mr. GERRY. Those are the ones that are outlined in my
testimony, so we are talking about the more significant, larger
changes in the process.
Mr. DOGGETT. By what point do you think you will have
determined whether significant additional moneys are necessary
to reduce the delay?
Mr. GERRY. It would have to be after she reviews the
options that are presented to her, and I know she will do that
as expeditiously as possible. What is a little hard for me to
at this point predict is how complex those will be.
Mr. DOGGETT. All right. Are you saying that you won't have
any request for additional resources on your short-term
solutions until she has reviewed all of your long-term
solutions?
Mr. GERRY. No. Our plan is to implement the short-term
initiatives that are outlined in the testimony as quickly as
possible. We are meeting with union representatives right now
to discuss implementation this summer. We are in the process--
and I would be happy to provide sort of a status on each of
them--of implementing each one of these changes. We have
incorporated the resources that we need to implement all of
those changes. They are part of the 2004 budget process, which
is underway in the Agency, or we have already accounted for the
resources for 2003.
So, we are not delaying any of the short-term changes. The
only thing we are not in a position to do at this point, of
course, is to look at the budgetary implications of
recommendations for the larger changes, which the Commissioner
hasn't seen yet.
Mr. DOGGETT. Do you believe any additional moneys will be
necessary to meet your short-term concerns in this
appropriation cycle?
Mr. GERRY. I don't believe so. I think we have certainly
included in the budget documents that have gone forward, to my
best knowledge, the resources that we need. I don't know of any
unmet needs for the changes outlined in the testimony.
Mr. DOGGETT. So, you are not seeking any appropriations to
address the delays that are occurring? You propose to deal with
those in other long-range proposals that you will have?
Mr. GERRY. Well, of course, we are going through the
process of submitting documents for the President's 2004
budget. In that budget we will reflect the resources that we
need for that fiscal year. I mentioned in my testimony resource
decisions and commitments that the Commissioner has already
made. Those decisions are coming out of funds that are already
available to us or that are part of the President's 2003
budget.
Mr. DOGGETT. Your best estimate at this point is that no
further dollars will be requested for the next fiscal year, the
one we are working on in the appropriations process?
Mr. GERRY. That is my best testimony at this point in time.
Mr. DOGGETT. Okay. With reference to other witnesses that
will be testifying at this hearing and next week, is the
Commissioner considering any of the proposals that they are
advancing?
Mr. GERRY. Well, yes. The Commissioner is considering
proposals from all sources. We are looking at recommendations
that are being made from a variety of sources.
She hasn't ruled out any source of recommendations. I think
she has laid out the general goals that she wants to accomplish
in terms of expediting the process. The mission of the Agency
historically has been characterized as getting the right amount
of money to the right people as early as possible in the
process. Obviously, we are not doing a very good job of getting
that money to those people very quickly in the process that we
currently have. So, the time delays are certainly a very high
priority. The accuracy and quality of the decisions is an equal
priority, and the Commissioner has various activities underway
to be sure that we improve that as well.
Mr. DOGGETT. I would just ask, as you go through that
process--that you continue in the coming months to consult with
and keep advised some of those organizations that represent
individuals with disabilities, as well as both majority and
minority staff on this Subcommittee.
Mr. GERRY. I would be happy to do so.
Mr. DOGGETT. Thank you very much.
Chairman SHAW. I would point out, in furtherance of Mr.
Doggett's questioning, that this appropriation process that we
are about to go through is going to be long and painful. So,
there may be some opportunities during the conference that, if
there are some immediate needs, there may be some tweaking that
we are able to do for you. Mr. Brady?
Mr. BRADY. Thank you, Mr. Chairman, and thank you for
holding the hearing on this very important issue.
The more I study disability, the more I am convinced that
for us to have a fair and timely process, and to work off this
growing backlog, it is going to take new reforms and new
resources with a healthy dose of new technology in the middle
of all that to bring this process into the 21st century. It is
going to take a lot of work in a number of different areas to
make this right.
One of those areas, just in the brief time we have, let's
go back for a minute to the Azdell case. We all worked together
to bring a special exemption that would allow us to hire 126
new administrative law judges. Hiring new ones alone won't
solve this whole problem, but working off the backlog is
critical.
The questions I have for you are: What is the status of
this case? Are we making progress in resolving it? If not, at
what point do you see Congress taking some legislative action
to try to ensure this backlog and freeze on judges doesn't
continue? It has really hurt the process terribly and needs to
be resolved. If we can't resolve it through the courts, we may
need to resolve it legislatively. What are your thoughts?
Mr. GERRY. First, I agree with your point about the
importance of the case and the impact on the Agency. It has a
substantial adverse impact on our ability to respond as we
would like to.
My best understanding is that the case is on appeal to the
Federal circuit. There is a stay currently in place from the
Merit Systems Protection Board, which, of course, affects us
directly. That hasn't changed as a result of the appellate
status.
I don't have a very reliable estimate of how quickly the
court will act on the case, unfortunately. I do agree with you
that we need to get to a point where this case doesn't hinder
us. We are very appreciative, by the way, of the assistance the
Subcommittee has provided in the past in trying to help relieve
the stresses that this has created.
I know that is probably not a very satisfactory answer, but
it is the best one I have at this point. It is one of the
factors contributing to the growing backlog of cases.
I wish I could say that even if we solved the staffing
problem, which would be of great help, that the problem
wouldn't continue to grow. As you pointed out, we have an
increased rate of claims; we have an increased rate of appeals.
Unless we make some more significant changes in the overall
process, even if we were to solve the immediate problem, that
isn't necessarily going to guarantee that we are not going to
need to hire yet more administrative law judges. I think we
have to do both, and we have to do them at the same time. We
have to try to respond to the backlog and eliminate it, and
solve the current problem. We also have to make some longer
term systems changes that we can't just keep postponing that.
Mr. BRADY. It seems like even with the exemption to hire
the new judges, if we were to double that and hire 120 more, we
would still just be back up to where we were back in 1997 or
1998. Yet the growing number of cases, it just seems to me
pretty obvious that we just don't have enough trained up and
running along with the other changes in the process that need
to be made for us to be able to both work off that backlog and
to handle the new cases that are being. A funnel is being
created that is nearly impossible to avoid, although reforms
earlier in the process could help that, no doubt. We still have
a funnel that at some point just can't continue as it is today.
Mr. GERRY. I think you are right.
Mr. BRADY. I didn't expect that answer. I will take that
while I have it. Thank you, Mr. Chairman.
Chairman SHAW. I have just one question. You state in your
testimony that the SSA is striving for uniform policy and
consistent application of policy throughout the Nation. Since
1994, the Agency has been talking about revamping its quality
system, which is so critical in ensuring national consistency
within and across disability decision makers both within and
across States. It simply isn't fair when a decision can depend
upon who makes the decision or which office processes the
application.
What precisely is being done? Do you have a timetable that
you might be able to share with us for taking action in this
particular area?
Mr. GERRY. Well, the Commissioner has taken some pretty
bold action on that by designating the former Regional
Commissioner in Atlanta to head up the new quality work group.
She is currently putting that work group together and will be
preparing a report for the Commissioner. This is very high on
the Commissioner's set of priorities, and it is on mine, too,
Mr. Chairman. I have had a major concern. For one thing, we
have had a process that has relied on appeals to protect people
from erroneous decisions. Many people who I have worked with
over the years--and I have been a pro bono lawyer for many
people with disabilities--and others who have been around the
program--agree that often the people who ought to appeal, don't
appeal. We very much need the quality process to protect the
entire program from becoming too much of a litigation-driven
model. I think the Commissioner is very concerned about not
losing that focus on quality.
I can tell you that the person she has appointed to this
work group is a high-energy person who is very focused on
producing a report. As I am sure you know, we had a study done
by an outside contractor that made some fairly sweeping
recommendations in changing the whole quality environment of
the Agency. I know the Commissioner has read that report
carefully and has paid a lot of attention to it. So, now we are
into the process of trying to figure out what those changes
should actually mean.
One of the recommendations of the report is that we
institutionalize a quality environment at all stages of the
process. That is a fine concept, but what this work group needs
to do is to talk about how would we really do that. How would
we go about providing the kind of management oversight that
will be necessary to identify problems and solve them before
they end up becoming backlogs or workloads? That is what the
Commissioner wants to do.
So, that is going on right now. Along with the other Deputy
Commissioners, I will be supporting that process. It is being
spearheaded by Myrtle Haberham, who was the Regional
Commissioner in Atlanta. She understands our process from the
field level and is probably the best person to lead that effort
right now.
Chairman SHAW. Okay. Well, we thank you for your
testimony--oh, Mr. Matsui has a question.
Mr. MATSUI. Thank you, Mr. Chairman. I appreciate your
giving me one more opportunity.
Mr. Gerry, you were saying the recommendations would be
made in the fall of this year. If at all possible--you know, I
don't know when we are going to recess, probably around the
second week of October, the first or second week of October, I
would imagine. It would really be helpful if your
recommendations and the Commissioner's recommendations came to
us so that we would at least have a chance to review it before
we adjourn for the year. Otherwise, it won't be until February
or so that we would have that opportunity. I think given the
backlog and given the number of people we are talking about, it
would really be helpful if we had an opportunity to comment on
it, work with you on it, during the regular calendar year. That
is, in September, early October at the latest, assuming we are
still in session. If, in fact, there is a short-term CR,
continuing resolution, there may be an opportunity to help then
with some of the funding requirements that may be necessary
that Mr. Shaw had referred to. That to me would be at least a
recommendation so that we would have a chance to vet it with
you, obviously, before we adjourn.
Mr. GERRY. Well, thank you, Mr. Matsui. I will convey those
sentiments to the Commissioner. What I know is that there will
be a two-step process. What you would really want to see is
what her recommendations would be. What we are doing is an
internal process. I will certainly make her aware of that
timetable and convey to her the important point you made about
the involvement of the staff and the Committee.
Chairman SHAW. Well, I think an interim report would be
welcomed if the Commissioner and you are comfortable in sharing
them at any particular point.
Well, we thank you. I was reading your background. It is
very impressive. We are delighted to have you, and thank you
for appearing before our Committee.
Mr. GERRY. Thank you, Mr. Chairman.
[Questions submitted by Chairman Shaw to Mr. Gerry, and his
responses follow:]
Social Security Administration
Baltimore, Maryland 21235
November 15, 2002
The Honorable E. Clay Shaw, Jr.
Chairman, Subcommittee on Social Security
Committee on Ways and Means
House of Representatives
Washington, D.C. 20515

Dear Mr. Chairman:

This is in response to your letter of July 24, 2002, which
transmitted questions for the record from the June 11, 2002, hearing on
the Social Security Disability Program's Challenges and Opportunities.
Enclosed you will find the answer to your specific questions. I hope
this information is helpful. If I may be of further assistance, please
do not hesitate to contact me.
Enclosures

1. Judge Kathleen McGraw stated in her testimony that there are no
performance standards for employees at the Office of Hearings and
Appeals (OHA), except for the judges. Is this true? If so, why? How
exactly is the performance of OHA employees assessed? Are there no
performance standards beyond a ``pass/fail'' rating? Do you have plans
to change this system? Why or why not?

Answer:

SSA employees, including those at OHA and those at the Office of
Appellate Operations (OAO) with the exception of ALJs, have performance
standards which are negotiated with SSA management and the unions which
represent SSA employees. Each standard requires the successful
performance of critical elements of the job. Employees are rated as
performing at a ``successful level'' or as performing at an
``unacceptable level.'' However, the standards do not include numerical
requirements for critical or other elements and the appraisal system is
based on a ``pass/fail'' rating.
Commissioner Barnhart has expanded the performance standards for
members of the Senior Executive Service and is considering this change
for other non-bargaining unit employees. The issue of returning to
numerical requirements in the performance standards is under
consideration for possible inclusion in SSA contract negotiations in
2004 for bargaining unit employees.
With respect to ALJs as independent decisionmakers, they are not
rated in the same manner as other SSA employees. However, their
decisions are still subject to the review of other ALJs (the peer
review) and, if SSA becomes aware of a potential problem with a
particular judge, it may refer the matter to the Merit Systems
Protection Board to be investigated.

2. Several witnesses suggested improving the appeals process by
allowing judges to manage their own offices, and to hold them
accountable. What has been your experience with this management
approach in OHA? Would you consider allowing judges to manage the
personnel in their offices and hold them accountable? Why or why not?

Answer:

We have not tried this approach in the past because, with the
exception of the Hearing Office Chief administrative law judge
(HOCALJ), ALJs do not manage employees. They are part of a collective
bargaining unit and, according to OPM's regulations, may not manage
personnel in their offices. However, SSA may explore this concept as
part of an overall initiative to improve the hearing process.

3. Much has been reported in the media and by the Advisory Board
about the varying allowances rates across and within the States at the
disability determination services (DDSs) and OHA offices. Can you
provide more detail as to why these allowance rates vary? What is being
done to address variances of allowance rates, including action taken,
action planned, and the timeframe for completion of these actions?

Answer:

Variations in Initial Allowance Rates Among States
The variation in allowance rates among states and regions has been
viewed by some as an indication that there may be a lack of uniformity
in disability decisionmaking, but that greatly oversimplifies the
issue. Enclosed is a study released in August \1\ that helps to explain
some of the variation in initial level allowance rates across states
for adult disability applicants.
---------------------------------------------------------------------------
\1\ Strand, Alexander, 2002, ``Social Security Disability Programs:
Assessing the Variation in Allowance Rates,'' ORES Working Paper No.
98, Social Security Administration, Office of Policy.
---------------------------------------------------------------------------
This study, like prior studies, will show that much of the
variation in allowance rates can be explained by a number of
socioeconomic and demographic differences among states. Using a
regression analysis that predicts allowance rates based on the
economic, demographic and health characteristics of states, the study
estimates the portion of variation that can be explained by these
differences. For example, states have different economic conditions,
and economic conditions are correlated with the tendency to apply for
benefits. When there are larger numbers of applications in a state, the
rate at which those applications are allowed may be lower than the rate
of allowance in a state that receive proportionately fewer
applications. States also differ in their age and gender composition,
and these groups have different tendencies to apply for benefits. For
these reasons and others that are addressed in the study report, the
composition and characteristics of the applicant pool differ across
states so that, even with no inconsistency in disability adjudication,
allowance rates would properly be expected to vary among states and
regions.
In view of the study results and our extensive experience with
Federal consistency and quality assurance reviews of initial level
determinations, we believe that most of the differences in initial
allowance rates are not due to inconsistency in applying policy. The
initial accuracy rate for the Nation through July 2002 is 94.6 percent.
However, the study does show some differences among states that cannot
be explained by the regression analysis (although these differences are
much smaller than the simple allowance rates themselves suggest) and we
will need to keep working to minimize them.

Variations in Administrative Law Judge Allowance Rates Among States:

We are not aware of any statistical studies that specifically
address possible variations in state allowance rates based on decisions
made at the administrative law judge (ALJ) level. Our Office of Quality
Assurance monitors the quality of ALJ decisions and provides reports
about quality at the regional and national levels, not for particular
states or hearing offices. Hearing offices are not organized along
state lines (e.g., the Evansville, Indiana hearing office handles
claims from parts of Kentucky, Illinois and Indiana) and ALJs have
decisional independence.

4. You stated in your testimony that implementation of the Hearings
Process Improvement (HPI) initiative created bottlenecks in processing
cases at OHA and in light of the initiative's failure, would not be
continued in its current form. Commissioner Barnhart has announced
short and near-term changes to the hearing process, but that SSA will
need to bargain with employee groups before any changes are
implemented. Please provide a status of the union negotiations relative
to these changes.

Answer:

In March 2002, SSA Commissioner Barnhart announced a number of
changes to the hearings process to remedy weaknesses in the HPI design
in the short term and to promote greater efficiency in hearing office
operations and better use of time and talents to reduce pending
workloads.
OHA has begun to award folder assembly contracts to assist in
eliminating the pending inventory of cases awaiting folder preparation.
The contractors will perform the routine clerical tasks of numbering
exhibits and pages, removing duplicate reports, and preparing exhibit
lists. In May 2002, OHA and two employee unions, AFGE and NTEU, entered
into memoranda of understanding regarding the impact and implementation
of this initiative on bargaining unit employees. Despite assurances to
the International Federation of Professional and Technical Engineers
(IFPTE)/Association of administrative law judges (AALJ) that OHA would
implement the folder assembly contracts in a way as to not directly or
materially affect the conditions of employment of any judge, OHA's
negotiations with IFPTE/AALJ did not culminate in a signed agreement.
IFPTE/AALJ filed an unfair labor practice complaint on this issue.
In June 2002, OHA notified AFGE, IFPTE/AALJ, and NTEU of its intent
to implement additional proposed initiatives for changes in the HPI
design and afforded the employee unions the opportunity to discuss the
impact and implementation of the initiatives on workers' conditions of
employment. The initiatives were to:

End the requirement that cases be certified as ready
to hear;
End rotational assignments for case technicians and
senior case technicians;
Extend early case screening and analysis to
administrative law judges;
Introduce a short form favorable decision format; and
Promote the issuance of bench decisions by
administrative law judges.

OHA and NTEU entered into a memorandum of agreement on these
initiatives. Talks with AFGE and IFPTE/AALJ terminated without reaching
agreement. AFGE negotiations stalled chiefly due to AFGE insistence on
issues that are either non-negotiable or beyond the scope of the
national collective bargaining agreement. AFGE required incorporation
of previous ``partnership'' agreements and partnering rights in any new
memorandum of understanding with OHA, contrary to the rescission of the
Executive Order on partnering that was executed early in the current
Administration. OHA adhered to the provisions of Articles 26 and 27 of
the national agreement in effectuating the initiatives; however, AFGE
insisted upon an expansion of the terms of the contract. AFGE grieved
OHA implementation of the initiatives prior to reaching agreement.
Discussions between OHA and IFPTE/AALJ also terminated without
agreement. IFPTE/AALJ failed to recognize management's statutory right
to assign work to employees.
Because of the importance of the initiatives to improve OHA's
service for the American public, the initiatives were implemented in
July 2002 despite the lack of agreement with AFGE and IFPTE/AALJ.
Mindful of its labor management obligations, as well as the importance
of the support of the employee groups in the success of any initiative,
OHA invited both employee groups to return to negotiations in August
2002. Despite preliminary indications from the groups that they were
amenable to continuing the discussion, neither AFGE nor IFPTE/AALJ
returned to the bargaining table.
OHA has notified the unions of its proposal for video-
teleconferencing of hearings. OHA will soon notify the unions of its
proposals for expansion of speech recognition technology. The unions
will be afforded the opportunity to discuss the impact and
implementation of these initiatives. OHA will continue to bargain in
good faith with the employee groups to ensure that the initiatives to
improve the hearings process do not adversely affect the conditions of
employment of any worker.

5. A number of changes to the disability appeals process were
suggested at the hearing. Please provide your views as to the merits of
each of the following and related issues the Subcommittee should
consider as we examine each of these proposals:

Limiting the review of the Appeals Council to clear
error of law or lack of substantial evidence, as recommended by
the American Bar Association.
Following the current system of administrative
hearings by review by an Article I Social Security Court, with
a right of appeal on questions of law in the regular courts of
appeals (as with the current Tax Court).
Agency representation at ALJ hearings.
Closing the record either after reconsideration or
after an ALJ hearing.

Answer:

We believe it would be premature to advance an Agency view
regarding any of these proposed changes. Commissioner Barnhart is
committed to improving the disability process but the work is just
beginning. In her testimony of May 2 before the Subcommittee on Social
Security, Commissioner Barnhart announced decisions on a number of
short or near-term improvements in the disability claims process but
also indicated that mid- and longer-term improvements would be
developed to improve the process. In her testimony Commissioner
Barnhart emphasized that she ``did not assume [her] duties as
Commissioner to manage the status quo.''
In his testimony of June 11 before that subcommittee, Martin H.
Gerry, Deputy Commissioner, Office of Disability and Income Security
Programs, reported that the Agency had determined that no single change
would suffice to improve the process as needed and that many
improvements (some large and some small) would be needed. The already
announced steps were ``just the first steps'' that SSA would take to
meet the challenge of providing an improved process.
Similarly, in his August 1 response letter to Ron Bernoski, IFPTE/
AALJ President, Deputy Commissioner Gerry noted that the Commissioner
had announced several improvements that were already being implemented,
expressed no judgment regarding particular process changes that Judge
Bernoski mentioned, and stated ``our work on additional program
improvements, however, is just beginning.''
The above remarks of Commissioner Barnhart and Deputy Commissioner
Gerry reflect a commitment to improving the process through mid- and
longer-term changes, but this work on developing such changes is just
beginning.
We agree with the comment in the Social Security Advisory Board's
Report ``SSA's Obligation to Ensure that the Public's Funds are
Responsibly Collected and Expended'', that there is no simple fix to
the challenges facing the disability program.

6. You mentioned in your testimony that SSA has been hampered in
hiring much-needed additional ALJs because of the Azdell v. OPM case
challenging the method used to compute veterans' preferences in the
ranking of ALJ candidates. What is the status of this case? Are there
legislative changes the Subcommittee should be considering to provide
the agency needed relief?

Answer:

The Azdell case is currently pending before the Federal Circuit.
Oral argument was heard by a three-member panel on October 10, 2002. It
is not clear at this time that legislative intervention is necessary.

7. You stated in your testimony that Commissioner Barnhart
appointed a former Regional Commissioner to head up a work group to
review SSA's quality assurance program and to prepare a report of their
recommendations. Can you provide more detail about this group,
including: who serves, the workgroup's mission, goals and objectives,
and the timeframe for the completion of its report. We would also
appreciate a staff briefing as to the group's findings and
recommendations, when ready.

Answer:

Commissioner Barnhart appointed the former Regional Commissioner
for the Atlanta and Chicago Regions, Myrtle S. Habersham, as the Senior
Advisor for Quality Management. A workgroup was established with 8
Members representing years of operational and administrative
experience. The Members came from the following major components: the
Office of Disability and Income Security Programs, the Office of
Finance, Assessment and Management, the Office of Operations, and the
Office for Human Resources. Permanent staffing plans are being
finalized. Additionally the group has utilized a senior level Steering
Committee composed of representatives from every component and members
from SSA management and Disability Determination Services (DDS)
administrators' organizations.
The group was tasked with developing a proposal on what quality
should look like for each of the Agency's business processes (claims,
post-entitlement actions, informing the public, enumeration, earnings)
and all supporting activities. The proposal was presented to the
Commissioner with initial implementation beginning in August 2002.
Initially, the workgroup was tasked with completing extensive
research and fact finding for the necessary background on their
assignment. They looked at five key areas: definition of quality, who
is responsible for ensuring its presence, the identification of quality
models, challenges that impede progress and solutions for those
impediments. The following recurring themes emerged from this fact-
finding and research process.
For SSA to improve its performance in this area, our Agency needs:

leadership to drive the change;
quantifiable measures where appropriate and
sufficient resources for employees to provide services to the
American public;
identification of initiatives that are currently
underway to improve processes;
incentives to encourage ongoing identification of
quality solutions;
an evaluative tool for use at the start of every
major initiative ensuring full consideration of quality; and
more investment in leadership training that enhances
the skills necessary to reinforce this quality environment.

To address the Agency's needs, the workgroup's proposal contains
four phases that are running concurrently. The focus of the first phase
was to re-emphasize the Agency's commitment to quality and increase
visibility of quality issues. Many of the activities in Phase I such as
a new Commissioner-level quality award and a Quality Matters website
have already been completed. The website currently features initiatives
that provide solutions to quality issues, i.e., changes in systems,
policies, and processes. Phase II of the proposal involves defining
quality for the disability claims process. The workgroup is continuing
the research and fact finding needed to identify a quantifiable
definition of quality. Beginning with Phase III, the workgroup has
started to identify process changes that will streamline processes and
procedures in order to free resources to focus on other priority
workloads. Phase IV looks at how to build quality into new processes,
i.e., the accelerated electronic disability process, online medical
report for disability claims, online policy/procedures, etc. As new
processes are developed, the workgroup will work with other components
to identify up front needed policies, systems, and management
information to ensure quality.
The above outlines the steps the Agency is taking to reinforce the
expectation of quality in everything it does. However, fully
integrating quality into each of the business processes that serve the
needs of more than 40 million beneficiaries is both a lengthy and
complex challenge. The Agency will continue to research, coordinate,
and develop a quality process to meet that challenge.

8. GAO states in their testimony that SSA hired a contractor to
evaluate their electronic disability strategy and make recommendations
for options to ensure that all the business and technical issues are
addressed to meet SSA's mission of moving the agency toward a totally
paperless disability claims process. Has the contractor submitted their
recommendations? If so, please provide a summary of the contractor's
report and a copy of the report to the Subcommittee staff. If not, what
is the timeframe for completion? What is the timeframe for
implementation of e-dib? Once the contractor review is completed, we
would appreciate a staff briefing as to the contractor's findings.
Answer:

SSA has contracted with Booz-Allen and Hamilton to support the
overall eDib project. Rather than simply reviewing and reacting to SSA
proposals, the contractor is helping us to formulate a strategy, define
an architecture and refine implementation options.
Since that time, Commissioner Barnhart challenged the Agency to
accelerate the eDib project. She directed SSA to be ready to start
implementation of a ``folderless'' disability business process by
January 2004. We have revised the eDib Project Management Plan to
reflect the Accelerated eDib (AeDib) project.

9. GAO commented that, in the past, SSA has had mixed results
implementing their information technology initiatives and that SSA must
review the pros and cons of past efforts before they undertake new
efforts. GAO also stated that SSA must identify, track, and manage the
costs, benefits, schedule, and risks associated with the system's full
development and implementation. In addition, they stated SSA must
ensure that it has the appropriate ratio of skills and capabilities to
achieve the desired results. Has the agency addressed these
recommendations? How can the Subcommittee be assured that e-dib will
succeed where other technology initiatives have not?

Answer:

SSA recognizes the inherent risks of any large-scale technology
initiative such as eDib, whether at SSA or any other public or private
organization. The success of the implementation of eDib is being
managed on a twofold front at SSA: via the SSA institutional
information technology (IT) management processes, and via process and
architectural approaches unique to the eDib application.
SSA has already addressed recommendations made by GAO concerning
reviews of past IT initiatives; including identifying the tracking and
managing costs, benefits, schedules and risks associated with full
system implementation and ensuring the availability of the appropriate
human capital IT skills and capabilities. Some of the means addressing
these various GAO recommendations are:
IT Capital Planning and Investment Control (CPIC)
SSA has had a documented and successful IT CPIC process in place
for many years. The SSA Acting Chief Information Officer (CIO) is
currently testing and evaluating promising changes to the already
successful process. The process change recommendations being tested and
evaluated address areas such as IT planning, value measurement for e-
services, as well as IT cost allocation methodologies for IT security
and other IT infrastructure costs. New guidance from the Office of
Management and Budget, along with ongoing evaluations of new tools and
recommendations for other process improvements from higher monitoring
authorities and consultants, will be included in the final model of a
new CPIC process guide. The anticipated process plus use of the
Information Technology Investment Portfolio System (I-TIPS) as a
repository for selection criteria as well as SSA's IT portfolios will
facilitate objective analysis, comparison, prioritizations and
selection of IT investments. SSA is also developing procedures to guide
future post-implementation reviews (PIR) that include criteria for
designated projects for PIR. Standardized input to SSA's review process
will probably be through I-TIPS.
Information Technology Advisory Board (ITAB)
SSA is adopting an IT planning and portfolio selection process that
includes predefined selection criteria. This new process includes the
development of a documented prioritized IT plan based on predefined
selection criteria. These plans will be provided to the CIO-chaired
Executive-level Information Technology Advisory Board (ITAB). That
board will perform enterprise-wide IT planning and prioritization using
the established evaluation criteria to produce and regularly evaluate a
single, integrated Agency IT project portfolio. The criteria will
include qualitative and quantitative factors including strategic
alignment, mission effectiveness, organization impact, risk and return
on investment. ITAB and senior Systems managers will provide oversight
of IT projects, comparing actual cost, schedule, and risk data with
original estimates.
Information Technology Architecture Plan (ITAP)
The ITAP continues to be a core management tool within SSA to
document and manage the existent IT portfolio and to ensure that IT
assets will be well positioned to support the evolving future service
delivery requirements of the agency, of which one example is eDib. The
ITAP is used to manage the current and target physical and application
architectures; link IT investments to essential operational
requirements; ensure that the IT architecture will support the SSA
vision of the future; ensure continually refined process management of
application development and operational IT management; ensure that
security requirements are an integral part of all IT planning; and
ensure the integration of IT capacity planning as part of the ongoing
and future IT asset portfolio management.
Software Process Improvement (SPI) Program
SSA Systems has heavily invested in the IT SPI program. SSA has
selected the Carnegie Mellon's Software Engineering Institute (SEI)
Capability Maturity Model (CMM) as the methodology for conducting the
SPI program. CMM is in wide use throughout the software industry and is
well respected as a standard benchmark. In 2001, SSA was certified by
the SEI as being at CMM level 2. Level 2 specifies that the management
processes are in place and in use to track cost, schedule and
functionality on a repeatable basis. In the history of evaluations of
non-military public sector organizations conducted by the SEI, 33 have
been evaluated. Of the 33, 29 are at level 1 and 4 are at level 2,
including SSA. The SEI has not evaluated any organizations in either
the state or Federal sector that have achieved level 3 or above. In
June of this year, Bill Gray, Deputy Commissioner for Systems, set a
goal for Systems to be level 3 compliant by the end of calendar year
2003.
Information Technology Human Capital Plan
SSA is currently in the process of developing a human capital plan
for the agency, including the human capital requirements to support
current and foreseeable IT requirements. Initial work has already been
completed to identify current IT skills using the Skills Inventory
Planning System (SIPS). SIPS information is being analyzed to assess
the usability of the data collected to support a gap analysis. SIPS
will be repeated once the Systems reorganization has fully stabilized.
SIPS will ensure the data is available to link current competencies and
requirements and future staff needs. Additional work is being
undertaken to develop a human capital plan based upon the difference
between foreseeable IT requirements, and the current and projected IT
workforce structure. In the meantime in recognition of the substantial
retirement wave over the next five to ten years, priority is being
given to future needs by setting aside a percentage of all full-time
equivalents for entry-level hiring.
eDib Specific Success Enablers
eDib is defined as a flexible IT framework to serve the complex SSA
disability business process. A key tenant of eDib is that eDib is not
viewed as just a successful demonstration of technology implementation,
but rather as technology implemented in such as way as to clearly
provide ongoing and increasing support for both the current and future
disability business processes. eDib planning and implementation
revolves around determining where automation might best make a
contribution to significant operational needs in a cost effective
manner. eDib IT development adheres to all of the SSA institutional IT
management processes (some of which are described above) in order to
ensure this rigorous connection between IT investment, IT development,
and desired business outcomes. Business case documentation under
development within SSA and with Booz-Allen & Hamilton is providing a
foundation for ensuring linkage between the business case for
disability processing improvements and the eDib IT structure to support
the business case.
eDib has ongoing and regular review at the highest levels of the
agency. A Deputy Commissioner workgroup has already been formed to
review and guide project performance on a regular basis. The
participants are the Deputy Commissioners from Systems, Disability and
Income Security Programs, and Operations. Management decisions
requiring prompt reconciliation and resolution are escalated to the
Deputy Commissioner workgroup. The Deputy Commissioner for Systems
meets weekly with senior Systems staff to review the progress of eDib
on all fronts, be they organizational, resource, business process, or
technical design and implementation.
Users and DCS are jointly framing requirements and implementation
plans so that the functionality to be delivered is commensurate with
available resources and timeframes. Extensive business process
analysis, adherence to the systems development life-cycle, and use of
CMM principles help ensure that the IT assets being developed in
support of eDib clearly support the business process, and that system
users and developers agree on clearly defined IT goals to support
specific business process requirements.
eDib is not a monolithic single application. Rather, eDib is being
architected to consist of a number of discrete components, many of
which can be implemented independently of one another. With the
individual eDib building blocks being for the most part loosely tied to
one another, success can be achieved incrementally within and between
separate eDib projects and without being hostage to a tightly
integrated ``grand design.'' Where eDib does introduce new IT
components and architectures to SSA, these items are being positioned
as core architectural components which will be used as part of the
ongoing common IT architecture development.
eDib is being designed to make the best use of projects, analyses,
and architectural components already in use or under development, to
maximize the use of commercial products, and to use external
consultative expertise where appropriate. For example, eDib is being
built to leverage and enhance the capabilities of existing disability
case development and management systems, such as those in the state
Disability Determination Services and the SSA Office of Quality
Assurance. eDib will not replace any of these systems, but will instead
provide additional services working in conjunction with these systems
to enhance the capabilities of these systems and improve the business
process already in place, while simultaneously setting the stage for
future business process enhancements.
As part of eDib planning SSA is making use of premier external
consults such as Booz-Allen and Hamilton, Gartner, the Giga Information
Group, Lockheed-Martin, and other select IT consultant and services
groups. External professional services will also play an important part
in eDib implementation in all areas, including design, development and
implementation activities where necessary to provide expertise and to
supplement the SSA IT workforce. Particular attention is being paid at
both the design and systems operational levels to developing monitoring
and modeling methodologies to proactively avoid potential performance
issues both during design and upon implementation. A separate capacity
planning and modeling activity is being undertaken to ensure that an
appropriate physical architecture is procured and implemented which can
support the operational business process and service level
requirements. SSA will be making extensive use of prototyping,
piloting, training, and phased and iterative deployment in order to
introduce the various eDib IT components into the production
environment in a carefully controlled fashion. This introduction will
be quite granular permitting introduction by eDib component, SSA
organizational entity type, and geographic location.

10. The Advisory Board has recommended strengthening the current
Federal-State relationship. Their suggestions for doing that include
requiring States to adhere to specific guidelines for educational,
salaries for staff, training, carryout procedures for quality
assurance, and other areas having a direct impact on the quality of
States' employees and their ability to make quality and timely
decisions. Do you agree with these recommendations? Are you pursuing
any of these suggested changes?

Answer:

SSA considered the establishment of a standard for adjudicators
along with a standardized test to establish a certain level of
proficiency. However, some States did not want SSA involved in what
they viewed as State personnel matters. Some States were also concerned
such educational requirements would result in higher salary levels that
would have a ripple effect on other positions in the State that were
not fully federally funded.
In addition we have taken action to:

1. LIncrease the disability policy component's staff
responsible for managing disability training to strengthen
SSA's ability to deliver high quality and consistent program
training to all adjudicators.
2. LFocus user input regarding training needs and delivery
through the Disability Training Steering Committee (DTSC),
which has been operating for the last several years. The DTSC
includes representatives from the DDSs, OHA, the Office of
Quality Assurance, and Operations. Its primary role is to
ensure that appropriate training is made available for all
disability adjudicators.
3. LEmbark on mandatory national training on selected topics in
which it is essential that every adjudicator, regardless of
component, have the same understanding to promote consistency
in decisionmaking. Training will be directed toward experienced
adjudicators. As we start the process, we envision providing 3
to 4 mandatory training programs in the 1^st year,
with the first program in early mid FY 2003.

11. The Advisory Board also recommends establishing a system of
certification for claimant representatives and establishing uniform
procedures for them to follow. Do you agree with this recommendation?
If so, what action has been taken or is planned? If not, why?

Answer:

We view the issue of establishing a system of certification and
uniform procedures for claimant representatives as another possible
structural change to the claims process. As we consider options and
develop proposals for changes in the disability process, we will keep
the Advisory Board's recommendation in mind.

12. Our hearings have reinforced the need for disability research
in general, but specifically for comprehensive research in the area of
return to work. Please provide a summary of related research that has
been conducted in recent years, research underway, and research
planned, including expected completion dates.

Answer:

Overview
SSA has conducted research in effective and efficient approaches to
returning disability beneficiaries to work since the mid-eighties.
Starting with the grants under the Research Demonstration Program and
the Transitional Employment Training Demonstration, through Project
NetWork, and continuing today with the State Partnership Initiatives
(SPI), SSA has tested a wide range of work incentives, service
provision techniques, and systems changes, designed to promote the
employment of Supplemental Security Income (SSI) and Social Security
Disability Insurance (SSDI) beneficiaries. In addition, over the next
few years, SSA plans to conduct several new demonstrations, including
an early intervention demonstration and several projects under a Youth
Employment Strategy.
Previously Completed Research
Research completed since the mid-eighties includes:

Transitional Employment Training Demonstration: A
randomized field experiment providing skills training and work
experience to adolescents with mental retardation in the SSI
Program. Participants in 8 sites nationwide were given up to 2
years of services. Program waivers were used to encourage
participation.
Research Demonstration Program: Three rounds of
research grants and cooperative agreements to State agencies
and private providers of vocational rehabilitation (VR)
services to SSDI and SSI beneficiaries. Some projects included
the use of program waivers to provide additional encouragement
to disability beneficiaries who wanted to work.
Project NetWork: A randomized field test of four
models of case management for providing return-to-work (RTW)
services to SSI and SSDI disability beneficiaries. This project
included 2-3 years of services in 9 States and pre- and post-
service interviews with participants to measure differences in
outcomes between treatment and control groups.
Current Return to Work (RTW) Research
RTW research currently in progress includes:

State Partnership Initiatives: A set of 12 projects
(cooperative agreements), sponsored by SSA, and 6 projects,
sponsored by the Department of Education. For the SSA-sponsored
projects, awards were made for 5 years to State agencies, which
proposed the most innovative consortia of State programs,
designed to encourage SSDI and SSI disability adult
beneficiaries and youth to attempt to work. Four of the
projects are also testing waivers of SSI Program features, such
as $1-for-$4 benefit offsets for earnings and suspensions of
Continuing Disability Reviews during participation in the
projects.

LExpected completion date: September 2003 for the eight non-waiver
projects; September 2005 for the four waiver projects.

Adolescents with Special Health Care Needs Project:
This cooperative agreement with Children's Research Institute
is located in Washington, DC. It is a collaborative partnership
between the Adolescent Employment Readiness Center, a model
transition program; Health Services for Children with Special
Needs, Inc., a managed care organization for SSI recipients;
and the American Academy of Pediatrics, the nation's largest
organization for pediatricians. The purpose of the project is
to prepare transition age SSI youth with severe, chronic
disabilities for post-high school employment by establishing,
in an urban setting, an uninterrupted, coordinated,
developmentally appropriate, psychologically sound and
comprehensive model of transition services for SSI youth. This
project is part of SSA's Youth Employment Strategy.

Expected Completion Date: September 2004.
Planned RTW Research
LSSA has several RTW research projects planned to begin in FY 2003,
spanning a broad range of topics.

Youth Employment Strategy: Designed to assist
individuals with disabilities between 11 and 30 years of age
transition to the work force, this initiative will consist of
several projects related to the delivery of services needed to
assist these individuals in achieving independence. States and
local communities will be awarded contracts, grants, and
cooperative agreements for testing and delivering needed
transition services to young SSDI and SSI beneficiaries with
disabilities. Cooperative agreements will test integrated
school-family community-agency models of transition planning,
aided by assessments of employment potential and Vocational
Rehabilitation services. SSA will be pursuing interagency youth
transition projects with the Department of Education, the
Department of Labor (DOL), and other interested Federal
partners. Waivers of SSI and/or SSDI program features to
support youth beneficiaries' transition to adult life will also
be considered.

Expected Completion Date: September 2008.

Mental Illness Treatment Demonstration: SSA will test
models of services and treatment for SSDI and SSI beneficiaries
with diagnoses of mental illness, such as, mood disorders or
anxiety disorders and related co-morbid conditions. The
objective of the tests will be to return these beneficiaries to
productive activity and reduce program costs. Sites will be
chosen scientifically in several States where the State and
local mental health service system is interested in
participating and wins a competitive cooperative agreement
award. Participants will be randomly assigned to treatment or
control groups. Program waivers will be considered if they are
felt to be essential to supporting the work attempts of
demonstration participants. Funding is initially scheduled for
5 years with the first year for setup and testing of
procedures, followed by 4 years of enrollment of cases and
service delivery.

Expected Completion Date: September 2008.

Early Intervention Demonstration: The objective of
the Early Intervention Demonstration is to assist title II (and
concurrent title XVI disability) applicants, who have
impairments reasonably presumed to be disabling, to secure the
necessary support services that will help them to return to
work. Applicants for disability benefits will be given the
opportunity to put their applications ``on hold'' and
participate in the demonstration. Providing the necessary
support services before a benefit award is made may improve the
applicant's chances of a successful return to work and possibly
eliminate the need for disability benefits. Alternate models of
service delivery will be tested to determine the interventions
that will most likely encourage employers to hire and retain
participants. Participants will be given a stipend to support
them during the intervention as well as health care benefits.
The demonstration will be conducted as a randomized experiment
in several States nationwide.

Expected Completion Date: Sept. 2009.

Comprehensive Employment Opportunities Demonstration:
The Centers for Medicare & Medicaid Services (CMS) and SSA will
solicit interested States for a demonstration entitled the
``Comprehensive Employment Opportunities (chief executive
officer)'' demonstration that would combine resources and
incentives from both Federal agencies and the States to promote
the employment of people with disabilities. States will
participate in this demonstration through cooperative
agreements that would include pre-approved Federal waivers.
Through this project, the Center for Medicare and Medicaid
Services and SSA are promoting the ability of States to offer a
coherent, comprehensive employment initiative. States will
extend health coverage via the Medicaid Buy-In and related
programs, and will bring State programs together to address all
major barriers to employment-- including health care, income
support, housing, employer access, and transportation. As part
of this demonstration, SSA will provide pre-approved waivers
under the SSI and SSDI programs to successful applicants. These
pre-approved waivers include additional disregards of income
and assets/resources, as well as ``hold harmless'' provisions
to ensure that an individual in the demonstration will not be
worse off as a result of participation. The pre-approved
waivers will be subject to State conformance with all
applicable terms and conditions, operational protocols, and the
cooperative agreement itself.

Expected Completion Date: September 2008.

Benefit Offset Demonstration: SSA will test the
impact on SSDI beneficiary employment through implementation of
a $1-for-$2 benefit offset. This demonstration was mandated by
section 302 of the Ticket to Work and Work Incentives
Improvement Act 1999. SSA will solicit the interest of States
that wish to participate in this test. Sites will be selected
to provide a diversity of settings nationwide. Participants in
the demonstrations who work will have disability benefits
reduced $1 for every $2 of earnings above a certain threshold,
instead of having benefits eliminated completely, as in the
current SSDI program. The extent of greater rates of employment
and higher earnings of participants will be assessed relative
to a control group.

Expected Completion Date: September 2008.

Evaluation of the Ticket to Work Program: As mandated
by section 1148 of the Social Security Act, SSA must evaluate
the size and nature of the impact of the Ticket to Work and
Self-Sufficiency Program on the employment and earnings of SSI
and SSDI beneficiaries and on the payment of Employment
Networks which provide services to those beneficiaries. SSA has
awarded a contract to design the evaluation. SSA will award a
competitive contract to a research firm to implement the
research design during FY 2003.

LExpected Completion Date: September 2007 with interim reports in
FY 2003 and 2005.

Benefits Navigator Demonstration: SSA is partnering
with DOL on a test of a Disability Benefits Navigator in the
nationwide network of One-Stop Centers. The Navigator will be
an expert in SSA's disability program work incentives, the
Ticket to Work program, and all SSA and non-SSA programs and
benefits that could assist a beneficiary or non-beneficiary to
start or return to work. SSA and DOL will test the efficacy of
this new position in One-Stops in 6-8 States for 2 years and,
based on the evaluation results, decide if this position should
be made a permanent part of the One-Stop system nationwide.

Expected Completion Date: September 2004.

13. SSA created the Employment Support Representative (ESR)
position to provide a specialist for work incentives. ERSs served as a
single point of contact with beneficiaries, monitored beneficiaries'
work progress, and processed work reports and work-issue continuing
disability reviews. A final evaluation report on the ESR position was
completed in November 2001 and recommended that SSA make the position
permanent. SSA decided not to make the position permanent due to staff
shortages and resources issues. Can you tell us what are SSA's plans
for proceeding? Please provide a copy of the evaluation report to my
Subcommittee staff. Additionally, we would appreciate SSA briefing
Subcommittee Staff on this issue.

Answer:

SSA piloted the temporary Employment Support Representative (ESR)
position in SSA's field operations structure consistent with the
requirement of section 121 of the Ticket to Work legislation that SSA
establish a corps of work incentives specialists within SSA. The ESR
pilot began in late July 2000 and ended in September 2001. In late
November 2001, the SSA ESR Pilot Evaluation Team presented its final
report recommending adoption of the ESR position. SSA is concerned that
all our beneficiaries receive the very best service that we can
provide, and we are currently deliberating on how best to provide
employment support programs-related information and services to our
beneficiaries with disabilities nationally with our present resources.
We provided Subcommittee staff with a briefing on this subject.

14. The National Council of SS Management Associations recommends
that a Technical Expert for Disability (TED) position be created in
field offices to focus on processing disability claims. Please comment
as to your views regarding this proposal.

Answer:

The Technical Expert (TE) position was established to handle a
broad range of complicated work in field offices. Managers in local
offices have the flexibility to assign technical disability work to
their TEs, and many do so. We feel that requiring all offices to have a
TE dedicated to disability claims would limit our flexibility to keep
all workloads in balance.

15. The National Association of Disability Examiners has proposed
placing greater emphasis on claimant responsibility, expanding the
single decisionmaker in DDS, providing for a due process hearing for
the claimant in the reconsideration, closing the record after the
reconsideration decision, eliminating the Appeals Council, and
establishing a Social Security Court to hear appeals of the ALJ
decisions. Please comment as to your views regarding this proposal.

Answer:

We believe it would be premature to advance an Agency view
regarding any of these changes.

16. The National Council of Disability Determination Directors
provided recommendations for change in their testimony, including;
providing adequate resources to handle the current and pending
caseloads at the DDSs, improving policy and training to produce more
consistent and accurate decisionmaking, making revisions of SSA's
quality assurance system a high priority to unify the application of
policy among all components, enhancing performance of electronic
systems, strengthening the reconsideration phase to provide for a face-
to-face de novo hearing between claimant and DDS reviewer, and
establishing uniform quality assurance and case review systems to bring
the DDS and OHA closer together in the determination process. Please
comment as to your views regarding this proposal.

Answer:

SSA is actively considering broad changes to the disability claim
process to improve service and efficiency, and we are moving forward
with some process changes. Commissioner Barnhart has announced her
intention to move aggressively to implement electronic disability
processing (eDib) by January 2004. We have received suggestions
regarding other changes from the public, Federal and State employees,
and employee groups, such as the National Association of Disability
Examiners and the National Council of Disability Determination
Directors. It would be premature to react to specific aspects of these
recommendations at this time. As we consider options and develop
proposals for change, we will continue to work with interested groups
and the Congress as we all strive to provide the best possible service
in an efficient manner.

17. What is the average number of cases an ALJ hears per day?

Answer:

According to the FY 2002 Caseload Analysis Report, the national
average number of hearings scheduled per ALJ per day was 2.32 through
July 2002 and the national average of hearings held per day per
available ALJ through July 2002 was 1.66. This latter statistic
reflects postponements, continuances and no-shows.

18. To help us better understand how the process of disability
determinations works at the OHA level, can you provide us with a step-
by-step process of what happens to a case beginning when it is received
in an OHA office until a decision is made? For each step, please
include when evidence is requested and by whom, and how evidence is
presented.

Answer:

The following is an outline of the step-by-step case processing at
the Hearings level of administrative appeal:

Case intake begins at the Master Docket level. The
folder is stamped-in to acknowledge the receipt of the file.
The case is screened to determine whether the
claimant has had a prior claim(s) at the OHA level.
The case is also screened through the Hearing Office
Tracking System (HOTS) to determine whether or not the folder
should be associated with a claim already pending at the
hearing level or if it is a new claim.
The case is the screened to determine if it is
properly at the hearing level and whether the Request for
Hearing is timely filed. Master Docket then enters the case
into the HOTS tracking system, identifying the parties to the
claim, the hearing type and the claim type. Master Docket also
verifies the service area and the correct spellings of names
and addresses.
Following established guidelines, Master Docket
screens cases for possible early dispositions. If the Request
for Hearing is not timely filed or the claim is not properly at
the hearing level, the case is referred to an administrative
law judge (ALJ) for possible dismissal. Possible on-the-record
decisions are referred to Senior Attorney Advisors for further
review.
If the case is properly at the hearing level, Master
Docket then prepares an acknowledgement letter to the claimant
and representative. Along with the acknowledgement letter,
Master Docket sends the claimant hearing office worksheets
requesting information regarding any recent treatment since the
Reconsideration determination, medications and any updated work
background information. Often the claimant will have submitted
additional evidence in connection with the request for a
hearing. The case is then assigned to a Group within the
hearing office. Within the Group, the case is first assigned to
a Senior Case Technician (SCT).
The SCT does a pre-hearing screening, including
verification of claim type, hearing type, names, SSN and
addresses.
Proposed exhibits are selected in the case work-up
process and the documents are stamped and numbered.
The SCT reviews the file to determine the need to
request updated medical information and information regarding
work and earnings. If additional information is needed, the SCT
requests this information from treating sources and employers
or requests the claimant's representative obtain this
information and submit it to the hearing office within a
specified timeframe. At this point, the SCT may also suggest
the need for medical or vocational expert testimony.
The case is then assigned to an ALJ for his/her pre-
hearing review. The ALJ will determine if further development
is needed or whether the case is ready to schedule for hearing.
The ALJ will also determine whether medical and/or vocational
expert testimony will be required at the hearing.
When a claim is scheduled for hearing, a notice of
hearing is sent which requests the claimant/representative to
send any and all additional evidence to the hearing office
prior to the hearing. The acknowledgement letter to the
claimant/representative explains that any additional evidence
they wish to submit must be sent as soon as possible. Also, if
they need help in obtaining evidence they should contact the
hearing office for assistance.
New evidence received prior to the hearing date is
added to the case file by the SCT or Case Technician (CT) and
the case is given back to the ALJ for review. The ALJ may
decide that a hearing is not necessary because a fully
favorable decision can be issued based on this additional
evidence.
The claimant/representative may submit written
evidence on the day of the hearing. If this occurs, the ALJ may
decide to reschedule the hearing for a later date if he/she
needs additional time to re-review the file with the new
evidence received at the hearing.
There are times when the ALJ will need to request
medical/vocational evidence subsequent to the hearing. This may
include additional development from the treating source, a
request for a consultative examination (CE), and/or a
supplemental hearing.
After the additional development/testimony is
received, the ALJ will make a decision and complete the
instruction sheet for the Attorney Advisor (AA) or Paralegal
Analyst (PA) assigned to write the decision.
The AA/PA prepares the draft decision.
The ALJ is given the draft decision for review and
edit.
A Notice of Decision with appeal rights and a copy of
the ALJ's decision are mailed to the claimant and
representative.
The claim file, containing the exhibits, audiotape of
the hearing, Notice of Decision, and the ALJ Decision are
mailed to the appropriate processing component of SSA.

The following is an outline of the step-by-step case processing at
the Office of Appellate Operations (OAO) level of administrative
appeal:

When an unfavorable decision or dismissal is issued
by an ALJ, the hearing office sends the claim file to the OAO
Mega Site processing center for holding in the event the
claimant or representative files a Request for Review of the
ALJ decision or dismissal.
When either a claimant or representative files a
Request for Review it goes directly to an OAO Branch where
receipt is documented by input into the case tracking systems.
Branch staff requests the file from the Mega Site in order to
process the claim. Often a claimant/representative will submit
additional evidence in connection with the Request for Review
or will request an extension of time in which to submit
additional evidence or present statements or arguments in
support of the claim.
OAO does not routinely request evidence. However, in
situations where a claimant/representative references
additional evidence in connection with the Request for Review,
the Council will routinely grant an extension of time to submit
the evidence. Evidence of this nature is generally medical
reports from treating sources, hospitals, examining sources,
etc.
Other pre-development activities may include
obtaining all pertinent files; obtaining the audiotape hearing
cassette, if missing; providing the claimant/representative
with copies of exhibits and/or audiotapes; and time to submit
evidence and/or statements or arguments, and so forth. Once all
pre-development activities are completed, an Analyst reviews
the case and makes a recommendation to the Administrative
Appeals Judge or Appeals Officer (signatory authority for
denials only) for his/her action, i.e., deny the Request for
Review; grant the Request for Review, vacate the ALJ decision
and Remand to ALJ for further processing; grant the Request for
Review, vacate the ALJ decision and issue an Appeals Council
decision; or Dismiss the Request for Review.
The Administrative Appeals Judge or Appeals Officer
(denials only) review the Analyst's recommendation and sign the
action documents, if he/she is in agreement with the
recommendation. If there is no such agreement, the case is
returned to the Analyst for further review, revision, etc.

19. Witold Skwierczynski's testimony focused on issues related to
the Title II special disability workload. Please provide your comments
regarding this testimony.

Answer:

We agree that the Special Disability Workload is complex and
difficult. For that reason, SSA established cadres of specially trained
employees to process the cases. The specially trained cadres will
screen and ``map'' each case. (``Map'' means that they identify the key
issues to be covered during the interview and development of the
claim.) They began processing cases in June 2002.
The cadres will send case-specific instructions, i.e., the
``mapping'' material, to the local field office that will obtain the
application and develop the entitlement factors. Cases requiring
medical determinations will then be sent to the disability
determination services (DDSs). After all these steps have been
finished, the field office will send the cases back to the cadres for
quality review. Upon completion of the quality review, cases will be
sent to the processing centers for payment.
In addition, SSA's Office of Quality Assurance will conduct
independent quality reviews. They will conduct ``early information''
reviews at various steps in the process to ensure accuracy.
Due to much longer retroactive benefit periods than normal title II
cases, the DDSs will need to develop much older medical evidence and it
is estimated the special disability workload will take approximately
1\1/2\ times longer to adjudicate than regular cases. The disability
determination services (DDSs) are not funded to do all initial receipts
in FY 2003. Absent additional funding, the special disability workload
will be worked along with other disability claims and add to the
backlog.
20. In what percent of ALJ hearings is a medical or vocational
expert present? Please provide this data totaled by year for the past 3
years.

Answer:

National data for Participants per Hearing Held is as follows:

------------------------------------------------------------------------
Fiscal Year Vocational Expert Medical Expert
------------------------------------------------------------------------
1999 47.4%............. 16.3%
2000 49.6%............. 17.8%
2001 51.2%............. 17.5%
------------------------------------------------------------------------

21. Dr. Stapleton stated in his testimony that he arrived at a
different conclusion regarding the findings of the Disability Claims
Manager (DCM)--``SSA's evaluation of the DCM test concluded that it
substantially reduced processing time, increased claimant satisfaction,
and improved employee satisfaction, but at a somewhat greater cost than
the current process. My interpretation of the evidence from that
evaluation is more positive than SSA's; it appears to me that the DCM
is cost neutral, and that it reduced processing time by more than the
report indicates.'' Please provide your comments relative to Dr.
Stapleton's conclusions.

Answer:

As Dr. Stapleton testified, SSA contracted the company he worked
for (The Lewin Group) as consultants for the DCM evaluation. Based on
the Lewin Group's recommendation, median processing-time was used as
the assessment tool for the final report. The report recognized that
the DCM cases had significantly faster median processing times for both
Title II and Title XVI claims than the control group (on average 10
days faster for Title II and 6 days faster for Title XVI).
The DCM cost assessment considered the volume of cases processed,
staff salaries including support staff and supervisors, medical
development/evidence costs and overhead. This analysis indicated that
the DCM model cost at least 7% more to process an initial claim than
the current process. The assessment did not factor in costs associated
with creating an infrastructure to support the DCM process, extensive
training and mentoring or productivity losses over the long learning
curve.
Although there were some positive outcomes in the DCM test, the
agency concluded that there was not a compelling business case for
making resource commitments necessary to implement the process. The
agency issued a decision not to pursue further testing or
implementation of the Disability Claim Manager position, but to
consider the valuable insights and experiences learned from this test
in its longer-term planning efforts.

22. Please summarize the procedures requiring field office and DDS
employees to instruct claimants and/or their representatives about how
the process works and what information they need to provide to
substantiate the claim. What quality review procedures are in place to
ensure these procedures are followed? Do such quality reviews
illustrate that these procedures are being followed?

Answer:

LField Office (FO) Responsibilities
When a disability claim is taken, field offices
explain to claimants and/or their representatives:
That SSA will need to obtain medical evidence to
support the claim;
That timely and accurate identification of medical
sources will assist the DDS in processing the case;
That SSA will pay for the medical evidence of record;
That the claimant will need to fully cooperate if a
special examination is necessary;
The estimated time it takes to get a determination;
Available work incentive provisions;
Available Vocational Rehabilitation Services; and
Mandatory continuing disability review requirements.

Claimants are given the booklet ``Disability Benefits''. This
booklet provides information on the definition of disability, how to
apply for benefits and the role of the DDS. This pamphlet is available
online at http://mwww.ba.ssa.gov/pubs/10029.html
Field office cases are reviewed for accuracy after they are worked.
This is done by a quality review component located in the Regional
Offices. Feedback is provided to the field offices on all cases found
to be inaccurate, and these cases are sent back to the claims
representative for correction.
Teleservice Center (TSC) Responsibilities
When a claimant calls one of our teleservice centers (TSCs) via our
800 number about applying for disability benefits, the TSC interviewer
screens the caller for self-help and, if screened in, sends the caller
a Disability Report form (SSA-3368-BK) and advises the caller that the:

FO interviewer will provide any needed assistance to
finish completing the form at the time of the interview, and
Claimant should return the form along with any
medical evidence (including prescription information) already
in his/her possession:

1. Lwhen requested by the FO, or
2. Lin person at the time of the in-office appointment, or
3. Lby mail after the FO telephone interview.

The TSC interviewer also informs the claimant of the location of
the SSA website, which explains each item on the Disability Report
form.
The TSC interviewers receive quality review two ways. Their calls
are monitored by management and/or technical staff onsite. Calls are
also remotely observed by a quality component in the Office of Quality
Assessment (OQA). Both service observation reviews look at the quality
of service provided by the interviewer as well as the interviewer's
accuracy of information provided to the caller. When needed, feedback
is provided to the interviewer from their supervisors and/or
technicians to ensure that correct information is given to the callers.
The OQA provides feedback of their evaluations on a monthly and
quarterly basis.
Disability Determination Services (DDS)
Many DDSs, as part of their initial development of every new claim,
also mail the claimant an explanation of the disability process. This
is in addition to the information provided by the FO and TSC. In
addition, letters sent to the claimant by the DDS for additional
information, such as work history, consultative examinations, and
activities of daily living, contain general information about why the
DDS needs this information and how it relates to the disability
process.
DDS Quality Specialists and frontline supervisors on an ongoing
basis conduct quality reviews. Cases are reviewed at various stages of
development to ensure that appropriate developmental practices and
procedures are abided by. Worksheets are maintained on each case to
verify that correct actions are being taken in a timely fashion.
Recommendations are made to Disability Examiners if the reviewer feels
that a more appropriate course of development should be pursued. A
record is maintained of all case reviews for training purposes.
All quality review information for the FO/DDS/TSC is evaluated and,
if it illustrates that procedures are not being followed, the necessary
training is provided. All components provide ongoing training of new
ad/or problematic procedures to insure that a high level of quality is
maintained.

23. Judge Bernoski testified on June 20 that improving the quality
of disability determination services (DDS) decisionmaking would improve
the overall determination process. He stated (page 4 of his testimony),
``rather than carefully develop and examine the claimants' case once,
DDS often is making its initial determinations based on incomplete
records and, upon reconsideration, rarely obtains significant
additional medical evidence or changes the outcome of the case.'' What
are your comments on this statement? [What] are the procedures for
developing a case? Would you explain the process for reviewing a case
for reconsideration, including under what circumstances a disability
examiner obtains additional information? Are such processes checked and
documented via DDS or Federal quality review?

Answer:

We believe that DDSs do carefully develop and examine cases.
A DDS is required by regulations to make every reasonable effort to
develop an individual's complete medical history for the 12-month
period preceding the month of filing before making any adverse
determination (20 CFR 404.1512(d) and 416.912(d)). ``Every reasonable
effort,'' means an initial request for the evidence and, if not
received one follow-up. (20 CFR 404.1512(d)(1) and 416.912(d)(1)). As
part of the initial development of every new case, the DDS routinely
requests evidence from medical sources identified by the applicant or
discovered during development. The DDS may also develop medical
evidence outside of the required 12-month period, if necessary.
If the DDS knows from past experience that a particular source
either cannot or will not provide the necessary evidence, they will not
request evidence from that source but will instead note this on the
case development worksheet, which is part of the case file. Otherwise,
the DDS develops evidence from all known sources.
However, that does not mean that the DDS receives responses from
every source. It is common for some medical sources not to respond to
the DDS's requests and follow-ups. Consequently, a case file can appear
to be incomplete because of ``missing'' evidence, even though the DDS
carefully developed the case by making every reasonable effort to
obtain available evidence.
If a DDS is not successful in obtaining needed evidence from the
individual's medical sources, then the DDS will ask the individual to
go to one or more special examinations, called consultative
examinations.
During the reconsideration process, the claimant has the
opportunity to present additional evidence. The DDS makes a new
determination considering all available evidence, including evidence
considered at the initial determination and any new evidence. An
adjudicator other than the one who made the initial determination makes
this new determination.
Development and documentation requirements for reconsiderations are
the same as for initial cases. At reconsideration, the DDS will request
any new evidence since the initial determination, as well as any
earlier evidence that is necessary.
Because reconsideration determinations are generally made soon
after the initial determination, there is often no significant
additional evidence available, and no reason to develop additional new
evidence. This can contribute to a misperception that the DDS is not
undertaking needed development at reconsideration. It also contributes
to the comparatively low (but still significant) allowance rates at
reconsideration of about 15%.
We continue to monitor DDS adherence to our development policies at
both the initial and reconsideration steps through our quality
assurance process.

24. Kathleen McGraw, the Chair of the Social Security section of
the Federal Bar Association, testified on June 20 that State Disability
Examiners do not assess claimants' subjective complaints. She stated
(page 2 of her testimony), ``They were confounded by the task of
assessing a claimant's credibility and subjective allegations and
articulating a reasoned basis for their conclusion. Notwithstanding the
clear message from the Process Unification Training that State Agency
Examiners were expected to perform individualized assessments and
rationalize their determinations, they have failed to do so. State
agencies have balked at this requirement, and examiners' determinations
continue to be devoid of rationale and are driven almost exclusively by
objective medical findings.'' What are your comments on these
statements? Would you explain what factors and criteria State
disability examiner use to assess an individual's claim? Are such
processes checked and documented via DDS or Federal quality review?

Answer:

Assessing subjective allegations and credibility is one of the most
complicated and difficult parts of disability claims adjudication. This
is true at all levels of adjudication--not just at the State agency
(i.e., DDS) level. And dealing with these complex issues can confound
not only DDS disability examiners, but also medical consultants,
administrative law judges, and others involved in disability claim
evaluation.
These issues present several particular difficulties for DDSs, even
though DDSs consider the same factors and criteria as administrative
law judges and other adjudicators. First, the volume of cases DDSs must
deal with makes individualized assessment a significant challenge.
However, our experience shows that the DDSs universally strive for, and
for the most part, achieve, a very respectable level of performance.
They provide individualized assessments and correctly apply our rules
for evaluating subjective complaints and credibility, as shown in our
quality review findings. However, their workloads make it increasingly
difficult for them to document, through comprehensive and detailed
rationales, how they have done so.
Despite these demands, however, we do not believe that DDSs have
``balked'' at the requirement to make proper assessments of disability
claims. Indeed, DDSs have done the best job we could expect of them,
while balancing enormous workloads with the need for comprehensive
documentation.
We have been testing a different process in ten States, which
includes the elimination of the reconsideration step from the appeals
process, and DDS examiners making some disability determinations
independent of medical and psychological consultants. Also included in
this process is an enhanced rationale process that requires clear
documentation of development actions as well as a clear explanation of
the examiner's thought processes. Without the savings from the
elimination of the reconsideration, however, the remaining States do
not have the necessary resources to provide these more detailed
explanations. This different approach among the States will be
addressed as we consider longer term, broader changes to the claims
process.
This new process was intended, in part, to help DDSs better meet
workload demands, while providing the comprehensive decision rationales
that we would prefer. Consequently, the rationales we have seen in
these States are more extensive than those in other States in which the
process was not tested. But, the same workload pressures exist in every
State across the country.
Although DDS rationales are often less detailed than what we would
like, it doesn't mean that DDSs aren't correctly applying our policies,
including those we refer to as ``Process Unification,'' such as
policies related to medical source opinions, symptoms and credibility,
and residual functional capacity. We believe that DDSs are doing so
within the constraints imposed by budgets and workloads. Because their
decisions are not always rationalized to the same extent as an
administrative law judge's decision, it is a common misconception that
that they consider only the ``objective'' medical evidence. That is
because the evaluation forms and medical consultant analyses tend to
reference readily available clinical information, and to give less
emphasis to any complex discussion of the individual's complaints and
credibility. But that doesn't mean the adjudicator did not consider
those factors. It only means he or she didn't spend a great deal of
time explaining them.
We continue to monitor and document DDS adherence to our disability
adjudication policies through our quality assurance process. All DDSs
are held to the same, strict quality standards, regardless of the level
of explanation provided in their determinations.

25. James Hill made the following recommendations in his testimony.
``1. All qualified OHA Attorney Advisers should be converted to Senior
Attorney decisionmakers and given the authority to issue fully
favorable on-the-record decisions. These Senior Attorney decisionmakers
would review all cases coming into the hearing office. 2. SSA should
establish a workgroup to examine the implementation of additional
attorney decisionmakers, such as Hearing Officers, in the OHA hearing
offices to work in conjunction with the ALJs in processing the ever-
growing workload that faces SSA. 3. SSA should establish a workgroup to
examine the issue of introducing an Agency representative into the
adjudication process.'' Please provide your comments as to these
recommendations.

Answer:

See the response to question 5. Additionally, there is a proposal
under development to establish an attorney decisionmaker position in
OHA to help address the growing backlog of cases.

26. The Commissioner has stated she will implement reforms to the
disability process this fall. Judge Bernoski indicated that SSA has not
asked either he or his association, the Association of administrative
law judges, to participate in identifying solutions to the problems
associated with the disability determination process. Is this true? If
so, why?

Answer:

Commissioner Barnhart has asked Martin H. Gerry, Deputy
Commissioner, Office of Disability and Income Security Programs, to
present suggestions for improvements in the disability process to her
this fall. As Deputy Commissioner Gerry stated in his August 1, 2002
message to all hearing office employees, he plans to meet with Judge
Bernoski as well as with representatives of OHA's other unions to
solicit ideas for improvement. Deputy Commissioner Gerry is also
looking into the possibility of obtaining input and feedback from other
interested parties such as the Hearing Office Chief administrative law
judge (HOCALJ) Association and the Federal Managers Association, and
outside organizations such as NADE, NOSSCR, NCDDD and NCSSMA.

27. Judge McGraw believes a major failing of HPI was the promotion
of clerical employees to the ranks of paralegals, who she states were
promoted without having any legal training or demonstrating ability to
write and communicate effectively. Their promotion reduced the number
of employees trained in ``pulling cases'' in preparation for
adjudication by ALJs, thus creating fewer cases ready for judges to
hear. Compounding the problem is that the promoted employees are paid
at the same grade and pay level as attorneys. Will you please comment
as to Judge McGraw's concerns?

Answer:

The Memorandum of Understanding signed by management and AFGE on
the implementation of HPI required the Agency to fill a large number of
paralegal analyst positions, primarily through internal promotion of
current OHA employees. The AFGE Partnership Agreement for HPI Phases II
and III specified 350 paralegal analyst positions would be announced in
July 2000 and filled before November 20, 2000. No one in a clerical
position was promoted to the paralegal analyst position; however, the
majority of the promotions were from the ranks of our technical
positions, in particular the Senior Case Technician position.
All of the employees who were promoted met the basic qualifications
of the position. However, as a result of the requirement to promote
such a large number of employees in a relatively short time, there was
a higher than usual incidence of employees requiring new skills
training. Moreover, this occurred during a period when many of the
employees supervising the new paralegal analysts were, themselves, also
new to their positions, and all office staff was learning a new
process.
Sincerely,
Martin H. Gerry
Deputy Commissioner for
Disability and Income Security Programs

Attachment:
______

ORES Working Paper Series
Number 98
Social Security Disability Programs:
Assessing the Variation in Allowance Rates

Alexander Strand *
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* Social Security Administration, Office of Policy
---------------------------------------------------------------------------

Division of Policy Evaluation

August 2002

Social Security Administration

Office of Policy

Office of Research, Evaluation, and Statistics

8th Floor, ITC Building, 500 E Street SW, Washington, DC 20254-0001

Working Papers in this series are preliminary materials circulated
for review and comment. The views expressed are the author's and do not
necessarily represent the position of the Social Security
Administration.
Summary
The Social Security Administration (SSA) operates two programs that
provide disability benefits: Social Security Disability Insurance (DI)
and Supplemental Security Income (SSI). The Social Security Act and the
regulations that implement it establish uniform national criteria for
determining whether someone who applies for disability benefits under
either of these programs is disabled. However, an agency of the state
in which the claimant lives makes the initial determination under
contract to SSA and using SSA guidelines.
Historically, states have allowed initial disability claims at
rates that vary from one state to another, in some cases widely. On the
surface, this variation seems to indicate that states apply the
national disability criteria differently from one another. Over the
years, this concern has prompted several congressional hearings and
numerous analyses and reports. For example, the Senate Finance
Committee report on the Disability amendments 1979 commented: ``The
assumption is that it is easier (or more difficult) to meet the
disability definition depending on where you live'' (Senate Committee
on Finance 1979). Most recently, a report by the Social Security
Advisory Board (2001a and b) showed geographic patterns of variation in
allowance rates and expressed concern about SSA's ability to assess
whether there is inconsistency and unfairness in disability
decisionmaking.
Equity demands that claimants receive the same consideration
regardless of their state of residence, but it does not require that
states have the same or even similar allowance rates. Allowance rates
depend in part on the economic and demographic characteristics of those
who apply, which vary among states. For example, a state with an older
population is likely to have a higher allowance rate because older
claimants are more likely to meet disability criteria, on average.
This study estimates the amount of variation in allowance rates
that is related to certain economic and demographic differences among
states. The major findings include the following:
In 1997-1999, states with the highest and lowest allowance rates
for DI, SSI, and concurrent applicationsdiffered by about 30 percentage
points.

States that have the highest and lowest allowance
rates for DI or SSI tend to retain that status over time,
although some changes in ranking do occur.
States with high filing rates tend to have low
allowance rates, and vice versa.
Adjusting for economic, demographic, and health
factors cuts the variation in allowance rates among states in
half.
The variation in the prevalence of disability
beneficiaries in the population has only a minimal ability to
explain allowance rates.
The allowance rates in most states are relatively
close to the rates predicted by demographic and socioeconomic
factors.
States that deviate from their predicted rates tend
not to do so consistently.

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

Concern about Variation in Allowance Rates

The variation in DI and SSI allowance rates across states has been
substantial and persistent. Recently, the range between the states with
the highest allowance rates and the ones with the lowest was around 30
percentage points.\1\ In addition, the states with the lowest allowance
rates tend to remain in this category in adjacent years. Over longer
periods of time, the ranking of allowance rates remains fairly stable.
For example, Chart 1 plots DI allowance rates that are 8 years apart.
States tend to keep their position relative to the other states, as
shown by the proximity of the data points to the diagonal line.\2\
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\1\ These allowance rates reflect initial decisions only (including
pre-effectuation review) and exclude SSI applicants who are minors. The
states with the five highest and lowest allowance rates for 1997 to
1999 are listed in Appendix A.
\2\ The correlation of the rankings of allowance rates is around
0.7 for both DI and SSI between 1991 and 1999. It is somewhat lower for
concurrent applicants.

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

Even though the differences between allowance rates are large and
persistent, an internal Social Security Administration study (1988)
showed that much of the variation is associated with economic and
demographic differences in state populations. The analysis also
concluded that more variation could have been accounted for had data on
additional factors (such as health) been available. Numerous other
studies have analyzed the relationship between allowance rates and
economic and demographic factors.\3\
---------------------------------------------------------------------------
\3\ For a review of these studies, see Rupp and Stapleton (1995,
1998).
---------------------------------------------------------------------------
This study expands on the 1988 analysis by considering a wider
range of possible explanatory variables. It differs from previous
studies by analyzing 3 years of data and by conducting separate
analyses for the DI and SSI Programs and for concurrent claims under
both programs. It responds to concerns about differing allowance rates
by reexamining the portion that is associated with external factors
and, by extension, the portion that could be attributable to
inconsistency. The analysis addresses the issue of whether a claimant
in one state is less likely to be allowed than a claimant in another
state, all other things being equal. By adjusting the allowance rates
to account for demographic and economic conditions, this analysis moves
toward making at least some important ``other things'' equal.
This study pertains to the average initial allowance rate for each
state across all cases. Therefore, it does not reach any conclusions
about the extent of variation across particular categories of
disability or particular steps in the process. It also does not cover
the important issue of possible inconsistency among decisionmakers
within a state.
Factors Influencing Allowance Rates

This study aims to account for state-to-state differences in
allowance rates using variables that are clearly external to the
administration of the disability program. Variables that measure
aspects of the economy or the population are in this category. An
example is the age of the population; it is logical to expect higher
allowance rates with an older population. The only variable used in the
analysis that could be considered partially internal to the program is
the percentage of applications based on physical (as opposed to mental)
impairments. It is internal in the sense that it refers to a
characteristic of the claimant rather than of the population. Although
this variable is largely independent of the claims process, an element
of subjective judgment exists in the classifying of disability cases.
The analysis nevertheless uses this variable because there is no
corresponding characteristic that can be measured in the state
population.
One of the goals of this analysis is to separate the variation that
can be influenced by administrative factors or policy from that which
is attributable to external differences between states. Through
controlling for the external factors for which data are available, the
analysis can focus on the remaining differences in allowance rates.\4\
---------------------------------------------------------------------------
\4\ It is important to note that while the degree of variation
between states is less than it appears, that finding does not imply
that inconsistency across adjudicators is not a concern. An earlier SSA
study (Gallicchio and Bye 1980) found inconsistency in adjudicating
sample cases.
---------------------------------------------------------------------------
This study uses data for calendar years 1997, 1998, and 1999 to
explain differences in allowance rates. It combines 3 years of data
into a single analysis. In addition to allowing for greater statistical
precision, combining the data permits an examination of whether
anomalies recur in different years. Separate analysis is conducted for
three different groups: DI claims, SSI claims, and concurrent claims
under both programs.\5\ DI and SSI allowance rates can differ greatly
in a particular state. The states with the lowest DI allowance rates do
not necessarily have the lowest SSI allowance rates. Furthermore, DI
and SSI filing rates are correlated with different external variables.
Concurrent applicants represent a unique population with labor force
experience but little financial success. This group has enough work
experience to be insured for DI but has meager enough assets and income
to qualify for SSI. Because of these differences, we separated the
programs for the purpose of this analysis.
---------------------------------------------------------------------------
\5\ Concurrent applications are excluded from the DI and SSI
equations.
---------------------------------------------------------------------------
Candidate Explanatory Variables

This section discusses the variables that were considered for
inclusion in the analysis based on prior expectations about what
variables might be important. Some variables that would be expected to
be important are, nevertheless, not included in the analysis for
reasons discussed below.
Filing Rates. Filing rates are the number of initial applications
expressed as a percentage of the working-age population. Filing rates
are negatively correlated with allowance rates; that is, the states
with higher filing rates tend to have lower allowance rates, although
not in all cases. Charts 2 and 3 plot data points for filing rates and
allowance rates. The lines show the general relationship between the
two.
It is not essential to include filing rates in equations explaining
allowance rates because filing rates themselves are heavily influenced
by economic and demographic factors. The influences on filing rates are
shown by regression equations in Appendix B. Although these equations
employ additional variables, they also use the same or similar economic
and demographic variables as are used to predict allowance rates. Thus,
the influence of filing rates on allowance rates is also captured by
these other variables. Consequently, when predicting allowance rates,
filing rates have only a marginal effect. Filing rates are rates on
allowance rates is also captured by these other variables.
Consequently, when predicting allowance rates, filing rates have only a
marginal effect. Filing rates are, nevertheless, included in the
equations explaining allowance rates because readers may be curious
about their impact.

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

Economic Indicators. Although filing rates are influenced by
economic factors, the economic indicators have an independent effect on
allowance rates even when controlling for filing rates. According to
economic theory, deteriorating economic conditions influence some
people to switch from the labor market to disability insurance for
their primary means of support as their probability of success in the
labor market declines. Thus, poorer economic conditions are associated
both with higher filing rates on an aggregate level and with an
applicant pool containing people with less severe impairments. If the
medical judgments are consistent, one would expect that more people in
this group would be denied benefits, resulting in lower allowance
rates. Thus, economic conditions affect both allowance rates and filing
rates.
Different aspects of economic conditions can be captured by
different variables. The available candidate variables are the
unemployment rate, the labor force participation rate, the poverty
rate, per capita income, and the proportion employed in retail or
wholesale trade.\6\
---------------------------------------------------------------------------
\6\ Retail or wholesale trade is used as a cyclical indicator by
Stapleton and others (1999).
---------------------------------------------------------------------------
Prevalence Rates. The proportions of DI and SSI beneficiaries in
the population, known as prevalence rates, are related to the allowance
rates for DI and SSI, as shown in Charts 4 and 5.

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

Despite the apparent relationship, prevalence rates are not good
explanatory variables for allowance rates when the other economic and
demographic variables have been included. This is because both
prevalence rates and allowance rates are influenced by economic and
demographic factors. Also, the prevalence rate and the allowance rate
are conceptually related measures. In an accounting sense, a prevalence
rate is the sum of many years' allowances and rates of leaving the
programs.
Demographic Indicators. Different demographic groups have different
risks of disability. Demographic indicators include the median age, the
proportion of the work force in ages most vulnerable to disability, the
percentage of the work force that is male, and the percentage of the
work force that has a high school education.
Health Indicators. Previous reports, including one by the Social
Security Administration (1988), referred to average health status by
state as a crucial but, at the time, unavailable piece of data. Such
data are now available through surveys measuring self-reported health
and disability levels. Indeed, these indicators are important variables
in predicting filing rates but are not essential for predicting
allowance rates. Other health-related variables that are useful for
explaining allowance rates include the proportion of workers with
health insurance and the rate of nonfatal work-related injuries and
illness.
Predictive Equations. The sets of variables described above are
used in a regression analysis to examine the variation in allowance
rates. Regression analysis is a statistical tool that divides the
variation in a variable into explained and unexplained portions based
on a set of predictor variables. A subset of the candidate variables
described above was used in each equation. A combination of variables
was selected based on the proportion of variation that was explained
and the relevance of the variables to economic theory. The equations
that were selected are not uniquely superior by any one criterion but
are among a number of equations showing similar results. More
information about the equations is given in Appendix B and Table B-3.
The equation for allowance rates among DI applicants contains the
following variables:

the filing rate,
the percentage of applicants claiming physical
disabilities,
the percentage of the work force with a high school
education,
the percentage of the work force that is male,
the occupational illness and injury rate,
the median age of the population,
per capita disposable income,
the poverty rate,
variables capturing the percentage of employment in
industries with high injury and illness rates, and
a variable capturing differences between years in the
data.

The equation for allowance rates among SSI applicants contains the
following variables:

the filing rate,
the percentage of applicants claiming physical
disabilities,
the percentage of the work force with a high school
education,
the percentage of the work force that is male,
the median age of the population,
the unemployment rate,
the percentage of employment in retail trade,
per capita disposable income,
the percentage of workers with health insurance,
variables capturing the percentage of employment in
industries with high injury and illness rates, and
two variables capturing differences between years in
the data.

The equations for SSI and DI are similar. Both equations include
the filing rate, the percentage of applicants claiming physical
disabilities, the demographic variables, and the variables representing
the composition of employment by industry. The equation for concurrent
applicants is similar to the ones for DI and SSI and resembles a
combination of the two. It contains the following variables:

the filing rate,
the percentage of applicants claiming physical
disabilities,
the percentage of the work force with a high school
education,
the percentage of the work force that is male,
the median age of the population,
the percentage of workers with health insurance,
the unemployment rate,
the poverty rate,
the percentage of employment in retail trade,
variables capturing the percentage of employment in
industries with high injury and illness rates, and
a variable capturing differences between years in the
data.

In assessing studies such as this one, there is frequently concern
that some of the explanatory variables are internal to the claims
evaluation process. For example, although filing rates may be expected
to influence allowance rates, the inverse may also be true. Allowance
rates may influence filing rates if the population in particularly
lenient or stringent states changes their filing behavior. Thus, it is
uncertain whether a variable measuring the filing rate captures
differences in a state's population or differences in the application
of the disability standards. Appendix B illustrates the impact of the
variables to which this critique would most apply, presenting empirical
analysis both including and excluding these variables. The primary
result is that including variables such as the filing rate makes little
difference in the explanatory power of the model equations and the
overall conclusions of the report. However, the results for an
individual state and the identification of an individual state as a
statistical outlier are affected by changing the variables of analysis.
The argument that certain variables measuring an aspect of the
population may also capture variation in the claims evaluation process
can potentially be extended to any of the explanatory variables. It is
sometimes argued, for example, that adjudicators are more lenient
during recessions. Following this logic, such variables as the
unemployment rate or the poverty rate may capture an element of
adjudicator judgment and may thus be internal to the claims evaluation
process.\7\ It is beyond the scope of this paper to address the issue
of whether adjudicators are more lenient during recessions. Variables
such as the unemployment rate and the poverty rate remain in the
analysis. Retaining these variables would create a problem in the
analysis only if adjudicator leniency varies with economic conditions
in a way that creates differences across states. There is no problem if
leniency varies only with national economic trends rather than with
state-level economic conditions.
---------------------------------------------------------------------------
\7\ Some studies have tried to quantify the feedback of disability
policy on some economic measures. For an example of how disability
policy can influence the unemployment rate, see Autor and Duggan
(2001).
---------------------------------------------------------------------------
In summary, regression equations are used to divide the variation
in allowance rates into the portion associated with external variables
and a remaining portion. This remaining portion is the difference
between the predicted allowance rates calculated from the equations and
actual allowance rates. The remaining portion is examined in the next
section. This remaining portion is of particular interest, since it
represents the portion of variation that could contain the effects of
inconsistency in evaluating claims.
Actual and Predicted Allowance Rates

A predicted allowance rate was calculated for each year of analysis
for SSI, DI, and concurrent applicants and is presented in Appendix C.
This allowance rate reflects the rate that is expected given the
demographic characteristics, economic indicators, and other variables
used in each equation. The difference between the predicted allowance
rate and the actual allowance rate represents the unexplained portion
of the variation in allowance rates.
States with the highest DI allowance rates in 1998 and their
deviations are shown in the following tabulation:

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

Although these states all have high actual allowance rates, only
some of them differ substantially from the predicted rate. These
differences from predicted allowance rates were examined from the
perspective of their likely occurrence due solely to random variability
and analyzed in terms of the standard deviation of the predictive
model.\8\ In Nevada, for example, there is a difference of 9.8
percentage points between the actual and predicted allowance rates for
1998. This difference exceeds two standard deviations (8.26 percentage
points), so the Nevada allowance rate can be considered an outlier in
1998. The allowance rate for Iowa is also an outlier in 1998 whereas
the other states listed here are not.\9\
---------------------------------------------------------------------------
\8\ The standard deviation is a measure of random variability of
actual observations from the value predicted by the regression model.
In general, due solely to random variability, an actual observation
will be 1.96 standard deviations from the predicted value 5 percent of
the time and will be one standard deviation away about 32 percent of
the time. Actual observations that are far from the predicted value
have a low probability of occurrence due solely to random variability.
Observations that are more than 1.96 (roughly two) standard deviations
away from the predicted value are considered to be outliers at the 5
percent level of statistical significance.
For the predictive allowance rate models for SSI, DI, and
concurrent applicants, the standard deviations are respectively 3.90,
4.13, and 3.40 percentage points. Thus, for the SSI model, a state
allowance rate that was more than 7.6 percentage points different from
the predicted value would occur only about 5 percent of the time, due
to random variability.
\9\ These outliers are specific to a particular set of regression
equations. Another set is shown in Appendix B, which produces a
somewhat different set of outliers. Other variables that are not used
here could explain a portion of the remaining variation.

---------------------------------------------------------------------------
Outlier Patterns

Three equations with 3 years of data for 50 states plus the
District of Columbia provide 459 comparisons of actual and predicted
allowance rates. Of these, 20 have differences from the predicted value
in excess of two standard deviations, which is about 4.4 percent of
observations; that is to be expected and is no cause for concern, in
itself.
We now look for patterns of outliers in individual states. About
half the outliers are a single occurrence for that state. In other
words, the state is an outlier in 1 year of analysis but not in the
other 2. A few states have more than one outlier. Out of a possible
total of nine (three equations times 3 years), no state has more than
four. The following tabulation shows states with more than one outlier:

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

Other Patterns of Differences

No individual state is an outlier for all 3 years of analysis for
any one set of applicants (SSI, DI, or concurrent applicants). In some
states, however, there appears to be a pattern in the differences
between actual and predicted allowance rates, even though the
differences are less than two standard deviations. These patterns
emerge when examining states that differ from their predicted value by
at least one standard deviation.
The states that have differences that are greater than one standard
deviation in all 3 years of analysis for one or more sets of applicants
are listed in the tabulation below. A positive sign means the actual
rate is higher than the predicted rate and vice versa. For example, the
actual SSI allowance rate for Colorado is consistently lower than the
predicted rate. The difference is 5.5, 6.5, and 11.0 percentage points
for 1997, 1998, and 1999, respectively. Only the last figure is greater
than two standard deviations, yet the available data consistently
overpredict the SSI allowance rate for Colorado. States that differ
from the predicted value by more than one standard deviation for one
set of applicants for all 3 years of analysis are as follows:

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

Discussion

If all states were the same in terms of their population and
economy, it might be appropriate to expect them to have allowance rates
near the national allowance rate. In that case, a measure of the extent
of inconsistency in the application of the national disability criteria
would be the difference between state allowance rates and the national
mean.
Given economic and demographic differences among states, however,
it is not appropriate to expect allowance rates to be the same. The
difference between a state's actual and predicted allowance rates is a
more appropriate measure of the extent to which the state might be
applying national disability criteria differently than other states. Of
course, this measure is dependent upon the quality of the available
data as well as the choices made when constructing the regression
equations. The measures are likely to capture the maximum difference
that could be attributable to inconsistency since there are other
aspects of the differences in caseloads that are not captured by the
variables that were used.
Comparisons between actual and predicted allowance rates are given
for each state and year in Appendix C. The differences are presented
visually in Charts 6, 7, 8, and 9. The states are divided into
categories, with darker shades representing categories with greater
differences. Chart 6 shows the differences between allowance rates and
the mean for DI. It shows a concentration of large differences in the
South. By contrast, Chart 7 shows the differences between allowance
rates and predicted allowance rates. When accounting for economic and
demographic differences by using predicted allowance rates, the South
no longer exhibits a concentration of large differences. Similarly,
Charts 8 and 9 show the same information for SSI. For both SSI and DI,
there are fewer states with the darkest shade representing differences
greater than 10 percentage points when comparing allowance rates with
predicted allowance rates. For example, 15 states fall into this
category in Chart 6, while only 2 remain in Chart 7. The remaining
states correspond in large part to the states that were described as
statistical outliers in the previous section. Nevada, Wyoming, and
Hawaii also appear in the category representing the largest differences
for either DI or SSI.

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

Because only a few states have large differences, a more
representative picture of the magnitude of state variation emerges by
examining differences for a typical state. The best way to show such
differences is with the mean of the absolute differences. A typical
state's DI allowance rate differs from the mean in either direction by
6.7 percentage points on average. It differs from the predicted rate by
less than half that amount, however, only 3.1 percentage points. The
reductions in allowance rate differences are not as notable for SSI or
for concurrent applicants. These differences, in percentage points, are
shown in the tabulation below, and more information is given in
Appendix B.

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

Conclusion

A major concern regarding the quality of disability adjudication
has been the consistency of decisions. While no two cases are
identical, SSA seeks to ensure that criteria are applied consistently
and that like cases will have the same outcome. This study has focused
on a subset of that issue--the variation in allowance rates across
states. The difference between a typical state's allowance rate and its
predicted allowance rate (for example, adjusted for economic,
demographic, and health factors) is estimated to be about half the
difference between a typical state's allowance rate and the national
mean. Nonetheless, differences still exist, and a few states have DI or
SSI allowance rates that are consistently above or below their
predicted rates. By focusing on areas of real rather than apparent
inconsistency, SSA can more effectively focus future examination of the
issue of inconsistency.

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

Appendix B: Technical Notes

This appendix presents the results of the regression analysis and
discusses topics relevant to their interpretation. Interpretation of
the influences on allowance rates is aided by discussion of the
influences on filing rates; thus a discussion of filing behavior and an
empirical analysis of filing rates is presented first. The analysis of
allowance rates follows.

Filing Rates

Interpretation of the equations in this paper is aided by two
assumptions about individual choice and the nature of disability.
First, according to standard economic theory, people choose rationally
between alternatives. In this case, the relevant alternatives are
seeking work and filing for disability. It follows that the decision of
those at the margin is affected by the return to each choice, in this
case the size of the disability payment and the attainable wage from
employment. Economic indicators serve as a proxy for the attainable
wage, in aggregate.\10\ Second, the analysis assumes that disability
status itself is not affected by economic conditions, at least in the
short run. Poverty and unemployment may affect the onset of disability
through nutrition, safety, and other influences; however, this
presumably happens gradually. Taken together, these two points portray
filing behavior as more responsive to economic conditions and
disability itself as less responsive. Therefore, when analyzing
allowance rates, the effect of changing economic conditions is largely
through changes in filing behavior and, it follows, in the composition
of the applicant pool. The composition of the applicant pool is
hypothesized to be one of the determining factors for aggregate
allowance rates.
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\10\ Muller (1982) asserts that there is no additional relationship
between aggregate economic indicators and individual outcomes beyond
the incentives and constraints faced by the individual. The analysis
uses economic indicators not to capture such an additional relationship
but rather to proxy the composite of individual incentives in state-
level equations.
---------------------------------------------------------------------------
It follows that the interpretation of allowance rates rests in part
on the interpretation of filing behavior. There is substantial
empirical evidence that filing behavior changes in response to changing
conditions. Leonard (1986) reviews the studies that examine whether
changes in the DI benefit amounts affect the tendency to work. The
consensus is that they do, although the magnitudes of the estimated
effects vary widely. Conversely, various chapters in Rupp and Stapleton
(1998) review and contribute to the literature on whether changes in
the reward to work affect filing behavior. Again, the results point to
substantial effects.
The results of this paper agree with most previous studies. Table
B-1 shows some simple evidence about the influences on filing rates.
The regressions describe filing rates for DI and SSI and include
concurrent applicants. All the independent variables described in the
text were made available for these regressions. Around 80 percent of
the variation can be described with just a few variables, although
different variables appear in the DI and SSI equations. Not
surprisingly, the poverty rate appears only in the SSI equation since
only that program has a means test. The DI equation uses the labor
force participation rate. The negative sign is consistent with a
discouraged worker effect; as labor force participation declines, DI
filings increase. Demographic variables that capture some behavioral
differences across age and educational attainment categories are also
used, as are the self-reported health and disability averages from the
Current Population Survey. Self-reported disability is strongly
correlated with filing for DI. The industry variables that are included
are also intended to measure an aspect of health. They capture the
percentage of employment in various industries that have relatively
high occupational injury and illness rates.

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

Allowance Rates

Given these effects on filing rates, the pool of DI and SSI
applicants changes with the economy and with demographic and health
trends. The regression coefficients in the allowance rate equations are
interpreted in this light. A procyclical economic indicator, for
example, would be expected to have a positive sign. If per capita
income falls during a recession, one would expect more marginal
applicants to file for benefits. With the applicant pool diluted by
these marginal filers, one would expect the allowance rate to be lower.
Similarly, employment in retail trade is sometimes a good procyclical
indicator of the low-wage labor market, but that is not borne out in
these data. Countercyclical indicators such as the unemployment rate
and the poverty rate are expected to have a negative sign.
The demographic variables have more straightforward
interpretations. Disability is more prevalent at older ages and is
associated with low educational achievement. The expected sign is thus
positive for median age and negative for the percentage of the
workforce that has completed high school. By contrast, there are no a
priori expectations for the signs on the coefficients for percentage of
the workforce that is male and percentage of applicants claiming a
physical disability.
The remaining variables are related to health or occupational
illness and injury. In general, one would expect health to be
negatively associated with allowance rates. The variables representing
employment in various industries capture employment in industries with
high risk; agriculture, construction, manufacturing, and transportation
are the one-digit Standard Industrial Classification codes with the
highest rates of occupational illness and injury. These variables and
the rate of occupational illness and injury itself are expected to have
positive signs.
Tables B-2 and B-3 show two sets of regressions for the allowance
rate equations. They differ primarily in terms of conceptual approach.
The preliminary results shown in Table B-2 represent specifications
reflecting a priori ideas about what variables should be included. By
contrast, the final specifications in Table B-3 were chosen because
they are among those that produce a good fit with just a few
explanatory variables, within some limits. The fact that these two
approaches produce quite similar results shows that the distinction
between the two is not a crucial one. The regressions that are
compatible with a priori ideas are close to the ones with a near-
optimal fit. Similarly, the regressions with a near-optimal fit do not
conflict with the a priori ideas. The results of the equations in Table
B-3 were used for the analysis in the main text.
There were several priori considerations in the variable selection
for Table B-2. Variables were selected corresponding to the nature of
the SSI and DI programs. The poverty rate was employed as a predictor
for the SSI equation corresponding to the SSI means test, whereas the
unemployment rate has a rough relation to the work history requirement
for DI eligibility.
Another consideration for Table B-2 was to exclude variables that
contained possible endogeneity. As demonstrated above, most of the
variation in filing rates corresponds to economic and demographic
differences among states. However, it is possible that filing rates
also respond to state differences in program administration. For
example, states with more allowances could inspire additional people to
file for benefits. It is also possible that some predictor variables
are coincidentally correlated with adjudicative, administrative, or
policy differences. Industry employment indicators, for example, could
capture variations that correspond to such differences.\11\ Because of
this, the filing rate was excluded, and industry variables were
included only in aggregated form in Table B-2.
---------------------------------------------------------------------------
\11\ Variables indicating differences in state SSI supplements also
fall into this category because state supplements are geographically
concentrated.

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

The variables in Table B-3, by contrast, were selected with less
regard for these issues. These equations were selected on the basis
that they explain a large amount of the variation with relatively few
variables. Variables were generally excluded if they did not contribute
to the overall fit. The selection does not represent a complete
disregard for endogeneity issues, however. The variables that are most
likely to be endogenous have been excluded. For example, the average
levels of self-reported health and disability were categorically
excluded from these equations. The evidence indicates that the
remaining variables are primarily exogenous but could be contaminated
by some endogeneity.
The relevance of this issue is limited by the size of the
differences between the two sets of equations. Given that the results
are similar, including a few potentially marginally endogenous
variables cannot undermine the results significantly. The results are
similar in several ways. The signs and magnitudes of the coefficients
that are included in both sets of equations are similar, with only one
exception for both the sign (percentage completing high school) and the
magnitude (percentage of employment in retail trade) in three
equations. Also, the explained portion of the variation is similar, and
the two sets of equations produce similar sets of outliers. The rank
order correlations of the regression residuals are 0.83, 0.91, and 0.94
for DI, SSI, and concurrent applicants, respectively.
The outliers from the regressions in Table B-2 are shown in Charts
11 and 13. (To facilitate comparison, Charts 6 and 8 are repeated here
as Charts 10 and 12.) In some cases, the two sets of equations produce
different outliers. Thus, the results for any one particular state
depend on the choice of specification; however, the overall results are
independent of the choice of specification.

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

The signs in Tables B-2 and B-3 are generally as expected. The
coefficient on the percentage of filings that are physical is negative,
indicating that physical claims have a lower allowance rate than mental
claims. States with more males in the workforce and a higher median age
have higher allowance rates. The coefficients for cyclical and health
indicators have the signs discussed above. The coefficients for filing
rates are negative but generally not statistically significant. It is
not essential to include filing rates in the equation when the economic
and health variables that are highly correlated with filing rates are
included. Filing rates are included in Table B-3 because many readers
may expect to see this effect.
Some other potential weaknesses of these equations should also be
mentioned. The inclusion of filing rates illustrates that
multicollinearity is present in these equations. Multicollinearity is a
general problem not isolated to this variable. All the variables are
related to deprivation of either health or income, and health and
income are also correlated. Thus, the accuracy of the standard errors
and tests of significance is affected. The worst cases of
multicollinearity have been removed. For example, self-reported
disability has a correlation with the DI filing rate of around 0.8 and
is thus excluded from the DI allowance rate equations.
The predictive value of the equations is not affected, however. The
predictions are the product of the data and the regression coefficients
summed for each observation. Table B-4 shows the quantile distributions
of the difference between actual allowance rates and the predictions
(based on Table B-3), as well as the distribution of the differences
from the mean. It shows that the variation in allowance rates by states
is lower when accounting for the variation due to economic and
demographic factors.

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

The figures give a sense of how much lower the variation is than
when using the mean as a basis for comparison. The differences from the
predicted rates have a smaller range and a more compressed
distribution. At any point in the distribution (the 5^th
percentile, for example), the differences between allowance rates and
predicted rates are smaller than the differences between allowance
rates and the mean. This is a measure of the composite predictive power
of the independent variables. Smaller average differences and a smaller
variability of differences result from taking the independent variables
into account. This result is robust with respect to choice of
specification and the potential problems mentioned above.
It is also possible that using aggregate state-level data rather
than individual-level data will introduce a bias in the estimates
presented in this paper (see Robinson 1950 and Heckman 2001).
Individuals within a state make the decision to apply for disability
benefits, and individual adjudicators make a decision to award
disability benefits. There is considerable within-state heterogeneity
in economic and demographic factors. Aggregate-level data ignore this
heterogeneity; thus the estimates presented in this paper may over--or
underestimate the degree to which the variation is attributable to
differences in environmental factors as opposed to the application of
the SSA disability standard. Individual-level data may be examined in
future work on this topic.

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

References

Autor, David H., and Mark G. Dugan. 2001. The Rise in Disability
Recipiency and the Decline in Unemployment. NBER Working Paper No.
8336. Cambridge, Mass.: National Bureau of Economic Research.

Gallicchio, Sal, and Barry Bye. 1980. Consistency of Initial Disability
Decisions Among and Within States. Staff Paper No. 39. U.S. Department
of Health and Human Services, Social Security Administration, Office of
Policy.

Heckman, James J. 2001. ``Micro Data, Heterogeneity, and the Evaluation
of Public Policy: Nobel Lecture.'' Journal of Political Economy 109(4):
673-748.

Leonard, Jonathan. 1986. ``Labor Supply Incentive and Disincentives for
Disabled Persons.'' In Disability and the Labor Market: Economic
Problems, Policies and Programs, edited by Monroe Berkowitz and M. Anne
Hill. Ithaca, N.Y.: ILR Press, Cornell University.

Muller, Scott L. 1982. The Impact of Local Labor Market Characteristics
on the Disability Process. ORS Working Paper No. 27. U.S. Department of
Health and Human Services, Social Security Administration.

Robinson, W.S. 1950. ``Ecological Correlations and the Behavior of
Individuals.'' American Sociological Review 15 (June): 351-357.

Rupp, Kalman, and David Stapleton. 1995. ``Determinants of the Growth
in the Social Security Administration's Disability Programs--An
Overview.'' Social Security Bulletin 58(4): 43-70.

Rupp, Kalman, and David C. Stapleton, eds. 1998. Growth in Disability
Benefits: Explanations and Policy Implications. Kalamazoo, Mich.: W.E.
Upjohn Institute for Employment Research.

Senate Committee on Finance. 1979. Social Security Disability
Amendments of 1979: Report of the Committee on Finance, U.S. Senate, on
H.R. 3236. Report No. 96-408.

Social Security Administration, Chief Financial Office, Office of
Program and Integrity Reviews. 1988. Factors Influencing Disability
Determination Services: Initial Allowance Rates. Washington, D.C.:
Social Security Administration. July.

Social Security Advisory Board. 2001a. Charting the Future of Social
Security's Disability Programs: The Need for Fundamental Change.
Washington, D.C.: Social Security Advisory Board. January.

________________. 2001b. Disability Decision Making: Data and
Materials. Washington, D.C.: Social Security Advisory Board. January.

Stapleton, David C.; Michael E. Fishman; Gina A. Livermore; David
Wittenburg; Adam Tucker; and Scott Scrivner. 1999. Policy Evaluation of
the Overall Effects of Welfare Reform on SSA Programs. Social Security
Administration Task Order No. 0440-98-33244, The Lewin Group, Inc.
Acknowledgments: The author wishes to thank Aditya Bamzai and
Joanna Greenberg for valuable assistance. Steve Fear, Bob Weathers,
Brian Greenberg, Charlie Scott, Susan Grad, Paul Van de Water, Howard
Iams, Kalman Rupp, the staff of the Office of Disability, and the staff
of the Office of Quality Assurance and Performance Assessment provided
helpful comments. Mark Nadel initiated the project and provided
guidance.
[Attachment is being retained in the Committee files.]

[Questions submitted by Mr. Matsui to Mr. Gerry, and his
responses follow:]
Social Security Administration
Baltimore, Maryland 21235
July 24, 2002
The Honorable Robert Matsui
Ranking Member
Subcommittee on Social Security
Committee on Ways and Means
House of Representatives
Washington, D.C. 20515

Dear Mr. Matsui:

This is in response to your letter of June 27, 2002, which
transmitted questions for the record from the June 11, 2002, hearing on
the Social Security Disability Program's Challenges and Opportunities.
Enclosed you will find the answer to your specific questions.
I hope this information is helpful. If I may be of further
assistance, please do not hesitate to contact me.

1. What precisely are the consequences of filing a new application
for benefits rather than appealing a denial--in terms of eligibility
for past due benefits, maintaining insured status for Disability
Insurance Benefits, and avoiding a denial on the second claim as a
result of res judicata?

Answer:

The immediate consequence of filing a new application rather than
appealing an unfavorable decision is the possible loss of past due
benefits. A successful appeal would permit payment of retroactive
benefits up to 12 months from the initial date of filing (starting with
the date all eligibility factors are met). Conversely, a favorable
determination on a subsequent application would have a maximum
retroactivity to 12 months from the date the new claim is filed.
Therefore, filing a new application instead of filing an appeal could
reduce the amount of retroactive benefits payable. It is also possible
for a person's insured status to expire between the retroactive period
for the initial claim and the retroactive period for the new subsequent
claim. Such cases could result in the person's new claim being denied
for lack of insured status, while benefits would be payable upon a
successful appeal of a medical denial.
There is no retroactivity for title XVI claims. Benefits are
limited to the month after the date the claim is filed. A successful
appeal would allow for benefits to be paid beginning the month after
the month in which the initial claim was filed while filing a new
subsequent application would limit benefits to the month after the
month the new claim is filed. Thus, filing a new claim in lieu of
filing an appeal could result in loss of benefits for the period
between the month after the initial claim was filed to the month after
the new subsequent claim was filed.
Administrative res judicata is a rule in civil law and an
administrative policy. It means that SSA will not consider a claim
again if it has already issued a determination based on the same facts,
same issues, same parties, and same adjudicative period. In other words
if a new application is filed with the same issue by the same party and
no new facts or evidence is presented, the application may be denied on
the basis of res judicata. (There are no appeal rights given in a
notice determining res judicata.) However, if anything has changed,
e.g., new evidence is presented, res judicata cannot be applied and a
determination on the merits of the claim is made.
SSA's field office personnel explain the implications of res
judicata to claimants who wish to file a new application rather than
appealing a denied claim. However, if an individual insists on filing a
new application, a new application must be taken. SSA has also revised
its notices to inform claimants that filing a new application is not
the same as requesting an appeal and that it could result in a loss of
benefits.

2. What fraction of DI and SSI claimants have no treating
physician, or no regular medical provider who can provide evidence of
the claimant's impairment on thorough knowledge of the claimant's
medical condition? Please provide separate estimates for DI and SSI
claims.

Answer:

SSA has no records or data available on whether a claimant has a
treating physician or regular medical provider.

3. Is the record ever closed during the agency's adjudicative
process? Can the Federal courts consider new evidence? If so, under
what circumstances?

Answer:

The record is never completely closed during the agency's entire
adjudicative process. Claimants may submit additional evidence
throughout the administrative review process including after the
issuance of a decision by an administrative law judge (ALJ). However,
the Appeals council considers new evidence submitted after the ALJ
decision only if it is material and relates to the period on or before
the date of the ALJ decision.
A district court may at any time order SSA to take or obtain
additional evidence if the claimant shows that there is new and
material evidence and there is good cause for failure to have the
evidence entered into the record during the administrative reviews.

4. Does SSA have standards for the conduct of claimant
representatives? What tools does it have available to sanction
misconduct?

Answer:

SSA has standards for the conduct of claimant representatives that
are published in our regulations at 20 CFR 404.1740. These standards
include that:
The Representatives shall:

Act with reasonable promptness to obtain the
information and evidence that the claimant wants to submit in
support of his or her claim, and forward it to SSA as soon as
practicable;
Assist the claimant in complying, as soon as
practicable, with SSA's requests for information or evidence;
and
Conduct their dealings in a manner that furthers the
efficient, fair and orderly conduct of the administrative
decisionmaking process.

The Representatives shall not:

With intent to defraud, willfully and knowingly
deceive, mislead or threaten any claimant or beneficiary with
respect to his or her rights under the Social Security Act;
Knowingly charge or collect any fee not authorized by
law;
Knowingly make or present any false statement,
representation, or claim about a material fact or law
concerning a matter within SSA's jurisdiction;
Unlawfully disclose any information SSA has furnished
relating to the claim of another person.
Through actions or omissions, unreasonably delay the
processing of a claim.
Attempt to influence the outcome of a decision by
offering a loan, gift, entertainment or anything of value to a
presiding official, SSA employee or witness; or
Engage in actions or behavior prejudicial to the fair
and orderly conduct of the administrative proceedings,
including repeated absences or tardiness; willfully disrupting
or obstructing hearings; and threatening or intimidating
language, gestures or actions directed at a presiding official,
SSA employee or witness.

If SSA finds that a representative has failed to comply with these
standards, SSA may suspend the representative for a period of from one
to 5 years, or disqualify the representative from further practice
before the Agency. SSA will also notify an attorney's State bar
disciplinary authority of any final decision finding that the attorney
has violated SSA's law or regulations. Our rules for making decisions
about violations of these standards are in our regulations at 20 CFR
404.1745-404.1795.
Other sanctions include:

If convicted of actions such as threatening a
claimant or beneficiary with an intent to defraud or knowingly
charging or collecting any fee in excess of the maximum fee
prescribed by the Commissioner, a representative can be
punished by a fine not to exceed $500 or imprisonment not to
exceed 1 year or both.
Civil and monetary penalties can be assessed against
any representative who makes or causes to be made false
statements or representations, or omissions of material fact,
for use in determining the right to or amount of social
security or supplemental security income benefits. The
penalties may not be more than $5000 for each false statement
or representation. The representative could also be subject to
an assessment of not more than twice the amount of benefits or
payments paid as a result of the statement or representation
that was the basis for the penalty.
A person can be excluded from representing claimants
if they have been criminally convicted or determined to be
civilly liable for committing fraud involving an SSA program.
The minimum exclusion is for 5 years if the representative has
no prior convictions, 10 years if the representative has one
prior conviction, or permanently if the representative has two
prior convictions.

The above listed sanctions are not mutually exclusive.
Representatives may be subject to a misdemeanor prosecution, suspension
or disqualification from practice before SSA and a civil monetary
penalty. The components within SSA that have responsibility for each of
the various types of sanctions coordinate their actions to ensure that
all appropriate sanctions are imposed.

5. What fraction of cases are allowed at each level of the
adjudicative process (at each level of agency decisionmaking and in the
Federal court system)? What fraction of denied claimants appeal their
denial at each level of the adjudicative process?

Answer:

The chart below, which is on SSA's website, represents aggregate
data showing the number of claims, per 100, that are allowed at each
step of the adjudicative process through the Appeals Council, and the
number of appeals at each step. Most allowances are made at the initial
level (40 out of 57 that are allowed overall for every 100 cases). Only
about 5 cases out of 100 go beyond the administrative hearings level.
At the Appeals Council level, 1 case in 5 is either allowed or remanded
for further action. Less than 1 per 100 enter Federal court. The
available data on Federal court decisions combines initial claims and
continuing disability reviews, and shows that about 6% of the cases
that reach Federal court are allowed, and 58% are remanded for further
action.

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

6. What is the responsibility of personnel at SSA field offices,
state Disability Determination Services and SSA Offices of Hearings and
Appeals to develop the evidentiary record? What policies does SSA have
in place to assure that each claimant's case if fully developed?

Answer:

Our policy for ensuring that each individual's case is fully
developed is contained in our regulations (20 CFR 404.1512 and
416.912). Before we make a determination that the individual is not
disabled, we are responsible for developing the individual's complete
medical history for at least the 12-month period before the month in
which application is filed, unless there is reason to believe that
development of an earlier period is necessary or unless the individual
says that his or her disability began less than 12 months earlier.
We make every reasonable effort to help the individual get medical
reports from his or her own medical source(s). We request evidence from
this medical source(s) and follow up with the medical source(s) if the
evidence is not received.
When the evidence we receive from the individual's medical
source(s) is inadequate for us to make a determination, we re-contact
the medical source(s) for the evidence. If the information we need is
not readily available, or we are unable to seek clarification from the
medical source, we ask the individual to attend one or more
consultative examinations at our expense (20 CFR 404.1517-404.1519n and
416.917-416.919n).
These policies are reflected in our operating instructions to field
offices, disability determination services (DDSs), and hearings
offices.

FIELD OFFICE (FO)

The FO is responsible for conducting the disability interview and
completing the appropriate disability report forms for adults and
children. The information that is provided by the individual to the FO
during the disability interview is critical to the DDS's medical and
vocational development.
Although the DDS is primarily responsible for developing the
medical evidence, the FO will assist the individual in requesting
medical evidence in special arrangement situations, or when asked to do
so by the DDS or other Social Security Administration component. In
addition, FOs are authorized to request medical evidence from medical
sources in certain Supplemental Security Income cases involving human
immunodeficiency virus infection for which there is a strong likelihood
that the individual will be found disabled. After initiating a request
for medical evidence, the FO sends the file to the DDS. The DDS follows
up on the request if necessary.

DDS

DDS examiners are responsible for making every reasonable effort to
help the individual get medical reports from his or her medical
sources. The examiners develop evidence, including diagnostic tests,
from all sources identified by the individual or discovered during
development who have treated or evaluated the individual for the
alleged or documented impairment(s) during the applicable 12-month
period. Examiners must also determine whether developing medical
evidence outside of the 12-month period is necessary, based on the
facts in each case.
The DDS is also responsible for obtaining additional vocational
evidence not contained in the disability report form when it is
necessary to determine the individual's ability do past relevant work
or other work. The individual is the best source of information about
past work. If this information is not sufficient, however, other
possible sources of vocational information who the DDS may contact
include family members, previous employers, authorized representatives,
or anyone else with knowledge of the individual's work history.

HEARING OFFICE (HO)

The administrative law judge (ALJ) or HO staff under the ALJ's
direction is responsible for reviewing the evidence before the hearing
to determine whether it is sufficient for a full and fair inquiry in to
the matters at issue. Development may be needed to:

obtain additional medical evidence (for example,
current evidence from a treating source);
obtain technical or specialized medical opinion; or
resolve conflicts or differences in the evidence.
If the ALJ or the HO staff decides that additional evidence is
needed, the ALJ or the HO staff will undertake appropriate development
before the hearing and arrange for any necessary witnesses to be
present at the hearing.
If the ALJ obtains evidence after the hearing from a source other
than the individual, the ALJ must provide the individual an opportunity
to examine the evidence before entering it into the record as an
exhibit.

APPEALS COUNCIL

The Appeals Council has responsibility for assessing whether the
ALJ committed an error of law or abused his or her discretion with
respect to the development of evidence or if the ALJ's decision is not
supported by substantial evidence. If the Appeals Council determines
that additional development of evidence is required, it typically
remands the case to the ALJ to obtain the additional evidence.

Chairman SHAW. The next panel is made up of Robert E.
Robertson, who is the Director of Education, Work force, and
Income Security Issues, U.S. General Accounting Office (GAO);
and Mr. Hal Daub, who is the Chairman of the Social Security
Advisory Board (SSAB), a former Member of Congress, and former
Member of this Subcommittee.
Welcome, gentlemen. We have your full testimony, which will
be made a part of the record, and we invite both of you to
proceed as you may see fit.

STATEMENT OF ROBERT E. ROBERTSON, DIRECTOR, EDUCATION,
WORKFORCE, AND INCOME SECURITY ISSUES, U.S. GENERAL ACCOUNTING
OFFICE

Mr. ROBERTSON. Mr. Chairman, Members of the Subcommittee,
thanks for the opportunity to discuss the challenges that the
Social Security Administration faces in improving its
disability claims process. These challenges are among the more
daunting that it faces. Before I go too much further, Mr.
Chairman, I had better, as a concession to age, put on these
glasses or who knows what words may come out of this mouth.
The written statement that I have submitted for the record
basically addresses three areas: one being the results and the
status of the five initiatives included in SSA's most recent
plans to improve the disability process; another being SSA's
current plans for developing an electronic disability system;
and the last being the implications of SSA's past efforts for
future success. What I would like to do this afternoon is
concentrate pretty much on that last area because that gives a
little bit more of a flavor of where do we go from here.
Mr. Chairman, here is the bottom line. In spite of the
significant resources that SSA has dedicated to improving the
disability process, the overall results have been
disappointing. Now, before I go any further, I just want to
emphasize something that I think is extremely important, which
is simply that implementing the types of sweeping changes that
were envisioned with the five initiatives I am going to be
talking about is no easy task. This is because there are a
number of factors that tend to make this very, very difficult,
which include: the complexity of the disability decisionmaking
process, the Agency's fragmented service delivery structure,
and the challenge of overcoming an organization's natural
resistance to change, inertia. However, the situation that led
SSA to attempt these redesign initiatives--increasing
disability workloads in the face of resource constraints--
continue to exist today and will likely worsen as more baby
boomers reach their disability-prone years.
This situation makes SSA's decisions on where to go with
its disability initiatives crucial. In that regard, we agree
with SSA that, because of its high cost and other practical
barriers to implementation, the Agency should not continue to
implement the disability claims manager initiative. If you will
recall, that initiative basically combined the responsibilities
normally divided between SSA's field representatives and the
State DDS disability examiners under a newly created position
of disability claims manager.
We also agree with SSA that the appeals council process
improvement initiative which resulted in modest reductions in
the processing times for certain types of appealed claims
should continue, but with increased commitment to achieving the
initiative's performance goals.
Deciding the future course of action on each of the
remaining three initiatives, however, presents a challenge to
SSA. For example, SSA continues to face decisions on how to
proceed with the prototype initiative, which, as you know,
experimented with significant changes to the initial claim
process at State DDSs. Interim results were mixed, making
decisions on the continuation of the initiative problematic.
The SSA has recently decided to revise some features of the
prototype in the near term and has also been considering some
longer term improvements.
Of all the initiatives, we are most concerned about the
failure of the hearing process improvement initiative to
achieve its goals. Hearing office backlogs are fast approaching
the crisis level of the mid-1990's. We have recommended that
the new Commissioner act quickly to implement short-term
strategies to reduce the backlog and develop a longer term
strategy for a more permanent solution to the problems. The new
Commissioner has agreed with our recommendations and has
announced her decisions on short-term actions. The challenge
remains, however, to identify the longer term strategies to fix
the longer term problems.
Similarly, we are concerned about SSA's lack of progress on
its initiative for revamping its quality assurance system.
Without such a system, it is difficult for SSA to ensure the
integrity of its disability claims process. We are encouraged
to see that the Commissioner has signaled the high priority she
attaches to this effort by appointing a senior manager for
quality who reports directly to her.
I would like to conclude my remarks by noting that, in
addition to the changes that the Agency is currently
considering to improve its claims processing, now may be the
time for the Agency to step back and reassess the nature and
scope of its basic approach. To date, SSA has focused, with
limited success, on changing the steps and procedures of the
process and on adjusting the duties of its decisionmakers. A
new analysis of the fundamental issues impeding progress may
help SSA identify areas for future action. This could include
examining the fragmentation and structural problems associated
with SSA's overall service delivery system.
Mr. Chairman, that concludes my statement, and I will be
happy to answer questions at the appropriate time.
[The prepared statement of Mr. Robertson follows:]
Statement of Robert E. Robertson, Director, Education, Workforce, and
Income Security Issues, U.S. General Accounting Office
Mr. Chairman and Members of the Subcommittee:
Thank you for inviting me here to discuss the challenges the Social
Security Administration (SSA) faces in improving the claims process for
its two disability programs, Disability Insurance (DI) and Supplemental
Security Income (SSI). Managing its disability 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 has
become one of SSA's most pressing management challenges.\1\ In the last
7 years, SSA has spent more than $39 million in efforts to test and
implement 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.\2\ These efforts have
included initiatives to improve the initial claims process as well as
the process for handling appeals of denied claims. In addition, the
agency has spent at least $71 million in an attempt to develop an
automated disability claims process intended to provide support for its
redesign efforts.
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\1\ U.S. General Accounting Office, Social Security Administration:
Agency Must Position Itself Now to Meet Profound Challenges, GAO-02-
289T (Washington, D.C.: May 2, 2002).
\2\ 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.
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Today, I will discuss the results and status of five initiatives
included in SSA's most recent plans to improve the process, SSA's
current plans to develop an electronic disability system, and the
implications of SSA's efforts to date for future success. The
information I am providing is based primarily on recent work we did for
this subcommittee.\3\ (Also see Related GAO Products at the end of this
statement.)
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\3\ U.S. General Accounting Office, Social Security Disability:
Disappointing Results From SSA's Efforts to Improve the Disability
Claims Process Warrant Immediate Attention, GAO-02-322, (Washington,
D.C.: Feb. 27, 2002) and GAO-02-289T.
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In summary, the results to date from SSA's redesign initiatives
have been disappointing. The agency's two tests of initiatives to
improve the initial claims process produced some benefits; however,
both initiatives as tested would have significantly raised costs, and
one would have lengthened the wait for final decisions for many
claimants. As a result, SSA is considering additional changes to one of
these initiatives and has shelved the other. The situation is less
favorable at the appeals level. One initiative to change the process
for handling appealed claims in SSA's hearing offices has resulted in
even slower case processing and larger backlogs of pending claims. A
second initiative has reduced the processing times for a separate group
of appealed claims, though far less than expected. Moreover, a cross-
cutting initiative to update the agency's quality assurance program--a
goal the agency has held since 1994--is still in the planning stage.
Finally, SSA's plans to improve its disability claims process relied in
part upon hoped for technological improvements; however, SSA failed to
design and develop a new computer software application to automate the
disability claims process after a 7-year effort.
On the basis of our recent work, we have recommended that SSA take
immediate steps to reduce the backlog of appealed cases, develop a
long-range strategy for a more permanent solution to the problems at
its hearings offices, and develop an action plan for implementing a
more comprehensive quality assurance program. SSA agreed with our
recommendations and is beginning to make some short-term changes. In
addition, SSA has recently announced plans to accelerate implementation
of needed technological improvements. However, much work remains. The
commissioner faces difficult decisions about long-term strategies for
problems at the hearings offices and in the disability claims process
as a whole. It will be important to both learn from the past and look
to the future.
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.\4\ 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.\5\
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\4\ 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.
\5\ Some DI beneficiaries have incomes low enough to qualify them
for SSI; therefore, they receive benefits from both programs.
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The process to obtain SSA disability benefits is complex and
fragmented; multiple organizations are involved in determining whether
a claimant is eligible for benefits. As shown in figure 1, 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: SSA's Disability Claims Process

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

Source: SSA Documents
Generally, a claimant applies for disability benefits 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. If the claimant meets these
eligibility criteria, the claims representative forwards the claim to
the state disability determination service (DDS).\6\ DDS staff then
obtain and review evidence about the claimant's impairment to determine
whether the claimant is disabled. Once the claimant is notified of the
medical decision, the claim is returned to the field office for payment
processing or file retention. This completes the initial claims
process.
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\6\ DDSs are state agencies that contract with SSA to determine
claimants' medical eligibility for DI and SSI disability benefits.
Although federally funded and guided by SSA in their decision making,
the DDSs hire their own staff and retain a degree of independence in
how they manage their offices and conduct disability determinations.
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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 administrative law judge (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. In fact, the commissioner recently
testified that claimants can wait as long as 1,153 days from initial
claim through a decision from the Appeals Council. Moreover, 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. For example, in fiscal year 2000, about 40
percent of claimants denied at the initial level filed an appeal and
about two-thirds were awarded benefits. This inconsistency calls into
question the fairness, integrity and cost of SSA's disability
decisions. Program rules, such as claimants' ability to submit
additional evidence and to allege new impairments upon appeal, as well
as the worsening of some claimants' conditions over time can explain
only some but not all of the overturned cases. Other overturned cases
may be due to inaccurate decisions by the DDSs or ALJs or to other
unexplained factors.
In response to these problems, SSA first announced an ambitious
plan to redesign the disability claims process in 1994, after a period
of rapid growth in the number of people applying for disability
benefits. This plan represented the agency's first effort to
significantly revise its procedures for deciding disability claims
since the DI program began in the 1950's. 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 agency's initial plan entailed a massive effort to redesign the
way it made disability decisions. SSA had high expectations for its
redesign effort. Among other things, SSA planned to develop a
streamlined decision-making and appeals process, more consistent
guidance and training for decision makers at all levels of the process,
and an improved process for reviewing the quality of eligibility
decisions. In our reviews of SSA's efforts after 2 and 4 years, we
found that the agency had accomplished little.\7\ In some cases, the
plans were too large and too complex to keep on track. In addition, the
results of many of the initiatives that were tested fell far short of
expectations. Moreover, the agency was not able to garner consistent
stakeholder support and cooperation for its proposed changes.
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\7\ U.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); and SSA Disability
Redesign: Actions Needed to Enhance Future Progress, GAO/HEHS-99-25,
(Washington, D.C.: Mar. 12, 1999).
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In 1999, we recommended that SSA focus attention and resources on
those initiatives that offer the greatest potential for achieving the
most critical redesign objectives, such as quality assurance, computer
support systems, and initiatives that improve consistency in decision-
making. In addition, because implementing process changes can be even
more difficult than testing them, we recommended that SSA develop a
comprehensive and meaningful set of performance measures that help the
agency assess and monitor the results of changes in the claims process
on a timely basis. We have also pointed out the need for effective
leadership and sustained management attention to maintain the momentum
needed to effect change in such a large and complex system.
SSA's Recent Redesign Initiatives Have Had Limited Success
SSA's five most recent initiatives were designed to improve claims
processing at all levels of the service delivery system. These redesign
initiatives continue to experience only limited success. A brief
summary of the status, results and problems experienced in implementing
each of the five initiatives follows.

The Disability Claim Manager initiative, which began
in November 1997 and ended in June 2001, 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.\8\ The managers assumed responsibilities normally
divided between SSA's field office claims representatives and
state DDS disability examiners. After an initial training
phase, SSA tested the concept in 36 locations in 15 states from
November 1999 through November 2000. 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
implement the initiative.
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\8\ The Disability Claim Manager initiative excluded claims for SSI
children's benefits.

The Prototype changed the way state DDSs process
initial claims, with the goal of ensuring that legitimate
claims are awarded as early in the process as possible. This
initiative makes 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. It has been operating in 10 states since
October 1999 with mixed results. Interim results show that the
DDSs operating under the Prototype are awarding a higher
percentage of claims at the initial decision level without
compromising accuracy, and that claims are reaching hearing
offices faster because the Prototype eliminates DDS
reconsideration as the first level of appeal. However, interim
results also indicate that more denied claimants would appeal
to administrative law judges (ALJ) at hearings offices, which
would increase both administrative and program costs (benefit
payments) and lengthen the wait for final agency decisions for
many claimants. As a result, SSA decided that the Prototype
would not continue in its current form. In April, the
commissioner announced her ``short-term'' decisions to revise
certain features of the Prototype in order to reduce processing
time while it continues to develop longer-term improvements. It
remains to be seen whether these revisions will retain the
positive results from the Prototype while also controlling
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administrative and program costs.

The Hearings Process Improvement initiative is an
effort to overhaul operations at hearings offices in order to
reduce the time it takes to issue decisions on appealed claims.
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; by reorganizing hearing office staff into
small ``processing groups'' intended to enhance accountability
and control in handling each claim; and by launching automated
functions that would facilitate case monitoring. The initiative
was implemented in phases without a test beginning in January
2000 and has been operating in all 138 hearings offices since
November 2000.
LThe initiative has not achieved its goals. In fact,
decisions on appealed claims are taking longer to make, fewer
decisions are being made, and the backlog of pending claims is
growing and approaching crisis levels. The initiative's failure
can be attributed primarily to SSA's decision to implement
large-scale changes too quickly without resolving known
problems. For example, problems with process delays, poorly
timed and insufficient staff training, and the absence of the
planned automated functions all surfaced during the first phase
of implementation and were not resolved before the last two
phases were implemented. Instead, the pace of implementation
was accelerated when the decision was made to implement the
second and third phases at the same time. Additional factors,
such as a freeze on hiring ALJs and the ALJs' mixed support for
the initiative, may also have contributed to the initiative's
failure to achieve its intended results.
LSSA has recently made some decisions to implement changes
that can be made relatively quickly in order to help reduce
backlogs and to streamline the hearings process, and they are
preparing to negotiate some of these changes with union
officials before they can be implemented. These changes include
creating a law clerk position and allowing ALJs to issue
decisions from the bench immediately after a hearing and
including them in the early screening of cases for on-the-
record decisions. They also include decisions to enhance the
use of technology in the hearings process, as well as other
refinements.

The Appeals Council Process Improvement initiative
combined temporary staff support with permanent case processing
changes in an effort to process cases faster and to reduce the
backlog of pending cases. The initiative was implemented in
fiscal year 2000 with somewhat positive results. The initiative
has slightly reduced both case processing time and the backlog
of pending cases, but the results fall significantly short of
the initiative's goals. The temporary addition of outside staff
to help process cases did not fulfill expectations, and
automation problems and changes in policy which made cases with
certain characteristics more difficult to resolve hindered the
initiative's success. However, SSA officials believe that
recent management actions to resolve these problems should
enhance future progress. Improving or revamping its quality
assurance system has been an agency goal since 1994, yet it has
made very little progress in this area, in part because of
disagreement among stakeholders on how to accomplish this
difficult objective. In March 2001, a contractor issued a
report assessing SSA's existing quality assurance practices and
recommended a significant overhaul to encompass a more
comprehensive view of quality management. We agreed with this
assessment and in our recent report to this subcommittee
recommended that SSA develop an action plan for implementing a
more comprehensive and sophisticated quality assurance
program.\9\ Since then, the commissioner has signaled the high
priority she attaches to this effort by appointing to her staff
a senior manager for quality who reports directly to her. The
senior manager, in place since mid-April, is responsible for
developing a proposal to establish a quality-oriented approach
to all SSA business processes. The manager is currently
assembling a team to carry out this challenging undertaking.
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\9\ GAO-02-322.
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LProblems Implementing Technological Improvements Have Long Undermined
SSA's Redesign Efforts
SSA's slow progress in achieving technological improvements has
contributed, at least in part, to SSA's lack of progress in achieving
results from its redesign initiatives. As originally envisioned, SSA's
plan to redesign its disability determination process was heavily
dependent upon these improvements. The agency spent a number of years
designing and developing a new computer software application to
automate the disability claims process. However, SSA decided to
discontinue the initiative in July 1999, after about 7 years, citing
software performance problems and delays in developing the
software.\10\
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\10\ U.S. General Accounting Office, Social Security
Administration: Update on Year 2000 and Other Key Information
Technology Initiatives, GAO/T-AIMD-99-259, (Washington, D.C.: July 29,
1999).
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In August 2000, SSA issued a new management plan for the
development of the agency's electronic disability system. SSA expects
this effort to move the agency toward a totally paperless disability
claims process. The strategy consists of several key components,
including (1) an electronic claims intake process for the field
offices, (2) enhanced state DDS claims processing systems, and (3)
technology to support the Office of Hearing and Appeals' business
processes. The components are to be linked to one another through the
use of an electronic folder that is being designed to transmit data
from one processing location to another and to serve as a data
repository, storing documents that are keyed in, scanned, or faxed. SSA
began piloting certain components of its electronic disability system
in one state in May 2000 and has expanded this pilot test to one more
state since then. According to agency officials, SSA has taken various
steps to increase the functionality of the system; however, the agency
still has a number of remaining issues to address. For example, SSA's
system must comply with privacy and data protection standards required
under the Health Information Portability and Accountability Act, and
the agency will need to effectively integrate its existing legacy
information systems with new technologies, including interactive Web-
based applications.
SSA is optimistic that it will achieve a paperless disability
claims process. The agency has taken several actions to ensure that its
efforts support the agency's mission. For example, to better ensure
that its business processes drive its information technology strategy,
SSA has transferred management of the electronic disability strategy
from the Office of Systems to the Office of Disability and Income
Security Programs. In addition, SSA hired a contractor to independently
evaluate the electronic disability strategy and recommend options for
ensuring that the effort addresses all of the business and technical
issues required to meet the agency's mission. More recently, the
commissioner announced plans to accelerate implementation of the
electronic folder.
Implications for Future Progress
In spite of the significant resources SSA has dedicated to
improving the disability claims process since 1994, the overall results
have been disappointing. We recognize that implementing sweeping
changes such as those envisioned by these initiatives can be difficult
to accomplish successfully, given the complexity of the decision-making
process, the agency's fragmented service delivery structure, and 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 continues to face crucial decisions on its
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, SSA continues to face decisions on how to proceed with the
Prototype initiative. Although SSA has recently decided to revise some
features of the Prototype in the near term, it also is considering
long-term improvements. As such, SSA continues to face the challenge of
ensuring that the revisions it makes 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. We have
recommended that the new commissioner act quickly to implement short-
term strategies to reduce the backlog and develop a long-term strategy
for a more permanent solution to the backlog and efficiency problems at
the Office of Hearings and Appeals. The new commissioner responded by
announcing her decisions on short-term actions intended to reduce the
backlogs, and the agency is preparing to negotiate with union officials
on some of these planned changes. It is too early to tell if these
decisions will have their intended effect, and the challenge to
identify and implement a long-term strategy for a more permanent
solution remains. It is especially crucial that the Office of Hearings
and Appeals make significant headway in reducing its backlog quickly,
as it faces in the next several months a potentially significant
increase in Medicare appeals due to recent legislative changes in that
program.
In addition to the changes the agency is currently considering, it
may be time for the agency to step back and reassess the nature and
scope of its basic approach. SSA has focused significant energy and
resources over the past 7 years on changing the steps and procedures of
the process and adjusting the duties of its decision makers, yet this
approach has not been effective to date. A new analysis of the
fundamental issues impeding progress may help SSA identify areas for
future action. Experts, such as members of the Social Security Advisory
Board, have raised concerns about certain systemic problems that can
undermine the overall effectiveness of SSA's claims process, which in
turn can also undermine the effectiveness of SSA's redesign
efforts.\11\ The Board found that SSA's fragmented disability
administrative structure, created nearly 50 years ago, is ill-equipped
to handle today's workload. Among other problems, it identified the
lack of clarity in SSA's relationship with the states and an outdated
hearing process fraught with tension and poor communication. As the new
commissioner charts the agency's future course, she may need to
consider measures to address these systemic problems as well.
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\11\ See Social Security Advisory Board, How SSA's Disability
Programs Can Be Improved (Washington, D.C.: SSAB, Aug. 1998); Selected
Aspects of Disability Decision Making (Washington, D.C.: SSAB, Sept.
2001); and Charting the Future of Social Security's Disability
Programs: The Need for Fundamental Change (Washington, D.C.: SSAB, Jan.
2001). 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.
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Regardless of the choices the agency makes about which particular
reform initiatives to pursue, SSA's experience over the past 7 years
offers some important lessons. For example, sustained management
oversight is critical, particularly in such a large agency and with
such a complex process. We have found that perhaps the single most
important element of successful management improvement initiatives is
the demonstrated commitment of top leaders to change. In addition, some
initiatives have not enjoyed stakeholder support or have contributed to
poor morale in certain offices, both of which may undermine the chances
for success. While it is probably not possible for the agency to fully
please all of its stakeholders, it will be important for the agency to
involve stakeholders in planning for change, where appropriate, and to
communicate openly and often the need for change and the rationale for
agency decisions. Moreover, because SSA has experienced problems
implementing its process changes, the agency will need to continue to
closely monitor the results of its decisions and watch for early signs
of problems. An improved quality assurance process and a more
comprehensive set of performance goals and measures can help the agency
monitor its progress and hold different entities accountable for their
part in implementing change and meeting agency goals. Thus, we are
concerned about SSA's lack of progress in revamping its quality
assurance system. Without such as system, it is difficult for SSA to
ensure the integrity of its disability claims process.
Finally, because SSA has had mixed success in implementing
information technology initiatives in the past, it is vital that the
agency look back at its past problems and take the necessary steps to
make sure its electronic disability system provides the needed supports
to the disability claims process. It is imperative that the agency
effectively identify, track, and manage the costs, benefits, schedule,
and risks associated with the system's full development and
implementation. Moreover, SSA must ensure that it has the right mix of
skills and capabilities to support this initiative and that desired end
results are achieved.
Mr. Chairman, this concludes my statement. I would be pleased to
respond to any questions that you or other members of the subcommittee
may have.
Contacts and Acknowledgements
For further information regarding this testimony, please contact
Robert E. Robertson, Director, or Kay E. Brown, Assistant Director,
Education, Workforce, and Income Security at (202) 512-7215. Ellen
Habenicht and Angela Miles made key contributions to this testimony on
the status of the five initiatives, and Valerie Melvin was the key
contributor to the section on information technology.
Related GAO Products
Social Security Administration: Agency Must Position Itself Now to Meet
Profound Challenges. GAO-02-289T. Washington, D.C.: May 2, 2002.

Social Security Disability: Disappointing Results From SSA's Efforts to
Improve the Disability Claims Process Warrant Immediate Attention. GAO-
02-322. Washington, D.C.: February 27, 2002.

Information Technology Management: Social Security Administration
Practices Can Be Improved. GAO-01-961. Washington, D.C.: August 21,
2001.

Social Security Disability: SSA Has Had Mixed Success in Efforts to
Improve Caseload Management. GAO/T-HEHS-00-22. Washington, D.C.:
October 21, 1999.

Social Security Administration: Update on Year 2000 and Other Key
Information Technology Initiatives. GAO/T-AIMD-99-259. Washington,
D.C.: July 29, 1999.

SSA Disability Redesign: Actions Needed to Enhance Future Progress.
GAO/HEHS/99-25. Washington, D.C.: March 12, 1999.

Social Security Disability: SSA Must Hold Itself Accountable for
Continued Improvement in Decision-making. GAO/HEHS-97-102 Washington,
D.C.: August 12, 1997.

SSA Disability Redesign: Focus Needed on Initiatives Most Crucial to
Reducing Costs and Time. GAO/HEHS-97-20. Washington, D.C.: December 20,
1996.

Chairman SHAW. Thank you. Mr. Daub?

STATEMENT OF THE HON. HAL DAUB, CHAIRMAN, SOCIAL SECURITY
ADVISORY BOARD, AND FORMER MEMBER OF CONGRESS

Mr. DAUB. Mr. Chairman, nice to see you this afternoon. Mr.
Matsui, thanks on behalf of the Social Security Advisory Board
for continuing this very vital series of hearings on Social
Security's disability programs. They have serious problems
today calling for fundamental changes. The hearings that you
are holding are an important step toward the reform that needs
to be in a timely and appropriate way.
Over the past 5 years, the Board has spent a great deal of
time studying the Social Security Administration's disability
programs on a nonpartisan basis. The Board has consulted with
Agency leaders and with hundreds of managers and employees in
the field. The Board has examined data and listened to the
views of many individuals and organizations in the disability
community. I have a longstanding personal interest in this
subject as well, both as a former Member of this Committee and
Subcommittee as well as before that, well before that, an
attorney representing claimants.
In my oral testimony today, I would like to focus on the
issue of the quality of the decisions that are being made in
the initial disability determination process. In my written
statement, which I ask to be included in the record, I take a
broader look at the process.
There are two items in the written statement which I would
like to draw to your attention, and they allude a bit to what
Mr. Ryan was saying in his questions a moment ago. They deal
with the hearing level, but they have a definite impact on the
initial process. The first is having the Agency represented at
the hearing. Doing so would help clarify issues, provide useful
feedback, which is sorely missing from the process, at the
initial decision level. The second point is that it is time for
serious consideration to be given to closing the record.
Leaving the record open means that the case can change at each
level of appeal, making it difficult for decisions at higher
levels to improve the quality of the process at lower levels.
Organizations get what they measure, and the emphasis in
the Social Security Administration disability programs has been
on quantity and processing times. Last January, the Board
issued a document entitled ``Disability Decision Making: Data
and Materials.'' The document presents extensive data
indicating striking differences in outcomes over time from
State to State and between levels of adjudication. I want to
make it clear that these problems in the disability program are
systemic. They are not the result of deficiencies in employee
performance. In its visits to field offices, State agencies,
and Offices of Hearings and Appeals around the country, the
Board has met people on the front lines of the disability
process. We have found that they work hard and care deeply. All
parts of the process are under stress, severe stress.
The quality of the decisionmaking is a longstanding issue,
but several things have happened since the mid-eighties to make
the disability determination process even more subjective and
more complex than previously. Over the same period of time,
workloads have grown substantially, and resources have been
constrained. The result is that disability policy and
administrative capacity are now seriously out of alignment.
There are also wide variances among States in areas that can
have a major impact on the quality of work that is performed,
such as staff salaries, hiring requirements, training, and
quality assurance procedures. Turnover rates are high in some
States. The result of lack of experience is especially
troubling as SSA moves toward increased use of a single
decisionmaker, examiners who can handle cases without much
input from a physician.
So, I have three recommendations that I would like to make
in my brief time remaining. They are crucial to improving the
quality of decision making. I want to stress them.
The Social Security Administration's current quality
assurance system relies on end-of-line reviews to check and
report on the quality of the completed case. The Board believes
that quality is something that should be built into the
disability determination process, not something that should be
graded at the end of the process. So, to make quality a central
objective of the disability programs, the Administration needs
to develop and implement a new quality management system that
would apply to all levels of adjudication. Quality management
is a process of ensuring that the right things are done well
the first time at every level of the process.
Second, SSA should develop a single presentation of policy
to guide all adjudicators. It should also enhance the medical
and vocational expertise of its staff.
Last, there is a gap between what is required by policy and
the administrative capacity to carry it out. The gap is large
now and will grow as baby boomers age and become more likely to
become disabled. The Administration's actuaries estimate that
by 2012 the number of cases to be decided will grow by 9
percent, to 2.6 million per year. This growth threatens to
overwhelm a policy and an administrative infrastructure that is
already inadequate to meet the needs of the public. Bridging
the gap between policy and administrative feasibility will
require introducing changes in policy, institutional
arrangements, funding, or most probably in all three facets of
this interwoven process.
I have listed at the end of my statement, Mr. Chairman, the
five publications that our Board has presented about SSA's
disability program: an August 1998 on how SSA's disability
programs can be improved; a September 2000 report on selected
aspects of disability decisionmaking; a January 2001 report on
disability decisionmaking; and the most recent one that was the
subject of the hearings a couple of weeks ago, Mr. Chairman--a
January 2000 report on charting the future of Social Security's
disability programs and the need for fundamental change.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Daub follows:]
Statement of the Hon. Hal Daub, Chairman, Social Security Advisory
Board, and former Member of Congress
Reforming the Disability Insurance and Supplemental Security Income
Disability Program\1\
The Nation's two primary disability programs--Social Security
Disability Insurance (DI) and Supplemental Security Income (SSI)
disability--are a vital but complex part of our social insurance and
welfare systems, requiring vigilant attention in order to keep their
policy and administrative structures sound and up to date.
---------------------------------------------------------------------------
\1\ For more information on this subject, see the Advisory Board's
January 2001 reports, Charting the Future of Social Security's
Disability Programs: The Need for Fundamental Change and Disability
Decision Making: Data and Materials, as well as How SSA's Disability
Programs Can Be Improved, issued in August 1998. The reports are
available at the Board's website, www.ssab.gov.
---------------------------------------------------------------------------
These programs have grown steadily over the years to the point
where in fiscal year 2002 they are expected to account for nearly $100
billion in Federal spending, or nearly five percent of the Federal
budget. They require a growing portion of the time and attention of
Social Security Administration employees at all levels. In 2002, about
two-thirds of the agency's $7.7 billion administrative budget, $5.2
billion, is expected to be spent on disability work.
As the baby boomers reach the age of increased likelihood of
disability the growth in these programs will accelerate. The Social
Security Administration's actuaries project that between now and 2012
the number of DI beneficiaries will increase by 37 percent. SSI
beneficiaries are projected to increase by 15 percent. The projected
growth in the number of disability claimants threatens to overwhelm a
policy and administrative infrastructure that is already inadequate to
meet the needs of the public.
In recent decades, disability policy has come to resemble a mosaic,
pieced together in response to court decisions and other external
pressures, rather than the result of a well thought out concept of how
the programs should be operating. Compounding the problem, the
disability administrative structure, now nearly a half century old, has
been unable to keep pace with the increasing demands that have been
imposed upon it. Policy and administrative capacity are dramatically
out of alignment in the sense that new and binding rules of
adjudication frequently cannot be implemented in a reasonable manner,
particularly in view of the resources that are currently available.
It has been more than two decades since either the Congress or the
Administration has reviewed in a comprehensive manner the question of
whether the administrative structure established nearly five decades
ago should be strengthened or changed. Numerous regulations and rulings
affecting how disability decisions are made have been implemented
without review by policy makers. The question of whether the definition
of disability for adults should be changed has not undergone close
examination for more than 30 years.
Major Issues Need to Be Addressed
Are disability decisions consistent and fair?
There are substantial data that show striking differences in
decisional outcomes over time, among State agencies, and between levels
of adjudication, raising the question of whether disability
determinations are being made in a uniform and consistent manner.
For example, in 2001 the percentage of disability applicants whose
claims were allowed by a State agency ranged from a high of 66 percent
in New Hampshire to a low of 27 percent in Tennessee. As another
example, a strikingly large percentage of cases denied by State
agencies are reversed upon appeal to an administrative law judge
hearing, and, at least at the State level, there appears to be no
correlation between high State agency allowance rates and low ALJ
reversals of these decisions. Both State agency and hearing level
allowance rates have varied substantially over the years. The hearing
level allowance rates (allowances as a percent of all decisions) for
both DI and SSI disability stood at 58 percent in 1985, grew to nearly
72 percent in 1995, fell to 63 percent in 1998, and grew again to 66
percent in 2000 and 68 percent in 2001.
For many years both Members of Congress and others who have studied
the disability programs have expressed concern about variations such as
these. Analysts have identified many factors which they believe
contribute to inconsistencies in outcomes, such as economic and
demographic differences among regions of the country, court decisions,
the fact that the claimant has no opportunity to meet with the decision
maker until the face-to-face hearing at the ALJ level, and that the
record remains open throughout the appeals process.
But many who are knowledgeable about the programs--including
disability examiners in the State agencies as well as administrative
law judges--have long believed that there are also reasons relating to
program policy, procedures, and structure that are responsible for some
if not many of these inconsistencies. In a recent study of SSA's
quality assurance processes, the Lewin Group found that although the
information on current consistency of the disability programs is
somewhat mixed and not as definitive as one would like, ``The evidence
of inconsistencies is compelling * * *.'' \2\
---------------------------------------------------------------------------
\2\ The Lewin Group, Inc. and Pugh Ettinger McCarthy Associates,
L.L.C., Evaluation of SSA's Disability Quality Assurance (QA) Processes
and Development of QA Options That Will Support The Long-Term
Management of The Disability Program, June 21, 2000, p. C-24.
---------------------------------------------------------------------------
Despite the long-standing concern about consistency, the agency has
no effective mechanism to provide the information needed to understand
the degree to which the programs' own policies and procedures--
including their uneven implementation--are causing inconsistent
outcomes in different regions of the country and different parts of the
disability system. As long as variations in decision making remain
unexplained, the integrity and the fairness of the disability programs
are open to question. These programs are too valuable and important to
the American public for this issue not to be addressed.
DI and SSI Disability Determinations and Appeals*

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

Percentage of Allowances

Initial Decisions 72.5
Reconsiderations 7.5
Hearing Level 19.8
Appeals Council .2

Note: Due to rounding, data may not always total 100%

* Data relate to workloads processed (but not necessarily
received) in fiscal year 2001, i.e., the cases processed at
each adjudicative level may include cases received at 1 or more
of the lower adjudicative levels prior to fiscal year 2001. Not
all denials are appealed to the next level of review.
** Includes ALJ decisions not appealed further by the claimant
but reviewed by the Appeals Council on ``own motion''
authority.
*** Remands to ALJs by the Appeals Council and courts result
in allowances in about 60 percent of the cases. Court decisions
include decisions on continuing disability reviews. Figures for
other levels are for claims only.
LIs disability policy being developed coherently and in accord with the
intent of the Congress?
Although Congress has not changed the law defining disability for
adults for more than 30 years, the determination of what constitutes
disability has changed in fundamental ways. For example, there has been
a gradual but persistent trend away from decisions based on the medical
listings to decisions that increasingly involve assessment of function.
Today, many more decisions involve mental impairments than was the case
in the past. In addition, changes in agency rules mean that now all
adjudicators must adhere to more complex and intricate requirements
regarding such matters as determining the weight that should be given
to the opinion of a treating source and making a finding as to the
credibility of claimants' statements about the effect of pain and other
symptoms on their ability to function. All of these changes have made
decision making more subjective and difficult.
These policy changes have been made through changes in regulations
and rulings. A number of the most significant changes have grown out of
court decisions, many of which have not been appealed. None of them
have been reviewed by the Congress as to their effect on decision
making or whether they are operationally sustainable for a program that
must process massive numbers of cases.
Can today's administrative structure support future program needs?
When the DI program was enacted in 1956, the expectation was that
the program would be relatively small. But over the last half century,
the original Federal-State administrative structure has had to
accommodate a growth in program size and complexity that it has been
ill equipped to handle. In addition to working within a fragmented
administrative structure, employees at all levels have been buffeted by
periodic surges in workloads and funding shortfalls.
At the present time, all parts of the applications and appeals
structure are experiencing great stress with every indication that the
difficulties each is facing will continue to grow unless changes are
made. There are about 15,000 disability adjudicators throughout the
disability system. Their qualifications and the rules and procedures
they follow differ, sometimes dramatically. For example, adjudicators
at the State agency and ALJ levels may receive vastly different
training and draw upon very different resources. Factors such as these
raise questions about how well the administrative structure will be
able to handle the growing workload.
LIs Social Security's definition of disability appropriately aligned
with national disability policy?
There are many who believe that the Social Security Act definition
of disability, which requires claimants to prove they cannot work in
order to qualify for benefits, is inconsistent with the Americans with
Disabilities Act and is at odds with the desire of many disabled
individuals who want to work but who still need some financial or
medical assistance. Recent Ticket to Work legislation is aimed at
helping people who are already on the disability rolls to return to
work by providing increased services and new incentives, but does not
fully address these basic inconsistencies.
In recent testimony the Consortium of Citizens with Disabilities
questioned whether the Social Security definition of disability
adequately captures ``the spectrum and continuum of disability today.
Does it reflect the interaction of vocational, environmental, medical
and other factors that can affect the ability of someone on SSI or SSDI
to attain a level of independence?''
Reform Should Have Clear Goals and Objectives
Reform of the disability programs must be evaluated within the
context of clear goals and objectives:
All who are truly disabled and cannot work should
receive benefits.
Those who can work but need assistance to do so
should receive it.
Vocational rehabilitation and employment services
should be readily available and claimants and beneficiaries
should be helped to take advantage of them.
Claimants should be helped to understand the
disability rules and the determination process.
The disability system should provide fair and
consistent treatment for all.
The disability system should ensure high quality
decisions by well-qualified and trained adjudicators.
The disability system should provide expeditious
processing of claims. When cases are complex and require more
time, claimants should be informed so that they will understand
why there is delay.
The Elements of Reform
To build a disability system that can meet the challenges of the
future will require changes in policy, procedure, and structure. The
Board has proposed a number of changes that we urge policy makers in
the Congress and the Administration to consider. These changes would
represent fundamental reform. In summary, they include the following
elements.
Strengthen SSA's capacity to manage
SSA's ability to manage the disability programs is undermined by
three major shortcomings--
There is a lack of management accountability. Nearly every staff
component of the agency has a role in administering the disability
programs.
The policy infrastructure is weak. There are too many voices
articulating disability policy. Adjudicators in different parts of the
system are bound by different sets of rules.
Important policy elements are out of date. As the result of
downsizing and lack of new staff to replace those who have left the
agency through retirement or otherwise, the level of expertise in areas
such as medical and vocational factors has declined.

The agency lacks a quality management system that can provide the
comprehensive information that is needed for accurate and consistent
decision making.

The Board recommends that SSA address these shortcomings by----

organizing the agency so as to ensure greater
accountability and
unified direction for the disability programs,
developing a single presentation of policy to guide all
adjudicators and enhancing the medical and vocational expertise
of its staff, and
developing and implementing a new quality management
system that will (1) provide the information that policy makers
and administrators need to guide disability policy and
procedures and (2) ensure accuracy and consistency in decision
making.
Change the disability adjudication process
Strengthen the Federal-State arrangement.--Although the law gives
SSA the basic responsibility for administering the disability programs,
it requires that disability decisions be made by State agencies rather
than by SSA itself. The Federal Government pays 100 percent of the
cost.
Whether the disability decision making authority should belong to
the States or to SSA has been a subject of debate since Congress
established the Federal-State arrangement nearly five decades ago.
Proponents of federalizing the process argue that the present structure
is inherently difficult to manage and that federal administration is
necessary to ensure high quality, uniform administration throughout the
country.
The issue of federalizing the disability determination process
needs to be examined in the light of anticipated future needs of the
disability programs. In the short term we believe it is necessary to
strengthen the present Federal-State arrangement. Underpinning this
view is the fact that SSA currently lacks the administrative and
staffing capacity to take on the significant additional responsibility
that federalization would entail. Nevertheless, the present arrangement
is inadequate to meet the needs of the disability programs today, and
problems need to be addressed as quickly as possible.
SSA's regulations should be revised to improve the agency's ability
to manage State agency operations and to provide greater national
uniformity. States should be required to follow specific guidelines
relating to educational requirements and salaries for staff, training,
carrying out quality assurance procedures, and other areas that have a
direct impact on the quality of their employees and their ability to
make decisions that are both of high quality and timely.
Reform the hearing process.--The formal right of claimants to a
hearing was adopted in 1940 with only 12 ``referees'' to hear appeals.
But with the enactment of the disability programs, the hearing process
has become massive, with about 1,000 administrative law judges and
nearly 7,000 other employees.
DI and SSI Claims Process: Steps and Average Processing Time* FY 2001

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

*Processing times shown must be added at each step to find the total
time

**Field office processing time includes all components of the field
office work, including taking the claim and processing it after the
State agency makes a determination

***SSA reports DDS initial processing time by programs; average total
processing time (DI and SSI) is not available

Along with becoming a much larger operation than originally
envisaged, SSA's hearing process has also changed as the result of the
fact that most claimants are now represented by attorneys or other
representatives. Because the agency is not represented as well, many
believe the hearing process has become too one-sided. We think that
having an individual present at the hearing to defend the agency's
position would help to clarify the issues and introduce greater
consistency and accountability into the adjudicative system and, as in
a more traditional court setting, would help to carry out an effective
cross-examination. Consideration should also be given to allowing the
individual who represents the agency at the hearing to file an appeal
of the ALJ decision.
We also recommend that the Congress and SSA review again the issue
of whether the record should be closed after the ALJ hearing. Leaving
the record open means that the case can change at each level of appeal,
requiring a de novo decision based on a different record. Many ALJs
have told the Board that leaving the record open gives attorneys an
incentive to withhold evidence in order to strengthen an appeal at a
later stage, and provides an inherent incentive to withhold evidence in
order to prolong the case and increase fees. Other ALJs do not believe
that representatives hold back evidence for these reasons. If evidence
is held back, they maintain, it is because the rules for presenting
evidence are lax and representatives do not take the time or spend the
money to obtain additional evidence unless required to do so as a
result of an unfavorable hearing decision. Closing the record would
heighten the need to develop the record as fully as possible before the
decision is made in order to ensure that claimants are not unfairly
penalized. Closing the record would not preclude filing a new
application.
Third, we recommend that consideration be given to establishing a
system of certification for claimant representatives and to
establishing uniform procedures for claimant representatives to follow.
The objective would be to provide for a more orderly and expeditious
hearing procedure than currently exists.
Consider changes in the current provisions for judicial review.--
Concerns about national uniformity in policy and procedure have led
many to consider whether there is a need for change in the current
provisions for judicial review. Under the current system, Federal
courts frequently issue decisions that vary from district to district
and circuit to circuit. Over the years a number of bills have been
introduced in the Congress that would create either a Social Security
Court or a Social Security Court of Appeals that would specialize in
Social Security cases, thus establishing a framework that could produce
greater uniformity in decision making. The statutorily-established
Commission on Structural Alternatives for the Federal Courts of
Appeals, chaired by Justice Byron White, stated in its final report in
December 1998 that Congress should seriously consider proposals that
would place judicial review of Social Security cases in an Article I
court. We believe that the question of whether existing arrangements
for judicial review should be retained or replaced by a new court
structure deserves careful study by the Congress and the Social
Security Administration.
Align policy and administrative capacity
Nearly every part of the Social Security Administration has been
affected by the downsizing and restraint on government hiring that has
occurred over the last two decades. But for various reasons, the
disability programs in particular have tended to suffer. As resources
have been constrained, SSA has issued numerous regulations and rulings
that require more time and expertise on the part of all adjudicators
than was the case in the past and workloads have grown substantially.
The result is that disability policy and administrative capacity are
now seriously out of alignment and threaten to become more so as the
agency moves toward national implementation of several new initiatives.
Of particular importance are the ``process unification'' rulings
issued by SSA in 1996, which were aimed at bringing State agency and
ALJ decisions closer together. Many State agency administrators claim
that some of them are so complex that State agency employees cannot
adhere to them without spending substantially increased time on a large
percentage of the cases they are adjudicating. In addition, these new
rules for adjudicating cases require analytical and writing skills that
many employees do not have.
Both the Administration and the Congress will share the
responsibility for making the changes that are needed to ensure that
disability policy and administrative capabilities are properly aligned.
This will likely involve a combination of changes in policy, processes,
institutional arrangements, and funding. In addition, the Board has
urged the agency to develop a comprehensive workforce plan and base its
appropriations requests on this plan, as directed by the 1994
independent agency legislation. We also urge the Administration and the
Congress to exclude SSA's administrative budget for Social Security
from any statutory cap that imposes a limit on the amount of
discretionary government spending.
LExamine ways to improve incentives for early rehabilitation and
employment
The issue of whether the present structure of assistance to the
disabled provides sufficient help and incentive for employment needs
careful review. Many experts believe that the most effective
intervention is to help disabled individuals return to work as quickly
as possible. More comprehensive research on ways to improve incentives
for rehabilitation and employment early in a period of disability is
needed. This may include new or different arrangements for cash or
medical benefits or for rehabilitation and employment services. The
experience of other countries and of both private and public employers
in the United States should be taken into account.
Included as part of this comprehensive research effort should be a
study of whether providing some type of short-term disability
assistance, combined with rehabilitation services, would improve
assistance for those who have disabilities while also relieving
pressure on the permanent disability programs. The studies that are
conducted should include cost-benefit analyses. Where needed, specific
legislative authority and funding for these studies should be provided.

[Attachments are being retained in the Committee files.]

Chairman SHAW. Mr. Daub, what was your second
recommendation?
Mr. DAUB. The second recommendation is on page 5 at the top
of our oral presentation, which is to develop a single
presentation of policy to guide all adjudicators.
Chairman SHAW. Is that adopting rules of procedure?
Mr. DAUB. So to speak. It would be. The Agency's
regulations should be revised to require States to follow
specific Federal guidelines relating to educational
requirements and to salaries for: staff, initial and ongoing
training, quality assurance procedures, and other areas that
have a direct impact on the quality of their employees and
their ability to make decisions. Regulations should also ensure
that State hiring freezes will not apply to State Agency
disability operations. These programs are national programs,
and SSA has an obligation to ensure equal treatment for all
claimants wherever they reside.
Chairman SHAW. Mr. Robertson, you expressed disappointment
at the pace at which things are going. Could you frame that
better for us and a position in time? The Commissioner was late
coming online, and anyone who comes into a position like that,
you don't want them to start making wholesale changes until
they can get their sea legs, so to speak. Could you comment
further or expand further as to exactly what you have seen
since the new Commissioner has come online?
Mr. ROBERTSON. Well, let me just start by saying that we
like a lot of what the Commissioner has done so far. She has
taken actions that are very consistent with some of the things
that we have been recommending for a long time. For example,
she has elevated a senior manager to the position of a QA
adviser. We have been emphasizing, as you know, the need to get
a QA program underway and in place for quite a long time.
Likewise, we like the emphasis that she has placed on
recognizing the importance of Information Technology solving
some of the problems that the system is currently experiencing.
Frankly, we like some of the short-term solutions that she has
suggested for addressing the hearings office problems that we
have seen.
Right now, it is just a little bit too early to get a good
handle on how effective these actions will be. If I could just
make an observation--I was sitting back earlier in the hearing
listening to the discussion. Being relatively new to the area,
it struck me that one of the fundamental differences that I see
in discussions so far today is that there is agreement on what
the problem is. There is inconsistency in the decisionmaking.
There is a lengthy process. It is a costly process. There is
also, it seems to me, some agreement on some of the actions
that should be taken. Trust me, having looked at other areas,
that agreement is not always there. So, I think this is a good
thing. Again, being new to the area, it was a personal
observation and it was kind of a nice thing to see.
Chairman SHAW. Mr. Robertson, are you saying that Mr.
Matsui and I disagree on some things pertaining to Social
Security?
Mr. ROBERTSON. Never, never.
[Laughter.]
Chairman SHAW. Mr. Matsui?
Mr. MATSUI. I won't respond to that, Mr. Chairman.
Mr. Robertson, your analysis actually goes back years and
years in terms of the problems that we have had. I recall Mr.
Daub does as well--in the early eighties we were having
problems with both administrative law judges. Obviously the
whole issue of disability claims and the backlog was
significant then. It has obviously grown much larger now.
You have said that the short-term solutions by the SSA
Commissioner and Mr. Gerry being implemented now are good
short-term solutions. Then you are basically saying where do we
go from here? I think that is really the crux of the issue.
Obviously time will have to be given to them to put together
the long-term plan.
In your analysis--and perhaps I am asking a question that
you won't want to answer, but is it a management problem in
terms of how these things are being done? Is it a structural
problem? Is it a lack of money? Or is it all three of those? If
it is all three of those, or any one of those, could you kind
of elaborate on that in terms of your analysis of the long-term
problems? How we can really address these issues? Obviously, we
are going to wait for the Administration to come up with their
package, and we are all going to work with them because we all
want to solve this problem. As you have said, we are all
working in agreement here in terms of our goals. What is your
analysis of the long-term approach that we need to be taking,
in those three areas or any other areas that you might want to
raise?
Mr. ROBERTSON. You have hit three areas that are all
contributors to the problem. The one that maybe you didn't hit
directly that I would like to re-emphasize--and I mentioned it
in my short statement--is that, I think everybody should
realize that we are dealing with an extremely complex process
that involves complex judgments, multiple appeals levels, and
lots of adjudicators. So, inherently, it is a difficult process
to get your hands around, simplify and say here is the silver
bullet that is going to fix everything. So, I would add that--
the inherent complexity of the process--to your list of factors
that have made the progress slow.
I would also add that the solutions--and I am going to say
this carefully--the solutions, in my view, to the problems
should not be narrowly focused. We should be looking very
broad. We should be looking at some of the systemic problems,
the fragmentation problems that are part of this overall
problem that we are talking about this morning.
So, my only suggestion as we are looking for causes and for
potential solutions to the problem, is that: we not look
narrowly, that we look broadly, that at least everything gets
on the table for discussion to begin with before we eliminate
things, and that we look at things system-wide as opposed to
one segment or another of the system.
Mr. MATSUI. Okay. I think I understood you. I am not sure
if I did. I think I understand your initial part of your
comments in terms of the length it takes. As somebody who
practiced law before coming here, a normal case that goes
through a superior court in California would take through the
appeal process 4 or 5 years, perhaps. We are talking about
something a lot simpler in terms of adjudicating a disability
claim. We do have statistics that show that a claim actually is
only seen for approximately 7 days or so. The rest is appeal
time, or 500 days, 500-plus days, due to the fact that we have
a backlog.
What do you think is an ideal time? Let's say that the
backlog was cleared, and we had an efficient system going
through the entire process. Could you make that estimate? Maybe
you can't.
Mr. ROBERTSON. I can't make that estimate. I know that
obviously we can do better than we are doing now, but I don't
have an ideal time in mind. I think we are going to be
talking--or you are going to be speaking with some QA people
later on this afternoon that have looked at benchmarking other
organizations. They may be able to provide some insights into
that question.
Mr. MATSUI. Could I ask you this question--and maybe,
again, you think it would make some sense to try to figure out
what should be the average time that a claim is adjudicated?
The reason I ask that, how do we have a benchmark or how do we
have some goals?
Mr. ROBERTSON. I think that is a very difficult question
that you raise. I think that you can look to other
organizations for benchmarking. Ultimately, you have got to
look back at your process and say what is it that I want? What
do I want to accomplish with this process? That is going to----
Mr. MATSUI. Process requirements, yes. Okay. Thank you.
Chairman SHAW. Mr. Brady?
Mr. BRADY. Thank you, Mr. Chairman.
Both the testimonies were excellent in different ways. Two
of the statements that struck me were in Mr. Daub's testimony,
but you addressed them a minute ago, Mr. Robertson. One of them
was that it has been 30 years since Congress has changed the
law defining disability. In that timetable, the intervening
years, the disabled community itself sort of passed the process
by with new technology and new approaches is able to do more in
occupational areas than ever before. The decisionmaking is more
complex with the determiners as a result of that. Also, as you
would imagine, in 30 years a lot of complex and conflicting
legal rulings--that have made it more difficult to consistently
apply the decisionmaking across the way.
The second point you make is that it has also been about
two decades since either Congress or the administration has
really taken a fresh look at how the whole structure and
process ought to work. I guess that is my question for both of
you. Are you in different ways saying it is time for the
administration to think outside the box in defining, in
developing a system that really works? Is it time for Congress
to step up to try to help remove some of the complexity or the
conflicting legal decisions over the years that make it tough
for the system to work? I would open it up to both of you.
Mr. DAUB. I would answer in this way: First, I think the
Commissioner is very dedicated to summoning the resources of
the administrative leadership of the Social Security program to
try to make as many efficient decisions inside the system
without legislative action, if that is possible. I think that
the short-term goals she has established are starting to make
sense and should produce some early results. I think that is an
important point to emphasize.
In our testimony, you will recall, I talk on behalf of the
Board about three things that we believe can be done by the
leadership of the Social Security Administration,
administratively. They deal with the quality of the decision
making, not the quantity or processing. Focusing on the quality
should lead to less confusion in the early period of the
determination process, which can take 100, 106, 102, 115 days,
according to various studies. If it just took 3 calendar
months, to make a decision that wouldn't be bad for a very
subjective judgment that is being made about assessing
somebody's degree of pain, their inability to take occupational
therapy and to do alternative work to make a living. The
Disability Determination Services are short of people who are
well trained--it takes about 2 years to train these folks to be
able to make those sound early judgments. We have high turnover
coming, a very aging work force, and a crazy quilt of rules and
regulations from the courts that have impacted the decision
process. Many of them never appealed, so we don't have any
consistency from region to region.
I think another important thing is that the administrative
law judge system is just a paradise for extending matters as
long as you can--especially if you hire a lawyer who is not
forthcoming with the evidence or holds back or has something
that may be a little damaging to your case. The administrative
law judge wears two hats: the decisionmaking hat of having to
decide the fairness of the Disability Determination Services
decision, to adjudicate whether the appeal should be approved
or not; and the interrogator representing the taxpayer and the
system, sort of attacking the credibility of the witnesses and
the claimant. So, the claimant and lawyer perceive the judge as
almost being adversarial in a way.
So, part of the problem is attorneys take cases all the way
through the court appeals process as long as they can because
the record is not closed. Then the case gets up to the Federal
district judge, where it gets remanded with an automatic $2,000
attorney's fee being paid for 30 seconds' worth of work. So,
the longer the case is strung out, the more the lawyer makes.
What is suffering is the process, the backlogs, and the
claimants behind them.
So, I think that a fundamental reform can be accomplished
by internally getting some of these things done that we are
talking about today with the encouragement of this Committee.
Second, I think Congress should legislate. I think it is time
in the next year or so that this Committee take a strong look
at things like: the record being closed, whether there should
be an Article I court specialized in disability case matters,
and whether there should be a process where there is a State's
lawyer, a Federal Social Security lawyer, that represents the
taxpayer side of the issue. Then after that hearing, close the
record.
Those are things that I think need to be looked at by this
Committee.
Mr. BRADY. Thank you. Mr. Robertson?
Mr. ROBERTSON. The short answer to your question, from my
perspective, is that in looking for potential solutions to the
problems that we are talking about today, yes, indeed, people
should be thinking outside the box. Of course, that means,
however, that those outside-the-box solutions are going to have
to be discussed in terms of here are the pluses, here are the
minuses, and there is going to have to be a lot of
communication with you about the pluses and minuses of these
types of solutions.
Mr. BRADY. Mr. Chairman, you need to know, in the
questioning I am not suggesting that we have legislative
solutions for all this, but neither do you want to abdicate
responsibility. It seems that at some point this has gotten to
such a critical situation. We all ought to be looking at ways
that--roles we can play in helping solve this. Thank you, Mr.
Chairman.
Chairman SHAW. Mr. Becerra?
Mr. BECERRA. Thank you, Mr. Chairman. Thank you very much
for empaneling the witnesses and holding this hearing. Thank
you for having come.
Let me go back to a question that Mr. Matsui raised. In
preparation for this hearing, I asked my district staff to give
me a sense of what we are encountering when it comes to these
cases, these disability claims. I was told by the senior
caseworker in my office that typically it takes someone in my
congressional district 4 to 5 months to get an initial
determination, about another 3 or 4 months to get a
reconsideration, about a year to get a decision from the judge,
an ALJ, and about 2 to 3 years to get a decision from the
Appeals Council. Of course, there are a few who do go on to
Federal court. I suspect that is pretty consistent throughout
with other folks as well.
Given everything you have said, and having looked over some
of the written testimony, is there some way that we can reduce
that latter portion of time? It seems that when you have to
appeal your case--and oftentimes, many of the claimants are--
you are going to be waiting a lot longer the last steps, when
you probably are most in need. Now you are starting to pay an
attorney to help you take your case forward. So, is there any
thought being given to how you reduce the wait between the
decision by the ALJ and any decision that might be rendered by
the Appeals Council, which at least in Los Angeles has resulted
in, in some cases, 2 to 3 year waits?
Mr. ROBERTSON. Is that a question for me?
Mr. BECERRA. Mr. Robertson, Congressman Daub, either one.
Mr. DAUB. The Social Security Advisory Board has addressed
it since 1998, and I think there are things that can be done. I
think to Mr. Brady's question, I said that it is time for
Congress to look at the process. Although I believe much can be
done administratively, the administrative law judge appeals
process, where you are focusing, is going to require
congressional action in order to create a new process.
Mr. BECERRA. Yes, but I am not sure I would like to see the
record closed.
Mr. DAUB. Let's talk about that for a minute, if I may.
Closing the record is what proves the American system of
jurisprudence. If you have any other type of court case of any
complexity, for mental stress, pain, emotion, shock, whatever
it is, at some point the record close. I am not saying when,
now. The concept is that of closing the record so that the
judge isn't at each next level considering new evidence, almost
taking the case through a de novo new process as if you start
all over. The fact is that the system currently is not cutting
off one set of factual considerations, forcing the claimant to
put his best evidence in at that point based on the disability
claim to get a determination, knowing that they can come back
and refile if there is further degeneration in the spine or
other illnesses, or if they get dismissed at some level they
can come back and refile, which you can do without prejudice in
any other type of court case.
Mr. BECERRA. See, I would look at it differently. I would
say that one of the difficulties we are having is that you are
having claimants who, for the most part, are not versed in the
law. They don't know how to best marshal the facts forward, and
it is not until they get to the ALJ stage that when they do
finally hire an attorney because now it is getting pretty late
in the process. If they do hire someone who can say, by the
way, you should have raised these facts. To me that is two
things. It spells out two solutions. One is we do a much better
job--and principally that means putting more resources at the
early stage so that these claimants do put forward all of their
evidence----
Mr. DAUB. Well, that is what we should do. I agree with
that.
Mr. BECERRA. If we do that, then I think you will have a
fairly complete--without having to close the record, and
ultimately I think what we have to try to do is figure out a
way to get from the ALJ through the Appeals Council in a much
faster way. To me that means if you put more resources in at
the initial stage or you make that initial determination by
someone at the Agency, that what you are going to do is you are
going to prevent the difficulties that I think you raise
rightfully, that a judge is having to consider new evidence for
the first time, which should have been developed way at the
beginning, at the first stage, and not depend so much on the
claimant to try to marshal together his or her best case. I
think we are wasting a lot of time in not allowing them to put
their best foot forward. We shouldn't be adversarial in any way
with them because if they have a legitimate claim, we owe them
those benefits, and we should develop their case as much as
possible.
Mr. DAUB. We should. We should make sure that it is a
proper claim, that it is not fraudulent, that it is being paid
properly. We have a system that also has a substantial
insolvency issue. The oversight over claims paid and the
redetermination process also lags dramatically.
So, it is complex, but to be sensitive to the disability
claimant, that is truly, compassionately what we should have as
our focus. On page 5 of the formal testimony that our Board has
presented to you today, we list the objectives that reform of
the system should have, that all who truly are disabled and
cannot work should receive their benefits.
My testimony on behalf of the Board today emphasized
administratively what we do to improve the quality of the
determination to begin with. I couldn't agree with you more
that that is where the emphasis on reform should be.
In the end, there will be those cases that will go into the
system of appeal. That system, too, if it is reformed, will put
pressure on more quality work up front early on. If you leave
that system open-ended so you are not happy with the way things
are going through the administrative process, knowing you are
going to get a better deal from the court system, which is what
is basically the result now, you will wait because you will get
a better deal if you take it to court.
Mr. BECERRA. Mr. Chairman, I know you have been gracious
with the time----
Mr. DAUB. So, I think that is the dilemma that you face.
Mr. BECERRA. Congressman Daub, I think the difficulty is
the courts which have to finally dispense the justice are
saying we see from the record, which should have been better
developed at the beginning--that this claimant had a cause. The
process didn't allow the claimant to fully develop at the
initial stages, so the ALJ or the Advisory Council could come
up with a good decision. It is now left up to the courts.
Instead of expending so much money and time and causing the
claimant so much grief and loss of money, let's get our
determiners to get out there and virtually tell these folks you
are missing this piece of evidence. Get it out here, because
the earlier we do it, the quicker we can dispense with those
cases that are truly frivolous and deal with those that are
really legitimate and come up with a solution. If there is an
appeal, then you are going to have a good record because the
ALJ will have all the evidence he or she needs. So will the
Advisory Council, and you will never have to go to court to do
that.
Mr. Chairman, you have been gracious with the time. Thank
you to the two of you for your testimony.
Chairman SHAW. Thank you. I think this is insightful, and I
think we need to do a little more work. It is difficult sitting
here, never having tried such a case, and trying to figure out
how we can solve the problems involved in the process.
Years and years ago, I was a municipal judge. What we would
do is if the defendant was represented by counsel, we would
always bring in the city prosecutor. If he were not, then it
would just go forth almost as an administrative type of
proceeding.
Maybe what we have here is a system that is a hybrid which
really doesn't focus correctly in either instance. It is one
size fits all, so it is like you are either a size 9\1/2\ or
10\1/2\. So, we will give you a 10. I think we need to maybe
take a look at the process for people that have attorneys and
people that do not to try to expedite the process.
Mr. DAUB. Mr. Chairman, Federal judges tell me--if I might
just briefly comment, I have talked to a number of Federal
judges in the last couple of months since I have been
privileged to have this assignment. They commiserate with the
administrative law judge. I say this kiddingly because I know
that they are here today, they are listening, they are
watching, and they are my friends. They ought to wear robes,
but they don't. They have a tough job to wear both hats,
almost, in that process.
So, if there is a way to force quality into that record on
the way up, we all feel that is the better approach. There is a
way--and you said it, when you were a municipal judge. There is
a way that you get some balance in the system. You force it to
come to the court better prepared so that the playingfield is
level. The end result is that we want fair and uniform
efficient determination. I think you are on to something.
Chairman SHAW. Who presents the case to the judge
initially? Is it----
Mr. DAUB. The lawyer for claimant normally, on appeal in
the ALJ system.
Chairman SHAW. Is there representation from the Social
Security Administration who made the first determination?
Mr. DAUB. Just the file that has been submitted.
Chairman SHAW. So, you are counting on the judge having
thoroughly read the file before the case.
Mr. DAUB. That is what you are counting on.
Chairman SHAW. I would assume that that is----
Mr. DAUB. I think most--I certainly think those judges make
an effort to read every file, but there is also a backlog
there. They are overwhelmed. They've got a huge load on them in
many jurisdictions. As that Federal judge commented to me,
these cases get to the Federal court just almost like they have
been thrown into a shoe box. The Federal judge then has to feel
compelled to go sort that case out from the beginning.
Chairman SHAW. How many cases a day would a typical judge
hear?
Mr. DAUB. I am sorry?
Chairman SHAW. How many cases a day would the judge hear? A
whole slew of them or----
Mr. DAUB. I don't know. It could be two or three. It could
be 10. It depends on the----
Chairman SHAW. How long does the process usually take, the
whole hearing process, typically?
Mr. DAUB. A typical case? I am going to ask a staffer
because I haven't been in the courtroom in a long time. Forty-
five minutes to an hour and a half?
Just the actual court experience itself, 45 minutes to an
hour and a half. That would probably be the average.
Chairman SHAW. Okay. Well, thank you very much. I thank
both of you. Perhaps this Subcommittee should go to court 1 day
and watch one of these. It might not be a bad idea
Mr. DAUB. We are going to hold field hearings in Denver on
Thursday and Friday.
Chairman SHAW. Well, I don't know that we have to go to
Denver. Perhaps downtown would do. I don't know. Anyway, we
thank you both.
Mr. DAUB. Thank you.
Mr. ROBERTSON. Mr. Chairman, thank you.
Chairman SHAW. We thank you both for your testimony.
Next we have Witold Skwierczynski. Boy, I am always
challenged on difficult names, but I believe this one is the
best one I have seen. He is the President of the National
Council of the SSA Field Operations Locals, Chicago, Illinois,
and a Representative in the American Federation of Government
Employees, Social Security General Committee, AFL-CIO,
Baltimore, Maryland. I apologize for crucifying the
pronunciation of your name. If it was any longer it wouldn't
fit on there. In fact, it barely fit on the placard there.
Anthony T. Pezza, who is the President of the National
Coalition of Social Security Management Association; Jeffrey H.
Price, who is the President of the National Association of
Disability Examiners (NADE) from Raleigh, North Carolina; Linda
Dorn, who is the Vice President of the National Association of
Disability Determinations Directors, Lansing, Michigan; and
David Stapleton, who is the Director of Cornell Center for
Policy Research.
Welcome to all of you. We have your written testimony that
will be made a part of the record, and you may proceed as you
see fit. Thank you. Thank you all for being here. Mr.
Skwierczynski, would you pronounce that for me, please?
Mr. SKWIERCZYNSKI. Witold Skwierczynski. Thank you.

STATEMENT OF WITOLD SKWIERCZYNSKI, PRESIDENT, NATIONAL COUNCIL
OF SSA FIELD OPERATIONS LOCALS, CHICAGO, ILLINOIS, AND
REPRESENTATIVE, AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES,
SOCIAL SECURITY GENERAL COMMITTEE, AFL-CIO, BALTIMORE, MARYLAND

Mr. SKWIERCZYNSKI. I am with the union. We represent 50,000
bargaining unit Social Security workers.
The Social Security Disability Program is in trouble, and
it is in deep trouble. Unfortunately, the Administration has
not provided sufficient appropriations to allow Social Security
to dig out of its hole. The Bush budget has cuts in our full-
time equivalent staffing for fiscal year 2003. I do not see how
we can absorb a cut when the Commissioner has already said that
we are about 150,000 case backlog on our disability program.
She has indicated to the Senate Finance Committee that in order
to work off that backlog, the Agency is going to need 400 to
500 million additional dollars just to work off the backlog. I
was shocked to hear Deputy Commissioner Gerry say that they are
not going to ask for any more money when it is clear that the
only way that the Agency is going to be able to cut down the
backlog is to have additional employees do cases.
I am also disappointed that nobody is mentioning this
terrible crisis that we are having on the special Title II
Disability Workload. Unfortunately, what has happened is
literally half a million of Title XVI Social Security
beneficiaries, the Agency has finally determined, are due back
Title II Social Security benefits. The Agency is going to have
to take a half a million Social Security claims. Most of these
claims are going to require additional disability decisions
which is going to totally backlog the State agencies as well as
the field offices that have to take those cases. These half a
million Title XVI beneficiaries, who are due back pay benefits,
have children and spouses who also may be due benefits on their
record, which will mean additional claims that have to be
taken. The union estimates that it will take a minimum of 22 to
25 hours per case to do these, which means that you're going to
need about 6,000 work years in order to work off these cases. I
think Congress needs to look very closely at funding the
situation. This is a group of beneficiaries, by the way, that
is the poorest of the poor. These are SSI recipients, who we
have not paid properly and are due benefits, some of these
cases date back to 1974. This is also an indication of
mismanagement of the disability program. The Agency has known
about this situation since the mid '90s and has not taken any
action until recently to deal with it.
Another thing that the Agency hasn't done that nobody is
mentioning today is work continuing disability reviews (CDR).
People who are getting disability benefits, some of them to go
back to work. If you are a Title II beneficiary, you get a
trial work period. We get information that these people go back
to work, but our employees in Social Security field offices
don't have any time to take these work CDRs. The Agency doesn't
track them. They don't track their processing time. They don't
track their volume. They stack up in our offices and are
overpayments that are not addressed. These overpayments
continue to mount. We need additional staff to do address these
CDRs. Now, the Congress did initiate a program called Ticket to
Work. The Agency hired 32 employment support representatives
(ESR) for a pilot program. One of their functions was to do
work CDRs, and they have done many of them and saved hundreds
of thousands of dollars of trust fund dollars. We need to
expand that program throughout the country. The ESRs pay for
themselves and save taxpayer dollars.
Although Commissioner Barnhart has testified about some of
the problems, it is funny that one of the big problems is the
initial claim. Most people don't file appeals. About 47 percent
of Title II beneficiaries are approved. A large percentage file
appeals, but the average person that files a claim only makes
it through the initial claims phase.
The Disability Claims Manager (DCM), which is a pilot that
the Agency experimented with, cut the processing time of
disability claims to 62 days. Right now you have heard
testimony that the average case takes 102 days. The Agency goal
is 120 days. The DCM did it in 62 days. Why did the Agency
terminate that program? Why aren't we implementing the DCM
across the board to save hundreds of thousands of disability
applicants time in terms of the processing of these cases.
Not only that, but with regards to the ALJ, the Agency
piloted the Adjudicate of Officer Program, which was a
professional employee who was able to make favorable decisions
upon reviews. They screened out about 17 percent of all cases
that were sent to hearing, and in screening out those 17
percent cases, reversing them and approving them, the ALJs has
less work. They had 20 percent less work. The Agency killed
that program, too.
The Commissioner says let's have more litigation. By
cutting out reconsiderations, what you do is you have more
litigation. The claimants are forced to get a lawyer to deal
with the hearings process. Even though reconsideration is only
cut 17 percent, have a 17-percent reversal rate, that is a
large group of people, along with 20 percent who don't pursue
their claims, 37 percent of the people that don't have to get
an attorney, don't have to deal with the hearings process and
with the lengthy delays. So, I don't think it is the greatest
idea to cut out the reconsideration process. I think what we
need to do is, one, improve--I agree we need to improve the
quality. I think the DCM does that. I think the wildly varing
approval rates from State to State would indicate that there is
something wrong with the system that we have now.
We ought to seriously look at Federalizing the Social
Security Disability Program to ensure more uniformity and more
consistency in decisionmaking. We should look at having a
caseworker approach, like the DCM, which claimants love. The
DCMs provided a quicker decisionmaking and quality product that
produced high satisfaction rates. We need to have consistency.
The problem today is that in the DDSs they are using one set of
rules and the judges are using another set of rules. So, we
need to unify the process to rectify the problems. It should be
shocking to us that 60 percent of cases that are appealed to
the ALJs are reversed, 60 percent. That means there is
something wrong with the initial claims process, and that is
the first thing that needs to be addressed.
Another problem is that we have 50 States with 50 different
supervisors making the decisions using different rules. My
suggestion is that this Committee addresses the initial claims
process and the lack of uniformity. The DCM and ESR have proven
effective. Thank you Mr. Chairman and Ranking Member Matsui for
holding this hearing.
[The prepared statement of Mr. Skwierczynski follows:]
Statement of Witold Skwierczynski, President, National Council of SSA
Field Operations Locals, Chicago, Illinois, and Representative,
American Federation of Government Employees, Social Security General
Committee, AFL-CIO, Baltimore, Maryland
Chairman Shaw, Ranking Member Matsui, and members of the Social
Security Subcommittees, I thank you for the opportunity to present this
statement regarding Social Security's disability programs and the
challenges that face SSA and Congress. As a representative of the AFGE
Social Security General Committee and President of the National Council
of SSA Field Operations Locals, I speak on behalf of approximately
50,000 Social Security Administration (SSA) employees in over 1400
facilities. These employees work in Field Offices, Offices of Hearings
& Appeals, Program Service Centers, Teleservice Centers, Regional
Offices of Quality Assurance, and other facilities throughout the
country where retirement and disability benefit applications and appeal
requests are received, processed, and reviewed.
In previous testimony before the Social Security Subcommittee, we
have commended the Social Security Advisory Board (SSAB) for its
continual perseverance addressing improvements necessary to strengthen
SSA's capability to answer the demands of the public it serves. Prior
to becoming SSA Commissioner, Jo Anne Barnhart was a member of the
SSAB. The Social Security Advisory Board has confronted a number of
important issues, including changes in the disability programs, the
Agency's quality of service to the public, the need to safeguard the
public's funds as well as the administration of the Supplemental
Security Income (SSI) program. AFGE is committed to working with
Commissioner Barnhart and Congress regarding these complex issues, as
well as other issues continuing to present challenges to SSA and its
employees.
Commitment to Staffing and Resources

The disability program is growing rapidly. Approximately 10 million
Americans and their families depend upon SSA's disability programs. As
baby boomers grow older, there is an increased likelihood of their
filing for disability benefits. This causes the amount of resources
dedicated to SSA disability programs to significantly increase. Last
year, almost 70 percent of SSA's administrative budget was spent
accomplishing disability work. Unfortunately, without serious changes
in the current administrative process, along with additional staffing
and resources needed to adequately receive and process this work,
disability service to the taxpayer will deteriorate.
SSA will be unable to continue to timely and efficiently process
disability claims unless the Administration and Congress provide
additional resources. Absent appropriate financing for additional
staff, SSA cannot guarantee providing timely payment of benefits,
correct administration of complex regulations as well as training and
mentoring both current employees and new workers. President Bush's FY
2003 budget request not only falls short of providing the resources
necessary to begin addressing this crisis, but calls for a reduction in
workyears. AFGE believes a shortage of over 5500 positions currently
exists in field offices and TSCs across the country. This shortage has
already proven to be a recipe for disaster in providing adequate
service. Backlogs of disability claims have created lengthier
processing times. Callers are unable to get through on the toll free
number and phones in field offices are frequently unanswered. The most
recent example of last week's 800 number accessibility will demonstrate
my point. Because of the tremendous backlogs in SSA's Processing
Service Centers (PSCs), employees who assist our understaffed
Teleservice Centers were unable to provide assistance during the
busiest week of the month. This resulted in unacceptable levels of
service. In fact, SSA has indicated that no PSC employees will be
answering the 800 number for the rest of the fiscal year. This will
cause 800 number performance levels to further deteriorate. The
Government Performance Results Act goal for SSA's 800 number service is
an overall 5-minute access rate of 92%. Last week, the 800 number 5
minute access rate slipped to an average of 82%. Occasionally last week
the 5 minute access rate was as low as 68%. As I have previously
testified, the public can expect to wait up to several hours in many
SSA reception areas across the country before being interviewed.
Employees are forced to rush through the interviews, and stress levels
have escalated to an unacceptable degree according to employee surveys.
Senior SSA officials have testified at various times to this
Committee and other committees, that without process improvements, the
Agency will need 20,000 additional Full Time Equivalent Employees
(FTEs) to maintain previous service levels. Eighteen years of staffing
cuts has been the primary cause for SSA's deteriorating service. During
this time FTE levels plummeted from 86,000 to 62,000. Most of the cut
was in direct service workers in the field. Recently the Social
Security Advisory Board (SSAB) has issued multiple reports, which
criticize SSAs inadequate staffing and resources. The Board has
concluded that such resource deficiencies have adversely affected the
Agency's ability to provide adequate service. In January 2001, the SSAB
urged the President to provide sufficient funding for SSA to enable it
to improve its service to the public. In September 2001, the SSAB
contacted the House and Senate Appropriation Committees reiterating its
concerns previously addressed to President Bush. It is unfortunate that
those cries for help seem to have fallen on deaf ears.
Unless Congress acts to increase SSA's administrative budget, the
Agency's service levels will continue to decline.
SSA's Disability Programs

AFGE believes that immediate attention needs to be given to three
specific issues regarding the SSA disability benefit program: providing
proper staffing and resource allocations, ensuring consistent
disability decisions in a more expeditious manner and maintaining
quality in person service and assistance at the field office level.
SSA's disability programs are at the heart of the Agency's many
challenges. AFGE is just one of many voices that has insisted upon
reform of SSA's seriously flawed disability structure.
However, institutional problems continue to be overlooked. SSA's
ethos of discouraging open discussion of problems continues to exist.
Communication between headquarters and operations in the field remains
poor. Workgroups designed to address problem areas or workloads no
longer include either the union or the employees who actually do the
work. These employees in field offices and teleservice centers who have
been working at SSA's frontlines serving the public, know what is wrong
and what is needed. The open door policy between the Commissioner and
the Union has does not exist. These actions have caused SSA employees
to doubt Commissioner Barnhart's sincerity and will ultimately cause
employees to mistrust any changes implemented without their
participation and input. AFGE understands that long-lasting progress
will only be achieved with the assistance of those who not only
understand the problems, but also have the institutional experience and
knowledge to repair SSA's disability programs. Certainly much more can
be accomplished in a constructive manner with open two-way
communications. The union remains committed to such a process.
SSA must develop and implement a new quality management system that
will routinely produce information the Agency needs to properly guide
disability policy. Equity and consistency in disability decision-making
does not exist today. Claimant's chances of being approved for
disability benefits depend on where they live and the amount of their
resources.
For example, SSA records appear to suggest that those who have the
resources to obtain medical attention early and often have a better
chance of being approved for benefits than those who have a limited
income or resources. (See Chart Below) Nationwide, those applying for
Social Security disability have a much greater chance of being approved
than those who may only apply for the Supplement Security Income (SSI)
program. SSA records clearly expose the inconsistencies of the State
DDS decisions. More than 70 percent of Social Security disability
claims for benefits are approved in New Hampshire, while only less than
38 percent of those who file for benefit in Oklahoma are approved. Of
those who applied for SSI benefits, New Hampshire soars with an
allowance rate of over 63%. However, less fortunate are those from
Kansas, Missouri, Louisiana and Georgia. Less than 35 percent of the
SSI applications in these states are approved by the respective State
Disability Determination service (DDS). The reconsideration process is
fraught with inconsistencies. Reconsideration claims in Missouri and
Pennsylvania result in a 40% reversal rate. Conversely,
reconsiderations in East Los Angeles, Kentucky, New York and Oklahoma
result in less than 15% approval rate. Reconsideration of an SSI
application is less likely to be approved than TII cases.
As an illustration, following is a compilation of different states
and the variance from state to state in allowance and denial rates:

--------------------------------------------------------------------------------------------------------------------------------------------------------
T2 Initial T16 Initial Concurrent Initial T2 Recon T16 Recon
-------------------------------------------------------------------------------------------------------------
Allow Deny Allow Deny Allow Deny Allow Deny Allow Deny
--------------------------------------------------------------------------------------------------------------------------------------------------------
NATIONAL AVERAGE 47.4 52.6 39.5 60.5 30.4 69.6 19.0 81.0 16.0 84.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
BOSTON Region 56.8 43.2 43.6 56.4 34.5 65.5 30.0 70.0 25.6 74.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
New Hampshire * 70.3 29.7 63.6 36.4 56.2 43.8 33.3 66.7 33.3 66.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Connecticut 55.7 44.3 39.2 60.8 32.3 67.7 30.4 69.6 21.6 78.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
New York Region 48.5 51.5 40.8 59.2 34.5 59.2 15.1 84.9 13.5 86.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
New York * 51.5 48.5 39.9 60.1 33.4 66.6 12.2 81.3 12.6 87.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Albany 55.0 45.0 36.2 63.8 32.6 67.4 22.0 78.0 19.4 80.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Puerto Rico 34.6 65.4 - - - - 16.3 83.7 - -
--------------------------------------------------------------------------------------------------------------------------------------------------------
Philadelphia Region 53.1 46.9 43.7 56.3 34.6 65.4 20.3 79.7 16.7 83.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Maryland 49.8 50.2 38.6 61.4 30.4 69.6 25.3 74.7 18.0 82.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
PA * 60.2 39.8 48.6 51.4 40.7 59.3 40.6 59.4 29.2 70.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Atlanta Region 40.3 59.7 35.8 64.2 27.0 73.0 16.3 83.7 14.0 86.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama * 48.8 51.2 37.7 62.3 33.3 66.4 34.7 65.3 33.5 66.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Georgia 38.2 61.8 34.0 66.0 25.7 74.3 17.9 82.1 14.5 85.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Kentucky 37.3 62.7 35.0 65.0 23.8 76.2 10.9 90.1 9.8 90.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
Birmingham 50.8 49.2 40.3 59.7 35.1 64.9 35.1 64.9 34.0 66.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Florida 41.7 58.3 41.6 58.4 30.7 59.3 20.5 79.5 19.6 80.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Miami 42.3 57.7 49.3 50.7 35.4 64.6 21.7 79.3 26.4 73.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Chicago Region 47.3 52.7 36.4 63.6 30.1 69.9 19.8 80.2 15.0 85.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Illinois 49.3 50.7 38.1 61.9 31.8 68.2 18.7 81.3 15.9 84.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Michigan * 49.8 50.2 35.3 64.7 31.9 68.1 32.3 67.7 24.7 75.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Wisconsin 52.0 48.0 37.2 62.8 30.3 69.7 31.7 68.2 16.8 83.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
Dallas Region 41.3 58.7 36.7 63.3 29.6 70.4 18.7 81.3 17.3 82.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Louisiana * 43.3 56.7 30.9 69.1 30.7 69.3 39.9 61.0 27.6 72.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Texas 40.0 60.0 40.0 60.0 30.5 69.5 18.7 81.3 18.5 81.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
New Mexico 49.1 50.9 41.3 58.7 32.2 67.8 23.2 76.8 20.9 79.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Oklahoma 39.3 60.7 36.7 63.3 27.7 72.3 14.3 85.7 12.6 87.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Shreveport 42.8 57.2 31.6 68.4 28.7 71.3 21.4 78.6 29.5 70.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Kansas City Region 54.3 45.7 34.4 65.6 27.0 72.0 23.8 76.2 15.5 84.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Missouri * 56.8 43.2 33.0 66.0 28.6 71.4 44.8 55.2 35.3 65.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Kansas 47.2 52.8 34.7 65.3 22.1 77.9 23.5 76.5 14.6 85.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Denver Region 43.6 56.4 41.1 58.9 25.2 74.8 14.2 85.8 9.7 90.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Colorado * 46.6 53.4 42.2 57.8 27.6 72.4 27.6 72.4 5.7 84.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
N. Dakota 45.4 54.6 37.3 62.7 22.0 77.0 17.2 82.8 8.5 91.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
S. Dakota 48.2 51.8 36.5 63.5 23.0 76.0 18.8 81.2 12.8 87.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
San Francisco Region 52.8 47.2 46.2 53.8 37.1 62.9 25.2 74.8 22.5 77.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Arizona 59.3 40.7 51.8 48.2 43.3 56.7 38.7 61.3 33.8 66.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
California 50.9 49.1 45.7 54.3 34.4 65.6 22.1 77.9 18.6 81.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Bay Area 56.0 44.0 52.6 47.4 43.2 56.8 28.5 71.5 20.8 79.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
L.A. East 42.7 57.3 44.0 55.0 32.1 67.9 12.4 87.6 12.2 87.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
L.A. West * 59.8 40.2 49.9 50.1 42.0 57.0 31.2 68.8 22.5 77.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
L.A. North * 58.7 41.3 49.3 50.7 40.0 60.0 31.8 68.2 42.2 57.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
L.A. South 42.0 57.0 49.2 60.8 31.4 68.6 19.7 80.3 19.9 80.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sacramento 48.6 51.4 42.2 57.8 30.2 69.8 23.6 76.4 31.6 78.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Seattle Region 50.0 50.0 43.6 56.4 21.2 68.8 22.2 77.8 16.1 83.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alaska * 57.4 42.6 52.3 47.7 38.1 61.9 50.0 50.0 0.00 100.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Oregon 49.7 50.3 40.7 59.3 28.3 71.7 24.1 75.9 16.2 83.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Washington 49.9 50.1 44.3 55.7 32.5 67.5 22.0 78.0 15.8 84.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
Seattle 50.1 49.9 49.8 50.2 36.6 63.4 24.3 75.7 16.1 83.9
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* ``Prototype'' sites.

In a system where contributions are made equitably, such wildly
divergent allowance rates raise significant questions regarding the
accuracy and fairness of the decision making process. The American
taxpayers are entitled to quality consistent decisions whether they
live in California or New Jersey. The significant differences between
SSA and SSI disability approval rates leads one to conclude that wealth
is a factor in the decision making process. We strongly encourage
Congress to hold hearings in the near future to address these very
important issues.
As long as inconsistent medical decisions continue to be made by
the State DDSs, the backlogs at the hearing levels may never be
completely resolved. In some areas, the rate of hearing reversals is as
high as 60%.
SSA has spent millions of dollars testing new disability
initiatives in an effort to address some of the serious problems with
the disability process. One of those initiatives is the ``Prototype''
pilot. Approximately 25% of SSA's national initial disability claims
workload was included in the Prototype, which was conducted in State
DDS facilities for Alabama,
Alaska, California (Los Angeles North DDS & Los Angeles West DDS
branches only), Colorado, Louisiana, Michigan, Missouri, New Hampshire,
New York, and Pennsylvania. The Prototype features were designed to:

Provide greater decisional authority to the
disability examiner and more effective use of the expertise of
the medical consultant in the disability determination process;
Provide more complete development and improved
explanations of how the disability determination was made in
order to enhance the quality of decisions;
Afford an opportunity for claimants to talk with the
decision-maker if the evidence in the file does not support a
fully favorable determination, and/or to submit further
evidence before an initial determination is made.
Simplify the appeals process by eliminating the
reconsideration step.

Recently, Commissioner Barnhart announced her decision to expand
the Single Decision Maker aspect of the Prototype pilot and to
eliminate the Claimant Conference portion of the initial disability
claims in the 10 Prototype states. These decisions were made prior to
the completion of the pilot and before an analysis of final data
regarding the pilot. The decision to eliminate the Claimant Conference
appears to have been made solely due to the additional time that
conducting such a conference adds to the processing time for initial
disability claims. No data has been provided to the union which
measures the impact of the claimant conference on the decision making
process. Claimant conferences were intended to partially replace the
loss of the Reconsideration appellate opportunity. Eliminating such
conferences will, undoubtedly, result in additional hearings requests
by denied claimants. Since there is a severe backlog of hearings cases,
this is an undesirable result. The 2001 Interim Report on the Prototype
indicated that claimant satisfaction was much lower than claimant
satisfaction for the Disability Claims Manager (DCM) pilot. The interim
report also indicated that Prototype productivity was less than the
current process, employee satisfaction was not especially high and
that, although final results were not available, the total program
costs of the Prototype appeared higher than the current process and the
elimination of the Reconsideration leads to more hearing requests than
the current process. In addition, the Prototype did nothing to resolve
the state to state disparity in the disability claims allowance rates.
The elimination of the reconsideration and the elimination of the
Claimant Conference in Prototype states does not appear to be the
solution to the disability problem in SSA. It is particularly puzzling
that SSA leadership appears enamored with the Disability Prototype and
its lukewarm results while it scuttled the DCM, which exceeded the
current process in numerous respects, especially processing time.
As I emphasized in previous testimony before the Social Security
Subcommittee in June 2001, the Disability Claims Manager (DCM) pilot
(another SSA initiative) proved to be highly successful in addressing
these problems in the disability program. Processing time was
significantly better. In fact, the DCM processing time of 62 days was
almost \1/2\ of SSA's initial disability claim processing time goal of
120 days. Customer service dramatically improved. Claimants expressed
record high satisfaction rates for the DCM. The public likes the DCM
caseworker approach and wants it retained in the current process.
Although SSA contended that the DCM would cost more than the current
process, no valid data exists showing this conclusion. Also, the pilot
was prematurely terminated before valid statistical data could be
compiled regarding full program costs. It is unfortunate that, since
the last time I testified before the SSA Subcommittee, then Acting
Commissioner, Larry Massanari, decided not to implement the most
successful new disability initiative, the DCM. The DCM was a positive
step to ensuring the public that consistent and equitable disability
decisions are made. Tragically, no actions were taken to implement any
of these successes, and the pilot was terminated. Congress should
demand that SSA justify the elimination of this successful and
innovative experiment. It is part of the answer to the disability
problem.
It is apparent that the primary reason that SSA terminated the DCM
pilot was due to State resistance. Such resistance certainly was not
based on a poor pilot result. Instead the decision appears to be based
on political considerations and the fear of losing work. Congress
should be very concerned when SSA spends $ millions for a process that
demonstrably improves the disability processing time yet is rejected
for political reasons. The concerns of the states are understandable in
view of their unacceptably poor performance regarding decision
consistency from state to state and their poor processing time in
comparison to the DCM. However, the only real criteria should be the
level of service that is provided to the claimant. Using customer
service as a measure, the DCM exceeds State DDS performance in
virtually every category.
AFGE has recommended to Commissioner Barnhart that she reconsider
former Acting Commissioner Massanari's decision and implement the
position of the DCM at SSA as soon as possible. AFGE is willing to work
with the Commissioner in an incremental approach to achieving this
goal. AFGE understands that there will need to be changes in policy,
processes and institutional arrangements, as well as funding to
implement this very valuable and successful position at SSA.
Legislative amendments to the Social Security Act would be necessary to
allow SSA workers to make disability decisions; however the crisis in
disability processing requires immediate, as well as long-term changes.
When trained to make medical decisions, SSA employees can provide
immediate relief to backlogged Disability Determination Agencies, and
provide faster and better service to the public by serving as a single
point of contact. The pilot demonstrates that the public loves the DCM,
employees enthusiastically support it and that it provides
substantially better service than the current disability product. It is
the responsibility of Congress to take the necessary action to assure
the DCM is part of the solution to the disability problem.
As a short term approach not requiring legislative change, AFGE is
supportive of the ``Technical Expert for Disability'' position. This
position would provide high quality, trained field office employees the
tools to assist disability claimants in both programmatic and medical
issues, provide professional personalized service to applicants, focus
the disability interview, make or recommend disability decisions, and
assist the DDS's in their development and backlogs.
Another tested initiative that would save considerable disability
processing time is the Adjudicative Officer (AO). This position was
intended to assist Administrative Law Judges to reduce the number of
hearings and to prepare cases for efficient and expeditious hearings.
AO's were empowered to gather additional evidence and to make favorable
decisions without hearings when the evidence submitted indicated that
such a decision was appropriate. The pilot indicated that many hearings
requests were quickly adjudicated by AO's. These workers reduced the
processing time for hearing requests. The AO's met the same fate as the
DCM's. SSA cancelled the initiative. When processing time can be
legitimately reduced, why is SSA terminating a methodology that
achieves that objective? SSA should reexamine this position.
Ticket to Work

Another prominent challenge for SSA, as well as a legislative
mandate, is complying with the provisions of the Ticket to Work and
Work Incentives Improvement Act of 1999 (TWWIIA). SSA has, in fact,
redefined its mission to include promoting the employment of Social
Security beneficiaries with disabilities. By the year 2005, SSA's goal
is to increase the number of beneficiaries who can attain steady
employment and leave the disability rolls by 100%. Currently, less than
one-half of one percent of Social Security Disability and SSI
recipients return to work and whose benefits are terminated. If only an
additional one-half of one percent of recipients were to cease
receiving benefits due to employment, savings to the Trust Funds and
Treasury would total $3.5 billion over the worklife of these
beneficiaries.
Section 121 of this legislation directs SSA to establish ``a corps
of trained, accessible and responsive work incentives specialists
within the Social Security Administration.'' As members of this
subcommittee are well aware, this legislation mandating specialists
within SSA is the result of many years of poor service on the part of
SSA in providing accurate information on employment supports and
failing to process cases timely or accurately. SSA created the
Employment Support Representative (ESR) position as this work
incentives specialist. The pilot of 32 ESRs testing models of how best
to service the disabled community concluded in August 2001.
The final Evaluation Report of the ESR position was completed in
November 2001. Findings of the report were clear that the ESR was most
effective in serving organizations and beneficiaries when situated in
field offices serving the communities. Beneficiaries and community
organizations were overwhelmingly appreciative of the services the ESR
performed, finding them to be compassionate, responsive, accessible,
and highly knowledgeable. The investments of the ESRs in outreach
programs have led to increased trust of SSA by the communities, and
increased program knowledge on the part of professionals and consumers.
There is a great deal of interest on the part of organizations for a
further rollout to service every locality. The pilot proved that
Congress was correct when it insisted that SSA improve its service to
disabled beneficiaries seeking to return to work.
Furthermore, the ESRs were able to develop a single point of
contact with beneficiaries, monitor their work progress in a timely and
supportive manner, and process work reports and work-issue Continuing
Disability Reviews (CDRs) timely, greatly reducing large benefit
overpayments and anxiety on the part of the beneficiary. ESRs gave many
examples of customers who, with ESR guidance, were able to reliably
predict the outcome of their work activity and viewed benefit cessation
as a mark of achievement.
Both SSA and AFGE agree that hundreds of millions of dollars in
benefit overpayments would be saved nationally if work issues are
reported and worked promptly. SSA projects a large increase in work CDR
activity, especially in the early stages of the Ticket to Work
implementation. Even discounting the potential effect of Ticket related
workloads, work issue CDRs processed in field offices have been
increasing at an average annual rate of over 35% for the past three
years. Anecdotal evidence from employees throughout the country
indicates that work issue CDRs are backlogged for up to several years
in field offices. Overpayments on these cases can reach $250,000 for an
office, and employees have encountered overpayments on individual
records reaching $100,000. Unfortunately, the Union is unaware of any
statistical data regarding the numbers of work CDRs processed, the
number pending and the cessation rate due to work activity. SSA should
be required to maintain and produce such data. In processing medical
issue CDRs, SSA contends that for every dollar spent, seven to twelve
dollars in benefits are saved. The cost savings are greater for
``work'' CDRs since the cost of medical decision making is eliminated.
Investing in the ESR position is a perfect example of applying
stewardship responsibilities effectively and investing resources in a
cost effective manner.
The Evaluation Report recommends that the ESR job should be made a
permanent position within SSA. The report also recommended that the ESR
position be expanded to as many SSA offices as possible. The Report
cautions: ``Failure to institutionalize a position to perform the
duties that the ESR has piloted could in effect deny the public and
community the opportunity to interact with an accessible and responsive
SSA specialist. This could eliminate an important element in SSA's plan
to improve its employment support service delivery to the public. It
could also negatively affect our ability to effectively train and
advise other SSA staff in the provisions of the law, with implications
for increased incorrect payments and the denial of benefits to
beneficiaries.''
Unfortunately, SSA is reluctant to implement the ESR position due
to the shortages of staff and resources in field offices. These
intolerable resource deficits leave SSA in the position of
ineffectively implementing the Ticket to Work and continuing to provide
the current level of service. This is an impossible situation.
AFGE believes an Agency decision not to implement the ESR would be
a tragic mistake when the ESR has proven to be a winner for all
parties. For SSA, it shows superb service to the public, provides
stewardship in reducing benefits and overpayments, and results in SSA
compliance with the legislative mandate for work incentive specialists
within SSA. For the public, it provides stellar service, a single point
of contact, and assists beneficiaries in leaving the disability rolls.
For the taxpayer, it saves money and extends Trust Fund solvency.
Section 121 of PL 106-170 authorized $23,000,000 to be appropriated
to establish a community based work incentives planning and assistance
program for disabled beneficiaries, and to develop a corps of work
incentives specialists with SSA, for each of the fiscal years 2000
through 2004. SSA allocated all of the appropriated resources to grants
outside the Agency. AFGE requests that Congress direct SSA to
appropriate additional funding to meet the requirements of the Ticket
to Work and Work Incentives Improvement Act. This provision of the
legislation also requires continuous adequate funding beyond FY 2004.
Otherwise, the most effective method of providing consistent, accurate
information and assistance on work incentive programs will not be
accessible to disabled beneficiaries. It is outrageous that budget
constraints for SSA's Administration Expenses will inhibit the success
of the ESR, a Ticket to Work initiative, which is designed to generate
Trust Fund Savings. It would cost approximately 120 million to staff
SSA's 1300 field offices with 1500 ESRs. The potential return of $3.5
billion indicates that this would be a prudent expenditure.
Special T2 Disability Workload

Inadequate staffing and resources influences SSA work priorities.
While ignoring or putting off the inevitable can provide a temporary
solution to a staffing and resource problem, the consequences can be
severe and compromise the Agency's integrity. In addition to this being
self-evident with the 800 number service, inadequate staff is also the
cause for the ``Special T2 Disability Workload.'' This resource
shortage will be a great challenge for the new Commissioner, this
Congress, and the employees of SSA as it begins to tackle the ``Special
T2 Disability Workload.''
A study done by an SSA employee in the early 1990s revealed that a
serious computer processing error existed in the Agency's software. At
that time, SSA became aware that the Social Security and SSI programs
were not properly interfacing, resulting in a failure to properly
identify SSI recipients who may be eligible for Social Security and
Medicare benefits retroactively to 1974. From 1974 until the early
1990's, the SSI application did not solicit information that would
identify individuals who would be eligible for Social Security
benefits. SSA officials neglected to take the necessary action to
correct this problem until recently. As a result of this systems
failure, hundreds of thousands of SSI recipients and their families
were not paid the proper Social Security benefits. This placed the
burden of benefits solely on SSI, Medicaid, and State and County
welfare programs instead of the Social Security trust fund.
Under Title XVI of the Social Security Act, SSI recipients are
required to apply for all benefits for which they are eligible. SSA is
responsible for identifying and paying the recipient once they achieve
insured status for Social Security benefits. Eligibility for Social
Security benefits reduces the State's obligation to supplement the SSI
and Medicaid programs. For example, in the cases SSA has identified,
the average retroactivity is 8 years. This means that the states will
be reimbursed an average of 8 years of past payments that States have
made on SSI. In addition, using Social Security data, these individuals
would have been eligible for Medicare retroactively for 6 years and
Medicare would have been the primary insurance provider rather than
Medicaid. Thus, the burden for paying for medical services would shift
from State budgets to Medicare. Therefore, SSA owes millions of dollars
in back payments to the States and the U.S. Treasury General Fund.
In March of this year, the AFGE National Council of Social Security
Field Operations Locals made Congress aware of this very serious
situation. This issue impacts not only the Social Security and
Supplemental Income (SSI) beneficiaries in every state and/or
Congressional district, but affects SSA reimbursements of revenue due
states for erroneous SSI and Medicaid payments.
SSA has identified approximately 505,000 impoverished individuals
to date who appear to be entitled to Social Security and Medicare
benefits. Of those cases identified, some may have a retroactivity
period that can date as far back as 1974; however, the average
retroactivity involved is estimated to be about eight years. Because of
the limited number of cases reviewed, we believe that a complete and
thorough audit of all SSI cases should be evaluated for possible
entitlement to Social Security benefits. It is important to notify you
that these numbers do not reflect the countless thousands of spouses,
widows and/or children that may be eligible for Social Security
benefits due to the Agency's failure to correctly enforce the
eligibility requirements for SSI beneficiaries.
The cases identified in the Special T2 Disability Workload are
complex and require careful screening and diligent review by FO
personnel. Development of trial work periods, substantial gainful
activity, and workers compensation will be very time consuming. Most of
these cases will require new medical determinations. If SSA's original
medical file no longer exists, medical records will have to be
redeveloped. Once approved for T2 benefits, the majority of these cases
will require extensive manual computations. The complexity of these
cases will be overwhelming. For example, all historic legislative
changes that have occurred since 1973 will have to be considered to
determine proper payment due to the disabled individual, spouse, widow,
children, survivors and/or estates. Initial attempts to process these
cases indicate that each case takes an average of 12 hours to properly
screen. This time estimate does not include the time needed to make a
disability decision and the time necessary to process and adjudicate
auxiliary claims (e.g., mothers/father's and children).
Based on SSA's current work measurement system, the minimum amount
of time to review and adjudicate the simplest of these cases will take
22-25 work hours. This would result in a minimum of 2,400 work years to
fully develop and adjudicate the first 210,000 cases. However, most
cases will not be simple.
SSA's mission requires that the Agency pay each eligible
beneficiary timely and accurately. Depriving poor SSI recipients
accurate benefits adversely affects their struggle for survival.
Without additional resources, addressing this workload will have an
enormously detrimental impact on service to current applicants and
beneficiaries. AFGE recommends that SSA, with Congressional oversight,
take immediate action to:

Determine trust fund expenditures related to this
workload;
Identify state supplements and Medicaid
reimbursements;
Provide an analysis of when complete resolution can
be expected, including reimbursement to federal and state
treasuries;
Verify that the processes are corrected, in an effort
to rebuild the confidence of the public, Congress and the
states;
Identify the additional staffing and resources
necessary to successfully process this overwhelming and complex
workload;
Earmark sufficient funds to process this work. This
was done in the 1980's in order for SSA to process the
``Zebley'' litigation cases, which reversed case decisions on
hundreds of thousands of cases involving children with
disabilities. It is necessary to earmark such funds again, as
in Zebley, to process this enormous complex workload.
Utilize the former Disability Claims Manager (DCM) in
processing this workload. DCM's are highly trained in SSA
programmatic issues and experienced in making medical
determinations. They would be able to process the entire
complex case from start to finish and provide needed relief to
the overburdened State DDS's regarding this workload.
Utilize the skills of the Employment Support
Representatives in developing and analyzing the many years of
work activity present on these records, taking into account all
work incentives and provisions, to insure accurate case
development.
Summary

There will always be budget priorities, whether it's reducing the
deficit or increasing our military opposition to terrorists. However,
both workers and employers contribute to the self-financed Social
Security system and are entitled to receive high quality service. It is
entirely appropriate that spending for the administration of SSA
programs be set at a level that fits the needs of Social Security's
contributors and beneficiaries, rather than an arbitrary level that
fits within the current political process.
Mr. Chairman, you and Human Resources Subcommittee Ranking Member
Benjamin Cardin reintroduced the Social Security Preparedness Act of
2000 (formerly H.R. 5447), a bipartisan bill to prepare Social Security
for the retiring baby boomers. AFGE strongly encourages each of your
committees to reconsider introducing legislation that will provide SSA
with the appropriate funding level to process claims and post-
entitlement workloads timely and accurately. AFGE believes that by
taking these costs OFF-BUDGET with the rest of the Social Security
program, Social Security funds will be protected for the future. This
will permit new legislation, such as Ticket To Work, to be fully
implemented without comprising public service integrity. We believe
this can be accomplished with strict congressional oversight to ensure
that the administrative resources are being spent efficiently.
AFGE is committed to serve, as we always have in the past, as not
only the employees' advocate, but also as a watchdog for clients,
taxpayers, and their elected representatives.

Chairman SHAW. Thank you. Mr. Pezza.

STATEMENT OF ANTHONY T. PEZZA, MANAGER, SOCIAL SECURITY
ADMINISTRATION DISTRICT OFFICE, HACKENSACK, NEW JERSEY, AND
PRESIDENT, NATIONAL COUNCIL OF SOCIAL SECURITY MANAGEMENT
ASSOCIATIONS, INC.

Mr. PEZZA. Chairman Shaw, Members of the Subcommittee, my
name is Anthony Pezza. I am here as President of the National
Council of Social Security Management Associations, which is an
organization of more than 3,000 managers and supervisors who
work at SSA's field officers and teleservice centers in more
than 1,300 locations throughout the United States.
I thank you for giving me the opportunity to come before
you today to speak about the problems the Social Security
Disability process is having from the perspective of SSA's
frontline managers and supervisors, and make recommendations
for change.
The managers and supervisors I represent deal directly
every day with the folks applying for Social Security
Disability and Supplemental Security Disability Payments. It is
most often our Members with whom your local staff deal to
resolve Social Security problems for your constituents. I must
tell you, that more often than not those problems involve the
disability program.
Since our organization was founded almost 34 years ago, we
have been a strong advocate for locally delivered Social
Security services nationwide. We work directly with those we
serve, because they are our friends and neighbors, folks we
know in our hometowns and local communities. We represent the
very essence of citizen-centered government. Those of us who
work in SSA's field offices spend a great deal of our time and
effort on the disability program. We deal directly with
disability applicants and recipients. We take their claims,
initiate their continuing disability reviews and provide them
and their representatives with information. We hear their
stories and see firsthand the impact of their impairments and
our procedures on their lives.
As we are all painfully aware, SSA's Disability program has
been under severe stress for a number of years. I believe we
all know about the processing delays. It takes too long to get
an initial decision. The time it takes to get a decision on
appeal is inexcusable. I think we all know that there are
troubling variances in the allowance rates between State DDSs
and between initial and appeals decisions.
Some 9 years ago, SSA embarked on an effort to re-engineer
its disability process. After almost a decade of spending
literally tens of millions of dollars on that effort, the sad
fact is we are still talking about the same problems and
discussing the same potential solutions today as we were then.
It appears the more we discuss and study the problem, the less
gets done. The bottom line is that after all of this effort,
from the claimants' point of view nothing is changed.
In our written submission to the Subcommittee, we made a
number of recommendations. I would like to tell you very
briefly about one of them. In February 2001 and again in
January of this year, the National Council of Social Security
Management Associations made a recommendation to SSA that a new
position be established in our local field offices. The
position which we have called the Technical Expert for
Disability, capitalizes on the success of the 3-year-long
Disability Claims Manager program. That pilot demonstrated that
field office personnel, given the same medical determination
training as DDS medical examiners, can have a positive impact
on the initial disability claims process. The new position
would expand and strengthen the role and performance of the
field office in the front end of the disability process.
Technical Experts for Disability would be responsible for
the intake of applications for disability benefits under both
titles. They would be responsible for developing both the
medical and non-medical aspects of certain claims. They would
be responsible for making the non-medical and making or
recommending the medical decisions in predetermined types of
cases in agreement with individual DDSs, for example, terminal
cases and presumptive disability cases. They would be
responsible for reviewing and taking where indicated the first
action on disability claims being forwarded to the DDS for
development and medical decision. This would ensure that the
product sent to DDS for medical determination is of high
quality and would often include supporting medical evidence.
And finally, they would be responsible for training and
mentoring other field office employees involved in the
disability process.
The incumbents of this new position would be drawn mainly
from SSA's current field office staff of claims representatives
and technical experts, and within current FTE ceilings. We
don't envision massive numbers. We are convinced that a 1,000
to 1,500 Technical Experts for Disability in field offices
across the country could have a dramatic and positive impact on
the timeliness and quality of the initial disability
determination process. We urge the Subcommittee to join us in
asking SSA to seriously consider this proposal.
Mr. Chairman, Members of the Subcommittee, I am ready to
answer any questions you may have. Thank you.
[The prepared statement of Mr. Pezza follows:]
Statement of Anthony T. Pezza, Manager, Social Security Administration
District Office, Hackensack, New Jersey, and President, National
Council of Social Security Management Associations, Inc.
Chairman Shaw and Members of the Subcommittee, my name is Anthony
Pezza, and I am here today representing the National Council of Social
Security Management Associations (NCSSMA). I am also the manager of the
Social Security District Office in Hackensack, New Jersey and have
worked for the Social Security Administration (SSA) for 40 years. On
behalf of our membership, I am both pleased and honored that the NCSSMA
was selected to testify at this hearing on the problems and
opportunities facing SSA in its administration of the disability
program.
As you know, Mr. Chairman, the NCSSMA is a membership organization
of more than 3000 Social Security Administration managers and
supervisors who work in SSA's more than 1300 field offices and
teleservice centers in local communities throughout the nation. It is
most often our members with whom your staffs work to resolve issues for
your constituents relative to Social Security retirement benefits,
disability benefits, or Supplemental Security Income. Since our
organization was founded almost 34 years ago, the NCSSMA has been a
strong advocate of locally delivered services nationwide to meet the
variety of needs of beneficiaries, claimants, and the general public.
We represent the essence of ``citizen centered'' government. We
consider our top priority to be a strong and stable Social Security
Administration that delivers quality service to our clients--your
constituents.
It is significant to note, that the number of people receiving
Social Security or Supplemental Security Income (SSI) disability
benefits is less than 20% of all those receiving Social Security or SSI
payments. On the other hand, about two-thirds of SSA's administrative
budget, around $5 billion this year, will be spent on the work
generated by the disability program.
SSA's field offices must expend a great deal of their efforts on
the disability program. Field offices deal directly with disability
applicants and recipients. Field offices take disability claims,
provide information to claimants and their representatives, initiate
continuing disability reviews, and provide the public and third parties
with information about the disability program. In dealing directly with
disability claimants and recipients, we hear their stories and see
firsthand the impact of their impairments and our procedures on their
lives. We are in a prime position to assess the challenges and
opportunities presented by the current situation.
Challenges Facing the Disability Program:

SSA's disability programs have been under severe stress for a
number of years. As reported by the Social Security Advisory Board in
its January 2001 report entitled ``Charting the Future of Social
Security's Disability Programs: The Need for Fundamental Change'',
SSA's actuaries project that between now and 2010 the number of Title
II disability beneficiaries will increase by 50% and the number of SSI
disability recipients by 15%. This tremendous increase in disability
claims workloads will further strain a system that is already at the
breaking point. Disability claims workloads are rising around the
country. During one recent week some 60,000 initial disability cases
were waiting to be assigned to Disability Examiners in the various
Disability Determination Services. There were in all probability a like
number of Continuing Disability Review cases awaiting assignment. This
is just the ``tip of the iceberg''.
The most prevalent criticism field offices hear concerns the amount
of time it takes to get a decision. Applicants wait an average of
almost 4 months from filing to receipt of an initial decision. The
almost half a million claimants who request a hearing before an
Administrative Law Judge (ALJ) each year can expect to wait, on
average, more than a year from the date of the initial filing for a
decision.
Delay in the process may be the most pervasive problem, but it is
by no means the only problem. Many claimants have no idea of how the
process works or how decisions are made. They have little understanding
of what is required to meet the definition of disability under the
Social Security program, much less what is needed to document their
claim. Unfortunately, limited resources have forced a reliance on self-
help completion of forms and on telephone interviews. Claims
Representatives rarely have the time to fully review all forms
completed by applicants or to fully explain how the process works.
Additionally, failure to see a claimant face to face increases the
opportunity for fraudulent activity. It is also extremely important to
note and understand that many claimants are suffering from mental
impairments. This makes self-help and electronic service delivery
extremely problematic for such individuals.
Other problems facing the disability program have been abundantly
documented by reports of the Social Security Advisory Board, GAO, and
others. There are, for example, wide variances in allowance rates and
processing times from state to state. Court decisions have greatly
complicated the disability determinations process and have resulted in
a disparity between the criteria used to make initial and
reconsideration decisions and criteria used at the hearing level. In
addition, recent attempts to focus efforts on helping disability
recipients return to work have not resulted in a promising response.
The problem is probably rooted in the ``all or nothing'' statutory
definition of disability and the application process that focuses on
inabilities rather than abilities. These factors tend to discourage a
return to work.
One of the most significant and sad points about the disability
problems faced by SSA is that we've been discussing the same problems
and talking about the same potential solutions for many years now. This
is not a situation that materialized overnight. It's been a long time
coming. But it appears that the more it gets discussed and studied, the
less gets done to deal with the problem.
Unfortunately, from the claimant's perspective, after years of
SSA's efforts to deal with its problems in the disability area, nothing
has changed.

There are reasons for this, among which are:
The structure of the disability determinations and
appeals process
The competing interests of the various
``stakeholders''
The institutional bias toward the paralysis of
analysis
The limitations on resources

It is probable that we have now reached the point where all of the
dire predictions about a ``melt down'' in the disability process will
occur if action is not taken quickly and decisively to avert it. The
final straw may be the recent emergence of an unanticipated workload in
the form of literally hundreds of thousands of cases that have come to
be termed Special Title II Disability cases. These cases involve
situations wherein there was a failure to identify SSI recipients who,
after becoming eligible for Title XVI (SSI) payments, subsequently
became insured for Title II benefits. At that point an application for
Title II benefits should have been solicited and processed. Having
identified these cases, SSA is now obligated to secure and process
applications. This will involve a very significant and unanticipated
expenditure of SSA's frontline field office resources. But
additionally, with specific reference to the disability issue, it is
anticipated that more than half of these cases will require medical
determinations. This will further strain the already strained
Disability Determinations Services (DDSs) with what could involve
hundreds of thousands of additional medical determinations.
Potential solutions to the disability crisis can be divided into
two broad categories: long-term and short-term. The long-term solutions
generally require legislation. The short-term solutions require
executive decision.
Long-Term Solutions:

The root causes of the disability dilemma were accurately described
by the Social Security Advisory Board when it reported: ``. . . the
structural problems with the agency's disability determinations and
appeals process . . . are at the heart of many of the agency's service
delivery problems.'' We believe that it is essential to reexamine the
nature of the federal-state relationship in the disability process.
What we have today is a system that produces wide variances in
allowance rates, staff salaries, hiring and training practices, and
quality assurance practices among the 54 different agencies making
medical decisions. Because SSA's disability programs are national
programs, there is an obligation to ensure that all applicants receive
equal treatment. This does not appear to be the case today. Examination
of the federal-state relationship may lead to recommended changes,
which in all likelihood will require legislation.
Another long-term solution would be to change the nature of the
disability program by changing the current definition of disability and
modifying the program to provide for short-term as well as long-term
disability payments.
Such a modified program could provide a smoother and faster initial
disability determination process. It could also build into the
provision for short-term disability the work incentive provisions
currently available through ``Ticket to Work''.
Short-Term Solutions:

While it may be prudent and desirable to pursue the relatively
long-term solutions described above, which would generally require
legislation, there are actions that can be taken now to improve the
current process.
Nine years ago, SSA embarked on an ambitious effort to improve the
disability process by attempting to redesign the process. A number of
pilots and other efforts were undertaken. While we haven't found a
``silver bullet'' much has been learned, and NCSSMA recommends that
some of the positive findings from the efforts undertaken over the past
nine years can and should be put to work now to help mitigate the
problems with the current process. Our specific recommendations are as
follows:

Technical Expert for Disability: The three-year-long
Disability Claims Manager (DCM) pilot undertaken by SSA was
successful in proving the concept that one individual could
handle both the program and disability determinations aspects
of disability claims. Under this initiative, one individual in
either an SSA field office or a DDS was given the
responsibility for the complete processing, from initial
application and interview to a final decision of an initial
claim for disability benefits. The DCM served as the claimant's
point of contact throughout the process. This pilot
demonstrated reduced processing times, greater claimant and
employee satisfaction, a level of accuracy at or above that of
the traditional process, and at the peak of the pilot produced
more work for the total number of staff hours involved than the
traditional process. It is especially significant that
claimants expressed high levels of satisfaction with the level
of service provided under the pilot vis-a-vis the traditional
process, especially claimants whose claims were denied. While
the nature of the federal-state relationship presented
difficulties preventing a general adoption of the DCM process,
there were valuable lessons learned that can be put to
immediate use to improve current service. The pilot established
that, within the confines of the current federal-state
relationship, the role of the field office could be
strengthened and enhanced in the front-end disability process.
Specifically, the NCSSMA has recommended to SSA that a new
position be created in field offices whose focus would be on
the processing of disability claims. This position, which we
have termed ``Technical Expert for Disability'' (TED), would be
fully trained in the same basic medical determination training
received by new DDS Disability Examiners (DEs). Their
responsibilities would include:

Intake of initial applications for disability
benefits under both the Title II and Title XVI programs

Developing both the medical and non-medical aspects
of certain claims

Making the non-medical and making or recommending the
medical decisions in predetermined types of cases, with
individual state agreement

Reviewing and taking, where indicated, the first
action on disability claims being forwarded to the DDS for
development and medical decision

Training and mentoring other field office employees
in the disability process

The TED position could help resolve one of the most pervasive
problems in the disability process by improving the quality of the
initial medical transmittals to DEs in the DDSs. Both the timeliness
and accuracy of initial disability decisions should be improved. The
TED could become the pivotal position in the disability process,
providing the claimant with a single point of contact that can only be
effectively accomplished by someone knowledgeable in both the medical
and non-medical aspects of the disability claims process. Once again,
we urge SSA to implement this position.

E-DIB: SSA has recently embarked on a project to
accelerate the conversion of the disability process to an
electronic environment, eliminating paper files and mailings
and permitting easier review and transfer of information in the
disability claims process. We applaud the Commissioner's
decision to move this project quickly.

``Intelligent'' front-end system: Field offices need
to be provided with an intelligent front-end interview system
that will allow the interviewer to obtain all relevant medical
information. This would include ``drop down'' menus and an
interview path with questions based on the specific impairment.
This will result in a better front-end product and avoid
unnecessary information by making the questions impairment-
specific.

Improving the appeals process: There are a number of
changes to the hearings process that would make the process
more efficient and reduce the length of time it takes to get
hearing and appeals council decisions.

L--Close the record after the ALJ decision

L--Allow Agency representation at ALJ hearings

L--Combine OHA and SSA field offices
The Need for Resources

Quality and service ultimately takes staff. SSA continues to
struggle to keep up with its burgeoning disability workload. This
situation will continue and probably worsen as the ``Baby Boomers'' age
and file for disability in growing numbers if something is not done.
Because of the nature of the disability process and program, it is not
amenable to an Internet service delivery solution. Many people who file
for disability are suffering from mental disorders. The complexity of
the process makes it unlikely that this service population will be able
to apply via the Internet. These individuals need the option of face-
to-face, personalized service. The NCSSMA, in a survey released in
March 2001, documented the finding that field managers felt the need
for an additional 5000 employees simply to keep up with current service
demands. The Special Title II Disability workload has added to this
need. We cannot overemphasize the point that disability claimants need
face-to-face, person-to-person service. This is the most effective way
to ensure that these most vulnerable of our citizens, facing crisis
situations in their lives, receive the timely and quality service they
deserve.
Again, Mr. Chairman, I thank you for this opportunity to appear
before this Subcommittee. I would welcome any questions that you and
your colleagues may have.

Chairman SHAW. Thank you. Mr. Price?

STATEMENT OF JEFFREY H. PRICE, PRESIDENT, NATIONAL ASSOCIATION
OF DISABILITY EXAMINERS, RALEIGH, NORTH CAROLINA

Mr. PRICE. Mr. Chairman, Members of the Subcommittee, the
Social Security Administration faces critical choices regarding
the direction the disability claims process should take, and
the National Association of Disability Examiners appreciates
this opportunity to present our perspective.
Our written testimony provides greater detail. Our oral
testimony concentrates on our proposal for a new claims process
that we believe will improve service to the claimant at an
affordable cost.
Because of the extent of the increase in the number of
disability claims over the next decade, improving the
disability process in a way that is practical and affordable is
critical. The SSA launched its most recent effort to redesign
the disability process in October 1999. Spiraling
administrative costs made it clear this design did not
represent the future of the disability process. It was also
clear that the attempt to reduce the four-tiered appeals step
to two was not a viable solution. The ALJs were overwhelmed by
the number of cases appealed. The need for an intermediate
appeals step was clearly established. After more than a decade
of redesigning efforts, SSA still does not have an acceptable
new disability process to handle the significant increase and
the number of claims. It does not have a new claims process
that will reinforce the need for fair and timely decisions
while awarding benefits only to the truly disabled.
The NADE accepted the challenge to develop a concept for a
new process that would achieve these goals. What we hoped to
achieve was to direct attention to a process based on what was
fair for the claimant, and what could SSA afford. The
highlights of our proposal include placing greater emphasis on:
claimant responsibility, expansion of the single-decision maker
in the DDS, enhancing the current reconsideration to provide a
due process hearing, closing the record after the
reconsideration decision, allowing administrative law judges to
make the legal decisions they are trained to do, eliminating
the appeals council, and establishing a Social Security Court.
Our proposal affords the claimant a right to the hearing
regarding their eligibility for benefits, and a review to
ensure that the medical decision correctly followed the law.
Hearings conducted at the DDS level would follow the
Administrative Procedures Act (APA) in the same way that
appeals at State workers compensation agencies do at the
present. Those hearings preserve claimant appeal rights, and
have been tested in courts so that we know this process is
viable. Under the APA claimants are entitled to a hearing to
ensure that the government's decision follow the law. Our
proposal does not alter this fact, but it does seek to reduce
the 1,153 days that claimants now wait for a decision if they
appeal their case all the way through the appeals council.
Our proposal recommends that the record be closed after the
DDS hearing. Closing the record is critical to establishing
consistency and affordability since appeals beyond the DDS are
extremely expensive. It will also encourage cooperation with
claim development efforts. The NADE's proposal required
claimants and their representatives to cooperate with all
components of the disability claims process. This Subcommittee
was advised in March 1999 by the U.S. General Accounting Office
that, ``Frequent delays in disability proceedings are a
significant problem and often attributable to the actions of
some representatives. Decision makers are frustrated by
disability program laws that provide numerous opportunities for
claimant representatives to submit new evidence in support of
their clients' claims throughout the entire process, but
holding SSA primarily responsible for adequately developing the
evidentiary record even when a claimant has representation.''
The NADE believes this Subcommittee and SSA should consider
holding claimants and their representatives accountable. Other
aspects of our proposal call for the elimination of the appeals
council and the creation of a Social Security Court. Eighty
percent of the claims now heard before administrative law
judges involve representation for the claimant. This process
places an unfair burden on the administrative law judge who
must remain fair and impartial while considering SSA's defense
as if they had presented one.
In conclusion, NADE believes truly disabled citizens should
be awarded benefits as early in the process as possible, and
those who are not disabled should not receive benefits
regardless of the process used. Our proposal has the potential
for making this happen. We believe that it is time to establish
a new process that reflects pragmatic reality and offers the
best service to the claimant at the best price to the American
taxpayer. Hon. Clay Shaw, Chairman of this Subcommittee, in
announcing today's hearing, commented, ``Individuals with
disabilities, already burdened by the challenge of their
illness or injury, are often in desperate need of benefits to
replace lost income. They deserve and should receive timely and
accurate decisions through a fair and understandable process.
Our challenge is to examine the disability process, to ensure
that it meets the needs of individuals with disabilities and
their families.''
The NADE believes our proposal for a new disability process
answer the Chairman's challenge. Thank you.
[The prepared statement of Mr. Price follows:]
Statement of Jeffrey H. Price, President, National Association of
Disability Examiners, Raleigh, North Carolina
The National Association of Disability Examiners (NADE) commends
the Subcommittee on Social Security for holding today's hearing. It is
entirely appropriate and urgently needed that public and congressional
attention be directed to `` SSA's Disability Determination and Appeals
Process.'' The Social Security Administration is bringing to a close
this month the last of many experiments aimed at creating a new
disability claims process. SSA now faces critical choices regarding the
direction it must choose to go. NADE considers itself to be an expert
on the disability claims process and we appreciate the opportunity to
present our perspective on this topic.
Who We Are
NADE is a professional association whose mission is to advance the
art and science of disability evaluation and to promote ongoing
professional development for our members. The majority of our members
work in the State Disability Determination Service (DDS) agencies and
are responsible for the adjudication of claims for Social Security and
Supplemental Security Income disability benefits. Our membership also
includes personnel from Social Security's Central Office and its Field
Offices, claimant advocates, physicians, attorneys, and many others.
Our diversity, our immense program knowledge, and our ``hands on''
experience, enables NADE to offer a perspective on disability related
issues that is unique and, more importantly, reflective of a pragmatic
realism.
Current Process
The current disability claims process presents a four tiered
approach that is challenging to the majority of claimants seeking help.
An initial application is adjudicated by the DDS. If denied, the
claimant may request a reconsideration of their claim. This is also
adjudicated by the state DDS. Subsequent appeals would ask for a
hearing before an Administrative Law Judge and review by the Appeals
Council. Further appeals are made in federal court. Initial and
reconsideration decisions are subject to quality review in the DDS and
in SSA's regional offices. Counting waiting times, hand-offs, etc.,
claimants currently will wait an average of 1153 days, more than three
years, for a final decision if their claim is appealed through the
Appeals Council.
Is this the kind of service we should expect from our government?
Do we really want to tell people, who believe they are disabled and
unable to work, that if they can find a way to feed, clothe and house
themselves, and their families, without an income, for more than three
years, we will then give them a decision? I doubt anyone believes this
is the level of service we should be providing. Anyone who does should
be made to wait three years for their next paycheck.
What's Wrong with the Current Process?
The current disability claims process presents many problems. These
are the same problems that have been studied by the Social Security
Administration and this Subcommittee for more than a decade. To date,
affordable solutions have remained elusive. The complexity of the
regulations and rules that govern the disability program and the multi-
layer appeal process tends to discourage many claimants from utilizing
all of their appeal rights. Consequently, SSA has been trying to
redesign the disability claims process. For the most part, these
efforts have been unsuccessful. The problems that persist are numerous:

Timeliness of decisions
Increasing administrative costs
Solvency of Social Security disability trust funds
Disparity in DDS and ALJ allowance rates
Concerns regarding public confidence
Poor customer service throughout the claims process
Inadequate training of staff

Clearly, there is a need for the agency to move forward with
implementing a new disability process that is practical and affordable.
Because of the expected increase in the number of Social Security and
Supplemental Security Income disability claims over the next decade,
improving the disability process is critical to the agency's mission.
SSA will also have to discover a way to incorporate into its assessment
of eligibility for disability benefits a determination of what is
actually needed to return the claimant to work. SSA will need to
develop more aggressive and more comprehensive return-to-work
strategies that focus on identifying and enhancing the work capacities
of claimants and beneficiaries.
Redesign
SSA's most ambitious efforts to redesign the disability claims
process were introduced in 1994. In the ensuing years, SSA tested many
ideas, including the Full Process Model (FPM), the Disability Claims
Manager (DCM), and others that, after lengthy testing, proved to be
inadequate to meet the demands for service and affordability. NADE
raised practical concerns about the feasibility of many of these
proposals but we supported testing to establish whether or not the
ideas would work. Our emphatic condemnation of the Full Process Model
and concerns over the administrative costs of Prototype did cause SSA
to step back from its plans to roll these designs out nationally.
SSA launched its most recent effort to redesign the disability
claims process in October, 1999. In so doing, the Agency ignored
warnings from NADE, from the General Accounting Office, and from
others, that this test was too large and committed too much of the
Agency's resources.
As the Prototype experiment was gradually refined in recognition of
its spiraling administrative costs, it became clear that SSA had
misjudged its data and that prototype did not represent the future of
the disability process. It was clear that the attempt to reduce the
four tiered appeal step to two was not a viable approach.
Administrative Law Judges were not prepared for the tremendously heavy
caseload that resulted from so many claimants choosing to appeal
initial denials. Without an intermediate appeal step, Administrative
Law Judges, already faced with a backlog of cases, were quickly
overwhelmed. The Prototype experiment clearly established the need for
an intermediate appeal step between the initial decision and the
hearing before the Administrative Law Judge.
Prototype also produced one idea that did show promise for the
future--the concept of a Single Decision-Maker (SDM). By eliminating
the need for medical consultants to ``sign off'' on every case and
allowing qualified disability examiners to make decisions on cases they
felt comfortable deciding, the SDM became the one positive result of
Prototype. It was successful in increasing employee satisfaction for
the disability examiner and the medical consultant and, more
importantly, there was no decline in the quality of the decision.
NADE Proposal For A New Disability Claims Process
After more than a decade of redesign efforts, SSA still does not
have an acceptable new disability claims process that will enable the
Agency to handle the expected significant increase in the number of
claims it will receive in the next decade. It does not have in place a
new process that will enforce the need for fair and timely decisions,
coupled with the need to maintain public confidence that only the truly
disabled are awarded benefits. NADE accepted the challenge to develop a
concept for a new disability process that would achieve these goals. A
copy of our proposal, published over three months ago, is attached to
our statement today. What we desired to achieve with this proposal was
to direct attention on a concept for a claims process based on two
ideas:

What is fair for the claimant?
What can SSA afford?

Our experience and expertise, as the only professional association
with the membership base that enables it to view the entire disability
process, was critical to our ability to develop this concept for a
process that, not only would improve the service provided to the
claimant, but would also be affordable. The major highlights of our
proposal include:

Placing greater emphasis on claimant responsibility
Expansion of the Single Decision-Maker in the DDS
Enhancing the current reconsideration to provide a
due process hearing for the claimant
Closing the record after the reconsideration decision
Allowing Administrative Law Judges to make the legal
decisions that they are trained to do
Eliminating the Appeals Council
Establishing a Social Security Court to hear appeals
of ALJ decisions.

We firmly believe that the decision as to whether a claimant is
disabled is a medical decision and should be made by those who are
especially trained to make such decisions. Judging the impact that a
heart attack or stroke has on a person's ability to function in a work
setting is a medical decision and is best made by those who have been
trained to do so.
Reviewing disability determinations to determine if the law was
correctly applied is a legal decision and is best left to those who are
especially trained to make those decisions. American jurisprudence
would not accept a legal decision made by a lay person untrained in the
law. Likewise, America's disability programs should not have to accept
medical decisions made by individuals who are not trained to do so.
NADE's proposal affords the claimant the right to a medical hearing
regarding their eligibility for disability benefits and a legal review
to ensure that the medical decision correctly followed the law. We can
hardly see where the argument that the claimant would lose appeal
rights has any merit.
There have been arguments presented that hearings conducted at the
DDS level would violate the Administrative Procedures Act and would
restrict the claimant's right of appeal. This is clearly not true. The
APA guarantees the claimant is entitled to a hearing to ensure that the
Federal Government agency's decision was made in accordance with the
law. This concept is reinforced in the NADE proposal. We fail see how
it can be advocated that the right to a medical hearing much earlier in
the process would restrict the claimant's appeal rights.
NADE's proposal asserts that the record should be closed after the
DDS hearing. The Association of Administrative Law Judges has also
supported closing the record after the claimant has received a hearing.
Because each appeal beyond the DDS is extremely expensive and each new
appeal level is looking at a new case, the decisions made on appeal
cannot be used to reflect on the decision rendered by DDS adjudicators.
There may be an incentive to not cooperate with the DDS. This is why we
have proposed closing the record after the reconsideration level. It
will add consistency and affordability to the program.
The proposal to close the record simply seeks to incorporate within
the disability program a practice common to the American judicial
system and most state workers compensation systems. Appeals are made on
issues of law and not on a new case. In NADE's proposal, if claimants
believe that new and material evidence does arise after the DDS
hearing, this evidence can be reviewed in the DDS and, if necessary,
the claim folder can be recalled and the file reopened. If the claim is
not reopened, the claimant has the option of submitting a new
application for disability and including this evidence. This process
still provides claimants with faster processing times than currently.
NADE believes that a new disability process should place greater
emphasis on the expectation that claimants, and their authorized
representatives, must assume greater responsibility for cooperating
with all components of the disability claims process. This Subcommittee
was advised in March, 1999 by the U.S. General Accounting Office that,
``frequent delays in disability proceedings are a significant problem
and often attributable to the actions of some disability
representatives.'' The GAO also reported it had found that disability
decision-makers were frustrated by, ``* * * disability program laws
that provide numerous opportunities for representatives to submit new
evidence in support of their client's claim throughout the entire
process and hold SSA primarily responsible for adequately developing
the evidentiary record, even when a claimant has representation.''
There is a growing problem in Continuing Disability Reviews where
claimants refuse to cooperate with requests for information and to
attend consultative examinations. This lack of cooperation is often
encouraged by representatives and we are beginning to see the same lack
of cooperation in initial and reconsideration claims, particularly when
there is legal representation involved.
Claimants and their representatives should be required to cooperate
fully with the decision-makers at each level in the disability process.
Consideration should be given by SSA and the Subcommittee to holding
claimants and their representatives accountable for their actions in
failing to cooperate.
Other aspects of NADE's proposal call for the elimination of the
Appeals Council and the creation of a Social Security Court. The
Appeals Council is an unnecessary appeal step. The complexity of
disability claims should require that a specialized court, similar to
federal bankruptcy and military courts, be created to hear these
appeals.
The DDS hearing decision should be defended in subsequent appeals
by an individual who can present the merits of the decision. Many will,
of course, advocate that this scenario will create an adversarial
relationship between the claimant and the Social Security
Administration at subsequent appeals. We do not believe this will be
the case. Eighty percent (80%) of claims now heard before
Administrative Law Judges involve legal representation for the
claimant. There is no representation of the government's decision.
Administrative Law Judges can be charged with bias if they are
perceived as defending the decision while questioning the claimant.
This process is unfair. The Social Security Advisory Board suggested in
their September, 2001 report that the government should be represented
at the hearing level. We concur with this opinion.
The Electronic Disability Claims Folder
The Commissioner of Social Security recently announced her intent
to have an electronic disability claims folder fully operational in the
field offices and DDSs by January 1, 2004. We believe this is an
ambitious goal for an Agency that has struggled for the past ten years
to develop an electronic folder. However, NADE is encouraged by the
Commissioner's commitment to advancing this goal and we support this
effort. We caution the Subcommittee, however, that the expected costs
will be significant and funding must either be taken from other
components within the disability program that are already experiencing
financial strain, or be provided as new money. It would be unfair to
expect the level of service that has been provided to be maintained if
needed funds are diverted to other projects. We should also not forget
that performance and training issues that would arise from this new way
of doing business have not been addressed. This will require learning
and using new tools and this usually has a negative impact on
production, as it has for the past several years in Wisconsin where the
DDS in that state has been working on a paperless folder pilot for five
years.
Training and Resources
The NADE proposal should be tested to determine whether it can work
and provide better service delivery to the claimant than the current
process. Its success, however, will be contingent on the proper funding
and training being made available to each component in the process.
The need for adequate training has never been more critical.
Advances in technology make it likely that knowledge in the world will
double every two months by the year 2010. Seventy-five percent (75%) of
the technology we will use in 2010 has yet to be invented. It is
critical that all components within the disability program be provided
with the training that will enable them to discharge their
responsibilities in the best interests of the claimants who come to us
for help and the taxpayers who pay for the service delivery.
Conclusion
NADE believes that truly disabled citizens should be awarded
benefits and that those who are not disabled should not receive
benefits, regardless of the claims process used. NADE supports the goal
of allowing disability claimants who should be allowed as early in the
process as possible. Our proposal has the potential of making this
happen in an affordable and expeditious manner.
In its September, 2000 report, the Social Security Advisory Board
reported that, ``. . . in recent decades, disability policy has come to
resemble a mosaic, pieced together in response to court decisions and
other external pressures, rather than the result of a well-thought out
concept of how the programs should be operating . . . Policy and
administrative capacity are dramatically out of alignment in the sense
that new and binding rules of adjudication frequently cannot be
implemented in a reasonable manner, particularly in view of the
resources that are currently available.'' NADE concurs with this
observation. We believe our proposal for a new disability claims
process achieves the goal of providing a well thought out concept that
describes how the disability program should operate. It is time to move
forward with a new disability claims process that reflects pragmatic
reality and offers the best service to the claimant at the best price
to the American taxpayer. It is equally important that the Commissioner
be given the support necessary to make the appropriate changes that
will recommit the Agency to its primary purposes of stewardship and
service.
The disability program presently requires about two-thirds of SSA's
operating budget ($8 billion in FY 2002-2003). To continue to allow the
disability program to operate as described in the report from the
Social Security Advisory Board would be a violation of the public's
trust and the mission of SSA--``To promote the economic security of the
nation's people through compassionate and vigilant leadership in
shaping and managing America's social security programs.''
At her confirmation hearing last year, the new Commissioner of
Social Security asserted, ``I do not seek to manage the status quo.''
NADE agrees that managing the status quo is no longer a viable option.
While we do not support change for the sake of change, we recognize
that the status quo has ceased to provide the level of service those
who seek our help have a right to expect. The question we must all seek
to answer is, ``How will we respond to the need to improve service
delivery while recognizing that financial resources have constraints?''
No other agency has a greater impact on the quality of life in this
nation and the American public will judge the ability of their
government to meet their needs by the quality of service provided by
SSA. In announcing today's hearing, the Honorable Clay Shaw, Chairman
of this Subcommittee, commented: ``Individuals with disabilities,
already burdened by the challenges of their illness or injury, are
often in desperate need of benefits to replace lost income. They
deserve, and should receive, timely and accurate decisions through a
fair and understandable process. Our challenge is to thoughtfully and
carefully examine the disability determination and appeals process to
ensure it meets the needs of individuals with disabilities and their
families.'' NADE believes the proposal we have submitted for a new
disability claims process addresses the Chairman's challenge.
______

NADE Proposal for New Disability Claims Process

February 26, 2002
1. LIntake of new disability claims at the Social Security Field
Office would not be significantly altered from the current practice
with the following exceptions:

a. LGreater emphasis would be placed on the inclusion of
detailed observations from the claims representative.
b. LThe claimant would be provided with a clear explanation of
the definition of disability by the claims representative. The
definition would also appear on the signed application.
c. LSSA's web site should clearly indicate that this is a
complex process that would be better served if the claimant
filed the application in person at the Field Office.
d. L Quality review of the Field Office product would be added
to demonstrate SSA's commitment to build quality into the
finished product from the very beginning of the claims process.
e. LSSA's outreach activities would combine education with
public relations. The Agency's PR campaign would remind
potential claimants of the definition of disability with the
same degree of enthusiasm as the Agency's efforts to encourage
the filing of claims.
f. LGreater emphasis would be placed on claimant
responsibility.

2. LDDS receipts the new claim and assigns the claim to a
disability examiner. The Disability Examiners initiates contact with
the claimant to:

a. LThe Disability Examiner will verify alleged impairments,
medical sources and other information contained on the SSA-
3368.
b. LThe Disability Examiner will provide a clear explanation of
the process and determine if additional information will be
needed.
c. LThe Disability Examiner will inform the claimant of any
need to complete additional forms, such as Activities of Daily
Living questionnaires.

3. LExpand the Single Decision Maker (SDM) concept to:

a. LInclude more claim types
b. LAllow more disability examiners to become SDMs
c. LStandardize national training program for all components of
the disability process
d. LEstablish uniform criteria for becoming SDMs
e. LStandardize performance expectations for all components of
the disability process

4. LIf the initial claim is denied by the DDS, the denial decision
will include an appeal request with the denial notice that the claimant
may complete and return to the DDS.

a. LThe requirement for a clear written explanation of the
initial denial will remain a major part of the adjudicative
process.
b. LProcess Unification rulings should be reexamined and, if
necessary, modified to clarify how the initial disability
examiners should address credibility and other issues.
c. LClaimant responsibility will be increased in the new
process

5. LThe denied claim will be housed in the DDS for the duration of
the period of time the claimant has to file an appeal. During this
period of time, claims could be electronically imaged (with adequate
resources--this would further the electronic file concept).

6. LThe appeal of the initial denial will be presented to the DDS.
Upon receipt of the request for an appeal, the claim will be assigned
to a new disability examiner. Under this proposal:

a. LThis appeal step would include sufficient personal contact
to satisfy the need for due process.
b. LThe appeal decision, if denied, would include a Medical
Consultant's signature.
c. LThe decision would include findings of fact.
d. LThere would be a provision to include an automatic remand
to DDS on appeals for denials based on failure to cooperate.

7. LThe record should be closed at the conclusion of this appeal
(including allowing sufficient time for explanatory process before the
record closes).

8. LAppeal to the Administrative Law Judge must be restricted to
questions of law rather than de novo review of the claim.

a. LThe DDS decision needs to have a representative included in
the hearing to defend the decision.
b. LThere must be an opportunity to remand to DDS but such
remand procedures must be carefully monitored to prevent abuse
and remands should only occur for the purpose of correcting
obvious errors.

8. LThere needs to be a Social Security Court to serve as the
appeal from OHA decisions.

a. LThe Social Security Court will serve as the final level of
appeal.
b. LThe Social Security Court will provide quality review of
ALJ decision.
c. LThe Appeals Council would be eliminated, limiting the total
number of appeal steps within SSA to three. Appeals beyond the
ALJ level would be presented to the Social Security Court.
d. LThe Social Security Court would be restricted to rendering
only a legal decision based on the application of the law.

Explanation of New Disability Claims Process Proposed by NADE

NADE considered various alternatives to the current disability
claims process before deciding on this process as representing the hope
for a claims process that truly provided good customer service while
protecting the trust funds against abuse. It was our intent to develop
a vision for what the total program should look like and not just the
DDS piece of the puzzle. We believe in the concept of ``One SSA'' and
our proposal is submitted based on the belief that all components
within the disability program should be united in the commitment to
providing good customer service at an affordable price. Quality
claimant service and lowered administrative costs should dictate the
structure of the new disability program.
The critical elements identified in the NADE proposal are:

The expansion of the Single Decision Maker concept to
all DDSs and expanding the class of claims for which the SDM is
able to provide the decision without medical or psychological
consultant input. Continuing Disability Review cases (CDR's)
and some childhood and mental cases can easily be processed by
SDMs.
More early contact with the claimant by the DDS to
explain the process and to make the process more customer
friendly. The Disability Examiner is able to obtain all
necessary information while clarifying allegations, work
history, and treatment sources. The claimant is educated about
the process so they know what to expect.
Housing the initial claim folder on denied claims in
the DDS pending receipt of an appeal of that denial. This will
effectively eliminate significant shipping costs incurred in
transporting claims from the DDS to the Field Office and then
back to the DDS. Costs of storage in the DDSs would be
significantly less than the postal fees incurred by SSA in the
current process. Housing the claims at the DDS instead of the
Field Offices could save as much as $20 per claim in shipping
costs. It will also reduce processing time by eliminating a
hand-off.
Closing the record after the appeal decision is
rendered. NADE believes that closing the record prior to any
subsequent ALJ hearing is critical to generating consistency,
providing good customer service, restoring public confidence
and reducing the costs of the disability program. Without it,
there will continue to be two programs, one primarily medical
and one primarily legal, with two completely different
outcomes. We are unclear as to the degree of personal contact
that would be required to satisfy the due process requirement
at this appeal level and would defer to SSA the decision as to
how much contact is needed and how the requirement could be
met. Is a face-to-face hearing necessary or can a phone
interview suffice? Even the former, conducted in the DDS, would
be substantially less costly than the current hearing before
the ALJ. The DDS hearing would allow the claimant to receive a
much more timely hearing than the current process allows. NADE
also believes that the role of attorneys and other claimant
representatives would be significantly diminished as the
opportunity for reversal of the DDS decision would be lowered
substantially. The DDS hearing would be an informal hearing,
lessening the impact attorneys have at this level.
NADE believes that the current 60 day period granted
to claimants to file an appeal should be reexamined in light of
modern communication and greater ability of claimants to file
appeals more quickly. Reducing the time allowed to file an
appeal would produce cost savings to the program and aid the
claimant in obtaining a final decision much more quickly.

The additional costs incurred by the DDSs in this new process would
be paid for from monies reallocated from OHA and from the cost savings
created by less folder movement between the DDSs and the Field Offices.
Political decisions will have to be made to reallocate these funds and
these decisions will not be popular. Because of turf guarding by the
various components within SSA and a general unwillingness to accept
change, NADE believes that the victim in past efforts to develop a
comprehensive disability claims process has been the claimant. The
question must be asked, ``Who do we serve, ourselves or the claimant?''
NADE envisions a claims process that would reinforce the medical
decision made by the DDS and limit the OHA legal decision to addressing
only points of law. NADE believes this proposal would produce a high
level of consistency for the disability decisions rendered by the DDSs
while significantly reducing the opportunities for OHA to reverse DDS
decisions. This would help restore public confidence in the system,
provide good service to the claimant and reflect good stewardship since
the entire process should prove to be less costly than prototype or the
traditional process. The decision as to whether a claimant is disabled
would rightfully remain primarily a medically based decision. Claimants
who appeal the DDS decision to an ALJ would be entitled to hire legal
counsel if they wish. Likewise, SSA would employ a legal representative
to define the legal merits of the DDS decision. Each side would present
legal briefs in support of their position, rather than appearing in
person, and the ALJ would make the decision based on review of the
claim file and the legal briefs. If necessary, the ALJ could be
permitted to request that both sides appear in person but this should
be only for rare circumstances. Unless the law was incorrectly applied,
the DDS decision would be affirmed. Any appeal of the ALJ decision
would be made to the Social Security Court and either side could
appeal.
The proposal is predicated on the assumption that sufficient
staffing and resources would be made available to the DDSs. It is also
predicated on the need for SSA to clearly define the elements that will
satisfy the process unification initiatives. It is critical that SSA
should provide clarification of what steps must be followed and provide
the funds necessary. To minimize the need for additional resources, we
believe the process unification rulings should be modified in
accordance with the recommendations that have been proposed by various
workgroups. Failure to adhere to this recommendation could result in
the likelihood of additional lawsuits throughout the country that will
make it mandatory for DDSs to adhere to regulations for which they are
not funded. Such a situation would have serious consequences for the
ability of the DDSs to provide good customer service and also meet the
requirements established by the courts.

Chairman SHAW. Thank you. Ms. Dorn?

STATEMENT OF LINDA DORN, VICE PRESIDENT, NATIONAL COUNCIL OF
DISABILITY DETERMINATIONS DIRECTORS, LANSING, MICHIGAN

Ms. DORN. Mr. Chairman, thank you for your invitation to
participate in this hearing on the challenges and opportunities
facing the Social Security Disability process. Our organization
agrees with your statement that improvement in the disability
determination function is among the primary challenges facing
the Commissioner. The National Council of Disability
Determination Directors (NCDDD) reaffirms all its previous
commitments to participate in finding and implementing
responsible solutions with accountability by all stakeholders.
The NCDDD is a professional association of directors and
managers of agencies of the State government, performing the
disability determination function on behalf of the Social
Security Administration. The NCDDD's goals focus on finding
ways to establish, maintain and improve fair, accurate, timely
and economical decisions to persons applying for disability
benefits.
Congress created the Federal/State relationship in response
to the need for professional experts working effectively and
efficiently with other community based services. It is through
the State initiatives, work with the medical community, cost
effectiveness in personnel usage, and working with individual
State infrastructures to provide referrals to State agencies
that serve the disability program and the American public well.
This relationship should continue to be nurtured and supported
to allow for alignment with other community-based services. The
Federal/State relationship, while not perfect, is at its best
when integrated with the administration's mandate of empowering
States to act on behalf of and empowering our most vulnerable
citizens.
We appreciate the recommendations of the bipartisan Social
Security Advisory Board as stated in their January 2001 report
in regard to strengthening the Federal/State relationship. Our
recommendations today focus on six key issues in need of
attention: adequate resources, clear concise policy, a quality
culture promoting consistency, integrated technology systems,
support for the interim decisions are post prototype, and
consistency between the DDSs and OHA.
First in regard to resources. The complex task of applying
the statutory definition of disability requires extensive
development of medical evidence, expert analysis of evidence,
and careful explanation of conclusions. The process is
therefore costly. Determining eligibility for disability
benefits requires staff trained in making complex medical,
psychological, vocational judgements. It is not done in any lab
situation or a vacuum, but rather in the real world of mounting
pressures. The DDS has continued to be the component performing
the mission of Social Security disability programs
productively, responsively, timely, consistently and cost
effectively. Federal components have referred to the State
agencies in the DDS as the best deal in government services. A
clear relationship exists between the level of service we are
able to provide and the resources available to provide that
service. The recent history of downsizing, the attempts to
implement multiple costly projects, pilots, prototypes, and the
creation of new policies that are expensive to administer and
other unfunded mandates have contributed to the current
situation in which the program and the resources available to
carry it out are seriously out of alignment. The task to
resource deficit has resulted in an alarming situation about
which we want to be very clear.
Presently our program has well over 125,000 disability
cases nationally pending than we are able to process. These
claims and disability application are awaiting assignment to
caseworkers because the caseloads are at maximum capacity for
the resources available. Worse, SSA has predicted that the
current resource allocation, that this number will continue to
grow. The NCDDD feels that this quality of service delivery is
unacceptable and amounts to a failure to provide the level of
service that the public deserves.
Second, improving policy and training as recommended in the
Advisory Board report, the most important step SSA can take is
to improve the process to develop ongoing joint training for
all adjudicators in all components. The Board also noted that
such training presumes the existence of a clear policy base,
which is clear, concise and applicable in the real world
setting. The NCDDD indicates much more remains to be done in
the policy arena. Quality assurance, along with clear, concise
policy, NCDDD recommends that SSA assign a high priority to
revising the quality assurance system so as to achieve the goal
of unifying the application of policy. The NCDDD endorses many
aspects of the Lewin Report. We commend SSA and the
Commissioner for their recent steps to appoint an executive
lead to this important focus on quality. The NCDDD has a group
ready, identified, to step forward and work with the
Commissioner on this effort.
System support, the development and enhancement of
effective performing electronic systems is critical to
delivering a high level of service. Historically, the DDSs have
an excellent track record of having worked together to develop
system capabilities to support their business processes. The
NCDDD wants to express our support for accelerated electronic
technology initiatives. We recommend further and future
development be accomplished with a greater reliance on DDS
systems experts and personnel. By working together, the DDS
systems experts and private sector and SSA will achieve the
bold timeline announced by the Commissioner.
Our support for Post-Prototype and strengthening
reconsiderations, we applaud the Commissioner's expeditious
actions on prototype, ending years of testing and pilots. We
want to acknowledge the decisions are the beginning steps of
the process improvements. We want the second level of a
possible review at the DDS level need not be an extra step, but
could be such that would provide a better product than those
that do go on to the next step in the appeals. We see as the
most important task consistency and bringing together
reasonable, consistent decision making to the process and the
outcomes between the DDS and the Office of Hearings and
Appeals.
The DDS process initial and reconsideration level, in an
average of about 70 days at a cost about $300 per case,
according to data. According to SSA quality reviews we have a
decisional accuracy of about 97 percent. Eighty percent of all
allowances of those who receive disability benefits are allowed
through decision made at the DDS. The NCDDD agrees that
disability claims meeting the definition of disability should
be allowed at the earliest step in the process.
In conclusion, there is not one single fix. There are
challenges to the disabled citizens, the program, the policy,
the quality assurance, the employees that make an effort to
implement the policy, our Agency, as well as the taxpayer
challenges, are in need of our collective attention. The NCDDD
restates its desire to continue to work together with you
during the continued evolution and improvement of the
disability program. Thank you.
[The prepared statement of Ms. Dorn follows:]
Statement of Linda Dorn, Vice President National Council of Disability
Determinations Directors, Lansing, Michigan
Mr. Chairman, thank you for your invitation to participate in this
hearing on the challenges and opportunities facing the Social Security
Disability process at the initial, reconsideration and continuing
disability levels at the State Divisions of Disability Determination
Services (DDS). Our organization agrees with your statement that
improvement in the disability determination function is among the
primary challenges facing the new Commissioner. The National Council of
Disability Determination Directors (NCDDD) reaffirms all its previous
commitments to participate in finding and implementing responsible
solutions with accountability by all stakeholders.
Before commenting on specific issues on the topic of today's
hearing, we would like to restate the purpose of our organization,
explain the reasons for the federal state partnership, and describe our
commitment to the identification of barriers to service improvements
and to the search for solutions to the challenges facing the disability
programs at the DDS adjudication levels.
The NCDDD is a professional association of directors and managers
of the agencies of state government performing the disability
determination function on behalf of Social Security. NCDDD's goals
focus on finding ways to establish, maintain, and improve fair,
accurate, timely, and economical decisions to persons applying for
disability benefits.
Congress created the federal state relationship in response to the
need for experts at the grass roots level working effectively and
efficiently with other community-based services. The intention was that
the DDS be the human face in government services to our disabled
population. This still proves to be the case in most instances. State
initiatives; cost effectiveness in personnel usage, and working within
the individual state infrastructures to provide referrals to related
state agencies have served the disability program and the American
public well. This relationship should continue to be nurtured and
supported to allow for alignment with other community-based one-stop
services. In reality, the federal state partnership, while not perfect,
is at its best when integrated with the Administration's mandate of
empowering the states to act on behalf of and empowering our most
vulnerable citizens.
The SSA/DDS partnership is held to a high standard by close contact
with individual state governors, U.S. Congressional delegations and the
American public. Serving the public requires close, collaborative
teamwork. We appreciate the recommendations of the bipartisan Social
Security Advisory Board (SSAB) as stated in their report of January
2001 and generally concur with their findings, particularly in regard
to strengthening the federal state relationship in the short run.
The definition of disability has remained essentially unchanged in
the past 30 years. It was always meant to be a more stringent standard
compared to many other programs. Recent attention has been focused on
allowance rates and other issues when, in fact, the program was never
designed to allow every individual with any disability. Contrary to
some statements contending the disability programs have not changed
over the past years, the program has indeed experienced multiple
changes in leadership, focus and direction. For example, mental,
childhood, pain, treating source opinion, and credibility issues have
engendered many changes which in turn impacted our ability to provide
thoughtful, consistent, timely adjudication of Social Security
disability cases.
Our recommendations today focus on key issues on which the
Commissioner must take prompt and decisive action in order to improve
public service for the programs that we jointly administer with SSA.

1. LAdequate resources
2. LClear, concise policy
3. LA quality culture promoting consistency and integrity
4. LUp to date, integrated systems support
5. LSupport for the interim suggestions ``Post-Prototype
strengthened reconsideration''
6. LConsistency between DDSs and OHA
1. Resources
The complex task of applying the statutory definition of disability
requires extensive development of medical evidence, expert analysis of
the evidence, and careful explanation of the conclusions. The process
is therefore costly. Because determining eligibility for disability
benefits are far more than a medical clerical function, the process
requires staff trained in making complicated medical, psychological and
vocational judgments. This is not done in a ``lab'' situation or vacuum
but rather in the real world of mounting pressures. The DDSs continue
to be the component performing the mission of the Social Security
disability programs productively, responsibly, timely, consistently,
and cost effectively. In fact, various SSA components have referred to
the state agencies as being the ``best deal'' in government service.
A clear relationship exists between the level of service we are
able to provide and the resources available to provide that service.
The recent history of downsizing, the attempts to implement multiple
costly projects, pilots and prototypes, the creation of new policies
that are expensive to administer, and other unfunded mandates have
contributed to the current situation in which the program and the
resources available to carry it out are seriously out of alignment.
The task-to-resource deficit has resulted in an alarming situation
about which we want to be very clear. Presently our program has well
over 125,000 cases pending than we are unable to process. These
disability applications are awaiting assignment to caseworkers because
all the caseloads are at maximum capacity for the resources available.
Worse, SSA has predicted that, with the current resource allocation,
this number will continue to grow.
NCDDD feels that this quality of service delivery is unacceptable
and amounts to a failure to provide the level of service that the
public deserves.
2. LImproving Policy and Training to Produce More Consistent and
Accurate Decision Making.
As recommended by the Advisory Board in its report of August of
1998, ``the most important step SSA can take to improve the process is
to develop on-going joint training for all adjudicators in all the
components that make and review disability determinations''. The Board
also noted that such a training program presumes the existence of a
policy base, which is clear, concise, and applicable in a real world
setting.
Presently, SSA policy for evaluating disability claims is
fragmented, complex, conflicting, confusing, and sometimes obsolete.
This compromises the ability of the DDSs to adjudicate cases
consistently and accurately and is part of the reason that more than
60% of the applicants who appeal denial of benefits at the initial
level receive those benefits after appeal.
While SSA should be commended for its recent efforts to introduce a
greater degree of consistency into the process, much more remains to be
done.
3. Quality Assurance
Along with clear, concise policy and guidelines, NCDDD recommends
that SSA assign a high priority to revising its quality assurance
system so as to achieve the goal of unifying the application of policy
among all components. The present QA system is out of date, applies
differently to the various components, and induces inconsistency of
decision-making.
SSA presently is in possession of an independent consultant's
report concerning changes in the QA system. NCDDD endorses many aspects
of the Lewin report and recommends that it receive expedited attention
by top management at SSA. We commend SSA for their recent steps to
appoint an executive lead to this important focus on quality.
NCDDD is committed to work with SSA to help create a new quality
culture and a new quality process.
4. Systems Support
The development and enhancement of effectively performing
electronic systems is critical to delivering high quality service at a
reasonable cost. Historically, DDSs have an excellent track record of
having worked together to develop systems capabilities to support their
business processes. In the last several years, SSA has embarked on
various initiatives to develop, at the centralized level, alternative
systems that would replace the equipment and software used in the DDSs.
These initiatives have been extremely costly and have not produced
advantages commensurate with their costs. While the available resources
were diverted to the unsuccessful development of SSA systems,
enhancement of the DDS systems has been curtailed due to lack of
funding.
NCDDD wants to express our support for accelerated electronic
disability technology initiatives.
NCDDD recommends that future development and enhancement of
electronic systems be accomplished with greater reliance on the DDS
systems experts and personnel.
We believe it is reasonable to consider system software development
be a task for which the knowledge, skills and ability of the private
sector should be better utilized. Only by working together with the DDS
systems experts and private sector will SSA achieve the bold timeline
announced by the Commissioner.
5. LSupport for the interim suggestions ``Post-Prototype'' and
strengthened Reconsideration.
We applaud the Commissioner's expeditious actions on prototype
issues ending years of testing and pilots. We want to acknowledge the
decisions are the beginning steps of process improvements. Further the
Social Security Advisory Board (SSAB) reported in January 2001 any
plans to eliminate the reconsideration should be reviewed carefully.
The rationale was that recon had become a meaningless step that only
delayed the correct decision. But a second level of review at the DDS
level need not be meaningless. Claimants could be provided the
opportunity for a face-to-face de novo hearing conducted by highly
trained and experienced DDS reviewers. This should enhance the
reliability and accuracy of DDS decisions and reduce the need for
claimants to go through the complex and lengthy ALJ hearing process.
NCDDD's position is an alignment of the SSAB's recommendation.
6. Consistency
We are concerned that by attempting to move on so many fronts
simultaneously, SSA will sacrifice progress toward solving what we see
as its most important task--bringing reasonable consistency to the
decision making processes and outcomes between the state DDSs and the
SSA Office of Hearings and Appeals (OHA).
We believe that variance in decision making between the two levels
is a serious problem in the disability program. Without asserting which
component is ``right'', the facts are as follows: DDSs process initial
and reconsideration level decisions on average in about 70 days at a
cost of about $300 per case. According to SSA quality reviews, DDS
claims have a decisional accuracy of about 97%. Additionally, we
believe that it is critically important to remember that eighty percent
(80%) of all the individuals who receive disability benefits are
allowed through a decision made by the DDS.
NCDDD agree that cases meeting the definition of disability should
be allowed at the earliest step in the process.
There has historically been an absence of uniformity and stated
clear policy instructions for adjudicators at the two levels. There has
been no established ongoing common training for personnel.
Separate and opposite quality assurance and case review systems
tend to drive the two components apart rather than to bring them
together.
Mr. Chairman and members of the committee, thank you again for the
opportunity to provide these comments on the challenges and
opportunities facing the disability program. NCDDD restates its desire
to continue to work together with SSA during the continued evolution
and improvement of the program. We appreciate this committee's
initiative in addressing and resolving barriers to improved service
delivery.

Chairman SHAW. Thank you. Dr. Stapleton?

STATEMENT OF DAVID C. STAPLETON, PH.D., DIRECTOR, CORNELL
CENTER FOR POLICY RESEARCH

Dr. STAPLETON. Mr. Chairman, Members of the Subcommittee,
thank you for inviting me today.
Since 1993 the bulk of my professional career has been
devoted to work on projects concerning SSA's Disability
programs. My knowledge of the disability determination process
comes from assistance that I provided to SSA in three
evaluations of its efforts to improve the determination
process, plus work on another project to review the quality
assurance process. Martin Gerry referred to the report we
produced today, which I have here in my hand, in his testimony.
I am pleased that the Commissioner has followed our first
recommendation in that report to appoint a quality work group
at a very high level to study some of the options we developed
and try to implement them.
My briefing paper presents my conclusions on the
performance of the disability determination process and the key
challenges that the Agency faces in trying to improve it. My
oral remarks are confined to five recommendations that I see as
key to making significant improvements
My first recommendation is to create a disability czar.
This recommendation follows from the maxim that if it is
everybody's responsibility, it is nobody's responsibility.
Currently responsibility for the disability programs is divided
among the deputy commissioners. Each deputy commissioner has
responsibilities to go beyond the disability programs, and all
of them interact with each other as equals. The Agency needs a
single person whose sole responsibility is the disability
programs, who has the authority needed to improve cooperation
and coordination among the offices, and who is accountable to
the Commissioner for all aspects of disability program
performance. The senior advisor who has recently been appointed
is not the disability czar I have in mind. It is possible that
that position could evolve into a disability czar.
My second recommendation is to develop a modern performance
management system for the disability programs. This is the
thrust of our quality assurance report. Such a system will
require improved information technology, improved performance
measurement, consistent use of performance score cards in every
day decisions, introduction of significance performance
incentives, and use of management techniques that build a
quality culture and support continuous improvement.
My third recommendation is to assign responsibility for
each initial determination to a single office. This
recommendation also follows from the maxim that if it is
everybody's responsibility, it is nobody's responsibility.
Currently no office, let alone individual, takes ownership of
an application. Each office involved blames the other for poor
performance, and inter-office communications delay the process,
use significant resources and result in duplication of effort.
The substantial success of the Disability Claims Manager test
demonstrates the gains to be made from single office
responsibility. I think the DCM went too far, personally, by
giving a single individual responsibility for adjudicating all
aspects of all adult applications. In so doing, it also
consolidated responsibility into a single office and gave a
single individual ownership of each application. The SSA has
concluded that the DCM, as tested, substantially reduced
processing time, increased claimant satisfaction and improved
employee satisfaction with no effect on measured accuracy, but
at an increased cost.
My interpretation of the evidence--and let me tell you, I
was intimately familiar with that evidence--is that it is
actually more favorable than SSA's. It appears to me that the
DCM is roughly cost neutral relative to the current process, as
it was implemented in the test, and also that it reduced
processing time by more than SSA's report indicates.
The most vexing question about assignment of responsibility
to a single office is: whose office? There are really three
options, SSA field offices, State run offices, and offices that
are established by private contractors. All of these ideas have
strengths and weaknesses, which I discuss in my briefing paper.
I'm not ready to endorse any one of these approaches over the
others, but I do think that one of them will have to be tried
if significant progress is to be made.
The fourth recommendation is that the Agency should abandon
the one-adjudicator-fits-all model. Currently each medical
determination is the responsibility of just one disability
examiner with some assistance from experts. This approach is
probably efficient for a large majority of cases, but the
complexity of the medical, vocational and legal issues involved
in a significant number of cases requires a team approach. Such
an approach is used for complex determinations conducted by
private disability insurers, as well as for many other complex
medical and non-medical determinations.
My final recommendation for improving the initial
determination process is to address the problems with the
appeals process, and in so doing I'm echoing the recommendation
of Hal Daub. Current problems with the appeals process
undermine the initial process because it is nearly impossible
for SSA to obtain useful information from the appeals process
and use it to improve the initial process. Defenders of the
initial process allege that ALJs are out of control and they're
undermining the initial process. Others allege that applicants
help their representatives game the system by withholding
evidence at the initial level so they can present it to an ALJ.
If the ALJ denies their application, they shop for a new ALJ by
filing a new application.
Given the lack of information about decisions at the
appeals level, it is hard to know how much truth there is in
these allegations, but it is clear to me that the initial
process is being undermined by the lack of trust in the appeals
process.
Those are my five recommendations. Thank you again for
inviting me to testify. I would be pleased to answer your
questions.
[The prepared statement of Dr. Stapleton follows:]
Statement of David C. Stapleton, Ph.D., Director, Cornell Center for
Policy Research
This briefing paper is largely based on the knowledge I gained
through work that was performed under contracts from the Social
Security Administration to The Lewin Group and its subcontractors,
Cornell University and Pugh Ettinger McCarthy Associates, LLC. I
gratefully acknowledge the contributions of individuals in those
organizations to the information contained herein and to my thinking on
this subject. The views expressed in this briefing paper and my oral
remarks to the Subcommittee are, however, my own, and do not represent
the views of the Social Security Administration, Cornell University, or
Pugh Ettinger McCarthy Associates.
Directions for Improvements to the Social Security Administration's
Disability Determination Process
I. Introduction
I am an economist, with strong training and experience in the
conduct of quantitative evaluations of social service programs. The
bulk of my professional career since 1993 has been devoted to work on
projects concerning the Social Security Administration's (SSA's)
disability programs, Social Security Disability Insurance (DI) and
Supplemental Security Income (SSI), and other disability programs and
policies. My knowledge of the disability determination process comes
from assistance that I provided to the SSA in evaluation of three of
its efforts to improve the determination process--the Full Process
Model (FPM), the Disability Claims Manager model (DCM), and the
Prototype--and from a project to review and develop options for
improvements to the Quality Assurance process for disability
determinations. The product of the latter was a voluminous report,
which included extensive background material, findings from our
analysis, and numerous options for improvement.\1\ My Cornell colleague
Gina Livermore co-led the first three of these efforts, and Michael
Pugh of Pugh Ettinger McCarthy Associates, LLC co-led the last.
---------------------------------------------------------------------------
\1\ See D.C. Stapleton and M.D. Pugh, Evaluation of SSA's
Disability Quality Assurance (QA) Processes and Development of QA
Options that will Support the Long-term Management of the Disability
Programs, to the Social Security Administration, 2001. http://
www.quintiles.com / products and services / specialty consulting / the
lewin group / lewin publications / detail / 1,1278,213,00.html.
---------------------------------------------------------------------------
This paper focuses on the initial determination process for all
types of applications and continuing disability reviews (CDRs) (i.e.,
everything up to appeals to the Office of Hearings and Appeals),
reflecting the Subcommittee's interest for this hearing. Some material
concerning potential changes to appeals above this level is introduced
because of its relevance to the initial determination process.
I begin by briefly summarizing my own conclusions about the
performance of the disability determination process. I then describe
challenges to improving the process that are posed by the nature of the
determinations being made. It is critical to keep these challenges in
mind as improvements are developed and implemented. I then describe
five changes to the initial process that I believe are key to
achievement of significant process improvements.
II. Performance of the Disability Determination Process is Poor
Performance of the process is poor. Mean processing times at the
initial level are very long. Approximately one-third of all allowances
are made to applicants whose applications are initially denied,
including many applications that are allowed on the basis of the
supporting evidence collected at the initial level. As a result, the
administrative cost of appeals is very high. The cost to applicants
whose awards are delayed, and who are often very vulnerable, is perhaps
greater, although it is not a line item in the federal budget. Worse
yet is the cost to an unknown number of applicants who should be found
eligible, but whose claims are initially denied and who fail to appeal.
There is also substantial evidence that eligibility criteria are
applied inconsistently across state Disability Determination Services
(DDSs), and even across disability examiners within DDSs, although SSA
does not currently have a good system to document it. We found one
convincing indicator by looking at the spread of initial allowance
rates across examiners within four DDSs. In each DDS, the examiners
included were experienced, made several hundred decisions per year, and
were drawing applications randomly from the same queue. We used
statistical methods to calculate that the luck of the draw would lead
to a spread in allowance rates across examiners of about 10 percentage
points within each of the DDSs, but we found that the actual spread in
allowance rates was 10 to 19 percentage points greater. Thus, it
appears that the examiner in a DDS that happens to get assigned to a
claim could affect the chance of that claim's allowance by 10 to 19
percentage points. It is not hard to imagine that differences across
DDSs are much greater, because of differences in management, training,
examiner qualifications, expert consultants, the health care system in
the state, and other factors.
Other evidence indicates that decisions are significantly
influenced by incentives. Dramatic evidence of this occurred in the
early 1980s. At that time, SSA, at the direction of Congress, started
conducting pre-effectuation reviews of a large share of initial awards
in response to low allowance accuracy identified through the quality
assurance process; denial accuracy was much better. Over three years,
allowance accuracy increased substantially, but denial accuracy fell by
essentially the same amount. The most obvious explanation for this
reversal in the two accuracy rates is that the pre-effectuation review
process made it more costly for examiners to allow error-prone cases
than to the deny them, tipping the balance in favor of denials.
Although cause and effect cannot be proved, I have not heard a more
convincing explanation.
People involved in the process are disgruntled about it.
Applicants, adjudicators, managers, union leadership and others all
have complaints that are difficult to dismiss. DDSs complain about the
SSA field offices, and vice versa. Morale is low, leading to high
turnover in many offices.
Some would say that the process is also very costly, but what is
the benchmark against which we can say costs are high or low? In 1999,
as near as I can tell, SSA spent about $1,400 per application
adjudicated--including appeal costs, quality assurance costs, and any
other costs that SSA associates with applications. The actuaries
estimate that the present value of the average SSDI award, including
Medicare benefits, is on the order of $100,000. Is $1,400 too much to
be spending when this much money is at stake? One private disability
insurer told us they were spending $2,400 per application when the
amount at stake for the average claim was much lower. Putting more
resources into the current process in a reasonably judicious manner,
without any other changes, would clearly improve other aspects of
performance, but it also appears that substantial improvements in
performance could be achieved more efficiently by other means.
III. The Nature of Disability Determination Poses Significant
Challenges to Performance Imporvements
Several features of disability determinations are significant
challenges to improving process performance. The first is the highly
complex and diverse nature of the medical, vocational, legal, and
financial issues involved in making determinations. An impressive array
of knowledge is required to make appropriate decisions in all cases.
The second is the high level of subjectivity involved in many
decisions--assessments of severity of functional limitations, the
credibility of evidence about pain and other symptoms, the weight to be
given to source evidence versus a medical examiner's evidence, and the
value of seeking medical evidence of record from certain providers, are
all examples. It appears that there is room for well-trained, well-
intended examiners to disagree on the ``correct'' decision in a
substantial number of cases.
The third challenge is that the applicant has a substantial
incentive--the potential benefit award--to mislead the adjudicator. The
applicant's supporter, including the applicant's provider, might share
that incentive.
The fourth challenge is that the program exists within an agency
that, despite its fairly recent independence, is subject to the
vicissitudes of the political process. Congressmen and governors
attempt to influence the program in the interests of their
constituents. While this can be a positive force for performance
improvement in some circumstances, it can undermine improvement in
others. Unions, professional organizations, and other groups can be
expected to resist changes that are not in the interest of their
members.
The fifth challenge is that major change takes time. The number of
years needed is likely longer than a Commissioner's six-year term.
Major change also takes extra resources during the transition period,
and is likely to crowd out other agency priorities.
Perhaps the most significant challenge is that the concept of
disability in the programs is out-of-step with current thinking.
Advocates, researchers, policymakers, and others have embraced the idea
that the inability to work results from the interaction of impairment,
or functional limitations, with a person's environment, yet the program
is required to make determinations on the basis of the old notion that
disability is ``medically determinable.'' Policy is changing in ways
that reflect the new thinking, albeit very slowly, and the
determination process, as well as the broader operations of the
disability programs, will need to change with it.
IV. Five Key Changes to Achieve Significant Process Improvements
There is much that can be done to produce small improvements to the
initial determination process, but significant improvements require
major change. I have developed a list of five changes that I think are
key to making significant process improvements.
1. Appoint a disability czar: A single person who reports to the
Commissioner must be given lead responsibility for all aspects of the
disability programs. The recommended change follows from the maxim that
``If it's everybody's responsibility, it's nobody's responsibility.''
Currently, responsibility for the program is divided among the Deputy
Commissioners, each Deputy Commissioner has responsibilities that go
beyond the disability programs, and all interact with each other as
equals. The Agency needs a single person whose sole responsibility is
the disability programs, who has the authority needed to improve
cooperation and coordination among the offices, and who is accountable
to the Commissioner for all aspects of disability program performance.
2. Develop a modern performance management system. The thrust of
our quality assurance report is that SSA needs to develop a modern
performance management system for the disability programs, including
the determination process. Such a system will require improved
information technology, improved performance measurement, consistent
use of performance score cards in everyday decisions, introduction of
significant performance incentives, and use of management techniques
that build a ``quality culture'' and support continuous improvement.
The job of the disability czar would be to develop and lead this
system.
3. Assign responsibility for each initial determination to a single
office: This recommendation change also follows from the maxim that
``If it's everybody's responsibility, it's nobody's responsibility.''
Currently, SSA Field Offices and state DDSs share responsibility for
disability determinations. The result is a system in which no office,
let alone individual, takes ownership of an application, each blames
the other for process problems, and inter-office communications delay
the process, use significant resources, and result in duplication of
effort.
The substantial success of the Disability Claims Manager model
demonstrates the gains to be made from single-office responsibility. I
think the DCM went too far, by giving a single individual
responsibility for adjudicating all aspects of all adult applications,
but in so doing, it consolidated responsibility into a single office
and gave a single individual ownership of each application. SSA's
evaluation of the DCM test concluded that it substantially reduced
processing time, increased claimant satisfaction, and improved employee
satisfaction, but at a somewhat greater cost than the current process.
My interpretation of the evidence from that evaluation is more positive
than SSA's; it appears to me that the DCM is cost neutral, and that it
reduced processing time by more than the report indicates.
That SSA has decided not to pursue the DCM, despite the
considerable success of the test, reflects the most vexing question
about assignment of responsibility into a single office: Whose office?
There are three options, and all have strengths and weakness. The first
is to federalize the entire process, so that all decisions are made in
field offices. This approach is favored by American Federation of
Government Employees (AFGE), and likely has substantial support among
SSA managers, but it is probably the most costly and it is also
difficult to imagine a federal bureaucracy managing such a large
internal process well. The determination process for Veterans' benefits
provides a useful model.
The second approach is to give the responsibility to the states.
This might be the least expensive approach, would provide a process
that is more tailored to the needs of the state, and make state
governments accountable to their voters for process performance. SSA's
past management of the state DDSs has, however, been hampered by lack
of political will; SSA does not have sufficient power to hold states
accountable. Perhaps a deal that gives the entire process to the states
in exchange for provisions that will make it possible for SSA to hold
states accountable could be developed. Such a system already exists in
the Food Stamp program, although it is imperfect.
The final approach is to contract the work to the private sector.
Many would oppose such a change because of a fundamental distrust of
entities that are driven by the profit motive. SSA might, however, be
in a stronger position to ensure performance of local entities that are
outside the political process than local entities that are either owned
by states or internal to SSA. This approach also has the advantage that
a successful firm could make determinations in multiple states. Every
participating firm would be continuously threatened by competition from
firms that are operating in other states. The Center for Medicare and
Medicaid Services uses this approach in its effort to improve health
care quality, with some success.
I'm not ready to endorse any one of these approaches over the
others, but I think one of these approaches will have to be tried if
significant progress is to be made.
4. Abandon the ``one-adjudicator-fits-all'' model. Currently, each
medical determination is the responsibility of just one disability
examiner. While expert consultation is available, and required in some
cases, the decision rests on the shoulders of an individual. This
approach is probably efficient for a large majority of cases, but the
complexity of the medical, vocational, and legal issues involved in a
significant number of cases requires a team approach. Such an approach
is used for complex determinations conducted by private disability
insurers, as well as for many other complex determinations, including
medical ones.
5. Address the problems with the appeals process. Currently, the
appeals process has significant performance problems of its own. Those
problems undermine the initial process. The fact that the program is
represented only by conflicted Administrative Law Judges (ALJs), and
that performance management is limited, make it nearly impossible for
SSA to obtain useful information from the appeals process and use it to
improve the initial process. Instead, defenders of the initial process
allege that ALJs are ``out of control'' and are undermining the initial
process. Others allege that applicants, with the help of their
representatives, game the system by withholding evidence at the initial
level so they can present it to an ALJ, and by continuing to file whole
new applications until they find an ALJ who will give them an award.
Given the lack of information about the decisions at the appeals level,
it is hard to know where the truth lies, but it is clear that the
initial process is being undermined by the lack of trust in the appeals
process.

Chairman SHAW. Mr. Brady?
Mr. BRADY. Thank you, Mr. Chairman. This was excellent
testimony. While I have questions for each, I will limit it to
three very brief questions.
Mr. Pezza, in your testimony you talk about the need for an
intelligent front-end interviewing process. I would like to
hear a little more about that.
Mr. Price, I was wondering about the relationship between
the State groups and the Federal Agency, SSA, and how that
helps or hinders the process?
Then to Dr. Stapleton, I would like to hear a little more
about the revenue-neutral approach on the Disability Claims
Manager because that seems like if we improve the information
gathering and the intelligence up front, if we have good work
relationships, consistent standards, and if we can process
these claims more accurately and quicker, the whole process
benefits in a big way. So, I would like to hear those real
quickly.
Mr. PEZZA. Well, one of the things that we do in the
initial disability application process taking in the field
office, is we take what we call a background report which
basically gives the nature of the impairment in the perspective
of the claimant. In doing this background report, it would be
very helpful if we had a system which would provide drop-down
menus for our interviewers. So, that based upon the nature of
the impairment, the individual interviewer would be able to
tailor the questions and guide the claimant in giving us the
information necessary to do a good background report and supply
the folks in the DDS with complete medical information. This is
something that I think the Agency's been looking into because
each----
Mr. BRADY. By its nature, each impairment's going to have a
unique set of--or some unique features that you ought to have
laid out and gathered.
Mr. PEZZA. Absolutely, right. So, for example, if a person
was talking about a heart condition there would be certain
specific guidance that this system would provide in a series of
drop-down menus which I think would be very beneficial. It
makes good sense.
Mr. BRADY. Thank you. Mr. Price, relationship?
Mr. PRICE. Yes. The relationship, we would concur with the
testimony of Mr. Daub and the previous reports by the Advisory
Board. Strengthening the Federal/State relationship would
greatly enhance the opportunity to reduce processing times, to
give better service to the claimant. The current set up is such
that NADE has encouraged the establishment of more uniform
national training standards, for example, at the front end and
strengthening the quality assurance process throughout.
Mr. BRADY. If you had to rank what could best be done to
improve that relationship, would that increased training be the
most important thing?
Mr. PRICE. I think it would be--yes, the training is
absolutely essential, and having that availability, I think SSA
needs to revamp, if you will, the way it does training, the way
it mandates training. Right now in the DDS's initial disability
examiners who are hired, receive training basically in
compliance with whatever the State feels is their set up. The
SSA has introduced a basic examiner training package which
forms the basis of this new examiner training, but NADE has
asked that there should be more than this because many States
simply do what is minimum.
Mr. BRADY. Sure.
Mr. PRICE. Minimum doesn't give you good service.
Mr. BRADY. Good answer. Thanks, Mr. Price.
Dr. Stapleton, I like the idea of having accountability in
one person. I like the idea of having teams evaluating these. I
would imagine both between the sophisticated medical decisions
and then ever-changing occupational standards and
opportunities, that the would really help. Tell me about
disability claims.
Dr. STAPLETON. Sure. Measuring costs in SSA's system is
very difficult. They were doing a test where both the current
process and the model they are testing. The DCM model were
embedded in lots of other things that were going on in various
offices.
I would say that--well, my recollection is that the result
that SSA reported is that the DCM costs from 6 to 12 percent
more than the current process. I would say that the margin of
error in just trying to make that estimate is probably 5 to 10
percent. So, it is close to the margin of error.
The other thing, a couple other points though, when they
did this they got the upper value by one method and the lower
value by another method. It seemed to me that the upper value
had some serious problems with it, and the other method was
much more sound. So, I think 6 percent is a reasonable estimate
given the whole period of the test which was 18 months. But if
you look at the test results from month-to-month, you will see
that productivity of the claims managers increases quite a lot
over the first 12 months. By the time it gets to the peak, if
you recalculated cost at that point, it would be lower or at
least about the same as the current process costs using SSA's
methodology. The costs reported are reported for the entire 18-
month period, and at the beginning there was startup time and
at the end there was wind-down time. These people knew they
were losing their positions and tried to wrap things up.
Mr. BRADY. Sure.
Dr. STAPLETON. So, that is the basis of my conclusions.
Mr. BRADY. Are your conclusions in detail on that in your
report or can we get some information along those lines?
Dr. STAPLETON. It is not in this report, and in fact, it is
not written in any report. I have detailed my thoughts in e-
mails to people at SSA. I could provide those to you, I think.
Mr. BRADY. If you don't mind because I would like to learn
about it. A final thought is that were the increased costs on
that due to accelerated benefits, that we make decisions sooner
and more accurately. Therefore, benefits occurred faster?
Dr. STAPLETON. Not really because the cost had to do with
administrative cost, not programmatic cost, and my recollection
is the allowance, the initial allowance rates were just about
the same.
Mr. BRADY. Thank you, Mr. Chairman, very much.
Chairman SHAW. Mr. Pomeroy.
Mr. POMEROY. Mr. Chairman. this is one of the more
challenging assignments we have given SSA. I appreciate you
having this hearing to explore what they are doing to execute
these duties as best as they can do, and I appreciate very much
you holding this important hearing. I regret my own schedule
prevented me from attending the bulk of it, and look forward to
reviewing and having staff put a review of your written
materials. It is obviously an area where Members of Congress on
the Social Security program perhaps the most active interaction
with their constituents. That is very important to us all.
Thanks again, Mr. Chairman.
Chairman SHAW. Dr. Stapleton, you said something in your
testimony regarding forum shopping to get the best
administrative judge that you can get. If somebody's turned
down at one, they can go ahead and refile, come up with another
judge, and there is no way of bringing it back to the same
judge?
Dr. STAPLETON. My understanding now is when somebody files
a new application it just enters a process like any other
application, and it can end up----
Chairman SHAW. Even though it may be from the same claimed
injury?
Dr. STAPLETON. Yes, yes.
Chairman SHAW. Interesting.
Dr. STAPLETON. Actually, if I may go on, there has been
some discussion earlier about closing the record. I know there
is a lot of concern about if you close the record and somebody
has got a new condition. Then that means filing a whole new
application and a much longer wait for them, and that is a
problem. It seems to me there is a fairly straightforward
solution to that if new evidence is being introduced at the
appeals level, at the ALJ level--to send the case back to the
initial level basically and do another reconsideration by
taking into account the new evidence.
Chairman SHAW. Can the court appoint its own doctor to
examine the claimant? Does it ever do that?
Dr. STAPLETON. It can do that, yes.
Chairman SHAW. Is that done very often?
Dr. STAPLETON. I wouldn't be the best person to ask.
Chairman SHAW. I would guess, from the way I understand
these things, that if you get the right doctor, the right
lawyer and the right judge, and----
Dr. STAPLETON. Well, I would certainly expect that the
advocates for the claimant get them to get medical examinations
independently which are brought into evidence.
Chairman SHAW. I know going from tort law that different
doctors are sought after depending on whether you are the
plaintiff or the defendant. We remember one doctor that we
didn't think he really believed in pain. He was one of the
favorite of the defendants, but that was before he had a disc
problem in is back. He now believes in pain.
All right. I want to thank all of you for being with us. It
has been a very, very good hearing. I think the thing that
comes out of this most is that I think this Subcommittee has to
know more about this process. This is really our first venture
into the details of this. We have looked at the process before
as to the lack of electronics and the slowness of the movement,
but now we are getting in a little bit into the actual process
of the hearing process itself. It is something I don't think we
have any expertise on this Committee--who really did any
litigation in this area, even though a number of us are
lawyers. Still, it is a very specialized area that most lawyers
haven't even ventured into.
Thank you. Thank you all for being here. This hearing is
adjourned.
[Questions submitted from Chairman Shaw to the panel, and
their responses follow:]

National Association of Disability Examiners
Raleigh, North Carolina 27602
August 14, 2002
The Honorable E. Clay Shaw, Jr., Chairman
Social Security Subcommittee
Committee on Ways & Means
United States House of Representatives
2408 Rayburn House Office Building
Washington, DC 20515-0922

Dear Mr. Shaw:

The National Association of Disability Examiners (NADE) is pleased
to provide the following response to your inquiry of August 1, 2002.
NADE was asked to respond to several questions regarding our testimony,
and the testimony of others, that was presented on June 11, 2002.
1a. Explain the process of developing a case.
Case development typically begins with a review of the disability
application that has been forwarded to the DDS from the Social Security
Field Office. In the vast majority of claims, the disability examiner
must initiate contact with the claimant (either by phone or by mail) to
develop or clarify issues regarding medical treatment, education, past
relevant work and the impact the claimant feels that the alleged
impairment has on their activities of daily living (ADLs). Frequently,
the disability examiner must also contact an interested third party who
is also asked to provide information about the impact the claimant's
impairment has on these activities. If these reports include
conflicting information then the disability examiner must resolve the
conflicts by re-contacting the claimant, and third party source, or
contact another source to resolve the conflicts.
All relevant medical sources listed by the claimant are then
contacted by mail or fax and asked to either send copies of records or
respond to questions specifically tailored to the alleged impairment.
Information received from treating sources is reviewed as it is
received to determine if a favorable decision is possible based on
those records. If so, additional evidence is not pursued. If not,
unless the treating source is a known uncooperative source, appropriate
follow up is made, either by telephone, fax, or by mail, to obtain any
records or completed forms which have not been received.
SSA regulations (POMS DI 22505.001ff) mandate that treating sources
be allowed thirty (30) days to respond and the DDS must initiate at
least one follow up if there is no response.
If treating source information is incomplete, unavailable, or does
not provide the specific documentation needed to determine eligibility
under Social Security regulations, the DDS will schedule a consultative
examination. This examination is at the government's expense. Every
effort is made to assist the claimant in keeping any consultative
examination, including arranging for responsible parties when the
claimant has a mental impairment and providing the cost of
transportation to the appointment. Once all of the medical and non--
medical information, including ADL and work history forms, pain
questionnaires, and so forth., has been received, the DDS will prepare
a decision following the sequential evaluation process. This decision
is based on an appraisal of the objective medical findings and
consideration of the subjective non-medical findings such as pain
allegations, claimant credibility, and treating source opinion.
b. LExplain the process for reviewing a case for reconsideration,
including under what circumstances a disability examiner
obtains additional information.
Reconsideration claims are assigned to disability examiners who are
more experienced than disability examiners who adjudicate only initial
claims. Reconsideration claims are assigned to a disability examiner
who had no part in the initial decision. If input from a DDS medical or
psychological consultant becomes necessary at the reconsideration
level, the consultant will also be one that had no part in the initial
decision.
The reconsideration examiner reviews the claim file to determine
both the accuracy of the initial decision and whether additional
development is needed in view of the claimant's statements and
allegations. The reconsideration examiner must determine if all
impairments alleged by the claimant or diagnosed in the file evidence
were fully developed initially. The reconsideration examiner must also
determine if there are any new impairments alleged or diagnosed and/or
whether the claimant has listed any new treating sources or has
reported receiving additional treatment from previously identified
sources.
If the prior decision was correct based on the information
available at the time and the claimant has not alleged any worsening of
the impairment(s) and has not reported receiving additional medical
treatment, the initial decision can be affirmed ``on the record''
without the need to pursue additional development. However, such
circumstances are unusual. If the claimant alleges worsening of the
impairment(s) and/or reports receiving additional medical treatment,
all relevant sources for more current records are contacted. The
reconsideration examiner follows the same adjudicative requirements as
the initial examiner in allowing an appropriate period of time to
elapse for a medical source to respond and initiating appropriate
follow up contact if the source does not respond. If the
reconsideration examiner is unable to fully document all alleged or
diagnosed impairments based on the medical evidence of record, a
consultative examination will be scheduled. Once all requested
information has been received, or it has been determined that the
information is unavailable, the DDS will prepare a reconsideration
decision, again following the sequential evaluation process.
c. LAre such processes checked and documented via DDS or Federal
quality review?
Any DDS decision is subject to review by internal DDS quality
assurance staff and/or review by the Federal Disability Quality Branch
(DQB) in the respective SSA regional office.
2a. LAre determinations made by disability examiners in the DDSs,
``devoid of rationale and--driven almost exclusively by
objective medical findings.''? What factors and criteria do
State disability examiners use to assess an individual's claim?
NADE is very concerned with the erroneous statements contained in
the testimony presented by Ms. Kathleen McGraw on June 11. We are
equally concerned that such inflammatory statements are often left
uncorrected, adding to the false perception the public already has of
the decisionmaking process in the State Disability Determination
Agencies. NADE is very appreciative of this opportunity to challenge
Ms. McGraw's statements.

DDS decisions, by law and by SSA regulation, are based on objective
medical findings, coupled with consideration of the claimant's age,
education and past work experience. DDS decisions do take into
consideration the subjective findings such as pain and fatigue and the
impact the alleged impairment is said to have on a claimant's daily
activities. However, DDS decisions are influenced to a lesser extent
than decisions made by administrative law judges by these subjective
findings. Where the disability examiner in the DDS is unable to
conclude that there is an objective medical basis to support the
claimant's allegations of pain or fatigue, the subjective complaints
are often disregarded, as required by law.
The primary factor in adjudicating disability claims at the DDS
level is that it must first be concluded that there is a medically
determinable physical or mental impairment that can reasonably account
for the subjective symptoms alleged by the claimant before any such
symptoms can be factored into the decision.
As an example, NADE would like to offer the case of an individual
who alleged disability due to severe burning pain in his hands. A
physical examination failed to detect a significant medical condition.
The claimant retained normal range of motion of all joints in the hands
and there was no impairment of neurological functioning. The claim was
documented with x-rays, nerve conduction studies, and a MRI, all of
which failed to reveal any evidence of a significant medical condition.
Without any objective evidence that could establish the existence of a
medically determinable impairment the DDS would conclude that the
alleged impairment was non-severe. This would be the correct decision
under the law and any attempt to render a different decision would have
resulted in DDS or DQB quality assurance reviewers returning the claim
to the disability examiner with instructions to deny the claim.
The application of process unification rulings would not alter the
DDS decision in such cases. By law, DDSs must first establish the
existence of a medical impairment before determining that the claimant
is functionally limited, even by pain alone.
An administrative law judge, hearing the same case and using the
same evidence available to the DDS, could conclude that the claimant
was under a disability. The decision by the ALJ would be based solely
on the claimant's alleged pain and no other factors.
Herein lies the difference between DDS decisions and those made by
ALJs--DDS decisions must have a medical basis that is defensible to
subsequent quality reviewers. Such decisions are sometimes
misinterpreted as if the DDS failed to consider the claimant's
subjective symptoms. This perception is reinforced by subsequent ALJ
decisions that do award benefits based only on such subjective
complaints, even when the objective evidence clearly fails to document
the existence of a significant impairment.
Such decisions by administrative law judges impact negatively on
program integrity since such decisions will, in effect, place an
individual on the disability rolls for life. All future continuing
disability reviews of such cases will obviously fail to establish that
there has been any significant medical improvement in the claimant's
condition. Individuals whose claims are allowed on the basis of
subjective symptoms alone will continue to receive benefits as long as
they continue to allege the presence of such symptoms. Since there was
no objective basis for the original allowance decision, there can be no
objective basis for determining that there has been medical
improvement.
NADE would contend that Ms. McGraw's testimony would have been more
effective if she had devoted equal criticism to the administrative law
judges who also have failed to adhere to the precepts of process
unification.
b. LAre such processes checked and documented via DDS or Federal
quality review?
As noted earlier, any DDS decision is subject to internal DDS
quality assurance review and/or review by the Disability Quality Branch
in the regional SSA office. Not only do such quality reviews check for
decisional accuracy, but also ensure that the procedures that define
the adjudicative process that are outlined in the regulations are
followed.
3. LWhat is the status of implementation of Process Unification? What
specific Process Unification activities were held last fiscal
year? This fiscal year? What are the results?
Process unification was stressed extensively in the ten Prototype
states and in those states under various court orders to follow the
process unification rulings without fail. It has been implemented to
some extent in all DDSs, both in anticipation of the roll-out of the
Prototype experiment and in an on-going effort to align DDS and ALJ
decisions. However, there has been some inconsistent application of the
process unification rulings in all DDSs because of a lack of necessary
resources. DDSs have struggled to apply the process unification rulings
in light of inadequate funding. For the most parts, the DDS application
of process unification has been limited for cases in which the rulings
would make a decisional difference. NADE strongly recommends that, in
the future, adequate resources should be allocated to the DDSs whenever
any changes are made in the adjudicative process that will require
significant allocation of time and resources by the DDSs.

NADE also contends that the continued absence of ongoing training
for all adjudicators and reviewers, and the lack of a consistent
Quality Assurance review of decisions made at all levels, have
contributed to the sporadic and inconsistent application of process
unification.
4. LIs the reconsideration, ``little more than a rubber stamp of the
original denial''? Should it be eliminated?
Current SSA statistics show a 16% reversal rate at the
reconsideration level. NADE would like to challenge the testimony
presented by others that point to only a 3% reversal rate at the
reconsideration level. Such a misrepresentation of the facts could be
viewed as an attempt to misguide the Subcommittee. Obviously, a
reversal rate of 16% at the reconsideration level is not a ``rubber
stamp of the original denial.'' The reconsideration step in the appeal
process has served to provide a needed intermediate appeal step between
the initial decision by the DDS and the hearing decision made by the
ALJ. This was effectively demonstrated in the Prototype experiment when
the absence of a reconsideration step caused appeals to OHA to soar out
of control. Even so, in recent years the reconsideration step has been
weakened in the interest of increasing case processing efficiencies and
reducing processing time. For that reason, NADE's proposal for a New
Disability Claims Process, included as an attachment to our testimony
of May 2, 2002 before the Subcommittee and the focal point of our
testimony on June 11, 2002, proposes strengthening this vital step.
Consideration of affordability, timeliness and fairness issues
would indicate that there is a need to strengthen the reconsideration
step, rather than eliminating it. The reconsideration, especially an
enhanced reconsideration, would provide claimants an opportunity to
have their cases reviewed again much earlier than the current 1-2 year
wait for a hearing before an ALJ. For thousands of people, an enhanced
reconsideration would prevent lengthy waits and would reduce
administrative costs.
5. LDoes the agency, ``. . . consult the claimant's health care
providers, and compensate them adequately for providing
relevant medical information?'' If so, how?
All relevant treating sources identified by the claimant on the
initial and, if one is filed, reconsideration application, or who are
subsequently identified in the course of DDS case development, are
contacted. The majority of disability claims are adjudicated based on
information obtained solely from the claimant's treating source(s).
However, the reality is that, regardless of the level of compensation
offered, some sources will to refuse to provide information, either
because they don't feel the claimant is disabled or because they don't
want to become involved with ``government bureaucracies''. Other
sources provide little or no information as they have not seen the
claimant for the alleged impairment or they do not have detailed
records. Hospitals, clinics and other medical sources are frequently
slow to respond due to the sheer volume of requests they receive for
medical records.
In every case in which the DDS seeks to obtain medical records,
compensation is offered. It is a subject of national debate as to
whether the amount offered by the DDS is ``fair and reasonable.'' DDSs
continually face uphill struggles when attempting to obtain increases
in the compensatory rates they offer for medical evidence of record.
6. LIn the case of continuing disability reviews, how common is it for
claimants to refuse to cooperate with requests for information?
Are claimant representatives a source for this lack of
cooperation? What is your solution?
We are unaware of any factual data that would describe the
incidence at which claimants and/or their representatives have refused
to cooperate with requests for information from the DDS. To our
knowledge, such data would be nearly impossible to collect because
failure to cooperate or deliberate actions by the claimant or their
representative to delay the DDS in making a decision are nearly always
concealed under false pretenses. However, we do have anecdotal
information that would indicate this problem is increasing as
claimants, and their representatives, become increasingly aware that
benefits will continue until a final decision is made and that, by
failing to cooperate fully with the DDS, such a decision can be delayed
for years. There are few penalties for such actions as there are no
administrative procedures in place that require the claimants to pay
back any overpayments if the Agency's final decision is to cease
benefits.
We further believe that anecdotal evidence suggests that the common
perception that exists among the public that claimants have a better
chance to ``win'' at the hearing level has caused some claimants and
their representatives to elect not to ``bother'' with the DDS level,
either at the initial or reconsideration steps. We believe that
claimants erroneously believe that failing to cooperate with the DDS
will force a quick denial of their claim and speed their case to the
hearing level. This is rarely the case. Usually, the DDS spends weeks
and months in an unsuccessful effort to document each case to show that
the DDS has done everything in its power to document the claim for a
medical decision before having to resort to denying the claim for
failure to cooperate.
As at least a partial solution, NADE has proposed that the
Regulations be revised to allow for the immediate suspension of
benefits in CDR claims where the DDS proposed a cessation of benefits
because the claimant has failed to cooperate or cannot be found.
NADE would also propose that administrative penalties should be
enacted that would enable SSA to force the cooperation of claimants
and/or their representatives when it can be clearly shown that there
has been a failure to fully cooperate with the DDS or when the claimant
and/or representative has engaged in actions designed to delay the
development of the case.
7. LIs the Federal/State relationship working? How could this be
changed to improve this relationship?
NADE believes that the Federal/State relationship is working.
However, we believe that this relationship could be strengthened by
encouraging more open discussion between the DDSs and SSA to resolve
issues as they occur. SSA must adopt a significant change in its
culture to allow for the possibility that they are not always the
experts in the development of policy for the DDSs. State governments
must be more willing to accept the oversight requirements of SSA with
regards to DDS training expectations and salary issues. Too often, the
DDSs are asked to compete with similar state agencies in the formation
of salary structure and training.
8. LShould SSA's regulations be revised to require States to, ``follow
specific guidelines relating to educational requirements and
salaries for staff, training, carrying out quality assurance
procedures, and other areas that have a direct impact on the
quality of their employees and their ability to make decisions
that are both of high quality and timely.''? What are the pros
and cons, and the feasibility for making these changes?
NADE believes that the Federal/State partnership could be revised
to allow SSA to stipulate minimum educational and training requirements
for DDS staff, but only if such a mandate were accompanied by a similar
mandate specifying minimum salary levels for DDS staff. NADE believes
that a national disability program should have national minimum
standards with regard to educational and training requirements for all
adjudicative staff. NADE is committed to the concept of ongoing
training and professional development. However, the ability to set
minimum educational standards would carry an expectation that SSA would
also set minimum salaries, an issue that will create problems in many
states. Heretofore, SSA has been unwilling to face this political
obstacle.
In recent years, we have witnessed frequent turnover in DDS staff.
This is due both to an increase in the number of retirees as well as an
increase in the number of employees who opt to leave the DDS for less
complex work, often with an increase in pay. The salary levels in the
DDSs have not kept pace with private industry and the ability of many
DDSs to attract the most qualified job applicants has been compromised.
At the same time, the DDSs have been forced to contend with the erosion
of their experienced staff. These two factors will create a crisis of
leadership and experience in the DDSs and contribute to an erosion of
their ability to effectively administer the disability program. This
will negatively impact on public confidence and the continued ability
of the disability program to fulfill its mission.
NADE does believe that educational requirements must not take
precedence over ongoing training needs. While we recognize there may be
a need to establish some degree of national uniformity in prescribing
minimum educational requirements, we strongly suggest that it is the
need for ongoing training for all adjudicative staff that will have a
greater impact in achieving national uniformity in the disability
program. Furthermore, while the ability to prescribe minimum
educational standards for DDS staff would have to be coupled with the
ability to prescribe minimum salaries, something that we do not
envision as being possible in the near future, the ability to prescribe
the need for ongoing training, and to be able to offer such training,
either through its own resources or by utilizing the availability of
training offered by such organizations as NADE, is certainly within
SSA's ability. In this regard, we agree with the opinion expressed by
the Social Security Advisory Board in its August, 1998 report, ``How
SSA's Disability Programs Can Be Improved,'' page 19). ``The most
important step SSA can take to improve consistency and fairness in the
disability determination process is to develop and implement an on-
going joint training program for all . . . 15,000 disability
adjudicators . . . and the quality assessment staff who judge the
accuracy of decisions made by others in the decisionmaking process.''
The Advisory Board also asserted, ``We urge the Commissioner to make a
strong ongoing training program a centerpiece of the agency's effort to
improve the accuracy, consistency, and fairness of the disability
determination process, and to see that the necessary resources are
provided to carry it out.''
Recently, SSA explored the idea that the Agency would offer
national disability examiner certification. This idea was abandoned
because little interest was expressed in a program that came with few
tangible rewards. We believe that an effort to prescribe minimum
educational requirements, without the ability to prescribe minimum
salary, would have a similar impact.
9. LDo you have specific suggestions for changes in the law to better
enable you to do your job?
NADE has long advocated review of an equal percentage of allowed
and denied decisions by the regional DQBs. We are concerned with recent
initiatives by SSA and the Congress that would require pre-effectuation
reviews in 50% of State agency allowances of SSI adult cases. These
initiatives are similar to existing legislatively mandated reviews of
Title II allowances. Without additional resources, any increase in the
percentage of allowance decisions reviewed will result in a
corresponding decrease in the number of denial decisions reviewed.
While we support the increased reviews as a means to improve decisional
consistency, we also strongly suggest that reviews of decisions made at
all levels should be increased. We are concerned that an increased
focus on DDS allowances may reduce objectivity and compromise program
integrity. The decision regarding an individual's eligibility for
disability benefits should be objective and unbiased. Therefore, NADE
supports requiring review of an equal percentage of DDS allowances and
denials and an increased review of decisions at all levels.
NADE recommends allowing for the immediate cessation of benefits in
failure to cooperate cases as a means of ensuring full cooperation from
claimants and their representatives and to also ensure program
integrity.
NADE believes that DDSs should be insulated from the particular
circumstances that impact on state governmental agencies that tend to
negatively effect the quality of service provided. For example, DDSs
can be subjected to state hiring freezes, inadequate salary structures,
and restrictions on out-of-state travel because of internal state
budget problems. In many cases, DDSs are not exempted from such
restrictions, even though their funding is provided in full from the
Federal budget. Even when exemptions are granted, DDS Administrators
are often required to exercise extraordinary measures to obtain such
exemptions, wasting time and resources that would be better used in
providing quality service to the people. The inability to hire new
personnel, retain experienced staff, or offer employees opportunities
to receive national training that may not be offered within their
particular State, negatively impacts on the quality of service DDSs can
offer. SSA needs to exert greater oversight in this regard.
Thank you for the opportunity to provide this additional response.
Should you or any Member of the Subcommittee have any additional
questions, please do not hesitate to ask.
Sincerely,
Jeffrey H. Price
President

National Council of Disability Determination Directors
Lansing, Michigan 48909
August 29, 2002
1. Judge Bernoski, the President of the Association of
Administrative Law Judges, testified on June 20 that improving the
quality of disability determination services decisionmaking would
improve the overall determination process. He stated (page 4 of his
testimony), ``rather than carefully develop and examine the claimants'
case once, DDS often is making its initial determination based on
incomplete records, and upon reconsideration, rarely obtains
significant additional medical evidence or changes the outcome of the
case.'' What are your comments on this statement? Would you explain the
process of developing a case? Would you explain the process for
reviewing a case for reconsideration, including under what
circumstances a disability examiner obtains additional information? Are
such processes checked and documented via DDS or Federal quality
review?

The National Council of Disability Determination Directors (NCDDD)
agrees that improving the quality of disability determinations would
improve the process. We agree that quality improvements are necessary
for all steps in the process, including the appeals process. However,
quality is a relative term when the Disability Determination Service
(DDS) is the only component with regular, targeted and substantive
reviews of their work. No other component, including Office of Hearings
and Appeals (OHA) is held to this type of quality review standard. The
DDSs' record of accuracy is well known as documented by the Federal
Disability Quality Branches (DQB) of the Social Security Administration
(SSA).
Additionally, we strongly disagree with the assumption that the DDS
often makes initial determinations based on incomplete records and at
reconsideration level rarely obtain significant medical evidence. We
know of no study or report that factually documents these assertions
and statements by the association of administrative law judges. The DDS
follows the legal requirements for development of claimants' cases for
the disability determination process.
The current process begins at the local SSA Field Office. The SSA
Claim Representative, in person or via teleclaim, obtains the pertinent
information from the claimant as to allegations, medical sources, types
of tests, medications, work history information and daily activities.
The claim file then moves to the DDS. Each case is assigned to a
Disability Examiner. The Examiner does, in fact, carefully develop and
examine the information provided by the claimant and/or representative.
This would include requesting all medical evidence relevant to the
claim within twelve months of the claimant's alleged onset (the day he/
she indicates that disability precluded work at substantial gainful
work activity). There are time constraints explained to each medical
vendor and prescribed by law, including a series of follow up
activities to providers slow in providing reports. Concurrently,
Examiners send requests to collateral sources, including but not
limited to relatives, friends, therapists, employers, teachers and
special service providers. This is an attempt to supplement the
objective medical evidence with additional evidence of functionality
from a source that is more familiar with the claimant. Each DDS
complies with state requirements for payment of medical reports. This
entails, at the national level, literally millions of requests for
medical evidence of record from various providers.
Throughout the entirety of the case, when an Examiner receives
enough documentation for an allowance, development is ceased and a
medical determination is made at the earliest possible time. After the
legal requirements for requests and follow-ups are met, the Examiner
reviews the evidence that has been compiled. The Examiner is required
to have supporting documentation for all alleged impairments. In
addition, if an impairment is discovered in the course of the
development, the Examiner is required to fully and carefully document
the new impairment(s). If there is enough evidence to support the
medical determination, the Examiner finalizes the decision. If there is
not enough evidence for one or more impairment, the Examiner requests a
Consultative Examination (CE) from one or more sources including the
treating physician, if appropriate. For the first 8 months of fiscal
year 2002, nationally, over 42% of the DDS cases required more medical/
psychological information. In these cases the DDS was required to
purchase additional medical information. This is a significant
administrative cost to the program. After the CE report(s) are
received, the Examiner once again re-evaluates the case. In the
statutory claims, both the DDS examiner and physician review the case
for the thoroughness and completeness of the legally required
documentation. In addition, all of the subjective information is
synthesized into the decisionmaking process. This would also include
credibility determinations and weighing treating source opinion.
After the DDS makes the medical determination, the case is subject
to random sample review by the Regional Federal Disability Quality
Branch (DQB). This review includes both allowances and denials. If the
DQB concurs with the documentation and/or decision, the case is
returned to the SSA Field Office for final processing. In unfavorable
decisions the claimant has 60 days to file for reconsideration. At this
time, the claimant may allege new impairments, new medical information,
and/or question why the DDS did not obtain pertinent medical records.
An Examiner is once again required by law to attempt to obtain the
medical evidence from appropriate providers as updated by the claimant.
The case is again subject to the same process as described above. This
may include documenting a newly alleged or worsening impairment with a
CE.
It is unfortunate that the reconsideration step may have been
perceived as a ``rubber stamp'' of the initial decision. The DDSs have
well known resource and time constraints in which to proceed with a
case. When the medical provider does not provide reports in a timely
manner (timely is considered in the range of 30 to 45 days), the case
must be moved along in the process without the unavailable records.
Many times these records do come in and are associated with the
reconsideration claim. Again, if the lack of the medical information
leaves an impairment ``undocumented'' a CE is purchased in most cases
in order to meet SSA policy requirements.\1\
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\1\ Redundant--stated in the 1st
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The DDSs have internal management reviews and/or quality assurance
teams who check all legally required processes. This includes
appropriate requests, follow-ups on these requests to the sources if
the information has not yet been received and waiting the legally
prescribed time for the medical providers to respond.
Since the appeal period on a denial is 60 days, many times the DDSs
do not see a vastly different case at the reconsideration level.
However reconsideration does validate that the claim was correctly
adjudicated and, where conditions have worsened, results in an earlier
allowance decision. Given the 12 month durational requirement for
disability benefits, the DDS may agree that while the claimant is
disabled at the time of the initial and reconsideration claim, their
medical condition is not expected to remain severe for 12 continuous
months. Because the DDSs have to make a medical/vocational projection
of the claimant's recovery 12 months down the line, the DDS would be
directed to deny the claim as a duration denial. This is a critical
fact, but little known factor in the definition of disability under
Social Security. Cases at the ALJ level are usually well beyond the 12-
month duration requirements. Many ALJs in our communities tell the DDSs
that they see a vastly different case when the case is a year or two
older. These ALJs tell us that there is much new evidence in the file
that the DDS was never told about or which occurred in months after the
case left the DDS the claimant's condition has changed. However, these
same judges tell us, given the DDSs' medical expertise, the DDS has
laid the foundation for the medical evaluation.
The continuing challenge of the process in the DDS is to manage
within the context of cost, resource, quality, and timeliness
requirements. The historical under-funding of the program has a direct
impact on our ability to balance the quality, timely adjudication of
disability claims at the DDS level. Now is the opportunity for the
Congress and Administration to find the supporting financial resources
to move into the DDS environment. This would enhance the overall
strength of the disability determination process.

2. Kathleen McGraw, the Chair of the Social Security Section of the
Federal Bar Association, testified on June 20 that State Disability
Examiners do not assess claimants' subjective complaints. She stated
(page 2 of her testimony), ``They were confounded by the task of
assessing a claimant's credibility and subjective allegations and
articulating a reasoned basis for their conclusions. Notwithstanding
the clear message from the Process Unification Training that State
Agency Examiners were expected to perform individualized assessments
and rationalize their determinations, they have failed to do so. State
agencies have balked at this requirement, and examiners' determinations
continue to be devoid of rationale and are driven almost exclusively by
objective medical findings.'' What are your comments on these
statements? Would you explain what factors and criteria State
disability examiners use to assess an individual's claim? Are such
processes checked and documented via DDS or Federal quality review?

NCDDD disagrees with the perceptions stated in the testimony of the
Federal Bar Association. In response to the allegation, ``. . .
examiner's determinations continue to be . . . driven almost
exclusively by objective medical findings'' we believe this
demonstrates a lack of understanding and medical expertise. We believe
the DDSs are in compliance and alignment with the law for determining
Social Security disability.
The foundation of each case is an objective medical impairment. ``A
medically determinable impairment (MDI) which must result from
anatomical, physiological or psychological abnormalities which can be
shown by a medically acceptable clinical and laboratory diagnostic
techniques and be established by medical evidence consisting of signs,
symptoms and laboratory findings . . .'' The DDS is the only
adjudicative component with the medical expertise, training and in-
house medical staff to develop and evaluate the facts of the case. Our
decisions are not based on bias, assumptions or unsupported
allegations. Also, subjective complaints are just that---subjective
and, by nature, individualized. It is not an easy process to evaluate
this information in the context of a medical determination, but it is
considered in the final determination by the DDSs. Severe resource
constraints do in fact place limitations upon the whole process.
We should be clear that most denial determinations have an
individualized assessment and rationale. The DDS certainly admits that
due to historical under-funding of the DDS process and workload volume,
the assessment obviously is briefer than a detailed legal document.
Most DDS cases that are appealed to an ALJ are rationalized on a
Residual Functional Capacity form which addresses current functioning,
subjective complaints, credibility and treating source opinion. As part
of Process Unification, Social Security Ruling (SSR) 96-6p dictates
that the DDS medical and psychological consultants' finding of fact may
not be ignored and must be given weight. It appears the legal community
might be reluctant to view this RFC as the individualized assessment
and rationalization. However, this is the format prescribed by SSA,
used consistently by the DDSs and should not be dismissed. The DDSs
have participated in pilots and prototype initiatives, which provided
for more detailed assessment, rationalization and explanation. It is
our understanding that resource limitations are the basis for not
including this detailed level of case explanation and documentation as
part of the DDS determination.
All of these processes, including the assessment and
rationalization, are subject to both DDS internal and Federal DQB
quality review. In fact, the Examiner's assessment is subject to very
close review by both quality review teams because it is a source of
potential inconsistencies and deficiencies. The DDSs' review process
reinforces the application of these concepts. The current national
quality rating has not identified insufficient Process Unification
application in the DDSs across the nation.
Given the DDS budgetary constraints, our organization believes that
we are meeting the challenge, fulfilling the mandate and case
compliance expectations set forth by SSA. We are in compliance with the
training, and the feedback/monitoring by DQB.
The DDS stands ready to make further refinements and adjustments as
required by the appeals process and SSA. The DDSs have been leaders on
various pilots and projects to improve the adjudicative process.
Unfortunately, resources have not always been commensurate with the
mission and goals of the pilots and process improvements. In the
future, it is crucial that both staffing and time extensions be built
into the process and additional resources dedicated to these concepts,
principals and requirements. The NCDDD believes that we need to
continue strengthening training, learning from case examples,
conducting cross reviews, and receiving component feedback.

3. What is the status of implementation of Process Unification?
What specific Process Unification activities were held last fiscal
year? This fiscal year? What have been the results?

The status of the Process Unification (PU) implementation at the
current time is commensurate with the level of funding provided by SSA
to DDSs. Activities continue and further refinements, training
programs; case staffing and the collective understanding of the
concepts outlined in the Process Unification guidelines are being
pursued. However SSA policy for evaluating disability claims is
fragmented, complex, conflicting, confusing and sometimes obsolete.
This compromises the ability of the DDSs to adjudicate cases
consistently and accurately.
NCDDD agrees with the recommendation by the Social Security
Advisory Board in its report of August 1998, ``The most important step
SSA can take to improve the process is to develop on-going joint
training for all adjudicators in all the components that make and
review disability determinations''. The Board also noted that such a
training program presumes the existence of a policy base, which is
clear, concise, and applicable in a real world setting.
Specific to your question about training, PU was the initial step
in the direction of providing a consistent level of training. When PU
was instituted there was a massive and mandatory intercomponent
training. PU is the framework upon which the DDS makes determinations
on a daily basis. This is not an added-on process. PU training is
initiated in the DDSs as the order of business from day one when
training the new Disability Examiner. This is supported in the
following ways: Basic Examiner Training, in-house mentoring, trainer/
supervisor/coach review, internal DDS Management Quality Assurance,
SSA-provided Interactive Video Training, update training, and Federal
DQB quality review.
As far as the specific training this past year, much of the PU
training has been integrated into other training. For example, in
January 2002, the DDSs had mandatory national training on the SSA
changes in the musculoskeletal listings. PU was included into the
training because it is the way we currently evaluate cases.
The DDSs continue to receive claims with ongoing feedback from the
DQB for appropriate application of the PU concepts and principles. The
DDS community does believe that there is a need for ongoing,
intercomponent refresher training that should be provided by SSA for
consistent presentation of policy similar to the original PU training.
It should be reiterated that this type of training and application
of these concepts is resource-intensive and very time consuming. The
DDS is not the only component with PU responsibilities. All components
should share in the consistent application of these principles. Limited
funding has compromised, in part, a comprehensive approach to the PU
principles. We are aware of various pilots, and certainly the Prototype
process, which have had success with these concepts when supported by
adequate funding. With sufficient training and funding support, this
regulatory language can continue to be refined and strengthened in the
DDSs and throughout the disability determination process. Further cross
component training, feedback and monitoring of PU concepts across all
components would serve as a cost-effective method in our delivery of
services.

4. Several witnesses testified at the Subcommittee's hearings
recently that the reconsideration step should be eliminated. Ms. McGraw
stated (page 8 of her testimony), ``Reconsideration is widely--and
correctly--viewed as little more than a rubber stamp of the initial
denial.'' What are your comments on this statement and the
recommendation of eliminating the reconsideration step? What are the
pros and cons in your view?

NCDDD is in agreement with the Social Security Advisory Board that
the reconsideration step should not be eliminated. We believe it should
be strengthened and enhanced at the DDS. For the 86,000 individuals
granted disability benefits at the reconsideration level last fiscal
year (19% of those appealing), it should not be considered a rubber
stamp for the initial decisions. This is particularly important when
you consider how soon these decisions were made following the initial
determination. The claimant does not have to wait for months for a
hearing and it is exceptionally less expensive to process a case in the
DDS. Per SSA Office of Disability, it costs on average $418.00 to
process a claim at the DDS level. This is \1/3\ of the cost of any case
appealed subsequent to the DDS determination. Therefore, we believe it
to be the most cost efficient part of the disability process.
In the debate over the value of the reconsideration we share the
concern that the second step in the case process should be meaningful
and value added. The rationale that the reconsideration has become a
meaningless step, only delaying the correct decision, is not valid for
the thousands of disabled citizens whose conditions continue to
deteriorate. The DDS can and does step in to reverse an adverse
decision to an allowance at the earliest possible time, including at
the reconsideration. This is the right thing to do for the American
public that the DDSs serve and is more cost-effective to the claimant
and the taxpayer than sending the case to OHA.
The challenge as we view this process is in strengthening the
reconsideration step. A second level of review at the DDS level need
not be meaningless or have the appearance of a ``rubber stamped''
decision. Claimants could be provided the opportunity for a face-to-
face de novo hearing, conducted by highly trained and experienced DDS
staff. This ``new'' reconsideration would enhance the reliability and
accuracy of the DDS decisions and reduce the need for claimants to go
through the complex and lengthy ALJ hearing process. In addition, we
recommend that the record be closed after this enhanced reconsideration
in order to strengthen the consistency of the adjudicative process.
The opportunity, as we see it, is to target resources that achieve
results in the component with a proven track record . . . the DDS. We
would again reiterate, as in much of our earlier testimony, that our
DDS organizations are the most cost effective and efficient. With
proper funding and resource support, we are prepared to help establish
and implement the program improvements that strengthen both the initial
claim and the reconsideration appeals step.

5. Mr. John Pickering, Commissioner Emeritus of the American Bar
Association Commission on Legal Problems of the Elderly, stated in
testimony on June 11 (page 2) that to improve the initial quality of
medical and vocational evidence and reduce the number of appeals, ``the
agency consult the claimant's health care providers, and compensate
them adequately for providing relevant medical information.'' Isn't
this done today? Can you explain how? What are your comments on this
recommendation?

The NCDDD position is that the DDS organizations are under-funded
in terms of appropriate financial support to pay medical providers.
Medical evidence is the very foundation for our documentation in all
disability claims. The states' ability to compensate health care
providers has been compromised and weakened and has negatively affected
their ability to deliver quality and timely service.
Each year many states request, as a part of their budget planning
requests, increases in the Medical Evidence of Record (MER) and
Consultative Examination (CE) fees paid by their state. This is
typically the first line item in the funding authority that is
eliminated or reduced as funds are being allocated to the State
agencies. Further, many states do not even pay the Medicaid rate for
retrieval of medical records and purchase of CE medical evaluations,
laboratory tests and x-rays. By law, as previously stated, the DDSs are
required to request the appropriate MER from the claimant's health care
providers. This is not a matter of ``picking and choosing'' which piece
of evidence to obtain. However, there are known timeframes to which all
providers are expected to adhere in order to improve overall claims
processing time.
Each state pays a predetermined amount for this MER. MER could be
in the form of the physician's notes, diagnostic studies, and could
include a narrative by the medical source in response to specific
questions from the DDS. Nationally the DDSs send out millions of
requests per year to document these cases. Mr. Pickering makes the case
to ``. . . compensate them [health care providers] adequately for
providing relevant medical information''. However, that would not
appear to take into consideration the millions of dollars spent to
document these cases in the current process. It also does not take into
consideration that despite perhaps not ``adequately compensating'' the
health care providers, the DDSs still manage to get the much of the
Medical Evidence of Record. Again, this could be in direct contrast to
Mr. Pickering's assertion that if we paid more for the medical records,
we would get more ``relevant medical information''. We reiterate, the
DDSs' don't dictate the relevancy of the record, it IS what is on the
record. The challenge continues to be one of ever increasing
administrative costs to the program.
We firmly believe that there are two options. These records could
be made available to government agencies as belonging to the claimant.
The other option would be to obtain available records and/or purchase
evaluations with the ability to pay a fair market price, similar to
what insurance companies and Medicare are paying, for existing medical
records or examinations. This may also be an up front cost, saving
overall dollars, resources, rework and costly appeals. The theory of
``pay slightly more now or pay significantly more later'' would seem to
apply.

6. We have heard from the Advisory Board, as well as others, about
the need for disability policy to be clear, concise, and applicable in
real world settings. Can you give us an example of current policy that
is not clear, concise, and applicable to real world settings? How can
Social Security Administration (SSA) improve their policies to ensure
they are applied consistently as they administer a national program?

The NCDDD organization believes that disability policy that is
clear, concise and can be applied in real world settings is ultimately
the most cost effective use of the limited resources in today's
environment. Historically, there has been inaccurate analysis and
insufficient funding associated with the implementation of operational
policy changes. Policy effectiveness and its implications are not
reviewed post-implementation. It is critical that decisionmakers at
both levels (DDS and OHA) apply the same statutory definition of
disability and the same regulations. The language in the regulation is
far less specific than that of the separate vehicles used to convey
policy to DDSs and to OHA. For DDSs there is a manual called the
Program Operations Manual System (POMS). Adherence to POMS directives
is required at the DDS level. The OHA appeals process has its own
separate manual, which differs substantially from the DDS manual.
In addition to the different directives given to the DDSs and OHA,
there are a number of unclear regulations and policies. A specific
example is found in the newer ``Musculoskeletal'' listing regulation.
One criterion for ``loss of function,'' as required by the listings, is
``The inability to ambulate effectively.'' This is defined as,
``Inability to ambulate effectively, means an extreme limitation of the
ability to walk; i.e. an impairment(s) that interferes very seriously
with the individuals' ability to independently initiate, sustain, or
complete activities.'' Terms such as ``effectively'', ``extreme
limitation'', ``very seriously'' ``independently initiate'',
``sustain'' or ``complete activities'' are nebulous and could lead
independent reviewers to different conclusions.
Another example is found in the different approaches to the
assessment of residual functional capacity by various decisionmakers.
According to the law and regulations, decisionmakers must consider the
effect of the medical impairments(s) on the applicant's ability to
perform work-related tasks. The resulting conclusion is called the
claimant's ``residual functional capacity''. This finding is based on
the medical facts and any opinions that may have been provided by a
claimant's treating physician. It is our understanding that OHA
decisionmakers tend to place much greater weight on the conclusionary
statements of treating physicians, often without supporting, objective
findings. SSR 96-2p requires controlling weight to treating source
opinions only when supported by objective findings. An extreme
difference in decisional outcomes emerges from the conclusions reached
about claimants' remaining ability to work.
A third example can be found in the way that SSA determines
disability due to a mental impairment. Policies dictate that the
claimant with a medically determinable impairment have two of the
following: ``Marked restriction of activities of daily living.''
``Marked difficulties in maintaining social functioning'';
``Deficiencies of concentration, persistence or pace resulting in
frequent failure to complete tasks in a timely manner (in work settings
or elsewhere)''. Or ``Repeated episodes of deterioration or
decompensation in work or work-like settings, which cause the
individual to withdraw from that situation or to experience
exacerbation of signs and symptoms (which may include deterioration of
adaptive behaviors).'' We suggest that these four areas are fraught
with potential for inconsistencies in the application of policy. In
addition, in spite of the allegation that ``Disability Examiners do not
assess claimants' subjective complaints'' one should clearly see by
evaluating the listing for a mental impairment, the way to establish
any limitation is by assessing subjective complaints. Although data are
not available, it is our understanding that at least half of the cases
in each DDS involve mental impairments.
An additional example is the Speech and Language policy being
applied in childhood disability claims. To some this is a very complex,
comprehensive policy and appears to be heading beyond the real world
operational boundaries.
A final example is in the way the DDSs and ALJ's assess vocational
information. The DDS is required to assess and evaluate the claimant's
past relevant work history for the previous 15 years. Then, using the
Dictionary of Occupational Titles (DOT) produced by the Department of
Labor, the examiner is required to make a vocational determination
including transferability of skills to other jobs in the national
economy. As an aside, the DOT has not been updated in many years; is
not being continued as a research publication; but it is the only
reference material available to the DDS. A finding of transferability
of skills in most cases dictates a finding of ``not disabled''. This
determination is done in the DDS by the Examiner who has been trained
to apply the DOT.
The ALJ frequently contracts an independent a Vocational Expert
(VE) to be present at hearings where a vocational determination is
required. While the VE uses the same DOT he/she is frequently allowed
to give testimony that the job as performed in the national economy (as
the DDS is required to determine) is no longer available in the
claimant's community. Therefore, there are no transferable skills used
in the determination. This frequently results in an allowance decision
at the ALJ level. This is inconsistent with the policy that the DDS
Examiner would be ``allowed'' to use for determination purposes.
The challenge continues to be improvements and methods to ensure
consistent application of policy. NCDDD and others in the disability
community have consistently advised that updates and changes in
regulations/policies should be carefully reviewed. There has been an
ever-increasing move for including more subjectivity and
`functionality' in the medical listings, which has increased variation
in the decisionmaking process. We acknowledge the current SSA
Commissioner for essentially putting a hold on any medical listing
updates that were being considered. It is our understanding that all of
the proposed changes are being re-reviewed and reconsidered at least
partly in response to NCDDD's expressed concerns.
The opportunity now is to review the many workgroup recommendations
in which our organization has participated. We encourage SSA to again
review the 30-Day Workgroup proposals, the Philadelphia Workgroup
suggestions, Tri-Regional recommendations, the One-Agency session ideas
and various subgroup proposals. All of these initiatives generated
comprehensive strategies that would advance improved cost efficient
policy development and operational efficiency.
In conclusion, a single presentation of clear policy for all
components is required. In addition, the quality assurance system must
be revised so as to achieve the goal of unifying the application of
policy among all components.

7. You state your organization supports many aspects of the Lewin
report. Would you describe which recommendations you specifically
support and why?

NCDDD does support many of the key elements in the Lewin Report.
First, NCDDD reiterates our commendation for SSA's recent steps in
appointing an executive lead to focus attention on creation of a
quality culture at all levels in the disability process. As one of the
first recommendations of the Lewin report, we urged SSA to start a
dialog. The SSA Executive Lead has already taken steps to include the
NCDDD organization in early deliberations and movement forward on the
findings of this report. We fully support this effort. The report
recommends that the existing QA system be changed radically. It is very
explicit that tinkering at the margins of the present system is not
enough. The most fundamental precepts and processes must be changed.
The structure of the disability program is too fragmented with too
many components responsible for the various pieces of the program and
too little coordination among those units. We particularly agree with
Lewin's recommendation that SSA develop a new organizational structure
that clearly establishes responsibility and authority for the
disability program across all SSA functions. This would not only
include operations and quality review; but also policy development,
budgeting, training and electronic data and tele-video systems design.
The current model is based on a decades-old industrial antiquated
model for quality control in which end-of-process reviewers check a
sample of the completed product and report and describe ``errors''.
Quality reviews should assure a consistency across the nation. End-of-
line quality review does not educate the front line workers or develop
their abilities, but simply makes them fearful of being identified as
error-prone workers. The SSA quality assurance system should place much
more emphasis on in-line process improvement and much less emphasis on
finding and reporting on defects.
The report recommends that SSA adopt a broader definition of what
it means by quality outcomes in the disability program. At the present,
quality, in the quality component, means only the extent of
documentation, analysis, and explanation and the resulting
``correctness'' of the eligibility decision. Other important factors
correlate with the quality of an operation--most notably case costs,
case processing time and claimant satisfaction with the process--are
not considered. This broader definition of quality must be shared among
all components. Everyone must buy into it. Progress toward the
objective is unlikely and is compromised if different components have
different views of what quality means. Lewin also observes that leaders
and managers in all components must commit to achieving all aspects of
the quality objectives.
The frontline workers, the quality reviewers and OHA, should
develop a shared definition of what ``quality'' means to replace the
current process in which they view the concept much differently.
Presently, frontline workers must always simultaneously balance
concerns for the amount of documentation, the thoroughness of analysis
and explanation, case processing time and case costs. The operations
definition of ``quality'' includes all these elements. But at the case
review level, ``thoroughness'' is the only consideration, cost and case
processing time are entirely ignored. The result is that operations
workers on the frontlines receive feedback from the quality reviewers,
which is virtually impossible to apply in the real work environment. We
recommended establishing a quality concept that all components can work
toward rather than continue the present model, which places the
components in adversarial positions to one another. The current process
does not demonstrate reviews as a value-added step in the process,
rather it is viewed as a costly, ineffective impediment.
Lewin recommends that DDSs be responsible for first level reviews
(which would incorporate emphasis on in-line improvements) and that
Federal resources be used to coordinate and develop the DDS QA units
rather than to perform direct reviews of the DDS work.
NCDDD supports the following: creation of a strong link between the
mission and goals of the disability programs. We support the refinement
of the definition of goals and how they are measured. We also support
the development and implementation of a communication plan that
reinforces the understanding of the mission, vision, and quality
definition for the disability programs at all levels of the
organization. We especially agree with:

Continuing the DDSs' internal quality management
systems that meet SSA's disability program specifications;
Case review and accuracy sampling conducted by the
DDS quality management unit (whereby redundant [and costly]
Federal and DDS end-of-line reviews are eliminated);
Validation audits conducted by SSA on self-reported
DDS accuracy and other performance metrics; and
Using the findings to adjust state measures.

DDS performance monitoring, through use of a balance scorecard of
key performance indicators, would serve as the foundation of the new
Federal state relationship.
The opportunity and the reasons for our support of these key
aspects are many. The DDSs have a proven track record of providing
accurate, cost effective, and timely service to the disabled population
that they serve. The DDSs have always been held accountable for a
multitude of performance metrics. We support all the components being
held to quality standards. A ``balanced scorecard'' approach would be
an important step toward creating a quality environment for all
components throughout the organization. This sets the stage for
reducing variation in the decisionmaking process across the nation. Of
critical importance in the quality process, are actions and steps
throughout the process that would advance national quality consistency.
In conclusion, developing the broader definition and applying the
definition to all the components can reasonably be expected to change
the current environment into one here teamwork and collaboration
flourish and adversarial behavior diminishes. The emphasis on quality
must begin much earlier in the business process than in end-of-line
review. Dedicating valuable time and resources to in-line quality
culture is ultimately cost effective and efficient to a business
process. The current environment costs the agency work and rework and
is an ineffective way to assure quality and national quality
consistency.

8. Much has been said by the Advisory Board and the media about
decisional variance across states. Can you provide your opinion on why
that is?

The NCDDD has historically recognized the issue of decisional
variance across states. Reasons for variance include, but are not
limited to demographics, urban, rural, age of population, education,
poverty, economy, health care programs, employment base, insurance and
corporate insurance policies, workers' compensation requirements and
workload mix.
An SSA Office of Policy study last year determined allowance rate
variance exists.
State supported programs, local economies, policies of large
business corporations that require application for SSDI benefits when
employees are in medical leave status and unemployment can all
contribute to the variation. Access to health care and availability of
public health and community mental health programs also add to the
variance.
There have been no population-based studies to analyze the client
population coming into the disability process. The questions of who is
applying, what are the reasons, what are the disabilities, are there
differences from state to state or among geographic areas, what are the
influences of health care in select geographical areas have not been
addressed.
In addition, we believe that the variance in decisionmaking between
the DDS and OHA is a serious problem in the disability program.
Realizing that time has passed and the claimant's condition may have
changed, and without asserting which component is `right', the facts
are as follows: DDSs process initial claims with an average processing
time of about 86 days, at a cost of about $418 per case. According to
SSA quality reviews, DDS claims have a decisional accuracy of about
97%. Additionally, we believe that is critically important to remember
that eighty (80%) of all the individuals who receive disability
benefits are allowed through a decision made by the DDS at \1/3\ of the
administrative cost incurred at subsequent appeals steps. There has
historically been an absence of uniformity and clearly stated policy
instructions for adjudication at the two levels. There has been no
established ongoing common training for personnel. Separate and
opposite quality assurance and case review systems tend to drive the
two components apart rather than bring them together. These challenges
continue today.
In addition, there is clear variance in the decisionmaking between
the ten DQB offices, again leading to inconsistencies across the
nation. Although SSA has recently undertaken `Consistency Reviews', SSA
has reported that the review ``Did not measure what we needed to
measure''.
Another demonstration of variances in the decisionmaking between
components is `Case Bank Studies'. This is an ongoing project to
attempt to provide sample cases to each component to get feedback on
consistency in adjudicative application. In theory, the results were to
come back to SSA and the `correct' answer would be disseminated to all
components. The results of this action did not provide clear case
policy decisional direction.
The variance can be attributed to the very beginning of policy
development and operational aspects of policy. There is variance in
interpretation at various levels including the DDS, the DQB, as well as
the OHA. The training, or lack thereof, also contributes to the
variation. There is little opportunity for dialog, cross component
feedback, retraining, and learning about the subjective areas of policy
complexities.
The opportunity exists for further in-depth study to explain the
variation. A national, not regional, review could minimize variance.
Dedicating resources to assure the public confidence in the program and
eliminate the concern of bias and unequal treatment of the disabled
citizens of this country is absolutely necessary.

9. Do you have specific suggestions for changes in the law to
better enable you to do your job?

NCDDD has recommended in several workgroups over the past few years
many changes in policy and process to better deliver service and meet
the mandated goals and objectives of the program. Adequate resources,
administration and management support could better enable the DDSs to
deliver improved service.
One specific suggestion is a change in the relevancy of past
relevant work from consideration of a 15-year work history to a 5-year
period. This is essential given the previous statement regarding the
currency of the Dictionary of Occupational Titles and ever-changing job
duties.
We have also recommended closing the record after an enhanced
reconsideration decision performed by DDS personnel. We also suggest
consideration be given to temporary and/or time-limited benefits.
Temporary disability and short-term disability with new work incentive
provisions and closing the record after the DDS final case review would
be consistent with future goals and return to work initiatives for the
future viability of the program. These kinds of changes in the
disability laws, consistent with the Americans with Disability Act
protections and provisions as a matter of general public policy,
encourages successful efforts to have the disabled in the work force
contributing to the national economy and productivity.
Decisionmaking between the initial (DDS) and appeals (OHA) level
must be more consistent. It is our understanding that SSA management
has historically permitted the development of an inaccurate view of the
immunity from management control of administrative law judges under the
Administrative Procedures Act. ALJs have successfully asserted broad
decisional independence and freedom from management control and
oversight. Our organization believes that this not only accounts for
much of the difference in decisionmaking between DDSs and OHA, but also
for the extreme difference in allowance rates generally. SSA has
recently obtained an opinion for its General Counsel that declares
management authority for requiring ALJs to attend training, apply the
agency policy, conform to administrative rules, and so forth. As the
administration establishes their authority as provided by law, a change
in the law may not be necessary
Again our organization encourages changes and updates in laws that
demonstrate cost effective public policy, protect vulnerable citizens,
protect integrity of the trust fund and assure that resources and means
to fund the program are consistent with these laws and initiatives.

Note: NCDDD is recommending regulatory changes that may not require
a change in law.

10. Do you think the Federal/State relationship is working or not
working? Please explain why, and what you would like to see changed?

The Federal state relationship is working, however the NCDDD
organization believes that this unique relationship should be enhanced,
nurtured and supported. We believe that the mission of the DDSs is to
make accurate determinations of eligibility, to do so quickly, and to
be economical.
In considering the effectiveness of the relationship, as well as
some of the challenges, we encourage ongoing, open dialog on areas of
concern. In reality, the federal/state partnership, while not perfect,
is at its best when integrated with the Social Security
Administration's mandate of empowering the states to act on behalf of
and empowering our most vulnerable citizens. Our organization does
recognize areas in need of attention and focus.
The NCDDD organization recommends changes including regulatory
language that provides sufficient resources and appropriate funding to
meet the mandates of the Administration. In addition, education of the
DDS's parent agency and state entities supporting the DDS structure,
improving the quality of staffing to deliver the service of this
complex process, training initiatives that support national
consistency, and staff that are dedicated to systems support are vital.
Working together is cost-effective when both national and local
governments understand the mission, goals and values of meeting the
needs of vulnerable citizens. The time and effort to strengthen the
relationship will, in the long run, serve both the states and nation.

11. The Social Security Advisory Board has recommended that SSA
strengths the Federal/State relationship, including revising SSA's
regulations to allow improving the agency's management of State
operations. In his testimony of June 11 (page 6), Mr. Hal Daub, the
chairman for the Advisory Board, suggested that these revised
regulations require States to ``follow specific guidelines relating to
educational requirements and salaries for staff, training, carrying out
quality assurance procedures, and other areas that have direct impact
on the quality of their employees and their ability to make decisions
that are both of high quality and timely.'' What are your comments on
this recommendation? What do you believe are the pros and cons, and the
feasibility for making these changes?

We agree with the Social Security Advisory Board (SSAB) in their
report of January 2001 that ``The agency's regulations should be
revised to require States to follow specific Federal guidelines
relating to educational requirements and salaries for staff, training,
carrying out quality assurance procedures, and other areas that have a
direct impact on the quality of their employees and their ability to
make decisions that are both of high quality and timely. Regulations
should also ensure that State hiring freezes will not apply to State
agency disability operations.'' While many states have recognized the
valuable, skilled professional staff in the DDS agencies, others are
seriously impairing DDS and SSA to achieve their service goals. DDS
organizations throughout the country have been impacted--as state
budgets continue to be compromised by current fiscal conditions and the
impact of revenue shortfalls and other local/state challenges. Hire
freezes and downsizing of state government programs have all had a
corollary impact on the DDS's business process. There is an urgent need
for SSA to address in regulatory terms the DDS's ability to direct and
control their data systems support staff, hardware and software assets.
Therefore, there are many issues regarding staffing, staffing
retention, training, internal DDS process issues, with a dramatic
impact on the agencies' ability to meet the SSA service delivery goals.
We agree with Chairman Daub of the SSAB, that the regulations need
strengthening. There are pros and cons to this challenge. The pros
include language and strengthened abilities to minimize these
mitigating effects on the DDS business and organizational process. The
cons include the question of oversight and control issues. Carrying out
the Federal mandate of the Social Security Administration should
include flexibility in business processes, while protecting the
integrity of the Federal funding.
The opportunity is now. The times call for an updating of the
regulations that will instill public confidence and deliver the most
cost-effective process for disabled citizens at the state and national
levels. Together we can create the future of effective human service
and efficient public policy.

Cornell Center for Policy Research
Washington, DC 20036
Kim Hildred
Staff Director
Subcommittee on Social Security
U.S. House of Representatives
B-316 Rayburn House Building
Washington, DC 20515

Dear Ms. Hildred:

This letter is my response to a letter I received from
Representative Clay Shaw, Jr., as follow-up to my testimony before the
Subcommittee on June 11, 2002. He asked me to respond to the following
question:
The results of your evaluation of the Disability Claims Manager
test were more positive than the Social Security Administration's
(SSA's) results. Would you explain why you disagree with SSA's
evaluation of this test, including why they found higher costs and
lower processing times than you?
First, I need to correct a misimpression that is reflected in the
preamble to the question. I did not conduct a separate evaluation of
Phase 2 of the Disability Claims Manager (DCM) test--the phase on which
SSA's conclusions are based. Instead, I interpret SSA's findings from
Phase 2 differently than SSA does. That interpretation is based on a
detailed knowledge of those findings, as well as the methods used to
produce them. My colleague, Gina Livermore, and I evaluated the Phase 1
pilot, designed the evaluation of Phase 2, and provided technical
assistance to SSA's Disability Process Redesign Team on their
implementation of the Phase 2 evaluation.
Cost
The most critical issue is the interpretation of the cost data.
SSA's report draws the following conclusion:
Dependent on the productivity and staffing models used, the DCM
administrative cost to process an initial claim ranged from about 7 to
21 percent higher than the current process.\1\
---------------------------------------------------------------------------
\1\ SSA, Disability Process Redesign Team, Disability Claims
Manager Final Evaluation Report, October 2001, p. 29.
---------------------------------------------------------------------------
The major component of cost is labor cost, which mirrors labor
productivity. SSA drew the following conclusion about productivity:
DCM productivity ranged from about 14 percent less to 8 percent
more than the current process.\2\
---------------------------------------------------------------------------
\2\ Ibid., p. 29.
---------------------------------------------------------------------------
Based on the evidence provided in the same report, I think a more
reasonable conclusion is that, apart from training costs, DCM cost per
claim was about the same as cost per claim under the current process.
DCM productivity is probably higher, but offset by higher salaries and
expenditures for medical evidence. I would further conclude that
opportunities for reducing DCM costs are substantial. My reasons
follow:

SSA's cost per claim and productivity estimates are
based on the average performance of the DCMs over 13 months of
the Phase II test. It is clear from other evidence in the
report, however, that productivity increased substantially from
the first month of Phase II through the 10th and 11th months,
then declined somewhat in the last 2 months. In the peak month,
SSA's estimates show that DCM productivity is no lower than
current process productivity and possibly 20% higher. I think
that peak productivity is a better gauge of actual DCM
productivity than the mean over 13 months because the reasons
for the gradual increase, followed by a decline near the end,
have to do with the test situation. Although there was a
substantial Phase I, the DCMs were still learning their jobs as
Phase II started, and as Phase II ended their attention shifted
to what they would be doing after the test ended. In fact, it
is possible that productivity would have continued to increase
had the test not ended when it did.
Measurement of DCM productivity relative to current
process productivity is very inexact, for two reasons. First,
the current process has two components (state Disability
Determination Service (DDS) and SSA field office (FO)), with
two different productivity measurement systems, and these must
be combined in some fashion for purposes of comparison to the
DCM. Second, many activities other than initial adult
disability claims processing occur in the DDSs and FOs, and it
is problematic to accurately apportion labor effort into
initial application processing and other activities. The
problems are so substantial that we cannot be confident that
the productivity (and cost) differences reported are real,
rather than the result of measurement problems. SSA developed
two approaches to measuring productivity, and the extremes of
the range of both productivity and cost estimates reflect these
two approaches. The range for measured DCM productivity
relative to measured current process productivity is 22
percentage points. If I had to choose, I would prefer the
approach that produces the relatively high productivity
measures for the DCM, because it relies less heavily on work
sampling. The more important point, however, is that the
estimates are not sufficiently precise to draw firm conclusions
about which process is less costly, given the differences
observed for these measures.
DCM costs could likely be lowered relative to current
process costs through adjustments to the DCM process. Remember
that the DCM process is largely new, while the current process
has been in place for many years; SSA and the DDSs have had
much more time to tinker with the current process in order to
improve productivity. An important example is improvement in
management information systems (MIS). Each DCM had to use both
Federal and state MIS during the test. Combining the two
systems would likely reduce costs substantially.
DCM salaries were an important determinant of DCM
costs during the test, and it is quite possible that lower
salaries would be sufficient to operate this process. The costs
SSA reports reflect the salaries of individuals who actually
participated in the test. With a few exceptions, the DCMs were
a mix of former disability examiners (state employees) and
claims representatives (federal employees). Almost all Federal
DCMs received a promotion, and many state DCMs also did. One
reason for the promotions was to encourage employees to accept
temporary assignments, in many cases away from home. In
general, state DCMs were paid substantially less than Federal
DCMs.
The cost estimates from the evaluation do not include
training costs. Training costs under the DCM might be higher
than under the current process because every adjudicator must
receive training in both medical and non-medical adjudication.
Lower adjudicator turnover, resulting from greater job
satisfaction and higher pay, might substantially mitigate this
increase.
Processing Time
SSA concludes that the median processing time for DCM Title II
claims was 10 days shorter than under the current process; for Title
XVI the median was 6 days shorter. These estimates understate the
reduction because of the way the samples used to calculate the medians
were selected. While it is not possible to determine exactly what the
corrected values would be from data in the report, it is possible to
make a good estimate. My calculations indicate that median DCM
processing times were shorter than those for the current process by
about 19 days for Title II (compared to SSA's 10), and by about 15 days
for Title XVI (compared to SSA's 6).
The report states: ``Any claim filed before Phase 2 began (11/1/
1999) or that was adjudicated after the evaluation phase ended (11/30/
2000)'' is excluded.\3\ Exclusion of claims filed before Phase 2 is
fine. Exclusion of claims adjudicated after the evaluation phase ended
is necessary, but by itself introduces a downward bias in processing
time for both DCM and control (i.e., current process) claims, because
claims filed late in the evaluation phase are included if they are
adjudicated quickly, but omitted if they are not. The bias is greater
for control claims, for two reasons. First, longer processing times for
control claims means that for all claims filed during any month, the
share of ``slow'' control claims excluded is larger than the share of
slow DCM claims excluded. Second, due to an initial problem in the
assignment of control claims, a larger share of the control claims is
initiated in the last few months of the evaluation period.
---------------------------------------------------------------------------
\3\ Ibid, p. 18.
---------------------------------------------------------------------------
It is possible to produce unbiased estimates of the medians for
claims in each group that were filed in the first 10 months of the
evaluation period, because more than half of all claims filed in each
of these months had been adjudicated by the end of the evaluation
period, for both the DCM and control processes and for both Titles. SSA
provides enough information in the report to approximate the median
processing time for all claims filed in the first 10 months of the test
by process and Title.\4\ My estimates of the reductions in median
processing time are based on those claims only.
---------------------------------------------------------------------------
\4\ Ibid, p. 23. The table on this page of the report shows the
percentage of claims filed in each month that were processed as of each
30 day interval after filing, from 30 to 180 days, plus the number of
claims filed in each month, by Title and DCM versus control. From these
data I calculated the percent of each type of claim completed at 60, 90
and 120 days for those claims filed in the first 10 months. My
estimates of the medians were obtained by interpolation between these
percentages. For example, I found that 39.0 percent of DCM Title II
claims were completed within 60 days and 62.7% were completed within 90
days. The median must, therefore, be between 60 and 90 days. I used
linear interpolation between these two points to estimate a median of
74 days for DCM Title II claims. Note that this value is actually
greater than the median reported by SSA, but this is because of the
bias in SSA's estimate caused by; the fact that SSA included claims
that were filed after the 10th month if they were adjudicated by the
end of the 13th month.
---------------------------------------------------------------------------
Conclusion
Based on the evaluation, I think that the DCM, if fully implemented
in a reasonable way, would produce substantial improvements in
processing time, applicant satisfaction, and employee satisfaction
without an increase in cost, a decline in accuracy or a change in the
initial allowance rate. However, as indicated in my testimony, I do not
recommend implementation of the DCM as it was tested. Based on
discussions with many people involved in the test, I think that much of
the success of the DCM occurred because a single person in a single
office took ownership of the claim and also served as the point of
contact for the claimant. That feature of the DCM can be preserved
without requiring the person to be qualified to adjudicate all aspects
of the claim. The complexity of many claims makes it inefficient to
have a single person have the expertise needed to fully adjudicate any
claim. A system that preserves the most positive aspects of the DCM,
but includes more specialization of expertise and functions, would be
better.
I hope this information is useful to the Subcommittee.
Sincerely,
David C. Stapleton, Ph.D.
Director

----------

[Whereupon, at 5:30 p.m., the hearing was adjourned, to
reconvene on Thursday, June 20, 2002, at 10:00 a.m.]

THURSDAY, JUNE 20, 2002

House of Representatives,
Committee on Ways and Means,
Subcommittee on Social Security,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:21 p.m., in
room B-318 Rayburn House Office Building, Hon. E. Clay Shaw,
Jr. (Chairman of the Subcommittee) presiding.

Chairman SHAW. We are going to go ahead and get started. I
am advised that we should be left alone for an hour before they
call us back across the street. I am told Mr. Matsui will be
here in just a moment. So, I am going to go ahead and read my
opening statement.
Today the Subcommittee will continue our examination of the
challenges and opportunities faced by Social Security's two
disability programs, Disability Insurance and Supplemental
Security Income.
Last week we examined the disability and appeals process.
Today, we will focus in depth on the disability appeals
decisions made by Federal Administrative Law Judges, the
Appeals Council and the Federal District Courts.
We will hear from stakeholder groups who can provide their
perspectives on the major issues their constituents face as
well as their recommendations.
Americans that apply for disability benefits and those who
appeal the Agency's decision expect to receive accurate fair
decisions within a reasonable period of time.
This is not happening now. Individuals with disabilities
who pursue disability benefits for themselves or their families
by appealing an unfavorable decision face unconscionable
delays. On average, according to the Commission of Social
Security, wait time from initial applications to decisions from
an Administrative Law Judge averages 495 days.
Add appeals and the court's processing time, the average is
nearly 3 years. Worse yet, this broken system has persisted for
years with little improvement. Individuals with disabilities
face tremendous obstacles every day and an enormously
frustrating process of applying for and obtaining Social
Security benefits shouldn't contribute to this challenge.
Changes must be made to improve this process to ensure that
Americans with disabilities and their families can depend on
Social Security to provide the economic security that they
deserve.
This morning we have one panel, and it is a large panel. We
have Marty Ford who is Co-Chair of the Social Security Task
Force, Consortium for Citizens with Disabilities (CCD). We
welcome you back.
We have Nancy Shor who is Executive Director of the
National Organization for Social Security Claimants'
Representatives from Midland Park, New Jersey.
We have James Hill, who is President of the National
Treasury Employees Union (NTEU), Chapter 224.
We have the Honorable Ronald G. Bernoski, who is President
of the Association of Administrative Law Judges. He is from
Milwaukee, Wisconsin.
We have the Honorable Kathleen McGraw who chairs the Social
Security Section of the Federal Bar Association (FBA).
We have John Pickering who is the past Chair of the Senior
Lawyers Division, Commissioner Emeritus, Commission on Legal
Problems of the Elderly, American Bar Association (ABA).
We have Paul Verkuil, who is Professor of Law, Benjamin N.
Cardozo School of Law at Yeshiva University in New York. He is
accompanied by Jeffrey Lubbers, who is a Fellow at the
Washington College of Law, the American University.
We welcome all of you. We have your full statements which
will be made a part of the record and you may summarize as you
see fit. Ms. Ford.
[The opening statement of Chairman Shaw follows:]
Opening Statement of the Hon. E. Clay Shaw, Jr., a Representative in
Congress from the State of Florida, and Chairman, Subcommittee on
Social Security
Good morning. Today the Subcommittee will continue our examination
of the challenges and opportunities faced by Social Security's two
disability programs--Disability Insurance and Supplemental Security
Income.
Last week we examined the disability determination and appeals
process. Today, we will focus in-depth on the disability appeals
decisions made by Federal Administrative Law Judges, the Appeals
Council, and Federal District Courts. We will hear from stakeholder
groups who can provide their perspectives on the major issues their
constituents face, as well as their recommendations for change.
Americans that apply for disability benefits, and those who appeal
the agency's decision, expect to receive accurate, fair decisions
within a reasonable amount of time. This isn't happening now.
Individuals with disabilities who pursue disability benefits for
themselves and their families by appealing an unfavorable decision face
unconscionable delays. On average, according to the Commissioner of
Social Security, wait time from initial application to decision from an
Administrative Law Judge averages 495 days. Add appeals through the
courts plus processing time and the average is nearly 3 years. Worse
yet, this broken system has persisted for years, with little
improvement.
Individuals with disabilities face tremendous obstacles every day--
the enormously frustrating process of applying for and obtaining Social
Security benefits shouldn't contribute to their challenges. Changes
must be made to improve this process to ensure that Americans with
disabilities and their families can depend on Social Security to
provide the economic security that they deserve.

STATEMENT OF MARTY FORD, CO-CHAIR, SOCIAL SECURITY TASK FORCE,
CONSORTIUM FOR CITIZENS WITH DISABILITIES

Ms. FORD. Chairman Shaw, thank you for this opportunity to
testify.
For people with disabilities it is critical that the Social
Security Administration significantly improve the process for
determining disability and the process for appeals. The CCD
Social Security Task Force strongly supports efforts to reduce
unnecessary delays and to make the process more efficient--so
long as those efforts do not affect the fairness of the
outcome.
I will highlight three points from my written statement.
First, regarding technological improvements: The current system
requires a great deal of manual labor. Using electronic folders
could allow much faster processing.
However, it is critical to establish from the outset that
electronic files must contain all of the claimant's evidence in
an exact, unalterable electronic copy of the original.
In addition, nothing should preclude the claimant from
presenting available evidence in any format. Important details
and nuances in handwritten and typed reports must not be lost.
We do not consider summaries or partial documents acceptable
substitutes for inclusion in a folder.
Advances in technology will allow the Commissioner to
ensure protection of this evidence by requiring that exact,
unalterable, electronic copies of all originals be permanently
maintained in the folder.
Second, keeping the record open for new evidence: We
strongly support the development and submission of evidence as
early as possible in the process. However, there are often
factors beyond the claimant's control which contribute to
delay. Claimant's conditions may worsen over time and diagnoses
may change. Claimants may undergo new treatment. They may be
hospitalized or referred to different doctors. Some conditions
take longer to diagnose. Some claimants misunderstand their own
impairments.
By their nature, these claims are not static and a finite
set of medical evidence does not exist. At what point can a
individual say that he now has all of the information about the
condition and how it will affect his life?
How sensible is it to refuse to receive new information,
especially if the process itself creates such a delay that
changes in condition are possible?
If the record is closed earlier in the process, individuals
will be forced to file new applications merely to have new
evidence reviewed. However, filing a new application may
severely jeopardize, if not permanently foreclose eligibility
for benefits.
Individuals applying for Title II Disability Insurance
could lose their entitlement to benefits if they are unable to
reapply before their recent connection to the workforce ends.
Contrary to statements made in oral testimony during last
week's hearing, great harm could be done to an individual who
is forced to reapply and who, due to the Title II time limits,
loses his or her eligibility.
We believe that it is important to work on the front end of
the process instead and figure out how to get the best possible
evidence as soon as possible.
Third, the Agency role in adjudication. An important issue
underlying many of these discussions is the role of the Agency
in determining disability and paying benefits. There seems to
be a sentiment among some that SSA is not being fairly
represented in the determination process.
We believe that it is important, however, to note that SSA
and the claimant are not parties on opposite sides of a legal
dispute. The SSA already has a major say in what goes on. The
SSA develops and publishes the regulations, including the
medical listings. The SSA provides guidance to claims workers
and DDS staff through its program operations manual system. The
SSA contracts with the States for determinations based on its
own regulations and Program Operating Manual System (POMS) and
SSA hires the ALJs.
The claimant's role is to show that she has an impairment
with limitations that fit within the parameters constructed by
Congress and implemented by SSA. Very few claimants would have
the wherewithal to know and understand all of the things that
could or should pertain to their cases.
The SSA's role is not to oppose the individual's claim, but
rather to ensure that people who are eligible, as contemplated
by Congress, are enabled, as a result of the claims process, to
receive the benefits to which they are entitled.
Where an individual has representation, SSA is not placed
in a weaker or unfair position. The SSA still controls the
process. Rather, SSA should see the individual's representative
as an ally in facilitating the collection of relevant evidence
and highlighting the important questions to be addressed in
making the disability determination.
Again, I thank you for this opportunity to testify on these
important issues. The CCD Social Security Task Force looks
forward to working with the Subcommittee and the Commissioner
in meeting the challenges to improve the disability
determination and appeals processes.
[The prepared statement of Ms. Ford follows:]
Statement of Marty Ford, Co-Chair, Social Security Task Force,
Consortium for Citizens with Disabilities
Chairman Shaw, Representative Matsui, and Members of the
Subcommittee, thank you for this opportunity to testify regarding the
disability determination and appeals process.
I am Director of Legal Advocacy for The Arc of the United States. I
am testifying here today in my role as co-chair of the Social Security
Task Force of the Consortium for Citizens with Disabilities (CCD). CCD
is a working coalition of national consumer, advocacy, provider and
professional organizations working together with and on behalf of the
54 million children and adults with disabilities and their families
living in the United States. The CCD Social Security Task Force focuses
on disability policy issues in the Title XVI Supplemental Security
Income program and the Title II disability programs.
For people with disabilities, it is critical that the Social
Security Administration address and significantly improve the process
for determining disability and the process for appeals. We are pleased
to see Commissioner Barnhart take on this task as a major goal of her
tenure as Commissioner. We support her view that this is a vitally
necessary course of action for the agency and we look forward to
working with the Commissioner and this Subcommittee in meeting the
challenges
The backlog of cases waiting for ALJ and Appeals Council decisions
is clearly unacceptably long, as so vividly and visually illustrated by
the Commissioner at this Subcommittee's hearing on May 2, 2002. People
with severe disabilities who by definition have limited earnings from
work are often forced to wait years for a final decision from the time
of application through the final Appeals Council decision. This is
damaging not only to the individual with a disability and his/her
family, but also to the public perception of and integrity of the
program.
We strongly support efforts to reduce unnecessary delays for
claimants and to make the process more efficient, so long as they do
not affect the fairness of the process to determine a claimant's
entitlement to benefits.
Technological Improvements
We support the Commissioner's efforts to make technological
improvements at SSA. Whatever funds are necessary should be
appropriated to ensure that the process works as intended by the law.
Much of the delay in the current process is caused by a system that
still requires a great deal of manual labor. If the system is not
upgraded, from a technological standpoint, some of the process reform
changes discussed below will not improve the system. Several
initiatives have been announced recently that, we believe, could reduce
delays, provide better service to the public, and would not require
fundamental changes to the current process. They include: electronic
folders (eDIB); digital recording of hearings, and video teleconference
hearings. We support such modernizations where they are used to ensure
a full and fair evaluation of a claim and ensure the claimant's access
to a full and fair hearing on appeal, where necessary.
We believe that using electronic folders will allow much faster
processing, eliminating delays while folders are moved from place to
place, avoiding loss of valuable records, and allowing immediate
recording of updates, new evidence, or other actions regarding the
file. However, we believe that it is critical to establish that
electronic files contain all of the claimants' evidence in an exact,
unalterable electronic copy of the original, including complete copies
of originals that are received electronically. In addition, nothing
should preclude the claimant from presenting available evidence in any
format.
In the past, we were skeptical about the use of electronic folders
due to concerns about how evidence, such as handwritten or typed
doctors' reports, would be included in an electronic file. We do not
consider summaries or partial documents acceptable substitutes for
inclusion in a folder. Important details and nuances in the paper
reports must not be lost. However, technology is now commonly available
to allow such ``paper'' evidence to be fully included in the electronic
folder without alteration. We urge the Commissioner to ensure
protection of this valuable, sometimes irreplaceable, evidence by
requiring that exact, unalterable electronic copies of all originals be
permanently maintained in the electronic folder. Otherwise, we could
not support this move toward a fully electronic record.
Gathering Evidence
It is critical that SSA collect the correct information at the
earliest possible time in the process to ensure that correct decisions
are made the first time. SSA must improve the collection of medical and
non-medical evidence by explaining what is needed and asking the
correct questions, with appropriate variations for different treatment
sources.
Claimants should be encouraged to participate to the extent they
are able. To that end, SSA should assess, as early in the process as
possible, the claimant's need for special assistance and provide it.
Such assistance could be triggered when applicants are unable to read,
show evidence of cognitive or other mental impairments, or give other
indications of being unable to maneuver the process alone.
As noted below, it may be difficult for claimants to obtain
evidence for various reasons, e.g., state laws limiting release,
reluctance of providers to release information, inadequate payment for
records. Providing DDSs with adequate funds to obtain evidence would
assist greatly at an earlier part in the process.
Eliminating Reconsideration
We support the concept of eliminating reconsideration and providing
the opportunity for a pre-denial interview. The Commissioner recently
announced in April 2002 that the elimination of the reconsideration
step would be extended in the ten ``prototype'' states while SSA
gathers additional information, but will not be extended nationwide at
this time.
However, the Commissioner also announced the end of the ``claimant
conference'' in the prototype states, upon publication of a notice in
the Federal Register. We believe that an in-person interview would be
beneficial to many claimants. In addition to identifying further
information, these interviews would also allow claimants to provide
information and explain the limitations caused by their impairments.
LThe Right To A Full And Fair Hearing Before An Administrative Law
Judge
The key aspect of the adjudication process for a claimant is the
right to a full and fair hearing by an Administrative Law Judge (ALJ),
who is an independent decision-maker, providing impartial fact-finding
and adjudication. The ALJ asks questions of and takes testimony from
the claimant, may develop evidence when necessary, and applies the law
and agency policy to the facts of the case. Claimants have the right to
present new evidence in person to the ALJ and to receive a decision
from the ALJ that is based on all available evidence. This right should
be preserved.
Keep the Record Open for New Evidence
Many recent proposals to change the disability determination
process recommend that the record be closed to new evidence either
after the DDS or, at least, after the ALJ level. In the past, both
Congress and SSA have recognized that such proposals are neither
beneficial to claimants nor administratively efficient for the agency.
We strongly support the submission of evidence as early as
possible. Full development of the record at the beginning of the claim
means that the correct decision can be made at the earliest point
possible. The benefit is obvious: the earlier a claim is adequately
developed, the sooner it can be approved and the sooner payment can
begin.
Despite the obvious benefit to claimants, the fact that early
submission of evidence does not occur more frequently indicates that
factors beyond the claimant's control contribute to this problem. In
attempting to find a solution, Congress and SSA should be careful not
to make the process less ``user-friendly'' or more problematic for SSA.
There are several reasons why closing the record is not beneficial
to claimants:

L(1) Conditions change over time. Claimants' conditions may
worsen or improve over time and diagnoses may change. Claimants
may undergo new treatment, be hospitalized or referred to
different doctors. Some conditions, such as multiple sclerosis,
take longer to diagnose. Some claimants mischaracterize their
own impairments, either because they are in denial or lack
judgment or understanding about their illness.
LBy their nature, these claims are not static and a finite set
of medical evidence does not exist. Think for a minute about
your own and your family's situation. How often has someone
received a diagnosis, only to have it change later as more
tests are conducted or as more symptoms begin to appear? How
often has the original assessment of a condition's severity
changed, for the better or the worse? At what point can the
individual affected say that he/she now has all of the
information about the condition and how it will affect his/her
life? And how sensible is it to refuse to receive new
information, especially if the disability determination process
itself creates such a time lag that changes in condition are
possible, if not likely?
LIf the record is closed, individuals will be forced to file
new applications merely to have new evidence reviewed, such as
reports from a recent hospitalization or a report that finally
assesses and diagnoses a condition. Closing the record to such
evidence does not serve either the claimant or the agency well.
It would merely ensure that a decision will be made based on a
snapshot that may be significantly out of date.
LFinally, the system already imposes restrictions on new
evidence submitted after the initial DDS decision. These
limitations prevent the process from being entirely open-ended
and serve to encourage claimants and their representatives to
gather as much relevant information as possible as early in the
process as possible.

L(2) The ability to submit evidence is not always in the
claimant's control. Claimants always benefit by submitting
evidence as soon as possible. However, there are many reasons
why they are unable to do so and for which they are not at
fault. Closing the record punishes them for factors beyond
their control, including situations where:

DDS examiners fail to obtain necessary and
relevant evidence.
Neither SSA nor the DDS explains to the
claimant what evidence is important and necessary for
adjudication of the claim.
Claimants are unable to obtain medical
records either due to cost or because state laws
prevent them from directly obtaining their own medical
records.
Medical providers, especially treating
sources, receive no explanation from SSA or the DDS
about the disability standard and are not asked for
evidence relevant to the claim.
Medical providers delay or refuse to submit
evidence.

LSo that claimants are not wrongly penalized for events beyond
their control, the current system provides a process to submit
new evidence if certain conditions are met. This exception
should not be eliminated in the name of streamlining the
system.

L(3) The process should remain informal. For decades, Congress
and the United States Supreme Court have recognized that the
informality of SSA's process is a critical aspect of the
program. Imposing a time limit to submit evidence and then
closing the record is inconsistent with the legislative intent
to keep the process informal and inconsistent with the
philosophy of the program.
LThe value of keeping the process informal should not be
underestimated: it encourages individuals to supply
information, often regarding the most private aspects of their
lives. The emphasis on informality also has kept the process
understandable to the layperson, and not strict in tone or
operation. SSA should be encouraged to work with claimants to
obtain necessary evidence and more fully develop the claim at
an earlier point.

Further, filing a new application is not a viable option because it
does not improve the process and may in fact severely jeopardize, if
not permanently foreclose, eligibility for benefits. A claimant should
not be required to file a new application merely to have new evidence
considered where it is relevant to the prior claim. If such a rule were
established, SSA would need to handle more applications, unnecessarily
clogging the front end of the process.
Worse yet, individuals applying for Title II Disability Insurance
benefits could permanently lose their entitlement to benefits if they
are unable to re-apply before their recent connection to the workforce
ends (DI beneficiaries must have worked 20 out of the last 40
quarters). Contrary to statements made in oral testimony during last
week's hearing, great harm could be done to an individual who is forced
to re-apply and who, due to the Title II time limits, loses his/her
eligibility permanently.
Many people will wait some time before applying for benefits as
they try to see if their impairments can be overcome or if they can
make it in their changed circumstances. Added to the delays in the
process as described by the Commissioner, the individual could be
beyond the 5-year ``recency of work'' test before facing the need to
re-apply. Those who do not have problems with recency of work may still
lose benefits for the time period between the first and second
applications. Forcing re-application merely to consider new evidence is
clearly unfair to the claimant.
The Agency Should Not Be Represented at the ALJ Level
We do not support efforts to have SSA represented at the ALJ
hearing because past experience shows that it does not result in better
decision-making and reducing delays, but instead injects a level of
adversity, formality and technicality in a system meant to be informal
and non-adversarial. In the 1980's, SSA tested, and abandoned, a pilot
project to have the agency represented. It was terminated following
Congressional criticism and a judicial finding that it was
unconstitutional and violated the Social Security Act. In the end, the
pilot did not enhance the integrity of the administrative process.
Agency Role in Adjudication
In the discussions above regarding maintaining an informal process
and representation of SSA in the ALJ hearing, an important underlying
issue is the role of the agency in determining disability and paying
benefits. There seems to be a sentiment among some that SSA is not
being fairly represented in the determination process.
We believe that it is important, however, to note that SSA and the
claimant are not parties on opposite sides of a legal dispute. SSA
already has a very heavy say in what goes on: SSA implements the law
through development and publication of regulations, including the
medical listings; provides guidance to claims workers and Disability
Determination Services staff through its Program Operations Manual
System (POMS); contracts with the states for determinations made in
accordance with its regulations and POMS; and hires the ALJs. The
claimant's role is to show that he/she has an impairment with
limitations that fit within the parameters constructed by Congress and
implemented by SSA.
Very few claimants would have the wherewithal to know and
understand all of the things that could or should pertain to their
cases. SSA has a vital role in helping the claimant through a very
complex process. SSA's role is not to ``oppose'' the individual's
claim; but rather to ensure that people who are eligible as
contemplated by Congress are enabled, as a result of the claims
process, to receive the benefits to which they are entitled. Where an
individual has representation, whether legal or lay representation, SSA
is not placed in a weaker or unfair position requiring its own
representation. SSA has still written all the regulations and POMS and
contracted with the DDSs and hired the ALJs. Rather, SSA should see the
individual's representative as an ally in facilitating the collection
of relevant evidence and highlighting the important questions to be
addressed in making the disability determination.
We believe that all the discussions about the formality/informality
of the process and whether SSA should/should not be represented should
be viewed from this perspective.
Retain Review by the Appeals Council
We oppose the elimination of a claimant's right to request review
by the Appeals Council. The Appeals Council currently provides relief
to nearly one-fourth of the claimants who request review of ALJ
denials, either through outright reversal or remand back to the ALJ.
Review by the Appeals Council, when it is able to operate properly and
in a timely manner, provides claimants, and SSA, with effective review
of ALJ decisions. Given the low percentage appealed to federal court,
it appears that claimants largely accept decisions by the Appeals
Council as the final adjudication of their claims. As a result, the
Appeals Council acts as the initial screen for ALJ denials, a position
for which the district courts are ill equipped, given their other
responsibilities.
Retain Access to Judicial Review in the Federal Court System
Both individual claimants and the system benefit from the regular
federal courts handling social security cases. Given the wide variety
of cases they adjudicate, federal courts have a broad background
against which to measure the reasonableness of SSA's practices.
Reasons given for establishing a Social Security Court include
creating a uniform body of case law and guaranteeing that the claims of
similarly situated claimants are treated without regional disparity.
Creation of a Social Security Court is not the most effective,
efficient, or fair manner in which to accomplish these goals.
Intervention by the federal courts has played a vital role in
protecting the rights of claimants. The courts have halted illegal
practices by SSA and have provided standards and guidance where SSA has
failed to articulate clear policies. The current federal court system
has contributed to national uniformity. The process of federal court
review has not led to significant regional variation. In general, the
courts have reached agreement on core issues concerning SSA programs.
As a result, extensive circuit case law has provided guidance to SSA in
developing uniform standards. Two examples in major areas include: (1)
rules describing the weight to be given all medical evidence, including
reports from treating sources; and (2) rules to evaluate subjective
symptoms, including pain. Overall, there is substantial benefit to be
derived from different courts thoughtfully considering different cases
on the same issue to shed light on the many aspects of any particular
position.
The courts should be readily accessible to all claimants, and
should allow everyone, including people who are poor, disabled or
elderly, an equal opportunity to be heard by judges of the high caliber
we expect. A Social Security Court located in Washington, DC, would
severely limit access to the court for those who most need it--people
with disabilities or who are elderly and who have limited financial
means. Currently, claimants and their attorneys have relatively easy
access to the federal courts and un-represented individuals are able to
file appeals without the assistance of counsel. If Social Security
Courts were not located in as many locations as the federal district
courts, many people would be unable to file cases because of distance
and the cost of travel. These individuals would likely feel that the
system had utterly failed to provide a fair opportunity for review. In
light of geographical distances and high caseloads, the court might be
forced to forego oral argument altogether, as has been the case with
the Appeals Council.
There are high financial and administrative costs in creating the
court. The court would involve expenditures for judges, staff,
courthouse space, etc. The financial cost of creating the court must be
weighed against the questionable effectiveness of the court to achieve
its stated objective, especially given the limited resources available.
Remove Limitation on Administrative Expenses
Reducing the backlog and processing time must be a high priority.
We urge commitment of resources and personnel to resolve the exorbitant
waiting times and make the process work better for people with
disabilities. First, SSA must be provided with the resources to fully
meet its administrative responsibilities. This can be accomplished by
removing SSA's Limitation on Administrative Expenses budget authority
from the domestic discretionary spending category.
SSA workloads are projected to begin increasing rapidly within the
next decade as the baby boom generation begins to reach its peak
disability years just prior to reaching early retirement age beginning
in 2008. In addition, the SSA workforce is also aging and will begin to
lose significant numbers of staff, including senior and leadership
staff. About 3,000 employees are expected to retire per year from 2007
through 2009. SSA is also taking on new or more complex
responsibilities such as providing increased rehabilitation and
employment services for people with disabilities, completing and
maintaining an appropriate schedule of continuing disability reviews
and other eligibility reviews, and new approaches to prevent fraud and
abuse. In FY 1985, SSA's staffing levels were 80,844 FTEs and 83,406
workyears. The President's budget requests for FY 2003 include 63,464
FTEs and 64,730 workyears, for a reduction of 17,380 FTEs and 18,676
workyears over the last 18 years.
The CCD Social Security Task Force has voiced concern for some time
over the continued long-term downsizing of the SSA workforce. We
believe that failure to conduct appropriate and timely CDRs and other
eligibility reviews could lead to decreased trust in the integrity of
the Social Security and SSI programs. In addition, the new efforts to
assist people with disabilities to go to work, through the Ticket to
Work and Work Incentives Improvement Act of 1999, require new and
expanded approaches for SSA interaction with beneficiaries. Adequate
staffing levels are critical for these and other efforts to be
successful, especially given the coming disability and retirement years
of baby boomers.
For these reasons, we strongly support removing the Social Security
Administration's Limitation on Administrative Expenses (LAE) budget
authority from any domestic discretionary spending caps. Even if the
LAE were removed from the domestic discretionary caps, SSA's LAE would
still be subject to the annual appropriations process and Congressional
oversight. Currently, SSA's administrative expenses total less than 2%
of benefit payments paid annually. Congress would still maintain its
role in ensuring continued administrative efficiency.
Most importantly, removal of the LAE from the domestic
discretionary spending caps would remove it from competition with other
health, education, and human needs programs for limited funds. It would
allow for growth that is necessary to meet the needs of the coming
baby-boomer retirement years (including the retirement of SSA and state
DDS personnel); continue the efforts to improve the processing time for
initial applications and appeals, particularly through technological
improvements; continue the efforts to ensure integrity in the program
through CDRs and other redeterminations; and allow for replacement of
staff in a timely manner and to provide for adequate training and
mentoring.
Again, thank you for this opportunity to testify on these important
issues. The CCD Social Security Task Force looks forward to working
with the Subcommittee and the Commissioner on improving the disability
determination and appeals processes.
On Behalf Of:
American Association on Mental Retardation
American Congress of Community Supports and Employment Services
American Network of Community Options and Resources
American Occupational Therapy Association
Brain Injury Association of America
National Alliance for the Mentally Ill
National Association of Protection and Advocacy Systems
National Multiple Sclerosis Society
National Organization of Social Security Claimants' Representatives
Research Institute for Independent Living
The Arc of the United States
Title II Community AIDS National Network
United Cerebral Palsy Associations, Inc.

Chairman SHAW. Ms. Shor?

STATEMENT OF NANCY G. SHOR, EXECUTIVE DIRECTOR, NATIONAL
ORGANIZATION OF SOCIAL SECURITY CLAIMANTS' REPRESENTATIVES,
MIDLAND PARK, NEW JERSEY

Ms. SHOR. Chairman Shaw, thank you for inviting us to
testify today about challenges and opportunities in the
administration of the Social Security Disability Programs.
Collectively, Members of the National Organization of
Social Security Claimants' Representatives (NOSSCR) have many,
many years of experience in representing claimants at every
level of the disability determination process. We appreciate
this opportunity to share some observations and recommendations
with you.
Today's hearing focuses on the challenges facing the
disability programs, two extremely important criteria for such
review are certainly efficiency and timeliness. They are not
the sole criteria. Today's hearing should be directed to ensure
the fairness of the process for determining whether or not a
claimant is entitled to benefits.
Without hesitation, NOSSCR strongly supports efforts to
reduce unnecessary delays for claimants and to make the process
much more efficient as long as these efforts do not impair the
fairness of the process to determinate a claimant's entitlement
to benefits.
First, it is certainly necessary to State without
elaboration. It is crucial to provide the Social Security
Administration with adequate resources to meet current and
future needs. To improve delays, better develop cases and
implement technological advances, SSA requires adequate
staffing and resources. The NOSSCR supports removing SSA's
administrative budget from discretionary domestic spending
caps.
Secondly, very briefly, but it is certainly necessary to
improve full development of the record earlier in the process.
Unfortunately, very often the files that denied claimants bring
to our Members show that inadequate development was done at the
initial and reconsideration levels.
Often claimants are denied at those levels, not because the
evidence establishes that the person is not disabled, but
because the limited evidence gathered there cannot establish
that the person is disabled.
Often, a properly developed file is before the ALJ because
either the claimant's representative has obtained the necessary
evidence or because the ALJ has. Not surprisingly, these
different evidentiary records can easily produce different
results on the issue of disability.
To address this, the Agency needs to emphasize the full
development of the record at the beginning of the claim. The
benefit is obvious. The earlier a claim is adequately
developed, the earlier it can be correctly decided.
We have set out several recommendations to improve the
development process in our written testimony.
Third, I want to speak to processes to streamline the
disability determination process without impairing the
claimant's right to a full and fair hearing.
First, we support elimination of the reconsideration level.
It appears to be a step that requires a lot of time and
produces very little.
Secondly, with the focus on the Office of Hearings and
Appeals, clearly current processing times at the ALJ and
Appeals Council levels are unacceptably high. We strongly agree
with the Commissioner that reducing the backlog and processing
time is a high priority. We urge commitment of resources and
personnel necessary to reduce delays and make the process work
better for the public.
We believe that features of a full and fair process include
the following: retain the right to a de novo hearing before an
Administrative Law Judge. This is the right to a full and fair
administrative hearing by an independent decision maker who
provides impartial fact finding and adjudication, free from any
agency coercion or influence for claimants. This means the
right to appear in person to provide testimony and new evidence
to an ALJ.
Keep the record open for new evidence and understand that
there are currently regulatory and statutory limitations on
what can come into a file once an ALJ has issued an opinion.
The NOSSCR strongly supports the submission of evidence as
early as possible, but we know there are often many legitimate
reasons that evidence cannot be presented at the time of the
ALJ hearing. I would certainly offer a cautionary observation
that telling a claimant to file a new application in lieu of
submitting new evidence on appeal can be significantly
disadvantageous to that claimant.
We believe that the Social Security Administration should
not be represented at the ALJ level. In the eighties, SSA
tested and abandoned a pilot project to have the Agency
represented. The government representation project, which I
guess works out to GRP.
The GRP caused extensive delays in a system that was
overburdened even then and injected an inappropriate level of
adversity, formality and technicality into a system meant to be
informal and non-adversarial.
We support continued review by the Appeals Council. I will
note very briefly, appropriately 25 percent of claimants who
have requested review of an unfavorable ALJ decision find
relief at the Appeals Council. We also note that the processing
times are significantly improved at that level in the past
year.
Finally, we support continuation of the current system of
access to the Federal courts for judicial review of Social
Security claims. Thank you for the opportunity to testify.
[The prepared statement of Ms. Shor follows:]
Statement of Nancy G. Shor, Executive Director, National Organization
of Social Security Claimants' Representatives, Midland Park, New Jersey
Chairman Shaw, Representative Matsui, and Members of the
Subcommittee:

Thank you for inviting me to testify about challenges and
opportunities in the Social Security disability programs. I commend you
for holding this hearing since millions of people with disabilities
depend on these programs.
For the past twenty years, I have been the Executive Director of
the National Organization of Social Security Claimants' Representatives
(NOSSCR). NOSSCR's current membership is approximately 3,450 attorneys
and others from across the country who represent claimants for Social
Security and Supplemental Security Income (SSI) benefits. Collectively,
we have many years of experience in representing claimants at every
level of the disability determination process and welcome this
opportunity to share some observations and recommendations with you.
During my tenure as the NOSSCR Executive Director, SSA
Commissioners and other officials at the Social Security Administration
have been willing to meet with us and other groups to discuss issues
important to our membership and to claimants. This has proven to be an
effective way of addressing our concerns before they become serious
problems requiring other types of intervention and we look forward to
continuing this dialogue with Commissioner Barnhart and her staff
regarding the disability programs.
Today's hearing focuses on the challenges facing the Social
Security and Supplemental Security Income disability programs. Two
extremely important criteria for such a review are efficiency and
timeliness. But these are not the only criteria. Today's hearing should
be directed to ensure the fairness of the process for determining
whether or not a claimant is entitled to benefits. We share SSA's goal
of providing accurate decisions for claimants as early in the process
as possible. Further, changes at the ``front end'' can have a
significant beneficial impact on improving the backlogs and delays
throughout the hearings and appeals process.
The vast majority of cases handled by NOSSCR members are claims for
Social Security and SSI disability benefits. NOSSCR strongly supports
efforts to reduce unnecessary delays for claimants and to make the
process more efficient, so long as these efforts do not impair the
fairness of the process to determine a claimant's entitlement to
benefits.
Provide SSA With Adequate Resources To Meet Current And Future Needs
NOSSCR is concerned about SSA's readiness to deal with the
impending increase in its workload as the ``baby boom'' generation
approaches the peak age for onset of disability and, subsequently,
retirement. At hearings held by this Subcommittee in 2000, testimony
painted a bleak picture regarding SSA's ability to deal with the
increased work, at the same time that its own workforce will reach peak
retirement numbers. To exacerbate this problem, SSA's budget continues
to be cut from levels that would allow it to adequately address current
and future service delivery needs.
Most cases handled by NOSSCR members are at the ALJ hearing and
Appeals Council levels, where current processing times are unacceptably
high. A claimant cannot proceed with an appeal in federal district
court until the Appeals Council has acted. Thus, while their medical
and financial situations are deteriorating, claimants are forced to
wait for many months, if not years, before receiving a decision.
To improve delays, better develop cases and implement technological
advances, SSA requires adequate staffing and resources. NOSSCR supports
removing SSA's administrative budget, like its program budget, from the
discretionary domestic spending caps. Legislation such as H.R. 5447, a
bipartisan bill introduced in 2000 by Chairman Shaw and Representative
Cardin, would accomplish this by allowing Congress to approve funding
for SSA to address current service delivery needs and planning for the
future.
Improve Full Development Of The Record Earlier In The Process
Developing the record so that relevant evidence from all sources
can be considered is fundamental to full and fair adjudication of
claims. The decisionmaker needs to review a wide variety of evidence in
a typical case, including the medical records of treatment; opinions
from medical sources and other treating sources, such as social workers
and therapists; records of prescribed medications; statements from
former employers; and vocational assessments. The decisionmaker needs
these types of information to determine the claimant's residual
functional capacity, ability to return to former work, and ability to
engage in other work which exists in the national economy in
significant numbers. Once an impairment is medically established, SSA's
regulations envision that all types of relevant information, both
medical and nonmedical, will be considered to determine the extent of
the limitations imposed by the impairment(s).
The key to a successful disability determination process is having
an adequate documentation base and properly evaluating the
documentation that is obtained. Unless claims are better developed at
earlier levels, the procedural changes will not improve the disability
determination process. Unfortunately, very often the files that denied
claimants bring to our members show that inadequate development was
done at the initial and reconsideration levels. Until this lack of
evidentiary development is addressed, the correct decision on the claim
cannot be made. Claimants are denied not because the evidence
establishes that the person is not disabled, but because the limited
evidence gathered cannot establish that the person is disabled.
A properly developed file is usually before the ALJ because the
claimant's representative has obtained evidence or because the ALJ has
developed it. Not surprisingly, these different evidentiary records can
easily produce different results on the issue of disability. To address
this, the agency needs to emphasize the full development of the record
at the beginning of the claim. The benefit is obvious: the earlier a
claim is adequately developed, the earlier it can be correctly decided.
NOSSCR supports full development of the record at the beginning of
the claim so that the correct decision can be made at the earliest
point possible. Claimants should be encouraged to submit evidence as
early as possible. However, the fact that early submission of evidence
does not occur more frequently is usually due to reasons beyond the
claimant's control.
Our recommendations to improve the development process include the
following:

SSA should explain to the claimant, at the beginning
of the process, what evidence is important and necessary.
DDSs need to obtain necessary and relevant evidence.
Representatives often are able to obtain more relevant medical
information because they use letters and forms that ask
questions relevant to the disability determination process. DDS
forms usually ask for general medical information (diagnoses,
findings, etc.) without tailoring questions to the Social
Security disability standard. The same effort should be made
with nonphysician sources (therapists, social workers) who see
the claimant more frequently than the treating doctor and have
a more thorough knowledge of the limitations caused by the
claimant's impairments.
Improve provider response rates to requests for
records, including more appropriate reimbursement rates for
medical records and reports.
Provide better explanations to medical providers, in
particular treating sources, about the disability standard and
ask for evidence relevant to the standard.

The Disability Determination Process: How to Streamline Without
Impairing the Claimant's Right to a Full and Fair Hearing
I. Initial And Reconsideration Levels
In ten ``prototype states'' [AL, AK, CA, CO, LA, MI, MO, NH, NY,
PA], SSA currently is testing two significant changes at the pre-
hearing levels of the process: elimination of the reconsideration level
and adding a predecision interview, also known as a ``claimant
conference.'' Originally scheduled to be implemented in 2002, SSA
published proposed regulations in January 2001. 66 Fed. Reg. 5494 (Jan.
19, 2001). However, SSA announced in mid-2001 that the nationwide
rollout would be deferred pending further analysis. In April 2002, the
Commissioner announced that the claimant conference would be eliminated
after notice is published in the Federal Register.
NOSSCR has supported elimination of reconsideration and adding the
predecision claimant conference. We have had concerns about the conduct
of the claimant conference based on reports from NOSSCR members such
as: brief and pro forma conferences held by telephone; variations in
content of the conference, depending on the particular DDS adjudicator
involved; claimants not being informed of their right to be represented
at the claimant conference; and claimants possibly being discouraged
from pursuing an appeal if the decision is denied.
We have long advocated the value of providing claimants with a
face-to-face meeting with the decisionmaker and hope that the
Commissioner will find a way to incorporate the most beneficial
features of the original objectives of the claimant conference. When
she announced that the conference would be eliminated, the Commissioner
stated that SSA would encourage early and ongoing contacts with
claimants during the development process. As discussed above, these are
goals that NOSSCR strongly endorses. Many NOSSCR members would like to
participate earlier in the process since they are able to assist the
disability examiners in obtaining medical evidence and focusing the
issues.
II. The Hearings And Appeals Levels
Current processing times at the ALJ and Appeals Council levels are
unacceptably high. We agree with the Commissioner that reducing the
backlog and processing time must be a high priority. We urge commitment
of resources and personnel necessary to reduce delays and make the
process work better for the public.
Recently, a number of proposals to change the disability
determination process have been put forward. However, these proposals
contain some recommendations that we believe would undermine a
claimant's right to a fair adjudication process. We believe that
features of a full and fair process include the following:

Retain the right to a de novo hearing before a
Administrative Law Judge.

A claimant's right to a hearing before an Administrative Law Judge
(ALJ) is central to the fairness of the adjudication process. This is
the right to a full and fair administrative hearing by an independent
decisionmaker who provides impartial fact-finding and adjudication,
free from any agency coercion or influence. The ALJ asks questions of
and takes testimony from the claimant, may develop evidence when
necessary, and considers and weighs the evidence, all in accordance
with relevant law and agency policy. For claimants, a fundamental
principle of this right is the opportunity to present new evidence in
person to the ALJ, and to receive a decision from the ALJ that is based
on all available evidence.

Keep the record open for new evidence.

Many recent proposals to change the disability determination
process recommend that the record be closed to new evidence either
after the DDS or, at least, after the ALJ level. In the past, both
Congress and SSA have recognized that such proposals are neither
beneficial to claimants nor administratively efficient for the agency.
Under current law, an ALJ hears a disability claim de novo. Thus,
new evidence can be submitted and will be considered by the ALJ in
reaching a decision. However, the ability to submit new evidence and
have it considered becomes more limited at later levels of appeal. At
the Appeals Council level, new evidence will be considered, but only if
it relates to the period before the ALJ decision and is ``new and
material.'' \1\ At the federal district court level, the record is
closed and the court will not consider new evidence. However, the court
may remand the case to allow SSA to consider new evidence, but only if
it is ``new and material'' and there is ``good cause'' for the failure
to submit it in the prior administrative proceedings.\2\
---------------------------------------------------------------------------
\1\ 20 C.F.R. Sec. Sec. 404.970(b) and 416.1470(b).
\2\ 42 U.S.C. Sec. 405(g).
---------------------------------------------------------------------------
As noted earlier, NOSSCR strongly supports the submission of
evidence as early as possible. Full development of the record at the
beginning of the claim means that the correct decision can be made at
the earliest point possible. The benefit is obvious: the earlier a
claim is adequately developed, the sooner it can be approved and the
sooner payment can begin. However, there are many legitimate reasons
why evidence is not submitted earlier and thus why closing the record
is not beneficial to claimants including: (1) worsening of the medical
condition which forms the basis of the claim; (2) the fact that the
ability to submit evidence is not always in the claimant's or
representative's control, e.g., providers delay sending evidence; and
(3) the need to keep the process informal.
Proponents of closing the record note that claimants could file a
new application. This does not improve the process and may in fact
severely jeopardize, if not permanently foreclose, eligibility for
benefits. By reapplying rather than appealing: (1) benefits could be
lost from the effective date of the first application; (2) in SSDI
cases, there is the risk that the person will lose insured status and
not be eligible for benefits at all when a new application is filed;
and (3) if the issue to be decided in the new claim is the same as in
the first, SSA will find that the doctrine of res judicata bars
consideration of the second application.
In the past, SSA's notices misled claimants regarding the
consequences of reapplying for benefits in lieu of appealing an adverse
decision. Congress addressed this serious problem and, in legislation
enacted in 1990, required SSA to include clear and specific language in
its notices describing the adverse effect on possible eligibility to
receive payments by choosing to reapply in lieu of requesting
review.\3\
---------------------------------------------------------------------------
\3\ 42 U.S.C. Sec. Sec. 405(b)(3) and 1383(c)(1).
---------------------------------------------------------------------------
Apart from these harsh penalties, which have been recognized and
addressed by Congress, a claimant should not be required to file a new
application merely to have new evidence considered where it is relevant
to the prior claim. If such a rule were established, SSA would need to
handle more applications, unnecessarily clogging the front end of the
process. Further, there would be more administrative costs for SSA by
creating and then developing a new application.

SSA should not be represented at the ALJ level.

We do not support proposals to have SSA represented at the ALJ
hearing. In the 1980's, SSA tested, and abandoned, a pilot project to
have the agency represented, the Government Representation Project
(GRP). First proposed by SSA in 1980, the plan encountered a hostile
reception at public hearings and from Members of Congress and was
withdrawn. The plan was revived in 1982 with no public hearings and was
instituted as a one-year ``experiment'' at five hearing sites. The one-
year experiment was terminated more than four years later following
congressional criticism and judicial intervention.\4\
---------------------------------------------------------------------------
\4\ In Sallings v. Bowen, 641 F. Supp. 1046 (W.D.Va. 1986), the
federal district court held that the Project was unconstitutional and
violated the Social Security Act. In July 1986, it issued an injunction
prohibiting SSA from holding further proceedings under the Project.
---------------------------------------------------------------------------
Based on the stated goals of the experiment, i.e., assisting in
better decisionmaking and reducing delays, it was an utter failure. The
GRP caused extensive delays in a system that was overburdened, even
then, and injected an inappropriate level of adversity, formality and
technicality into a system meant to be informal and nonadversarial. In
the end, the GRP experiment did nothing to enhance the integrity of the
administrative process.

Retain review by the Appeals Council.

In the ten prototype states, SSA also is testing the elimination of
a claimant's right to request review of a hearing decision by the
Appeals Council. We oppose the elimination of a claimant's right to
request review by the Appeals Council. The Appeals Council currently
provides relief to nearly one-fourth of the claimants who request
review of ALJ denials, either through outright reversal or remand back
to the ALJ. As the Commissioner noted in her testimony at this
Subcommittee's hearing on May 2, the Appeals Council has made
significant improvements in reducing processing times and its backlog.
Based on this progress, she stated that by the end of the year, the
Appeals Council pending caseload could be at a workable level.
The Appeals Council, when it is able to operate properly and in a
timely manner, provides claimants with effective review of ALJ
decisions and acts as a screen between the ALJ and federal court
levels. In addition, elimination of Appeals Council review could have a
serious negative impact on the federal courts. As long ago as 1994, the
Judicial Conference of the United States opposed elimination of the
claimant's request for review by the Appeals Council prior to seeking
judicial review in the district courts, stating that such a proposal
was ``likely to be inefficient and counter-productive.'' \5\ Since most
ALJ denials did not then result in federal judicial review, as is
currently the case, the Judicial Conference stated: ``Claimants largely
accept the outcome of Appeals Council review.'' Further, the Conference
expressed concern that allowing direct appeal from the ALJ denial to
federal district court could result in a significant increase in the
courts' caseloads. As a result, the Judicial Conference concluded:
---------------------------------------------------------------------------
\5\ Comments dated May 26, 1994, of Chief Judge John F. Gerry,
Chairman of the Judicial Conference of the United States, in response
to SSA's April 1, 1994 ``Disability Reengineering Project Proposal.''

From the perspective of both unsuccessful litigants and the
federal courts, the present system of Appeals Council review as
a precondition to judicial review is sound. The right of
judicial review by Article III courts for all claimants remains
intact under the present system. To the extent that the process
of Appeals Council review is thought to be too time-consuming,
despite the high degree of finality that results, it would be
wiser to seek to streamline and expedite the process of review
rather than to bypass it as a precondition to federal judicial
review.\6\
---------------------------------------------------------------------------
\6\ Id.

We agree with the conclusion of the Judicial Conference of the
United States. Access to review in the federal courts is the last and
very important component of the hearings and appeals structure. Court
review is not de novo, but rather, is based on the substantial evidence
test. We believe that both individual claimants and the system as a
whole benefit from federal court review. The district courts are not
equipped, given their many other responsibilities, to act as the
---------------------------------------------------------------------------
initial screen for ALJ denials.

Retain access to judicial review in the federal court
system.

NOSSCR supports the current system of judicial review. Proposals to
create either a Social Security Court to replace the federal district
courts or a Social Security Court of Appeals to provide appeal of all
Social Security cases from district courts have been considered, and
rejected, by Congress and SSA over the past twenty years.
We believe that both individual claimants and the system as a whole
benefit from the federal courts deciding Social Security cases. Over
the years, the federal courts have played a critical role in protecting
the rights of claimants. The system is well-served by regular, and not
specialized, federal judges who hear a wide variety of federal cases
and have a broad background against which to measure the reasonableness
of SSA's practices.
Creation of either a single Social Security Court or Social
Security Court of Appeals would limit the access of poor disabled and
elderly persons to judicial review. Under the current system, the
courts are more geographically accessible to all individuals and give
them an equal opportunity to be heard by judges of high caliber.
Rather than creating different policies, the courts, and in
particular the circuit courts, have contributed to national uniformity,
e.g., termination of disability benefits, denial of benefits to persons
with mental impairments, rules for the weight to give medical evidence,
evaluation of pain. The courts have played an important role in
determining the final direction of important national standards,
providing a more thorough and thoughtful consideration of the issues
than if a single court had passed on each. As a result, both Congress
and SSA have been able to rely upon the court precedent to produce a
reasoned final product.
Finally, the financial and administrative costs of creating these
new courts must be weighed against their questionable effectiveness to
achieve the stated objectives. The courts, if created, would involve
new expenditures. We believe that limited resources should be committed
to the front end of the process. Further, from an administrative
perspective, the focus should not be on the end of the appeals process
but, rather, on the front end. Requiring claimants to pursue an appeal
to obtain the justice they are due from the beginning will only add to
the cumulative delay they currently endure.
Other Hearing Level Improvements
Recently, the Commissioner decided that the Hearings Process
Improvement plan (HPI) would be discontinued as a nationwide initiative
and that she would move forward, based on what was learned from that
initiative. We support her decision.
From the inception of HPI, NOSSCR members raised numerous, critical
concerns about the current state of affairs in hearing offices around
the country. These concerns were shared last year with the Executive
Task Force established by former Acting Commissioner Massanari to
evaluate HPI. The main problems included: processing times after the
Request for Hearing is filed; development; lack of on-the-record
decisions; conduct of hearings; and processing times after the hearing.
Specific concerns included duplicate requests for medical evidence;
inability to speak to a ``point'' person on the case; mail not being
associated with the file prior to the hearing; organization of files;
preparing cases for hearing; and confusion over when a case was ready
for hearing.
Some of the recommendations NOSSCR presented to the Task Force
included: (1) creating the same claims folder earlier in the process;
(2) reinstating senior attorney authority to issue decisions in certain
cases; (3) identifying a ``point'' person who is available to ensure
that the case is ready for hearing; (4) a better mechanism for review
of requests for on-the-record decisions; (5) single requests for
information; and (6) advance notice of hearings so that submission of
evidence can be targeted. We hope that the Commissioner will consider
these recommendations as she determines the future organization of the
hearings process.
In addition, the Commissioner and the Associate Commissioner for
Hearings and Appeals recently announced an initial series of
initiatives to improve the hearings and appeals process which include:

Early screening and analysis of cases, including
possible on-the-record decisions
Short form favorable decisions
Bench decisions
Expansion of videoconference hearings
Digital recording of hearings

We are generally supportive of these initiatives so long as they do
not impair the claimant's right to a full and fair hearing. The
technological improvements are discussed below.
Technological Improvements
At the Subcommittee hearing on May 2, 2002, Commissioner Barnhart
expressed her strong support for moving forward to improve the
technology used in the disability determination process. NOSSCR fully
supports the Commissioner in this effort, as we believe that much of
the delay in the system could be rectified with improved technology.
For example, the Commissioner has committed herself to development
of the electronic disability folder, ``eDIB,'' as soon as practicable
in light of available resources. This would reduce delay caused by
moving and handing off folders, allowing for immediate access by
whichever component of SSA or DDS is working on the claim. Further,
this would allow adjudicators to organize files to suit their
preference.
In terms of preparing a record for the district court, it would
allow for electronic filing of the administrative record, which is
consistent with the Judicial Conference of the United States' policy
and initiative to move towards electronic filing of documents and
pleadings. The Appeals Council has had difficulty reproducing copies of
the record, whether needed by the claimant or for federal court filing.
Files are too often lost or difficult to locate, leading to delays at
the Appeals Council and district court levels. Our members report
increasing delays and government requests for extension while cases are
pending in court, in order to locate files and prepare transcripts. In
many cases, after more lengthy delays, the files cannot be found and
the court must remand the case for a new hearing. The electronic folder
would certainly ease the workload in this regard and consequently,
reduce delays. However, we urge the Commissioner to ensure that the
eDIB folder contains complete copies of the paper records, rather than
summaries or otherwise reduced copies, and that claimants would be able
to submit evidence in any format, including paper records.
Another important component of technological improvement is digital
recording of ALJ hearings. Currently, hearings are taped on obsolete
tape recorders, which are no longer even manufactured. If copies are
needed, they must be transferred to cassette tapes, which is time-
consuming. Tapes are frequently lost because they are stored separately
from the paper folder. Given the age of the taping equipment, the
quality of tapes is often quite poor, which also results in remands
from the Appeals Council or the district court. A digitally recorded
hearing would not only be of high audio quality but would be easy to
copy or transfer to the district court as part of the administrative
record.
The Commissioner also has announced an initiative to expand the use
of video teleconference ALJ hearings. This allows ALJs to conduct
hearings without being at the same geographical site as the claimant
and representative and has the potential to reduce processing times and
increase productivity. NOSSCR members have participated in pilots
conducted by SSA and have reported a mixed experience, depending on the
travel benefit for claimants, the quality of the equipment used, and
the hearing room set-up.
In 2001, SSA published proposed rules on video teleconference
hearings before ALJs. 66 Fed. Reg. 1059 (Jan. 5, 2001). In general, we
support the proposed rules and the use of video teleconference hearings
so long as the right to a full and fair hearing is adequately protected
and the quality of video teleconference hearings is assured.
Conclusion
We commend the Subcommittee for holding this hearing today to look
at the challenges and opportunities for the Social Security disability
programs. NOSSCR is committed to working with Commissioner Barnhart to
improve these programs which are so vital to millions of people in this
country. I would be glad to answer any questions that you have.

STATEMENT OF JAMES A. HILL, ATTORNEY-ADVISOR, OFFICE OF
HEARINGS AND APPEALS, SOCIAL SECURITY ADMINISTRATION, CLEVELAND
HEIGHTS, OHIO, AND PRESIDENT, NATIONAL TREASURY EMPLOYEES
UNION, CHAPTER 224

Mr. HILL. Good morning, Mr. Chairman. I thank the
Subcommittee for inviting me to testify today.
I have been employed as an attorney advisor in the
Cleveland, Ohio hearing office for nearly 20 years. I am also
the President of Chapter 224 of the National Treasury Employees
Union, which represents attorney advisors and other staff
Members in approximately 110 hearing offices and regional
offices across the United States.
The crisis in disability adjudication of the mid-1990s has
returned. The OHA is once again failing to provide quality
service to the American public. Commissioner Barnhart and her
staff are currently in the process of planning long-term
initiatives. Implementation of those initiatives is years into
the future.
To address the current problems, SSA has announced a series
of short-term initiatives. I regret to inform you that these
initiatives are utterly inadequate for the task. Some of the
initiatives resulted from recommendations of the HPI Executive
Steering Committee, which was tasked by Acting Commissioner
Massanari with finding short-term initiatives to combat the
growing case backlog at OHA. I was a Member of that Committee.
Many Members of that Committee were bitterly disappointed that
we failed to address the primary problem with OHA disability
adjudications, that being the lack of a sufficient number of
decision makers.
We were well aware that the initiatives we advised would
have only a minimal impact. I seriously doubt that feeling was
conveyed to the Commissioner during the briefing she received
regarding the Committee's recommendations.
Despite the plethora of problems caused by the
implementation of HPI, the most fundamental problem at OHA
remains the lack of a sufficient number of decision makers. The
SSA must quickly recognize that the current initiatives are
inadequate and quickly augment them by reinstituting the Senior
Attorney Program.
The GAO recently issued a report which emphasized the
success of that program. Its recommendations to SSA clearly
contemplated a return to that program. However, SSA did not
follow that advice. While recognizing the value of early
screening of cases by a decision maker, SSA is instructing its
ALJs to perform that role.
Having ALJs perform the time-consuming task of reviewing
``unpulled'' cases significantly reduces the time they can
spend conducting hearings and deciding cases in which a hearing
is required.
While the Senior Attorney Program produced a substantial
number of dispositions in addition to those produced by ALJs,
the current program only redirects ALJ time. It does not
increase the number of decision makers and will not
significantly increase the number of dispositions.
The lack of sufficient decision makers must be addressed on
both a short term and a long-term basis. However, the answer is
not hiring vast numbers of ALJs, as was acknowledged last week
by Deputy Commissioner Gerry in his testimony before this
Subcommittee. Hiring the number of ALJs needed to efficiently
adjudicate the entire OHA workload is cost prohibitive and
operationally unnecessary.
Many of the cases that come to OHA do not require the
participation of an Administrative Law Judge in the
adjudicatory process. The ALJs must remain the backbone of the
OHA process. The SSA should investigate the utility of
introducing an Agency representative into the hearings process
and the feasibility of using other attorney adjudicators, such
as a magistrate or hearing officer, to assist the
administrative law judges and Senior Attorneys in adjudicating
the OHA caseload.
The NTEU makes the following recommendations for actions
necessary to ensure OHA delivers quality service as demanded by
the American people now and in the future:
One, all qualified OHA attorney advisors should be
converted to Senior Attorney decision makers now and given the
authority to issue fully favorable on-the-record decisions.
These Senior Attorney decision makers would review all cases
coming into the hearing office, as well as provide decision-
writing support for Administrative Law Judges.
Two, SSA should establish a work group to examine the
implementation of additional attorney decisionmakers such as a
magistrate or hearing officer who would work in conjunction
with ALJ's and Senior Attorneys in adjudicating the ever
growing disability work load that faces SSA.
Three, SSA should establish a work group to examine the
issue of introducing Agency representatives into the
adjudication process at the hearing level. Thank you very much.
[The prepared statement of Mr. Hill follows:]
Statement of James A. Hill, President, Attorney-Advisor, Office of
Hearings and Appeals, Social Security Administration, Cleveland
Heights, Ohio, and President, National Treasury Employees Union,
Chapter 224
Chairman Shaw and Members of the Subcommittee:

My name is James A. Hill. I have been employed by the Office of
Hearings and Appeals (OHA) of the Social Security Administration (SSA)
for more than 19 years as an Attorney-Advisor. I am also the President
of National Treasury Employees Union (NTEU) Chapter 224 that represents
Attorney-Advisors and other staff members in approximately 110 Hearing
Offices and OHA Regional Offices across the United States. I wish to
thank the Subcommittee for inviting me to testify regarding the
challenges and opportunities facing Social Security disability programs
today.
The crisis in disability adjudication at the hearing level of the
mid-1990's has returned. Case backlogs and average processing time have
increased at an alarming rate, severely diminishing the quality of
service provided to the American public. SSA must immediately address
the current backlog problem and devise a system that will adequately
serve the needs of the future. At the request of the Social Security
Subcommittee, the United States General Accounting Office (GAO)
conducted a study of the initiatives that SSA developed and the results
that have been obtained. GAO stated that:

LSSA'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 . . . 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. . . .
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. (GAO Report 02-322, February 2002,
Page 23-24, (hereinafter ``GAO''))

GAO recommended implementing ``short-term strategies to immediately
reduce the backlog of appealed cases in the Office of Hearing and
Appeals. These strategies could be based on those that were
successfully employed to address similar problems in the mid-1990's''.
(GAO at Page 28) (Emphasis added.)
Unfortunately, SSA has chosen to evade the clear advice of the GAO
and has not implemented strategies based on those that worked in the
1995 to 1999 time period. The misuse of ALJs to screen and analyze
unassembled cases off the master docket is the only short term change
proposed by the Commissioner that bears any resemblance to the changes
that successfully brought down the backlog by more than 250,000 cases.
It will not succeed because every minute an ALJ spends on screening and
analyzing unassembled cases is a minute that that ALJ will not spend
preparing for a Hearing, holding a Hearing or deciding a case after the
Hearing, tasks that no other SSA employee can assume. It robs from
Peter to pay Paul. It actually reduces the time ALJs will have to spend
on the great majority of cases that go to Hearing, the ones where the
claimant waits the longest. This initiative will have the unintended
consequence of actually making most claimants wait longer for their
Hearing. Additionally, if each ALJ does not produce a decision for each
4 hours he or she spends on this program, ALJs will actually produce
fewer decisions with this initiative than they would have without it.
To be sure, some deserving (and lucky) claimants will get their
decisions and benefits significantly earlier than they would under the
present process, but it will come at the expense of other claimants who
have been waiting much longer. Further, these claimants would receive
the same benefits from a Senior Attorney program that has none of the
adverse consequences of this initiative. The Senior Attorney program
would not divert any ALJ time from the Hearing workload. No one would
wait longer for a Hearing because of the Senior Attorney program.
Rather than the possibility of fewer cases going out each month, the
Senior Attorney program will result in as many as 5,000 to 8,000 more
cases going out every month. Based upon previous experience the average
processing time for these cases would be approximately 100 days. We
asked the Agency how many cases they expected their initiatives to
produce and we were told that they did not have that data.
Deputy Commissioner Martin Gerry recently testified before this
Subcommittee and stated that short term initiatives are being
implemented that are intended to alleviate some of the current problems
at the Office of Hearings and Appeals. Mr. Gerry testified that these
initiatives were recommended by the HPI Executive Steering Committee
impaneled by Acting Commissioner Massanari and charged with finding
short term initiatives to solve many of the problems associated with
HPI. I was a member of the Executive Steering Committee as was Judge
Bernoski. I regret to inform you that many members of that Committee
were bitterly disappointed that we failed to address the primary
problems associated with HPI, and we left the final meeting with a
pervasive feeling that we had failed. We were well aware that the
initiatives we advised would have only a minimal impact. I seriously
doubt that feeling was conveyed to the Commissioner during the briefing
she received regarding these initiatives.
In light of the GAO analysis and recommendations, NTEU makes the
following recommendations for action necessary to ensure that the
Office of Hearings and Appeals delivers the quality of service demanded
by the American people currently and in the future:

1. LAll qualified OHA Attorney Advisers should be converted to
Senior Attorney decision makers and given the authority to
issue fully favorable on-the-record decisions. These Senior
Attorney decision makers would review all cases coming into the
hearing office.
2. LSSA should establish a workgroup to examine the
implementation of additional attorney decision makers, such as
Hearing Officers, in the OHA hearing offices to work in
conjunction with the ALJs in processing the ever-growing
workload that faces SSA.
3. LSSA should establish a workgroup to examine the issue of
introducing an Agency representative into the adjudication
process.

Since the mid-1990's SSA's disability program has been in crisis.
In the mid-1990s the disability backlog rose to over 550,000 cases and
processing time climbed to nearly 400 days at the hearing office level.
In 1995 SSA introduced the Senior Attorney Program that was
instrumental in reducing the disability backlog to approximately
311,000 cases by September 1999 and reducing processing time to
approximately 270 days at the end of fiscal year 2000. Since the
termination of the Senior Attorney Program the pending case backlog has
risen to approximately 491,350 and SSA projects by the end of FY 2002
the backlog will rise to 546,000 cases.
The Senior Attorney Program was replaced by HPI, a program which
was implemented without testing. HPI includes a triage system in which
Attorney Advisers screen profiled cases (the same profiles used by the
Senior Attorney Program) and recommend cases to ALJs that could be paid
on the record. This still requires a significant commitment of ALJ
resources. However, this process has resulted in a considerable decline
in on-the-record decisions emanating from this profiled workload
leading to fewer overall dispositions. The average rate of ALJ
dispositions has not increased; in fact, it has declined, leading to a
substantial decrease in total dispositions. We are in the midst of an
emerging disaster precipitated by the demise of the Senior Attorney
decision maker and fueled by HPI. The situation continues to
deteriorate. Any hope of significant improvement without bold and
decisive action is unreasonable. OHA has traditionally maintained a
roster of 1000-1100 ALJs. Hiring substantial numbers of additional ALJs
to meet future needs is fiscally irresponsible. SSA recently hired
approximately 130 new Administrative Law Judges (returning to the norm)
but readily admits that this addition will not solve today's problems.
The loss of efficiency caused by HPI, the elimination of the Senior
Attorney Program, the precipitous decline in the number of on-the-
record decisions, the staggering increase in ``unpulled'' cases, the
expected increase in disability receipts, and the imposition of a new
and increased Medicare workload spell disaster. The Social Security
Administration must act quickly to deal with the current disability
backlog. It must also realistically assess its future workloads and
devise processes sufficient to meet the decision-making needs of the
future.
SSA Must Immediately Re-introduce the Senior Attorney Program
The fundamental problem at OHA is that the number of decision
makers is insufficient to meet the workload. There is widespread
agreement that it is unreasonable to expect an Administrative Law Judge
to produce more than 500 dispositions in a year if an acceptable level
of quality is to be maintained. If ALJs are the only decision-makers,
unless the Agency is prepared to accept a much greater number of ALJs
than currently are employed, the simple arithmetic mandates an ever
increasing backlog and skyrocketing processing times. The solution is
more decision makers.
In 1995 the Social Security Administration faced a disability
caseload backlog and processing time crisis very similar to that
existing today. In order to reduce the backlog and decrease processing
time, SSA instituted the Short Term Disability Program. The primary
element of that program, designed to reduce both the backlog and
processing time, was the Senior Attorney Program.
That program continued until the advent of the HPI Program. The
authority to make and issue fully favorable decisions on the evidence
of record, with minimal development, was delegated to the Agency's
experienced Attorney Advisors. The Senior Attorney decisions combined
with ALJ decisions resulted in a substantially higher level of total
dispositions than would have occurred if ALJs had been the sole
decision-makers. In addition to performing the ``Senior Attorney
work'', the Senior Attorneys also continued to draft ALJ decisions.
This arrangement utilized the knowledge, skills, and abilities of these
attorneys to issue fully favorable decisions to those claimants whose
case did not require a hearing, and to continue to draft the more
difficult ALJ decisions. This afforded, on an individual hearing office
basis, the flexibility to direct decision making and decision writing
resources as necessary to achieve maximum productivity.
Senior Attorneys issued approximately 220,000 decisions during the
course of the Program. The average processing time for Senior Attorney
decisions was approximately 105 days. During its pendency the OHA
backlog fell from over 550,000 to as low as 311,000 at the end of FY
1999. The correlation is obvious. During the same time period there was
also an increase in ALJ productivity demonstrating that dual decision
makers was a viable concept. It is readily apparent that processing a
large number of cases in such an expeditious manner materially reduced
the average processing time for all disability cases at the hearings
level in OHA.
While the Senior Attorney Program resulted in a substantial
increase in on-the-record decisions, there was not a corresponding
increase in the OHA payment rate. In fact the overall payment rate at
OHA declined during the course of the Senior Attorney Program.
In July 1998 the Senior Attorney Program was significantly
downsized with approximately one-half of the senior attorneys returned
to the GS-12 attorney adviser position. The remaining Senior Attorneys
spent 100 percent of their time doing ``Senior Attorney work''. This
lack of flexibility doomed this arrangement which lasted only four
months before the remaining Senior Attorneys were also assigned ALJ
decisions drafting duties. Unfortunately, the number of Senior
Attorneys was not increased which led to a significant decline in the
Program's productivity. This decrease in productivity led to the rise
in unpulled cases and the beginning of the increase in the backlog and
average processing time.
The Senior Attorney Program benefited more than just those
claimants who received their disability payments far earlier than would
otherwise have been the case. Staff and ALJ time was not spent
needlessly on cases that could be paid without a hearing and they could
more timely attend to the other cases, thereby reducing processing time
for those cases as well. Another benefit was that cases paid by a
Senior Attorney were not ``pulled'' (prepared for hearing). Had the
Senior Attorney Program not been downsized, and then eliminated, there
would be about 90,000 fewer cases waiting to be ``pulled''.
The processing of Senior Attorney cases involved a very limited
amount of hearing office staff time. This resulted in the expenditure
of far fewer work years devoted to processing Senior Attorney cases
than would have been the case had ALJ adjudication been required. This
resulted in a significant reduction of administrative costs for those
cases. The former Chief Administrative Law Judge stated that OHA may
receive as many as 100,000 cases a year that with minimal development
could be paid without a hearing. The savings in administrative costs
arising from the reinstitution of the Senior Attorney Program would be
substantial.
One of the criticisms of the Senior Attorney Program involved
decisional accuracy. Of course that is also one of the chief complaints
regarding ALJ decisions. The Appeals Council review of Senior Attorney
and ALJ on-the-record decisions found no difference in quality. I am
convinced that the formulation and implementation of an effective
quality assurance program at the hearing level should be of the highest
priority
The success of the Senior Attorney Program ultimately rests on the
competence of the legal professionals who can serve as adjudicators.
These individuals are experienced OHA Attorney Advisors who have many
years experience dealing with the intricacies of the legal-medical
aspects of the Social Security disability program. They are attorneys
well versed in the law, and they are experienced disability
practitioners with a wealth of adjudicatory experience in the Social
Security disability system.
The conversion of OHA Attorney Advisers to Senior Attorney
decisionmakers as described above will result in an immediate and
substantial improvement in OHA service to the public at minimal
additional cost. Based upon the Agency's experience with the original
Senior Attorney Program, and with the full cooperation of hearing
office management (lacking during the original Senior Attorney
Program), this measure could produce as many as 75,000-100,000
decisions a year without diminishing ALJ productivity.
The original Senior Attorney Program was a resounding success. It
materially improved the quality of service provided to the public,
especially for those individuals who were disabled and entitled to
receive their disability decision and benefits on a timely basis. In
addition, it resulted in administrative and program cost savings.
Senior Attorney decisionmakers have proven by their performance that
pre-ALJ decisionmaking in the OHA hearing office significantly improves
the quality of service provided to the public.
SSA's Proposed Changes
Instead of following the advice of GAO, SSA has once again decided
to implement additional permanent untested changes to the Appeals
process. These include requiring ALJs to perform early screening and
analysis of unassembled cases from Master Docket; implementing a short
form favorable decision; and, authorizing ALJs to issue bench
decisions. While current Senior Attorneys will continue to screen and
analyze some cases, they will not have the decisionmaking authority
that they had in the original, successful, Senior Attorney Program.
Also contrary to the advice of GAO, SSA did not involve this
Stakeholder, NTEU, in any predecisional planning for these changes.
The agency has stated that both the ALJs and Senior Attorneys will
generally be expected to complete their early screening and analysis of
cases within five work days. This will not permit ALJs or Senior
Attorneys to develop the record. The system will allow ALJs to do
little more than cherry pick the easy cases and second guess the DDS
decision. The review of a lesser profile of cases by Senior Attorneys
who have neither the authority to decide the case, nor the time
allocated by management that is necessary to develop the case, will
largely be a waste of resources. These short-term strategies will not
reduce the backlog, in fact, it is unlikely that they will
significantly slow the rate of growth of the backlog. (Other changes,
such as ending certification of cases as ready to hear, simply
recognize the reality that many offices never implemented this change,
and most of those that did have already stopped the practice.
Similarly, many offices no longer rotate clerical employees. Neither of
these changes will have a measurable affect on the backlog.)
Without a doubt the biggest problem with the plan is the decision
to have ALJs perform screening and analysis. This adds significantly to
the workload of SSA's most expensive and most limited resource, ALJs.
The time they spend on screening, analyzing, deciding and writing these
unassembled cases is time that they cannot spend preparing for a
Hearing, holding a Hearing, deciding a case after a Hearing or editing
and signing the final decision, functions that no other SSA employee
can perform. Even if the program worked, most claimants would have to
wait longer for their decision. ALJs will have less time to review,
hear and decide those cases already in the 500,000 case backlog while
critically limited ALJ time is spent cherry picking payments as they
come into the office. This is supremely unfair to those claimants
already waiting almost a year at OHA for their decision. The critical
difference between the Senior Attorney Program and this current SSA
plan is that the Senior Attorney Program did not divert any ALJ time to
produce 50,000 or more decisions a year. NTEU does not believe that a
process that reduces the number of Hearings that an ALJ can hold and
the number of Hearing decisions that an ALJ can issue is a fair or
effective way to increase production or reduce processing time. SSA
needs a program where decisionmakers can pay deserving claimants at the
earliest possible time in the appeals process, but not at the expense
of those longer suffering claimants whose cases require a Hearing. That
program is the Senior Attorney Program.
The Senior Attorney Program is a real life tested program that
demonstrated it could produce 50,000 to 60,000 on the record decisions
a year without the use of any ALJ time. It can be instituted quickly
with minimal cost to the Agency using current Agency personnel. If it
were implemented with the strong support of the Commissioner, OHA
could, for the first time since the original Senior Attorney program
was eliminated, actually decide more cases in a month then it received
and begin to reduce the backlog.
As indicated by Acting Commissioner Larry Massanari, in response to
questions from the Chairman following your June 28, 2001, Hearing:

L The Senior Attorney Program was established in 1995 as an
initiative of the Agency's Short Term Disability Project to
rapidly reduce the number of pending disability cases at the
hearing level. Under this program, some 200,000 fully favorable
decisions were issued without the need for approval by an ALJ,
thus saving the ALJ's time for hearings and decisions on the
rest of the hearing workload. In general, the Senior Attorney
Program had a positive impact on hearing process efficiency and
productivity.

I note that rather than saving the ALJ's time for hearings and
decisions the current plan reduces the time that ALJs have for hearings
and decisions on the rest of the hearing workload. Acting Commissioner
Massanari continued:

L However, by the beginning of FY 2000, pending hearing
workloads had declined and fewer cases lent themselves to on-
the-record fully favorable decisions primarily because of
process unification improvements at the initial claim level.
Thus, it was decided that an adjudicator in addition to the ALJ
would not be a useful element of the workflow and staffing
structure and that the signatory authority of the Senior
Attorney would be terminated in each office.

Note that pending hearing workloads are now higher than they were
during most of the existence of the Senior Attorney Program and they
continue to increase. The anticipated improvements from ``process
unification'' have not materialized and thus the conditions that now
exist are remarkably similar to the conditions that led to the first
Senior Attorney Program in 1995. Acting Commissioner Massanari further
stated:

L At the time the decision was made to terminate the Senior
Attorney Program, the full implementation of prototype in the
DDSs was believed to be imminent. These process changes would
further reduce the pool of possible on-the-record decisions at
the hearing level by ensuring more allowance decisions made
correctly at the DDS level and by sending fully developed and
``fresher'' cases to the hearing offices for adjudication.

Clearly, this did not take place.

L The Senior Attorney Program was never a part of HPI.
However, the HPI plan institutionalized key positive aspects of
the Senior Attorney Program, like early screening and analysis
of cases and early identification and fast-tracking of
potential on-the-record decisions.

Unfortunately, HPI was unsuccessful in its attempt to screen,
analyze, identify and fast-track on-the-record decisions. HPI proved
that taking a few, but not all, key aspects of a successful program
like the Senior Attorney Program, does not guarantee success in a new
untested program. HPI had too many handoffs and still required the ALJ
to review the potential on-the-record decision, and make the decision.
This cumbersome process is what remains in place for most of the cases
that will be screened and analyzed in OHA. It did not work well when it
was called HPI and it won't work any better with whatever new name they
put on it.
NTEU doubts that Bench decisions will add significantly to ALJ
productivity or decrease processing time. We do believe, however, that
they will increase the rate of cases remanded to ALJs as these
decisions are likely to be less well reasoned and drafted than those
decisions where an ALJ can review the entire record after the Hearing
and make a thoughtful reasoned decision with the advice and counsel of
Hearing Office attorneys and program experts. Even without the
screening and analysis initiative, many ALJs (who generally have
hundreds of cases on their docket at any one time) have insufficient
time to fully evaluate and consider all of the nuances of each case
prior to the Hearing. We are concerned that ALJs are being pressured
into making premature decisions.
NTEU also has serious concerns about the short form for favorable
decisions format (FEDS) that the Agency proposes that ALJs and other
employees use in drafting decisions. We are unimpressed that a number
of Agency components have reviewed the format for legal sufficiency and
quality as formats do not have to be legally defensible, disability
decisions do. Decisions such as these, long on conclusions and short on
facts, will fuel the complaint that the ALJ decisions are not supported
by the evidence.
Long Term Changes
NTEU believes that it is time for the Social Security
Administration to seriously consider fundamentally altering the nature
of ALJ hearings by introducing an Agency representative, the Social
Security Counsel, who will be responsible for presenting the Agency's
case to the Administrative Law Judge. The Counsel would be responsible
for developing the record and presenting it at the hearing. It is the
responsibility of the Counsel to present the adjudicator with a
balanced and complete record upon which a fair and just decision can be
based. The Counsel, in concert with the claimant's representative, will
resolve issues and propose settlement agreements that would be
presented to the adjudicator for approval.
The role of the adjudicator would be reduced to oversight of the
pre-hearing process, conducting hearings, and preparation of written
decisions based on evidence presented at hearing. The ALJ would be
relieved of the responsibility of representing the agency and the
represented claimant, and would act as a trier of fact.
In its report dated January 2001, Charting the Future of the Social
Security's Disability Programs: The Need for Fundamental Change, the
Social Security Advisory Board also noted that Administrative Law
Judges have been required to balance three roles. They are obligated to
protect the interests of both the claimant and the government, and to
serve as an objective adjudicator. The Board further noted that
approximately 80 percent of disability insurance claimants are now
represented by an attorney. The Board also noted that because of the
massive increase in the disability appellate workload, SSA has
periodically made efforts to increase ALJ productivity which many in
OHA believe has impacted adversely on the quality of decision-making.
The Social Security Advisory Board recommended that the agency be
represented at hearings. The Board stated that having a representative
present at the hearing to defend the Agency's position would help
clarify the issues and introduce greater consistency and accountability
into the adjudicatory system.
The extent of the quality assurance problems in the current system
is underlined in the report of The Lewin Group, Inc, which stated that
the adjudication process at OHA is almost unique. The Lewin Group
reported, ``We have not encountered good examples of non-adversarial
processes.'' The Lewin Group suggested that one way to improve the non-
adversarial system is to make it more adversarial. It suggested that
the mechanism for such a change would be to introduce a representative
from the Social Security Administration into the adjudication process.
This would relieve the Administrative Law Judge of the responsibility
of representing the agency, and if the claimant were represented by
outside counsel, the responsibility for representing the claimant.
In conclusion, NTEU makes the following recommendations:

1. LAll qualified OHA Attorney Advisers should be converted to
Senior Attorney decisionmakers and given the authority to issue fully
favorable on-the-record decisions. These Senior Attorney decision
makers would review all cases coming into the hearing office.
2. LSSA should establish a workgroup to examine the implementation
of additional attorney decision makers in the OHA hearing offices to
work in conjunction with the ALJs in processing the ever-growing
workload that faces SSA.
3. LSSA should establish a workgroup to examine the issue of
introducing an Agency representative into the adjudication process.

Chairman SHAW. Thank you, Mr. Hill. Mr. Bernoski?

STATEMENT OF THE HON. RONALD G. BERNOSKI, ADMINISTRATIVE LAW
JUDGE, OFFICE OF HEARINGS AND APPEALS, SOCIAL SECURITY
ADMINISTRATION, MILWAUKEE, WISCONSIN, AND PRESIDENT,
ASSOCIATION OF ADMINISTRATIVE LAW JUDGES, MILWAUKEE, WISCONSIN

Mr. BERNOSKI. Thank you, Mr. Chairman for inviting us to
testify here today.
Based on the testimony of this hearing and other hearings
that you have conducted so far this year, it is clear that the
Social Security Disability System is under severe distress. It
is also clear that the Agency-imposed process of HPI is at the
center of the problem.
Immediately before the start of HPI, both case backlogs and
case processing times were being reduced. For fiscal year 1998
and 1999, we averaged about 600,000 cases each year. After HPI,
both case backlogs and case processing times have increased and
for fiscal year 2001, we produced about 450,000 cases.
As found by the Social Security Advisory Board, the Agency
has not properly administered the hearing process. Therefore,
we believe that active Congressional oversight is needed at
this time.
I will discuss three major issues this morning.
First, if the entire case processing time is to be reduced,
the steps in the process should also be reduced. This can be
done by having one complete review at the DDS level, which is
based upon the same legal standard that is used by the
Administrative Law Judges.
The issue of the variance between the DDS allowance rates
should also be addressed.
Second, the hearing process must be restored and the
problems caused by HPI corrected. As stated in some detail in
our written statement, we believe the corrections should
include both short range and long-term objectives.
Some of the reforms that we consider vital include
restoring the Administrative Law Judges to the primary position
in the hearing process; assigning staff and attorney writers to
each judge; adopting a government representative to help
develop the record and to represent the Agency at some hearings
before the Administrative Law Judge; closing the record after
the ALJ hearing and as of the date of the decision; defending
decisions of the Administrative Law Judges before the Appeals
Council and in the Federal courts; clarifying the disability
law by either statute and/or case law; and adopting rules of
practice and procedure for claimant representatives and for our
hearings.
The Commissioner has stated that she will announce reforms
for the disability system this fall. We have not been asked to
participate, despite our effort to do so.
Thirdly, the hearing system and the hearing system should
be strengthened. A bill has recently been introduced into
Congress within the last week. It is H.R. 4932. This bill will
place the Administrative Law Judge hearings of SSA under the
operational control of a Chief Judge who reports directly to
the Commissioner. This is an important first step for reform
and this bill deserves the support of this Committee.
We have also suggested a more comprehensive reform that
would make the hearings function a separate component within
the Agency. The hearings component will report directly to the
Commissioner. The plan eliminates the Appeals Council and it
creates local administrative law judge appellate panels that
are based upon the Bankruptcy Court model.
We testified in detail on this change before this
Committee, and the plan is part of the record of a prior
hearing of this Committee.
Whichever reform the Congress adopts, we believe that it is
now time for the Congress to act. We know the problems. We have
been discussing them for many years. We have also identified
several solutions. We think that the Congress should begin
moving along these lines and begin some type of reform effort.
We think that it is now time to bring together a work group
consisting of legal scholars, judges, attorneys and claimant
groups and start crafting a plan for reform. We believe that we
should also give the recommendations of the Social Security
Advisory Board considerable credit and use them as a guide.
We believe that the American people must have a hearing
system that is timely, accurate, fair and understandable, and
is protected by the Administrative Procedure Act.
Mr. Chairman, our request as judges is simple. We ask that
we be given the responsibility and authority and we be held
accountable for our work.
Mr. Chairman, we look forward to working with you and the
Committee on this important project of reforming the Social
Security disability system. Thank you.
[The prepared statement of Mr. Bernoski follows:]
Statement of the Hon. Ronald G. Bernoski, Administrative Law Judge,
Office of Hearings and Appeals, Social Security Administration,
Milwaukee, Wisconsin, and President, Association of Administrative Law
Judges, Milwaukee, Wisconsin
Mr. Chairman and Members of the Subcommittee:
I. INTRODUCTION
Thank you for the opportunity to testify before you today. My name
is Ronald G. Bernoski. I am an Administrative Law Judge (``ALJ'') who
has been hearing Social Security disability cases at the Office of
Hearings and Appeals (``OHA'') of the Social Security Administration
(``SSA'') in Milwaukee, Wisconsin, for over 20 years.
This statement is presented in my capacity as the President of the
Association of Administrative Law Judges (``AALJ''), which represents
the ALJs employed in the SSA OHA and the Department of Health and Human
Services (``DHHS''). One of the stated purposes of the AALJ is to
promote and preserve full due process hearings in compliance with the
Administrative Procedure Act for those individuals who seek
adjudication of program entitlement disputes within the SSA.
I will address the challenges and opportunities for the Social
Security Disability Programs in improving the disability determination
appellate process at the ALJ hearing and Appeals Council administrative
review levels. First, I will list the challenges at the DDS agencies
that affect the appellate levels and at each of the appellate levels.
Then I will offer short and long term solutions that may be implemented
to resolve these challenges. The table of contents is an outline of the
challenges and proposed solutions that I present for the Social
Security Disability Programs. This discussion presumes familiarity with
the structure of the SSA OHA and the initiatives by the SSA management
to change or improve the functioning of OHA, including the Process
Unification Training (``PUT''), the Hearing Process Improvement Plan
(``HPI''), and the Appeals Council Improvement Plan (``ACPI'').
II. CHALLENGES FOR THE SOCIAL SECURITY DISABILITY PROGRAMS
A. Challenges at the DDS Level:

1. The Need to Reduce the Number of Cases that Require an ALJ
Hearing by Getting the Claimants a Correct Final Administrative Result
Sooner: The reversal rate of the DDS decisionmakers' determinations by
the ALJs remains high. In order to reduce the number of ALJ reversals
of DDS determinations, in 1996, the SSA conducted the PUT training to
have the DDS decisionmakers use the same rules to decide cases as the
ALJs. This has not resulted in fewer cases requiring an ALJ hearing
because DDS decisionmakers are required to apply a medical standard set
forth in the SSA POMS manuals when determining disability, which is not
the standard used by the ALJs. ALJs use a legal standard when
determining disability that is based upon the Social Security Act, the
SSA regulations and rulings, and the federal case law that interpret
them.
Although Congress has expressed concern about the different
benefits allowance rates between the DDS agencies and OHA, there also
is a concern about the wide discrepancy in the benefits allowance rates
among the different states' DDS agencies. The latter discrepancy cannot
be explained by the use of a different standard for decisionmaking,
since all of the DDS agencies use the same medical standard.
2. The Need to Reduce Processing Time for the Initial and
Reconsidered Determinations Levels: Rather than carefully develop and
examine the claimants' cases once, DDS often is making its initial
determinations based on incomplete records, and, upon reconsideration,
rarely obtains significant additional medical evidence or changes the
outcome of the case. SSA recently reported that only about three
percent of initial determinations are changed at the reconsideration
level.
There are steps that SSA can take that do not require legislation
to (1) improve the quality of DDS decisionmaking, which will reduce the
number of ALJ hearings, and (2) reduce the DDS case processing time.
They are enumerated in Section III below.
B. Challenges at the ALJ Hearing Level: In brief, the Social
Security Disability Programs' challenges at this level is to have a
large and growing volume of cases heard and decided by SSA's ALJs in a
timely and high quality manner that preserves the claimant's due
process rights under the Social Security Act and Administrative
Procedure Act (``APA''). Several specific challenges that now confront
the new Commissioner are as follows:
1. The Need to Reduce the Number of Cases that Require an ALJ
Hearing by Getting the Claimants a Correct Final Administrative Result
Sooner: The burgeoning caseload at the ALJ hearing level has been
growing unabated in recent years. Prior to HPI, the SSA OHA heard and
decided over 500,000 cases annually, and surpassed 600,000 in one
recent year. SSA is projecting that the annual caseload will climb to
about 726,000 by 2005. This has strained the current structure of OHA
to timely handle the volume with quality because nothing effective has
been done to either reduce the number of cases that require an ALJ
hearing or change the structure of OHA to better address the huge
caseload:

L(a) OHA's structure and process for hearing cases has not
changed significantly to adjust to the large scale of the
operation since the APA went into effect in 1947. There is no
mechanism for settling cases without a hearing, other than
granting a claim on the record, because SSA has no
representative to assert its interests at the hearing level.

L(b) Cases endlessly are remanded back to the ALJ level for
rehearing because the record remains open without limits, new
issues may be raised at all levels of appeal, and the quality
of the Appeals Council review is poor.

There are several steps that SSA can take that do not require
legislation to reduce the number of ALJ hearings. They are enumerated
in Section III below.
2. Challenges from the ALJ Level HPI Reorganization of OHA: There
is a consensus that HPI, which SSA implemented in 2000, has both
exacerbated the case disposition time problems that it was intended to
solve and created new problems that have caused work flow bottlenecks,
reduced the quality of decision drafts by some decision writers, and
increased the case backlog. The several HPI challenges are as follows:

L(a) One purpose of HPI was to reduce the amount of processing
time it takes to obtain the evidence for the record by doing it
more completely before the ALJ hearing, so that fewer cases
would need post-hearing development. The practice of HPI did
not result in a reduction of cases that require post-hearing
development.

L(b) HPI also was expected to reduce overall case processing
time, ostensibly by reducing the need for post-hearing
development. Instead, case processing time steadily has
lengthened under HPI beyond what was considered to be
unacceptable at the time that HPI was implemented. The creation
of teams to handle cases was intended to decrease the number of
people who have to work on each case and increase individual
responsibility for the quality of work within the group, which
were expected to reduce case processing time and increase work
quality. Instead, HPI process has resulted in an increase of
the ``hand offs'' of the files and the sense of individual
responsibility for work quality has vanished. The cases are
assigned to judges later in the process and the responsibility
for early pre-hearing case development has been transferred to
the staff.

L(c) The quality of decision drafts has declined because, as
part of the HPI plan, SSA has promoted to Paralegal Specialist
positions as ALJ decision writers clerical staff members, many
who do not have the skills to perform the job adequately. HPI
created promotion opportunities for the clerical staff, which
boosted the morale of those receiving the promotions. However,
the implementation of HPI resulted in the promotion of clerical
staff to approximately 350 writer positions without the need to
show that they have the skills to do the job. This promotion
process resulted in positions being filled by clerical staff,
some of whom who have not been successful in performing the
job.

L(d) A huge backlog of case files that need to be prepared for
hearing has accumulated as a result of the SSA promoting about
350 clerks to writer positions and about 300 clerks to case
technician positions as part of the HPI plan without replacing
the vacated clerical positions. (The process of organizing and
marking exhibits to prepare a case for hearing is called
``pulling,'' which is a clerical task.) As a result, the
backlog of unpulled cases has ballooned from about 34,000 to
216,000 since HPI has been implemented. The shortfall in
``pulled'' cases has resulted in an insufficient number of
cases being scheduled for ALJs to hear in many offices and adds
to the case processing time.

L(e) The lack of acceptance of the failure of HPI by the SSA
administrators is a challenge that the new Commissioner
confronts. At a hearing before the House Subcommittee on Social
Security in June 2001, Mr. Stanford Ross, Chair of the SSAB,
testified that the HPI did not improve the hearing process and
in some circumstances it had made the situation worse. Without
acknowledgment of the failure of HPI, new strategies will not
be considered seriously and implemented by SSA administrators.

3. The Challenge of Preserving Due Process While Achieving Greater
Efficiency:
I have a strong concern with recent information that AALJ has
received relating to three proposals to transfer the SSA administrative
law judge hearing and final adjudication of Social Security Act claims
to non-ALJ claims personnel within the District Offices, non-ALJ claims
personnel within the District Offices the Departments of Disability
Services, and/or non-ALJ hearing officers within OHA. A brief summary
of the facts about these proposals that are known to AALJ are as
follows:

Transfer of SSA Hearings to non-ALJ Technical Personnel in the
District Offices: Recently, AALJ learned that the SSA is
creating a ``Special Title II Disability Workload cadre''
(``ST2DW'') to make final determinations of Title II Social
Security Act claims. The jobs are for a detail of one year that
may be extended in upstate New York (Buffalo, Schenectady,
Albany) that will consist exclusively of GS-12 level claims
personnel employed in the District Offices in that local area,
whose title is ``Technical Expert (``TE'').'' No OHA personnel
reportedly will be considered for this position. The SSA New
York Region Personnel Operations already has issued
solicitations for Technical Experts to apply for the position
that was to close on May 1. There reportedly will be a two
month training period for this one year detail. The training
was to begin in New York City on May 13. The solicitation
provided as follows:

LTEs will perform a pre-interview assessment of each ST2DW
case and complete a development sheet. This sheet will be used
to conduct interviews with the claimant and to obtain complete
development of the case. TEs will be responsible for final
adjudication of developed cases, and/or pre-effectuation
reviews of cases developed by others. TEs will use all
available tools and controls associated with the ST2DW.
The position reportedly will be at the GS-12 level and no
position description has been prepared. This is a proposal that
already is being translated into action. The use of the words
``final adjudication'' of cases in this job announcement is
telling, since only ALJ and Appeals Council decisions may
become final decisions of the SSA Commissioner pursuant to the
Social Security Act and APA.
Transfer of SSA Hearings To DDS: Since February, information
has surfaced that report that the Agency may attempt to change
the Social Security hearing process and move the administrative
law judge hearing to the reconsideration level at the DDS. The
National Association of Disability Examiners (``NADE'') has
published its detailed proposal for such a change and the fact
that its executive officers met with the SSA Commissioner in
February 2002 to discuss the proposal. NADE also has submitted
its proposal in a written statement that is part of the record
of this Subcommittee's May 2, 2002, hearing on the Challenges
Facing the New Commissioner of Social Security. The DDS
proposal would restrict appeals to the administrative law judge
to questions of law, rather than the de novo review of the
claim that is mandated by the Social Security Act and the APA.
In mid-January, the New York DDS director sent a letter to the
Commissioner that includes suggested reforms of the Social
Security disability system that is like the NADE proposal. The
letter contains the recommendations that the administrative law
judge hearing be abandoned and that the hearing be changed to a
``fair hearing'' conducted at the state level by the DDS. At
the end of January, the Commissioner attended a meeting of DDS
personnel at which the attendees agreed to continue to
investigate this change.
AALJ has learned that a small committee had been appointed by
the SSA Commissioner to look at alternative hearing methods.
There also is an existing SSA Commissioner's Committee on
Disability that is looking at various aspects of the disability
program. AALJ learned that the Committee soon will send a
report to the Commissioner that contains a recommendation to
conduct the de novo Social Security hearing at the
Reconsideration level of the DDS. Under this proposal,
administrative law judges would have jurisdiction only to
review cases for errors of law. If error is found, the case
would be remanded to the DDS for hearing. The Commissioner
apparently has not made a policy decision on the transfer of
the due process hearing to a lesser DDS hearing, but this issue
clearly is on the table for consideration.
Any such change would have a profound effect on the rights of
the American people and would deny them a constitutional due
process hearing and decision of their claims as now is
protected by the APA. The DDS proposal also would markedly
restrict the claimants' access to judicial review, since few
cases would reach ALJs and thus be subject to the Appeals
Council review that is a necessary predicate to judicial
review.
Transfer of SSA Hearings to Non-ALJ Hearing Officers: AALJ has
learned from a reliable, well-placed source that SSA is
planning to budget for hiring of hearing officers at the GS-14
and GS-15 level. However, AALJ does not have information on the
timing or implementation of the plan. This information is
consistent with a proposed hearing officer job description for
a position to handle ``small claims'' that the National
Executive Board became aware of at the time of its October 2002
meeting. This news is of considerable concern because it is a
natural ``spin off'' from the discussions to transfer the
hearings to the DDS. This type assault on the hearings system
goes to the very heart of the purpose and function of
administrative law judges.

Any plan to deny Social Security claimants the right to a full due
process hearing under the APA before an administrative law judge will
result in a denial of basic constitutional rights to the American
people. The preservation of APA due process for the claimants,
including the hearing and decision of their claims by ALJs who are
appointed pursuant to the APA, is essential as the new Commissioner
devises ways to more efficiently address the agency's large and growing
caseload.
The APA was adopted by Congress in 1946 to ensure that the American
people were provided hearings that are not prejudiced by undue agency
influence. The securing of fair and competent hearing adjudicators was
viewed as the heart of the Administrative Procedure Act.
The APA was enacted primarily to achieve reasonable uniformity and
fairness of the administrative process in the Federal Government for
members of the American public with claims pending before Federal
agencies. The APA sets forth a due process administrative procedure for
the hearing and decision by administrative law judges of cases brought
before the Federal agencies to which the APA applies. The APA provides
the minimum standards for federal administrative due process in the
Executive Branch, and delineates procedures for adjudicative
administrative proceedings, namely individual case decisions about
rights or liabilities as an agency's judicial function. This includes
uniform standards for the conduct of adjudicatory proceedings,
including the merit appointment of administrative law judges. U.S.
Justice Dept., Attorney General's Manual on the Administrative
Procedure Act 9 (1947) (the ``Manual''). The APA, Pub. L. No. 79-404,
60 Stat. 237 (1946), as amended, is codified at 5 U.S.C. Sec. Sec.
551-559, 701-706, 1305, 3105, 3344, 4301(2)(E), 5335(a)(B), 5372, and
7521.
By APA mandate, the administrative law judge is an independent,
impartial adjudicator in the administrative process and there is a
separation of the adjudicative and prosecutorial functions of an
agency. The administrative law judge is the only impartial, independent
adjudicator available to the claimant in the administrative process,
and the only person who stands between the claimant and the whim of
agency bias and policy. If SSA returns to using subordinated employees
who would be an instrument and mouthpiece for the SSA, we will have
returned to the days when the agency was both prosecutor and judge.
There is a close relationship between the APA and the Social
Security Act. In the case of Richardson v. Perales, 420 U.S. 389
(1971), the U.S. Supreme stated that the APA was modeled upon the
Social Security Act.
It is clear that Congress intended the APA to apply to hearings
conducted under the Social Security Act. The Attorney General's Manual
on the Administrative Procedure Act, which is recognized by the U.S.
Supreme Court to be part of the legislative history of the APA, states
that ``the residual definition of ``adjudication'' in section 2(d) was
intended to include. . . . [t]he determination of . . . claims under
Title II (Old Age and Survivor's Insurance) of the Social Security Act.
. . . '' Manual at 14-15 (emphasis added), citing, Senate Judiciary
Committee Hearings on the APA (1941) at 657, 1298, 1451 and S. Rep. No.
752 at 39; 92 Cong. Rec. 5648. (The other programs did not then exist.)
The U.S. Supreme Court defined the role of a federal Administrative
Law Judge in Butz v. Economou, 438 U.S. 478, 513-514 (1978), as
follows:

There can be little doubt that the role of the modern hearing
examiner or administrative law judge within this framework is
``functionally comparable'' to that of a judge. His powers are
often, if not generally, comparable to those of a trial judge.
He may issue subpoenas, rule on proffers of evidence, regulate
the course of the hearing, and make or recommend decisions. . .
. More importantly, the process of agency adjudications is
currently structured so as to assure that the hearing examiner
exercises his independent judgment on the evidence before him,
free from pressures by the parties or other officials within
the agency. Prior to the Administrative Procedure Act, there
was considerable concern that persons hearing administrative
cases at the trial level could not exercise independent
judgment because they were required to perform prosecutorial
and investigative functions as well as their judicial work . .
. and because they were often subordinate to executive
officials within the agency. . . . Since the securing of fair
and competent hearing personnel was viewed as ``the heart of
formal administrative adjudication,'' . . . the Administrative
Procedure Act contains a number of provisions designed to
guarantee the independence of hearing examiners. They may not
perform duties inconsistent with their duties as hearing
examiners. When conducting a hearing under the APA, a hearing
examiner is not responsible to or subject to the supervision or
direction of employees or agents engaged in the performance of
investigative or prosecution functions for the agency. Nor may
a hearing examiner consult any person or party, including other
agency officials, concerning a fact at issue in the hearing,
unless on notice and opportunity for all parties to
participate. . . . Hearing examiners must be assigned to cases
in rotation so far as practicable. . . . They may be removed
only for good cause established and determined by the Civil
Service Commission after a hearing on the record. . . . Their
pay is also controlled by the Civil Service Commission.

The Supreme Court recently reaffirmed its holdings in Butz that a
federal ALJ's role is similar to that of a trial judge and that
administrative adjudications are similar to judicial proceedings when
it held that state sovereign immunity bars the Federal Maritime
Commission from adjudicating a private party's complaint against a non-
consenting state. Federal Maritime Commission v. South Carolina State
Ports Authority, ______ U.S. ______, slip op. 1, 10-14 (2002).
The Congress has reviewed the function of the administrative law
judge in the Social Security Administration. In 1983, a Senate
Subcommittee on Oversight of Government Management of the Committee on
Governmental Affairs conducted a hearing that inquired into the role of
the administrative law judge in the Title II Social Security Disability
Insurance Program. S. PRT. 98-111. The Committee issued its findings on
September 16, 1983, which provided in part as follows:

The APA mandates that the ALJ be an independent impartial
adjudicator in the administrative process and in so doing
separates the adjudicative and prosecutorial functions of an
agency. The ALJ is the only impartial, independent adjudicator
available to the claimant in the administrative process, and
the only person who stands between the claimant and the whim of
agency bias and policy. If the ALJ is subordinated to the role
of a mere employee, and instrument and mouthpiece for the SSA,
then we will have returned to the days when the agency was both
prosecutor and judge.

The decisionmaking independence provided by the APA is not for the
benefit of the judge, but instead is provided for the protection of the
American people. The protections are intended to ensure that the
American people receive a full and fair due process hearing with a
decision based on the evidence in the hearing record. This is a right
protected by the constitution. ``The APA creates a comprehensive
bulwark to protect ALJs from agency interference. The independence
granted to ALJs is designed to maintain public confidence in the
essential fairness of the process through which Social Security
benefits are allocated by ensuring impartial decisionmaking.'' Nash v.
Califano, 613 F.2d 10, 20 (2nd Cir. 1980). Despite these protections,
the Social Security Administration has a history of attempting to
assert undue influence on the decisionmaking of its administrative law
judges. This abuse occurred in the 1980's after the agency had
implemented the Bellmon Review Program. The Senate Subcommittee on
Oversight of Government Management (referred to above) issued findings
on September 16, 1983, on this improper agency conduct that provided in
part as follows:

The principal findings of the subcommittee is that the SSA is
pressuring its ALJs to reduce the rate at which they allow
disabled persons to participate in or continue to participate
in the Social Security Disability Program.

The Bellmon Review Program also was challenged in the courts in
Association of Administrative Law Judges v. Heckler, 594 F.Supp. 1132
(1984). In that case, a Federal district court judge found in part as
follows:

In sum, the Court concludes, that defendant's unremitting focus
on allowance rates in the individual ALJ portion of the Bellmon
Review Program created an untenable atmosphere of tension and
unfairness which violated the spirit of the APA, if no specific
provision thereof. Defendants' insensitivity to that degree of
decisional independence the APA affords to administrative law
judges and the injudicious use of phrases such as
``targeting'', goals and ``behavior modification'' could have
tended to corrupt the ability of administrative law judges to
exercise that independence in the vital cases that they decide.

The efforts of the administrative law judges of the Social Security
Administration to protect the Social Security hearing process and the
rights of Social Security claimants was recognized in an award
presented to the judges of the agency by the President of the American
Bar Association in August 1986. The award acknowledged the efforts of
the Social Security administrative law judges in protecting the
integrity of the hearing system. The award specifically stated:

That the American Bar Association hereby commends the Social
Security Administrative Law Judge Corps for its outstanding
efforts during the period from 1982-1984 to protect the
integrity of administrative adjudication within their agency,
to preserve the public confidence in the fairness of
governmental institutions and uphold the rule of law.

On January 9, 2001 Commissioner Kenneth S. Apfel affirmed the
relationship between the Administrative Procedure Act and the Social
Security Act for Social Security hearings. He stated as follows:

The Social Security Administration (SSA) has a long tradition,
since the beginning of the Social Security programs during the
1930s, of providing the full measure of due process for people
who apply for or who receive Social Security benefits. An
individual who is dissatisfied with the determination that SSA
has made with respect to his or her claim for benefits has a
right to request a hearing before an Administrative Law Judge,
an independent decisionmaker who makes a de novo decision with
respect to the individual's claim for benefits. As the Supreme
Court has recognized, SSA's procedures for handling claims in
which a hearing has been requested served as a model for the
Administrative Procedure Act (APA). Congress passed the APA in
1946 in part to establish uniform standards for certain
adjudicatory proceedings in Federal agencies, in order to
ensure that individuals receive a fair hearing on their claims
before an independent decisionmaker. SSA always has supported
the APA and is proud that the SSA hearing process has become
the model under which all Federal agencies that hold hearings
subject to the APA operate. SSA's hearing process provides the
protections set forth in the APA, and SSA's Administrative Law
Judges are appointed in compliance with the provisions of the
APA.

In a recent study prepared for the Social Security Advisory Board
by Professors Paul Verkuil and Jeffrey Lubbers, entitled Alternative
Approaches to Judicial Review of Social Security Disability Cases, the
authors recommended the establishment of an Article I court for Social
Security cases. The report favorably refers to the over 1000
administrative law judges in the Social Security Administration as an
objective source of decisionmaking that can be effectively integrated
into an article I court review structure. This recommendation seeks to
improve and strengthen the Social Security disability process, not to
diminish the system as would result from abandoning the administrative
law judge hearing. In fact, articles recently have been published that
recommend that the Veterans disability appeals system be improved by
modeling it after the Social Security administrative law judge hearing
process. James T. O'Reilly, Burying Caesar: Replacement of the Veterans
Appeals Process Is Needed to Provide Fairness to Claimants, 53 Admin.
L. R. 223 (2001); William F. Fox, Jr., A Proposal to Reform the VA
Claims Adjudication Bureaucracy: One Law Professor's View, FBA Veterans
Law Sec., Tommy: A Lawyer's Guide to Veterans Affairs, 1 (Issue 3,
2001).
Any retreat from this long and proud tradition of the Social
Security Administration with regard to the manner in which it conducts
hearings will have a substantial adverse effect on Social Security
claimants and will deny them basic constitutional rights. American
citizens will have less rights than they had prior to the enactment of
the APA.
We urge Congress to protect the constitutional rights of the
American people and to continue to provide the Social Security
claimants the full range of due process rights for a Social Security
hearing under both the APA and the Social Security Act.
C. Challenges at the Appeals Council Level: Several specific
challenges that now confront the new Commissioner are as follows:
1. Long Case Processing Time: The long case processing time at the
Appeals Council often is measured in years, rather than months.
2. Poor Decision Quality: The chronically poor quality of the
Appeals Council decisions has declined further in recent years. The
decisions rarely have legal citations of authority or rationales for
the positions taken, and often are factually inaccurate regarding what
the record shows. The informality of the decisions does not give the
impression of the careful deliberation to which the claimants are
entitled.
3. Excessive Number of Lost Hearing Record Tapes and Files: The
chronic loss of hearing record tapes and files by the Appeals Council
requires a lengthy rehearing process for the claimants. Anecdotal
evidence suggests that thousands of hearing tapes and files have been
lost. SSA recently reported that there are about 5,000 remands per year
for lost or inaudible hearing tapes, most of which are for lost tapes.
The loss of tapes and files reportedly is caused by three problems: (a)
the repeated crashing of the Appeals Council's antiquated computer case
tracking system and loss of case names from the database that are not
recoverable, (b) a large backlog of cases that have not been entered
into the case tracking system but instead are stored on shelves without
being alphabetized, numbered or coded, and (c) separating hearing tapes
from the hearing file to save storage space and prevent jamming paper
shredder machines when the files ultimately are destroyed.
4. Achieving Acceptance of the Failure of the Appeals Council Level
ACPI Reorganization of OHA: Acceptance by SSA administrators of the
failure of the ACPI that was implemented in 2000 to correct these three
chronic challenges of the Appeals Council operation also is a challenge
that the new Commissioner confronts. Without acceptance of the failure
of ACPI, new strategies will not be considered seriously and
implemented by SSA administrators.
III. PROPOSED ACTIONS TO MEET THE CHALLENGES FOR THE SOCIAL SECURITY
DISABILITY PROGRAMS
A. Overview of Needed Reforms for the SSA Hearing Process
1. Reorganize the Hearing Office Process: Because of the failure of
HPI, SSA should reorganize the hearing office process. The
reorganization should correct the defects in HPI. We propose that the
recommendations of the Commissioner's HPI Steering Committee be used as
a guide for the reorganization. The reorganization should consist of
both short term and long term changes. The short term changes should be
structured in a manner that permits easy transition to the long term
reforms. The objective should be to immediately return to the
efficiency and level of case production that existed in the hearing
offices immediately before the introduction of HPI (over 500,000 cases
a year). The long term reform should then build on that base. There is
no single change that will accomplish this objective. It instead must
be accomplished by a series of coordinated changes in several different
areas. The changes will allow the agency to improve the service
provided to the American public.
We recommend that the short term changes should include the
following elements:

(a) LThe process must be simple, and administrative law judges
should be assigned to cases from master docket according to
law.
(b) LEach administrative law judge should have adequate and
properly trained support staff. The support staff should
include a clerical worker, paralegal and attorney/writer.
(c) LThe support staff should be assigned to perform the work
product of a particular administrative law judge according to
the instructions and guidance of the judge.
(d) LThe administrative law judge should have control of all
case development.
(e) LThe administrative law judge should have the
responsibility to determine when a case decision is legally
sufficient and the judge should have the authority to return
the decision for rewrite to achieve the same.
(f) LCase files of each administrative law judge should be
maintained separately.
(g) LThe assigned support staff of each administrative law
judge should be under the supervision of the hearing office
management staff for personnel actions.
(h) LStaff members should be accountable for their work
product. Case work should be assigned on an individual basis to
support staff to provide for accountability and enhance the
employees' sense of ownership.

We recommend that the long term changes should include the
following elements:

(a) LClose the hearing record after the administrative law
judge hearing as of the date of the ALJ's decision.
(b) LAssignment of Social Security Administration
representatives to represent the agency at administrative
hearings. Such representatives would be responsible to defend
the position of the agency at the hearing, recommend favorable
cases, exercise settlement authority, and assist unrepresented
claimants. When most claimants were unrepresented, having a
non-adversarial process made sense to keep the benefits process
simple and not intimidating. However, now, approximately 82% of
the claimants who have an ALJ hearing are represented,
according to recent statistics assembled by the SSA OHA Office
of the Chief ALJ.
(c) LCreate a case manager and law clerk position for the
support staff of each administrative law judge (as recommended
by the Commissioner's HPI Steering Committee).
(d) LAllow administrative law judges to issue bench decisions
and short form decisions.
(e) LAdopt regulations for issue exhaustion as suggested by the
United States Supreme Court in the case of Sims v. Apfel, 530
U.S. 103 (2000), if SSA representatives are available to assist
the unrepresented claimants.
(f) LReform the Appeals Council to issue decisions in some
cases, limit the scope of appeal for claimants who have
received the requested relief from the administrative law
judge, and support the administrative law judge in ``no-show''
dismissals.
(g) LImplement a sustainable agency policy on the issue of pain
and the treating physician rule and defend the same if
challenged.
(h) LRequire the DDS to follow the same legal standard as the
ALJs when determining disability, which is based upon the
Social Security Act, the SSA regulations and rulings, and the
federal case law that interpret them.
(i) LImprove the use of technology in the hearing process (i.e.
an improved case processing and management system, and
electronic file, voice to print software, improved equipment
for recording hearings, etc., most of which already is in the
planning and pilot stages).
(j) LAdopt rules of procedure for the hearing process.

(k) LReorganize the Office of Hearings and Appeals.

B. Strategies to Reduce the Number of Cases Heard at the ALJ
Hearing Level that May Be Effected in the Short Term by Regulation
Changes and Preserve Due Process
1. Require DDS Decisionmakers to Follow the Same Legal Standard as
the ALJs, not a Medical Standard: SSA should issue regulations that
require DDS decisionmakers to adjudicate cases pursuant to the Social
Security Act, the SSA regulations and rulings, and the federal case law
that interpret them. This can be implemented on a short term basis and
immediately would serve to reduce the number of cases appealed to the
ALJs.
2. Have the DDS Do One Thorough Case Development and Determination
to Increase the Accuracy and Quality of the DDS Determinations: If the
DDS were enabled to do one thorough development of the medical record
and carefully considered determination, rather than two incomplete
reviews of incomplete files, the accuracy and quality of the
determinations would rise and result in fewer appeals to the ALJ level.
Either eliminate the reconsideration level to save processing time at
the DDS level or make it into a meaningful decision level in which
evidence is further developed and a meaningful second look is taken at
the claimants' files that has a realistic chance of a more accurate
outcome for the claimants than at the initial level.
3. Close Record as of the Administrative Law Judge decision date:
The amendment of SSA's regulations to close the record after the ALJ
hearing and as of the date of the ALJ decision would reduce the number
of cases that ALJs must hear upon remand from the Appeals Council and
courts based upon new evidence. New evidence is one of the most common
reasons for remand of cases. This adds to the ALJ caseload and greatly
delays a final administrative decision for the claimants. This change
will place the responsibility upon the claimants' representatives for
producing all relevant and material evidence at the hearing.
By SSA regulation, the hearing record in the Social Security
disability system is not closed at any stage in the appeals process.
This system precludes administrative finality and allows the claimant
to introduce new evidence at each step of the process, including the
Appeals Council level. 20 C.F.R. Sec. Sec. 404.900(b), 404.976(b). This
is true even when the evidence was in existence and available during
the prior stage of the appeal. The reason the SSA keeps the record open
at the administrative levels is that the Social Security Act authorizes
the courts to remand a case to SSA when a claimant shows that there is
material new evidence and there is good cause for not including it in
the record earlier. 42 U.S.C. Sec. 405(g).
In a recent report, the Social Security Advisory Board (``SSAB'')
stated that ``Congress and SSA should review again the issue of whether
the record should be fully closed after the ALJ decision.'' Charting
the Future of Social Security's Disability Programs: The Need for
Fundamental Change, January 2001, p. 20. This change will bring
administrative finality to the Social Security disability case and will
encourage all known relevant and material evidence to be produced at
the hearing.
New documentary medical evidence of disability based upon treatment
that occurred before the date on which the ALJ hearing closed should be
admitted into evidence by the Appeals Council only upon a showing that
the new evidence is material and that there is good cause for the
failure to incorporate such evidence into the record in a prior
proceeding. This standard is in keeping with the standard that the
Social Security Act allows for the courts. Unrepresented claimants
should be excepted from the requirement to show good cause.
4. The SSA Should Have a Representative at the ALJ Hearings: After
conducting a pilot program to work out the details in practice, the SSA
should amend its regulations to provide for a government representative
at the ALJ hearing. This change would permit SSA to complete the
documentary record faster, enter into settlements without the need for
a hearing in some cases, and present the government's position on each
case. SSA representation will allow the SSA to present its evidence,
present the type of expert witnesses it deems necessary, and advance
its legal theories in the case. The government representative also
should provide assistance and advice to claimants in unrepresented
cases.
In order to meet the requirements of due process, the APA provides
that ``[a] party is entitled to appear in person or by or with counsel
or other duly qualified representative in an agency proceeding.'' 5
U.S.C. Sec. 555(b). Therefore, the SSA, as a party, has the right to
appear on its own behalf at the proceedings before the OHA. However,
the Social Security Administration is not represented at the disability
hearing before an administrative law judge. SSA regulations long have
stated that it ``conducts the administrative review process in an
informal, nonadversary manner,'' 20 C.F.R. Sec. 404.900(b), so SSA thus
has waived its right to appear at the ALJ hearings. The present system
worked well when most claimants in Social Security cases were not
represented at the hearing. However, there has been a dramatic rise in
the number of claimants who are represented at the hearing. Presently,
well over 80% of the claimants are represented at the hearing. The
Social Security Advisory Board has noted that ``[t]he percentage . . .
of claimants represented by attorneys at ALJ hearings has nearly
doubled [between] 1997 [and 2000].'' SSAB, Disability Decision Making:
Data and Materials, Chart 56 Attorney and Non-attorney Representatives
at ALJ Hearings Fiscal Years 1997-2000, p. 73 (January 2001).
In its recent report, the SSAB recommended that the SSA have
representation at the Social Security disability hearing: ``We think
that having an individual present at the hearing to defend the agency's
position would help to clarify the issues and introduce greater
consistency and accountability into the adjudicative system.'' Charting
the Future of Social Security's Disability Programs: The need for
Fundamental Change, January 2001, p. 19.
The SSA had a pilot program for its representation at the hearing
in 1982. This pilot program was discontinued after an unfavorable court
decision on the project. Salling v. Bowen, 641 F. Supp. 1046 (W.D.Va.
1986). The past pilot program on the government representative project
was not an adequate test of this system. The SSA should implement a new
test program for agency representation at the hearing. This pilot
project should be implemented in coordination with the claimants' bar,
SSA employee organizations, our Association, and other interested
groups. The pilot program should address the issues raised by the court
in Salling. The objective is to establish a hearing process that
provides a full and fair hearing for all parties who have an interest
in the case.
In addition, in the current non-adversarial setting, the SSA ALJ
has the legal responsibility to ``wear three hats'' in each case. The
ALJ legally is bound to ensure that all of the claimant's relevant and
material evidence is made part of the record and the claimant's
interests are protected, to protect the interests of the government in
the hearing, and to make a fair decision which is based on the evidence
in the record. Additionally, the judge must take care to not become
overly protective of the interests of the government for fear that the
case will be reversed on appeal on a claim of bias against the
claimant. The inherent conflict in all of these roles is patent and
would be resolved by having the government represented at the hearing.
5. If the SSA Provides for a Government Representative at the
Hearing, Require Issue Exhaustion at the Appeals Council Level for
Represented Claimants: As the Supreme Court stated in Sims v. Apfel,
530 U.S. 103, 120 S.Ct. 2080, 147 L. Ed. 2d 80 (2000), there is no
statute or regulation that requires that a claimant must list the
specific issues to be considered on appeal on the request for review by
the Appeals Council of an ALJ's decision, in order to preserve those
issues for judicial review. Although agencies often issue ``regulations
to require issue exhaustion in administrative appeals,'' which are
enforced by the courts by not considering unexhausted issues, ``. . .
SSA regulations do not require issue exhaustion.'' Id. at 2084. The
Supreme Court refused to impose a judicially inferred issue exhaustion
requirement in order to preserve judicial review of the issues upon a
claimant for Title II and Title XVI Social Security Act benefits
because the issues in SSA hearings are not developed in an adversarial
administrative proceeding and the ``[Appeals] Council, not the
claimant, has primary responsibility for identifying and developing the
issues.'' Id. at 2086. However, the Court, deferring to the agency,
noted that ``. . . we think it likely that the Commissioner could adopt
a regulation that did require issue exhaustion.'' Id. at 2084. The
Supreme Court thus explicitly invited SSA to draft new regulations.
Unrepresented claimants should be excepted from the requirement to
show good cause. Expecting unrepresented claimants to bear the burden
of preserving specific legal issues for judicial review does not
comport with a sense of fair play and keeping the claims process
claimant-friendly.
Issue exhaustion would bring finality to the administrative process
and it is consistent with the general principles of administrative law
and the procedure of other agencies in the Federal Government.
C. Strategies to Reduce Case Processing Time and Increase Quality
of Service at OHA While Preserving Due Process
1. Administratively Reform the HPI Process: SSA should change the
HPI process by assigning cases to ALJs at an earlier point in the
process, such as when the cases are entered into the computerized
master docket. This would return the control of pre-hearing case
development to the ALJs, leave the ALJ in control of the hearing, and
support the ALJ's responsibility for determining when a draft decision
is legally sufficient. SSA also should return individual accountability
for work product to the employees by assigning staff employees to work
with each ALJ, which should consist of a clerical person, paralegal,
and staff attorney. This will enhance morale through a sense of
ownership by employees working on particular cases for an individual
judge. These changes are needed to permit the ALJs to provide full and
fair hearings for the American public in an efficient and timely
manner. SSA may effect these changes administratively on a short term
basis.
2. Redefine Paralegal Specialist Job To Include Clerical Duties:
SSA OHA may redefine the GS-0950 Paralegal Specialist ALJ decision
writer job across a broad band of General Schedule levels to permit the
assignment of appropriate clerical duties to the people promoted to
this position who have not performed the ALJ decision writing function
well. The clerical work could include the case pulling and other
clerical work that has been accumulating. This permits the necessary
clerical work of the agency to get done while permitting the promoted
staff to stay at their new grade levels and experience satisfaction
from a job well done.
3. Enhance the Appeals Council Case Tracking System by Including it
in the First Phase of the Accelerated e-DIB Project: SSA should install
a modern computerized case tracking system with bar coding for the
Appeals Council as expeditiously as possible to prevent loss of files
and tapes by the Appeals Council. SSA is in the process of developing a
new Case Processing and Management System (``CPMS'') for OHA that is
part of the Accelerated e-DIB project, the first phase of which will be
implemented in January 2004. Although both the ALJ-level offices and
the Appeals Council are expected to have the capacity to read an
electronic file by January 2004, senior SSA management reportedly is
including only the ALJ-level offices in the implementation of the CPMS
by January 2004. Implementation of the CPMS for the Appeals Council
reportedly is being deferred to a later phase of the Accelerated e-DIB
project, despite the chaos in its case tracking system. If 140 OHA
offices can be brought into the CPMS by January 2004, the Appeals
Council, with its one location, also can be included in the first phase
of implementation.
4. Reorganize the Office of Hearings and Appeals
(a) Proposed Legislation to Reform the Office of the Chief ALJ and
Create an Office of Administrative Law Judges within SSA:
Current Status:
The adjudication of administrative claims by the SSA currently is
done by administrative law judges who are part of the OHA. The function
for both administrative law judge hearings and the appellate process
for the review of administrative law judge decisions by the Appeals
Council are located in the OHA. The OHA is under the dual leadership of
a Chief Administrative Law Judge and an Associate Commissioner. The
position description of the Chief Administrative Law Judge places the
Chief Judge in charge of the hearings function and hearings field
operation of the agency. The Associate Commissioner is placed in charge
of the Appeals Council and major policy-making and policy-
implementation responsibilities of the OHAs. The Chief Judge reports to
the Associate Commissioner, who in turn reports to the Deputy
Commissioner for Disability and Income Security Programs (``ODISP''),
who in turn reports to the Commissioner.
Problems with Current System:
In the current organization of SSA, the Office of Hearings and
Appeals is buried in the bureaucracy and is far removed from the
Commissioner. This structure prevents the Commissioner from having
effective oversight of the agency hearing process. The administrative
law judge adjudication function should not be treated as a staff
responsibility in the agency. The administrative law judge adjudication
function is a major program of the agency with every individual in this
nation being a potential claimant within the system. The SSA
Administrative Law Judge hearing system protects a constitutional right
of our citizens and provides a constitutionally protected due process
hearing to the American public. This vital process should have direct
oversight from the Commissioner and the Chief Judge should have direct
interaction with the Commissioner.
Another major defect in OHA is created by the dual leadership
responsibilities of the Chief Judge and the Associate Commissioner.
Frequently these two leaders are competing for power to control the
administrative and/or policy decisions for this component of SSA that
has deprived OHA of strong effective leadership. The lack of effective
leadership and direction of the Office of Hearings and Appeals has
resulted in an organization that has been deteriorating. During the
past 10 plus years several reforms have been imposed on the SSA hearing
process. Each attempt has resulted in failure. Subsequent to a recent
change in the hearing office process that was implemented in January
2000 (HPI), the number of case depositions have dropped while the case
processing time and the case backlog have increased. The result has
been poorer service for the American public. Within the past several
years, the Associate Commissioner attempted to reorganize the
responsibilities of the Chief Judge and divest the Chief Judge of most
of the powers of that office leaving the Chief Judge with some minor
duties relating to judicial education and staff support for the
Associate Commissioner. This scheme was thwarted by the efforts of
interested individuals and organizations together with the oversight
action of the Congress.
The problem has now returned with the present Associate
Commissioner of the Office of Hearings and Appeals. He has striped most
of the power from the Office of the Chief Judge. He treats the Chief
Judge as a staff person instead of a vital policy maker who is in
charge of the field operations for the hearings function of the agency
as provided for in the Chief Judge's position description. This action
of the Associate Commissioner has led to a crisis within the Office of
Hearings and Appeals with the last Acting Chief Judge leaving the
position last March after having served for only a few weeks in office.
The Chief Judge position was vacant until June 3, when a new Acting
Chief Judge was appointed. This position has not been filled
permanently since the last Chief Judge left over a year ago.
Proposed Reform:
This system requires basic reform that places an established Chief
Judge in charge of the agency hearing process with reporting
responsibility directly to the Commissioner. We propose legislation
that separates the agency hearings function from the Appeals Council
and places the hearing component in an Office of Administrative Law
Judges under the control of a Chief Judge who reports directly to the
Commissioner. Our bill to effect this reform imminently will be
introduced in the House.
The following improvements in service to the American public will
result from the proposed legislation:

a. LThe Commissioner will have direct oversight of the hearing
component of the agency that is necessary to effectively administer
this important program which provides constitutional due process
hearings for the American public.
b. LImproved leadership and efficiency in the hearings component
will permit the SSA to provide better service for the American public
by increasing case dispositions, reducing processing times and reducing
case backlogs.
c. LThe change will improve the SSA hearing process and will
continue to ensure that the American public receives a fair
constitutional due process hearing.
d. LThe proposed legislation creates an Office of Administrative
Law Judges (``Office'') in the SSA. The national ALJ hearings function
and hearings field operation that presently is within the OHA would be
transferred to the Office by the proposed legislation.
e. LThe Chief Judge would be in charge of the Office, would report
directly to the Commissioner, be appointed by the Commissioner for a
term of six years that is renewable once, and be subject to removal
only upon a showing of an enumerated cause.
f. LThe administrative law judge hearing component of SSA is
regarded as an organization that is responsible for administering a
major agency program which reports directly to the Commissioner. It
will be no longer organized as a staff function within the agency.
g. LThe Office of Administrative Law Judges will have one
individual, the Chief Judge, responsible for administrative operations
and policy making. This will result in effective leadership of the
administrative law judge function.
h. LThe Associate Commissioner of OHA will continue to head the
Appeals Council.
i. LThe change is a reorganization within the agency and will not
result in any additional costs to the agency.

This change is endorsed by the SSAB. The SSAB recently prepared a
report on the Social Security disability system that states that
``[m]any believe that the Office of Hearings and Appeals is buried too
low in the agency and should be elevated so that the head of the office
would report directly to the agency leadership. Others believe that
there should be independent status for an administrative law judge
organization.'' Charting the Future of Social Security's Disability
Programs: The need for Fundamental Change, January 2001, p. 19.
(b) In the Alternative, Reorganize OHA to Have the Chief ALJ Report
Directly to the Commissioner and Replace the Appeals Council with a
Right of Appeal to Appellate Panels Staffed by ALJs that Would Be
Administered by the Chief ALJ: This proposal is identical to AALJ's
proposal for an independent adjudication agency that would provide a
hearing before an ALJ with a right of appeal from the individual ALJ's
decision to an appellate panel staffed by ALJs, which is explained in
suggestion 6(b) below, except that the Chief ALJ would report to the
Commissioner rather than be the head of an independent agency. Such a
reorganization may be effected by the SSA without legislation.
(c) As an Alternative to Reorganizing OHA, Create A New Independent
Agency within SSA to Issue the Final Administrative Decisions of Social
Security Act Claims, Including Medicare Claims: A consensus has formed
that the SSA's administration of OHA and its efforts to bring DDS
decisionmaking into accord with ALJ decisionmaking have failed and that
fundamental change is needed. Management initiatives such as process
redesign, process unification, prototype, and, most recently, the
Hearing Process Improvement Plan (``HPI'') and Appeals Council Process
Improvement Plan (``ACPI''), have not achieved their goals. The Appeals
Council, which originally was intended as a policy making body, is
universally recognized as a failure in its function as the final step
in the administrative review of Social Security claims.
OHA performs an adjudicatory function in an executive agency that
was created by Congress, and handles the largest appellate
administrative caseload of any agency in the world. SSA's many
misguided efforts to implement policy through OHA's adjudication
function, some of which are described in this statement and AALJ's
Statement that is published in the Report for the June 28, 2001, First
Hearing in the Series on Social Security Disability Programs'
Challenges and Opportunities, House Subcommittee on Social Security,
No. 107-35, 107th Cong., 1st Sess., pp. 80-93, reveal the nature of the
change in the Social Security claims process the American public needs:
Separation of OHA's appellate administrative adjudication function into
an entity that is independent of the political policy making and
implementation portions of SSA. An independent adjudication agency
would provide members of the American public who file claims for Social
Security Act entitlement program benefits that have been denied by the
SSA timely adjudications that give due process, including a timely and
fair hearing free of policy implementation and political pressure.
The rationales that have justified Congressional separation of the
appellate administrative adjudication function from Executive Branch
agencies include an efficient and low cost process for the claimants,
high case volumes, expertise, and decisional independence of
adjudicators. The maintenance of a reasonably efficient, orderly and
low cost adjudication system in the traditional domain of public rights
is in the public's interest, especially for programs that distribute
benefits on a large scale. Specialized tribunals are more likely to
make correct decisions in subject areas that are legally complex or
have technical facts. The large increase in the administrative case
volume also supports the use of specialized adjudication agencies. The
most important rationale is the experience that effective protection of
individual rights before agencies through independent decisionmaking
cannot take place unless adjudications are separated from the agency's
rulemaking/policy, prosecutorial/enforcement and investigatory
functions.
These rationales, particularly the need to separate the
adjudicatory function from other conflicting agency functions, led
Congress to create the Occupational Safety and Health Review Commission
(``OSHRC'') in 1970, 29 U.S.C. Sec. 661, and the Federal Mine Safety
and Health Review Commission (``FMSHRC'') in 1977, 30 U.S.C. Sec. 823,
as independent Executive Branch agencies outside the Department of
Labor with only adjudicative authority. The OSHRC determines whether
regulations promulgated and enforced by the Occupational Safety and
Health Administration have been violated. The FMSHRC adjudicates
violations of standards promulgated and enforced by the Mine Safety and
Health Administration.
Therefore, when an agency, such as SSA, exclusively uses rulemaking
proceedings to set policy, rather than also using adjudications to set
policy, there no longer is any rationale for keeping the adjudicatory
function within the agency. The Congressional interest in providing a
check on SSA's enforcement powers, i.e., to withhold disability and
other program benefits, is best served by having entitlement
determinations decided by an independent adjudicatory agency based on
the benefits entitlement standards set by SSA. Hence our proposal that
the independent agency be an adjudicatory body that is self-
administered by the ALJs with a right of appeal from an individual
ALJ's decision to an appellate panel staffed by ALJs.
There are additional reasons why an independent adjudication agency
administered by ALJs would provide a more efficient and higher quality
of due process for Social Security benefits claimants than the current
SSA Appeals Council or an independent but politically appointed
Commission or Board structure. First, a small body, such as the current
Appeals Council, or a Commission or Board, cannot be of sufficient size
to do meaningful administrative review of appeals from the ALJ
decisions, which now number near 100,000 per year. The SSA ALJs are a
large group of highly qualified judicial professionals who are capable
of administering themselves and the appellate administrative process in
a competent and effective manner. Second, creating an independent
agency would eliminate political oversight by appointees (ie.,
Commissioners or Board members) who do not have due process and
adjudicative independence as their foremost goal in agency
administration. Finally, if the SSA ALJs administer themselves, they
will draft and issue the procedural regulations and rules of the new
agency based upon their experience and needs of the process, rather
than expediency and other policy concerns as they are now. There now is
no coherent set of procedural regulations and rules for the SSA
appellate administrative process.
For all of these reasons, the Social Security Act hearing process
should be reformed by the transfer of the authority to make final
administrative adjudications of Social Security Act claims, which
currently are made at the ALJ and SSA Appeals Council levels, from the
Social Security Administration to a new ALJ-administered independent
adjudication agency within SSA. This agency may be called the United
States Office of Hearings and Appeals (``USOHA'').
The USOHA would have the exclusive jurisdiction to make the final
administrative decisions of Social Security Act Title II and XVI
claims. The USOHA would have permissive jurisdiction over other classes
of cases, including Medicare cases under Social Security Act Title
XVIII. [On December 4, 2001, the House passed the Medicare Regulatory
and Contracting Reform Act of 2001, H.R. 3391, section 401 of which
authorizes the transfer of the ALJ function from SSA to the Department
of Health and Human Services by October 1, 2003, to hear and decide
Medicare cases pursuant to Title XVIII of the Social Security Act.
AALJ's proposal advocates placing all of the ALJs hearing Social
Security Act cases into one independent agency, including Medicare
cases.]
AALJ recommends the creation of a new ALJ-administered independent
adjudication agency for Social Security Act claims that would provide a
hearing before an ALJ with a right of appeal from the individual ALJ's
decision to an appellate panel staffed by ALJs. The panels would
consist of three ALJs who would review the cases locally. This Social
Security Appellate Panel Service within the USOHA would replace the
Appeals Council, a failed appellate review step that already exists and
is funded.
The ALJ appellate panels would be akin to the Bankruptcy Court
appellate panels and is one of the key features that makes the ALJ
self-administration model superior to the current SSA Appeals Council
model, which is a small body that cannot timely and effectively handle
a heavy caseload. Based upon the Bankruptcy Court experience, the
appellate panel model (1) is an appellate system that can handle a
large caseload, (2) results in a shorter disposition time because the
large pool of about 1,000 ALJs throughout the United States permits the
timely determination of appeals that cannot take place with a small
body such as the Appeals Council or a Commission or Board, (3) results
in higher quality decisions because of expertise, (4) results in
substantially fewer appeals to the courts and a substantially lower
reversal rate by the courts because of the confidence in the high
quality of the decisions, which reflects a higher degree of decision
accuracy, (5) results in a substantially reduced federal court
caseload, and (6) affords the claimants access to a local
administrative appellate process.
This proposal would provide the claimants with timely, high
quality, impartial and fair decisions of their claims pursuant to the
Social Security Act and APA by adjudicators who are in an agency
independent of, but within, the SSA.
The USOHA would be located within the SSA for logistical reasons,
but its officers and employees will not be supervised by any other part
of SSA. The USOHA will be accountable only to Congress and the
President. Placing the USOHA within SSA results in no new costs for
office space and information systems and is a practical necessity,
given the USOHA's substantial space needs that currently are in place
at SSA, the need to share the SSA's information services and data
bases, and the need to use the same case files.
A Chief ALJ appointed by the President for a term of years would
administer the agency.
The final decisions of the USOHA that are made by its appellate
panels would be appealed only to the federal courts, with the District
Courts as the first step in the judicial review. A District Court
appeal step is essential for several reasons: (1) The huge size of the
Social Security appellate caseload would overwhelm the Circuit Courts
if the District Court step is removed. An Article I court as a
substitute for the District Courts would suffer from the same problems
of being too small to effectively handle the case load that the Appeals
Council does. (2) Retaining District Court judicial review keeps local
decisional generalists in the appeals chain who are sensitive to due
process concerns, including adherence to the Administrative Procedure
Act. (3) Social Security claimants have come to rely on the
availability of the District Courts as a part of the judicial review
due process. (4) Congress has a demonstrated preference for local
control and decisionmaking with Social Security programs. (5) It is
desirable to retain local access to the judicial review process for the
often indigent Social Security claimants.
The appeals from the District Courts will remain with the regional
Circuit Courts of Appeal, as they do now, rather than go only to the
D.C. Circuit or the Federal Circuit. Even with District Court review,
placing all of the Social Security Circuit-level appeals in either of
these courts would increase their workload by over 50%. The SSAB's
recent suggestion of a specialized Social Security Court of Appeals
superficially may sound attractive as a device to have one national
interpretation of the Social Security Act. However, the SSAB does not
demonstrate a strong need for such a specialized court. First, as SSAB
points out, the Supreme Court already serves the function of providing
a national interpretation of the Social Security Act, and having the
regional circuits address the issues allows for legal debate that would
otherwise not occur. Second, continuing to have the appeals go to the
regional Circuits allows somewhat local access to the claimants. This
is the same procedure as for appeals from both Bankruptcy Court
decisions after District Court review and Tax Court decisions, which
are appealed to the regional Circuits, which makes sense since they
also serve individual claimants throughout the country who often have
limited means. (Although the Tax Court is based in Washington, D.C., it
sits throughout the country.) Regional circuit review has worked for
tax and bankruptcy cases, despite the obviously strong argument that a
single standard for construing the tax and bankruptcy laws is desirable
so that they are applied the same to everyone. Finally, the regional
circuits are not being overrun with Social Security cases. During the
years that ended on September 30, 1999, and September 30, 2000, only
891 and 845 Social Security cases respectively were filed with the
regional Circuit Courts of Appeals. Judicial Business, 1999 and 2000
Reports, Table B-1A. This is less than two percent of the 54,693 cases
that were filed in 1999 and 54,697 cases filed in 2000 in the regional
Circuit Courts. Judicial Business, 1999 and 2000 Reports, Table B.
Thus, no substantive changes in the process of judicial review
after the final administrative decision are recommended by AALJ, other
than to amend the Social Security Act to reflect that judicial review
will be from the final decisions of the new agency, not the SSA. Our
recommendations pertain only to the appellate administrative
adjudication process that results in a final administrative decision of
the claimants' entitlement to Social Security benefits, since that is
where the problems lie.
This proposal requires legislation that would amend the Social
Security Act.
A detailed version of the features of the proposed new agency and
the rationales for such a new agency is presented in the AALJ's
Statement that is published in the Report for the June 28, 2001, First
Hearing in the Series on Social Security Disability Programs'
Challenges and Opportunities, House Subcommittee on Social Security,
No. 107-35, 107th Cong., 1st Sess., pp. 80-93. A very detailed version
of the features of the proposed new agency and the rationales for such
a new agency, including legislative language, is presented in the
AALJ's ``Report and Recommendations for the Transfer of the Authority
to Make Final Administrative Adjudications of the Social Security Act
Claims from the Social Security Administration to a New Independent
Regulatory Agency,'' which is available upon request or on the AALJ
website, www.aalj.org.
The AALJ proposal for a new adjudication agency is a detailed and
practical blueprint to improve the Social Security disability process.
The AALJ proposal would improve the timeliness and quality of ALJ and
final administrative review decisions that, at the same time, likely
will reduce the claimant's need to resort to federal court review and
thus reduce the federal court Social Security caseload. The process
AALJ is proposing is realistic in terms of handling the large caseload,
which I respectfully submit is not the case for the other proposals in
this area. All of the agencies and academicians who comment on the
disability process correctly recognize the need for change, but rely on
the creation of small bodies, such as a Review Board or Social Security
Court, that would suffer from the same problems of low decision quality
and untimely action as the SSA Appeals Council, another small body, has
had for years.
(d) As an Alternative to Reorganizing OHA, Create A New Independent
Agency outside SSA to Issue the Final Administrative Decisions of
Social Security Act Claims, Including Medicare Claims: Another
alternative is to create a separate adjudication agency to hear Social
Security Act claims, including Medicare claims. This agency would have
the same organization structure as is described in section 4(c)
immediately above, but it would be a separate agency outside the SSA.
(e) As an Alternative to Reorganizing OHA at the ALJ Level, Create
a Unified Corps of ALJs outside SSA: A more comprehensive reform of the
ALJ hearing process may be achieved through the House Judiciary
Committee by creating a unified corps of ALJs outside SSA and other
agencies that includes SSA ALJs and ALJs from other agencies in any one
of the following three configurations:

1. La unified corps of all ALJs from the agencies that hear
benefits cases, including SSA,
2. La unified corps of all ALJs from SSA and the Cabinet-level
Executive Branch agencies, and
3. La unified corps of all ALJs in the Executive Branch,
including all of the independent agencies.

Chairman SHAW. Thank you, Judge. Ms. McGraw?

STATEMENT OF THE HON. KATHLEEN MCGRAW, ADMINISTRATIVE LAW
JUDGE, OFFICE OF HEARINGS AND APPEALS, SOCIAL SECURITY
ADMINISTRATION, ATLANTA, GEORGIA, AND CHAIR, SOCIAL SECURITY
SECTION, FEDERAL BAR ASSOCIATION

Ms. MCGRAW. Chairman Shaw, thank you for convening this
hearing on an issue of vital importance to millions of
Americans.
I am pleased to be here on behalf of the Social Security
section of the Federal Bar Association. Although I am an ALJ
with Social Security, I am not here in my official capacity and
my remarks are solely those of the Social Security section of
the Federal Bar.
As you know, the FBA represents a broad array of
stakeholders working at all levels of the disability
adjudication process. The primary concern of the FBA is the
integrity, independence, fairness and effectiveness of the
disability hearing process. Clearly, the effectiveness of the
process is front and center in this hearing today.
Two years ago, I testified before this Committee and not
much has changed. We are faced with the same problems, only
they have gotten worse. In my limited time I want to address
two of those problems. First, the fundamentally different
approaches to disability of DDS and OHA, and second, the
unacceptable delays at OHA.
The SSA's process unification initiative was intended to
have everyone using the same legal standards to decide the
issue of disability. That still is not happening. At the DDS,
decisions are driven solely by the objective medical findings
with mere lip service being paid to the requirements of the law
that a claimant's subjective complaints such as pain and
fatigue be assessed. No two people with the same objective
findings have identical functional limitations. The law
requires an individualized assessment.
While there has been some good faith effort in prototype
States to apply the law and assess subjective complaints, the
testimony before this Committee 1 year ago of Sue Heflin, then
President of NADE, is illuminating. She made the point that it
is expensive and time consuming to gather the evidence
necessary to make an individualized assessment. Moreover, doing
individualized assessments leads to inconsistencies in
decisionmaking. Consequently, DDS prefers to base decisions
purely on objective medical findings. That, however, is not
what the law requires.
The NADE has proposed to move the claimant's hearing to the
DDS level. Based on the DDS response to process unification, it
is clear the DDSs are not capable of providing claimants the
due process hearing they are entitled to consistent with the
requirements of the law.
At a minimum now, DDSs need to do a better job of
collecting relevant evidence; they need to contract for higher
quality consultative examinations; and, they need to provide
claimants with rationalized decisions that explain the
standards for disability and the reasons claimants don't meet
those standards.
The Commissioner recently announced an initiative to have
ALJs screen cases as they come in the door from DDS. The
purpose is to pay those that should be paid on the record and
to identify those that need more development. If this
initiative can be productive, then clearly claimants are not
being allowed as early in the process as they should be and
cases are not being properly developed at the DDS.
That said, the delays at OHA are unacceptable. You no doubt
want to know why and what can be done about the situation. As
for the ``why,'' the culprit is poor management practices at
OHA. Mr. Bernoski referenced the number of cases ALJs used to
produce. We are dealing in large part here with a management-
induced crisis.
Two years ago we raised with this Committee a warning about
management problems within OHA. The HPI was conceived and
implemented without meaningful input from judges. It was not
designed for the needs of an organization that delivers
judicial services.
Under HPI, employees were organized into groups servicing
groups of judges. Instead of more accountability, there was
none. Claimants and representatives found themselves unable to
identify any one employee who had responsibility for or
knowledge of their cases. Judges didn't even know which
employees were handling the cases on their own dockets. There
was chaos in the office.
In addition, there was wholesale promotion of employees
into jobs they weren't prepared for or qualified to perform.
The OHA was without a support staff that could effectively
process cases. Judges who routinely issued 40 to 60 decisions a
month no longer had enough cases pulled and scheduled to enable
them to maintain that level of production. Added to this
organizational debacle is the inscrutable decision of SSA not
to impose performance standards on its employees. The only
people in OHA who have production expectations are judges. The
employees that both claimants and judges rely upon for case
preparation, scheduling and decision drafting have no
quantifiable standards. They operate on a pass-fail basis. In
my experience, no one, no matter how little they do or how
poorly they do it, has ever failed or suffered any adverse
consequences.
The simple act of imposing quantifiable performance
standards would produce immediate improvement in OHA's
productivity and timeliness.
Finally, in the view of the FBA, OHA is a judicial entity.
It needs to be led by a Chief Judge and it needs the support
and services of attorneys. While there is a legitimate place
for paralegals, the massive promotion under HPI of 350 clerical
staff to the paralegal position with no legal training and no
demonstrated qualifications for the job of drafting decisions
is inexplicable. These so-called paralegals are at the same pay
and grade as attorneys. This decision flies in the face of
effective judicial administration.
With this, I am afraid time deserts me. So, I thank you for
this opportunity to testify on behalf of the Social Security
section of the FBA.
Chairman SHAW. Thank you.
[The prepared statement of Ms. McGraw follows:]
Statement of the Hon. Kathleen McGraw, Administrative Law Judge, Office
of Hearings and Appeals, Social Security Administration, Atlanta,
Georgia, and Chair, Social Security Section, Federal Bar Association
INTRODUCTION
Chairman Shaw and Members of the Subcommittee:

I am Kathleen McGraw, Chair of the Social Security Section of the
Federal Bar Association. I am an administrative law judge in the Office
of Hearings and Appeals of the Social Security Administration in its
Atlanta North office. As an Administrative Judge for the U.S. Merit
Systems Protection Board for 13 years and as an Administrative Law
Judge for Social Security for the past seven years, I have heard and
decided well over 2,500 appeals. I am very pleased to be here today
representing the Social Security Section of the Federal Bar Association
(FBA). My remarks today are exclusively those of the Social Security
Section of the Federal Bar Association, not the FBA as a whole.
Moreover, they in no way reflect the official views of the Social
Security Administration.
Thank you for convening this hearing this afternoon on a matter of
critical importance to the Federal Government's delivery of effective
services to the American people. As you know, the Federal Bar
Association is the foremost professional association for attorneys
engaged in the practice of law before federal administrative agencies
and the federal courts. Fifteen thousand members of the legal
profession belong to the Federal Bar Association. They are affiliated
with over 100 FBA chapters in many of your districts. There are also
over a dozen sections organized by substantive areas of practice, such
as the Social Security Section, of which I am the Chair.
Unlike other organizations associated with Social Security
disability practice that tend to represent the narrow interests of one
specific group, the Federal Bar Association's Social Security Section
encompasses all attorneys involved in Social Security disability
adjudication. Our members include:

Attorney Representatives of claimants
Administrative Law Judges (ALJs)
Administrative Judges at the Appeals Council
Staff Attorneys at the Office of Hearings and Appeals
Attorneys at the Social Security Administration's
Office of General Counsel
U.S. Attorneys
U.S. Magistrate Judges, District Court Judges and
Circuit Court Judges

The greatest interest of the FBA's Social Security Section is in
the effectiveness of the adjudicatory process associated with hearings
in the Office of Hearings and Appeals (OHA), the appeal process at the
Appeals Council and judicial review in the federal courts. Our highest
priority is to assure the integrity, independence, fairness, and
effectiveness of the Social Security disability hearing process for
those it serves--both Social Security claimants themselves and all
American taxpayers who have an interest in assuring that only those who
are truly disabled receive benefits.
It is the Section's collective view that the Social Security
disability program is under considerable strain. Current delays in the
processing of claims are unacceptable and the quality of decisions at
all levels is less than ideal. The Commissioner is faced with a
daunting task. It is with that in mind that we offer the following
comments.
Full Implementation of Process Unification at All Levels of
Adjudication
Process unification is essential to an efficient, timely and
accurate disability adjudication system that ensures disabled claimants
will be paid as early in the process as possible.
In the mid-1990's the Social Security Administration (SSA)
acknowledged the inconsistency created by the Disability Determination
Services (DDS) applying one set of rules for determining eligibility
through the Program Operations Manual (POMS), and its Administrative
Law Judges, Appeals Council, and the federal courts applying another
through statute, regulations, rulings and case law. Consequently, in
1996 SSA initiated Process Unification Training for all DDSs, ALJs, and
the Appeals Council. The training was based on a set of rulings--the
``Process Unification Rulings''--that were designed to guide all
adjudicators at every level. It was anticipated that the DDSs would no
longer rely exclusively on POMs, and that they would begin to write an
analysis of their decision-making. This rationalized determination, in
turn, would be granted some deference by reviewing ALJs and Appeals
Council.
As a facilitator for this training, I traveled across the country
and interacted with all components being trained. It became clear to me
during this training that State Agency examiners, although hardworking
and well-trained in the medical area, were not assessing a claimant's
subjective allegations. Moreover, they were overwhelmed by the prospect
of having to do so. They were confounded by the task of assessing a
claimant's credibility and subjective allegations and articulating a
reasoned basis for their conclusion. Notwithstanding the clear message
from the Process Unification Training that State Agency Examiners were
expected to perform individualized assessments and rationalize their
determinations, they have failed to do so. State agencies have balked
at this requirement, and examiners' determinations continue to be
devoid of rationale and are driven almost exclusively by objective
medical findings. It is the only way they can maintain the production
expected of them.
These observations were confirmed by Sue Heflin, President of the
National Association of Disability Examiners, who testified before this
Subcommittee on June 28, 2001. In her answer to the Subcommittee's
question on the prototype initiative, she confirmed that it is only in
the 10 prototype states that Process Unification initiatives have been
really implemented. In those states, while the implementation of
Process Unification enabled examiners working as Single Decision-Makers
to allow claims they might have otherwise denied--something they found
to be a positive and fulfilling professional experience--examiners also
learned that it takes longer to process a claim and costs more to do
the additional development required to comply with Process Unification
requirements. Ms. Heflin astutely observed that evaluating subjective
factors such as pain, fatigue, credibility and treating source opinions
is more time consuming for examiners and therefore more costly.
The evaluation of the claimant's subjective complaints is an
everyday occurrence for ALJs deciding Social Security disability cases.
Under Process Unification, it should have been an everyday occurrence
at the DDS level as well. The failure to fully implement Process
Unification at the DDS level implicates the due process rights of the
claimant because the evaluation of subjective complaints is an integral
part of the process that is due the claimant. The evaluation of
subjective complaints should not be postponed until the case reaches
OHA. Postponement in the review of subjective complaints represents one
of the core problems that Process Unification was intended to address.
Social Security regulations and rulings mandate an individual
assessment of each and every claimant's subjective complaints and their
impact upon that claimant's ability to function. Yet, as candidly
acknowledged by Ms. Heflin, the DDS examiners do not consider
subjective complaints. We have all heard the stories about people
walking around with herniated discs, documented by MRI, who suffer few
or no symptoms, while others with the same MRI findings suffer from
debilitating pain. At the DDS, both would receive the same decision
based on the objective findings the individual level of pain alleged
would not matter. That certainly makes for consistency, but
unfortunately does not make for accuracy in decision-making. One can
only imagine how the claimant who suffers with a subjective condition
such as fibromyalgia or chronic fatigue syndrome will fair at the DDS
level. Only at OHA, will the claimant's subjective complaints be fully
evaluated.
The failure to implement Process Unification has led to a new
agency initiative to identify cases shortly after arriving at OHA
offices from the DDS. The new initiative would have been wholly
unnecessary had Process Unification been implemented at the DDS. The
Commissioner recently announced that, in an effort to deal with the
backlog and delays at OHA, ALJs will begin to review raw, unpulled
files as they arrive from DDS. The purpose of the review is twofold: to
grant those claims that can be allowed on the record without a hearing;
and to undertake immediate development of cases requiring additional
expansion of the record. While this initiative is commendable from the
viewpoint of claimants who should have been paid earlier in the
process, it attests to the failure of process unification. If such an
initiative yields significant results and productivity, then the cases
were either: (1) not decided correctly under the law at the DDS; or (2)
not adequately developed at the DDS.
We submit that SSA had it right the first time when it recognized
the need for process unification. Fairness requires that all
adjudicators assess a disability claim using the same legal standards
and requirements. A fundamental premise of the SSA process unification
effort was that disability benefits should be awarded to claimants as
soon as their disability has been determined under the law. The burden
of long delays to claimants before the statute, regulations, rulings,
and case law are applied is unacceptable and does not serve the
interests of justice. Quite simply, it can wreak havoc in the lives of
deserving claimants.
LPreservation of the Due Process Hearing Before an Administrative Law
Judge
It is our understanding that various proposals are being made that
would eliminate a hearing before an Administrative Law Judge. The
Social Security Section of the FBA strongly opposes any such effort.
In 1983, the Senate Governmental Affairs Subcommittee on Oversight
of Government Management conducted a hearing on the role of the ALJ in
disability hearings. The report provided in part:

The principal finding of the Subcommittee is that the SSA is
pressuring its ALJs to reduce the rate at which they allow
disabled persons to participate in the Social Security
Disability Program. . . . [The Subcommittee found that the SSA
was limiting the decisional independence of ALJs through its
Rulings, its non-acquiescence to federal court decisions, and
its increasing of case quotas that reduced the time an ALJ
could spend on each case to develop additional evidence that
may support an allowance decision, among other things.] The APA
mandates that the ALJ be an independent, impartial adjudicator
in the administrative process and in so doing separates the
adjudicative and prosecutorial functions of an agency. The ALJ
is the only impartial, independent adjudicator available to the
claimant in the administrative process, and the only person who
stands between the claimant and the whim of agency bias and
policy. If the ALJ is subordinated to the role of a mere
employee, an instrument and mouthpiece for the SSA, then we
will have returned to the days when the agency was both
prosecutor and judge.

Sen. Rep. No. 98-111 (September 16, 1983).
The Administrative Procedure Act requires that independent
administrative law judges be selected on a merit basis and insulated
from agency bias and pressure in performing the adjudicative function.
See Butz v. Economu, 458 U.S. 478, 513 (1978). Regretfully, as noted in
the Senate Report, SSA in the past has attempted to subvert the
statutory independence of its administrative law judges. It has sought
overtly, and at other times more subtly, to influence the decisions of
its ALJs to achieve some predetermined acceptable allowance rate or
altogether cease payment of benefits to a particular class of disabled
beneficiaries. In one well-publicized episode in 1982, SSA attempted to
terminate benefits to thousands of Americans with mental disabilities,
triggering the reversal in many cases of that policy decision by SSA
ALJs who applied the law and restored the benefits. The American Bar
Association in fact honored the SSA ALJ corps for their outstanding
efforts during the period from 1982-84 to protect the administrative
adjudication within their agency, to preserve the public confidence in
the fairness of governmental institutions and to uphold the rule of
law.
A due process hearing conducted by an ALJ is a protection against
potential agency bias and policy that may at times run contrary to the
law as mandated by Congress. Disability claimants should not be
deprived of this step in the disability process. Moreover, as noted
earlier, given the constraints on DDS's, it is the first opportunity
for claimants to have their subjective complaints meaningfully
considered as mandated by the law. That being said, there remains the
critical issue of unacceptably long delays at OHA. The causes of these
delays are many, but most obvious is the abject failure of the Hearing
Process Improvement (HPI) initiative. Prior to HPI, in FY 1998, ALJs
issued 618,578 decisions. In FY 2001, with full implementation of HPI,
that figure plummeted to 465,228.
The defects in HPI, both in design and implementation, are legion
and need not be enumerated here. Suffice it to say, a fundamental
problem was the de-legalization of the adjudicative process, which
included the removal of judges from the case development function. Over
350 employees, primarily from the clerical ranks, were promoted to the
position of ``paralegal''. Their promotion left OHA bereft of employees
trained in ``pulling cases'' in preparation for adjudication by
administrative law judges. This created fewer cases ready for judges to
hear and fewer cases for judges to decide--a crisis induced by an ill-
advised management decision. To make matters worse, the employees who
have been promoted to the ``paralegal'' position, in almost all cases,
have had no legal training whatsoever and in their promotion were not
even required to demonstrate an ability to write; yet, they were and
remain tasked with writing draft decisions for the judges--decisions
that are subject to judicial review in U. S. District Court. Attorneys
could have filled the positions encumbered by these ``paralegals'' as
the two positions are at the same grade and pay level. Instead, SSA
made the conscious choice to fill these slots with clerical workers
rather than trained lawyers. It goes without saying that under this new
arrangement the review time required for judges to edit and revise
their decisions has increased exponentially further delaying
disposition of claimants' cases.
OHA performs an adjudicative function and its procedures and
support systems need to be designed and implemented to facilitate that
function. Clearly, with proper and adequate support, ALJs are capable
of timely adjudicating the cases before them while providing claimants
with due process.
OHA Adjudicative Support Functions Should be Reorganized

OHA fundamentally is a judicial operation. Therefore, it should be
under the direction of a Chief Administrative Law Judge, who is
provided appropriate administrative assistance in carrying out the
adjudicative function. Contrary to the current situation, the
administrative and support system should not dictate to OHA's judges
how the adjudicative function should be accomplished.
The foremost problem within the Office of Hearings and Appeals is
that the judges have no managerial authority over the staff who work
for them. It may come as a surprise to members of this Subcommittee,
particularly those who may have practiced in federal or state courts,
how different the delivery of judicial ``services'' is in Social
Security cases. In federal district courts, as well as in most state
courts, judges have secretaries and law clerks whose work they direct
on a day-to-day basis. Theses employees are ultimately responsible to
the judge and practitioners can readily identify them as the employees
who support the work of the judge.
This is decidedly not how the Social Security Administration has
chosen to deliver its judicial services. A pooled staff is available to
assist judges, but without direction or supervision by the judges
themselves. Judges, as well as claimants' representatives, are often at
a loss to know what staff member to talk to about specific case
problems. Miscommunication abounds, leading to processing and
scheduling problems that impede the timely adjudication of cases. The
situation is further compounded by staff working at home--a
complicating factor that in some cases further diminishes the
effectiveness of the office. On a daily basis, evidence that needs to
be associated in a timely manner is not. In fact, the evidence may even
be lost. Messages do not reach the right person to avert scheduling
problems. Ultimately claimants' cases are delayed as a result of this
administrative chaos.
Added to these problems, and probably chief among them, is the fact
that within OHA there are no quantifiable standards by which employee
performance is measured. Appraisals are done on a pass/fail basis, and
no one ever fails. Employees can nominate themselves for awards and too
often the worst of employees reap the same rewards as their hardworking
coworkers who are picking up the slack for their shoddy performance.
Morale is understandably low. Other components of SSA have employee
performance standards and it is difficult to see why a component such
as OHA would not utilize a system of individual employee
accountability.
Like it or not, OHA is drawn into a numbers game. Yet, the only
persons in OHA for whom there is a stated numerical expectation are the
judges who are supposed to produce a certain number of cases per day.
There is no comparable expectation for the employees upon whom the
judges must rely for support, such as the case technicians who ``pull''
cases or the attorneys and paralegals who draft decisions. Competitive
and excepted service employees in other federal agencies are subject to
objective performance standards both for quality and quantity of work.
For some unexplained reason, that is not the case at OHA. As a result,
substandard performance is routinely tolerated and claimants suffer as
a result. There could be no more single effective improvement at OHA
than the imposition of quantifiable performance standards and the
willingness on the part of management to enforce those standards.
LEstablishment of a Comprehensive Quality Assurance Program Throughout
the Disability Program
The General Accounting Office has repeatedly reported that SSA
needs to implement a comprehensive and meaningful quality assurance
system. SSA announced a plan to revamp its existing quality assurance
system in 1994. Yet, in 2001 SSA acknowledged that its quality
assurance system needed to more effectively promote uniform and
consistent disability decisions across all geographic and adjudicative
levels. GAO has made specific recommendations as to the content of such
a plan.
The Commissioner has appointed a Regional Commissioner to lead an
effort to establish a quality assurance program. We commend the
Commission for undertaking this action, and we encourage the
development of a comprehensive quality assurance program that
establishes quality standards at all levels of the claims process. The
disability program is a nationwide program, and it is not acceptable to
have disparate allowance rates at the initial DDS level on disability
claims in FY 2001 ranging from a low of 27% in one state to a high of
65% in another state.
A quality assurance plan should, for example, set the standard for
the collection of evidence at all levels of review, including DDS. Much
of the delay in the life of a disability claim is due to the time
needed to collect relevant evidence. For example, if a claimant alleges
disability due to severe injuries in an automobile accident and DDS
obtains the primary care physician records of general care, but fails
to obtain the records of the trauma surgeon and hospital, DDS will not
have the relevant evidence needed to make an accurate determination.
While a denial based on the primary care physician records may be
technically correct, given the record as developed, that record is
wholly inadequate. The claimant is then forced to appeal the denial
until someone develops the complete and relevant record. If the correct
record were obtained at the DDS level, the accuracy of the DDS decision
could be realistically measured. It is a meaningless statistic to say
the DDS made the right decision, when it was rendered on an inadequate
record.
Similarly, delays at the ALJ level occur while the relevant
evidence is obtained and the file is assembled. One of SSA's redesign
initiatives, the Adjudication Officer (AO), sought to accomplish the
generation of evidence and file assembly at the DDS level. The AO
developed the record and granted eligible claims, forwarding the
ineligible claims to an ALJ for further review. In those cases that
were denied, the AO prepared a summary of the evidence, and certified
that the record was complete. The case was then heard by an ALJ
generally within 60 to 90 days of its receipt and little or no further
development of the record was required. Concerns were raised about the
AO project because a higher percentage of claims was paid at the DDS
level, and administrative costs for assembling a complete record and
providing a summary were high. The project, however, resulted in
correct decisions earlier in the process and savings of administrative
costs and time at OHA.
A Quality Assurance Program should measure the adequacy of the
file, the quality of the analysis, and the correctness of decisions at
all levels. It should also undertake to measure the accuracy of both
allowances and denials of claims. At the DDS level, quality review work
currently performed by SSA's Disability Quality Branch focuses on
allowances of claims rather than denials. This creates systemic
pressure on the DDS examiner to avoid erroneous allowances, but not
necessarily erroneous denials. Since an erroneous denial is much less
likely to be scrutinized by quality control, a denial represents a far
more attractive and safer decision option for the DDS examiner. At the
ALJ level, the opposite is true. To be effective, without subtly
influencing the outcome of decision-making, a quality assurance program
should be neutral and refrain from pushing the process toward allowing
or disallowing claims. The QA program must measure the accuracy of both
allowances and denials.
LThe Electronic Folders Initiative (E-DIB) must be adequately funded,
closely monitored, and not viewed as the complete answer to
disability adjudication problems
The Commissioner has announced that the entire record at all levels
will be contained in an electronic folder (E-DIB) by January, 2004. The
E-DIB initiative has the potential to provide significant improvement
in the speed of claims adjudication. However, given SSA's track record
in the conceptualization and implementation of HPI and other redesign
initiatives, we strongly encourage the application of significant care
and attention to the testing and introduction of E-DIB.
Very few details concerning the plan have been announced, and there
are innumerable questions relating to the implementation of this
initiative. We urge extensive testing at the pilot stage and vigilant
monitoring of its rollout. Given the shortage of personnel within DDS
and OHA to handle the current caseload, careful attention also should
be devoted to staffing plans for those who will maintain the systems
and scan the documents included in the electronic folder. Attention
should also be devoted to whether E-DIB coverage will extend to claims
pending at the time of conversion or whether this will include only
claims filed after January, 2004. The Social Security Administration
needs to work with the representative community to insure the
confidentiality of the claimant's record, while also assuring safety
and security of the internet system itself. Access to the claimant's
record by those on the other side of the digital divide, who lack
compatible equipment, also should be considered.
Elimination of Reconsideration and Reorganization of the Appeals
Council
The Social Security Section of the FBA seriously questions whether
the current processes of DDS level reconsideration and Appeals Council
review are serving their intended purposes. Thoughtful scrutiny should
be devoted to whether the time spent on these two review processes
contributes to the effective adjudication of disability claims and the
interests of justice.
A claimant who is initially denied benefits may request DDS
reconsideration of the denial decision. Reconsideration is widely--and
correctly--viewed as little more than a rubber stamp of the initial
denial. During FY 2001, of an average 100 claims processed by DDS, 40
were approved at the initial level and 4 at the reconsideration level.
Time spent at the reconsideration level was 69 days. Given the few
requests for reconsideration that ultimately are successful, concerns
can be deservedly raised whether reconsideration represents a
meaningful step in the disability process. The Social Security Section
of the FBA supports the elimination of reconsideration and redirection
of that portion of DDS budgets into the initial level of decision-
making.
Attention should also be devoted to the role and effectiveness of
Appeals Council review. Upon receipt of an adverse claims decision by
an ALJ, a claimant may appeal to the Appeals Council, which then
undertakes a review on the record. While the Appeals Council serves a
valuable purpose in screening out many cases that should not reach
federal court due to deficiencies in the ALJ decisions, the Appeals
Council is overwhelmed by its staggering workload. It has taken steps
to shorten its appeal time, and according to the General Accounting
Office, reduced the amount of time to process an appeal from 458 days
in FY 1999 to 447 days in FY 2000. This is still an unduly long period
of time. There can also be no excuse for the number of cases in which a
remand occurs for no reason other than a lost or defective hearing
tape. Technology needs to be improved to eliminate this needless delay
for claimants.
The substantive legal correctness of the decisions of the Appeals
Council has also been frequently challenged. In a mounting number of
cases appealed to U.S. District Court after denial of review by the
Appeals Council, the Office of General Counsel and U.S. Attorneys have
asked the Appeals Council to agree to a ``voluntary remand.'' These
requests are prompted by concerns over the ability to defend the
underlying ALJ decision--the decision that had already been affirmed by
the Appeals Council. The frequency of such ``voluntary remands''
indicates that in its rush to process appeals, the Appeals Council may
not be getting it right the first time. The record the Appeals Council
agrees to take back in a voluntary remand is usually identical to the
record it initially reviewed. If the ALJ decision is indefensible, it
should have been caught before the case proceeded to federal court.
That, after all, is the role of the Appeals Council in the request for
review process.
Therefore, we believe that the Commissioner should review and study
the role and responsibility of the Appeals Council, with special
attention devoted to: the usefulness and necessity for the request for
review function; the merits of redesign of the Appeals Council mission
to focus on quality review; and the establishment of a time-limit for
the processing of requests for review, permitting cases not reached
within the allowable time to go directly to court.
Conclusion
This concludes my prepared remarks. Thank you once again for the
opportunity to appear before you today. The Social Security Section of
the Federal Bar Association looks forward to working with you and the
Social Security Administration in improving disability process. I would
be happy to answer any questions you may have.

STATEMENT OF JOHN H. PICKERING, PAST CHAIR, SENIOR LAWYERS
DIVISION, AND COMMISSIONER EMERITUS, COMMISSION ON LEGAL
PROBLEMS OF THE ELDERLY, AMERICAN BAR ASSOCIATION

Mr. PICKERING. Mr. Chairman and Members of the
Subcommittee, it is a privilege to appear before you this
morning to present the views of the American Bar Association to
discuss the important issue of improving the Social Security
disability appeals system.
The American Bar Association as a representative of our
legal profession, is particularly concerned with making access
to justice available to those persons who are most in need and
are least able to protect their rights: the poor, the elderly
and persons with disabilities.
Accordingly, we have had a longstanding interest in the
Social Security disability review process and we have worked
actively to promote increased efficiency and fairness. Over the
years we have developed numerous recommendations for
improvement, which are appended to my written statement. We
have filed an amicus brief in the landmark Bowen case in the
Supreme Court for the disability claimants who had been
unlawfully deprived of their rights.
Our first recommendation for improvement builds on what you
have previously heard. To reduce the number of appeals, we need
to improve the initial stage of the process by providing
applicants with a clear statement of eligibility requirements,
a list of claimant responsibilities, and a description of the
administrative steps in the process, and explanation of
relevant medical and vocational evidence and a notice of the
availability of legal representation.
The SSA should take affirmative steps to make a better
record at the initial stage by compiling accurate documentation
and by supplementing medical reports that are not sufficient.
Next we recommend that before denying a claim, SSA should
notify claimants of the pending adverse action, inform them of
the reasons for the finding, ensure that they have access to
all the evidence in their file, and provide them with an
opportunity to submit further evidence.
We recommend that the SSA advise claimants' health care
providers of deficiencies in the medical evaluation and give
them an opportunity to cure those deficiencies.
If the claim is denied after full development of the file,
we recommend additional steps to ensure the integrity and
efficiency of the appeals process and to guarantee due process.
To do that, claimants should be provided with a clear and
detailed statement of the reasons for denial, their opportunity
to appeal, the availability of legal representation, and the
consequences of failing to appeal.
We support the elimination of the reconsideration level. In
the present scheme it serves no purpose. Instead, you should go
right to a due process hearing on the record before an
Administrative Law Judges whose authority as an independent
fact finder is assured.
That ALJ should have the opportunity to take testimony from
the client, develop evidence when necessary, consider and weigh
the evidence and evaluate vocational factors in order to reach
an impartial decision free from Agency coercion. I emphasize
the need for independence because we must never forget past
history when SSA tried to eliminate the backlog of disability
cases by threatening the ability of the ALJs to ensure due
process. That sorry experience must not be repeated.
We also urge that the proposals to close the record be
carefully considered. We think the record should not be closed
until the conclusion of the hearing at the very earliest and
that it could be reopened upon a showing of good cause. Denying
the opportunity to reopen and requiring the applicant/claimant
to submit a new application is simply a waste of time and
resources.
Recent proposals have again raised questions about the role
of the Appeals Council. We have recommended that this issue be
studied in the past. We caution that any changes should not
compromise the independence and the impartiality of the ALJs.
We therefore urge that the scope of the Appeals Council review
be limited to clear errors or law or lack of substantial
evaluated.
The ALJ findings of fact should not be reversed without
specific documentation and review of the hearing tapes.
We recommend that if the Appeals Council fails to act upon
a request for a review within a specified period of time,
claimants should be deemed to have exhausted their
administrative remedies and be permitted to seek Federal court
review if the decision is adverse.
Finally, there is the issue of creating Article I courts to
hear Social Security appeals. The ABA has consistently opposed
legislation to create such Article I review courts. It may be
timely to revisit this issue, but the important factor is that
it is not court review that has resulted in delay. It has been
defects in the administrative process itself.
Accordingly, we think that the improvements have to be made
at the front end, not at the back end of the review. Simply
shifting appeals to another court system is not a practical
solution.
We are confident that our recommendations will improve the
disability system and alleviate the backlog by reducing the
number of appeals and the number of reversals when cases are
appealed.
We commend the Subcommittee for holding these hearings on
these important issues. We appreciate the opportunity to
testify. We look forward to working with the Subcommittee and
with SSA on these issues in the future. Thank you very much.
[The prepared statement of Mr. Pickering follows:]
Statement of John H. Pickering, Past Chair, Senior Lawyers Division,
and Commissioner Emeritus, Commission on Legal Problems of the Elderly,
American Bar Association
Mr. Chairman and Members of the Subcommittee:

My name is John H. Pickering. I serve as Commissioner Emeritus of
the American Bar Association Commission on Legal Problems of the
Elderly, which I chaired for a number of years. I am also a past chair
of the ABA Senior Lawyers Division. I appreciate the opportunity to
appear before you today on behalf of the Association, to discuss our
views on the Social Security disability appeals system.
As representative of the legal profession in the United States, the
American Bar Association is particularly concerned with equal access to
justice for those members of our society who are generally least able
to protect their own rights--low-income persons, individuals with
disabilities and older people. We have a long-standing interest in the
Social Security Administration's disability benefits review process,
and have worked actively for many years to promote increased efficiency
and fairness in this system. We have followed the agency's efforts over
the past decade to improve the timeliness, accuracy, and consistency of
its disability decisions, and we commend those attempts, although we
recognize that they have met with mixed results. It is clear that they
have not alleviated backlogs in the system. It still takes the agency
as long as one year to reach a determination on an initial appeal; some
claimants must wait years for a final Appeals Council decision. These
delays have a profound effect on public confidence in the agency, on
agency staff, and most significantly, on claimants who desperately need
the benefits.
Almost seventeen years ago, the ABA joined with the Administrative
Conference of the United States (ACUS) to sponsor a national symposium
to examine Social Security's administrative appeals process. In 1986,
the Association filed an amicus curiae brief in the landmark U.S.
Supreme Court case, Bowen v. City of New York, in which we argued
successfully that the Social Security Administration should reopen the
cases of thousands of mentally disabled claimants who were denied
disability benefits because they failed to meet sub rosa requirements
and appeal deadlines. Brief for the American Bar Association, Amicus
Curiae, in Support of the Respondents, Bowen v. City of New York, 476
U.S. 467 (1986). More recently, the Association adopted a set of
recommendations for strengthening safeguards and protections in the
representative payee program. Over the years, we have drawn upon the
considerable expertise of a membership with backgrounds as claimant
representatives, administrative law judges, academicians and agency
staff to develop a wide ranging body of recommendations on the
disability adjudication process that encourage clarity in
communications with claimants, due process protections, and application
of appropriate, consistent legal standards at all stages of that
process.
It is with this background that we offer some recommendations to
the Subcommittee for consideration. We believe that implementation of
these recommendations will help to alleviate the backlogs and delays
that are overwhelming the current system, and will lead to the
development of a disability determination and appeals process that is
timely, efficient and fair, and that meets the needs of individuals
with disabilities and their families.
The first step toward increasing the speed and efficiency of the
appeals process is to reduce the number of appeals. According to the
General Accounting Office, of the 40% of claimants who appealed initial
denials in fiscal year 2000, approximately two-thirds were awarded
benefits upon appeal. In all too many cases in the system today, claims
that could have been decided at the initial stages are awarded at the
hearing level simply because the evidence of disability is more
complete by the time it is presented to the administrative law judge.
We recommend that the Social Security Administration improve the front
end of the process by providing applicants with a clear statement of
eligibility requirements, a list of claimant responsibilities, a
description of the administrative steps in the process, an explanation
of relevant medical and vocational evidence, and notice of the
availability of legal representation.
To improve the quality of medical and vocational evidence at the
initial stages of the process and to reduce the need for appeal, we
suggest that the agency consult the claimant's health care providers,
and compensate them adequately for providing relevant medical
information. We encourage SSA to take affirmative steps to compile
accurate documentation and to supplement medical reports (particularly
those from treating physicians) that are not sufficiently detailed or
comprehensive. We are pleased to note that the SSA website includes
information for the medical community about eligibility criteria used
in the disability program. We encourage the agency to go further by
assisting claimants in compiling necessary documentation and in
supplementing incomplete reports. We also urge the agency to establish
a single standard for the determination of disability at all levels of
decision-making making.
We recommend that, prior to denying claims, the Social Security
Administration notify claimants of the pending adverse action; inform
them of the reasons why the finding of disability cannot be made;
ensure that they have access to all the evidence in their file,
including medical reports; and provide them the opportunity to submit
further evidence. We also recommend that SSA advise claimants' health
care providers of deficiencies in the medical evidence and give them
the opportunity to supply additional information. Disability claims
managers should be encouraged to consult with legal as well as medical
resources in their evaluation of a claim. We encourage the vesting of
initial decision-making authority in two-member teams composed of a
disability examiner and a medical or psychological professional, and we
support face-to-face interviews between claimants and agency decision-
makers before a final decision is made.
In the event that the claim is denied after this full and complete
development of the file, we suggest certain additional steps to enhance
the integrity and efficiency of the appeals process while guaranteeing
the claimant due process.
Claimants whose applications are denied should be provided a clear
and detailed statement of the reasons for denial, the opportunity to
appeal, the availability of representation, and the consequences of
failing to appeal. The ABA supports elimination of the reconsideration
level. If the quality of intake and development of evidence at the
early stages is improved, there is little reason for reconsideration,
particularly given the historically low reversal rate and substantial
delays involved at this level. Instead, claimants whose applications
are denied should have the right to a due process hearing on the record
before an administrative law judge whose authority as an independent
fact-finder is assured. The administrative law judges should be
appointed pursuant to the Administrative Procedures Act. This hearing
is essential to a full and fair review of the claim, and administrative
law judges should have the opportunity to take testimony from the
claimant, develop evidence when necessary, consider and weigh the
medical evidence, and evaluate vocational factors in order to reach an
impartial decision free from agency coercion.
In 1995, in response to the Social Security Administration's
efforts to eliminate the backlog of cases that threatened the ability
of administrative law judges to assure due process at the hearing
level, the ABA House of Delegates endorsed additional reforms at the
hearing and pre-hearing stages. We recommended the designation of
adjudication officers with supporting staff who, immediately following
the initial denial of a claim, would work with the disability claims
manager to develop the evidence, assemble a file and, where
appropriate, allow the claim. The adjudication officer could obtain
additional evidence necessary to establish a change in medical
condition, or evidence that the claimant was unable to procure due to
cost or other circumstances beyond the claimant's control. Should the
case proceed to a hearing, the adjudication officer could be a
``presenter'' responsible for drawing attention to salient facts in the
record and calling witnesses where appropriate. However, concerned
about the disadvantage such a system might pose to unrepresented
claimants, we also recommended that administrative law judges have
access to investigative sources and be permitted to assert direct
control over the development of the record. Those recommendations still
have value today.
Several proposals over the past few years have suggested closing
the record at some point during the administrative appeal process to
provide a measure of finality. While we hope that evidence would be
submitted as early in the process as possible, we urge that proposals
to close the record be carefully considered. Certainly, the record
should not be closed until the conclusion of the hearing at the
earliest. Even then, claimants who show good cause, such as newly
discovered evidence or a material change in condition, must be
permitted to reopen the record within one year of an adverse decision.
To close the record without allowing reopening under those
circumstances would penalize claimants who may have been unable through
no fault of their own to gather the evidence necessary for a full and
fair hearing. It would also create additional costs for the agency,
because claimants would file new applications simply to submit new
evidence.
Recent proposals have raised anew questions about the role of the
Appeals Council. In 1986, the ABA advocated for a complete study of
Appeals Council procedures and functions to determine whether Appeals
Council review is necessary and to explore possible changes in the
Council's role. We are cognizant of past agency attempts to control the
rates at which administrative law judges allowed claims, so we caution
that any changes to the role of the Appeals Council not compromise the
independence and impartiality of administrative law judge decision-
making making. We therefore urge that the scope of Appeals Council
review be limited to clear errors of law or lack of substantial
evidence. Administrative law judges' findings of fact should not be
reversed without specific documentation and review of the hearing
tapes. Finally, we recommend that if the Appeals Council fails to act
upon a request for review within a specified period of time, claimants
should be deemed to have exhausted their administrative remedies and
permitted to seek federal court review.
Finally, we consider the issue of Article I courts to hear Social
Security appeals. The ABA has consistently opposed legislation to
create Article 1 courts to hear appeals from final decisions of the
SSA. When we testified before this Subcommittee in 1991, we observed
that efforts to establish a separate court appeared to have been
motivated by three concerns: increasing numbers of appeals, issues too
technical for courts of general jurisdiction; and the need for
uniformity of decision-making making. More recent arguments have
included the potential for more cases in the system as a result of baby
boomer claim filings, and the parallels to be drawn with the Veterans
Court of Appeals and other specialized courts. We have posited in the
past that Social Security appeals are not drains on federal court
resources since they are considered by magistrates in many if not all
jurisdictions, and are on the record reviews using a substantial
evidence test. While it may be time to revisit this issue in light of
the more recent arguments, the more significant problem remains the
failure of the Social Security Administration to make accurate
determinations on claims in the earlier stages of the process. Simply
shifting appeals to another court system is not a practical solution,
and indeed could overwhelm a single court.
We attach copies of relevant ABA policies for your reference.
The Social Security Administration has made great strides in
improving access to information, particularly on the Internet, but
there continues to be room for improvement in the appeals process
itself. We are confident that our recommendations would improve the
disability system and alleviate the backlog by reducing the number of
appeals and the reversals upon appeal. We commend the Subcommittee for
holding hearings on these important issues, and appreciate the
opportunity to submit this testimony. We look forward to working with
the Subcommittee and with the Social Security Administration on these
issues in the future.

Chairman SHAW. Thank you.

STATEMENT OF PAUL VERKUIL, PROFESSOR OF LAW, BENJAMIN N.
CARDOZO SCHOOL OF LAW, YESHIVA UNIVERSITY, NEW YORK, NEW YORK,
ACCOMPANIED BY JEFFREY LUBBERS, FELLOW, WASHINGTON COLLEGE OF
LAW, AMERICAN UNIVERSITY

Mr. VERKUIL. Thank you. Mr. Chairman and Members of the
Committee, I am pleased to be here this morning to discuss the
findings and conclusions of a recent study for the Social
Security Advisory Board that evaluates various proposals for
changes in the judicial review structure relating to disability
determinations.
The study was conducted for the SSAB by Jeffrey Lubbers and
myself. Mr. Lubbers is here. It was submitted on March 1, 2002.
Of course, in our testimony we do not speak for the SSAB,
but I believe that the Committee has copies of the study. It
should be made generally available. It was submitted both to
Members of Congress and also to Members of the Judiciary.
In the last few decades there have been several legislative
proposals to modify the current system of judicial review,
including one model that would change the review structure
after the ALJ stage by creating a new Article I court, a so-
called Social Security court, and give it limited Article III
review power to legal and constitutional issues.
There is another proposal that would maintain the current
district court review structure, but centralize court of
appeals review in a special Article III court, the Social
Security Court of Appeals.
While these and other alternatives are not themselves new,
they have become increasingly relevant in light of recent
events. The number of disability claims is expected to rise in
the future for several reasons. One is the impending retirement
of baby boomers; two, the downturn of the economy in the last 2
years; three, the resumption of CDRs by the SSA; and four, the
increasing tendency of private insurance companies to require
as a condition of payment that claimants pursue their
offsetting SSA benefits.
These caseload realities create pressure on the SSA to
achieve more uniform, fair and efficient decision-making and
will likely increase the present time-consuming nature of that
review, which varies between 12 to 18 months.
In addition, during the last decade, a possible model for
Article I and Article III shared review of disability cases has
become a reality with the emergence of a program for the review
of the U.S. Department of Veterans Affairs disability claims.
Finally, in 1994 Congress also made a significant
structural change in the Social Security program by separating
SSA from the U.S. Department of Health and Human Services to
``ensure that policy errors resulting from inappropriate
influence from outside the Agency such as those that occurred
in the early 1980s do not occur in the future.'' I believe Mr.
Pickering referred to those incidents in his testimony.
As a result, the Agency is now independent and better able
to assist in a restructuring of the decision process. After the
SSA signs off on a disability case, either as a result of an
ALJ decision or after Appeals Council review, the losing
claimant has an opportunity to appeal to the District Court.
While traditionally known as a trial court, the District Court
serves an appellate function in connection with disability
review. In this role it is called upon not to hear matters in a
trial de novo, as it usually does, but to apply the substantial
evidence test to the record before it.
Over the years, substantial evidence review of disability
cases by District Courts and even subsequent review by Courts
of Appeals has been a heavily contested matter.
Modification in the role of a District Court was made
necessary because of the size of the disability caseload, which
makes the usual practice of direct review in the Court of
Appeals to create administrative adjudication impractical.
For example, during the decade 1990 to 2000, the number of
new disability cases in the Federal District Courts nearly
tripled from 5,000 to 15,000. In terms of impact upon the court
system, during the 1-year period ending September 30, 2000,
Social Security cases represented 5.86 percent of all civil
District Court cases.
It seems clear that the substantial judicial resources
allocated to disability determinations are not used in the most
cost effective manner.
I do not wish to minimize the significant, symbolic role,
as well as a corrective one that the District Courts play in
our judicial system. Over the years the theoretical advantage
of Article III oversight in SSA cases has become more limited
in practice. District judges increasingly review disability
cases not by themselves directly, but through surrogates.
Article I, magistrate judges take evidence, decide on summary
judgment or remand to the Agency. In fiscal year 1999
magistrates decided over 40 percent of disability cases
throughout the Federal courts and, in some jurisdictions over
50 percent.
In addition to caseload concerns within the District
Courts, there are genuine concerns as to uniformity of
decisions around the country, not only because of widely
varying reversal rates, but also in terms of the need for
better development of the law. A Social Security court would be
a remedy for both of these problems.
Opponents of such a court counter these arguments on a
variety of fronts: the new court would be inconvenient to
claimants; it would produce a windfall of appointments to the
current President; or it might become captured by the SSA or
those that tend to favor a higher rate of denial of claims.
I respect these concerns, but believe that the caseload and
uniformity problems are acute enough to warrant serious
consideration of the changes to the current system.
The current system of administrative hearings with a
somewhat revised system of administrative review, followed by
review in an Article I Social Security court with a right of
appeal on questions of law to the regular courts of appeals, as
with the current Tax Court, is, in our judgment, the best
approach.
This doesn't mean that class actions and facial
constitutional challenges would be heard in this Article I
court. They could still be reserved to the District Courts, as
well as, challenges to SSA rule making which could be heard
directly in the Courts of Appeals.
Concerns about the convenient problem can be addressed by
having regional offices for the SSA disability court. Concern
about politicized appointments to the court would, of course,
be ameliorated by the Senate confirmation process, but could be
addressed more directly by requiring judges to be appointed
like commissioners of independent agencies, with one political
party limited to a bare majority.
Down the road one could foresee the combination of such a
court with the current Court of Veterans Appeals to produce a
Federal disability court with a broader experience and
expertise.
Well, next steps to consider: Whatever happens with the
Judicial Review Proposal, we believe that several steps can and
should be taken at the SSA level. First, the use of attorneys
for the government requires further consideration, as has been
mentioned.
Second, consideration should be given to a long pending
suggestion to closing the file after the ALJ stage.
Third, amending the good cause remand provision in the
current law, section 205(g), should also be considered to
reduce the ease with which District Courts simply remand cases
back to the SSA. These remands fail to produce an effective
feedback loop.
Finally, we believe that much can be done to better utilize
and improve the performance of ALJs in the current process,
separate and apart from the Article I idea. An ALJ appeals
process, which has been mentioned, is something worth looking
at. We have made some initial analyses of that idea and if it
works it could assume the correction and quantity review
functions now performed by the Appeals Council.
By the side of my statement was written ``explain.'' In
connection with the ALJ appeals process idea, I gather that
note is from the staff. I will reserve further explanation for
the comment period.
I would like to thank you and praise the Committee for
their efforts in this hearing.
[The prepared statement of Mr. Verkuil follows:]
Statement of Paul Verkuil, Professor of Law, Benjamin N. Cardozo School
of Law, Yeshiva University, New York, New York
I am pleased to be here this morning to discuss the findings and
conclusions of a recent study for the Social Security Advisory Board
(SSAB) that evaluates various proposals for changes in the judicial
review structure relating to Social Security disability determinations.
The study was conducted for the SSAB by Professor Jeffrey Lubbers of
American University, Washington College of Law and myself, and was
submitted on March 1, 2002. Professor Lubbers is with me today. I
believe the Committee has copies of the complete study.
Background

In the last few decades, there have been several legislative
proposals to modify the current system of judicial review of Social
Security Administration (SSA) disability cases, including one model
that would change the review structure after the administrative law
judge (ALJ) stage by creating a new Article I court structure (a
``Social Security Court'') with Article III review limited to legal and
constitutional issues; and another that would maintain the current
district court review structure but centralize court of appeals review
in a special Article III court (a ``Social Security Court of
Appeals'').
While these and other alternatives are not themselves new, they
have become increasingly relevant in light of recent events. The number
of disability claims is expected to rise in the future for several
reasons: (1) the impending retirement of Baby Boomers, (2) the downturn
of the economy in the last two years, (3) the resumption of continuing
disability reviews (``CDRs'') by the SSA, and (4) the increasing
tendency of private insurance companies to require as a condition of
payments that claimants pursue their offsetting SSA disability
benefits.
These caseload realities create pressure on the SSA to achieve more
uniform, fair, and efficient decisionmaking and will eventually add to
the caseload of the federal courts on judicial review. In addition,
during the last decade, a possible model for Article I/Article III
shared review of disability cases has become a reality with the
emergence of a program for review of the Department of Veterans Affairs
disability claims.
Finally, in 1994, Congress also made a significant structural
change in the social security program, by separating SSA from the
Department of Health and Human Services to ``ensure that `policy errors
resulting from inappropriate influence from outside the agency such as
those occurring in the early 1980s do not recur in the future.''' As a
result, the agency is now independent and better able to assist in a
restructuring of the process.
The Current System of Judicial Review

After the Social Security Administration signs off on a disability
case, either as a result of an ALJ decision or Appeals Council
consideration, the losing claimant has an opportunity to appeal to the
federal district court. While traditionally known as a trial court, the
federal district court serves an appellate function in SSA disability
review. In this role, it is called upon not to hear matters in a trial
de novo as it traditionally does, but to apply the substantial evidence
standard to the record before it. Over the years, substantial evidence
reviews of disability cases by district courts (and even subsequent
review of such decisions by courts of appeals) have remained a heavily
contested matter.
This modification of the role of district courts is made necessary
because of the size of the disability caseload, which makes the usual
practice of direct review of formal administrative adjudication in the
courts of appeals impractical. For example, during the decade 1990 to
2000, the number of new disability cases in the federal district courts
nearly tripled from 5,000 to 15,000. In terms of impact upon the court
system, during the one-year period ending September 30, 2000, Social
Security cases represented 5.86 percent of all civil district court. It
seems clear that the substantial judicial resources allocated to
disability determinations are not used in a cost-effective manner
I do not wish to minimize the significant symbolic role (as well as
a corrective one) that federal district courts play in our judicial
system. But over the years, the theoretical advantage of Article III
court oversight in SSA cases has become more limited in practice.
District judges increasingly review disability cases not by themselves,
but through surrogates: Article I magistrate judges take evidence,
decide on summary judgment, or remand to the agency. In FY 1999,
magistrates decided over 40 percent of disability cases.
In addition to caseload concerns within the district courts, there
are genuine concerns as to uniformity of decisions around the country
not only in terms of widely varying reversal rates, but in terms of
development of the law. A Social Security Court would be a remedy for
both of these problems.
Possible Concerns

Opponents to such a court counter these arguments by saying that
the concerns are overstated and that a new court would be inconvenient
to claimants, would produce a windfall of appointments for the current
President, and might become ``captured'' by the SSA or those that tend
to favor a higher rate of denials of claims.
I understand those concerns, but believe that caseload and
uniformity problems are acute enough to warrant serious consideration
of changes in the current system. I believe that the current system of
administrative hearings (with a somewhat revised system of
administrative review), followed by review by an Article I Social
Security Court, with a right of appeal on questions of law in the
regular courts of appeals (as with the current Tax Court) is the best
approach.\1\ Concerns about convenience can be addressed by having
regional offices for the SSA Court. Concern about politicized
appointments to the court would, of course, be ameliorated by the
Senate confirmation process, but could be addressed more directly by
requiring the judges to be appointed like commissioners of independent
agencies, with one political party limited to a bare majority.
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\1\ Class actions and facial constitutional challenges could be
preserved in district courts, with challenges to SSA rulemakings going
directly to the courts of appeals.
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Down the road, I could also foresee the combination of such a court
with the current Court of Veterans Appeals to produce a Federal
Disability Court.
Next steps

Whatever happens with the judicial review proposal, we believe
several steps can and should be taken at the SSA level. First, the use
of attorneys for the government requires further consideration, and we
are currently looking at this issue for the SSAB. Second, consideration
should be given to the long pending suggestion of closing the file at
the ALJ stage. Third, amending the ``good cause'' remand provision in
the current law (section 205(g)) should also be considered, to reduce
the ease with which district courts simply remand cases back to SSA.
Finally, we believe much can be done to better utilize and improve
the performance of ALJs in the disability decision process, separate
from the Article I court idea. An ALJ appeals process (using two or
three ALJs to review their colleagues' decisions in precedential or
other selected cases) could aid uniformity and correctness, and, if it
works well, could take over the error correction and quality review
functions now performed by the Appeals Council.\2\ The resources
currently spent on the Appeals Council (reportedly over $64 million in
FY 2000) could be used to cover the additional ALJs needed for the two
tier review. Additionally, some Appeals Council members might be
considered for positions as ALJs or as members of the Social Security
Court. Moreover, the SSA should use some of these resources to improve
its policymaking through rulemaking.
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\2\ If the ALJ stage were to be made the final stage, then SSA
should also be entitled to appeal such decisions to the Social Security
Court.
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I compliment the Committee for giving its consideration to these
ideas and others for improving our vital but overly stratified SSA
disability appeals process and would be happy to try to answer any
questions about our proposals.

Chairman SHAW. Thank you, Professor. Ms. Ford, you made
reference in your testimony and I believe Mr. Pickering also
made reference that when someone is going through the appeals
process and their condition changes, that this is sort of an
unamendable process.
An example: Starting out the process, the claimant is
partially blind. He is denied. During the appellate process in
the days that are going by the claimant becomes totally blind.
I would gather from your testimony that the process would
require that claimant to start the process all over again and
claim total blindness. Is that what you are saying?
Ms. FORD. Well, as I understand the process, after the ALJ
hearing new evidence would be allowed only if it related to the
period before the ALJ hearing. So, depending on when that total
blindness occurred, it might require him to start over, if I
get that correctly.
Chairman SHAW. I see. So, it would be like regular court
process. Once a judgment is made, if you are appealing an ALJ
process, that the record would stay intact. Is that correct?
Ms. FORD. It is closed somewhat. The period of disability
before the hearing is what is being looked at. If you have new
evidence that relates to that period, as I understand, you can
bring that evidence in at that point. We think that is
important because people keep on seeing doctors.
Chairman SHAW. I think it is important to that point. I
would like to get the judges to comment on that because I want
to be sure this Committee fully understands the process here.
Would either one of you judges comment on that?
Mr. BERNOSKI. The current process is that the record is not
closed after the Administrative Law Judges hearing. In theory,
the Appeals Council is not to receive new evidence, but in fact
it is done routinely.
The record isn't ever really closed. Even before the
Federal court evidence is submitted to the Federal court. It is
usually attached to the brief. The judge considers the new
evidence as part of the brief.
I understood Marty Ford's comment to be addressed to
closing the record, the proposal to close the record after the
Administrative Law Judges hearing. Now the record is not
closed.
Chairman SHAW. When the appeal is made to the Federal
District Court from the Administrative Law Court, does it go up
as a record or does the Appeal Court take testimony?
Mr. BERNOSKI. No. It is certiorari. It is on the record.
Chairman SHAW. So, it is simply, it is as any other court
process?
Mr. BERNOSKI. Yes, Mr. Chairman.
Chairman SHAW. I'm glad you cleared that up. Another point
that I would like to explore here for just a moment is how long
do these cases usually take in the courtroom?
Mr. BERNOSKI. Before the Administrative Law Judges?
Chairman SHAW. Yes, sir.
Mr. BERNOSKI. I would say a case before an Administrative
Law Judge ranges from 45 minutes to an hour and a half, maybe 2
hours on the outside.
Ms. MCGRAW. Yes. In my experience, on average it is about 1
hour. That brings me to that other question. In 2000, last
year, there were two cases that were disposed of per day as an
average. This would go from a high of about four and a half
cases that were heard down to slightly less than one per day.
What is the variance and how do you spend the rest of your
day and how many cases do you all hear per day on the average?
Ms. MCGRAW. I would say that on average I hear about two
cases a day. I think it is important to realize Social Security
is looking for numbers here, but I think it is important to
realize that each claimant is entitled to a full and fair
hearing.
I think when you get up over two to three cases a day,
because you have to prepare for these hearings. I do not go
into a hearing without reading all the evidence concerning that
claimant. I then hold the hearing and have to write directions
and actually review the decision.
So, I think there is an outside limit on what a judge can
do effectively and in my view two to three cases a day is that
limit.
Chairman SHAW. How thick are those files when you receive
them?
Ms. MCGRAW. They range from a half an inch to a foot high,
depending on how much treatment the claimants have. That is a
very good point. Across the country you have different sized
files based on the medical treatment that is available to
citizens in particular parts of the country.
Chairman SHAW. Do you have clerks working for you?
Ms. MCGRAW. I have no one directly working for me. We are
in a pooled system. I believe that if I had someone that I was
working with it would be more efficient.
Chairman SHAW. You have, as you say, a pool system. Are
they reviewed by staff for you, are the files reviewed for you
and summarized when they come to you or are you just given the
raw file?
Ms. MCGRAW. When the file is given to me it is what we call
``pulled.'' The exhibits have been put in chronological order.
That is all that has been done to the file. I personally go
through and read every piece of evidence in the file. I don't
think it is fair to a claimant not to have done that.
Chairman SHAW. Are there depositions in the file or is that
part of the process?
Ms. MCGRAW. No. By and large, depositions do not occur in
these cases. We are dealing with medical evidence, physical
therapy, statements of activities of daily living. There is
rarely a deposition unless there has been a workers comp case
or something like that that the claimant has been involved in.
Chairman SHAW. We have heard about incomplete medical
records that sometimes show up. Do you order the claimant to go
back and do you bring the doctors in? How do you handle that?
Ms. MCGRAW. If the claimant is unrepresented, the claimant
has filled out a form that States his medical sources. If a
claimant is unrepresented, I ask someone on the staff to write
to the sources that the claimant has identified.
If a claimant is represented, then I expect the
representative to go out and get that evidence.
Chairman SHAW. Is there any sworn evidence that comes
before you?
Ms. MCGRAW. At the hearing the testimony is sworn.
Chairman SHAW. It is all sworn in at the hearing. These
medical records can come into consideration without sworn
testimony. Is that correct?
Ms. MCGRAW. Absolutely. They are almost never sworn.
Chairman SHAW. Do you find in your experience that--and
this is getting in the area of represented and non represented
claimants--I would assume that if someone has a serious claim
and represented by a lawyer, that perhaps the lawyers screen
their cases somewhat. So, if somebody is just unhappy with the
decision but without legal grounds, I would assume that
probably if a lawyer is representing the claimant--the claimant
probably has some grounds or the lawyer probably wouldn't have
taken the case.
Do you generally find that when the lawyers are involved
that there are stronger grounds on the average?
Ms. MCGRAW. I don't think that is necessarily so because I
think there a lot of claimants out there who simply don't know
how to go about getting an attorney. They may have a very good
case. Some lawyers screen. There are other lawyers who are
willing to take the cases of almost any claimant.
On average I would say that cases where the claimant is
represented, there has probably been more preparation of that
case and a greater understanding of what is necessary to meet
the disability standards.
Chairman SHAW. I would assume that most of the State bar
associations would represent this as a specialty, representing
claimants for Social Security, and they could actually list
that as qualified.
Ms. MCGRAW. Yes, and when a claimant files we send out a
form that gives them information about sources of legal
representation.
Chairman SHAW. A list of lawyers?
Ms. MCGRAW. Not specific lawyers, but places to go to look
for lawyers.
Chairman SHAW. That is interesting. What is the general
quality of the lawyers who practice before you? That is not a
fair question, but I am going to ask it anyway.
Ms. MCGRAW. By and large, it is good, although in any forum
like this there are those that don't do such a good job. I
think that Social Security takes the view that the job of
developing the record is the Judge's. There are some lawyers
out there who do take the view, ``Judge, it is your job. We
will let you do it. Ultimately, it is your responsibility.''
Unfortunately, that happens sometimes, but it is not the
normal course of events.
Mr. MATSUI. Thank you very much, Mr. Chairman. I want to
thank all of you for your testimony.
Let me follow up with Ms. McGRAW. on the questions that Mr.
Shaw was asking. My understanding is that there are groups of
lawyers in various communities, Sacramento, for example, where
I represent, in which they kind of specialize in Social
Security claim issues or workmen's comp claim issues.
We have a law school in Sacramento. It is McGeorge School
of Law. Oftentimes the lawyers will recruit some of the law
students to participate in this. I would imagine that law
students can come before you as well. I have gone through the
process with some of the professors and some of the lawyers and
some of the students over the years.
I find, as you suggest and I think that Mr. Shaw was
suggesting, some are really good and some are not so good. You
get all kinds of variations here. Do the Administrative Law
Judges? They come to know this over time, they are more careful
in some cases than they need to be in others, I would imagine.
How does that affect the issue of closing the record, which
obviously is the big issue in terms of the point of view of the
ALJ judges in terms of why the case never closes? That is why
you have somewhat a backlog here.
Can you discuss that with us a little bit? Go ahead, and
then I will follow up.
Ms. MCGRAW. Generally, when someone is represented, I leave
it up the representative to develop the record. I will often
identify pieces of evaluated that I feel are missing and need
to be obtained. I leave it to the representative to do that.
So, the closing of the record, if a representative is not
doing their job, it might disadvantage a claimant. I agree with
you. Representatives are being paid a lot of money, and I think
they have an obligation. I think it is part of the process that
they should be held to that obligation to properly develop the
record.
Mr. MATSUI. It is so difficult to know when that happens
and when that doesn't happen. Obviously Mr. Pickering----
Ms. MCGRAW. I can honestly say, there is discussion that
there are some attorneys who hold back evidence and then they
spring it on the Appeals Council. I don't see that happen very
often. I don't believe attorneys are doing that and
representatives are doing that. I think what sometimes happens
is a claimant loses and then a representative will say, ``Well,
I am going to send this claimant to another doctor and have
another opinion.''
Then that opinion gets offered at the Appeals Council level
and as a result the case gets remanded because it raises a
question about the decision. That is a somewhat frustrating
situation for ALJs.
Mr. MATSUI. I can appreciate that.
Chairman SHAW. If you would yield to me just for a moment,
I want to develop this line of questioning a little bit because
I am confused. I am hearing an inconsistency which probably
isn't there.
Do you mean after you rule in a case that the claimant can
go get another opinion from another doctor and that would be
admitted at the appeal level at the District Federal Court?
Ms. MCGRAW. I have had that happen on multiple occasions.
That is not unusual.
Chairman SHAW. Well, then the record is kept open as it
goes up the appellate process.
Ms. MCGRAW. We do not close the record. We have no
authority right now to close the record.
Chairman SHAW. So, you can get reversed on evidence you
never saw?
Ms. MCGRAW. I won't get reversed. I will probably have the
case sent back to me, and that happens a lot.
Chairman SHAW. Okay. Thank you.
Mr. MATSUI. On the contrary side of that, and I have a
totally open slate on this because this is kind of like
Groundhog Day to me. This has been like a lot of times we have
had discussions on this and the caseload. The backlog just
keeps growing more and more and we really need to solve it.
I really appreciate the Chairman holding these hearings and
really trying to come to grips with it. In your opinion, and of
course I am asking you to speculate and I am somewhat reluctant
to do this kind of--in a formal hearing, because I don't want
to create a bias for you. Is it in your opinion that the
lawyers or representatives of the claimants--do you think they
are gaming the system when they do this?
I mean I know that there are a lot of doctors in various
communities that specialize in these areas. You know, you can
cherry pick, I guess, and pick and choose. You see, probably,
the same doctors in the reports over and over again.
Tell me, is that a gaming of the system? Do you think there
is some of that going on? Again, if you don't want to answer
it, that is fine, because you do have to maintain your
independence here.
Ms. MCGRAW. I think our representatives are putting their
best foot forward for the claimants, trying to get the case
allowed. I do see doctors who are used repeatedly by particular
representatives. The system allows that. I am not sure how to
correct that, to tell you the truth.
Chairman SHAW. Mr. Lewis.
Mr. LEWIS. What is your opinion, the panel, of continuing
to keep the record open or closing the record? Are you in favor
of closing the record?
Mr. BERNOSKI. The Association of Administrative Law Judges,
and I believe most administrative law judges in the field, are
of the opinion that the record should be closed because this
provides administrative finality to the adjudication process.
In my opinion at some time the record has to be closed and
the case has to come to an end. We believe that the best point
for that is at the conclusion of the ALJ hearing when the
decision is actually signed and issued. At that point the case
record should be closed.
There should be at that point a process for an appeal on
the record, a certiorari appeal on the record that has been
compiled.
Mr. LEWIS. On the question of employment representatives,
should there be a system of certification for these claimant
representatives or some standard procedures that are set forth
for these representatives?
Mr. BERNOSKI. Well, our association hasn't taken a position
on that issue, but I will offer my opinion. I would say yes. It
is not uncommon in the government system of administrative
hearings to have some type of a certification process by the
government Agency. I think it would be appropriate for the
Social Security Administration to do that.
We have a system in place, but it is not very well
developed. I think there could be work done in this area. It
would provide protection to the claimant to have the
government, the Social Security Administration, certify the
claimant representatives.
Hopefully we would have better quantity representation. You
must understand that not all of the representatives are
required to be attorneys. We have people representing claimants
before Administrative Law Judges who are not attorneys and do
not have the skill and training of an attorney.
In my personal opinion, that is probably where most of the
trouble is, in that area as opposed to attorney
representatives.
Mr. LUBBERS. If I could add a quick point on that. With
respect to attorneys, under the Agency Practice Act, all
attorneys are deemed to be qualified to participate in Agency
proceedings. So, a special law would be needed to allow
certification of attorneys in SSA cases. With respect to the
non-attorney representatives, however, it is a different
matter.
Mr. PICKERING. On the closing of the record, the American
Bar Association takes the position that if you do close the
record, it should not be until after the ALJ hearing, but there
should be a good cause exception for claimants who have been
unable through no fault of their own to gather necessary
evidence.
The alternative, if there is no additional evidence, is for
the claimant to start a new proceeding. There is no res
judicata here and I would like to emphasize, even though
representation is desirable, we are not dealing with an
adversary process.
The Social Security Program is a social insurance for the
benefit of the people of this Nation. Consequently, they are
entitled to some help. That is one of the reasons why we
suggested that the ALJs be able to take a more active role in
questioning and in trying to assist people to get a full record
so that rights are not arbitrarily or without reason denied.
Mr. LEWIS. Just following up on the adversarial role, you
know, there has been some that believe that the Social Security
Administration should be represented at the hearing. What is
your feeling on that?
Mr. VERKUIL. Maybe I can offer something on that score. In
the study that Jeff Lubbers and I are doing for the SSAB, we
will explore this more fully. The following case serves as a
basis for government representation.
The first assumption is that when this process started out
there were no representatives for either side. The ALJ in the
Richardson v. Perales case in 1971 was approved by the Supreme
Court as having a three-hat role: represent the claimant,
represent the United States, Foreign Sales Corpration, and be
an objective decider.
Now, over the years one of those hats has dropped off,
since the claimant is now represented in 80 to 90 percent of
the cases. That is the reality. So, now the judge has got two
hats, is that right? This puts the judge in an awkward position
vis-a-vis the claimant because by trying to question the
claimant the judge often feels, he or she may be showing a kind
of bias against the claimant.
Now, the process looks imbalanced. So, the notion would be
to give the judge the independent role, keep the one most
important hat, but give the other one over to a government
representative. This representative could also serve in
preparing the case. Importantly, if there are two lawyers, or
even if there are two non-lawyers, before a hearing, cases can
get decided without having to go to a hearing. That happens
frequently in other settings. Certainly in our criminal justice
system it happens all the time. So, there is that opportunity
and that is the case for it, I think.
Mr. LEWIS. So, obviously, you feel like this would speed
the process up.
Mr. VERKUIL. It could have that effect. I don't want to be
committed to a precise definition because we really haven't
finished the study. But, of course, that is one of the issues
that would be explored, i.e., whether it would have a positive
effect.
Mr. LEWIS. Thank you.
Chairman SHAW. Mr. Becerra.
Mr. BECERRA. Thank you, Mr. Chairman. Thank you again for
this second of two hearings on this matter.
Thank you all for your testimony.
Let me ask a series of questions, and I will try to go
through them quickly. Do disability examiners follow precedent
in reaching their decisions on whether or not a claimant
deserves or does not deserve benefits?
Ms. MCGRAW. Well, they have objective medical standards
that they use. Court precedent is not really a part of their
world. They follow the POMS. In my experience from reviewing
these cases, I would say that they are driven by the objective
medical evidence in the record.
Mr. BECERRA. So, it is principally a fact-finding mission
that these examiners undertake.
Ms. MCGRAW. What is critical is developing the record
properly, getting the medical evidence that relates to the
claimant's impairments.
Mr. BECERRA. Now, do the examiners have any interaction
with the claimants?
Ms. MCGRAW. By and large they do not. They may call them on
the phone. I see phone contacts asking questions of the
claimants. If you are familiar with the prototype, with the 10
States where there has been some change at the DDS. The idea
was to have a face-to-face contact at the DDS level. The
Commissioner has now eliminated that face-to-face contact with
the claimant, even in prototype States.
Mr. BECERRA. Is that working well?
Ms. MCGRAW. It has just started. I can't tell you. I think
that most people believe that face-to-face contact assists in
deciding a case.
Mr. BECERRA. That would be my gut reaction as well, that
you are trying to make a judgment on someone's disabilities
which in many cases is emotion. To not have a face to face, to
have a paperwork administrative act occur which could be life
or death for an individual probably doesn't help that
individual feel comfortable with the final decision if it is
adverse.
It just seems to me that you add to the mounting number of
days and delay that occurs. It is kind of horrific to see that
at the very final stage of this process at the Federal court
level, there is a 64 percent, nearly a two-thirds result of
either remand or granting of the claimant's case. Two-thirds,
if we had that in our judicial process, we would be swamped
from here until eternity. It just doesn't make any sense that
64 percent of all the cases by the Federal court have to be in
some way returned to the system to be reviewed.
It seems to me we don't do enough at the initiative stage
and if it is accurate that most of these claims that have some
difficulty take up to 3 years to complete----
Chairman SHAW. At what level is that? Is that from the
District Court?
Mr. BECERRA. You are correct, Mr. Chairman. The numbers
that I am showing from the Social Security Administration show
that 6 percent of the cases presented to the Federal court are
allowed and 58 percent of the cases are remanded, which could
mean at the end of the day the ALJ still dismisses the case or
finds adversely to the claimant.
The fact remains, it has to go through the process again.
So, you are adding additional time, delays, grief for the
claimant. Even in our court system, which most people complain
about to begin with, I guarantee you, two-thirds of the cases
that go to the court on the appellate level do not have some
type of positive or recurring activity.
So, we have got to deal with that. If it takes that long,
it just seems to me that we have to do a lot more up front and
that principally means, not just at the examiner level, I would
hope, and I know there have been some recommendations, that we
talk about the collection of evidence.
I would think that we could do a much better job at the
administrative level of telling claimants, who are not
claimants at that point, they are just hoping to be
beneficiaries, what they need to do to get the process running.
That means give them a better sense of what kind of evidence
you all look at so they understand what they need to provide in
terms of medical records; they understand that certain evidence
that may be provided by non-medical individuals could be
helpful in their case.
It just seems that as you try to prepare a better record
that we can do a lot more through the administration, on the
government side, of helping prepare the case and giving
claimants the information they need. Perhaps it is a brochure
that tells them, ``Get ready if you think you are qualified.
This is also what you will have to go through if you have to
appeal.''
So, they know what they need to keep so they can remember
the name of that one physician who said this or that, who never
really did a document at a particular visit to an office or
something along those lines.
Time and complexity of cases. I wouldn't go into because I
think I just did. It seems to me that if you can't get it
resolved well at the examiner stage, you are in real trouble.
It just seems that for most of these folks, many of whom are on
fixed incomes, it is a travesty to expect them to now try to
find an attorney and in many cases go without an attorney and
make it through the process.
Mr. Chairman, I see my light is on. Let me just have one
last question.
Should the government be a party in these ALJ proceedings?
I know that has always been a question that is out there. I
guess if you have a process in the sense that the government
prosecuting its case and being seen as an opposing party to the
claimant, it creates an adversity and it makes it difficult.
At the same time, perhaps if we help rid ourselves of the
frivolous cases because now you have the government prosecuting
this matter to try to engage the claimant in a more robust
collection of evidence.
Perhaps what we do is also make the claimant better develop
the case. Of course, if you have a claimant who is not prepared
or doesn't have good representation, you are now facing Goliath
in the government.
Is there any thought on what we should do in terms of that?
Mr. HILL. Yes, I think at OHA one of the problems and one
of the things that takes a lot of time is developing the case.
The simple fact of the matter is cases are not as well
developed as they should be coming up.
Now, a lot of that may be due to the extreme time
constraints the DDSs, the State agencies are under. The fact of
the matter is, we get a lot of cases in OHA office that are not
well developed. We also have a lot of cases that come in that
when you have worked in the business long enough you look at it
answer say, ``This is probably a pay.''
The evidence isn't there. You have to go get it. There are
a couple of ways to get it. One of the things that was done in
the past, when we had the Senior Attorney Program, we reviewed
these files. If it looked like a pay and the people were
reported, we could make a call to the representative. When the
representative at that point recognizes that these cases that
we were looking at as probably pays, you would be surprised how
fast evidence can come in under those circumstances.
Mr. BECERRA. I agree.
Mr. HILL. That is one way to handle it. One of the
advantages to having somebody represent the government is they
will be responsible for developing the case. Very quickly, I
think what is really wrong with OHA is that cases sit and sit
and sit. They are either in line, we are waiting for evidence
or there are some time periods that have to run.
The basic problem is they are sitting there waiting for
somebody to do them. The quicker we get through them, the
quicker we have somebody who can make a recommendation, ``We
should go after this real quick because it looks like pay,''
the better off we are.
Mr. BECERRA. In that regard, don't we have funding that is
going in the opposite direction of caseload? The SSA has less
money today to administer these cases than it did before and
its caseload is ballooning.
Mr. HILL. It is going up and we need a better way of
triaging those cases that don't need to go to the judges
because that is time consuming. Necessarily, it involves all
kinds of assets. There are a lot of cases that they really
shouldn't be involved in.
Ms. MCGRAW. I would suggest, if that case can be paid when
it comes in the door, DDS didn't do its job. It never should
have gotten in the door. It should have been allowed earlier in
the process.
Mr. BECERRA. Thank you, Mr. Chairman.
Mr. BERNOSKI. On the government representative, as Mr.
Verkuil indicated, there is a definite probability that this
could speed up the process.
During last week's hearings, it was demonstrated quite
conclusively that the case doesn't get active until the
attorney from the claimant gets involved in the case. That
unfortunately happens most generally at the Administrative Law
Judge level. If the government also had an attorney involved in
the case at that level, these two attorneys could more
completely develop the case at an earlier time. There could be
a resolution of the case, as Mr. Verkuil said, on a compromise
basis or on a settlement basis as is normally done in the court
system.
I think that would be a beneficial aspect that would help
the claimant in the process.
Chairman SHAW. I think Ms. Ford wants to jump in here.
Ms. FORD. Yes. We are opposed to having SSA represented. I
think that changes the entire dynamic and the relationship
between SSA and the claimant.
Chairman SHAW. Yes.
Ms. FORD. The SSA is supposed to be helping the claimant
get that evidence. To put SSA in a position of being in an
adversarial role against the claimant totally changes things. I
think it would have to change the nature of an ALJ hearing. You
couldn't have SSA in two roles in that hearing.
I think the perception of unfairness of the process would
be tremendous. This Subcommittee actually has testimony,
significant amounts of testimony from the government
representation project in the early 1080s that was submitted on
behalf of claimants.
I would be happy to dig that out and resubmit it as it
stands, but it is in the record, documenting the problems that
claimants encountered in these types of very adversarial
hearings.
Mr. BERNOSKI. Mr. Chairman, I think a point has to be made
that having the government represent itself helps expedite the
case, but if it becomes a prosecutor, then Ms. Ford is correct.
It becomes not only an adversarial process, but a process where
most claimants won't be able to hold their own. It would cost
them additional money for the new attorneys that they would
have to hire.
We are trying to figure out a way to promote the full and
expeditious development of the record without turning it into a
strong prosecutor process.
Mr. VERKUIL. Excuse me. Maybe the word ``prosecutor'' crept
in when I drew an analogy to the criminal process. If so, Mr.
Becerra, I withdraw the word. That is an inappropriate
reference. Social Security attorneys do not do a prosecutorial
function. There is a claimant helping function. It would still
be that.
We should focus on the fact that Social Security is the
only ALJ setup where there is no government representation, or
one of the few I can think of.
In most cases, an ALJ presides over a formal hearing. So,
that to bring an attorney in would not be an extraordinary act
in terms of the ALJ's experience. But surely, even if that
happens, the nature of the process still would be different
from formal ALJ proceedings. It wouldn't be as adversarial. It
might be more so in some contexts, but it would still be a
claimant helping process and the statute wouldn't change in
that regard.
Chairman SHAW. I want to refine a point. Mr. Becerra
brought out a statistic which, on its face, appears to be
startling, but it may not be as startling as it appears to be.
That is that 58 percent of the cases appealed to the District
Court are remanded back. That, by the way, is up from 48
percent in the year 2000.
What percentage of the cases are appealed? We have to know
that figure first before we know how startling that 58 percent
is.
Mr. VERKUIL. I think I can help you with that. There are
approximately 120,000 decisions at the Appeals Council level
and about 75 percent are denied, so that leaves you about
90,000 cases that come to the Appeals Council and have not been
paid. Of that 90,000, the Federal court only gets, say, 15,000.
So, the percentage would be--we can do the math. It is 15 or 16
percent.
Chairman SHAW. About 15 percent.
Mr. VERKUIL. There is a lot of drop out.
Chairman SHAW. Mr. Brady.
Mr. BRADY. I agree with Mr. Becerra's observations about
improving the initial decision-making in this whole process. As
to the panel, I really appreciate your testimony today because
it seems like this process is just ripe for a major overhaul.
Not only because between this and SSI we are talking about 5
percent of the Federal budget, not just because there are very
tragic individual consequences for not doing this right, for
cases.
There are so many areas of improvement open in this whole
process, it just cries out for a major change in how we handle
all this. The more homework I do, the more I am becoming
convinced that the process is legally top heavy in the sense
that we have an emergency room full of non-emergency cases. All
important, but many which could have been treated accurately,
faster, better and sooner in the process.
By its nature, the legal process in the courtroom is
deliberate. It is complicated and it is expensive. My thought
is that it ought to be reserved for, not only as part of our
due process, but reserved for the cases that are the most
complex, where the decisions of fact and prospective really are
difficult. They require the expertise of a legal mind in going
through that.
The only way that works is if we dramatically strengthen
the initial process.
Many of you offered good ideas on how to do that. As to the
issue of how do we create an appellate model that works well,
that really applies those legal resources to those truly legal
cases. What appellate models would you suggest we look at that
this Committee or the Social Security Administration look at if
we are to undertake a major overhaul in the appeals process?
Mr. VERKUIL. Well, we have several alternatives. One, as an
appellate model in the court system, Mr. Brady.
Mr. BRADY. Well, within the whole process.
Mr. VERKUIL. Oh, within the whole process.
Mr. BRADY. Whether it is equivalent to the U.S. Department
of Veterans Affairs (VA) or Workman's Compensation.
Mr. VERKUIL. We have a VA system which now has become much
more formalized where there is a Court of Veterans Appeals and
it reviews decisions. Then there is appeal on legal questions
to the Federal circuit.
We also have a Tax Court which as an Article I court,
resolves most cases involving taxpayers even though there is a
District Court option. That is, the taxpayer has a choice
between an Article I or an Article III determination. The
Article I is vastly preferred. About 90 percent of the cases go
through an Article I court and then on to an appellate review
in the Federal court system. So, that is another model.
Mr. BRADY. Well, which one, in your opinion, works better
in the whole process of fair, timely, accurate decisions as
early in the process as possible, and then the legal system
really gets to the heart of the more complicated matters?
Mr. LUBBERS. It is a very hard question because there are
so many levels in the process. I think that most of the
comments from the panel today were that you want to try to
resolve as many cases as you can at the beginning, when the
stream of cases is at its widest. So, there are a lot of
recommendations that have been made to improve the initial
disability determination service review of cases.
Then the stream narrows a little bit at the reconsideration
level. Some people have suggested getting rid of that. You have
the ALJ process, Appeals Council and court. So, you have a
multi-stage process and when you change one process, it affects
all the other processes.
Mr. BRADY. Back to the question of which, in your opinion,
which model ought we look at for significant improvement.
Mr. LUBBERS. I think the basic structure of having an
initial determination process at the State level is sound. I
will consider perhaps not having a reconsideration level before
going to the Administrative Law Judge system for the full
hearing. Then the question is, do you need further review at
the Social Security Administration Appeals Council?
The panel has differed on that. I think the basic structure
of maintaining an Administrative Law Judge hearing is something
we can all agree on.
So, I don't have a major structural change of the process,
but I think you have to look at each step and make changes. We
think a Social Security Court could help.
Mr. VERKUIL. The reason why, and I would say in response
that we came out favoring an Article I, Social Security Court,
precisely because in the current system, in the Article III
system, there is no feedback loop.
These Federal District judges get 15,000 to 20,000 cases a
year. They remand more than half, as was pointed out. That
remand is a total disconnect. It doesn't even go back
necessarily to the same decider. Nothing is learned and there
is no education and uniformity gained from that kind of a
process.
An Article I process, however, with a Social Security Court
who are experts in the field, could be more closely tied to
educating what was wrong. If you have to remand a case, you
want the decider to learn why the case was remanded and to get
it correct the next time.
An Article I system has a feedback loop that doesn't exist
in Article III because it is just two different worlds. If you
create an Article I court with rule making and other powers
that would be provided through the Agency, you could define
issues more clearly. You could have more accountability at the
administrative system, and there would be connections.
So, that is the argument in favor of it. That is why we
would say we think the case for Article I is worth
reconsidering.
Mr. PICKERING. The view of the ABA on this is that it may
be time to revisit whether we change the system or judicial
review between Article I and Article II courts.
The real problem here, as you have identified, is getting
the system right at the beginning. Everything else will fall
into place if we have a much better intake system, much better
development of the record and help given to these people, many
of whom are not represented by attorneys and need the help of
the tryers of fact as to what are the deficiencies in the
record. The better the product is from the beginning, the more
likely it is that everything else will fall in place.
Mr. BRADY. Thank you.
Mr. BERNOSKI. It is our opinion, as we indicated in our
written statement and during the testimony, and I agree with
the other panelists, that the first thing that must be improved
is the initial intake, review and decision. It should be based
upon the legal standard that the ALJs use.
The case is then appealed to the next level, and that is
where the government representative is important. The
government representative would develop the case as needed and
would compromise or settle the cases that could be settled at
that point.
After the Administrative Law Judges hearing, we are of the
opinion that the next level of appeal, if there is going to be
one in the Agency, should be, to a three judge Administrative
Law Judge panel. That panel is based on the Bankruptcy Court
model, which is working well. That would give a higher and more
careful level of review.
After that, we believe the case should go into the Federal
District Court because that seems to be the preference of the
bar. Congress also seems to be very comfortable with the
Federal District Court review of Social Security cases.
Although there seems to be an interest in exploring a change at
that level.
Mr. BRADY. Okay. Thank you, Mr. Chairman.
Chairman SHAW. Ms. Ford, go ahead and then Mr. Matsui has
some questions.
Ms. FORD. First of all, I am in an agreement with the other
witnesses who have said that the front end is the important
place to be putting our time and effort--in case development
and evaluation. From our perspective, the process needs to
remain informal for the claimant because this is a very
difficult process.
Not all medical evidence may be available at all points
along the process. We have to help that claimant put as much
forward as possible.
I think one point that keeps getting missed is the fact
that submitting a new application is not a valid choice for
many people. If you are applying for Title II benefits, you
must apply for benefits for a certain period of time to keep
your connection to the recency of work--you must have worked 20
out of the last 40 quarters before the period applied for.
So, if your case has been denied, and then you are forced
later to reapply, you may in fact lose eligibility permanently
(res judicata) for benefits that you in fact should have been
found eligible for.
I am not sure that the question at higher levels of appeal
should be, ``What was wrong in the earlier decision so much as
the question might be, what more do we know about the claimant
now at this later stage of the process?'' Thank you.
Chairman SHAW. Well, Ms. Ford, just to expand on that 1
second, though, let's assume none of these guys get into the
case and the claimant is settled very, very quickly to
everybody's satisfaction and then several years later, perhaps
someone who was 50 percent disabled becomes 100 percent
disabled. They can go back, can't they, at any time on that?
Ms. FORD. The date of application is going to be important
for the back benefits for a lot of folks. Also, in Title II
their claim of when disability began has to be within that time
period of having worked 20 out of the last 40 quarters.
In Title II, there is the potential for waiting too long
and losing benefits or losing eligibility.
Mr. LUBBERS. I want to make a quick point, Mr. Chairman.
Chairman SHAW. I am confused by that.
Mr. LUBBERS. You mentioned a 50 percent disability. My
understanding is that in the VA system you can be partially
disabled, but in Social Security, you are either disabled or
you are not.
Chairman SHAW. That's correct.
Mr. HILL. There is another real misunderstanding, when you
file an application for disability insurance benefits, you
allege an onset date. That onset date is not the date you file
the application. I could file an application today alleging I
was disabled December 1, 1988. If I have the evidence to show
that I was disabled December 1, 1988, I will be awarded
benefits, provided my case is approved.
Chairman SHAW. One of the disadvantages that we have, and
it probably is obvious from some of the questions that we are
asking. We are trying to help reform a system that we have
never seen before, even though you are a lawyer, aren't you?
Mr. BRADY. No.
Chairman SHAW. No? You plead not guilty?
Mr. BRADY. Not guilty.
Chairman SHAW. Bob and I are reformed lawyers, but neither
one of us have been through this process. Most lawyers haven't.
Mr. Matsui?
Mr. MATSUI. May I ask, Ms. Ford, because I did ask the
Administrative Law Judges about the closing of the record, I
would like your thoughts? Perhaps, Ms. Shor, if you want to add
to it, if you have any new thoughts on this.
Ms. FORD. Well, we think the record should remain open as
it is allowed to be now. There are some limitations. I
understand what has been said earlier, but as I understand it,
there are some limitations on what new evidence could come in
after the ALJ level or the appeals level. It depends on whether
the new evidence relates to the period of time before the ALJ
hearing.
There are some limits on new evidence. There is, therefore,
some pressure on the claimant and the representative to get
evidence in early.
This is so important for the claimant, I don't think that
we should be closing the record before it is absolutely
necessary.
If it can be handled by remanding--as it is now--or
otherwise taking a look at the evidence, whatever is available
that tells us more about that claimant and whether or not they
have an impairment that is disabling ought to be looked at.
Chairman SHAW. Did you want to add to that?
Ms. SHOR. I think with the discussion earlier about Federal
court, the statute provides that there has to be good cause and
evidence has to be not cumulative and has to be new and
material. The evidence that is going into Federal court cases
is already quite tightly restricted.
I don't think you would want a situation where someone with
perhaps diverse symptoms and an undiagnosed case at the time
they appeared before an ALJ, and was subsequently given a
diagnosis of Multiple Sclerosis, for example. This happens
quite frequently because it is a condition that is so difficult
to diagnose. It seems more administratively efficient to deal
with that case on remand when in fact the policy of the Social
Security Administration is to send Federal court case remands
back to the ALJ who heard the case in the first place; rather
than to tell that person to file a new application and go back
to the front of the line.
That is the important reality. People with new evidence are
not going to disappear. If the door were slammed in their face
immediately and they were told, ``Under no circumstances and
for any reason new evidence will not be accepted'' the Social
Security Administration is not free from dealing with that
person. They will go back to the front of the process, file a
new application and frequently will find themselves
disadvantaged by that choice.
Mr. MATSUI. Thank you.
Chairman SHAW. Well, we have learned about a lot of
problems. I think it is going to take, a lot of independent
study. Professor, perhaps you will come in with some answers
that we will have a hearing on at a later date with your study.
Perhaps the American Bar Association might come in with some
study and suggest recommendations.
The problem really is going to have to be looked at by the
people who are in the system and know the system well as to how
to streamline it.
One further question I do have, though, and I would like to
ask this of both the judges. What is your current case backlog?
I am concerned exactly as to where the delays are.
Ms. MCGRAW. It varies widely from office to office. Within
my office I am now processing cases, requests for hearing that
have come in our office in February of this year. We are pretty
caught up. Then there are other offices around the country that
are woefully backlogged.
Chairman SHAW. Is that because of the--I will try to put it
delicately, but I am not sure I can--about the work ethic of
the judge involved?
Ms. MCGRAW. No, I can't really tell you why that is. Mr.
Bernoski, you may have a better understanding of it. I don't
know the reason. I know that that is the situation in our
office.
Chairman SHAW. In Federal courts the work ethic of the
judge has a lot to do with it.
Ms. MCGRAW. It does, there is no doubt about that.
Mr. VERKUIL. It varies greatly at all levels,
administrative law judges and District judges.
Chairman SHAW. Some judges have a huge backlog just because
they are not working enough.
Mr. BERNOSKI. The overall backlog in the Agency, as we
indicated, has grown. I believe it is around 490,000 cases or
in that neighborhood at this point.
As Ms. MCGRAW. indicated, that backlog does vary between
individual offices for various reasons. Some offices just have
more cases coming in. Some have more Administrative Law Judges.
Some have more staff. So, to some extent, it is particularized
in the offices.
But the overall backlog for the Agency is growing. The HPI
has hurt us to the extent that, as Ms. MCGRAW. testified, the
confusion that has been caused by the API process has allowed
fewer cases to be set up for hearings. That has caused backlogs
to grow, together with the filings of more cases.
Chairman SHAW. What is the average backlog in your area?
Mr. BERNOSKI. In our office, we were relatively current,
but it is growing now. There seems to be more cases coming in.
Chairman SHAW. What is current--February?
Mr. BERNOSKI. For us current is about 6 months.
Chairman SHAW. I see. Thank you all very much. We very much
appreciate it. It has been very enlightening. We are trying to
build some knowledge in this area, which I think is
tremendously important to the people we serve.
Thank you very much.
[Questions submitted by Chairman Shaw to the panel, and
their responses follow:]
Consortium for Citizens with Disabilities
Washington, DC 20006
August 9, 2002
The Honorable E. Clay Shaw, Chairman
Subcommittee on Social Security
U.S. House of Representatives
Washington, DC 20515

Dear Chairman Shaw:

This is in response to your letter of August 1 requesting
additional information regarding the Social Security disability
programs' challenges and opportunities. Specifically, you asked:

1. There have been suggestions that to improve the entire
disability determination process, the claimant's record needs to be
better developed at the disability determination services (DDS). This
would involve obtaining more complete medical evidence earlier in the
case. SSA's procedures include field office and DDS personnel advising
claimants of the information needed to determine their eligibility for
disability benefits. Are these procedures not being followed? Is the
information that is now provided not adequate? If not, what else can be
done to better gather and develop the evidence?
I suspect that the ability of claims representatives and DDS staff
to properly collect evidence would depend on a number of factors,
including the workload of the individual and the tools available to
assist in the process. Collection of better evidence earlier requires
that SSA look carefully at all of the factors that currently hinder the
effort. Applicants come to SSA with varied backgrounds. Some will not
understand the process or the importance of the evidence; some may not
have consistent treating medical sources in their history; and still
others may not fully grasp their own impairments. SSA should look at
all of the relevant factors, such as: whether the claimant needs
assistance in understanding the process and the nature and importance
of the material to be collected; whether the field offices and DDSs
have adequate staffing and resources to thoroughly carry out evidence
collection functions, including necessary follow-up with treating
sources; whether physicians and others from whom evidence is sought are
given enough guidance about what documentation is needed and the
importance of a speedy response; whether consultative exams should be
purchased earlier in the process for those without adequate medical
treatment histories; and whether payment rates for consultative exams
are adequate.
It would be valuable for SSA to work with claimants'
representatives, including attorneys, who have proven their ability to
collect otherwise unavailable evidence. SSA should identify the key
differences in the approach to evidence collection between these
claimants' representatives and the SSA and DDS staff who have the
statutory responsibility for evidence collection. It may be that the
overall elements are the same (letters of request, follow-up phone
calls, and etc.), but that the details or implementation differ
(initial interview with claimant, content of the letter to physicians,
number of follow-up calls, and etc.). I believe that such an effort
could only result in useful, valuable information for SSA to use in
assessing its own procedures.
2. In your testimony of June 20 (page 4), you state that you
believe a claimant's record should remain open so they are not wrongly
punished for events that may be beyond their control. Could your
concerns regarding closing the record be mitigated if claimants were
provided sufficient protections? If so, what protections would be
needed for you to support closing the record?
Some of my concerns regarding closing the record could be mitigated
if claimants were provided sufficient protections. These protections
would have to include a hold-harmless provision for claimants whose
late evidence is not accepted for purposes of reaching a decision. The
claimant would have to be protected against application of the doctrine
of res judicata--the period of time covered by a decision would need to
be open for further decisionmaking in the future should late evidence
become available. This must protect the claimant in at least two ways.
The claimant should be able to apply again for the same time period and
be able to receive any back benefits for that period without being
negated by res judicata. Further, those claimants whose coverage has
expired due to application of the recency of work test (insured status
requires 20 quarters of coverage out of the last 40 quarters) must be
able to apply again for that same time period, should late evidence be
available, without being negated by res judicata. It is interesting to
note that, in 1990, when Congress addressed the notices which SSA sends
to beneficiaries and claimants, there was a clear recognition that re-
application, under current policy and accepted legal doctrine, does not
equate to an appeal.
Another way to address this issue might be to allow a case to be
reopened. However, the current regulations on reopening a case place
time limitations on the reopening, leave the decision to reopen to the
discretion of the Commissioner, and do not allow appeals on the
decision regarding reopening.
Even if the above concerns were addressed, I would be concerned
about the potential delay in the process. Claimants with late evidence
would be forced to begin again and go through the entire process. I
would expect this to increase, rather than decrease, administrative
burden. In addition, from the claimant's perspective, the refusal to
accept late evidence and the insistence on making a decision on a less-
than-complete record would create the appearance of arbitrary
decisionmaking and government waste.
As the process currently stands, late evidence is accepted under
certain conditions, avoiding the appearance of arbitrary decisions and
allowing a common-sense result of a decision made on the basis of all
available evidence. Existing statutory and regulatory provisions
recognize the need for the system to be flexible enough to admit such
evidence on a limited basis. I believe that if the acceptance of late
evidence were viewed in a common-sense way, there would be no problem
with ensuring that all available evidence is brought into a decision. I
believe part of the problem with late evidence is the perception that a
remand to the ALJ from the Appeals Council or the district court is
indicative of a bad or wrong decision. In many cases, it is merely
indicative of late-arriving, but relevant, evidence. Quality assurance
mechanisms should take this into account.
3. The Social Security Advisory Board, in their testimony of June
11 (page 8) recommended that the Social Security Administration (SSA)
consider establishing a system to provide certification for claimant
representatives and establishing a system to provide certification for
claimant representatives and establishing uniform procedures for them
to follow. What are your comments on this? What are the pros and cons
of implementing these suggestions?
I do not believe that certification is necessary, given the tools
already available to SSA for ensuring proper behavior by
representatives and the bureaucracy it would be necessary to establish
for a certification process. The limited administrative funds available
to SSA can be put to far better use in improving the disability
determination process.
In 1998, SSA issued final rules governing the conduct of all
claimants' representatives, ``Rules Of Conduct And Standards of
Responsibility for Representatives''. 20 C.F.R. 404.1740. These rules
include both affirmative duties and prohibited actions, addressing,
among other things, the duties to obtain and submit evidence and to
comply with requests to submit evidence. The rules establish a
procedure for filing complaints against representatives which are
handled by SSA's Office of Special Counsel. In addition, SSA has the
capacity to reduce attorneys fees in any case.
Thank you for this opportunity to provide comment on these issues.
I would be happy to respond to any further questions.
Sincerely,
Marty Ford
Co-Chair
Social Security Task Force.

National Organization of Social Security Claimants' Representatives
Midland Park, New Jersey 07432
August 21, 2002
Hon. E. Clay Shaw, Jr., Chairman
House Ways and Means Subcommittee on Social Security
U.S. House of Representatives
Washington, DC 20515

Dear Chairman Shaw:

I am responding to your letter dated August 1, 2002, requesting
additional information for the June 20, 2002 hearing on the Social
Security disability programs' challenges and opportunities.
Specifically, you asked for a response to the following question:
1. The Social Security Advisory Board, in their testimony of June
11 (page 8) recommended that the Social Security Administration
consider establishing a system to provide certification for claimant
representatives and establishing uniform procedures for them to follow.
What are your comments on this? What are the implications of
implementing these suggestions?
For the following reasons, I do not believe there is a need for
certification of claimants' representatives.
First, the bureaucracy involved in establishing and maintaining a
certification system would be a significant expenditure of limited
agency resources. In any meaningful certification program, required
tasks include:

defining the area of practice
devising the applicable standards
writing the examination
administering the examination
grading the examination
providing an appeal mechanism for aggrieved
certification candidates
maintaining the certification roster, and
providing for future re-certification.

Second, SSA already has adequate procedures to govern the conduct
of representatives. All claimants' representatives are subject to the
agency's Rules of Conduct and Standards of Responsibility for
Representatives, which have been in effect since 1998. 20 C.F.R.
Sec. Sec. 404.1740, et seq., and 416.1540, et seq. These rules include
both affirmative duties and prohibited actions. They were designed to
clarify the obligations of representatives by promoting competence,
diligence, and timeliness. The rules establish a procedure for filing
complaints against representatives with the Office of Special Counsel
(OSC) at the Office of Hearings and Appeals. OSC has the responsibility
to investigate complaints and to administer discipline (suspension or
outright disqualification) where warranted. Should, for example, an
Administrative Law Judge (ALJ) wish to file a complaint about the
conduct of a representative, the procedures set forth in the
regulations on the Rules of Conduct would address the ALJ's concerns.
Third, certification is not necessary because most representatives
are attorneys and their conduct is already governed by state bar
organizations. Each state bar promulgates rules of conduct and codes of
professional responsibility. To the extent that a problem of misconduct
by a claimant's attorney exists, SSA has the discretion to address each
instance by referring it to the state bar which holds the license of
the attorney involved.
Thank you for the opportunity to provide this information.
Very truly yours,
Nancy G. Shor
Executive Director

Federal Bar Association
Washington, DC 20037
January 10, 2003
Hon. E. Clay Shaw, Jr., Chairman
House Ways and Means Subcommittee on Social Security
U.S. House of Representatives
Washington, DC 20515

Dear Chairman Shaw:

1. The Social Security Advisory Board has stated that the Federal-
State relationship should be strengthened. Do you agree? If so, why do
you agree? How can that relationship be strengthened?
Out of concern for the variations in State Agencies in areas such
as staff salaries, hiring, qualifications, training and quality
assurance procedures--all of which have a major impact on quality of
work product--the Advisory Board has asserted that the Federal-State
relationship needs strengthening. While the Advisory Board has not
advocated Federalization of the State programs, it has recommended
implementation of guidelines for disability examiners vis-a-vis
experience, training, background and salary.
The Social Security Section of the Federal Bar Association (FBA)
appreciates the point being made by the Advisory Board. The Social
Security disability program is a national program and a person living
in New Hampshire should expect his claim to be adjudicated in a
comparable manner to the person living in Texas. While Federal
guidelines in the areas mentioned above are a good idea, it is more
important that the Social Security Administration (SSA) strengthen its
oversight of the quality of State Agency decisionmaking. It can do so
by implementing a strong and consistent quality assurance (QA) program
within SSA that monitors State Agency work. The component that
currently does this job is known as the Disability Quality Branch
(DQB). It wields significant power over the States' work but it does
not appear to have effectively fulfilled its mission. As GAO indicated
in its report ``Social Security Disability: Disappointing Results from
SSA's Efforts to Improve the Disability Claims Process Warrant
Immediate Attention'' (GAO-02-322), SSA needs to develop a quality
focused culture and it needs to implement a comprehensive quality
assurance program. Such a program at the State Agency level needs to
focus not only on favorable decisions but also on unfavorable decisions
and adequate development of the record. To date, there is no evidence
that this has been done.
As just one example, SSA has a treating physician rule set forth at
20 C.F.R 404.1527 and further explained in Process Unification Ruling
SSR 96-2p. This rule is applicable at all levels of adjudication. Yet,
State agencies repeatedly fail to apply this rule and the perception is
that DQB condones and sometimes even encourages this practice. The
actions of DQB have a profound impact on the work of the State
Agencies, and we suggest that SSA focus on the function and performance
of its quality assurance component as a means of strengthening the
Federal-State relationship.
2. You state that claimants' subjective complaints are not
evaluated at the DDS level, but are when the cases reach OHA. Why is
this? What could be done to improve the evaluation of subjective
complaints at the DDS?
Evaluation of subjective complaints, i.e., symptoms, such as pain
and fatigue is a very difficult task because it requires an assessment
of a claimant's credibility. Subjective complaints are not measurable
by means of clinical tests or lab findings. Under SSA law, if a person
has a medically determinable impairment that could cause subjective
complaints of the type alleged, then the extent of those complaints
must be evaluated. Reports from both claimant representatives and ALJs
indicate that it is fairly standard that State Agency reviewing doctors
will inevitably conclude that a person with a bulging lumbar disk that
impinges on a nerve is capable of light exertional work. Yet, because
this medically determinable impairment has the potential to cause
debilitating pain in any given individual, SSA law requires that a
number of factors beyond the objective clinical findings be considered
in evaluating the person's ability to function. At 20 C.F.R. 404.1529,
seven factors are set forth and they include: activities of daily
living; location, duration and intensity of pain or other symptoms;
precipitating and aggravating factors; type, dosage, effectiveness and
side effects of medications; treatment other than medication for
alleviation of the pain or other symptoms; measures used to alleviate
pain or the other symptoms such as lying flat on one's back, sleeping
on a board, changing positions; and other factors concerning one's
functional limitations due to pain or other symptoms. These factors are
elaborated upon in SSR 96-7p.
Given the time and resources available to State Agency examiners,
evaluating subjective complaints is a daunting task. Moreover,
consideration of subjective complaints can lead to what appear to be
inconsistent results in cases involving identical or similar objective
findings. Yet, SSA regulations and rulings require that subjective
complaints be assessed at all levels of adjudication.
We submit that examiners who attempt to perform this kind of
individual assessment may be taken to task by State Agency medical
consultants, as well as SSA's quality component, as they tend to focus
almost exclusively on objective clinical findings. It is much easier,
more predictable, and less time-consuming to make decisions based
solely on objective findings. As prototype States are discovering, if
the State Agencies are going to evaluate subjective complaints they
need more resources--more time per case, more employees, more training
and better retention of trained employees. This means one thing--more
money.
3. During the hearing, you seemed to indicate that the DDSs needed
to better evaluate claims. What suggestions do you have for improving
case evaluation by the DDSs?
The answer to this question is inextricably entwined with the
response to the previous question. In addition to my previous response,
however, there are steps that can be taken at the DDS level to better
evaluate claims. First, there needs to be better development of the
record. All sources of relevant medical evidence need to be identified
and contacted. Where medical evidence is scant, appropriate
consultative examinations must be obtained. Too often, a claimant with
an orthopedic problem is sent to an internist or family practitioner
rather than to an orthopedist or physiatrist and the examination is not
particularly enlightening. Yet, it is relied upon to decide the
claimant's eligibility for benefits. In addition, the old saw, ``you
get what you pay for'' certainly applies to CEs, and DDSs do not pay a
competitive fee to the doctors performing these examinations.
Obtaining medical evidence is not always easy to do. Sources can be
dilatory and uncooperative. If SSA could facilitate cooperation from
hospitals and doctors, it would go a long way to improve the process.
In addition, involvement early on at the DDS level by claimant
representatives could facilitate the gathering of evidence.
Unfortunately, such involvement at the State Agency level tends to be
viewed as interference rather than assistance and thus may be
discouraged.
Claimants need to be provided a rational explanation for why they
have been denied benefits. The determinations issued by the DDSs can
best be described as uninformative. They are crammed full of standard
language but they are very short on explanation as to why the claimant
is being denied. A typical explanation reads something like this:
You said that you are disabled because of chronic obstructive
pulmonary disease, bursitis and depression. The available medical
evidence shows that your condition or combination of conditions is not
severe enough to be disabling. The evidence does not show an impairment
that would prevent you from performing some work-related activities. It
has been decided, therefore, that you are not disabled according to the
Social Security Act. We have concluded that you are able to return to
your past work as it is usually done in similar jobs.
This sheds little light on how this decision was reached. A real
explanation for the denial could result in fewer appeals if claimants
understood why they don't meet the standard for disability.
In 1996, SSA embarked upon a process unification initiative to
assure that the same standards are used at all levels of adjudication.
State Agencies were expected to assess subjective complaints and
provide a reasoned rationale in their determinations. At the OHA level,
ALJs would then be expected to give deference to those rationales.
Other than in prototype states, this has not happened and it appears
that SSA has quietly abandoned this initiative.
4. In your testimony, you question the need for an Appeals Council.
You give as an example that the substantive legal correctness of the
decisions of the Appeals Council has been frequently challenged. Do you
suggest an alternative to the Appeals Council? If so, what?
In theory, the role of the Appeals Council is a good one--a final
review in the administrative process before a claimant reaches Federal
Court. Where an ALJ has erred or failed to provide a full and fair
hearing, the Appeals Council can remand the case for a new hearing and
decision. In this way, the Appeals Council acts as a filter for the
Federal Court system weeding out many cases that might otherwise be
filed in court.
Unfortunately, however, of late the theory has been far better than
the reality. In recent years, the Appeals Council has been overwhelmed
and unable to provide timely, effective review. Yet, to its credit,
when faced with the overwhelming workload, the Appeals Council has
implemented strategies that have reduced average processing time by
over 200 days since early 2000. Moreover, the pending request for
review workload has been decreased from nearly 156,000 to below 58,000
as of December 2002.
Nonetheless, as at all levels within the disability process, there
is need for improvement within the Appeals Council. I offer a few
suggestions. First, there must be a better way to maintain the
recording of the hearings. Far too many cases are remanded solely
because the hearing tape has been lost at the Appeals Council. Second,
SSA should consider the suggestion set forth by the Supreme Court in
Sims v. Apfel, 530 U.S. 103, 120 S.Ct. 2080 (2000), that SSA impose an
exhaustion requirement, i.e., that the Appeals Council will limit
review to those exceptions raised in the request for review whenever
the claimant is represented. Third, consideration should be given to
setting a time limit by which review must be accomplished or the
claimant is afforded the right to proceed to Federal Court. Fourth, as
noted earlier, SSA needs a quality assurance program at all levels. At
the Appeals Council, this should result in a reduction in the large
number of cases where the Appeals Council has affirmed an ALJ decision
and, after a complaint has been filed in district court, the Appeals
Council agrees to seek a voluntary remand finding the same record it
had earlier reviewed to be now legally insufficient. It should also
result in more meaningful feedback and direction to ALJs in the remand
orders.
Sincerely,
Hon. Kathleen McGraw
Chair
Social Security Section

Benjamin N. Cardozo Law School, Yeshiva University
New York, New York 10005

Washington College of Law, American University
Washington, DC 20016
August 15, 2002
Hon. E. Clay Shaw, Jr., Chairman
Chairman
Subcommittee on Social Security
House Committee on Ways and Means
Washington, DC 20515

Dear Chairman Shaw:

This is in response to your follow-up question from the June 20,
2002 hearing. Your question, and our response, follows:

1. You stated that the SSA's ALJ hearings are the only hearings
processes that you know of where the agency is not represented. Would
you explain what makes the ALJ hearings in SSA unique from other
agencies' administrative hearings?
Although we haven't completely researched the issue, we believe
that SSA ALJ hearings are the only ones where the agency is, as a rule,
unrepresented. This has been the case since the beginning of the
disability program, (except for the short-lived government
representation experiment in the 1980s). In such cases the
Administrative Law Judge (ALJ) has been relied upon to ``wear three
hats''--(1) neutral adjudicator; (2) protector of the claimants'
rights; and (3) trustee of the Social Security Trust Fund.
This makes the SSA adjudication process unique from other
adjudications presided over by ALJs. Of course there are many different
types of ALJ adjudications--benefit claims denials, benefit
revocations, initial license denials, license revocations, civil money
penalties, etc. In agency enforcement cases, the agency is, of course,
represented since it is, in effect, the ``prosecutor'' in the case. In
initial benefit or initial license denial cases, there might appear to
be less reason for an adversary proceeding since nothing is being
``taken away'' from an applicant. Nevertheless, someone from the agency
normally is charged with defending the agency's decision to deny the
benefit or license if the case is contested before an ALJ.
SSA disability cases are the exception to this rule. This obviously
places a great responsibility on the ALJ. It may have been more
understandable for the government to not be represented in the early
days of the program when most claimants were also unrepresented. As
late as 1977, less than half of all claimants were unrepresented (by
either a lawyer or non-lawyer) at the ALJ hearing. Now, however, the
figure is about 87% (70% by lawyers and 17% by non-lawyers).
Sincerely,
Paul Verkuil
Professor of Law
Yeshiva University

Jeffrey Lubbers
Fellow
American University

[Questions submitted by Mr. Matsui to Ms. Ford and Ms.
Shor, and their responses follow:]

Consortium for Citizens with Disabilities
Washington, DC 20005
July 12, 2002
The Honorable. Robert Matsui, Ranking Member
Subcommittee on Social Security
Ways and Means Committee
U.S. House of Representatives
Washington, DC 20515

Dear Representative Matsui:

This is in response to questions in your letter of June 27
requesting additional information following the June 20 hearing in the
Subcommittee on Social Security regarding challenges in the Social
Security disability programs.
1. How would closing the record force workers at SSA field offices,
DDSs, and OHA to do a more complete job of developing all evidence
necessary to make a well-considered disability decision, since this
does not always happen under current procedures?
I do not believe that closing the record earlier than is required
under current law would improve the performance of workers at SSA field
offices, DDSs, or OHA in collecting evidence. The penalty, closing the
record to evidence that comes in late, falls only on the claimant.
It does seem clear that ensuring better development of evidence
earlier in the process would help at all later stages of the process.
Collection of better evidence earlier requires that SSA look carefully
at all of the factors that currently hinder the effort now. Applicants
come to SSA with varied backgrounds. Some will not understand the
process or the importance of the evidence; some may not have consistent
treating medical sources in their history; and still others may not
fully grasp their own impairments. To fill these gaps will require
addressing such things as: whether the claimant needs assistance in
understanding the process and the nature and importance of the material
to be collected; whether the field offices and DDSs have adequate
staffing and resources to thoroughly carry out evidence collection
functions, including necessary follow-up with treating sources; whether
physicians and others from whom evidence is sought are given enough
guidance about what documentation is needed and the importance of a
speedy response; whether consultative exams should be purchased earlier
in the process for those without adequate medical treatment histories;
and whether payment rates for consultative exams are adequate.
Improving the whole range of factors that result in slow development of
evidence will be necessary to ensure any significant improvement.
2. How would SSA obtain the resources necessary to provide agency
representation, given the severe constraints on its budget and the
rising backlog of claims awaiting decisions at the DDS, ALJ, and
Appeals Council levels? In your opinion, would this be the best use of
additional resources, should they be provided to the agency?
Providing agency representation at the ALJ hearings would be very
costly. As reported by Nancy Shor of the National Organization of
Social Security Claimants' Representatives, the SSA government
representation project of the `80s was very costly. I do not believe
that the cost can be justified, especially since agency representation
has proven to change the nature of the hearings to an adversarial
process. In addition, agency representation is likely to add processing
time (based on experience with the project in the `80s) and, certainly,
does nothing to ensure that overall processing times are reduced or
better evidence is developed earlier.
Any additional resources available to SSA should be targeted to the
better development of evidence earlier in the process, as discussed
above.
Thank you for this opportunity to provide comment on these issues.
I would be happy to respond to any further questions.
Sincerely,
Marty Ford
Co-Chair
Social Security Task Force

National Organization of Social Security Claimants' Representatives
Midland Park, New Jersey 07432
July 12, 2002
Honorable Robert T. Matsui, Ranking Member
Subcommittee on Social Security
Committee on Ways and Means
United States House of Representatives
Washington, DC 20515

Dear Representative Matsui:

I am responding to the questions in your June 27, 2002, letter to
provide additional information for the record of the June 20, 2002,
hearing before the House Ways and Means Subcommittee on Social
Security.
1. Proponents of having a ``government representative'' represent
the agency claim that this change would result in better development of
evidence. Why would a ``government representative'' do a better job of
developing a claimant's case and the evidentiary record than the
existing cadre of field office personnel, Disability Determination
Service workers, attorneys at the hearing offices and Administrative
Law Judges?
SSA's duty to develop the evidence is well established in its own
regulations and the case law, a duty that exists even it the claimant
is represented at the ALJ hearing level. In the past, OHA staff
developed cases at the hearing level. However, in most cases where
claimants are represented, the ALJ will rely on the representative to
obtain updated evidence, as ALJ Kathleen MCGRAW. testified before the
Subcommittee on June 20, 2002. If the claimant is unrepresented, OHA
staff develops the evidence. Even if there is a representative, the ALJ
may nevertheless decide to obtain evidence, for example, a consultative
examination.
Existing DDS and OHA staff can do an adequate job of developing the
record, if provided with sufficient resources and staffing. As
discussed below in response to question 4, the government
representatives did not adequately assist in development of the
evidence during SSA's mid-1980's ``Government Representation Project
(GRP). Based on testimony before this Subcommittee in March 1986, the
cost of the GRP was nearly $1 million per year for the 5 OHAs
participating in the Project. Given the enormous cost of providing
government representation at the more than 100 OHAs that currently
exist, we believe that the limited dollars available to the agency
could be put to better use by assuring adequate staffing at the DDS and
OHAs and developing better procedures to obtain evidence, including
reasonable payment for medical records and examinations.
2. If the agency is represented at a hearing only when the claimant
has his or her own representative, wouldn't the agency representative
unavoidably be placed in the position of opposing the claim and
defending the agency's prior decision?
In Salling v. Bowen, 641 F. Supp. 1046 (W.D.Va. 1986), the court
held that SSA's previous effort to have the agency represented at the
ALJ hearing in the 1980's was unconstitutional and permanently enjoined
SSA from holding further proceedings under the GRP. The court found
that ``[t]he mere presence of a government advocate at the hearing
renders it adversarial--The government advocate is under no obligation
to try to ascertain the truth but, rather, he is there to state the
SSA's position in the case.'' 641 F. Supp. at 1070. The court noted
that while the 1982 GRP regulations baldly stated that the project
would not be adversarial, all the evidence presented in the case
established otherwise.
It is difficult to see how a representative for the agency would be
anything other than adversarial. Otherwise, there would not appear to
be any reason to have a government representative. As the Salling court
noted, the ``mere presence'' of the government representative makes the
proceedings adversarial.
Another matter to consider, which could add to the cost of
establishing government representatives, is that the agency would be
liable to pay attorneys' fees in some cases under the Equal Access to
Justice Act (EAJA). EAJA provides that the federal agency must pay fees
where its position was not substantially justified in adversarial
administrative and judicial proceedings. These fees are paid by the
agency, not the claimant. Under current law, EAJA fees are paid in
appropriate court cases involving Social Security and SSI claims, but
not for ALJ hearings since they are not adversarial.
3. Some have argued that a ``government representative'' would be
able to facilitate the claims process by offering to ``settle'' a
claim. What does ``settle'' a claim mean in the context of disability
decisionmaking, and in what fraction of cases would ``settlement'' be
an option? Do existing staff have any ability to offer to ``settle'' a
claim?
Although it is unclear what the other witnesses mean by
``settling'' a case, for NOSSCR members, settling a case could include
the following:

Requesting an on-the-record decision without the need
for a hearing
Amending the onset date to a later point in time
Agreeing to a period of disability, rather than
ongoing benefits, if the claimant has returned to work or
otherwise is no longer eligible for benefits at the time of the
hearing
Agreeing to accept SSI benefits and withdrawing a
Title II disability claim if there is a remote date last
insured

I do not have statistics, however, this is a procedure our Members
frequently use under the current process by dealing directly with the
ALJs, either through pre-or post-hearing letters or at the time of the
hearing. SSA has recognized the value of screening cases for on-the-
record decisions by recently including it in recently announced OHA
initiatives. ALJs also may issue fully favorable on-the-record
decisions or offer to settle the case on their own initiative.
We have serious concerns whether a government representative would
facilitate settlements beyond the current number. Based on NOSSCR
members' experiences, the procedure currently works smoothly in most
situations, without the need for a government representative. Based on
past experience, the government representative may actually impede the
settlement process. This was the case with the GRP, described in more
detail in the answer to question 4, where settlements were often
impossible. The GRP statistics showed that government representatives
did not request on-the-record decisions in appropriate cases and
further, challenged eligibility in cases where the evidence was
overwhelming.
4. What was SSA's experience with the previous effort at having the
agency represented at the ALJ hearing? Did it improve benefit
decisions? Did it speed up or slow down processing times? Were cases
better prepared? Was the representative perceived as someone who
assisted the claimant, or rather as someone who was there to oppose the
claim?
Shortly after the 1986 decision in Salling v. Bowen, SSA abandoned
the GRP. Information obtained by the plaintiffs during the course of
that case provides objective evidence that the project did not achieve
its stated goals. In addition, testimony at Congressional hearings in
March 1985 and March 1986, the latter before this Subcommittee,
corroborated the findings of the court, providing first-hand
experiences from claimants' representatives involved with the GRP.
Processing times were lengthened. The Salling court found, based on
the evidence presented in the case, that: (1) the time for hearing
dispositions greatly increased; (2) there was a longer delay between
requesting a hearing and holding a hearing; (3) the number of ALJ
dispositions decreased; and (4) more cases were referred to the Appeals
Council for its own-motion review by the government representatives,
``many of which should not have been sent,'' causing further
unwarranted delay in receipt of benefits by duly entitled claimants.
641 F. Supp. at 1060-1062.
One of the attorneys in Salling, Martin Wegbreit, Esq., submitted
testimony to this Subcommittee for the March 1986 hearing. His written
statement (a copy is attached) provided specific statistics, based on
SSA's own information, about the lengthened processing times.
A witness at that hearing, Dennis W. Carroll, Esq., offered first-
hand testimony about dealing with the government representatives. His
testimony and written statement (a copy is attached) describe extensive
delays in individual cases.
The quality of decisionmaking did not improve. The Salling court
found, based on evidence in the case, that ``there has been a
remarkable decline in decisions.'' 641 F. Supp. at 1062.
SSA's own statistics indicate that government representatives did
not assist in making recommendations to the ALJ that a favorable
decision be issued without the need for a hearing. Mr. Wegbreit's March
1986 statement to this Subcommittee states that although 56.7% of all
claimants in the project won at the hearing level, the government
representatives opposed 92.2% of the claimants. Mr. Carroll's testimony
describes individual cases with strong evidence of disability where the
government representative argued against an award of benefits.
Cases were not better prepared by the government representatives.
Current proponents of having the agency represented maintain that the
duty to develop cases would be taken away from the ALJs so that they
could devote time toward making decisions. This also was put forward as
a reason for the project in the 1980's. However, the Salling court
concluded that the goal of the program to assist the ALJ in the
development of the evidence has not been achieved. When the ALJ was in
control of development, ``[t]here was better development of the record
than has been shown under the current procedures.'' 641 F. Supp. at
1069.
According to affidavits from the plaintiffs' attorneys in Salling,
the court noted that the government representatives ``had done very
little in developing the files. If the [government representatives]
found that the claimant's case was weak, they left it alone; but if the
claimant's case was strong, consultative examinations were sought.''
641 F. Supp. at 1063. Martin Wegbreit's March 1986 written statement
for this Subcommittee's hearing noted two key conclusions based on
statistics provided by SSA:

In 45.54% of the cases, government representatives
offered no pre-hearing development at all.
In 59.8% of the cases, government representatives did
not contact treating sources.

Government representatives generally acted in adversarial roles. In
Salling, the court found that ``[t]he mere presence of a government
advocate at the hearing renders it adversarial and indeed, he proceeds
so to act on through the appellate process . . . [T]he government
advocate is under no obligation to try to ascertain the truth, but,
rather, he is there to state the SSA's position in the case. . . .
[A]ll of the evidence in this case shows that the [Government
Representation Project] is an adversarial process.'' 641 F. Supp. at
1070-71.
Mr. Carroll's March 1986 testimony to this Subcommittee provides
examples from actual cases supporting the view that the government
representatives were adversarial:

They sought to have cases dismissed for technical
reasons unrelated to the merits, even after the ALJs indicated
they would not dismiss and would hear the merits;
They cross-examined claimants, often attempting to
establish they were lying and asking personal information
unrelated to their claims;
They would not agree to settle a case, despite
overwhelming evidence of disability. In one case, the
government representative refused to settle a case, even though
the ALJ stated during the hearing that the case should not have
required a hearing. The government representative called
witnesses and the hearing lasted 3 hours. The ALJ found the
claimant disabled.

5. Why did Congress establish a non-adversarial hearing process?
What have courts found on the matter of Congressional intent regarding
whether hearings should be adversarial?
Only 1 month ago, SSA published proposed regulations where it
reaffirmed the nonadversarial, informal nature of its proceedings:

Our administrative process was designed to be nonadversarial.
See [20 C.F.R.] Sec. Sec. 404.900(b) and 416.1400(b) of our
regulations; Richardson v. Perales, 402 U.S.389, 403 (1971);
Sims v. Apfel, 120 S. Ct. 2080, 2083-85, 2086 (2000).

67 Fed. Reg. 39904, 39905 (June 11, 2002). This interpretation is
consistent with Supreme Court decisions over the last thirty years that
discuss Congressional intent regarding the SSA hearings process, with
the most recent just 2 years ago:

The differences between courts and agencies are nowhere more
pronounced than in Social Security proceedings. Although many
agency systems of adjudication are based to a significant
extent on the judicial model of decisionmaking, the SSA is
perhaps the best example of an agency that is not. . . . Social
Security proceedings are inquisitorial rather than adversarial.
It is the ALJ's duty to investigate the facts and develop the
arguments both for and against granting benefits . . . .

Sims v. Apfel, 530 U.S. 103, 110 (2000) (citations omitted). The
Court relied on another decision that was then nearly 30 years old,
Richardson v. Perales, 402 U.S. 389 (1971). In Perales, the Supreme
Court rejected a challenge that would have imposed a formal evidentiary
rule into Social Security hearings. In Perales, SSA argued against
adopting such a rule, stressing the need to keep the system informal,
rather than becoming a ``full blown adversary procedure.'' Adopting the
SSA's arguments and emphasizing Congress' intent to keep the process
informal and nonadversarial, the Court stated:

[I]t is apparent that (a) the Congress granted the Secretary
the power by regulation to establish hearing procedures; (b)
strict rules of evidence, applicable in the courtroom are not
to operate at Social Security hearings so as to bar the
admission of evidence otherwise pertinent; and (c) the conduct
of the hearing rests generally in the examiner's discretion.
There emerges an emphasis upon the informal rather than the
formal. This, we think, is as it should be, for this
administrative procedure and these hearings, should be
understandable to the layman claimant, should not necessarily
be stiff and comfortable only for the trained attorney, and
should be liberal and not strict in tone and operation. This is
the obvious intent of Congress so long as the procedures are
fundamentally fair.

Some have argued that it would be appropriate for SSA to adopt an
adversarial system because other Federal agencies have one. However,
countering such arguments, a number of noted law school professors, who
have studied the Social Security process, have concluded that an
informal and nonadversarial process is the only effective way that the
Social Security hearing system can function, thus agreeing with the
position taken by SSA in the Perales case:

While Federal regulatory agencies have largely chosen
adversarial adjudicative systems, federal benefactory agencies
typically employ inquisitorial models. Professor Jerry Mashaw
has observed that ``[v]irtually all mass justice systems have
decided that they are unable to function effectively without
the active-adjudicator investigation, informal rules of
evidence and procedure, and presiding officer control of issue
definition and development that characterize an inquisitorial
or examinational approach.'' The SSA, the largest ``mass
justice'' Federal benefactory agency, while employing most APA
adjudication requirements, fits this pattern.

Jon C. Dubin, Torquemada Meets Kafka: The Misapplication of the
Issue Exhaustion Doctrine to Inquisitorial Administrative Proceedings,
97 Columbia L. Rev. 1289, 1301-1302 (1997) (footnotes omitted), quoting
Jerry L. Mashaw, Unemployment Compensation: Continuity, Change, and the
Prospects for Reform, 29 U. Mich. J. L. Reform 1, 16 (1996). Professor
Dubin's article was cited with approval by the Supreme Court in the
Sims case.
Finally, the Court's reasoning in Perales formed a basis for the
court's decision in Salling v. Bowen, 641 F. Supp. 1046 (W.D.Va. 1986),
that SSA's effort in the 1980's to implement government representation
violated due process:

The greatest lack of fundamental fairness as required in the
Perales test is that the proceedings which have heretofore been
deemed to have been informal and nonadversarial are now formal,
stiff, strict and adversarial. . . . Congress did not intend it
to be an adversary proceeding. . . .

641 F. Supp. at 1070.
Thank you for the opportunity to provide this additional
information for the hearing record.
Sincerely,
Nancy G. Shor
Executive Director

[The Subcommittee on Social Security Hearing Print # 99-63 is being
retained in the Committee files.]

[Whereupon, at 12:03 p.m., the hearing was adjourned.]
[Submissions for the record follow:]
Statement of the Federal Managers Association, Alexandria, Virginia
Mr. Chairman, thank you for the opportunity for the Federal
Managers Association--Social Security Conference to submit written
testimony on the challenges and opportunities facing the Social
Security Disability Program.
The Federal Managers Association (FMA) represents the interests of
over 200,000 executives, managers and supervisors in the Federal
Government. The FMA-SSA Council represents executives, managers and
supervisors in all Social Security Program Service Centers, the Office
of Central Operations and the Office of Hearings and Appeals (OHA).
We have read, with significant interest, the testimony of all of
the Social Security Disability Program stakeholders who have testified
to date. FMA supports a number of positions expressed on June 11th and
again on June 20th. Briefly, FMA supports testimony on:

The Due Process Hearing
The recommendation to closing the record following
the decision by the Administrative Law Judge (ALJ)
Accelerating the use of electronic disability folder
(eDib), video teleconferencing, digitally recorded hearings,
and a strong management information system
The need to aggressively address the staffing issue
in the Social Security Administration (SSA)
Agency efforts to correct problems with the OHA
process
The need for Agency representation at the hearings

FMA does not support:

Moving the hearing process to Disability
Determination Services (DDS)
Assigning clerical duties to paralegal specialists
Combining OHA and SSA field offices

Testimony submitted to date has covered issues ranging from
providing greater autonomy to the ALJs, to turning the ALJ process over
to DDS, having skilled paralegal specialists performing clerical
duties, and ALJs performing routine screening. In addition to the many
divergent views, testimony further differed on what led to the
purported failure of the Hearing Process Improvement (HPI) initiative.
The vast majority of views laid the blame on the process rather than
the initiative's implementation. With HPI, the devil was truly in the
initiative's implementation.
There are several barriers that prevented successful implementation
of the HPI initiative. At the top of the list was not giving management
the ability to replace the hundreds of clerical workers who were
promoted from clerical positions they performed very well, to positions
with steep learning curves. Much of the failure in the early stages of
HPI can be attributed to our inability to prepare cases for ALJs
because of severe staffing imbalances. From implementation until the
present, this inability to backfill for lost clerical support has had a
far more serious impact on OHA than senior attorneys losing signatory
authority. The ability to backfill clerical positions, coupled with a
balanced MOU and time to mature could have dramatically changed the
results of the Hearing Processing Improvement initiative.
For SSA to meet the challenges and opportunities facing our
disability programs, it will require staffing levels that will permit
us to handle the anticipated retirement wave. In addition, we will need
the technology necessary to accomplish the work in today's digital age,
and tools to hold individuals accountable for the work they perform. We
would like to focus on these three critical issues that are essential
to meeting the challenges, and comment on three that would help, but to
a lesser degree.
Top Three Issues
1. Meaningful Performance Management system
2. E-Dib and other automation enhancements
3. Addressing the staffing imbalances in OHA
Additional Areas Requiring Attention
4. LElevating the Federal manager's ability to hire on equal
footing with private sector
5. Short term initiatives
6. Consistency between DDS and OHA

We feel that it is important to note that action on the top three
will have short and long term positive impact on the disability process
regardless if any other issues are addressed. Action on the additional
areas will have marginal impact without action on the top three.
Meaningful Performance Management System
The success or failure of any of these initiatives will be directly
related to management's ability to hold all employees accountable for
their work. Without meaningful performance measurements, we can realize
only limited success at best.
The deterioration of the disability process has run parallel to the
deterioration of our performance management system. Our performance
management system began to decay in the late 1980s and has steadily
gotten worse. Group-based accountability, under HPI, only moved us
further from individual accountability. The current Pass/Fail appraisal
system does not provide incentives for high performance and we are
seeing the consequences of that.
Each year the Social Security Administration presents its
Government Performance and Results Act Annual Performance Plan. This
plan describes specific levels of performance and outlines the means
and strategies for achieving those objectives. The objectives are
supported by indicators, which are used to measure the agency's success
in achieving the objectives. The performance indicators are translated
into goals that are shared with SSA executives. These goals are then
clearly presented to managers and supervisors as expectations for
performance. At OHA for example, the indicators are expressed in terms
of dispositions per day per ALJ, processing time, percent of aged
cases, etc. As noted above, SSA holds managers and supervisors
responsible for communicating performance goals to agency employees.
However, when the goals are communicated to the employees, managers are
required to communicate in very generic terms due to the absence of
numeric standards.
Our current Performance Management system in SSA addresses these
elements, but at an organizational rather than an individual level. We
certainly have set performance expectations (Planning), but these are
agency goals, not individual goals. As directed by the system, progress
reviews are held (Monitoring), but since there is no individual
measurement, the discussions are generic. Ideally, we would spend time
training (Developing) our employees, but in reality, most of our
offices suffer from significant staffing imbalances and struggle just
to accomplish our most basic missions. We rate (Rating) our employees
on a Pass/Fail appraisal system, which fails to distinguish individual
performance. And finally our reward (Rewarding) system is essentially a
``do it yourself'' process.
According to a White Paper published by the U.S. Office of
Personnel Management in April 2002, ``(I)n the current Federal white-
collar pay system, performance does not matter very much . . . In any
given year, Federal employees receive more pay increases for remaining
on the rolls than for meeting or exceeding performance expectations.
The dominance of these performance-insensitive pay increases can make
performance-oriented tools appear trivial.'' While this paper, in
addressing the issue of pay for performance, goes beyond the scope of
our immediate concerns, many of the principles addressed apply readily
to performance management at SSA.
Our current performance management system sends the message that
performance does not matter. Because the standards are so generic,
performance cannot be measured on an individual level. The labor-
management contract requires that data focus on the process, not the
individual. For all intents and purposes, the system is one of non-
accountability. In spite of an employee's best effort, the employee
will simply ``pass''. Award money is distributed on a formula based on
the number of employees on the payroll. This distribution is completely
devoid of any recognition for performance, even at an office level.
Since we have no individually measurable standards (numerics) that can
be taken into consideration, overtime/credit hours/flexiplace must be
given to anyone interested.
It is our belief that it is imperative that our employees are
provided with clear goals. These goals must be measurable,
understandable, verifiable, equitable, and achievable. According to an
Associated Press article on 5/27/02, The Department of Veteran's
Affairs slashed their backlog of pending claims. Secretary Anthony
Principi was quoted, ``We decided to really declare war on that backlog
and took some rather bold steps to address it. We're really getting
this backlog under control, and we did it through sheer focus and
discipline, performance measurements, and production goals.'' When
employees know what is expected of them, they are better able to focus
their efforts.
The National Council of Social Security Management Association
(NCSSMA), who previously testified, clearly stated the difficulties in
addressing this issue earlier this year. They cite `a dysfunctional
merit promotion process, overly restrictive performance improvement
procedures, lack of objective performance criteria, and an impractical
awards process . . . ' We agree with this assessment and believe in
fact that these problems all relate back to the weaknesses of our
current performance management system.
There is an old adage that states, ``What gets measured, gets
done.'' Implementing an effective performance plan within SSA given the
current culture will be difficult. But if the Agency expects to meet
its objectives it must be done. OPM has prepared A Handbook for
Measuring Employee Performance. This Handbook outlines the guiding
principles for performance measurement as follows: 1) performance
management must be viewed as a valuable tool, not as an evil; 2)
acceptance of the process is essential to its success; 3) we must
measure what is important, not what is easy; 4) the plan must be
flexible enough to allow for changes in goals to keep the process
credible; 5) we must rely on multiple measures; 6) employees must
perceive that performance measurement is important; and 7) management
must demonstrate that performance is critical to organizational and
individual success. These are the principles, which must guide efforts
to reform the current system.
A strong performance management system will go a long way in
restoring the Social Security Disability Program to the status of a
premier program. Our current leadership is committed to reforming our
performance management system, but it will take several years to have a
system in place. Any initiative implemented prior to having a
meaningful performance management system will have minimal impact.
E-DIB and Other Automation Initiatives--
Potentially, this will have the greatest impact on productivity and
would significantly alter the way we do business. All necessary
resources need to be devoted to E-DIB, as we will virtually eliminate
case preparation (not to mention savings on mail and storage).
As we move closer to this reality, we need to look at the entire
structure of the field office and the positions within. We cannot start
too early on this project considering the impact on the senior case
technicians (SCTs) and the potential to easily distribute work to where
the resources are.
That said, there are a number of automation initiatives that are
currently available, and FMA feels that the Agency should fast-tract
rollout for:
Voice Recognition software--When the initial learning curve period
is over, this will save time both with writing decisions and eliminate
the need to type decisions. Many offices have a limited number of
typists and must ship cases to other offices to type. The time involved
could be eliminated. The software is very inexpensive ($200.00 per
office) and would not tax the budget.
Video Teleconferencing--This technology can also have very positive
impact on both production and the budget. The Agency has made a
decision to fast track the rollout and this is commendable. However,
FMA feels the rollout should be further accelerated.
Reminder Pro Software--This is currently being piloted as a way to
reduce ``no shows'' for our hearings. Offices using it find it very
useful. Again, all OHA offices need this technology. Although Reminder
Pro comes at a greater cost than Voice Recognition ($2500.00), FMA
feels that the overall savings realized from not rescheduling so many
``no show'' hearings will significantly offset the initial expense.
Local Systems Support
As we move to new technology it will be extremely important to
ensure that OHA has qualified, competitively graded employees in
systems positions in each field office and in Central and Regional
offices. The need for enhanced position descriptions (PD) has been
apparent for some time, but any forward momentum to enhance our
computer specialists has stalled. The Hearing Office Systems
Administrator position description no longer meets our needs, and the
Agency needs to address this critical need as soon as possible.
Addressing Staffing Imbalances in OHA
As previously noted, the hundreds of promotions from the clerical
ranks during the transition to HPI have left OHA with severe staffing
imbalances. OHA does not have the clerical support necessary to
adequately support our Administrative Law Judges. The Agency is
currently looking at ways to ease the problem without additional
staffing, but these types of fixes will not hold up as more and more
Baby Boomers begin to retire. We need the ability to replace the
personnel that we lost to promotion if we are to be in a position to
handle the claims anticipated over the next decade. Social Security has
worked hard to try to ease its staffing losses by at least replacing
the people who retired in recent years. The problem stems from not
replacing highly trained technical staff until after they have left!
Many positions within our Agency require three or more years of
training/experience before a person reaches journeyman status. We must
have the ability to hire additional staff before we are faced with the
retirement wave so we do not slip as new, inexperienced employees are
trained. As with performance management, we can expect only marginal
improvement with any initiative implemented without the staff to
perform the tasks.
LElevating the Federal Manager's Ability To Hire on Equal Footing With
the Private Sector
The Federal Government still hires following OPM rules established
in 1948. We still use the outdated ``Rule of Three'' which has been in
existence much longer. Some Federal Agencies have the ability to hire
locally, but at SSA we ask potential applicants to inquire at OPM and
we then must go through the labor-intensive process of OPM certificate
of listings. Often, it takes months to complete this process and
usually means that the most qualified of our potential candidates have
usually accepted positions with Federal departments or private
companies with greater hiring flexibility.
We stand to lose a considerable degree of our accumulated knowledge
over the next 7 years, and we must have the ability to fill this void
with the best and brightest if we are to effectively serve the American
public and ensure an experienced workforce. As with our earlier
discussion on performance management and staffing imbalances, we need
to address all of these issues if any new initiative is to be met with
success. A change or an initiative implemented without the staff to
carry it out and/or a performance management system that does not give
managers the tools to effectively lead and manage is doomed from the
beginning.
The New OHA Process Initiatives Recently Announced
FMA fully supports the Agency as we work to correct problems
discovered following our transition to HPI. Our concern is that the
first series of initiatives will have only marginal impact without
addressing issues within the Agency and government such as performance
management and hiring roadblocks that that would have a far greater
long term impact than surface issues such as new process initiatives.
Ending the Certification Process--
Any impact on eliminating certification will, in large part, be
determined by the number of offices still actually doing them. It is
our understanding that many offices ended certification when the
``flexibilities'' were introduced last year. Some offices never began
certification to begin with. The idea of an initial review by a higher
graded employee is still a good idea and is worth considering, in some
format, as long as we have sufficient writing resources to absorb the
additional duties without appreciable reductions in our writing
production. Accelerated distribution of voice recognition software may
allow some review with current staffing levels. It was just not viable
in the formal way HPI designed it, and certainly not without some
additional resources or relief for our writing staff. FMA does not
support prior testimony asking that clerical duties be added to a
paralegal's position description. This would only serve to further
impact productivity and would devalue the position.
Ending Rotational Assignments--
Again, many offices have already eliminated rotations either fully
or partially. We asked for the elimination of rotations shortly after
Phase II was implemented. However, once rotation officially ends, what
will replace it? Many offices have few, if any, case technician's (CT)
so the burden of doing the mail and reception duties fall to the SCT's.
Logic would suggest the hiring of a mail clerk and receptionist at a
lower pay than a GS-8 SCT. FMA previously submitted an enhanced
receptionist PD for consideration. We are pleased to learn that our
proposal is receiving strong consideration by the Agency. Even with the
addition of an enhanced receptionist position, we will still be forced
to rotate to some extent unless without an infusion of FTEs and
additional positions to handle scheduling.
In the end, this will have a minimal impact on production without
an infusion of FTEs. We still need to have someone do the clerical
work.
Extend Early Case Screening to ALJ's--
In order for this initiative to succeed we would have to make the
following assumptions:

The ALJ's would have time to conduct this review
The ALJs would be willing to do it, and
There are a significant number of On the Record
decisions available

Unfortunately we have no empirical data that would support these
assumptions. The anecdotal information we have would indicate that:

The ALJs will not have time to go through significant
numbers of unpulled files given the number of cases they must
schedule, hear and decide to meet ever increasing budgeted
goals.
Although there are some ALJs willing to review raw
files, it has been our experience that most will not, and
Although there are cases that can be paid prior to a
hearing and with minimal development, these are the exceptions.
A significant number require extensive development.
Short-Form Favorable Decision Format--
We must have agreement with the Appeals Council and OQA on an
acceptable format. Once that is achieved, it could result in
significant production increases.
We can reduce the number of cases sent to writers and thus reduce
processing time on unfavorable cases. We could potentially free-up
writers to perform other tasks.
The ALJs should be encouraged to complete the form. It should be
simple enough for them to complete via speech recognition, typing, or
by writing. We must keep the writer out of the workflow. If the case
has to go to a writer, to edit or elaborate on the ALJ decision, then
the new format's effectiveness would be greatly diminished. Although
the Agency could mandate the use of a short-form, receiving ALJ buy-in
would be the most effective method if we want a successful initiative.
Bench Decisions--
The ``bench'' decision is the same idea as the short-form reversal.
It is all part of the idea to have the ALJ make the complete decision
and by-pass the writer. Whether the ALJ does it by voice recognition at
the end of the hearing (a so-called bench decision) or typing later (or
even handwriting it so an SCT can type the decision) is not material.
Whatever format the ALJ feels most comfortable with should be the one
to go with. The buy-in can come by giving them the option as long as it
meets ALJ needs and is acceptable to everyone. We can't emphasize
enough the fact that if the case goes to a writer, to add to the
decision, then we defeat the purpose of the process. Once again, the
Agency can mandate its use, but ALJ buy-in is the key.
Folder Assembly Service Contract--
This was an excellent idea to get more cases pulled quickly. The
initiative should fit well with the short-form reversal since, in
theory, we will have more cases to write.
We need enough ALJ's who are willing to hear the additional pulled
cases. There is no point in pulling more cases if the ALJ's are not
willing to hear them and we have no other means to dispose of the
cases. It was mentioned that a new Code of Conduct for ALJ's would be
issued. Perhaps a minimal standard on the number of cases scheduled and
heard per month could be part of the code.
Contracts would be best utilized at the local level. Local
management should have the authority to find, train and pay the
contractor in the same way as we pay the Hearing Reporters. Payment, by
case, seems to make the most sense since that will guarantee a level of
production. There appears to be a sufficient pool of recent retirees
from SSA that might be interested in this. Although FMA is fully aware
of the competitive sourcing initiative, and believes there are
functions that can be competitively sourced, this is a case where we
believe we would be better served with personal service contracts
controlled locally.
Another benefit of these contracts is that it will free up our
experienced SCTs so they can devote more time to maintaining their
analytical skills. E-DIB will virtually eliminate the ``shuffling''
paper exercise of the work up process and the analytical skills of the
SCTs will be used to a higher degree. Maintaining these skills now by
not spending time on lower graded work, will pay dividends when OHA
transitions to the electronic folder.
Consistency Between DDS and OHA
Process Unification Training was supposed to bring consistency
between OHA and DDS decision making in disability cases. Consistency
has not happened for several reasons.

1. LDDS and OHA speak different languages. DDS speaks in a
language focused on diagnosis while OHA is focused on
credibility. Thus, DDS decision makers focus on objective
medical findings and whether complaints are proportionate to
objective medical findings. OHA judges focus on concepts in the
1996 Social Security Rulings (SSR), such as whether a treating
source's medical opinion is well supported (96-2p), whether an
impairment could reasonably be expected to produce the alleged
symptoms (96-3p, 96-7p). Rarely, if ever, do DDS decision-
makers address credibility concepts in the 1996 SSRs.
2. LDDS decision-makers rarely, if ever, address the concept of
sustainability whereas (SSR) 96-8p requires such consideration,
and such consideration is important at OHA.
3. LDDS decision-makers often do not resolve conflicts between
their opinions and opinions of consultative examiners or
treating physicians. For instance, a treating physician
(physical medicine) will submit specific Sit/Stand/Walk
limitations, which preclude performance of sustained work.
However, DDS will check a block on form SSA 4734-U8, p. 7
stating that there is no treating source statement regarding
the claimant's physical capacities in file, or, if the block is
checked yes, will reject the treating sources statement on the
basis of lack of objective evidence. Similarly, with regard to
mental impairments, frequent are the cases where a consultative
examination provides evidence of a severe impairment but DDS
reports No Severe Impairment on a Psychiatric Review Technique
Form (PRTF). The exigency of time (DDS medical consultants have
only 15 minutes to review an unpulled file and make a decision)
brings about these failures of DDS to resolve conflicts between
their opinions and opinions of consultative examiners or
treating sources. OHA must, and attempts to, resolve these
conflicts.
4. LDDS, unlike OHA, has no person who looks at a case as a
whole. DDS bifurcates consideration of an individual's mental
and physical impairments, sending the case first to one
specialty and then to the other. Once both specialties have
reviewed the case and made a decision, there is no decision
maker who has authority to look at the decisions of both
specialties and act like a judge at OHA, who has the authority
to accept, remand, or overrule medical determinations.

The Social Security Administration is an agency that affects the
lives of millions of Americans, particularly in its disability
services. With increased staffing and funding, the Agency would be able
to improve its service to its customers--the American public. The
missions performed by SSA could be completed at an even higher level of
proficiency if a meaningful performance management system were
instituted within the Agency. These changes would allow SSA to provide
to the public the level of service that is both expected and needed by
taxpayers.
FMA would welcome the opportunity to act as a sounding board for
any initiatives that this Subcommittee, as well as SSA would like to
create to further enhance the mission of the Social Security Disability
Program. We thank you, Mr Chairman and the Subcommittee, for your hard
work and interest on this very important topic.

Statement of Larry Jacks, Public Employees Federation, New York, New
York
Major changes are required in the national disability program if we
plan to meet the needs of the disabled and ensure the solvency of the
disability trust funds. I offer the following steps to simplify the
program and process.
1. Establish the age 50 medical severity test. Under the current
process an applicant may be found disabled at any age due to a less
than sedentary Residual Functional Capacity. 70% of all Administrative
Law Judge awards are made using this restriction. This finding is
HIGHLY subjective and cannot be measured. Under the new process
applicants under age 50 MUST meet or equal the level of medical
severity as published in the the Listing of Impairments to be found
disabled. For applicants age 50 and older, consideration will still be
given for diminished RFC as the vocational outlook is reduced by age.
This approach is simple to understand and administer. Program and
administration costs would be reduced by 35% at all levels.
2. Replace the current determination process and medical
improvement standard with Diary Decisions with Recertification. Under
the current process, decisions are reached on average in 100 days at
the DDS and appealed denials may take as long as 500 days until heard
by the ALJ. In addition under the current program FEWER than 5% who are
put on the disability rolls are ever removed or leave. This results in
a slow and costly program. Under the new process decisions, will be
determined much faster because we combine the age 50 severity
application and a Diary Decision. Decision-makers will make faster
approvals because decisions will be based on projected medical
limitations such as cancer with chemo, heart surgery with rehab, severe
fractures with physical therapy etc. The diary approval will then allow
the applicant to `recertify' his/her disability 90 days prior to the
end diary date if the condition remains severe. The medical improvement
standard WILL NOT apply since recertification will be a de novo
decision. Decisional timeframes will be reduced for DDS decisions by
20% and future program and administration costs will be significantly
reduced while improving customer service and payment of benefits.
Citizens will receive much needed benefits quicker and exit the rolls
earlier.
3. Intake of disability applications will be done by the DDS and
not SSA. This will result in an immediate savings of 7-10 days in
process time. State public libraries can be utilized as a gateway for
applications.
4. Replace the Reconsideration appeal step with a DDS pre-hearing
review. Upon review the DDS will process any case that can be found
fully favorable. Cases that cannot will not be redetermined but rather
moved forward to the Office of Hearings and Appeals and the ALJ
decision.
5. Close the record after step 4.
6. Regulations are needed to standardize the educational
requirements, training programs and quality procedures within the DDS
system. DDS decision-maker turnover and subsequent erractic decisions
are due to woefully inadequate salaries. The disability decision is a
complex decision that requires medical, legal and technical expertise.
In order to recruit and retain a quality DDS workforce, salaries must
be raised by regulation not left to the States and administrators to do
it on the cheap. Only the American public is shortchanged.
7. Create a Social Security Court to provide a uniform review of
SSA decisions.
8. Revise the Administrative Procedure Act to give requisite
authority to manage OHA.
I appreciate the opportunity to discuss these ideas with you and
applaud the leadership of the committee in trying to resolve the
problems with this critical national program.

Statement of Philip A. Robinson, Framingham, Massachusetts
Chairman Shaw, Ranking Member Matsui, members of the subcommittee,
I am an individual non-attorney claimants representative.
I work with a former agency employee with a wealth of experience
and we represent disabled persons before SSA who have problems with the
admittedly complicated system that is SSDIB and SSIDIB in place today.
Our purpose is to ensure that the people we represent have an
opportunity to present their claims for disability and other matters
before SSA in a cogent manner. It is our goal to ensure that claimants
receive fair treatment and due process at all levels of the system.
I applaud the desire of the members of the subcommittee to make the
disability process work better and am pleased that Commissioner
Barnhart has quickly begun the process of examining the more disastrous
experiments that have been in effect for the past years to the
detriment of claimants, all of whom are your constituents. I am happy
that the Commissioner and the subcommittee have begun the process of
listening. I would add to your expert panelists a number of employees
of the OHA 's across the country. Not just the ALJ Association
President, not just the Union heads or area Union representatives and
not just the DDS state Commissioners, but the real people who do the
work every day in every DDS and Social Security Field Office across the
country. The real workers. You should travel to them, listen to them
out of the spot light and seek the larger truths which only they know.
Even the upper level managers at OHA and SSA (deputies and associates)
only speak of what you wish to hear, not often of what you should hear.
A brief history of the immediate past.
For the purpose of these comments, the recent past is 1996 to now.
The agency budget has been reduced substantially as has the number of
employees. Many senior and well trained employees throughout the agency
have left and many more are ready to retire. Tele-service centers
originally designed to handle basic retirement questions and related
matters have been expanded to handle many tasks that well trained CRs
in the Field Offices used to handle. Budget cuts and reductions in
staff caused the agency to make unrealistic promises, to the Congress
and this and prior administrations, about this change to the tele-
service mission. The agency has not and cannot now keep those promises.
Training money has been cut to such an extent that videos are used
to substitute for what previously were many hours of direct class
training and employee monitoring in the field over many months. Field
office personnel are expected to handle the rising applications for DIB
with fewer employees and no work year credits in the budget for this
added work load.
The DDS partnership between the agency and the states does not work
because training is inadequate and insufficient budget money for
payroll has led to lower standards and higher turnover. Add to that the
cultural and regional differences and the disconnects between the
agency and the DDS and there is a formula for disaster.
The process unification rulings, which were designed to improve the
process of developing claims are not followed by the DDS components in
the individual states. The uniformity of decision making expected in
this program has never happened. HPI plans implemented at the OHA
offices across the country have been a disaster, as you are aware, for
claimants and the agency.
Emphasis has been placed on speed rather than quality at all
levels. We have been told that the average Disability Examiner in a DDS
has about 20 minutes of actual time spread over 2-4 months to make an
initial disability determination and that decision is usually
problematic. The agency policy to examine approvals only for quality
lets horribly unjust decisions pass through to claimants.
The OHA offices have old outdated computers for use in processing
their work. A simple examination (without prior announcement) will find
DOS based systems running on computers so old that school children
would not use them. Employees at OHA are expected to produce
outstanding work with outmoded and inadequate computers and programs
because there is no money to purchase modern computers with compatible
programs and provide the needed training and technical services. I have
been in the State offices of a number of Congressional Representatives
and found the newest and best PC systems money can buy. That grade of
equipment would be perfect for the agency. We do not believe that the
Congress has ever appropriated and the agency has not requested the
funds for this type of upgrade. The purchasing systems, which are based
on distrust, and take years to complete, ensure that outdated equipment
is all that is purchased.
A small start has been made.
Fortunately, HPI has been halted but the problems created by this
ill-conceived program have had a detrimental effect on the OHA staff,
promotions and the career tracks of dedicated employees. This may not
be able to be undone.
What proper funding and training can buy.
1. DDS disability examiners should be adequately trained and
instructed to follow the law as written. The goal of a uniform
interpretation of the laws will not be met unless and until the DDSs in
every state use the same interpretations of the law as the agency.
Denials of claims should be examined for errors by DQB offices and
returned with instructions for corrections. If the error rate for
approvals is xx% then it is logical that the error rate for denials
would at least be the same or even higher.
2. The reconsideration process at DDS should be more than a pro
forma scan of the records and a quick denial. Doing away with
reconsideration and extending the time an examiner has to handle an
initial claim would almost provide the same result as the 2 step system
at DDS does now. SSA considered the experiment in this prototype a
failure because more claims were paid and more denials were appealed to
OHA. A local elected representative once described the disability
process as follows: ``You apply, you get denied, and then you go
away''. The public perception of the process is disastrous. I believe
that DDS management is overreaching in attempting to expand the role of
DDS in the disability hearing process. However, I also believe that
with proper training and funding for employee work years and more
competitive pay scales that the DDS work product can be improved to the
point where approvals and denials will be more realistically arrived at
and the number of appeals to OHA will decline.
3. OHA has substantial numbers of very experienced staff people,
ALJs and attorneys. Moral is low because of the HPI problems. A lack of
respect between professional staffers and support staff is obvious to
all. Productivity has suffered because of management failure at highest
levels. Accountability is lacking and numbers are over emphasized.
Utilization of staff is poor. Many attorneys function well above their
level of competence while others are not competent in their present
positions. All are rewarded for time in grade.
4. An institutional attitude to `save the money' is fostered by
senior management. The term `not cost effective' and variations of same
appear often in reviews of programs tried and dropped. Generally the
body of comments describing end results seems to be that too many
claims were paid. If this is what the Congress really wants, if this is
to be the goal of every administration then the simple solution is to
do away with the disability program. Payroll and payout will drop to
zero. We do not believe that is the intent of either the administration
or the Congress. It is most assuredly not the desire of the public.
Looking to the future.
Please do away with the idea of an SDM at any level. No matter how
experienced a claim manager or SSA employee may be or is expected to be
the experience of those of us who work representing claimants in states
where SDM has been tried have been disastrous. DDS and SS employees
fear face to face conferences with angry claimants and telephone
interviews have usually been used to convince the claimant not to
pursue a claim. The DDS claim managers are not doctors or vocational
experts, yet the SDM model places them in that position. I and other
claimants representatives have found that communication with our local
Field Offices where CRs' are knowledgeable about the program is more
productive. That is a place where staffing can and should be increased
so that more career track employees can be hired and trained as the
agency used to do and individual claimants can be encouraged to use the
experienced people there for information instead of the Tele-service
centers where lack of knowledge leads to errors and incredibly wrong
information being provided to people in distress.
The tele-service centers should be used as originally intended,
processing retirement information for citizens and legal residents
whose retirement age is rapidly approaching and who will tax the
systems across all areas. This may mean reductions in the numbers
employed in the centers, but that money can be more productively used
in the FOs' to hire career track employees as the agency used to do.
Plans for increased technical and computer use including electronic
filing and processing and file maintenance is not in the agencies
immediate future and neither are televised hearings. The proper
equipment is not on hand at this time. The idea is wonderful and should
be implemented, but it cannot be done with yesterday's technology and
equipment or can this activity be set up incrementally. To work the
system needs to be set up in advance in each region on a rolling basis
from DDS to FO to OHA and AC and for every employee expected to use the
system. Not one machine, but at every work station and every front
desk. The equipment exists in embryonic form in the market now and can
be purchased with simple specifications and off the shelf programs. The
purchasing process will need to be changed in order to do this. Proper
equipment including up to date computers (this is one area where
individuals use free standing PC's) and well trained and well paid
technical backup for OHA would enable that component to do its intended
job.
Changes in the laws and listings and definitions used to define
`disability' to reflect our modern post industrial society and changed
work habits should be a priority and can improve the process. Millions
of our citizens have jobs and work in industries that did not exist 10
years ago. Skill levels required for even the most mundane jobs are
constantly rising
Millions more have illnesses that are controlled or whose effects
are reduced to an extent that part time work is a possibility. But
millions more never have that relief available to them. High school
students working part time after school can, and often do, earn more
than the dollar amount specified as the threshhold for `substantial
gainful activity'.
Each ALJ should be responsible for her/his case load and the HOCALJ
should not only be the titular head of the office, but should be able
to manage the entire office.
Who is in charge at the agency?
The simple answer is every one and no one. No one has any
responsibility for what goes wrong and no one has the authority to say
stop. The CALJ should be responsible directly to the Commissioner of
Social Security. The CALJ should have an ACALJ for DIB who is an
administrator and an Senior Executive Service career manager for
operations, both responsible for the day to day functions of OHA and
answerable to the CALJ.
Myths and excuses to explain shortcomings in the process.
Social Security Advisory Board which you all know is a
Congressional created agency to examine the way SS operates and offer
suggestions for improvements has recently issued a commentary that
suggests that there are lawyers and representatives who cheat by
delaying the submission of helpful medical or other evidence to build
up the amount of the fees payable. The Board also noted that some
physicians fudge or cheat on the medical reports they submit to the
agency to help their clients secure benefits. This has become a part of
the `one size fits all' explanation on why the system is dysfunctional.
Like all the stories of welfare cheats there is little beyond
anecdotal evidence. Legitimate claims are denied at every DDS office in
the country. Medical reports are read by MEs' who never see the
claimants or examine them, who miss important points in the records and
opine that people with long-term illnesses will recover in the
immediate future and become productive members of society. These are
errors which are difficult to correct in the process and they represent
a healthy majority of claims that are brought before OHA and allowed.
However in order to overcome the prior errors more records must be
obtained, more statements elicited to rebut the errors made. Claims
that end up in the District and Circuit Courts are remanded less than
25% of the time and they are occasionally paid but usually returned for
further development because the agency violated its own rules or
ignored critical evidence.
We all know that medical records are often delayed. Physicians
dealing with lawyers are like oil and water. They fear the lawyers,
they fear the representatives and clients who ask for records and
written statements to explain the physical and mental problems of their
patients. OHA itself and the FO's treat requests to copy the claimant
files as impositions on their limited resources. Although regulations
exists instructing OHA and FOs to forward files to the OHA or FO office
closest to the claimants' representatives because of distance or
explain why in writing as part of the record, some OHA offices refuse
to do so causing additional expenses in the of 100s of dollars for copy
and shipping fees to be taxed to the claimant. The alternative is a
lost claim at OHA and a potential remand from the AC because the
claimant was deprived of due process all other matters being properly
presented.
``Experts'' for DDS `are created' by regulations which describe the
expertise in the rules and laws gained by several weeks of training by
SSA employees in classroom settings. These experts are not provided
with the time to properly examine a medical file or paid any reasonable
sum of money. There is a myth that representatives `purchase' favorable
medical reports from physicians and/or others in order to win a claim.
The medical and vocational expert `vetted' by each states DDs and used
throughout the process do not meet any legal definition of `expert'.
Most are alive, they breath, they walk, they talk, but they are not
what SSA says they are with extremely rare exceptions.
There is no benefit to either the claimant or the representative to
withhold records or reports. Fees are limited by law and also are part
of the Federal Code.
A final comment.
SSA's problems can be solved with trained, adequate staff, money
and proper equipment.
Mr. Chairman and members, thank you for the opportunity to present
this testimony in writing.