[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]
THE SUPPLEMENTAL SECURITY INCOME PROGRAM
=======================================================================
HEARING
before the
SUBCOMMITTEE ON HUMAN RESOURCES
of the
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
SECOND SESSION
__________
APRIL 29, 2004
__________
Serial No. 108-44
__________
Printed for the use of the Committee on Ways and Means
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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 SANDER M. LEVIN, Michigan
WALLY HERGER, California BENJAMIN L. CARDIN, Maryland
JIM MCCRERY, Louisiana JIM MCDERMOTT, Washington
DAVE CAMP, Michigan GERALD D. KLECZKA, Wisconsin
JIM RAMSTAD, Minnesota JOHN LEWIS, Georgia
JIM NUSSLE, Iowa RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas MICHAEL R. MCNULTY, New York
JENNIFER DUNN, Washington WILLIAM J. JEFFERSON, Louisiana
MAC COLLINS, Georgia JOHN S. TANNER, Tennessee
ROB PORTMAN, Ohio XAVIER BECERRA, California
PHIL ENGLISH, Pennsylvania LLOYD DOGGETT, Texas
J.D. HAYWORTH, Arizona EARL POMEROY, North Dakota
JERRY WELLER, Illinois MAX SANDLIN, Texas
KENNY C. HULSHOF, Missouri STEPHANIE TUBBS JONES, Ohio
SCOTT MCINNIS, Colorado
RON LEWIS, Kentucky
MARK FOLEY, Florida
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin
ERIC CANTOR, Virginia
Allison H. Giles, Chief of Staff
Janice Mays, Minority Chief Counsel
______
SUBCOMMITTEE ON HUMAN RESOURCES
WALLY HERGER, California, Chairman
NANCY L. JOHNSON, Connecticut BENJAMIN L. CARDIN, Maryland
SCOTT MCINNIS, Colorado FORTNEY PETE STARK, California
JIM MCCRERY, Louisiana SANDER M. LEVIN, Michigan
DAVE CAMP, Michigan JIM MCDERMOTT, Washington
PHIL ENGLISH, Pennsylvania CHARLES B. RANGEL, New York
RON LEWIS, Kentucky
ERIC CANTOR, Virginia
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
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C O N T E N T S
__________
Page
Advisory of April 22, 2004, announcing the hearing............... 2
WITNESSES
Social Security Administration, Hon. Jo Anne B. Barnhart,
Commissioner................................................... 7
SUBMISSIONS FOR THE RECORD
Davis, Hon. Susan A., a Representative in Congress from the State
of California, statement....................................... 35
National Association of Disability Examiners, Madison, WI,
Theresa Klubertanz, statement and attachment................... 36
Paul, Margaret, Redlands, CA, statement.......................... 42
Stannard, John, Santa Barbara, CA, statement..................... 42
THE SUPPLEMENTAL SECURITY INCOME PROGRAM
----------
Thursday, September 29, 2004
U.S. House of Representatives,
Committee on Ways and Means,
Subcommittee on Human Resources,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:04 a.m., in
room B-318, Rayburn House Office Building, Honorable Wally
Herger (Chairman of the Subcommittee) presiding.
[The advisory announcing the hearing follows:]
ADVISORY FROM THE COMMITTEE ON WAYS AND MEANS
SUBCOMMITTEE ON HUMAN RESOURCES
CONTACT: 202-225-1025
FOR IMMEDIATE RELEASE
April 22, 2004
HR-8
Herger Announces Hearing on the Supplemental Security Income Program
Congressman Wally Herger (R-CA), Chairman, Subcommittee on Human
Resources of the Committee on Ways and Means, today announced that the
Subcommittee will hold a hearing on the Supplemental Security Income
Program. The hearing will take place on Thursday, April 29, 2004, in
room B-318 Rayburn House Office Building, beginning at 10:00 a.m.
In view of the limited time available to hear witnesses, oral
testimony at this hearing will be from the Honorable Jo Anne B.
Barnhart, Commissioner, Social Security Administration. However, any
individual or organization not scheduled for an oral appearance may
submit a written statement for consideration by the Subcommittee and
for inclusion in the printed record of the hearing.
BACKGROUND:
The Social Security Administration's (SSA) Supplemental Security
Income (SSI) program is a means-tested Federal assistance program that
provides monthly cash benefits to the Nation's needy blind, disabled,
or elderly individuals. In fiscal year 2005, 6.9 million individuals
are expected to receive $38.4 billion in SSI payments averaging about
$425 per month.
The 1996 Welfare Reform Law (P.L. 104-193), the Foster Care
Independence Act of 1999 (P.L. 106-169), and the Social Security
Protection Act of 2003 (P.L. 108-203) included provisions designed to
improve the SSI program and address concerns about fraud and abuse.
These changes included ending disability determinations based on drug
addiction or alcoholism, barring fugitive felons and parole violators
from receiving benefits, establishing a bounty system to prevent
prisoners from illegally receiving benefits, enhancing the ability of
SSA to detect and collect overpayments, strengthening penalties for
fraud and abuse, and increasing protections for vulnerable SSI
recipients. In addition, the Ticket to Work and Work Incentives
Improvement Act of 1999 (P.L. 106-170) contained provisions to help
disabled individuals receive assistance to help them return to work.
In spite of these legislative changes and SSA program improvement
initiatives, challenges remain in the SSI program. Program improvement
issues discussed in the President's fiscal year 2005 budget include
disability-decision reviews, overpayment recovery, program
administration improvement, and continuing disability reviews. While
the U.S. General Accounting Office removed SSI from its list of
programs at high-risk for fraud and abuse in January 2003, a new high-
risk area encompassing a range of Federal disability programs,
including SSI, was added. The Social Security Advisory Board focused on
program stewardship and the disability determination process in a
statement included in the May 2003 SSI annual report. In the September
2003 semiannual report to Congress, the SSA Inspector General
identified improper payments, management of the disability program, and
service delivery among significant management issues that continue to
confront SSA.
In announcing the hearing, Chairman Herger stated, ``Over the past
few years, we have taken steps to improve the SSI program so it
provides better services for recipients and includes enhanced measures
to prevent fraud and abuse. There is more work to be done. This hearing
will allow us to review the status of the SSI program, anti-fraud and
abuse initiatives, and suggestions for additional program
improvement.''
FOCUS OF THE HEARING:
The hearing will review the operation of the SSI program, including
anti-fraud provisions in law and policy, and consider further measures
to improve program performance and better prevent fraud and abuse.
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noted above.
Chairman HERGER. This morning we are pleased to welcome the
Commissioner of the Social Security Administration (SSA), the
Honorable Jo Anne Barnhart, to our hearing on the Supplemental
Security Income Program (SSI) (P.L. 92-603). I also note that
this is her first appearance before the Subcommittee on Human
Resources as Commissioner.
The SSI Program, provides $3 billion of benefits monthly to
nearly 7 million individuals, providing a safety net to the
Nation's neediest elderly and disabled individuals. Today's
hearing will cover how the SSI Program is operating and what
can be done to continue to improve it. Some issues involve very
basic questions, such as how does SSA determine who is eligible
for benefits, and can that process be improved?
Most Members have heard from their constituents that it
takes years to find out if they are eligible for SSI benefits.
The whole process is complicated and frustrating. This is
because there is no bright line separating those who can work
and those who cannot due to a disability. I know the
Commissioner has spent a great deal of time focusing on
disability determination issues and how to improve this
process. We look forward to her comments on what steps she is
taking to improve SSI in this area and what more we can do.
We also should consider other ways to improve how SSI meets
the needs of those it serves, along with better supporting our
society's need for a more productive work force. For example,
Congress recently promoted work by disabled persons through the
Ticket to Work law (P.L. 106-170). We want to explore what else
we can do to promote more work and less dependence on
government benefits. That is in everyone's interest, especially
disabled individuals who often want nothing more than to go to
work like other Americans.
Another important part of ensuring SSI operates effectively
involves protecting beneficiaries and taxpayers from fraudulent
payments and wasteful practices. This Subcommittee, working
with SSA, the Social Security Inspector General and the U.S.
General Accounting Office (GAO), among others, has made
numerous changes to better protect the integrity of the SSI
Program.
Working together we have made real progress. Prisoners,
fugitives, as well as drug addicts and alcoholics, among
others, have been removed from the SSI rolls, better targeting
benefits to those in need while saving millions of dollars each
year. As a result, the GAO removed SSI from its list of
programs of high risk of fraud and abuse. Still, disability
programs remain vulnerable to waste and misspending, so we must
remain vigilant to ensure we are protecting beneficiaries and
taxpayers from abuse.
Commissioner Barnhart, we look forward to your testimony
and to working with you on the challenges ahead. Unfortunately,
Mr. Cardin could not be with us today, but I want to thank Mr.
Stark for stepping in for him. We plan to have a follow-up
hearing soon featuring other interested groups, so there will
be more opportunities for input on this important topic.
Without objection, each Member will have the opportunity to
submit a written statement and have it included in the record
at this point. Mr. Stark, would you like to make an opening
statement?
[The opening statement of Chairman Herger follows:]
Opening Statement of The Honorable Wally Herger, Chairman, and a
Representative in Congress from the State of California
This morning we are pleased to welcome the Commissioner of Social
Security, the Honorable Jo Anne Barnhart, to our hearing on the
Supplemental Security Income program. I also note that this is her
first appearance before the Human Resources Subcommittee as
Commissioner. Again, welcome.
The Supplemental Security Income program, also known as SSI,
provides $3 billion of benefits monthly to nearly seven million
individuals, providing a safety net to the nation's neediest elderly
and disabled individuals. Today's hearing will cover how the SSI
program is operating, and what can be done to continue to improve it.
Some issues involve very basic questions--how does SSA determine who is
eligible for benefits, and can that process be improved?
Most Members have heard from their constituents that it can take
years to find out if they're eligible for SSI benefits. The whole
process is complicated and frustrating. This has to do with the fact
that there is no bright line separating those who can work and those
who cannot due to a disability. I know the Commissioner has spent a lot
of time focusing on disability determination issues, and how to improve
this process. We look forward to her comments on what steps she is
taking to improve SSI in this area, and what more we can do.
We also should consider other ways to improve how SSI meets the
needs of those it serves, along with better supporting our society's
need for a more productive workforce. For example, Congress recently
promoted work by disabled persons through the Ticket to Work law. We
want to explore what else we can do to promote more work and less
dependence on government benefits. That's in everyone's interest, and
especially disabled individuals, who often want nothing more than to go
to work like other Americans.
Another important part of ensuring SSI operates effectively
involves protecting beneficiaries and taxpayers from fraudulent
payments and wasteful practices. This Subcommittee, working with SSA,
the Social Security Inspector General, and the General Accounting
Office, among others, has made numerous changes to better protect the
integrity of the SSI program.
Working together, we've made real progress. Prisoners, fugitives,
and drug addicts and alcoholics, among others, have been removed from
the SSI rolls, better targeting benefits to those in need, while saving
millions of dollars each year. As a result, GAO lifted SSI from its
list of programs at high risk for fraud and abuse. Still, disability
programs remain vulnerable to waste and misspending. So we must remain
vigilant to ensure we are protecting beneficiaries and taxpayers from
abuse.
Commissioner Barnhart, we look forward to your testimony and to
working with you on the challenges ahead.
Unfortunately, Mr. Cardin could not be with us today, but I want to
thank Mr. Stark for stepping in for him. We plan to have a follow-up
hearing soon featuring other interested groups, so there will be more
opportunities for input on this important topic.
Mr. STARK. Thank you, Mr. Chairman. A bit of deja vu. I sat
in your chair in the early eighties, when on a bipartisan basis
we expanded the benefits for SSI and Aid to Families with
Dependent Children (AFDC, P.L. 74-271) and a lot of programs,
and I am proud of the work that this Committee has done on the
SSI Program.
However, much of our focus in the last 10 years has been in
reducing expenditures in the SSI Program. You will recall in
1996 we figured out how to get rid of about 100,000 children by
raising eligibility standards, and most legal immigrants were
barred from the program. To differentiate, we are going to be
talking this morning about basically what I would refer to, I
am not sure it is the correct term, but extending benefits for
refugees, people who we have given legal asylum from religious
or a danger of being killed if they go home. I hope we all can
keep in mind that we are not dealing with our problem in my
home State of California with a host of illegal entrants to the
country or undocumented, but these are people that our
government has designated as people that we would give asylum
status to.
We have had 10 pieces of legislation to combat perceived
fraud and abuse within the program, and you might suspect from
this that SSI is an incredibly generous program, when in fact,
it is not. It still leaves individuals and couples, I think, at
about 85 percent of poverty for many of them. So, I hope we can
consider reforms that will help those who are rightfully
entitled to the program.
We have not really increased the income disregards, for
instance, in over 30 years, and so in many cases with
inflation, we have been reducing benefits in that way, and I
would hope we could look at those. The income disregards, if
they had kept pace with inflation, such as the general
exclusion would be worth $85 a month rather than $20, and for
somebody living on a few hundred bucks a month, that is
significant. It may not sound like a lot to us, but it really
can mean a great deal to the very lowest income people.
I hope as we think through this and discuss this issue with
Commissioner Barnhart, if any of us can do this--I cannot
remember doing it since I was 10--think about people living on
$400 a month or whatever they may be doing, and it is a whole
different program. There is legislation to increase these
disregards. We have a bipartisan bill that would extend the
benefits for 2 years. The Administration I think has suggested
they would support a 1-year extension. Maybe this morning we
could agree on 18 months, and get that right through and bring
it up. Uh-oh, I am sorry if I stole your bill.
[Laughter.]
There are 36,000 refugees who will lose their SSI benefits
through 2007, and perhaps we can find a way this morning to
increase that. I would also, Mr. Chairman, like to think that
when we talk about fraud, there is two edges to that sword. Not
only is it people who would desperately try to get on the
rolls, which is understandable, but we have quite a few people
who are ignoring their obligation to the Social Security
program, whether it is employers who employ people off the
books, or those of us who may not pay the proper amount for our
baby-sitters, and I think we should look at both sides of the
coins, the income as well as the expenses. I appreciate you
holding this hearing.
[The opening statement of Mr. Stark follows:
Opening Statement of The Honorable Pete Stark, a Representative in
Congress from the State of California
Mr. Chairman, I welcome this opportunity to evaluate the operations
of a program that provides assistance to nearly 7 million disabled and
elderly Americans. I also am glad that Commissioner Barnhart can join
us today to share with us her expertise and her vision for the SSI
program.
Over the last decade, much of Congress' focus has been on reducing
expenditures in the SSI program. For example, over 100,000 children
were removed from the SSI rolls under the 1996 welfare law, which made
the disability eligibility standard more strict.
Additionally, most legal immigrants were barred from gaining access
to the program. And finally, 10 separate pieces of legislation have
been enacted to combat perceived fraud and abuse within the SSI
program. All of this might lead you to believe that SSI is an
incredibly generous program, when in fact the SSI benefit still leaves
individuals thousands of dollars below the poverty line.
I hope today we might actually consider reforms that will help
those disabled and elderly Americans who depend on the SSI program. For
example, the income disregards for SSI have not been increased for 32
years--meaning they have lost more than 75% of their real value.
One of these income exclusions provides a very small reward for
past work by allowing up to $20 of Social Security benefits to be added
to the SSI benefit without any penalty. The second exclusion allows the
first $65 in earnings a month from current employment to be disregarded
from SSI eligibility (after that, every $2 of earnings reduces the SSI
benefit by $1).
If these income disregards had simply kept pace with inflation over
the last three decades, the general exclusion would be worth $85 a
month, rather than $20; and the earnings exclusion would be worth $280
a month, rather than $65.
We hear endless rhetoric about promoting and rewarding work, and
yet the SSI program rewards work less and less every year. I therefore
urge both the Chairman and the Commissioner to consider legislation to
increase the income disregards in the SSI program. The Democratic
Members of this subcommittee have introduced such a bill, which is
supported by a variety of organizations representing senior citizens
and individuals with disabilities.
I also encourage the Chairman to allow a vote on legislation to
extend SSI assistance to elderly and disabled refugees, all of whom
have fled political and religious persecution in their home countries.
A bipartisan group of Members on this committee introduced
legislation to provide a two-year extension for these individuals, many
of whom have no other source of income. The Bush Administration has
proposed a one-year extension.
And yet, we have not seen any action in this subcommittee on the
issue, despite a projection from SSA that 36,000 refugees may hit the
current time limit through 2007 (some may naturalize before they hit
the limit and thereby retain eligibility).
Mr. Chairman, I look forward to the Commissioner's thoughts on
these issues, as well as on her ongoing effort to improve processing
times for SSI applications. Thank you.
Chairman HERGER. Thank you, Mr. Stark. Without objection,
all the written testimony from our witness today will be made a
part of the permanent record. Again, Commissioner Barnhart, I
would like to welcome you today. Please proceed with your
testimony.
STATEMENT OF THE HONORABLE JO ANNE B. BARNHART, COMMISSIONER,
SOCIAL SECURITY ADMINISTRATION
Ms. BARNHART. Thank you, Mr. Chairman. I would like to
thank you and Members of the Committee for inviting me to
discuss the SSI Program today. Although this is the first time
that I have had the privilege of coming before this
Subcommittee as Commissioner, I would like to thank the
Subcommittee for your work on this important program over the
years to improve program integrity and public confidence in our
program, and to protect the millions of low income, aged,
blind, and disabled individuals the program was designed to
assist.
In March 2004, 6.9 million individuals received federally
administered monthly SSI benefits, 5.7 million of these
beneficiaries were disabled, 1.2 million received benefits
because they are 65 or older, and 95,000 are blind. Their
monthly benefit averages $425. In 2003, more than $36 billion
in cash benefits were paid under SSI. As this Committee well
knows, SSI is an extremely complicated program. Changes in
earnings, bank accounts, and living arrangements are only some
of the factors that affect eligibility and benefit payments.
My written testimony describes in some detail many of the
steps that we are taking to address the tremendous challenges
and the opportunities we have for effective administration of
SSI, but so there will be ample time for the questions of the
Members, I will limit my oral statement to a very brief
overview of my approach to the challenges at hand. Everything
we at the SSA are striving to accomplish in SSI can be summed
up in two words: stewardship and service. As you know, when I
became Commissioner, SSI was on the GAO's high risk list. Last
year, recognizing our efforts to develop and implement a
comprehensive corrective action plan, GAO removed SSI from that
list, and quite frankly, we take great pride in the fact that
we were able to have that designation removed.
Under the corrective action plan we have intensified our
program integrity efforts to prevent, detect, and collect debt,
and we continue to monitor and improve the effectiveness of
these measures. We also continue to refine our criteria for
identifying the high error-prone (HEP) cases so that we can
maximize the effectiveness of our SSI eligibility
redeterminations. In other words, if we are making sure that a
larger portion of our redeterminations are being geared toward
the so-called HEP cases, then it means that the net cost
benefit of those redeterminations is much greater. One
important area of program integrity in which we continue to
improve is the nonpayment of SSI benefits to prisoners,
fugitive felons, and probation and parole violators. These
nonpayment provisions are in the law because of your diligence,
Chairman Herger, and this Subcommittee working together.
I mentioned earlier the complexity of SSI, and this
complexity increases the challenges that we face in providing
good stewardship, the kind of stewardship the taxpayers, as the
Chairman mentioned in your opening remarks, so rightly expect
and deserve, as well as the good service for those who depend
on us as was mentioned as well, because we serve an extremely
vulnerable population in SSI. I want to thank this Subcommittee
for its key role in including several SSI simplification
measures in the recently passed and enacted Social Security
Protection Act (P.L. 108-203). We are looking at all of the
most complex areas of SSI program policy currently within the
agency. I have a group working on that, because even small
incremental changes that could be made sometimes can make the
program simpler and less error prone in terms of
administration.
The electronic disability determination process that we
have begun to roll out, in fact, roll out started in the State
of Mississippi in January, continued to South Carolina in
March, and Tennessee in April. I should mention, Mr. Chairman,
since there are two Members from California here, we had a
pilot that started in California, as well as North Carolina and
Illinois. The electronic disability system that we are working
on rolling out through those States and the future States that
will occur in the next 18 months, is going to really, I
believe, revolutionize the way we do business in the disability
system in terms of providing more efficient service, keeping
track of cases, documents, and so forth.
In addition to reducing processing time, it is going to
help us provide service in many, many ways. For example, it is
going to help us get reports of earnings in the system faster
so that we can make adjustments in benefits payments timely. I
know this is something of great interest to this Committee.
That helps avoid the large overpayments that affect
beneficiaries trying to return to work. We are going to
continue to focus on helping beneficiaries become self-
sufficient so that they no longer have to rely on SSI. I know
that is another matter of great interest for this Subcommittee.
The Ticket to Work Program, along with increased emphasis
on the many other SSI work incentives--and I would point out we
do have many work incentives already incorporated in the SSI
Program--are providing real opportunities for individuals to
work and for us to provide assistance to help them do that.
Another service improvement that will affect many SSI
recipients is my new approach to the disability determination
process. As you may know, the disability determination process
takes far too long. You referred in your opening statement, Mr.
Chairman, to sometimes the fact it takes years to receive
eligibility notification. I developed a new approach to the
process with the goal of making the right decision as early in
the process as possible. The approach also includes, I think
very importantly, a number of demonstration projects that
promote return to work at all stages of the disability process,
including entry, or even prior to entry into the system.
As we refine this new approach and prepare to develop
regulations, we are seeking input from groups involved in every
stage of the process within SSA, with the State disability
determination services, from Congress, from advocacy
organizations, and professional organizations as well. I want
to assure you that I will continue to look for ways to improve
service and ensure fiscal stewardship. I look forward to
continuing to work with this Subcommittee to improve our
ability to administer the SSI Program in a way that increases
congressional and public confidence in both the program and the
agency as well as service. Thank you, Mr. Chairman. I would be
happy to try and answer any questions you or any other Members
might have at this time.
[The prepared statement of Ms. Barnhart follows:]
Statement of The Honorable Jo Anne B. Barnhart, Commissioner, Social
Security Administration
Mr. Chairman and Members of the Subcommittee:
Thank you for inviting me to appear today before the Subcommittee
to discuss the Supplemental Security Income (SSI) program. Although
this is the first time I have had the privilege of coming before this
Subcommittee as Commissioner of Social Security, I would like to thank
the Subcommittee for its work over the years to improve the integrity
and public confidence in the SSI program, while protecting the millions
of low-income aged, blind, and disabled individuals the program was
designed to assist.
In March 2004, 6.9 million individuals received federally
administered monthly SSI benefits. This group is composed of 1.2
million individuals who receive benefits based on their being aged 65
or older, 5.7 million disabled recipients, and 95,000 blind recipients.
The monthly benefit paid to these eligible individuals averages $425.
In calendar year 2003, more than $36 billion in benefits were paid
under SSI--$32.4 billion in Federal expenditures and nearly $4 billion
in federally administered State supplementary payments.
SSI is a complex program, which poses tremendous challenges and
opportunities for SSA. Today, I would like to touch on several areas:
the administrative challenges facing the agency, the
progress we have made in meeting those challenges and current
initiatives;
progress in simplifying the SSI program;
my approach to improving the process for determining
disability; and,
opportunities for those disabled SSI recipients who want
to begin or return to work.
Before I describe our challenges and accomplishments, I would like
to briefly give you some idea of the people the SSI program serves.
Beneficiaries
SSI beneficiaries are among the most vulnerable members of our
society. All of them are either blind or disabled, or aged 65 and
older. All have very limited incomes and little or no assets. The
maximum income an individual can have and still be eligible for SSI
represents less than 75 percent of the poverty level for a one-person
household, and the maximum income a couple can have and remain eligible
for SSI represents less than 85 percent of the poverty level for a two-
person household. Only 35 percent of SSI beneficiaries receive other
cash benefits such as Social Security benefits. It is clear that
without SSI, the vast majority of beneficiaries would be destitute.
The current maximum Federal SSI benefit rate is $564 per month for
an individual and $846 for a couple, when both members are aged, blind,
or disabled. Of the 1.2 million individuals who receive SSI benefits
based on age, more than half are over age 75 and about 70 percent are
women. About half of all SSI elderly beneficiaries live alone. The
average age of the nearly 4 million adults receiving SSI benefits based
on disability is about 45 years old and 60 percent are women. In
addition, there are760,000 SSI beneficiaries who came onto the SSI
rolls as blind or disabled individuals who are now aged 65 or older.
By any measure, SSI recipients are among the poorest of the poor.
For them, SSI is truly the program of last resort and is the safety net
that protects them from complete impoverishment. In administering this
program we must recognize both the vulnerability of those served by it
as well as our obligation to the American taxpayer to ensure that
payments made under the program are consistent with the program's
requirements.
Administrative Challenges
As its name indicates, the SSI program is designed to supplement an
individual's income up to a minimum floor of income. The definition of
income in the SSI program includes cash and in-kind income, and is
anything that a person receives that can be used to obtain food,
clothing, or shelter. It includes cash income such as wages, Social
Security and other pensions, and unemployment compensation. In-kind
income includes food, clothing, and shelter. Generally, the amount of
the cash income or the value of the in-kind income is deducted from the
maximum Federal benefit rate. In computing the SSI benefit, the first
$65 of earnings is disregarded and then $1 is deducted from the benefit
rate for each $2 of earnings. Unearned income--for example, Social
Security--causes the benefit rate to be reduced $1 for $1 after the
first $20 is disregarded.
Individuals' SSI benefit amounts also may change if they move into
a different living arrangement--whether a person lives alone or with
others, or resides in a medical facility or other institution affects
benefit levels. For instance, when individuals move into nursing homes,
their benefits generally are reduced to not more than $30 per month. If
they move from their own household into the household of another
person, and that person provides food, clothing, or shelter, their
benefits also may be reduced. If their income or resources in a month
exceed the limits specified in the law, they may be ineligible. The
design of the SSI program requires SSA to take into account the many
changes in an individual's financial and personal life and make
adjustments in benefit payments to reflect those changes.
SSI eligibility is based on a monthly means test for income and
resources. It is a practical impossibility for SSA to obtain
information from all recipients about every change in their income,
resources, or living arrangements every month. Some overpayments and
underpayments are inevitable. Additionally, even if individuals report
timely, requirements to notify individuals of how a specific change
affects their benefit amounts can create a lag in adjusting the
benefit, also causing overpayments and underpayments.
The very design of SSI as a program that provides for current
needs, leads to some amount of overpayment. Certain amounts of
overpayments are unpreventable because of due process notification
requirements or because an individual's income increases during a month
after the SSI benefit has already been paid for the month. Overpayments
can occur when recipients report benefit-changing events too late or do
not report them at all. In addition, some amounts of overpayments occur
because SSA is unable to act promptly on reports of changes because of
insufficient resources and competing workloads. Regardless of the
various causes of improper payments, SSA is committed to preventing
such payments where possible, and where not, acting quickly and
efficiently to correct such payments.
In 1997, the GAO designated SSI as a high-risk program. At the
time, GAO said that SSA lacked an effective plan to address the level
of debt created by overpayments. Further, GAO said that SSA had
difficulty determining initial medical and non-medical eligibility for
the program, as well as continuing eligibility of program participants.
GAO also noted what it perceived as SSA's emphasis on adjudicating
initial disability and aged claims and providing beneficiary services
over program integrity.
Corrective Action
When I became Commissioner I made it a priority to address GAO's
concerns about the administration of the SSI program. In fact, Deputy
Commissioner James B. Lockhart and I met personally with Comptroller
General David Walker to discuss GAO's concerns. In developing a
corrective action plan, we focused on four areas: commitment to timely
processing of continuing disability reviews (CDRs), improved prevention
of overpayments, increased overpayment detection, and increased
collection of debt. SSA developed a Corrective Action Plan directed at
the issues raised by GAO in its designation of SSI as a high-risk
program.
The Corrective Action Plan identified the root causes of problems
in the SSI program, provided solutions and provided for substantial
additional near-term measures, primarily improved program
administration and higher payment accuracy. Our efforts to develop and
implement the Corrective Action Plan paid off. In January 2003, the
General Accounting Office (GAO) took the SSI program off its high risk
list.
Still, much remains to be done. With the enactment of the Improper
Payments Information Act (IPIA) of 2002, SSA has increased its focus on
reducing payment errors by refining and improving upon the Corrective
Action Plan so that it can be an increasingly effective program,
integrity planning, and tracking tool. The Plan is reviewed and updated
monthly and I hold specific senior agency officials accountable for its
results. Major ongoing initiatives under the Plan involve electronic
death registrations, electronic bank account verification, and
improving debt collection strategies. In addition, to simplify wage
reporting for beneficiaries, SSA has conducted a pilot project designed
to test beneficiary reporting of income using touch-tone and voice-
prompt telephone technology. The Plan has been the impetus for helping
SSA meet the improper payment reduction targets that are being
established pursuant to the IPIA. Through the Plan, SSA is implementing
administrative sanctions, online data matching in the redetermination
process, and improved collections of overpayments through netting,
credit bureau referrals, administrative offsets, and mandatory cross-
program recovery.
When conducting a redetermination, SSA reassesses SSI recipients'
incomes, resources, living arrangements, and all non-disability factors
of SSI eligibility. While we will continue to refine our
redetermination selection process to make it more effective and
efficient, the number of redeterminations that we can do in a year are
directly related to the resources that are allocated to us by Congress.
Redeterminations and CDRs are the most effective means of
preventing erroneous payments. Redeterminations return about $7 for
every $1 it costs to administer. CDRs, during which we determine
whether an individual continues to be under a disability, have a
savings-to-cost ratio of roughly $10 to $1. We expect that the present
value of SSI program savings resulting from the CDRs conducted in FY
2003 will be close to $2 billion. And that redeterminations conducted
in FY 2003 will produce an estimated $2.7 billion of overpayment
prevention and recoveries. While we are considering a number of ways to
improve the redetermination process by better targeting the types of
cases we select, budget restraints could adversely affect these ongoing
important program integrity efforts. Doing fewer CDRs and
redeterminations would mean that fewer erroneous payments would be
prevented and detected.
However, as you know for FY 2004, SSA's appropriation for
administrative expenses was significantly lower than the President's
budget request. I found that I had to balance the need for CDRs and
redeterminations against the need to process claims filed by aged and
disabled citizens--arguably the most vulnerable of our population. And
we are not going to be able to do as many CDRs and redeterminations as
I had originally planned.
Prisoners and Felons
A very important area of program integrity in which we continue to
improve involves non-payment of SSI benefits to prisoners, fugitive
felons, and parole and probation violators. These non-payment
provisions are in the SSI law because of Chairman Herger's and this
Subcommittee's diligence. As you know, the fugitive felon prohibition
was recently extended to the Social Security program as well in the
Social Security Protection Act of 2004.
Since its inception, the SSI program has prohibited the payment of
benefits to individuals who reside in public institutions--including
prisons, jails, detention centers, and other types of correctional
institutions. Social Security recipients in correctional institutions
also generally are not eligible for benefits. Even though we conducted
matches with correctional institutions, we were not always able to
identify all of the individuals who should have their benefits
suspended. Under this Committee's guidance and leadership, legislation
was enacted that provided for incentive payments to state and local
correctional institutions that furnish information resulting in the
suspension of SSI payments. Under the provision, SSA pays up to $400 to
state and local correctional institutions for each report that results
in the suspension of an individual's benefits.
SSA currently has agreements with jails and prisons under which the
Agency is provided lists of inmates to match against our recipient
records. These agreements are with institutions that house 99% of all
prisoners in the country. Since the incentive payment program began in
1997, SSA has paid 5,196 penal institutions over $113 million in
incentive payments. Suspension of benefits to prisoners saves
approximately $500 million annually. In fiscal year 2001, there were
over 89,000 prisoner suspensions.
Another very important SSI program integrity provision prohibits
fugitive felons from receiving benefits. A key to its implementation is
having access to records of outstanding felony warrants. We have
entered into matching agreements with a number of Federal, state and
local law enforcement agencies to facilitate electronic matching of
warrant information.
For example, SSA and OIG have matching agreements for obtaining
fugitive warrants in place with the FBI; the FBI's National Crime
Information Center, the U.S. Marshal's Service, State agencies, and
metropolitan police departments. Currently, SSA has access to all
Federal warrant information, all felony warrant information from 40
States, the District of Columbia, and three major metropolitan
jurisdictions.
When we obtain warrant information from any of these sources, we
first verify the social security numbers by matching them against our
Enumeration and Verification System. We then match against our SSI
beneficiary files to determine if any of the fugitives are receiving
SSI benefits. Results of the second match are forwarded to OIG for
action.
OIG works with both the FBI Information Technology Center, the ITC,
and with the U.S. Marshals Service to verify that the felony probation
or parole violation warrant is active. The ITC and U.S. Marshals
Service provide the address information in SSA's records about each SSI
recipient to the appropriate law enforcement personnel so that they can
apprehend the individual. Over the years, these leads to law
enforcement have resulted in the apprehension of 19,000 fugitives.
Since the inception of the fugitive felon program in August 1996,
SSA has suspended nearly 78,000 SSI payments under this provision, and
the number is growing every year. In FY 2003 alone, we processed nearly
24,000 suspensions. For FY 2001 (the most recent year for which an
estimate is available), we estimate that the 5-year Federal SSI program
savings from suspensions processed in that year amount to over $25
million. Additionally, the suspension of SSI payments to fugitive
felons and parole violators also saves both Federal and State Medicaid
expenditures.
The provision in the Social Security Protection Act of 2004
extending the fugitive felon prohibition to OASDI payments is estimated
to reduce OASDI program expenditures by $800 million over10 years. We
are currently working toward implementing this provision by its January
2005 effective date.
The core of program integrity involves making sure that individuals
meet all SSI eligibility factors before benefits are paid and assuring
that only correct amount of benefits are paid on an initial and ongoing
basis. In those cases in which individuals are overpaid SSI benefits,
we pursue recovery. SSA has a number of tools to collect overpayments
from deducting amounts from benefits to referring the debts outside of
the agency for collection. I would like to give you an idea of some of
our more recent successes that have been accomplished in the debt
collection area.
Debt Collection Efforts
As part of the Corrective Action Plan, we implemented a new system
in FY 2003 to measure and report the status of various types of debt.
This allows us to identify debt that had been previously determined to
be uncollectible but may now be recoverable because the overpaid
individual is again eligible for SSI or has become eligible for OASDI
benefits from which the debt may be collected. Previous to the
Corrective Action Plan, we were unable to track debt in such situations
because often the old debt was not carried over onto the newer benefit
record. The plan has also been the catalyst for several other changes.
These include collecting overpayments using new ``netting'' software
that automatically recovers overpayments when an underpayment is
discovered, mandatory cross-program recovery, and new administrative
offset and credit bureau referrals.
These debt collection improvements contributed to increased
recovery of SSI overpayments at reduced cost. Specifically, SSI
overpayment collections in FY 2002 totaled $859.6 million and in FY
2003, they totaled $941.6 million (up nine percent), with almost $100
million of that total being attributed to the automated netting
technique. SSA also worked with Congress to develop new authority for
expanded cross-program recovery of SSI overpayments from OASDI
benefits, which included lifting the restriction on the amount of
offset that can be applied to retroactive checks. An estimated savings
of over $200 million over 10 years is expected from the enactment of
this provision in the Social Security Protection Act of 2004.
SSA refers delinquent debtors to credit bureaus and delinquent
debts to the Department of the Treasury for offset of Federal payments
being made to the individual. The credit bureau reporting program led
to the voluntary repayment of$20.9 million during FY 2003. In FY2003,
SSA referred 158,484 debtors to credit bureaus; the total debt owed by
these individuals was $525 million. The Treasury Offset Program has
also been very successful. For example, SSA collected over $35 million
in FY 2003 through this program.
Overpayment prevention, overpayment detection, and overpayment
collection are vital parts of our overall program integrity efforts.
Many overpayments are the result of SSI beneficiaries not reporting
changes or SSA not acting on reported changes in time to correct the
benefit payment. Some overpayments are caused by due process
requirements that are a matter of law. And, a number of overpayments
are caused by complex program policies that can be difficult to
administer. In all cases, regardless of the cause of the improper
payment, SSA is committed to tracking and reporting these payments,
setting aggressive reduction targets, and taking the necessary steps to
ensure that reduction targets are achieved.
Program Simplification
I previously mentioned the recent enactment of the Social Security
Protection Act of 2004. I thank this Subcommittee for including SSI
provisions in the bill. While the bill includes many important Social
Security program integrity and improvement provisions, I want to point
out those SSI provisions that simplify the program.
One provision excludes small amounts of income paid as interest or
dividends on an SSI beneficiary's countable resources. Currently, an
SSI individual cannot have countable resources of more than $2,000 if
he or she is single or $3,000 if married. Thus, an interest bearing
bank account with a balance close to the resource limit would yield
only a small amount of interest income perhaps no more than $1 to $2 a
month. Prior to enactment of the provision in the Social Security
Protection Act of 2004, SSA field office employees would have to obtain
documentation from the individual or the bank about the amount of the
interest paid, record it in the SSI file, and make adjustments to the
benefit payment, which resulted in a small overpayment. We would then
take appropriate action to recover or waive recovery of the small SSI
overpayment caused by a small interest payment. All of these actions of
identifying, recording, and recomputing are no longer necessary making
the program simpler to administer and avoiding overpayments.
Another provision increases from $20 to $60 a quarter the amount of
infrequent unearned income an individual can receive in a quarter
without it affecting his or her SSI benefit. Again, by eliminating the
reporting and recording of these very small amounts of income--cash
birthday gifts or small payments for babysitting, for example--
administration of the SSI program is simpler, overpayments are avoided
and the program is more equitable and easier to understand.
Yet another provision eliminates the unreasonable situation in
which income received in the first month of eligibility is counted
three times even if it were only received once. The reason for triple
counting the first month's income is because in all initial eligibility
cases the law required that there be a transition from current month
accounting to retrospective accounting without considering income
received prior to the first month of eligibility. Although the law
recognized exceptions for certain types of income such as Temporary
Assistance for Needy Families (TANF), refugee relocation assistance,
and Bureau of Indian Affairs payments, it did not include a general
exception for other income that ended. For example, a relative provides
cash assistance only until the individual begins receiving SSI
benefits. This triple-counting of one-month's income caused beneficiary
confusion and was difficult for SSA employees to administer and
explain.
Two provisions in the Social Security Protection Act of 2004 helped
military families. The first extended the current-law exception for SSI
eligibility outside the United States to children of military personnel
who were born or became disabled overseas while accompanying their
parents on duty assignments. This makes the treatment of disabled
children of military personnel consistent whether or not they first
received SSI while they were in the United States. The second provision
simplifies the program by providing SSA with the authority to count
compensation reported on a monthly leave and earnings statement issued
by the military reflecting compensation earned in the prior month as
compensation received in the prior month. The provision is a
significant administrative simplification in that it eliminates the
need to review multiple payment statements from different periods to
determine countable compensation for a month.
These provisions are an important first step in simplifying the SSI
program. I assure you that we will continue, with the help of Congress,
to improve and simplify SSI.
President's Budget SSI Proposals
While the enactment of the SSI provisions in the Social Security
Protection Act of 2004 was very helpful, there may still be many areas
in the SSI program that might lend themselves to simplification.
For example, a proposal in the President's FY 2005 budget would
provide more help for military families with disabled children while at
the same time simplify the administration of the SSI program. Under
current law, only basic pay is counted as wages for SSI purposes. But,
there are 30 types of military compensation that are not basic pay, and
therefore are treated as unearned income. (The distinction between
earned and unearned income is important in determining the amounts to
be deemed from a parent or spouse in military service. Higher disregard
amounts apply to earned income yielding less countable income and,
often, higher SSI benefits.) Determining the difference in the types of
military pay is time consuming and error prone, and the guidelines for
making such determinations covers 14 pages in SSA's operating
instructions.
The proposal would treat most cash military compensation as wages
and, thus, as earned income. The provision would treat cash military
compensation and civilian wages alike, and thus eliminate the present
unfair and disadvantageous treatment of cash military compensation
other than basic pay under SSI. The proposal would increase SSI
benefits for most military families with disabled children, which are
currently about 3,000 families. It would be a significant program
simplification in these cases and would have a relatively small program
cost of only $2 million over 10 years.
Enactment of this proposal would complement SSI policy changes
relating to military families that I made a year ago. One of these
changes ensures that any additional pay received by military personnel
deployed to a combat zone cannot be used to reduce SSI benefits paid to
their children or spouse. The other changes the SSI treatment of
privatized military housing enabling some military families living in
such housing who lost SSI payments and Medicaid coverage to regain
those benefits.
The President's budget includes another proposal that would help
families with disabled children. Currently, in cases in which
relatively large retroactive SSI payments are due disabled children,
SSI law requires that those payments be placed in ``dedicated'' bank
accounts and the monies used only for specified purposes related to the
children's impairments. The dedicated account provision is viewed
negatively by parents and advocates of disabled children due to the
conflict between the rigid nature of the uses permitted for the money
from the accounts and the unpredictable nature of the needs of disabled
children. The proposal would eliminate the requirement to establish a
dedicated account if the representative payee is the parent of the
disabled child. It recognizes that parents act in the best interests of
their children and know best how to address the needs of their
children. At the same time, the proposal protects the retroactive
benefits of children who have representative payees other than their
parents.
Modifying the dedicated account requirement would improve service
to SSI beneficiaries and their families and make the program simpler to
administer. There are currently about 40,300 dedicated account cases.
About three-fourths of these are cases in which the parent is the
child's representative payee. The President's proposal would eliminate
an estimated 30,000 dedicated account cases. Reducing the number of
dedicated accounts that would be required to be established and
monitored would not only ease some of the day-to-day burden on parents
of disabled children, it would also ease some administrative burden on
SSA. We would be able to redirect the estimated $5 million per year in
administrative resources to other error reduction and debt collection
activities.
We note that this Subcommittee has included the President's
proposal for pre-effectuation review of State agency SSI blindness and
disability determinations in H.R. 4, the TANF reauthorization bill.
Reviewing the cases before benefits are awarded would be a significant
program integrity effort and would save an estimated $1.7 billion SSI
and Medicaid program dollars over the first 10 years.
One other proposal in the President's FY 2005 budget that I would
like to mention would temporarily extend the current 7-year period for
SSI eligibility for refugees and asylees to 8 years effective October
2004. This proposal recognizes that some refugees and asylees have been
unable to become U.S. citizens within the 7 year time period, and would
give them an additional year to naturalize. The extension would expire
after September 2007. The proposal would benefit about 4,000 SSI
beneficiaries each of the three years it is in effect.''
AeDIB
Up to now, I have discussed program integrity and simplification
issues that deal with program policies and, as such, are relatively
limited in scope. I would like to turn now to a much larger process
simplification that affects many of the nearly 1.5 million Americans
who file for SSI disability benefits each year and all of the SSA and
the State Disability Determination Service (DDS) employees who work on
those disability applications.
I know that everyone is concerned about the length of time the
disability determination process takes and, quite frankly, I think that
in too many cases the length of time is unacceptable. I have a strategy
for reducing these delays.
The linchpin for my strategy is the development and implementation
of an electronic disability claims system, the Accelerated Electronic
Disability System (AEDIB). AEDIB is a major Agency initiative that is
moving all components involved in disability claims adjudication and
review to an electronic business process through the use of an
electronic disability folder. These components include the field
office, regional office, the program service center, State DDSs, the
hearings and appeals office, and the quality assurance staff. When the
process is fully implemented, each component 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. This will reduce delays that result from mailing, locating, and
organizing paper folders.
SSA field offices are currently collecting disability information
for initial adult and child cases using the Electronic Disability
Collect System (EDCS). Also, claimants can now use the Internet to
submit disability information. I am especially proud to announce that
we began national roll-out of AeDIB in January 2004 starting in
Jackson, Mississippi, and we have estimated it will be complete by June
2005. In fact, the roll-out is going well and we're right on schedule.
Approach for Improving Disability Determination Process
Early in my tenure as Commissioner, I began a comprehensive service
delivery assessment to thoroughly examine all of SSA's workloads. We
began that assessment with the disability claims process and mapped out
each step from the initial claim through a final administrative appeal.
Our analysis of the process showed that the length of time required to
move through the entire appeals process was 1153 days--525 days due to
backlogged cases and 628 days to move through the process.
Based on that analysis, I developed a Service Delivery Plan which
now forms the basis of our annual budget submission.
To tackle the management and process issues, we developed both a
short-term and long-term strategy.
The short-term strategy is focused on identifying areas where
immediate action was possible, while the long-term strategy would focus
on improving the overall disability determination process. Over the
past two years, we have implemented a number of short-term initiatives.
These include:
The participation of Administrative Law Judges (ALJs) in
early screening for on-the-record decisions;
developing a short form for fully favorable decisions;
creating a law clerk (attorney intern) position;
deploying speech recognition technology to hearing
offices;
ending the practice of rotating hearing office
technicians among different positions;
using scanning technology to track and retrieve folders;
eliminating the tape transcription backlog, and
eliminating delays in presenting cases to the U.S.
District Courts.
We are in the process of implementing two other initiatives:
allowing ALJs to issue decisions from the bench
immediately after a hearing; and
expanding video teleconference hearings.
And we are preparing to implement an initiative to digitally record
hearings.
I am pleased to report that we have made significant progress. In
FY 2003, we exceeded our Agency-wide productivity goal. SSA offices
processed over 2.5 million disability claims--an increase of more than
350,000 from FY 2001. Administrative Law Judge productivity rates were
the highest in history--at 2.35 cases per day. SSA's Office of Hearings
and Appeals processed 40,000 more hearing decisions than FY 2002 and
almost 80,000 more decisions than in FY 2001. In November 2001, the
average time to appeal an unfavorable hearing decision was 467 days. In
November 2003, it took 252 days.
But these short-term efforts, important as they are, do not address
the fundamental problems. If we are to see long-term results, we must
look at the entire process as a whole, and make systemic changes.
When I introduced my approach for improving the process, it was the
first step of what I believe must be--and have worked to make--a
collaborative process. I am working within the Administration, with
Congress, the State DDSs and interested organizations and advocacy
groups. To be successful, perspectives from all parts of the system
must be considered.
I believe that if we work together, we will create a disability
system that responds to the challenge inherent in the President's
questions about why it takes so long to make a disability decision and
why can't people who are obviously disabled get a decision quickly. We
will look beyond the status quo to the possibility of what can be. We
will achieve our ultimate goal of providing accurate, timely service
for the American people.
Work Incentives and Opportunities
When the President asked me about the disability determination
process he asked why, other than pride, anyone would want to risk going
back to work after going through such a long process to receive
benefits. With the SSI program, the question could be expanded to
include not only those individuals who return to work, but also those
disabled individuals who go to work for the first time. Regardless of
their reasons for working, a surprising number of individuals who have
been determined to have disabling medical conditions do try to work.
Nearly 330,000 individuals who receive SSI disability benefits were
working in September 2003. This represents nearly 6 percent of all SSI
disability recipients.
The SSI program encourages individuals with disabilities to work
through a number of program incentives and opportunities. I will
briefly describe these provisions, many of which have been an important
part of the program for at least 20 years, and then turn to the newest
work opportunity provision in the SSI program.
Generally, after the first $20 is excluded, income reduces the SSI
benefit $1 for $1, unless the income is from work in which case it is
treated more generously. The first $65 of earned income is excluded and
then the SSI benefit is reduced only $1 for every $2 earned. These
higher exclusions for work recognize the additional costs associated
with work, and also assure that SSI beneficiaries who work have higher
incomes than those who do not work. In addition, other amounts of
earnings may be excluded under specific circumstances. For example, as
incentive for working and remaining in school, up to $5,520 a year of a
student's income is excluded. Similar to the DI program, an
individual's work expenses attributable to his or her impairment are
also excluded in SSI. Blind individuals have additional impairment-
related work expense exclusions.
A very important work incentive is the plan for achieving self-
support or PASS. Under an SSA-approved PASS, an individual is permitted
to set aside income and resources for a work goal. The amounts of the
set-aside income and resources are not considered in determining an SSI
beneficiary's continued eligibility or benefit amount. The income or
resources set aside are used to pay for goods and services needed to
reach the goal, such as education, vocational training, starting a
business or purchasing work-related equipment. A PASS may be approved
for the length of time that is determined reasonably needed for the
individual to attain his or her goal. Currently, about 1,785 SSI
beneficiaries have established a PASS.
A common fear that individuals have expressed about going to work
is the potential effects that work may have on their medical coverage
under Medicaid. The SSI program addresses this concern by providing
continued Medicaid coverage after an individual's earnings cause his or
her income to exceed the level at which cash benefits could continue to
be paid. Under this section 1619(b) provision, a working individual's
Medicaid coverage continues even after SSI stops as long as the
individual has earnings, remains disabled, and the earnings are below
the individual and state threshold amounts. Currently, about 73,500
beneficiaries continue to qualify for Medicaid through this provision.
For individuals whose earnings exceed the threshold and live in one of
the participating states, individuals can continue to receive Medicaid
through the Medicaid Buy-In programs authorized by the Ticket to Work
legislation.
The most recent provision in SSI law that provides an opportunity
for beneficiaries to work is the Ticket to Work Program, which was
enacted in December 1999.
First, let me briefly describe how the program works. Under current
agency regulations, an SSDI or SSI beneficiary with a disability
receives a Ticket to Work if he or she is between the ages of 18 and 64
and has a medical condition that is not expected to improve in the near
future. Approximately 2.5 million, or 63 percent, of all SSI
beneficiaries with disabilities who do not also receive Social Security
benefits meet this standard.
Under the Act, SSA enters into agreements with Employment Networks
(ENs) and with State Vocational Rehabilitation Agencies (``State VR
Agencies''). ENs are qualified State, local, or private organizations
that offer employment support services. These organizations include
One-Stop Career Centers established under the Workforce Investment Act
of 1998; single providers of services; or groups of providers organized
to combine their resources into a single entity.
A beneficiary who receives a Ticket to Work can choose to assign it
to any EN that provides services within the community or to the State
VR Agency. Together, these organizations are referred to as ``Ticket
Providers.'' An EN may decide whether or not to accept the assignment
of a Ticket. ENs may only be paid based on their success in assisting
beneficiaries to secure and maintain employment and move beneficiaries
off the disability benefit rolls.
Once a Ticket is assigned by a beneficiary to a Ticket Provider,
the beneficiary and the Provider jointly develop and implement a plan
of employment, vocational, or other support services designed to lead
to and maintain employment. Providers may provide these services
directly or by entering into agreements with other organizations or
individuals to provide the appropriate services at no cost to the
beneficiary.
SSA is implementing the Ticket to Work program in three phases.
During the first phase of the program, from February through October
2002, about 723,373 SSI beneficiaries in 13 states received Tickets to
Work. During the second phase, which ran from November 2002 through
September 2003, we mailed Tickets to approximately 718,886 SSI
beneficiaries in 20 additional States and the District of Columbia.
Then beginning in November 2003, we started releasing Tickets to the
more than one million SSI beneficiaries in the remaining 17 States and
the U.S. Territories during the third and final implementation phase.
By September 2004, nearly 2.5 million eligible SSI beneficiaries will
have been mailed a Ticket to Work, and any eligible beneficiary who has
yet to receive a Ticket to Work in the mail can obtain one by asking
for it. To date, we have certified almost 1,100 ENs to participate in
the Ticket program, and about 22,000 SSI beneficiaries have assigned
their Tickets to an EN.
The impact of the Ticket to Work program is being evaluated both
inside and outside of SSA. Preliminary findings from these reviews are
that SSA has made progress in developing such a system to assist
individuals with disabilities to find work and remain in the workforce.
But, given our experience so far and the comments we have received, we
are taking a comprehensive look at the Ticket program. We will be happy
to provide the Subcommittee with the results of these reviews, which we
expect to be available shortly, and will also be happy to brief you on
their findings.
Conclusion
The President's budget for FY 2005 includes $8.878 billion for the
Limitation on Administrative Expenses (LAE), a 6.8 percent increase
over our FY 2004 appropriation. We believe this increase in funding
reflects the President's desire to meet the needs of Americans who
apply for and benefit from SSA's program, including beneficiaries of
SSI.
I want to assure that we are committed to continuing to improve the
administration of the SSI program. Program integrity efforts for debt
prevention, debt detection, and debt collection are being monitored and
improved through our Corrective Action Plan. We are looking at all of
the most complex areas of SSI program policy to see if changes--even
small incremental changes--can be made to make the program simpler and
less error prone. The disability approach will be a major
simplification with regard to the taking and adjudicating of SSI
disability applications, and the approach is already yielding improved
processing times and decision making accuracy. There has never been
more focus on helping beneficiaries become self-sufficient so that they
no longer have to rely on SSI. The Ticket to Work program along with
increased emphasis on the other SSI work incentives are providing real
opportunities for individuals to work.
As for the longer term, we do not anticipate that there will be any
early 1990's-like spike in program growth over the next 25 years. Each
year, SSA's Office of the Actuary publishes a report on the SSI program
and sends it to the President and Congress. This year's draft report
projects that the projected growth in the SSI program over the 25-year
period is largely due to the overall growth in the U.S. population.
Program expenditures in constant dollars are estimated to increase from
$34.5 billion in 2004 to $43.8 billion in 2028, an increase of 1
percent per year. When compared to the Gross Domestic Product (GDP),
SSI expenditures are projected to decline over time, from the current
level of 0.30 percent of GDP in 2003 to 0.24 percent by 2028.
I assure you that we will continue to look for ways to improve
service and ensure fiscal stewardship. I believe that working together,
SSA and the Subcommittee can find common ground for legislation to
improve and simplify SSA's ability to administer the SSI program in a
way that evokes increased congressional and public confidence in both
the program and the Agency.
Again, I appreciate the opportunity to appear before this
Subcommittee. I will be glad to answer any questions that you may have.
Thank you.
Chairman HERGER. Thank you very much, Commissioner
Barnhart, for your testimony. I would like you, if you would,
to maybe expand a little bit. You were mentioning briefly in
your testimony about the use of electronic folders in the
disability determination process. If you could tell us
something of that effort to maintain computer files about a
case, allowing participants in the process to see data and
speeding the process along. For example, what percent of the
cases are now handled in this way, and how much time and money
does this save?
Ms. BARNHART. Yes, sir. When I began as Commissioner the
agency was on a 7-year timeframe to implement electronic
disability, and we accelerated that. That is why we call it
Accelerated Electronic Disability (AeDIB), and 23 months after
I discussed this with my staff and promised to get the
resources that were necessary--and I thank Members of Congress
who supported providing those resources--we rolled out
electronic disability as opposed to 7 years. We will fully
implement electronic disability across the Nation approximately
15 months from today. That is 18 months from the January roll-
out date. We started in the Atlanta region, and as I mentioned,
we had pilots in Illinois, California, and North Carolina prior
to the roll-out. Mississippi, South Carolina, and Tennessee
have started implementation.
Generally speaking, the way it works, Mr. Chairman, is they
start with a few disability examiners, and then every week
increase the number of examiners. We have something like 80
cases a week that are now being decided through electronic
disability in the State of Mississippi, and it is a growing
number all the time. We are very, very excited about this.
I was speaking with one of your staff members prior to the
hearing, and he had a great familiarity with the very large
case files that we have, these enormous case files. We process
2.5 million disability cases a year. You can imagine what is
required in staging, as we call it, or just keeping track of
those case files. We estimate that we will be able to eliminate
100 days of the disability determination process, if a person
goes all the way through every step of appeal. The average case
is lost for 100 days. I do not say that to be glib or flip, but
when you are staging 2.5 million folders it is very hard to put
your finger on the right one at any given point in time. Now
with the push of a button, we will be able to find that case.
We will save millions of dollars in postage and 60 days in time
mailing folders back and forth from one office to another, so
there are 160 days that, just in terms of pure administration
alone, we will save time.
The other thing is we are working very, very closely with
the medical community. I have convened several sort of summit
type meetings with representatives from all of the medical
organizations, and everything from social workers to specific
physician and hospital groups, to encourage the submission of
medical evidence electronically. In fact, you may have seen the
article in the newspaper yesterday about President Bush talking
about the need to move toward electronic medical records. In
fact, when our electronic disability system is complete, we
will be the largest medical record repository electronically in
the entire world.
Chairman HERGER. Thank you. Do you know offhand how much
this has cost?
Ms. BARNHART. Yes, I can tell you that. It is going to cost
a total of $850 million, which sounds like a lot of money, but
we are going to save at least $1.3 billion, so we expect a net
of at least $500 million, and quite frankly, I believe that
understates it. We were very conservative in doing our cost
benefit analysis. In fiscal years 2003 and 2004 it is
approximately $155 million, and ongoing through 2007, $300
million. The $850 million, by the way, is not actually outlays.
That includes, I should point out, it is really about $450,
$500 million in outlays. The $850 million really includes all
the training and the scanning that is going to be necessary, so
it is not just for the system itself because obviously our
employees have to be trained. That includes calculating time
off the line, doing work, and I think it is very important that
we consider all those matters when we look at cost benefit
analysis.
Chairman HERGER. Thank you. Can you tell me what further
improvements are ahead?
Ms. BARNHART. Yes. In my new approach, as I said, which we
are in the process of discussing with, as I mentioned,
congressional staff, as well as advocacy organizations and
professional organizations and our staff and our administrative
law judges, I basically wanted to focus on making the right
decision as early in the process as possible, and it was in
response to three questions that President Bush posed to me the
first time I met with him to discuss disability. He asked me,
``Jo Anne, why does it take so long to get disability? Aren't
people just obviously disabled and why can't we make immediate
decisions on those and then spend our time wrestling with the
ones that are more difficult?'' Which I believe you referred to
as sort of a gray area when you were talking about people with
the ability to work in your statement. Then the third question
he asked me was, ``Why in the world would anyone risk going
back to work when they have to wait so long to get disability
benefits to begin with?''
I used those questions as the framework for developing my
new approach. I had a team of staff do an assessment when I
came into the agency of how long it takes to get disability,
and, Mr. Chairman, from the point of entry, calling our 800-
number until the finding by the Appeals Council--this is for a
case that goes through every level of appeal--in fiscal year
2002 it could take 1,165 days. Of that 1,165 days, 525 were due
to backlogs, cases simply waiting in the queue somewhere along
the line, and 625 days were due to a variety of other things,
things like lost folders, as I described to you, time spent
mailing, due process requirements in terms of notice and so
forth. Seven days were spent actually processing. I thought
that was a rather dramatic analysis of the time going into
these cases, and frankly, unacceptable for the American people
we are trying to serve and the Congress who created this
program and has expectations.
Let me just say one final thing about that. When I talk
about the problems that we face in this program, in no way am I
criticizing the employees who work at Social Security. Quite
frankly, if they were not as dedicated and diligent and cared
so much and worked so hard, we would have much greater backlogs
and it would probably take even longer.
Chairman HERGER. Thank you. I am very pleased with the
progress you are making Commissioner. With that, Mr. Stark,
would you like to inquire?
Mr. STARK. Thank you, Mr. Chairman. Commissioner, I am just
trying to get into focus here your constituency, which is about
7 million people. As I go down the list--and I know this chart
I am looking at may double count some, but I see aged, who I
assume are just poor, 1.25 million, and they are not apt to
change their circumstances much as compared to others, and we
have the blind. Then we get into this disabled category. That
is about 5.5 million people, a big chunk of the people getting
these benefits. It appears that half of your constituency are
disabled between the ages of 22 and 64, and as I presume that
18- to 21-year-olds are eligible for the work force as well,
you have got 3.7 or 3.8 million, big chunk, are disabled people
who are at least of an age where one might suspect they could
go back to work.
Ms. BARNHART. Yes, that is accurate.
Mr. STARK. To the extent that we want to look for abuse of
the program--fraud I sort of think of as a police activity and
people cheat or lie or do something like that, that there ought
to be a way to catch them in time, and I do not know that we
can legislate obedience to the law. We can set the speed
limits, but I don't know if there is anything we could do to
make people drive more slowly.
In that group, are there things that you think we could do
that would encourage people to go to work? One of the things
that I recall, and I don't really know your current rules on
this, but with SSI I would presume there is Medicaid
eligibility. It always seems to me that there is a risk leaving
the security of a government check and having government backed
health insurance, the risk to leave that and go to work
someplace with a contractor, is horrendously fearsome for the
individuals. Are we doing enough, in your opinion, to say,
``Look, try it, and if you fail, you can come back, without
going through this long process of being vetted again for your
disability.'' In other words, I guess that is my question: are
we doing enough to get people to take the risk, and maybe
sharing some of that risk with them and saying, ``Try a job. If
it doesn't work, come on back to the security of SSI and
Medicaid.''
Ms. BARNHART. You are absolutely correct about the fact
that we do have a number of programs that promote return to
work for individuals who want to work. There are a number of
different things in SSI and in Title II disability, quite
frankly. Ticket to Work of course is one of the most preeminent
at this point, a relatively new program began 2 years ago.
While we are making progress with the Ticket, we are not where
I want it to be, nor where I think the advocates, nor the
beneficiaries, nor Members of Congress want it to be, and we
are quite aware of that and working very hard to do something
about it.
What I would like to do at this time, I did bring--I
anticipated there would be some questions about return to work,
and I brought a copy of what I consider our SSA Work
Opportunity Vision. I believe you have a copy of this. If I
could just describe to you the approach that we are taking to
address that precise question.
[The chart follows:]
[GRAPHIC] [TIFF OMITTED] T6080A.001
----------
Mr. STARK. Sure.
Ms. BARNHART. One of the things that is very clear is that
the SSI rolls are comprised of a variety of individuals, some
who are able to work, some who may not be able to work. When
you look at this vision, what we tried to do was to identify
the different subgroups of people and what their specific needs
and situations might be. If you look at this, it runs from left
to right, time-limited intervention to ongoing intervention and
support. What this shows is our recognition of the fact that
there are some people who will be able to eventually earn above
the substantial gainful activity amount of $810 a month, exit
from the program if they get a time-limited support or
intervention from us. There are other people, however, who are
going to require ongoing intervention and support. If you look
at the earners on SSI right now, approximately 25 percent of
them earn less than $65 a year, roughly 5 percent----
Mr. STARK. A month? A year?
Ms. BARNHART. A month. Roughly 5 percent of them, or
350,000, have earnings. As I said, 25 percent have very low
earnings. So, those are individuals--and I think it is 14
percent have over $1,000. If you look at this, what you see is
we recognize there are people who, if they go to work, may be
able to leave the rolls. There are others who may never be able
to leave the rolls, but as you mentioned, as the Chairman
mentioned, would like to have the opportunity to work and
continue to work to the extent that they are able to.
Down the side what you see is earnings above the
substantial gainful activity (SGA), you see on the left there,
and earnings below the SGA. This is to show, in terms of the
dollar amount that they could earn, the point I made earlier
about the earnings above SGA. This is a list of all the
demonstrations and the current authorities that we have that
can be used for individuals who want to go work and are willing
to take that risk, and hopefully to minimize and mitigate that
risk.
It is coded. The programs in black apply both to SSI and
Title II Disability. The programs in red, for purposes of this
Committee specifically, address purely SSI. There are some
things on here that have been around for a long time. You will
see section 1619(a) and (b). That has been in existence for I
think over 20 years at this point. You see the Ticket to Work
program, the Plan for Achieving Self-Support (PASS) program.
There are many things where Congress has taken action, provided
opportunities already.
Some of the newer things that you see here are Early
Intervention Demonstration, the $1 for $2 Benefit Offset/
Employment, which would allow individuals to keep a greater
share of the earnings that they make. Our Florida Freedom
initiative, which was designed specifically to encourage asset
accumulation of SSI. It is largely modeled after individual
development account programs which allow people to accumulate
assets for education, home ownership, those type of things, so
it allows it to go above the current resource level for SSI. In
addition, it tests the idea of increasing the earnings
disregard, which you spoke about in your opening statement. It
increases----
Mr. STARK. Is that something that you all would support,
increasing the disregard?
Ms. BARNHART. What we are doing is testing that idea in
this Florida Freedom Initiative. It is a program that is just
now starting. What we have done in that demonstration, instead
of providing for the $65 plus one-half the remainder, we are
actually providing, I believe it is $280 plus one-half of the
remainder in that demonstration. The reason I thought this was
important is based on my experience in welfare work programs in
the past, when I was administering the AFDC program prior to
Temporary Assistance for Needy Families (TANF), there is an
awful lot of time spent looking at this whole issue of earned
income disregards and what was an incentive or disincentive to
work. Knowing that, as you mentioned, that amount had not been
increased for many years, knowing there was great interest in
that, but knowing at the same time that to make a change in
that, even a small change, costs hundreds of millions of
dollars a year, and the fiscal constraints that we operate
under, I thought it would be prudent to undertake a
demonstration to see if in fact increasing the disregard has
the desired effect of encouraging people to go to work, and
enables people who want to go to work, to go to work.
So, it is too early to tell, because we have just started
it, but my hope would be in 2 or 3 years we would have some
good information. Of course, we are obviously interested in
looking at other demonstrations along those lines. So, we would
have a body of knowledge that should this Committee or Congress
decide to move ahead, they could actually look at what the
facts show.
Mr. STARK. I hope you will let us know.
Ms. BARNHART. We will, absolutely.
Mr. STARK. Thank you, Mr. Chairman. I appreciate it.
Chairman HERGER. You are welcome. The gentleman from
Louisiana, Mr. McCrery to inquire.
Mr. MCCRERY. Thank you, Mr. Chairman. Ms. Barnhart, you say
that only about 5 percent of SSI recipients have earned income.
Is that right?
Ms. BARNHART. That is 5 percent report earnings, yes, sir,
that is correct.
Mr. MCCRERY. Has that number changed any at all in the last
few years since we have implemented some of these incentives,
Ticket to Work and so forth?
Ms. BARNHART. I believe it has been fairly flat, Mr.
McCrery, and let me just say one point about that. While the
Ticket was passed some years ago, we started rolling out the
Ticket in three phases, and we are right now in the third phase
before all of the Tickets--all the Tickets will not be out
until September of this year. This is not to make excuses, but
just because I continue to look at it and say, should we be
expecting better results than we are getting, which I think
is----
Mr. MCCRERY. I think you are getting to my next question.
Ms. BARNHART. That is where you are going with it, yes.
Mr. MCCRERY. Go ahead.
Ms. BARNHART. One of the things that we have learned in
working with the vocational and rehabilitation agencies is
oftentimes for people with disabilities, and particularly
people who qualify for the disability rolls, not just people
who are in the private--not dependent on the government program
and have had to go through the arduous process, but because of
the severity of the disability to become eligible for
assistance, it can take an average of 2 years working with
those individuals to help them find employment.
So, we have a situation where the first Ticket was rolled
out in February of 2002, shortly after I came into this job. We
are just hitting the 2 years basically for the first third of
States. The next wave I believe started last fall, in September
of 2003. So, we won't really hit 2 years until 2005 and so on.
You get where I am going with this. Again, that is not to make
an excuse, but I think, again, based on my experience in
welfare-to-work programs over the years, and I spent the better
part of my career working in that arena, I think that we have
to be realistic and understand that even incremental increases
are significant with this population.
The people that are on SSI are largely, I believe,
reflective of the residual caseload in TANF now, and you know
the aggressive efforts that have been undertaken--because you
all have been a part of that and you have jurisdiction over
that--to move people from welfare to work. In fact, what we see
is that for the people who remain on welfare, in many cases the
States are trying to qualify those individuals for SSI, which
suggests that this is a population that does not have a strong
if any attachment to the work force, so there are a whole host
of things that--it is sort of like if you characterize your
most difficult population to employ, I would daresay that the
SSI population would be one of those, again, not making
excuses. That is why we think this vision is important because
we need to look, we need to separate out and understand
everybody is not the same. There are different subgroups of
people who may need this kind of help or that kind of help, and
we want to make sure that we are offering enough alternatives
that everybody who wants to work can find the one that might
work for them.
Mr. MCCRERY. The SSI population is probably the most
difficult to get into the work force if for no other reason
than the just can't. That is why they are on SSI. For those who
do, they are marginal and they do have that desire, it is only
human nature I think for them to be afraid to seek employment
for fear of losing their benefits. So, I think to the extent
that we can get the message out to those few probably who are
able and want to get in the work force that they do not risk
losing their benefits, then we may see that little incremental
increase that we desire.
Ms. BARNHART. Let me just say, despite the best efforts of
this Committee and the entire Congress in terms of providing
those many opportunities and the different exclusions and the
return to work provisions that have existed in the program and
the Ticket to Work, there is a great deal of skepticism and it
stems from things like the risk. If they go off the rolls, will
they be able to get back on in an expedited fashion, which is
one of the questions that was raised earlier. The Ticket to
Work addresses many of those. It doesn't address all of them,
but we really are having to do an incredible marketing job to
the claimants and their families because if you waited 1,165
days to get on disability, and now someone from the government
sends you a piece of paper--and I have personally looked at
what we send out as the Ticket, the letter that accompanies and
says you can do all these things and use this Ticket to get all
these services--you can understand why you don't change those
fears overnight, and it is requiring real public education to
do that.
For that reason, I personally have participated in a number
of press events around the country, as has Deputy Commissioner
for Disability Martin Gerry--he is in fact sitting right here--
because we were trying to publicize, make it clear to the
public. We had Ticket beneficiaries, Ticket recipients there to
testify and offer testimony on how they were going to use their
Ticket and how excited they were because we are really trying
to show this is a positive program, has a positive intent, and
could be extremely beneficial to those beneficiaries and their
families.
Mr. MCCRERY. Thank you very much.
Chairman HERGER. Thank you, Mr. McCrery. The gentlelady
from Connecticut, Mrs. Johnson, to inquire.
Mrs. JOHNSON. Thank you very much, Mr. Chairman.
Administrator Barnhart, you have really done a remarkable job.
It is very refreshing to see someone who is not afraid to take
on technology, and who set out an aggressive plan, worked
closely with the employees, because you are absolutely right,
the employees are good. We have been derelict in government in
supporting the systems they need to make their work manageable
in an era in which there is more and more demand for services,
and the demand is far more complicated. I am very impressed on
your progress on electronic health records, and I am carefully
noting it and will hope to work with you on that as we try to
build some more stringent requirements, and to Medicare to move
in that direction.
Medicare covering prescription drugs is going to be
extraordinarily important to this population because they will
all fall in the income guidelines. It means they will have no
deductible and no premiums, and copayments, if they are under
135 percent of poverty income, which most of your people are--I
think all of them are--they will have $1 for generics and $3
for brand name. When I look at your chart here, Human
Immunodeficiency Virus (HIV) and Mood Affective Disorders, now,
many HIV people are perfectly capable of working, but they
cannot afford their expensive drugs. Mood affective disorders,
many of our mental health support centers have lots of people
in them who actually can work. They can't necessarily work 9 to
5 every single day, but with the right medication, they can
contribute at a level that is really terribly important for
them and terribly important for us.
Having those people guaranteed access to drugs, and having
them able to earn--now, they do eventually earn their way off
the stipend, but they can retain, as I understand it, their
eligibility for Medicare. So, how are you going to manage this
work opportunities component of your program to more
aggressively educate and work with our disabled community as
they gain now this new benefit? We have about a year and a half
before they really will be put in a very different position.
Your review processes will have to change too because many of
them will become much more stable. This issue that the Ticket
to Work poses of their then moving into full-time work, but
being able to get back into the program fast, it is going to
take a lot of educating to help them see how your systems have
changed to speed reentry, but it is also going to take a lot of
education to help them see how good their health benefits are,
because under the current system they have to stay on
disability because they couldn't possibly afford their drugs,
and then they get Medicaid, a bridge, or they struggle along at
very low income and very high drug cost.
So, the Medicare Modernization Act (P.L. 108-173) has not
come a moment too soon. It may not be perfect. It didn't
attract universal support, but I think if people had understood
it better, it would have attracted far more support and the
environment would have been a little different, because it will
make absolutely dramatic changes in the lives of our disabled
population. I want to know what you are doing to prepare for
that? What are you thinking about? How will it affect your
disability review issue? How will it affect your entry process?
Ms. BARNHART. Let me just say first of all, thank you for
the nice comments about the agency. We really appreciate that.
The HIV/Mood Affective Disorder Demonstration is founded
precisely on these situations, an area you laid out, which is
many individuals themselves told us they would love to be able
to work, and they could work if they could afford their
prescriptions to be able to do that or to receive health care.
So, that is what that demonstration is all about, and we
started working on it actually prior to the passage of the
Medicare reform legislation.
In terms of what the prescription drug legislation is going
to mean for us, it is going to mean challenge and opportunity
at the same time. The challenge being that we are actually
going to be the agency that makes the subsidy determination.
People are going to bring their applications, submit
applications to us. It makes perfect sense because we have the
infrastructure across the Nation, which Centers for Medicare
and Medicaid Services (CMS) did not have. People are used to
coming to Social Security. We take Medicare applications now,
and a significant amount of money has been made available for
us to have the resources necessary to do that, and obviously,
those resource needs will dwindle over time once we get through
the current beneficiaries and are just adding on each year with
the new people.
Our responsibility for providing information and responding
to inquiries is obviously a big, big part of that. One of the
things that we have done already, we have been working very,
very closely with CMS. I have a prescription drug task force.
Actually, I brought in my Regional Commissioner from New York,
a very talented long-time SSA professional who has been heading
that up. She has a tremendous background, doing a fabulous job,
Bea Disman. One of the things that we have done already is
actually translate documents into something like 38 different
languages for CMS in terms of outreach to population. We are in
the process right now of sending out 19 million letters. We are
sending out over 500,000 a day between now and May 28th to
advise people that they may be eligible for the transitional
assistance that takes effect with June 1st.
As part of that ongoing responsibility for responding to
inquiries and education, obviously, we are going to be looking
for ways to connect the benefits of prescription drugs with the
individuals who work in our cadres related to work. I have
created a new position, the Work Incentive Coordinator, and we
have one of those in each of our area director's offices, and
the idea there is that that person is the expert on all of
these many, to work provisions that are available, and
obviously, we are going to want them to be very conversant on
how the benefits of the new Medicare reform legislation can
help individuals who are seeking employment.
Similarly, with our Benefit Planning Assistance
Organizations that we provide grants to, Congress has given us
money to provide grants to them for helping people apply for
assistance. We obviously want to work very closely with them to
make sure that they have all the information about the
benefits, because if they are advising people on benefit
application, this should obviously be a part of it. I think
that we have a really wonderful opportunity here to do
something to move giant steps ahead in terms of return to work
because of the way these two could come together.
Mrs. JOHNSON. Would you see that I get copies of those
letters, and I imagine Pete will want copies too as the Ranking
Member on the Health Subcommittee.
Ms. BARNHART. Yes.
Mrs. JOHNSON. We need to be much more aggressive in letting
Members know and understand how this affects the disabled
community, because while I know your communications are broad,
many of those who receive your letters do not particularly
understand them, and not all of our disabled live where there
is a good disabled support organization. So, we need to educate
Members about this.
Most of your constituents will qualify for the $600 cash
credit program that assures that they have the money to buy the
drug at the discount. You can't benefit from the discount if
you can't make the purpose. So, this should provide access to
antibiotics and a lot of other things that are maintenance or
are illness-treatment oriented during the course of a year for
a person with a disability, but it also could help them
tremendously with that complex of drugs that many of them
depend on for the balance in their lives.
Ms. BARNHART. Yes. In fact, when you look at our
beneficiaries, approximately a third of them are SSI, a third
of them are Title II, and about 40 percent are actually both,
eligible for both programs. Of course, the SSI beneficiaries
are eligible for Medicaid and Medicaid has prescription drugs.
For over 70 percent of the people who don't now have access to
that, this Medicare reform legislation, a good number of those
would be eligible for that and it would be very important for
them.
Mrs. JOHNSON. One of the shocks that I got in working on
the Medicare bill was that 38 States only cover people in their
Medicaid program up to 75 percent, and that is Federal poverty
income. So, a lot of people on disability income who are really
living in very, very difficult financial circumstances will
benefit tremendously from this, and then Medicaid programs have
increasingly refocused coverage on generics, and particularly
for people with mental disabilities this is having a very
negative impact. So, being eligible for Medicaid and its quote,
``drug benefit'' is not enough. So, I look forward to working
with you on educating. I appreciate your work.
Was there anything more you wanted to tell us about the
disability determination process you put in place? I appreciate
how much more timely you have made it, but how have you
simplified it, and how have you clarified the criteria? This
business of deciding who is eligible for permanent disability
in today's medical world is very tough. Has it changed also
your review process?
Ms. BARNHART. I am still in the process. What I announced
last September was what I called an approach, and one of the
reasons I called it an approach and not a plan is because it
was an approach. I think looking back over history, I have
worked in these programs, as you know--we have worked together
for a long time, for almost 30 years now. One of the lessons
that I have learned is that we do better when we try to make
strides in programs if everybody is working together, and we
are in a situation now where I call it a perfect storm, where
everyone understands we need to make changes in disability as
we are now implementing it and the process that we have. The
question is: how do we go about it?
So, by laying out a framework for an approach, I am now
engaging in conversations to decide the specifics and talking
to all the affected parties. I do not suggest that everyone
will be 100 percent happy. You know well that does not happen,
but I am hoping everyone won't be 100 percent unhappy either,
that we will be able to come up with a final plan and
regulation that addresses those needs. So, I would be happy to
come up and talk to you or your staff and walk through the
specifics of what the approach was, but it is not final and so
it has not been implemented yet.
Actually, it is predicated on successful implementation of
electronic disability because one of the things I feel we must
do with the great number of baby-boomers that are going to be
moving into the Disability Insurance (DI) program in the next
several years, is we must be able to handle that workload, and
we cannot do it in our current situation. So, the process, the
new approach, is grounded on having electronic disability
implemented, so I am actually looking at sort of the best-case
situation for implementing the new approach will be probably
after October 2005, maybe even January 2006.
In the meantime, we are working on short-term approaches
because obviously people don't want to hear that we are going
to have to wait 2 years before you do anything. We have made
some strides. We have reduced the amount of time it takes for
an appeal of a decision from 452 days when I came into the
agency, to now 250 days. I shared that I think with one of you
yesterday, and indicated that while 250 days is still too long,
it is a lot better than 452.
Chairman HERGER. I thank the gentlelady from Connecticut. I
want to thank our Commissioner Barnhart very much for your very
informative testimony today. I look forward to working with you
to strengthen and improve the SSI Program.
Ms. BARNHART. Thank you, Mr. Chairman.
Chairman HERGER. With that, this hearing stands adjourned.
[Whereupon, at 10:53 a.m., the hearing was adjourned.]
[Questions submitted from Chairman Herger to the Honorable
Jo Anne B. Barnhart, and her responses follow:]
Question: What is the projected growth in the number of SSI
recipients as the baby boom generation begins to retire? How does that
compare with the Social Security disability insurance program?
Answer: Over the next 20 years, with the baby boom cohort in the
disability pr1 years, the Supplemental Security Income (SSI) recipient
population aged 50 to 64 is projected to grow 25 to 30 percent. The
Disability Insurance (DI) beneficiary population for that age group
during the same period is projected to grow more than 55 percent.
Question: The Census Bureau reports that in California in 1999
there were nearly four million persons with disabilities, about half of
whom worked. More than one-third worked full time, at a median wage of
$31,000. What separates disabled individuals on SSI--few of whom work--
from other disabled people, many of whom work? What can we do to help
more SSI recipients join other disabled people in the work force?
Answer: The primary difference between the number of SSI recipients
who work and the number of disabled persons reported by the Census
Bureau as working is the difference in how disability is defined. For
the purposes of the Census Bureau's Decennial Census, a person with a
disability is someone who responded ``yes'' to any of the six questions
on the long form. Several of the questions ask about limitations in
activities in daily living. One might liken the Decennial Census
definition to one of the definitions in the Americans with Disabilities
Act. That is, a person with a disability is someone with a condition or
impairment that substantially limits him or her in a major life
activity.
In contrast, the Social Security Administration's (SSA) disability
definition is work related and a very strict and narrow definition. SSA
defines disability as the inability to engage in any substantial
gainful activity due to a physical or mental impairment which can be
expected to result in death or has lasted or can be expected to last
for a continuous period of not less than 12 months.
In addition to requiring applicants for SSI disability benefits to
meet SSA's definition of disability, eligibility for SSI is based on
strict income and resource limitations, which individuals who are
working may exceed.
Current SSI statute includes a number of incentives for recipients
to work. SSA is very interested in developing additional work incentive
programs. To that end, we have initiated several programs and
demonstration research projects to assist all disability beneficiaries
to work, including:
The Ticket to Work program--This provision of the law,
enacted in December 1999, expands the options available to DI and SSI
beneficiaries to access vocational rehabilitation and other support
services.
The Florida Freedom Initiative--Undertaken with the
Florida Department of Children and Families, the project allows
participants to save earnings for use toward capitalizing a small
business, attending college, and other purposes such as purchasing of
assistive technology or transportation.
The Benefit Offset Project--This demonstration project
will test a range of employment support interventions in combination
with a $1 reduction in DI benefits for every $2 in earnings.
(Individuals who receive DI and SSI benefits concurrently are able to
participate.)
The Disability Program Navigator--This project
establishes positions in the Department of Labor's One Stop Career
Centers. The Disability Program Navigators (DPNs) or ``Navigators''
provide an important link to the local employer network as well as
other supports and information, including information on SSA's
employment support programs, which will improve the chances of
successful employment for individuals with disabilities.
Early Intervention Project--This project will offer early
intervention to a sample of DI (and concurrent DI and SSI) applicants
that may reasonably be presumed to be disabled and who are likely to
engage in substantial gainful activity as a result of their
participation in the project. These individuals will have access to a
wide range of necessary employment services, a 1 year cash stipend
equal to the individual's estimated DI disability benefit, and Medicare
for 3 years.
Mental Health Treatment Study--This project will
determine what effect the availability of treatment funding has on the
health and healthcare/job-seeking behaviors of DI (and concurrent DI
and SSI) beneficiaries for whom a mental health disorder is the primary
diagnosis and calls for SSA to pay for the costs of outpatient mental
health disorder treatments not covered by other insurance.
The Youth Transition Project--This project will integrate
service delivery systems that improve educational and employment
outcomes for youth with disabilities. The project targets youth ages 14
to 25 who receive SSI, DI, or childhood disability benefits, or are at
risk of becoming eligible for such benefits.
Additionally, SSA is testing the use of alternative SSI Program
rules in several demonstration projects. SSA has waived provisions of
current law to determine how relaxing the strict requirements of limits
on earnings and work affect eligibility in the SSI Program. Examples
include:
Three-for-Four--SSA is testing the effectiveness, as a
work incentive, of using modified earned income exclusions in
determining a recipient's countable income for SSI program purposes.
Normally SSA excludes, from countable income, one dollar for every 2
dollars earned, or ``one for two.'' ``Three for four'' allows for
exclusion of three dollars out of every four earned, thus the SSI
recipient can earn more while still retaining eligibility.
Unearned Income Related to Work Activity--SSA is testing,
as an additional work incentive, the exclusion of certain types of
temporary unearned income related to work activity (such as worker's
compensation or unemployment) as earned income for the determination of
eligibility and benefit amounts.
Independence Account--SSA is testing the use of an
additional resource exclusion as a work incentive. Under this
alternative rule, SSA allows a project participant to maintain an
``Independence Account'' as a resource, beyond the current $2,000 or
$3,000 resource limits.
Medical Continuing Disability Reviews (CDR)--SSA is suspending
medical CDRs for participants in some demonstration projects who are
SSI-only recipients with ``medical improvement possible'' or ``medical
improvement not expected'' diaries.
Question: A recent report by Mathematica Policy Research (Peikes
and Paxton, December 2003) found that ``disabled SSI recipients who
work have a low rate of use of SSA's current work incentive programs.
For example, only 27 percent of working SSI recipients with
disabilities use the work incentives available under section 1619, and
only four percent use a work incentive such as a Plan for Achieving
Self-Support (PASS) to shelter some of their income.'' What accounts
for this low take-up rate of SSI programs that promote work, even among
the relative handful of SSI recipients who do work? How many recipients
are enrolled in these programs? What is the annual cost of the section
1619 and PASS programs?
Answer: It is important to note that nearly three-quarters of the
SSI recipients with disabilities who work earn less than $800 a month.
Since the 1619 provisions generally apply when an individual earns more
than $810 a month (the level of substantial gainful activity in 2004),
it follows that relatively few (about 27 percent) working SSI
recipients come under the 1619 provisions. It also should be noted that
all working SSI disabled recipients have severe disabilities that by
definition cause them to be unable to work, and that nearly
58 percent have mental disorders (as opposed to 35 percent for
Social Security Disability beneficiaries). Certainly, to some extent,
the individual's disability and limited work experience explain why the
earnings are relatively low.
Work incentive provisions for excluding blind or impairment related
work expenses are dependent on an individual's having both excludable
expenses and earned income within a certain range. Very few working SSI
recipients meet both criteria--they do not have excludable expenses or
they either earn too little (and, thus, do not need the exclusion) or
too much (so that excluding the expenses would still not allow payment
of cash benefits). Although overall participation in the early stages
of the Ticket to Work program remains low, SSI recipients are
participating in the program at approximately the same rate as are DI
beneficiaries.
Following is information on how many SSI recipients are
participating in selected SSI work incentive programs.
Statistics on Work Incentive Use (as of December 2003)
Total number of SSI recipients--5,740,683
323,682 individuals with disabilities are working, or 5.6% of
all SSI recipients
Student Earned Income Exclusion
Used by 1,515 (.4% of working SSI recipients, or.03% of all
SSI recipients)
Earned Income Exclusion
Used by 323,682 working SSI recipients (5.6% of all SSI
recipients)
Impairment Related Work Expenses
Used by 7,604 ( 2.4% of working SSI recipients, or.1% of all
SSI recipients)
Blind Work Expenses
Used by 3,074 (1.0% of working SSI recipients, or.05% of all
SSI recipients)
Plans for Achieving Self Support
Used by 1,705 (.5% of working SSI recipients, or.03% of all
SSI recipients)
Property Essential to Self Support
No statistics available.
SSI Payments for People who Work (Section 1619(a))
Used by 17,132 (5.3% of working recipients, or.3% of all SSI
recipients)
Medicaid While Working (Section 1619(b))
Used by 71,097 (22% of working recipients, or 1.2% of all SSI
recipients)
Continued Payment During Participation in a program of VR
Services, Employment Services, or Other Support Services
No statistics available.
Ticket to Work and Medical Review Protection
Ticket assignments: 8,788 SSI/SSDI concurrent; 13,087 SSI-
only
(SSI total: 21,875).
SSA does not have current complete information on the costs and
savings from work incentive provisions, such as the section 1619 and
PASS provisions. We can say, however, that administration of the PASS
program utilizes approximately 50 employees per year. Developing
additional estimates will take several months, but we will provide this
information to the Subcommittee as soon as the estimates are complete.
Question: Back in 1996, we reformed the children's SSI Program to
ensure that only children with serious impairments collected benefits.
In addition to improving the eligibility criteria, the 1996 law
required reviews every 3 years for children on the rolls, and also when
a child turns 18. Are these reviews taking place? What are the results?
Do you have any suggestions for improvement in this area?
Answer: Reviews of children with disabilities have risen
dramatically since 1996. We perform two types of reviews of children
and young adults who are eligible for SSI. P.L. 104-193 (The Personal
Responsibility and Work Opportunity Reconciliation Act of 1996)
included a requirement that we redetermine the eligibility of all child
recipients who reach age 18. These disability redeterminations are
based on the adult eligibility criteria that we use for initial claims.
Before P.L. 104-193, the requirement that we do age-18 disability
redeterminations was included in the statute on a temporary basis, and
the provision would otherwise have expired October 1, 1998. P.L. 104-
193 also added the requirement that we do a continuing disability
review (CDR): (1) at least once every 3 years for SSI recipients under
age 18 who are eligible by reason of an impairment which is likely to
improve; and (2) not later than 12 months after birth for recipients
whose low birth weight is a contributing factor material to a
determination of their disability.
Disability reviews of SSI children rose from 7,837 in 1995, to
19,138 in 1996, an increase of about 244 percent. The increase
continued with reviews rising to 55,939 in 1997, to approximately
150,000 in 1998. In 2003, there were 188,632 reviews, an increase of
over 2,000 percent over the number of reviews performed in 1995.
Of the 188,632 reviews carried out in 2003, 7,283 (or about 4.3
percent) were reviews of low birth weight children and 53,905 (or about
28.5 percent) were redeterminations at age 18. This compares to 19,138
total reviews in 1996, with 5,709 (or about 29.8 percent) being for low
birth weight children and 12,640 (or about 66.0 percent) being
redeterminations at age 18.
The percentages of cases in which benefits are continued and those
in which benefits are terminated have remained relatively constant over
the past 5 years, with almost 25 percent being terminated.
For more information, please see the three page table from the 2004
SSI Annual Report attached at the end of these questions and answers
that shows the numbers of such reviews undertaken since 1996 and the
results of the reviews.
Finally, at this time, we have no suggestions for legislative
improvements in the area of children's eligibility for SSI.
Question: Just last month, the SSA Inspector General (IG) released
an audit report on SSI overpayments. The IG concludes that while ``SSA
has made significant efforts to identify, prevent, and recover SSI
overpayments over the past several years . . . we recommend that SSA
continue to evaluate the recovery tools that have not yet been
implemented, but which were authorized through legislation (such as
Federal salary offset, charging interest, and using private collection
agencies).'' Please explain the current SSI overpayment situation for
us. How much is owed? How much could reasonably be collected? Have any
of the issues identified by the IG been addressed? What plans do you
have to improve performance in this area?
Answer: SSI overpayments have been and remain the subject of
intense improvement efforts by SSA. To control SSI overpayments, the
agency employs a strong and dynamic debt management program. As
demonstrated by several noteworthy accomplishments, SSA is succeeding
in its management of SSI overpayments. In 2003, the General Accounting
Office (GAO) recognized our efforts by removing the SSI Program from
the list of government programs considered at high risk for waste,
fraud and abuse. Also in 2003, the Office of Management and Budget
(OMB) recognized our progress in achieving the goals of the President's
Management Agenda. OMB upgraded SSA's status score in financial
management to green, the highest category.
The SSI Program is complex, and many factors affect the eligibility
for and amount of payments to aged, blind and disabled people.
Therefore, we are providing some background about overpayments in the
SSI Program and what we do to prevent and detect them. SSA's most
recent study of SSI overpayments shows that the major causes were (1)
financial accounts such as bank savings accounts, checking accounts,
credit union accounts; and (2) wages.
To prevent overpayments related to financial accounts and wages,
SSA has undertaken a variety of initiatives. These include testing the
feasibility of automated linkages with financial institutions to detect
financial accounts. In addition, we are engaging in matching operations
with entities such as the Office of Child Support Enforcement to detect
wages earned by SSI recipients.
One of the most powerful tools available to SSA for preventing and
detecting SSI overpayments is the redetermination/limited issue
process. To detect overpayments, SSA regularly reviews cases to ensure
that the nondisability factors of eligibility continue to be met and
payment amounts are correct. The selection process is based on the
likelihood that a case will be in error. The total overpayments
detected or prevented by the fiscal year FY 2003 redetermination and
limited issue cases were $2.68 billion.
Another key activity in ensuring the integrity of the SSI
disability program is periodic CDRs. These reviews enable SSA to
determine whether recipients continue to be eligible for SSI payments
because of their medical condition. The estimated lifetime savings from
the SSI CDRs conducted in FY 2002 (the most recent year for which this
statistic is available) amounts to about $2.4 billion.
Those initiatives and many others are closely monitored by SSA's
executives, who hold monthly meetings devoted to the improvement of all
aspects of the SSI Program. An important outcome of the executive
leadership is the agency's SSI Corrective Action Plan, which outlines a
multi pronged approach to improving stewardship through increased
detection, prevention and collection, as well as new measurement
strategies, potential changes in SSI policies and agency
accountability.
You asked how much is owed and how much we can reasonably expect to
collect. The latest month for which we have collection information is
March 2004. At the end of that month, SSA was owed $4.190 billion in
SSI debt. In addition, we estimate the agency will identify slightly
over $2 billion in new SSI overpayments during FY 2004. The following
table presents SSI collection information for the past five fiscal
years.
SSI Collections \1\ and New Debt
$ in millions
----------------------------------------------------------------------------------------------------------------
Fiscal Year New Debt Collections
----------------------------------------------------------------------------------------------------------------
1999 1,812.5 639.9
----------------------------------------------------------------------------------------------------------------
2000 1,460.9 701.7
----------------------------------------------------------------------------------------------------------------
2001 1,984.5 795.5
----------------------------------------------------------------------------------------------------------------
2002 2,050.3 859.6
----------------------------------------------------------------------------------------------------------------
2003 $1,936.3 $941.6
----------------------------------------------------------------------------------------------------------------
\1\ Collections for FY 2003 include the impact of SSA's Netting project which was implemented in September 2002.
Netting is an SSA internal adjustment in which SSI excess payments are recovered from additional amounts due
via an automated program. The excess payments are never established as overpayments in SSA's accounts
receivable. In FY 2003, SSA recovered $99.9 million via netting. When added to the $841.7 million in
established overpayments collected during FY 2003, total recoveries equaled $941.6 million.
Based on our most recent collection experience in FY 2003, we
project that SSA's collections will be in the range of $900 million to
$1 billion during FY 2004 (including recoveries by netting). Through
March 2004, collection of SSI overpayments totaled $429 million. In
addition, SSA recovered $44.7 million via netting through March 2004,
resulting in total recoveries of $473.7 million to date.
You also asked if SSA addressed any of the issues identified by OIG
in their report, ``Supplemental Security Income Overpayments.'' As
explained in this response and the SSI Corrective Action Plan, we
believe SSA has made and continues to make concerted efforts to address
the issues raised by OIG. We have put in place and are working on a
wide array of initiatives that fully address debt prevention, detection
and collection.
Although OIG's report acknowledged SSA's accomplishments, it also
recommended that SSA continue with its plans to develop all of the debt
collection tools for which it has been given authority. Those tools
include Federal salary offset, interest charging and the use of private
collection agencies. We agreed with OIG's recommendation.
The agency has always had a strategy for developing all of the
tools. Since 1990, when we were given the authority to use tax refund
offset (TRO) to collect delinquent Title II overpayments, SSA has been
granted many other debt collection authorities. They include:
administrative offset, credit bureau reporting, mandatory cross program
recovery (the collection of an SSI overpayment from any Title II
benefits due the overpaid person), administrative wage garnishment,
Federal salary offset, private collection agencies, and interest
charging. SSA's strategy is to develop first those tools that yield
direct collections from a revenue source or that can be relatively
easily integrated into existing debt collection systems. That strategy
led us to implement the following initiatives in the SSI debt
collection program:
Tax Refund Offset (TRO) for delinquent SSI overpayments
(implemented in 1998). Since then, SSA has collected $250 million in
delinquent SSI overpayments by offsets from the Treasury offset
program.
Mandatory cross program recovery to collect SSI
overpayments from Title II benefits (implemented in 2002). Since then,
SSA has collected about $110 million via that initiative.
Administrative offset and credit bureau reporting for SSI
overpayments (implemented in 2002). Since then, SSA has collected over
$50 million in voluntary payments made by former SSI recipients who do
not want to submit to those collection actions.
In addition to developing those tools, SSA continues to use its
internal collection methods. When SSI debtors are on the rolls, we
collect the overpayments from their monthly payments at the statutorily
required rate of the higher of their monthly payments or 10 percent of
the sum of their payments plus any income.
When SSI debtors are no longer on the rolls, we attempt collection
by our own billing and follow up system called the Recovery and
Collection of Overpayments (RECOOP). This system sends a series of
follow up letters asking for repayment and notifying the debtors about
the consequences of not repaying; e.g., TRO, administrative offset,
credit bureau reporting. If the debtor does not respond, then we employ
our own employees to call the person and negotiate repayment. If that
fails, then SSA uses the debt collection tools previously described.
With regard to our plans for improving debt collection, SSA has a
number of efforts underway. For example, we succeeded in expanding our
authority to use mandatory cross program recovery (that is, the
collection of an SSI debt from any Title II benefits due an
individual). As a result of a legislative provision in the recently
enacted Social Security Protection Act of 2004, SSA can withhold a
Title II underpayment up to the amount of the SSI overpayment and can
impose cross program recovery regardless of the debtor's SSI payment
status. In the past, SSA was limited in the amount it could recover
from a monthly or retroactive Title II benefit due while the debtor was
not eligible for SSI. The agency is in the process of implementing this
expanded collection tool.
In FY 2002, SSA also created a new system for analyzing and
monitoring its debt portfolio. The new system will enable SSA to
develop more efficient processes to deal with outstanding debt, both
Title II and SSI. Our objective is to use it to increase the percent of
outstanding debt that is in a collection arrangement and to increase
collections.
In addition, SSA is developing a system for conducting
administrative wage garnishment (AWG), or the collection of
overpayments from the wages of former Title II beneficiaries and SSI
recipients. We expect to begin sending the first wave of AWG orders in
early calendar year 2005. The AWG initiative is estimated to yield $105
million in collections over a 5 year period, including about $25
million in SSI overpayments. We chose to use our resources on AWG,
because it has the greatest potential for debt collection of the
remaining debt collection tools.
Once we complete the AWG system, we will focus our attention on
Federal salary offset. That debt collection tool can be easily
integrated into our existing debt collection system and will give us
access to an additional revenue source, Federal salaries. Currently, we
are working on the regulations for that tool and will begin systems
development as soon as resources permit. After Federal salary offset,
SSA will focus on developing the use of private collection agencies and
interest charging.
In conclusion, we believe SSA is meeting the challenge of managing
debt in the SSI Program. The SSA management team is providing the
executive leadership that drives the successes to date and those of the
future. The agency understands the causes of overpayments and has taken
steps to prevent and detect them. When debt does arise, SSA has a wide
array of collection tools to recover the money. We are also committed
to developing the new debt collection tools as soon as possible.
Question: SSI benefits are generally payable only to people who
live in the U.S. Yet some people fraudulently collect benefits despite
not being in the country. A July 2003 GAO report (GAO-03-724)
identified three weaknesses that affect SSA's ability to detect and
deter such residency violations: (1) reliance on self-reported
information from recipients, (2) insufficient use of existing tools to
detect violations, and (3) inadequate pursuit of information available
from other Federal agencies or private organizations to detect SSI
recipients living outside the U.S. What steps have you taken to address
these weaknesses or otherwise improve SSA's ability to reduce SSI
residency violations?
Answer: SSA has program integrity and verification procedures that
are designed to ensure that only eligible individuals receive SSI
benefits. The issue of residency violations is not new--SSA and OIG
have done much in the past several years including the hiring of
private investigators and matching Medicare and Medicaid utilization
records as indicators that individuals may be either deceased or
outside the United States. We appreciate GAO's investigation in this
area and have read its July 2003 report with much interest. We
generally agree with GAO's recommendations and are undertaking a number
of initiatives to reduce residency violations in the SSI Program.
Following are brief descriptions of some of these initiatives.
As part of our data exchange with the Department of
Veterans Affairs and the Railroad Retirement Board, we receive reports
when those agencies' records reflect a foreign address for an SSI
recipient.
In three States (California, Texas and New Mexico), we
have established a process where State Medicaid fraud investigators
make home visits at our request to verify residency in suspect cases.
Our regional offices are working with other States to establish similar
processes. To date, 27 States and the District of Columbia have
expressed interest in the process.
We expect to implement a new data exchange with the
Department of Homeland Security in July to identify individuals who are
deported. We are discussing other possible exchanges with DHS.
We tested the use of credit bureau records to identify
individuals who left the United States. However, that effort was
unproductive.
We recently conducted a manual review of a sample of over
6,800 SSI checks to identify any cashed outside the U.S. (None were.)
We are developing a study to examine whether Automated Teller Machine
transactions could indicate that a person is outside the U.S.
We are studying the value of modifying our
redetermination profiling system to include additional elements that
may indicate a person is at risk of being outside the United States
(e.g., non-use of Medicaid).
__________
[Submissions for the record follow:]
Statement of The Honorable Susan A. Davis, a Representative in Congress
from the State of California
Chairman Herger, Congressman Stark, and other distinguished members
of the Subcommittee:
Thank you for your consideration of my written testimony for
inclusion in the printed record of the hearing on the Supplemental
Security Income (SSI) program. My comments highlight the need to change
the current treatment of some types of military compensation under the
SSI benefits program.
The men and women who serve in our Armed Forces are everyday
heroes. Their unwavering courage in answering the call to serve our
country is even more inspiring when one realizes that many of these men
and women are leaving families back home. We must remember that many of
our service personnel also answer to the title of ``mom'' or ``dad.''
Just as these brave men and women are working to protect our nation, we
must likewise protect them and their loved ones through the laws and
policies we enact.
SSI benefits provide valuable assistance to military families who
have children with disabilities in meeting the costs of health care,
day care, and care for special needs. However, I have heard from
military families who are in danger of losing this much-needed benefit
because of a restrictive definition of income. Servicemembers face a
unique risk of losing their benefits because of the more than 30 types
of military compensation that are not considered basic pay and,
therefore, jeopardize SSI eligibility.
I truly appreciate Commissioner Barnhart's remarks regarding the
challenges encountered by some of our military families under current
SSI regulations. As Commissioner Barnhart noted, changes in a person's
financial situation affect SSI benefit levels and eligibility. Imagine
the frustration this presents for servicemembers who, after receiving
pay for service-related inconveniences or hazards, lose their SSI
benefits! Consider what this disruption in benefit eligibility means in
terms of health care services for a disabled child.
The dilemma regarding military compensation and SSI eligibility
clearly illustrates that Congress must reevaluate and amend current
regulations. I have introduced legislation to change how the Social
Security Administration calculates income to determine eligibility for
SSI. This simple change in the treatment of income will keep families
eligible for SSI benefits and resolve an existing disparity between
military and non-military families.
With our men and women in harm's way, there is not a worse time for
them to be concerned about whether their loved ones are getting the
care they need. Updating SSI policy on eligibility requirements ensures
that these brave men and women who serve our country will not have to
worry about losing the critical services their children need. I look
forward to working with the members of the Ways and Means Committee on
this issue.
Statement of Theresa Klubertanz, National Association of Disability
Examiners, Madison, Wisconsin
Chairman Herger, Ranking Member Cardin, and members of the
Subcommittee, thank you for providing this opportunity for the National
Association of Disability Examiners (NADE) to present our views on the
status of the Supplemental Security Income (SSI) program, anti-fraud
and abuse initiatives, and suggestions for additional program
improvements.
NADE is a professional association whose purpose is to promote the
art and science of disability evaluation. The majority of our members
work in the state Disability Determination Service (DDS) agencies and
thus are on the ``front-line'' of the disability evaluation process.
However, our membership also includes SSA Field Office and Central
Office personnel, attorneys, physicians, and claimant advocates. It is
the diversity of our membership, combined with our extensive program
knowledge and ``hands on'' experience, which enables NADE to offer a
perspective on disability issues that is both unique and which reflects
a programmatic realism.
NADE members, whether in the state DDSs, the SSA Field Office, SSA
Headquarters, OHA offices or in the private sector, are deeply
concerned about the integrity and efficiency of both the Social
Security and the SSI disability programs. Simply stated, we believe
that those who are entitled to disability benefits under the law should
receive them; those who are not, should not. We also believe decisions
should be reached in a timely, efficient and equitable manner. The
Commissioners' Strategic Plan, with its emphasis on service,
stewardship, solvency and staff, provides an excellent blueprint for
achieving those goals.
We agree with Commissioner Barnhart that, ``SSI beneficiaries are
among the most vulnerable members of our society . . . By any measure,
SSI recipients are among the poorest of the poor. For them, SSI is
truly the program of last resort and is the safety net that protects
them from complete impoverishment''. For that reason we are concerned
with the Commissioner's proposal and congressional initiatives to
require pre-effectuation reviews of fifty percent of State agency (DDS)
allowances of SSI adult cases, ``in order to correct erroneous SSI
disability determinations . . .'' We question the rationale for
increasing the federal quality review rate for the DDSs, a component
that allows approximately forty percent of initial claims, with a
current accuracy rate of 96.4%, while there is no such corresponding
review of decisions made at the Administrative Law Judge (ALJ) level, a
component that allows approximately sixty-five percent of claims, with
a decisional accuracy rate in FY 2002 of 90%.
NADE does not believe that the increased review of DDS allowance
decisions represents an appropriate use of scarce resources. The
decision regarding an individual's eligibility for benefits should be
objective and unbiased. We believe that by targeting DDS allowances SSA
sends a message to the DDSs to deny more claims, forcing claimants to
``pursue their claims to the ALJ level.'' This ``message'' only serves
to increase the appeal rate and the overall administrative costs of the
program. In addition, if the review concludes the DDS allowance to be
correct, the review process itself delays payment to disabled citizens
who are frequently in dire financial straits.
For several reasons the SSI disability program is more labor
intensive and difficult to administer than the Title II disability
program. Both medical eligibility and exact payment amounts are
determined by complex, ever-changing rules. Individuals applying for
SSI disability benefits are, by definition, very poor. Most have little
or no ongoing medical treatment or treating sources able to provide
comprehensive records. While it is our firm belief that the vast
majority of applicants are not out to defraud the disability
program(s), SSI applicants are strong candidates for manipulation by
others for financial gain. They are often the victims of others whose
mission is to defraud the SSI program.
Rather than increased pre-effectuation reviews, we believe a more
effective use of resources to promote stewardship and ensure program
integrity would be to increase the number of Cooperative Disability
Investigation (CDI) units. These units, which first became operational
in 1998, have allowed SSA to avoid improper payments of over $159
million. Anti-fraud efforts such as the CDI units effectively utilize
the strengths and talents of OIG, disability examiners and local law
enforcement, offer a visible and effective front-line defense for
Program Integrity, and serve as a visible and effective deterrent to
fraud. Our members have a unique opportunity to observe and assist in
the process of detecting fraud and abuse within the SSI program. Both
the Social Security Advisory Board and SSA's Office of Inspector
General have stated in previous reports and congressional testimony
that the experienced disability examiner is the most effective weapon
SSA has at its disposal to combat fraud. Instead of sending a message
to the public that encourages appeals and increases administrative
costs, the message sent to the public should be that it is not worth
the risk to try to defraud the program. NADE supports the continued
expansion of the CDI units to combat fraud and abuse in the disability
program.
NADE also supports SSA's plans to increase the number of re-
determinations to ensure greater payment accuracy. This would help
ensure that claimants receiving SSI benefits are, in fact, eligible to
do so. Adequate staffing will be needed to ensure that this effort is a
true exercise in combating fraud. In addition, adequate resources are
needed to enable SSA and the DDSs to process the Special Title II
Disability Workload. These individuals are receiving SSI but have been
found to be potentially eligible for some type of Social Security
disability benefit.
In her September 25, 2003 testimony before the House Ways and Means
Subcommittee on Social Security Commissioner Barnhart presented her
approach to improving the disability determination process designed to
``shorten decision times, pay benefits to people who are obviously
disabled much earlier in the process and test new incentives for those
with disabilities who wish to remain in, or return to, the workforce.''
Both formally and informally, NADE has provided extensive feedback to
the Commissioner on the new approach. A flow chart incorporating NADE's
suggestions is attached to this Statement. Our comments are summarized
below. If this subcommittee is interested in reviewing our complete
comments, we will be glad to share them under separate cover.
NADE fully supports all efforts to allow earlier access to health
care, treatment and rehabilitation needs of disabled individuals, as
well as efforts to assist those individuals who wish to return to work
by providing them the needed services to allow them to do so. We
believe that early intervention efforts will provide improved service
to the American public by providing needed treatment and services
earlier in their disease process. This early intervention has the
potential to decrease the lifelong disability payments that some
individuals receive once they have been determined eligible for
benefits. Although few details are available in the Commissioner's
approach regarding potential demonstration projects, it appears that
individuals chosen for participation in these projects could be
screened based upon age, education, work history and claimant
allegations. This type of data is currently collected in the initial
disability interview; using these types of screening criteria would not
require system changes or other modifications to the existing process.
Therefore, NADE believes that a trained ``technical expert in
disability'' in a SSA field office could screen applicants for
disability into these demonstration projects. Oversight of these
projects could be done on a regional basis by regional expert units as
proposed by the Commissioner.
NADE agrees with Commissioner Barnhart that successful
implementation of AeDIB is a critical feature of any new approach to
SSA disability determinations. NADE remains supportive of these new
technologies as a means for more efficient service to the public. We
believe that SSA's goal of achieving an electronic disability claims
process represents an important, positive direction toward more
efficient delivery of disability payments. However, while technology
can be expected to reduce hand-offs, eliminate mail time and provide
other efficiencies, technology is merely a tool. It cannot replace the
highly skilled and trained disability examiner who evaluates the claim
and determines an individual's eligibility for disability benefits in
accordance with Social Security federal rules and regulations. In
addition, in order for this initiative to be successful, it is
critically important and an absolute necessity that adequate
infrastructure support and proper equipment to make the process work
effectively and efficiently is in place. Without sufficient support,
adequate resources and proper equipment, any attempts at an efficient
paperless process will meet with failure.
NADE strongly supports the Commissioner's emphasis on quality as
described in the new approach. By including both in-line and end-of-
line review, accountability can be built into every step. We believe
that this will promote national consistency that, in turn, will build
credibility into the process.
Although the Commissioner's approach envisions that ``quick
decisions'' for those who are obviously disabled would be adjudicated
in Regional Expert Review Units, NADE believes that the DDSs are better
equipped in terms of adjudicative expertise, medical community
outreach, and systems support to fast track claims and gather evidence
to make a decision timely, accurately, and cost effectively. DDSs
already process at least twenty percent of allowance decisions in less
than twenty-five days. In addition, DDS disability examiners are well
versed in the evaluation of disability onset issues, unsuccessful work
attempts and work despite a severe impairment provisions to quickly and
efficiently determine the correct onset for quick decision conditions.
Establishing a regional expert unit to handle this workload
constitutes an additional hand-off of a claim with no value added to
the process. We see no need to add another layer of bureaucracy to
process quick decisions when such cases are already ``triaged'' and
handled expeditiously by the DDS disability examiners. In order to
implement a regional expert unit for quick decisions, SSA would need to
change its existing infrastructure to make these decisions and provide
for hiring, training and housing staff. In addition, business processes
would have to be developed to secure and pay for medical evidence of
record.
Likewise, NADE does not support assigning the responsibility for
Quick Decisions to the SSA Field Office. Even with additional training,
we do not believe that SSA Claims Representatives will have the
knowledge and skills necessary on an ongoing basis to adjudicate these
cases. We are also concerned that assigning this responsibility to the
SSA Field Offices will invite jurisdictional disputes between the DDSs
and the SSA Field Offices as to what types of cases or alleged
impairments actually constitute potential for ``Quick Decisions.'' In
addition, we would point out that some Field Offices already struggle
with the concept of recognizing presumptive disability claims and TERI
(terminal illness) cases. Adding additional conditions or expanding
their responsibilities in this area will require extensive time-
consuming and expensive training to an already lengthy claims
representative training period. Experience with the Disability Claims
Manager pilot demonstrated that there is too much complexity in both
the claims representative and disability examiner positions to
``merge'' them into one.
NADE would not oppose SSA Claims Representatives recommending cases
for potential quick decisions but we do suggest that more extensive in-
line quality assurance and end-of-line quality control be applied to
this new process to ensure that those claims that deserve to be
identified as having potential for ``Quick Decisions'' are so
identified and that those that do not, are not so identified.
NADE is strongly opposed to the Commissioner's proposal to remove
onsite Medical Consultants from the DDS. As an integral part of the DDS
adjudicative team, DDS medical consultants play a vital role in the
disability evaluation process, not only in reviewing medical evidence
and providing advice on interpretation, but also in training and
mentoring disability examiners, as well as performing necessary public
outreach in the community. The DDS medical consultant interacts with
disability examiners on a daily basis and offers advice on complex case
development or decision-making issues. He/she maintains liaison with
the local medical community and has knowledge of local care patterns
and the availability of diagnostic studies and state regulations to
facilitate the adjudication process within the complex Social Security
system.
Most disability applicants have multiple impairments involving more
than one body system and require a comprehensive view of the combined
limitations and resultant impact on function. Specialty consultants
with limited scope and experience cannot fully assess the combined
effects of multiple impairments on an applicant's functioning. The SSA
programmatically trained DDS medical consultant has the education,
clinical experience and decision-making skills, along with expertise in
evaluating medical records and disease conditions and making prognosis
predictions regarding a claimant's function and future condition, to
more accurately assess the case as a whole.
DDS medical consultants are not only medical specialists--
physicians, psychologists or speech/language pathologists--they are
also SSA program specialists. There is a very real difference between
clinical and regulatory medicine and it takes at least a year to become
proficient in Social Security disability rules and regulations. The DDS
medical consultant's unique knowledge of SSA's complex rules and
regulations and regional variants of those regulations, their medical
expertise in many fields and knowledge of local medical sources, and
their familiarity with DDS examiner staff, quality specialists and
supervisors, make them an invaluable asset to the DDS's and the SSA
Disability Program as a whole. It is critical that this expertise be
on-site in the DDSs and readily available to the disability examiner
for case consultation and questions.
The SSI disability program is unique among disability programs. The
disability examiners who evaluate claims for SSI disability benefits
must possess unique knowledge, skills and abilities. Those who
adjudicate SSI disability claims are required, as a matter of routine,
to deal with the interplay of abstract medical, legal, functional and
vocational concepts. Disability examiners are required by law to follow
a complex sequential evaluation process, performing at each step, an
analysis of the evidence and a determination of eligibility or
continuing eligibility for benefits before proceeding to the next step.
Adjudication of claims for SSI disability benefits requires that
disability examiners be conversant (reading, writing and speaking) in
the principles of medicine, law and vocational rehabilitation. The
disability examiner is neither a physician, an attorney or a vocational
rehabilitation counselor. Nevertheless, he or she must extract and
employ major concepts that are fundamental to each of these
professions. The disability examiner must appropriately and
interchangeably, during the course of adjudication, apply the ``logic''
of a doctor, a lawyer and a rehabilitation counselor. It takes years
before an individual becomes adept at this complex task.
The U.S. General Accounting Office declared in one of their reports
to Congress that: ``The critical task of making disability decisions is
complex, requiring strong analytical skills and considerable expertise,
and it will become even more demanding with the implementation of the
Commissioner's new long-term improvement strategy and the projected
growth in workload.''. NADE concurs with this assessment. A disability
examiner must have knowledge of the total disability program as well as
proficiency in adult and child physical and mental impairment
evaluation, knowledge of vocational and job bank information and the
legal issues which impact on case development and adjudication.
NADE has long supported an enhanced role for the disability
examiner and increased autonomy in decision-making for experienced
disability examiners on certain cases. We were pleased, therefore, that
in NADE's discussions with Commissioner Barnhart we were told that it
was her intent in the new approach to enhance the disability examiner's
role in the disability process. In order to achieve that, we believe
that the Single Decision Maker (SDM) from the highly successful Full
Process Model project and currently operating in the prototype and ten
other states should be fully integrated into the new approach. (Under
the SDM model, medical sign-off is not required unless mandated by
statute.)
Decisions regarding disability eligibility can be considered to be
on a continuum from the obvious allowances on one end, through the mid-
range of the continuum where only careful analysis of the evidence by
both adjudicator and physician can lead to the right decision, and
finally to the other end of the continuum where claims are obvious
denials. It is at both ends of the continuum where the disability
adjudicator can effectively function as an independent decision-maker.
Use of the SDM to make the disability determination, and retaining the
availability of medical consultant expertise for consulting on cases
without requiring doctor sign off on every case, promotes effective and
economical use of resources. It is prudent to expend our medical and
other resources where they can most positively impact the quality of
the disability claim.
Of all the ``reengineered'' disability processes proposed or
piloted in the past, the SDM process has been the most successful. It
has had a more positive impact on cost-effective, timely and accurate
case processing than any other disability claims initiative in many
years. Statistical results have shown that disability examiners
operating under the SDM model in the twenty states where this concept
was tested have the same or better quality than disability examiners
operating under the traditional disability adjudication model. Studies
of the SDM have demonstrated its value as an integral part of the
Social Security Administration's disability claim adjudication process.
NADE strongly believes that the SDM model should be integrated fully in
any new initial claims process, expanded to Continuing Disability
Reviews and adopted as standard procedure in all DDSs.
The Commissioner, in her approach, has proposed establishment of a
federal Reviewing Official (RO) as an interim step between the DDS
decision and the Office of Hearing and Appeals (OHA). NADE agrees that
an interim step is necessary to reduce the number of cases going to the
OHA as much as possible. An interim step laying out the facts and
issues of the case and requiring resolution of those issues could help
improve the quality and consistency of decisions between DDS and OHA
components. NADE supports an interim step because of the structure it
imposes, the potential for improving the accuracy of DDS decisions and
processing time on appeals, and the correction of obvious decisional
errors at the initial level before a hearing. The establishment of
uniform minimum qualifications, uniform training and uniform structured
decision-writing procedures and formats will enhance the consistency
and quality of the disability decisions. NADE is not convinced,
however, that customer service is improved from the current process if
this remains a paper review at this interim step.
NADE believes that this interim step should include sufficient
personal contact to satisfy the need for due process. We do not believe
that it needs to be handled by an attorney as proposed by the
Commissioner. There is little, if any, data that supports a conclusion
that this interim step needs to be handled by an attorney. In fact, a
2003 report commissioned by the Social Security Advisory Board to study
this issue recommended that this position NOT be an attorney.
Decisions made at all levels of adjudication in the disability
process are medical-legal ones. NADE believes that Disability Hearing
Officers (DHOs) can handle the first step of appeal between the DDS
initial decision and the ALJ hearing. DHOs are programmatically trained
in disability adjudication as well as in conducting evidentiary
hearings. Using trained Disability Hearing Officers instead of
attorneys will be substantially less costly. In addition, there is
currently an infrastructure in place to support DHOs and using such a
structure will prevent creation of a new costly and less claimant
friendly federal bureaucracy. Since this infrastructure is already in
place, national implementation of the DHO alternative can occur very
quickly.
NADE supports closing the record after the Administrative Law
Judge's decision since this decision will, under the Commissioner's
proposed approach, represent the final decision of the Commissioner of
Social Security before any subsequent appeal to the federal courts. We
support providing the assistance of programmatically trained medical
and vocational experts to the Administrative Law Judges.
NADE supports elimination of the Appeals Council review step. We
have long advocated establishment of a Social Security Court. As long
as judicial review of disability appeals continues to occur in multiple
district courts across the country, a bifurcated disability process
will continue to exist as different DDSs operate under different court
rulings and regulations depending upon what part of the country the
claimant lives in.
Both the Social Security and SSI disability programs provide a
vital safety net for an extremely vulnerable population. It is
essential that these programs operate effectively while protecting
beneficiaries and taxpayers alike from fraudulent payment and wasteful
practices. NADE appreciates this opportunity to present our views on
the SSI program, problems and solutions, and we look forward to working
with the Social Security Administration and the Congress as the
Commissioner continues to refine her approach to improve the disability
process.
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Statement of Margaret Paul, Redlands, California
I am a school psychologist in San Bernardino who has observed
rampant abuse of SSI for children with disabilities. We have had to
hire a full time clerk to deal with the requests for records and have
been inundated with requests from parents to assess their children. I
do not have any problem with payments to a severely handicapped child.
It is the children who are considered learning disabled that is a
problem. It is ironic that many of these lower income families are
getting what they see is a check because their child can not read. What
is the incentive for helping their child read when they see a monetary
benefit in them not reading? I have personally dealt with many cases
where it is guaranteed that the parent never uses the money for
tutoring. I also work at the high school level, and was most concerned
to hear an 18 year old student call his mother a ``bitch'' because she
was angry that he was now getting the checks instead of her. He stated
that she just spent it on CDs. I asked him what he was going to do with
his check; he was planning on going to a Rave party. Honestly, they do
not even try to hide the fact that the money is not spent
appropriately. My suggestion? Abolish SSI dollars for mild speech and
learning disabilities. These children get services within the public
school system. Replace the dollars with vouchers for tutoring that can
not be used as cash. Establish learning centers funded with some of the
money you save where the parents can bring their children for tutoring
(think of how much money would be saved if the vouchers were not even
used). But better still, think of the possibility of some of these
children actually getting more help and progressing in reading and
other subject areas because their learning problems are no longer
considered a cash cow.
Statement of John Stannard, Santa Barbara, California
Any natural process lacking a feedback mechanism will have no
stable point of operation. This is true whether we are talking about
natural biological processes or governmental processes like S.S.I. If
taxpayers were unable to express their unwillingness to pay additional
taxes there would be no limit to the taxes levied. As benefits are
spread more widely more people will vote for the benefits, the
responsible governmental agency will handle more money and so will have
a larger budget, and legislators will vote for even more benefits as it
will further their career. Health professionals will support claims for
benefits as it is their self-interest to do so.
If there would be one and only one S.S.I. reform it should be to
incorporate taxpayer involvement directly in agency operation. If I
worked in the agency and it was my job to determine whether an
applicant is legally entitled to benefits, I would find it difficult to
rule strictly. My supervisor wants more people receiving aid. The
applicants separately and collectively are not reluctant to express
their opinion, self-interested though it may be. If I were a health
professional what reason would I have to say my client does not qualify
for benefits? Without negative feedback systems like S.S.I and Social
Security for that matter, are certain to fail even when we assume
pyramiding population growth.
The system is broken not because one or more laws are inadequate.
It is broken and will remain broken because of it's structure. People
are very intelligent and adaptable. A law or regulation that cannot be
got round has never and will never be written. I am sure systemic
changes have been proposed in the past. The entire system and the
government's promises to boot are in now doubt. Please revisit those
systemic changes.