[Senate Hearing 108-515]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 108-515

  THE ROAD TO RECOVERY: SOLVING THE SOCIAL SECURITY DISABILITY BACKLOG

=======================================================================

                                HEARING

                               before the

                  OVERSIGHT OF GOVERNMENT MANAGEMENT,
    THE FEDERAL WORKFORCE AND THE DISTRICT OF COLUMBIA SUBCOMMITTEE

                                 of the

                              COMMITTEE ON
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                    FIELD HEARING AT CLEVELAND, OHIO

                             MARCH 29, 2004

                               __________

      Printed for the use of the Committee on Governmental Affairs



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                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska                  JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio            CARL LEVIN, Michigan
NORM COLEMAN, Minnesota              DANIEL K. AKAKA, Hawaii
ARLEN SPECTER, Pennsylvania          RICHARD J. DURBIN, Illinois
ROBERT F. BENNETT, Utah              THOMAS R. CARPER, Delaware
PETER G. FITZGERALD, Illinois        MARK DAYTON, Minnesota
JOHN E. SUNUNU, New Hampshire        FRANK LAUTENBERG, New Jersey
RICHARD C. SHELBY, Alabama           MARK PRYOR, Arkansas

           Michael D. Bopp, Staff Director and Chief Counsel
      Joyce A. Rechtschaffen, Minority Staff Director and Counsel
                      Amy B. Newhouse, Chief Clerk

                                 ------                                

   OVERSIGHT OF GOVERNMENT MANAGEMENT, THE FEDERAL WORKFORCE AND THE 
                   DISTRICT OF COLUMBIA SUBCOMMITTEE

                  GEORGE V. VOINOVICH, Ohio, Chairman
TED STEVENS, Alaska                  RICHARD J. DURBIN, Illinois
NORM COLEMAN, Minnesota              DANIEL K. AKAKA, Hawaii
ROBERT F. BENNETT, Utah              THOMAS R. CARPER, Delaware
PETER G. FITZGERALD, Illinois        FRANK LAUTENBERG, New Jersey
JOHN E. SUNUNU, New Hampshire        MARK PRYOR, Arkansas

                   Andrew Richardson, Staff Director
   Marianne Clifford Upton, Minority Staff Director and Chief Counsel
                      Kevin R. Doran, Chief Clerk


                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Voinovich............................................     1

                               WITNESSES
                             March 29, 2004

Hon. Jo Anne B. Barnhart, Commissioner, Social Security 
  Administration.................................................     7
Hon. Hal Daub, Chairman, Social Security Advisory Board..........    15
Robert E. Robertson, Director, Education, Workforce, and Income 
  Security, U.S. General Accounting Office.......................    17
Erik Williamson, Assistant Director, Ohio Bureau of Disability 
  Determination..................................................    18
Hon. D. Kevin Dugan, Vice President, Association of 
  Administrative Law Judges......................................    29
James A. Hill, President, Chapter 224, National Treasury 
  Employees Union, Office of Hearings and Appeals, Social 
  Security Administration........................................    31
Marcia Margolius, Esq., Brown and Margolius, L.P.A...............    32

                     Alphabetical List of Witnesses

Barnhart, Hon. Jo Anne B.:
    Testimony....................................................     7
    Prepared statement...........................................    45
Daub, Hon. Hal:
    Testimony....................................................    15
    Prepared statement with an attachment........................    55
Dugan, Hon. D. Kevin:
    Testimony....................................................    29
    Prepared statement with an attachment........................   126
Hill, James A.:
    Testimony....................................................    31
    Prepared statement...........................................   133
Margolous, Marcia, Esq.:
    Testimony....................................................    32
    Prepared statement...........................................   144
Robertson, Robert E.:
    Testimony....................................................    17
    Prepared statement...........................................   107
Williamson, Erik:
    Testimony....................................................    18
    Prepared statement...........................................   121

                                APPENDIX

``Disability Service Improvement,'' submitted by Commissioner 
  Barnhart.......................................................   146
``Impact of Not Passing a Budget On Time,'' submitted by 
  Commissioner Barnhart..........................................   147
``Category Hiring vs. Rule of Three,'' submitted by Commissioner 
  Barnhart.......................................................   148
Letter to Hon. George V. Voinovich from Jo Anne B. Barnhart......   149
Questions for the Record from Commissioner Jo Anne B. Barnhart...   151

 
  THE ROAD TO RECOVERY: SOLVING THE SOCIAL SECURITY DISABILITY BACKLOG

                              ----------                              


                         MONDAY, MARCH 29, 2004

                                       U.S. Senate,
            Oversight of Government Management, the Federal
             Workforce and the District of Columbia Subcommittee,  
                          of the Committee on Governmental Affairs,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 9 a.m., in the 
Vocational Guidance Services Headquarters, 2235 East 55th 
Street, Cleveland, Ohio, Hon. George V. Voinovich, Chairman of 
the Subcommittee, presiding.
    Present: Senator Voinovich.

            OPENING STATEMENT OF CHAIRMAN VOINOVICH

    Senator Voinovich. The hearing will come to order.
    I would like to open by thanking the Vocational Guidance 
Services for allowing us to use this very wonderful, brand new 
facility. And I think the people of Cleveland are fortunate to 
have such a nice facility.
    And, of course, this organization has a long history going 
back until 1890. So sometimes we think that some of the things 
we are dealing with today are just new on the scene, the last 
several decades. But the fact is that the challenges have been 
around since that time and it is nice to know the community 
recognized the challenge back in 1890.
    I want to thank all of you for coming today. Congressional 
hearings are an integral part of the legislature and oversight 
process.
    I serve as the Chairman of the Subcommittee on Government 
Management, the Federal Workforce and the District of Columbia. 
Ms. Barnhart, you should be familiar with my Subcommittee since 
you worked for Senator Roth on the Governmental Affairs 
Committee before he went to the Finance Committee.
    Ms. Barnhart. Yes, I was.
    Senator Voinovich. It is a pleasure to hold this hearing on 
the Social Security Disability process which impacts many 
Ohioans including 180,000 people whose applications were 
processed at the State level last year. I want you to know my 
opening statement is going to be a bit longer. Ordinarily I 
have three or four other senators sitting with me, so I'm 
taking advantage of their time but it will be for the better.
    We are going to examine the cause of the Social Security 
Disability backlog and, more importantly, Commissioner Jo Anne 
Barnhart's approach to the overall process. The Social Security 
program is a separate agency retirement program. I think people 
think of Social Security and know about a couple other programs 
that come within the purview of Social Security. It also 
includes Disability Insurance (DI), and Supplemental Security 
Income (SSI). Last year those two programs alone paid 107 
billion dollars in benefits to roughly 14.5 million disabled 
workers and family members.
    Now, during my time in the Senate I have become familiar 
with the problems of the disability process. In fact, Senator 
DeWine and I currently have 360 disability cases open on behalf 
of our constituents. These are people frustrated with the 
system and have come to us for our help. In my time in the 
Senate we have assisted about 950 Ohioans with disability 
cases.
    In addition to the case load that we have in our 
constituency office in Columbus, I know there are thousands of 
constituents waiting for a hearing and trying to get through 
the red tape. The fact of the matter is that the disability 
process should be so efficient that the Members of Congress 
should not have to intervene on behalf of people who are 
frustrated with the system. And sometimes, Commissioner, 
perhaps we don't help the matter because we get involved and we 
try to expedite certain cases because of extenuating 
circumstances.
    But I will never forget when I became governor of Ohio we 
had a disastrous situation with the Ohio Bureau of Workers' 
Compensation, which I refer to as the silent killer of jobs. 
And our goal was to streamline the process. State legislators 
were constantly contacting the Bureau on behalf of Ohio 
residents. And after 8 years we eliminated that problem. The 
Bureau stopped getting letters because the system was handling 
the needs of the people that were going through the process.
    As many of you know, the Cleveland Social Security Office 
of Hearings and Appeals, OHA, has one of the longest processing 
times for disability cases in the Nation. And that's one of the 
reasons why we have so many cases come to us in our 
constituency office.
    Currently, the national processing time at the hearing 
level is 368 days. The processing time in Cleveland is an 
astounding 550 days. Unfortunately, residents throughout Ohio 
face similar delays in three hearing offices in Cincinnati 412 
days, Columbus 477 days, Dayton 381 days. These are all times 
way above the national average.
    When examining the case load in Cleveland, it is evident 
slow processing time is only part of the problem. For instance, 
at the end of last month, the Cleveland hearing office had a 
backlog of 8,796 cases of which 5,461 had yet to be assigned to 
a particular judge. Those are just numbers but, folks, there 
are people behind those numbers.
    Commissioner Barnhart joins us today to talk about how she 
will resolve this situation. I mentioned to her the 65,000 
people that she has responsibility over, and I was with Mr. 
Daub who brought it to my attention, there's another 15,000 
that work in the State organizations. That's a lot of people.
    I thank you, Commissioner, for taking your time to be here 
today. I am honored you came to Cleveland. I can assure you 
your visit here and the visits of the other witnesses are going 
to be worthwhile for you because I'm holding this hearing to 
help you.
    I would like to commend you for not only recognizing the 
shortcomings of the disability system but for trying to work 
with your stakeholders to improve the disability process. I'm 
going to ask how much involvement your stakeholders have. Your 
challenge is to utilize today's technology to update the 
disability process that was created back in 1956. To accomplish 
this task, you must work within the confines of the Federal 
bureaucracy while balancing the needs of several key 
stakeholders. Given these parameters, it is evident that your 
work is cut out for you.
    We all are very critical of the current situation and want 
to know how Congress can help you out, and make it easier for 
you to do your work. However, we can't fully appreciate your 
task until we understand some of the problems.
    Unfortunately there does not appear to be one root cause of 
the backlog. I am only going to mention a few. Instead, several 
complicated interrelated factors seem to contribute to the 
crushing case load. One is the outdated processing system which 
needs to be examined and improved. There seems to be a number 
of steps within the disability process including the State 
operation process, reconsideration, the hearings, and the 
appeals. Applicants can even end up in supreme court. It is 
unbelievable.
    There's specific human capital management challenges, 
including the Administrative Law Judge's (ALJ) hiring freeze 
and the hearing process improvement. In addition, perhaps your 
budget request did not receive adequate funding during the 
appropriations process.
    And I am also sure people do not understand the fact that 
we have not been able to pass a budget on time and have had to 
move our appropriations into January. We have done that twice 
now. That makes it very difficult for an agency to figure out 
what their budgets are going to be and, seemingly, the media 
completely overlooks the fact that this happens. Again, 
Congress will try this year to get it done on time but it is 
easier said than done.
    According to a January 2001 report issued by the Social 
Security Advisory Board the disability infrastructure was, 
``ill-equipped to handle today's massive and complex 
workload.'' That was back in January 2001. In fact, the system 
itself has changed very little since it was first created. 
However, since the disability programs are expected to expand 
by 35 percent by 2012, it is imperative this outdated 
infrastructure receive an overhaul. Commissioner, I would like 
to know how you plan on improving the process.
    Second, in January of this year GAO issued human capital 
challenges facing State Disability Determinations Services, 
DDS. It outlines three key changes facing DDS across the 
Nation, high turnover, recruiting and hiring difficulties and 
gaps in key skilled areas. From an organizational standpoint, 
the current operating structure between the Social Security 
Administration and the State Disability Determinations Services 
is certainly a unique alignment. I would like to know if the 
Commissioner thinks this is the most efficient way to run the 
disability system.
    Erik Williamson, from the Ohio Bureau of Disability 
Determination is here to discuss how they manage their human 
capital challenges. I am also interested in learning how they 
manage their case load and what steps they have taken to keep 
their processing time close to the national average.
    Third, in 1996 the merit system, MSPB, ruled the OPM 
scoring system unfairly favored veterans over nonveterans. This 
ruling started a 7-year hiring freeze of ALJs and ultimately 
affects Social Security's ability to manage the disability 
program.
    SSA currently employs 1,000 administrative law judges out 
of the government's 1,200 judges. During ALJ's hiring freeze 
OPM took steps to minimize the shortage of judges at SSA by 
filling a motion to vacate the MSPB order. The staffing 
challenges did not dissipate even though the board lifted the 
stay in September 2001 allowing SSA to hire additional ALJs.
    The question I have is, why did it take so long for the ALJ 
hiring freeze to be resolved. That in itself may be something 
we ought to look at. I wonder if this is symptomatic of the 
Federal appeals process in general. The ALJ issue should have 
been resolved in a couple years. If this were the case, we 
would not have had a scarcity of ALJs.
    On February 20, 2003, as I mentioned the Federal circuit 
ruled that the ALJ scoring formula was applied lawfully and did 
not violate the veterans preference. This rule was upheld by 
the U.S. Supreme Court on March 2004, almost 8 years later.
    Ms. Barnhart. Something like that.
    Senator Voinovich. Fortunately the ALJ hiring freeze is 
over. Social Security Administration will hire 50 new judges 
and I appreciate it if you can provide insight regarding the 
number of judges assigned to Cleveland and Ohio to deal with 
the backlogs we seem to have as differentiated from some other 
States.
    Frankly, I would like to know whether 50 judges is enough 
to get the job done. In addition, does the list of potential 
ALJs contain competent and qualified candidates, is your pay 
scale competitive, and is your budget adequate. These are some 
of the questions that we need to explore. For instance, I know 
State ODS in Ohio wanted to hire 20 employees last year but 
were only able to find 17 qualified employees. Some of these 
recruitment challenges may stem from the fact that your pay 
scale may not be adequate or we may need to do a better job of 
recruiting employees to take on these jobs.
    Finally, regarding the backlog, can be attributed to the 
hearing process improvement (HPI). This three phase initiative 
was implemented between January and November 2000. The question 
I have is that November 2000, this was the last year of the 
Clinton Administration, why would you ever undertake such an 
extensive project in the last year of your administration on an 
overhaul that his administration should have been working on 
during the first 7 years. Maybe I'm being a little critical but 
my last year as governor I realized that and I didn't take on 
new initiatives. Our mindset was to wrap up any projects and 
get some things done rather than starting a whole new process.
    Based on reports from the GAO and the SSA inspector 
general, the HPI initiative did not have the desired effect. 
And the Commissioner inherited an ineffective program. Prior to 
HPI, the average national processing time for disability cases 
in fiscal year 1999 was 280 days, 2 years later 336 days. HPI 
was going to improve the system? As I mentioned earlier, the 
current national processing time for disability is 368 days.
    According to GAO the failure of the HPI initiative in part 
is the result of attempting to implement large scale changes 
too quickly without resolving known problems. I would like to 
know who designed the HPI, was it a consultant firm? How often 
were the people actually doing the work? Were they asked about 
how they could improve the system, and the issue of how long it 
takes to get the job done?
    Right now there are people complaining that we came up with 
a new Medicare prescription drug benefit. And a lot of people I 
see at meetings say it will take until 2006 to get it done. All 
we have is the end of this year, 2004 and 2005, that is a major 
undertaking to provide this kind of benefit to millions of 
Americans. We want to make sure it is done right, and I think 
that underscores, Commissioner, that you can't snap your 
fingers and expect something is going to get done overnight.
    These are some, but not all, of the reasons for the 
backlog. Commissioner Barnhart, I would like to know what you 
are doing to improve the situation but also would like to offer 
you some advice. Woody Hayes, the Ohio State football coach, 
said that you win with people. That's what it is about. If you 
think about it, his words apply to the disability process as 
well. In order to effectively streamline and improve the 
disability process, you have to have the right people with the 
right skills and knowledge and the right places at the right 
time. Most importantly, however, your approach will only be 
successful if it improves the process to the applicants 
themselves.
    Folders sitting in dockets across the country represent 
people with serious health related problems. Those individuals 
are my constituents and your clients and they deserve a better 
system. I just received a weekly report from my staff about 
hangups and busy signals at SSA call centers. SSA's telephone 
service conducted a survey with the National Council of 
Security Management Association and 93 percent of the managers 
at the local Social Security offices and 73 percent of the 
managers for 1-800 numbers claim their office is not providing 
acceptable telephone service. This gets to the point, answering 
the phone is vital to serving the American public and somebody 
ought to get on that one right away to make sure that gets 
done.
    Before I recognize the Commissioner for her opening 
remarks, I would like to read excerpts from a letter I received 
from a constituents in Pemberville. We asked her if it would be 
all right to read her letter and make it a part of the hearing 
this morning. Her letter personifies the hardship that occurs 
because of a lengthy and drawn out disability process. I asked 
consent that it be made part of the record and since I'm 
running the hearing it will be. And it is a very well written 
letter. And I wouldn't be sharing it with you but it just does 
a super job of laying out the situation.

          ``On September 20, 2002, I suffered a brainstem stroke. My 
        life as I have known it to be would be forever changed from 
        that day forth. My road to recovery was long and grueling. When 
        I inquired from my physicians how long it might take for my 
        recovery, I was told up to a year or longer. That became very 
        distressing news for me because I began to wonder how I was 
        going to manage financially for that length of time.
          ``After much urging from immediate family, primary physician 
        and stroke related physician I began the process of filing for 
        Social Security Disability in November 2002. Had I known then 
        what I know now, I may have reconsidered that decision. The 
        paperwork alone is a very lengthy, time consuming matter.
          ``I received my first notice that I was not qualifying for 
        purposes Social Security Disability or Supplemental Security 
        Income. I refiled for a second determination. Once again, a 
        mountain of paperwork and once again my claim was denied.
          ``My local Social Security office informed me that the next 
        step would be a third filing and a hearing before a Social 
        Security judge. I was also told it would take another 12 months 
        before I would be granted a hearing. The system is not 
        structured in such a manner as to accommodate someone such as 
        me. It is a system that only looks at me as a number, not as an 
        individual. Every time I have contacted the Social Security 
        administration I am first asked for my Social Security number 
        and then, only then, do I become a person with a name.
          ``The changes that have occurred in my life over the past 
        year have been devastating for me. In a nutshell, since my 
        stroke I have lost my job, my home, my health insurance, and 
        the majority of my savings.
          ``I want to know why it is necessary to endure such a 
        cumbersome and long, drawn out process. I truly believe the 
        system is set up for the average citizen to become so 
        discouraged they discontinue filing their claim. It seems to me 
        someone like me gets swallowed up in the big sea of bureaucracy 
        of the Social Security system. I am a number with no face or 
        voice.
          ``The system needs to be revamped. My voice needs to be 
        heard. I need to know there is someone out there who is 
        listening and someone who cares.''

    Commissioner, I know you have heard these stories before, 
perhaps not as eloquently as this woman has written. I would 
like to add if anyone else here today is experiencing similar 
difficulties, the Social Security Administration has staff in 
room 103, to talk to you about your case.
    Commissioner, I am anxious to hear from you. I apologize to 
you for taking so long in my opening statement but I thought it 
would kind of bring everything together and I want to thank you 
and I want to thank all the other witnesses that have taken 
time, many of you to come long distances to be here with us 
today.
    It is the custom of this Subcommittee that all witnesses be 
sworn in. So I, therefore, ask all of today's witnesses, are 
they all here, if you all stand I will administer the oath.
    [Witnesses sworn.]
    Senator Voinovich. Let the record show that everyone 
answered in the affirmative. I also would like to ask if the 
witnesses here today would limit their statements to no more 
than 5 minutes. I want every witness to know your written 
testimony will be entered into the record and be reviewed. The 
only witness that I'm going to make an exception to is the 
Commissioner herself. You've got a big job and you came from 
Washington, you are here today and we thank you for coming here 
today and look forward to hearing from you.

TESTIMONY OF HON. JO ANNE B. BARNHART,\1\ COMMISSIONER, SOCIAL 
                    SECURITY ADMINISTRATION

    Ms. Barnhart. Thank you, Mr. Chairman, and thank you for 
providing this opportunity to return to Ohio to discuss my 
approach for improving the disability determination process and 
also to talk about the initiatives we have underway to improve 
service right here in Cleveland.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Barnhart appears in the Appendix 
on page 45.
---------------------------------------------------------------------------
    As you know, I heard earlier this year from many of your 
constituents about their experiences and concerns with the 
current disability process. And holding this hearing is clearly 
evidence of your personal commitment to the Social Security 
program and people we serve. I do appreciate that.
    When I became Commissioner, I pledged to improve the Social 
Security Disability process. Last fall I presented my approach 
for improving the disability determination process to Congress 
and since then I have met with the House and Senate staffs, SAA 
employees and groups involving every staff of the disability 
determination process to discuss this new approach. I met with 
the representatives for the attorneys in Social Security, 
representatives of the ALJs and ALJs themselves, and many 
advocacy organizations. In fact, I kept track of all the groups 
I met with and would be happy to provide a list of the meetings 
for the record. I personally held sessions to discuss 
proposals.
    Senator Voinovich. I would like to have them because it 
would let me know of the allies we might have.\1\
---------------------------------------------------------------------------
    \1\ ``Disability Service Improvement List,'' submitted by 
Commissioner Barnhart appears in the Appendix on page 146.
---------------------------------------------------------------------------
    Ms. Barnhart. I have incorporated what I think are some 
very important changes in my approach to shorten the decision 
time and pay benefits expeditiously to people who are obviously 
disabled, as well as test new ways to help people with 
disabilities who want to return to work to do so.
    I have provided a complete description of my new approach 
to disability determination in my written testimony, and for 
time constraint purposes I won't walk through the entire thing. 
It takes me 40 minutes. I don't want to take more time than the 
Chairman.
    In January of this year we began rolling out what I believe 
is the cornerstone of my strategy to improve the disability 
process. The Accelerated Electronic Disability system, (AeDib). 
This new system is going to eliminate the current process of 
mailing, locating and manually organizing paper folders. That 
may not sound like much, but based on the content of the 
analysis I did on the disability process when I became 
Commissioner, we estimate it takes approximately 60 days to 
mail folders back and forth from one office to another and that 
it takes approximately 100 days to locate files at various 
stages in the process. That may sound like a lot and it is a 
lot but when you are staging, as we call it, over a million to 
two million cases a year, it's understandable that it's 
sometimes hard to find paper files.
    Senator Voinovich. That was exactly the way the Ohio Bureau 
of Workers' Comp was organized. We had files in boxes and they 
would move the boxes around in the State and people would loose 
the boxes. Are you going to put everything electronically right 
from the beginning and make it a paperless system?
    Ms. Barnhart. That's right. It affords us the opportunity 
to revolutionize the way we process disability cases. We 
specifically want to get to the issues in Cleveland. Now work 
submitted from one place to another can be done with a push of 
a button in terms of record review and that kind of thing and 
preparation of the case. By moving to electronic processing, it 
will reduce processing time by 25 percent.
    And I'm pleased to tell you that Ohio is scheduled to have 
this system starting to run in late September. As we move 
ahead, I would be more than happy to keep you informed of our 
progress. I'm pleased to say that we rolled out in Mississippi 
on January 26, and, frankly, Mr. Chairman, this is a good 
example of the approach that I have taken in general in the 
agency dealing with the disability issue.
    When I came into the agency, electronic disability was on 
scheduled for 7 years from the time that I came in. I said, no, 
that won't do. I have 5 years left in this term. I would like 
to accomplish it during my term as Commissioner, going to the 
point you made of starting things you have the opportunity to 
actually complete.
    And I asked my staff if they had all the resources they 
needed and I promise you we sat down and talked about how long 
will it take to begin implementation. We decided it would take 
23 months, which was January of this year. We met that start 
date in Mississippi. We are moving on to South Carolina and 
gradually moving from one State to another and doing one region 
at a time. We are currently on schedule and, in fact, we had a 
couple States ask if we could come sooner to them than 
originally planned. I think that's very significant because you 
and I both know the grapevine among State directors, if AeDib 
weren't working, other States wouldn't be interested in having 
it get in sooner. We are working through the issues as they 
arise. It's going very well and it's one of my top priorities.
    In the meantime, while we have begun the electronic 
disability process and announced a new approach, I am working 
with all the stakeholders, as you put it, in order to finalize 
that approach. I do think it is important to point out that 
when I introduced my approach, I called it that because the 
problems in this system are so immense that it really requires 
an all encompassing perspective of the system working together 
to come up with a solution. I really didn't want to have 
something I developed and lay it out and say this is it and 
it's all signed, sealed, and delivered. I laid down an approach 
and I'm meeting with all the interested parties before 
finalizing it.
    Because of the time it will take to do that, I estimate 
implementing a new approach probably couldn't happen until 
October 2005 at the earliest. This is largely because it's 
predicated on successful implementation of electronic 
disability, which will take 18 months to roll out nationwide.
    There are situations like the one here in Cleveland we had 
to take short-term action. We had to take action to work as 
quickly and expeditiously as we possibly could to address the 
challenges faced by offices like Cleveland. To assist with the 
workload one of the things we did is we brought back retired 
administrative law judges and reemployed them on a part-time 
basis.
    Senator Voinovich. Were you able to bring them back and 
have them work without----
    Ms. Barnhart. There's like a senior ALJ program.
    Senator Voinovich. They don't have to give up their 
retirement, sort of like senior service, like a Federal judge?
    Ms. Barnhart. Yes, I believe we used that. And you went 
into great detail as to the delay of MSPB and no question that 
has had a very detrimental effect. We have identified 50 judges 
now coming on April 26 and three of those judges will be coming 
to Cleveland June 1. From April 26 to June 1 they will be in 
training at headquarters.
    I have plans later this summer to bring on an additional 50 
judges which means a hundred will be hired this year. You asked 
me if we had enough ALJs. We don't, as you pointed out. We have 
approximately a thousand now. I'm hiring a hundred. Ideally I 
would like to add a hundred more. That is simply a function of 
the budget situation. In addition to hiring ALJs and using----
    Senator Voinovich. Are your administrative costs part of 
mandatory spending or subject to----
    Ms. Barnhart. Subject to the discretionary cap. It's not 
clear whether the Appropriations Committee----
    Senator Voinovich. You'll have to compete with other things 
in the discretionary budget.
    Ms. Barnhart. There's no question that has an effect. Last 
year the President requested an 8.5 percent increase for SSA 
and we ended up with a 5.4 percent increase. This year the 
President requested 6.8 percent and we are hoping obviously to 
come very close to getting that. When we look at the budget 
situation, obviously there certainly is no guarantee. I think 
it's significant that in both years when the budget situation 
was certainly a pressing one, that the President requested for 
SSA more than twice the percentage increase for the whole 
Federal Government. It's a very significant increase relative 
to other agencies. Not getting that 8.5 percent increase 
obviously had an effect and if we don't get the 6.5 percent 
increase it will have an effect.
    You correctly pointed out the whole issue of being able to 
hire staff because of the passed budget is very significant. We 
basically had to put a curb on hiring until the appropriation 
was passed because we didn't know what level of funding we were 
going to have. Obviously I wasn't going to have to run a 
furlough. We have been hiring judiciously. Just last Friday we 
completed our opinion on the initial budget, what we call 
budget scrub, since the appropriation was passed and so I will 
be putting out more FTEs around the country for people to be 
brought on board. But we have had to proceed in a judicious 
manner until we were confident of the level of appropriation we 
were going to receive.
    Senator Voinovich. What I would like you to do, sorry for 
interrupting your testimony, is maybe give me a one pager on 
the disastrous effect of not passing the budget on time because 
I'm trying to convince my colleagues, and so is Ted Stevens, 
that we have to act before October 1.\1\ However, with the 
Senate's schedule this year it's going to be difficult to do 
it. Over the past few years, we have delayed passing the 
appriations bills. I am afraid this year that we'll just delay, 
delay and come back after the election with a big omnibus 
appropriations bill. I would like to get it done before the end 
of the year but it could end up in January.
---------------------------------------------------------------------------
    \1\ ``Impact of Not Passing a Budget On Time,'' submitted by Ms. 
Barnhart appears in the Appendix on page 147.
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    Ms. Barnhart. That's a disadvantage to the Federal agency. 
You have a great interest in the Federal personnel system, and 
obviously our best recruiting time is summer up to early fall 
when the kids are just graduating from college. We have direct 
hiring authority for outstanding scholars, who are students 
with an overall GPA of 3.5 or higher. If we don't know what our 
budget is going to be in January of the next year, then many of 
those talented young people would have chosen to go other 
places by the time we were able to offer them a job. So it's 
very significant for us in particular.
    In addition to adding to the ALJs, we have various hearing 
offices in the Chicago region as well as some outside of the 
region, that are assisting Cleveland with its work load. We 
plan to transfer 5,200 cases from Cleveland to other hearing 
offices. Over approximately 1,500 of those cases will go to our 
Boston region, and approximately 3,500 have been transferred 
within the Chicago region to other hearing offices.
    I have also been moving toward using video conferences, 
which gives us the capability of conducting hearings via video. 
I think time and distance are very important factors, 
particularly with a pared down ALJ core and hiring delays due 
to the Ashdale case. Having the judges spend time traveling as 
opposed to conducting hearings is not efficient and sometimes 
it's much more convenient rather than traveling to that office 
to go to a location that has video capability. This also makes 
transfer of cases possible because claimants in Ohio don't have 
to leave Ohio in order for their case to be heard by a judge 
outside of Ohio.
    We have also sent in a team of attorneys to supervise and 
to screen pending cases to make a decision without a hearing, 
so-called on-the-record decisions, and we have ALJs travel to 
conduct hearings.
    I want to assure you the hearing and appeal staff is 
actively involved in the challenges of the Cleveland office. 
Our Chief ALJ, David Washington, has been to Cleveland several 
times meeting with management and heard a docket of cases 
himself in May. In addition, with the VTC equipment a regional 
chief judge in Chicago heard 45 cases from the Cleveland office 
and my understanding is he plans to hear 45 more.
    We have conducted onsite meetings with management offices 
and hearing offices, and have examined a number of 
administrative best practices. We expect these actions to 
significantly reduce the time to get a decision. We know and 
understand how important it is for the claimant and family 
members who are waiting for a decision. Everyone at Social 
Security realizes the folders on our desk represent parties. 
These big tall folders aren't just files. They are people whose 
lives are affected by the job we do and how well we do it. 
These people are in dire need, and are counting on Social 
Security for support. I assure you this is a responsibility no 
SSA employee takes lightly, from teleservice representatives to 
claim paralegals to attorneys and judges. Everyone at Social 
Security is committed to providing the kind of service the 
American people expect and desire.
    I thank you for holding this hearing and I would be happy 
to answer any questions and address any issues you would like 
me to.
    Senator Voinovich. Thank you very much. The first one I 
wanted to address is the electronic disability folder and you 
pretty well answered that in your opening statement. You think 
you are going to wrap that up by October 2005?
    Ms. Barnhart. I think AeDib will be implemented 18 months 
from January--June of next year. My thought was if we are 
improving a new process approach we need to not just implement 
it but have 6 or 7 months experience with it. That's why I was 
looking at no sooner of October 2005 for implementing a new 
process.
    Senator Voinovich. Ohio is June?
    Ms. Barnhart. September of this year.
    Senator Voinovich. And Ohio is part of Region V?
    Ms. Barnhart. Yes, Region V.
    Senator Voinovich. Your opening statement was very thorough 
and you have done a good job answering my questions. In October 
2003 the Social Security Advisory Board issued a report 
entitled ``The Social Security Definition of Disability.'' Do 
you think that we need to update that definition or would you 
think it would be such a political hot potato that we ought not 
to bother with it?
    Ms. Barnhart. I didn't get into that. I have limited my 
improvements to process improvements I could accomplish without 
legislation. That's one thing I didn't mention. The new 
approach I designed and presented can all be implemented with 
regulation or administrative issuances and I thought that was 
important because that means the process is something I could 
actually accomplish and see through to its completion during my 
term as Commissioner. My term expires in January 2007.
    The definition of disability obviously would require 
statutory change and I think it is certainly a very complicated 
issue, one where people have diverse views about it.
    GAO did place all of the Federal disability programs, as 
you know, on the high risk area. And I have had several 
conversations with David Walker, the controller general, about 
that. The Federal disability programs were not a high risk area 
from a management perspective. David was very clear about that 
in our discussions. They were considered high-risk because the 
disability programs as they currently exist were created in the 
1950's and don't necessarily reflect what happened societally 
over that time period.
    With the passage of the ADA almost 11 years ago, attitudes 
about people with disabilities and their abilities changed 
dramatically. Back to work legislation that Congress passed in 
1999 reflects----
    Senator Voinovich. No one has taken advantage.
    Ms. Barnhart. Some people are and we are working on that, 
Senator. So I think there are a lot of things that contribute, 
and will contribute to that debate and discussion on 
disability. It's difficult but it definitely would be the next 
step after improving the process to look at the definition of 
disability if it were going to happen.
    Senator Voinovich. One of the things I have been working 
on, human capital practices and I have been working on that 
since 1999. When we passed the Homeland Security Bill we were 
able to add numerous flexibilities for all the Federal agencies 
and Senator Akaka and I worked on that. For example, hiring, 
allowing an agency to use a category rank in hiring instead of 
the rule of three. Are you using categorical hiring instead of 
the rule of three?
    Ms. Barnhart. I don't know for certain. I would be happy to 
find out and let you know, Senator.\1\
---------------------------------------------------------------------------
    \1\ ``Category Hiring vs. Rule of Three,'' submitted by Ms. 
Barnhart appears in the Appendix on page 148.
---------------------------------------------------------------------------
    Senator Voinovich. How about voluntary attrition and 
voluntary retirement? Are you using these flexibilities?
    Ms. Barnhart. We have used early out, which is a voluntary 
decision to leave, with great success. It's one of the things 
that has helped the agency level out the big retirement wave. 
We anticipated we will have lost over the next 7 years half of 
the people in the agency. This is more than the number of 
people who have retired in the last 10 years.
    Senator Voinovich. American people are not aware of that. I 
got involved in this in 1999 because I wanted to bring quality 
management to the Federal Government. Currently, the Federal 
Government is in the midst of a human capital crisis. Seventy 
percent of the senior executives could retire next year if they 
wanted to. You have a real challenge in terms of retirement. Do 
you think you have thought about new flexibilities you might 
need to make your job easier? I would ask you to share those 
with me.
    Ms. Barnhart. I haven't. I'm glad you asked me. One of the 
things I mentioned is the outstanding scholar program for 
direct hiring authority. In other words, when we identify a 
talented young person at job fairs or recruiting efforts with 
an overall Grade Point Average (GPA) of 3.5 or higher we are 
allowed to directly hire that person. If that person had a 3.0 
GPA, we should be allowed to directly hire him or her because 
that's an accomplishment and certainly speaks to the 
individual's ability. It also broadens the pool for us.
    One of the things we really need to do is to encourage 
young people to come in to the government, to become the 
dedicated kind of employees that we are very fortunate to have.
    Senator Voinovich. Do you have any contact with the 
Partnership of Public Service that Max Stier is leading. They 
have established a call to serve initiative and are working 
with colleges and universities to build interest in Federal 
service.
    Ms. Barnhart. I haven't personally. The deputy for human 
resources has. One of the other things that would be possible 
would be speaking again to the budget situation. If we hire an 
employee as a term or temporary employee, sometimes it's the 
prudent thing to do. If you don't know what your budget is 
going to be, it would obviously be helpful. When we find out we 
are able to keep an individual then we can then make them 
permanent. If they work very well as a temporary or term 
employee to convert them to permanent status. We would have a 
person who is already trained and instead of having to go 
through all the steps to get there. Having that capability 
would be important.
    One place that is going to be important is the prescription 
drug program. We are actually responsible for implementing part 
of the program and people are going to come to us to apply for 
their benefits just as they do for Medicare. To handle the 
workload, we estimate we will be dealing with somewhere around 
30 to 40 million people. We are going to have to bring a couple 
thousand people on board. And then obviously once we get 
through the people who are currently on the rolls, we'll have 
an ongoing workload of a million and a half a year so we won't 
need all these people. It would be wonderful knowing we were 
not going to lose 5,000 people a year, that we could hire right 
from that trained pool. Even if it's in prescription drugs, 
they will have government experience and it would be wonderful 
to use them as a hiring pool for us to replenish our ongoing 
retirees. I have other things but won't take time now.
    Senator Voinovich. I would be interested in having you put 
them down for us. We are still trying to get David Walker's new 
flexibilities through. And I will be at meetings in the 
Pentagon to talk about what they are doing with the 
nonuniformed employees in the Defense Department. But if there 
are some things we can provide to help expedite your hiring 
needs, I would like to hear about it and we'll be glad to work 
on it.
    Ms. Barnhart. I appreciate that. I will send something up 
to your staff.
    Senator Voinovich. Anything else you would like to share 
with us?
    Ms. Barnhart. I wanted to make a few points on a couple 
things. I was taking notes. We implemented starter kits for 
disability applicants that is going to be mailed out soon.
    Senator Voinovich. What is that?
    Ms. Barnhart. As in the rather eloquent letter from your 
constituent, there's an enormous volume of paperwork. With the 
starter kit that idea is someone applies for disability and 
they'll receive this and it gives very simple instructions and 
explains the kind of documents they need to have.
    Senator Voinovich. Who put that together?
    Ms. Barnhart. We did at Social Security.
    Senator Voinovich. Did you hire a consultant or----
    Ms. Barnhart. We did it inside. We worked with claims 
representatives, teleservice representatives, and people in our 
program service centers. When we have undertaken projects, my 
approach has been actually to set up internal workgroups. For 
example, the service delivery budget was one of my major 
activities during my first year. It really has been key for all 
the other things we have done. It budgets where we want to be 
in 5 years and what are the resources it takes to get us there. 
The service delivery budget was based on the desire to 
eliminate backlogs, keep current with claims and special 
workloads to make the technology investments we need and so 
forth.
    My approach is to bring in people from the district 
offices, field office, program service centers located around 
the country, and our hearing offices. It's very important to 
have people who are doing the work be involved in fixing the 
program because we sometimes form an idea in Washington or 
Baltimore about what is causing a problem but we are not on the 
ground working with it.
    So people from all of the different parts of the agency 
that needed to be involved with the starter kit were involved. 
I'm hoping that it's going to have very positive results for 
the claimants. What we have seen in the pilots we ran on the 
starter kit was that the number of people who had higher 
percentage of the documentation and the information when they 
came to the interviews increased fairly dramatically. I have no 
reason to believe that won't be the case. It's being rolled out 
across the Nation.
    You mentioned HPI, and I don't want to go back and relive 
history I wasn't a part of. I was watching it play out from my 
perspective on the Social Security Advisory Board. But I think 
one of the points you made is really worth mentioning time and 
time again.
    It took us many years to get to this situation we are in 
today. And I wish that I could wave a magic wand and get us out 
of it tomorrow but that is not possible. I did start working on 
these from the moment I was confirmed in November 2001. It was 
actually one of the board members who signed that January 
report you cited from the Social Security Advisory Board that 
pointed out the problems with the disability system. And there 
is no question that having had that experience on the board 
helped position me better coming into the agency to understand 
the really nitty-gritty the agency faced.
    I want to take this opportunity to say Hal Daub, the 
chairman, is testifying later today but the board continues to 
be a wonderful place to bounce ideas and to hold my feet to the 
fire to make sure we actually move ahead on a regular basis.
    I think that pretty much covered the comments that I wanted 
to make just in response to your opening comments except 
finally to say I do appreciate your interest and your 
dedication to helping solve this problem. There is no question 
it's going to take the full support of everyone in Congress.
    We need to get the budget. When people ask me what's the 
one thing they can do to be helpful, to try to make sure we get 
our budget. Last year the Senate voted the full amount as the 
President requested. It was in Congress that we received a 
reduction. So I'm hoping I can count again on the Senate to 
vote 6.8 percent for Social Security. It is money put to good 
use. I will point out the first full year's----
    Senator Voinovich. What budget?
    Ms. Barnhart. Fiscal year 2005. The people in this agency 
work very hard and they care very much. I travel around quite a 
bit to meet with employees in the agency and many are here 
today. And I think it's important always when I testify on 
these problems to separate the problems from the people in the 
agency. What I would like to remind people is that, if the 
people in the agency were not working as hard as they are and 
as dedicated as they are to doing the job for the American 
people, the backlogs would be even greater than they are. The 
processing times would be longer than they are. I really 
appreciate the job they are doing.
    We need to get additional resources so we can provide the 
kind of service that you and all your constituents expect. It's 
definitely the kind of service we want to provide.
    Senator Voinovich. I really appreciate you being here. I 
have to tell you I'm very impressed with your testimony. I 
think it's good that we have somebody who really understands 
the problems of the agencies. I'm impressed with the fact you 
are looking at this long term and you understand there are some 
short term things you need to get done. I will monitor what you 
said today and I will remind you. I will make a deal if Ohio 
receives AeDib in June, I will send you a beautiful letter, if 
not I will ask you what happened.
    Ms. Barnhart. You got a deal. Thank you very much.
    Senator Voinovich. Thank you very much.
    Ms. Barnhart. I want to mention that I have previous 
commitments and I have to leave immediately to go to the 
airport. I did read the testimony of all of the other witnesses 
today and I want to say I have worked very closely with some of 
the witnesses coming up, Jim Hill and Kevin Dugan, I met Ms. 
Margolius before while I was in Cleveland. I appreciate the 
cooperative spirits and comments they made in their testimony. 
I have staff staying to listen to the entire hearing and be 
able to provide me with information.
    Senator Voinovich. Thank you for being here today.
    Our next panel is Hal Daub, Chairman of the Social Security 
Advisory Board, former Congressman and Mayor of Omaha, 
Nebraska. Robert Robertson is Director of Education, Workforce, 
and Income Security at GAO who has been paying a great deal of 
attention to what has been happening at the Social Security 
Administration. Erik Williamson is Assistant Director at Ohio 
Bureau of Disability Determination.
    Mr. Daub, we'll start with you first. Thank you for coming 
here.

   TESTIMONY OF HON. HAL DAUB,\1\ CHAIRMAN, SOCIAL SECURITY 
                         ADVISORY BOARD

    Mr. Daub. Thank you very much. I want to thank you for this 
very timely hearing. There are few of your colleagues who even 
want to deal with this problem, it is complex, is it technical. 
And in the process of preparing for this hearing I want to 
thank you for the attentiveness of your staff who really did 
dig deeply into the problems that the system does have and it 
should be noted they have done a very good job and are prepared 
now to deal with the issue and to support you.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Daub appears in the Appendix on 
page 55.
---------------------------------------------------------------------------
    Ten years ago, Congress created a bi-partisan Social 
Security Advisory Board to recommend ways to improve the Social 
Security programs. The Advisory Board travelled to every region 
in the Nation. We have talked to those involved at every 
level--both those who run the program and those who seek help 
from it. We have found widespread consensus--with which we 
agree--that this is a program with serious problems.
    Disability decisions should be fair and consistent 
throughout the country and at each level of adjudication. We 
have found large and unexplained inconsistencies. The program 
lacks a comprehensive quality management system to assure 
careful and uniform application of the law. Improvements are 
needed to develop and to apply the same standards as 
objectively as possible at all levels of the decisionmaking. We 
are very pleased to see the Commissioner take bold steps to 
address these issues. To move ahead with major improvements in 
technology is a leap the agency needs to better meet its 
challenges. I urge you not to underestimate the scope of the 
problem.
    As your title for this hearing states, proposed process 
changes and technology improvements can put the Social Security 
Disability programs on the road to recovery. Traveling all the 
way down that road will also require addressing needs such as 
more--and more uniform--training. There must be a stronger 
policy development capacity. Better human capital planning is 
also essential. The crucial factor for really achieving these 
goals is an adequate level of resources.
    As the Board travelled around the country we were impressed 
by the dedicated and hardworking employees in Social Security 
offices and State disability determination services. They have 
been increasing their productivity. The Commissioner has 
proposed changes that will allow even greater improvements. 
That will only happen if Congress provides sufficient resources 
to handle the ever-growing caseload.
    The agency has carefully developed a 5 year service 
delivery budget for bringing the backlogs down to a manageable 
level. But a vital increase in administrative funding is needed 
and the President has endorsed a very modest increased funding 
level. It's now up to Congress to decide whether to provide 
those resources or opt for growing backlogs.
    The Commissioner described today her immediate plans for 
changes that she can quickly implement administratively. There 
certainly also is room for Congress to consider legislative 
improvements.
    The Social Security Advisory Board, for example, has urged 
Congress to consider changes such as creating a Social Security 
court and changes in the hearing process itself.
    Finally, there are larger issues that must be dealt with. 
Social Security Disability program uses a definition of 
disability that is a half century old. Many today feel that the 
focus on ``inability to work'' does a disservice to impaired 
individuals and we should find ways to change the program to 
better support the desire of those individuals to continue 
leading productive, self-sufficient lives.
    The Board has recently issued a report on the definition of 
disability and is sponsoring a forum on April 14 to further 
explore this important issue. In fact, Senator, during recess 
you are invited, and if not you, your staff, to join us for 
that forum. It will be held on the Senate side.
    Along with my full statement, I would like to submit for 
the record a copy of a Social Security Advisory Board report 
from October 2003.\1\ It is a report on the need for 
fundamental changes in the disability programs and on the 
definition of disability. All of our reports can be viewed on 
the Social Security website, 
www.socialsecurityadvisoryboard.gov.
---------------------------------------------------------------------------
    \1\ The report entitled ``The Social Security Definition of 
Disability,'' submitted by Mr. Daub with an attachment appears in the 
Appendix on page 58.
---------------------------------------------------------------------------
    Senator Voinovich. Mr. Robertson, I would like to say 
before your testimony, I appreciate your tremendous cooperation 
and help I received from the General Accounting Office. David 
Walker and I have become very good friends over the years and I 
just want you to carry back to your associates how much this 
Senator appreciates the good work you are all doing at GAO.

   TESTIMONY OF ROBERT E. ROBERTSON,\1\ DIRECTOR, EDUCATION, 
 WORKFORCE, AND INCOME SECURITY, U.S. GENERAL ACCOUNTING OFFICE

    Mr. Robertson. Thank you very much. Let me begin, Mr. 
Chairman, reiterating one of your opening comments. That is, 
this is just a wonderful new building to have this hearing in. 
I'm also very happy that you invited me here for a discussion 
of what has to be one of SSA's most pressing challenges--to 
produce timely, consistent, high quality decisions for people 
who are applying for disability benefits.
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    \1\ The prepared statement of Mr. Robertson appears in the Appendix 
on page 107.
---------------------------------------------------------------------------
    As you indicated earlier, the stakes are high. The two 
programs we are talking about involve large numbers of people 
and large amounts of Federal resources. I'm going to be making 
four points this morning.
    The first is not news but it's certainly worth stating. 
That is, the SSA disability programs have in the past and 
currently continue to experience problems in terms of producing 
timely, consistent disability decisions. There is some good 
news in the area in that SSA has made some short-term gains in 
improving timeliness for part of its decisionmaking process. 
The bad news is that, as the Commissioner has noted on previous 
occasions, the SSA system has a long way to go. For example, 
over the past 5 years the average time it takes to receive a 
decision at the hearing level has increased by a month, from 
316 to 344 days.
    Second, beyond decision timeliness and consistency, the 
disability program suffers from more fundamental problems 
related to the basic concept that disability determinations are 
based upon. It's been referred to in earlier statements. More 
specifically the programs are grounded in an outdated concept 
of disability that equates impairment with the inability to 
work. Under this concept a person is determined to be totally 
disabled or not. There is nothing in between. This all or 
nothing idea really is not in synch with medical advances and 
economic and social changes over the years that have resulted 
in greater work opportunity for people with disabilities. 
Further, employment assistance that could allow claimants to 
stay in the workforce or return to work and potentially remain 
off the disability rolls of Social Security are not offered 
until after a claimant has gone through a lengthy determination 
process to prove his or her inability to work. In short, the 
basic design of the program does little to recognize improved 
work opportunities for individuals with disabilities or to 
foster a return-to-work philosophy.
    As a brief aside here, the problems SSA faces with its 
disability program both in terms of the management of the 
program and the program's basic design are not unique. There 
are other Federal disability programs that face the same types 
of problems. Based on all of these concerns we placed the 
Federal disability programs, including those at SSA, on our 
high risk list in January 2003.
    My third point is to simply recognize and acknowledge that 
the Commissioner has placed a high priority on addressing 
problems in the disability program and is developing a strategy 
to improve the disability process. This has included expediting 
the new electronic disability folder and automated case 
processing system, proposing changes to the determination 
processing system intended to produce more accurate decisions, 
sooner, and testing concepts intended to foster a return to 
work at all stages of the process.
    My fourth and final point is to highlight what can only be 
termed as some very daunting challenges that face the 
Commissioner. Some of these have been mentioned earlier. More 
specifically, improvements in the claims processing time, are 
closely linked to successful implementation of the automated 
electronic case processing system. However, we have recently 
raised concerns about SSA's plan to accelerate this system's 
deployment.
    Additionally, we have reported that SSA faces human capital 
problems that affect the very people who are critical to 
implementing the proposed changes to the determination process. 
In particular, we found that the 5,600 disability examiners 
employed by the federally funded but State run DDSs, face high 
turnover, recruiting and hiring difficulties and gaps in key 
knowledge and skills. Finally, growing case loads can only 
exacerbate the challenges SSA faces. Between 2002 and 2010 SSA 
expects disability insurance roles to grow by about 35 percent.
    Mr. Chairman, that concludes my prepared remarks. I would 
be happy to answer questions at the appropriate time.
    Senator Voinovich. Mr. Williamson.

   TESTIMONY OF ERIK WILLIAMSON,\1\ ASSISTANT DIRECTOR, OHIO 
               BUREAU OF DISABILITY DETERMINATION

    Mr. Williamson. Thank you, Mr. Chairman, for the invitation 
to participate in this hearing on improving the backlog of 
Social Security disability claims. The bureau is 100 percent 
funded by SSA and each State has a comparable Disability 
Determination Service.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Williamson appears in the 
Appendix on page 121.
---------------------------------------------------------------------------
    I would like to begin by briefly providing some background 
and data regarding the Ohio DDS.
    Ohio has the highest productivity rate of the country's 12 
DDS programs and based on the number of cases received, Ohio 
program is the fifth largest in the Nation.
    During fiscal year 2003 Ohio produced over 183,285 Social 
Security Disability claims. Since fiscal year 1996 the number 
of claims processed by Ohio increased by 25 percent. During the 
same period our staff increased by 6.8 percent. The bureau has 
remained highly productive despite the disparity in resources 
and we are committed to making the most of the resources 
available to us. However, additional staffing commensurate with 
our increasing caseloads will be critical to ensure that 
services to the public are not severely impacted.
    To prepare our workforce for the changes we see 
approaching, we provided over 9,000 hours of training to staff 
including vocational issues, medical issues and change 
management and problem solving for our supervisors. To prepare 
for the electronic disability folder, we improved our hiring 
process to include a computer skills assessment and invested in 
an online electronic learning program. We regularly provide 
training on pertinent issues conducted by employees and medical 
consultants who are strong in these particular areas. And we 
created a mentoring program and job shadowing program. Training 
strains our productivity, but we realize the impact to our 
quality if we do not continue to provide relevant training. We 
ask that adequate resources for training be provided to help us 
to continuously improve the skills of our workforce.
    The Accelerated Electronic Disability Process will 
transition our business process into a totally paperless 
environment. The Ohio DDS is scheduled for rollout later this 
year.
    We see great benefit in the increased efficiency of moving 
to an electronic environment. We are also cognizant of the fact 
there will be a significant learning curve during 
implementation.
    We are encouraged by our preparation today and believe it 
will minimize the impact to our organization. However, we do 
have a few concerns.
    Other States in our region will not be in a position to 
help us during the transition as they will also be implementing 
the electronic folder. Ohio's caseload continues to grow at an 
``unprecedented rate'' and we will need adequate staff to meet 
the challenges this presents. It takes 2 years for a recently 
hired adjudicator to complete training and work independently. 
In order to process the increased workload, the Ohio DDS 
budgeted to hired 80 employees during fiscal year 2004. It has 
received authorization to hire 20 due to budget restrictions.
    Perhaps most importantly, we need the process to become 
fully electronic as soon as possible. The key to this issue is 
the National Archives and Records Administration approving the 
electronic file as the officially recognized document. We do 
not have adequate resources to support both a paper and 
electronic system indefinitely, which will affect our ability 
to serve the public. We see tremendous advantage to this 
project and hope that we can move to the electronic environment 
quickly as possible.
    We agree improvements can, and need to be made, in the 
overall disability process. I will outline some of our concerns 
on the Commissioner's approach.
    In-line quality reviews. An in-line review process can 
identify potential problems early in the process before the 
claim is completed, saving time and resources for our claimants 
and the DDS. We strive to prepare our claims for the next level 
of review, and therefore, we have begun piloting the in-line 
review concept in conjunction with our end-of-line quality 
assurance efforts. We would add to Commissioner Barnhart's 
proposal implementation of formal quality review for the field 
offices to ensure accuracy of application forms and also for 
the regional expert review units and reviewing officials.
    We agree that centralized quality control would improve 
consistency over the current regional disability quality branch 
process. We are always willing to improve, and we would welcome 
national input to help us with the overall process.
    Additionally, as far as demonstration projects, we believe 
there is tremendous potential in exploring new ways of doing 
business. We are interesting in working in collaboration with 
the Ohio Vocational Rehabilitation bureau to determine if early 
intervention with SSDI applicants will help them to reenter the 
workforce and achieve financial independence. We would like to 
explore a temporary allowance project that will provide 
immediate cash and medical benefits for a specified period to 
applicants who are highly likely to benefit from aggressive 
medical care and/or vocational rehabilitation. We see great 
value in exploring these projects suggested by the Commissioner 
and look forward to the opportunity to work with SSA on the 
initiatives.
    In closing, I would like to emphasize our desire to work 
with internal and external components to improve the disability 
process. We strongly support the transition to the electronic 
environment and we are excited about the benefits it will bring 
to our organization.
    We are committed to providing the highest levels of public 
service possible and making the best use of our existing 
resources.
    We ask for your consideration in providing us with adequate 
funding to continue to offer the level of service expected of 
our organization in light of the growing demands that we face.
    Mr. Chairman, thank you for the opportunity to testify and 
I would be happy to take any questions.
    Senator Voinovich. One of the Commissioner's approaches 
require State DDS examiners to fully document and explain the 
basis for their determination. The Commissioner contends this 
should result in more accurate decisions. In 2002 initial 
denials across the country ranged from 34 to 73\1/2\ percent 
which is an unbelievable difference. The Ohio DDS initial 
denial rate was about 70 percent, which was the fifth highest 
in the Nation.
    To what extent do your examiners document and explain their 
decision and do you feel that Commissioner's documentation 
requirement will improve the overall disability process at the 
State level.
    Mr. Williamson. Our adjudicators document their decisions 
in a PDN or personalize denial notice that goes to the 
claimant. The difference between what the Commissioner said 
would go into greater detail and perhaps be a far more 
technical audience to explain essentially how we got where we 
did in terms of the decision.
    We think that the centralized quality review that she's 
proposed would go a long way to adding consistency to the 
States. So I don't know if that answers your question.
    Senator Voinovich. Well, I mean it seems to me that more 
documentation requirements will cause more work or do you think 
that a standardized form will bring about a more accurate 
determination in regards to an individual and down the road 
result in less requests for reconsideration and appeals to the 
judges?
    Mr. Williamson. Frankly, I have to believe it would improve 
the process. My personal opinion and position of the agency is, 
I think, it would take more resources, it would take longer to 
do that. I think we have to decide that it may be an investment 
we need to make.
    Also in the Commissioner's plan she did indicate that 
resources would be redirected to DDS in terms of taking away 
some of the quick decisions and taking away the reconsideration 
step that would allow our staff more time to do that inter-
department analysis.
    Mr. Daub. I look at it from a perspective that on the front 
end a little more time will be required and will be 
appropriately invested for a more thorough examination of that 
citizen's disability request. Then, as a result of that, a 
quicker decision can be made and the benefits will be delivered 
quicker. And then those claims that take a little more time 
will be so thoroughly documented that they won't be in the 
queue for a year and a half waiting for the administrative law 
judge process after reconsideration. If you look at the total 
process it will take more time and resources on the front end, 
but really shorten the appeal process dramatically.
    Senator Voinovich. One of the things we did with our 
workers' comp system was we had a procedure with these boards 
of revision--from a hearing it would go to the board of 
revision and we eliminated some of the procedural steps to 
streamline the process. Hearing people come in rather than 
doing it the way we were doing it in the past and it expedited 
things for the claimants.
    Has anybody looked at it, GAO looked at it, does this 
system make sense? Do you believe that having the States do the 
initial disability determination is the best way to get the job 
done? Would they be better decided by the Federal Government 
instead of the State? In other words, your retirement Mr. 
Williamson, you are part of the whole Public Employee 
Retirement System. Has anybody looked at that whole process 
procedurally?
    Mr. Robertson. Two points to make. The first one is that 
the decision itself, the disability determination itself, is a 
very complex, difficult decision to make. So you start with 
that and then you put that decision in a process that is, as 
Hal noted earlier, very fragmented--it involves 1,300 field 
officers, 50 some odd DDS's, and 140 hearing offices. That 
makes the determination process even more difficult.
    Senator Voinovich. Do you think the Commissioner, according 
to the information I have, would replace the State's 
reconsideration process with new SSA reviewing initiative?
    Mr. Robertson. I think the Commissioner is pushing for 
process improvements and looking at the process in its 
entirety. We haven't seen the details on a lot of the design 
yet and, of course, the devil is in the details. But much of 
what she is talking about in general makes sense.
    Mr. Daub. There are two changes, Mr. Chairman, that I don't 
think the Commissioner decided yet, but her approach to the 
process is looking at eliminating reconsideration and looking 
at the administrative law judge stage and subsequent appeal 
review being streamlined. It is amazing how many days it takes 
for a determination and then the appeals, as you point out. 
Interesting things are happening. In recessionary times, 
unemployment rises and disability claims tend to rise. The next 
thing that is happrning is the aging of our society. The baby 
boomers are coming in here. Disability tracks age; the older 
you get, the more disability claims come into the system.
    This movement into electronic files is absolutely critical. 
The whole reform process is predicated upon the electronic 
file. That has to work first. And assuming that is on track and 
resources are in place for that, the streamlining of the 
administrative review can occur. And the Commissioner has not 
decided yet which pieces will be taken out of the system but at 
least there are two that should cut a lot of processing time 
for the applicant.
    Senator Voinovich. It gets back to the issue of, Mr. 
Robertson, do you think Social Security has the staffing 
capacity at the Federal level to meet the challenges you 
discussed?
    One of the things, if I'm not mistaken, in the background 
material I read was that State disability determination systems 
are having human capital challenges. I hope that the Social 
Security Adminstration will work to alleviate these challenges. 
That is, why we elevated human capital as officers in each of 
the agencies and it's very important that they turn their 
reports in every year.
    In terms of SSA's last GPRA report we didn't think there 
was enough attention made to the staff capacity that would be 
needed to achieve the agency's goals. Mr. Robertson, I would 
like you to comment on that.
    Mr. Robertson. As you know, Mr. Chairman, SSA is in the 
process of really transforming itself. Its like taking a big 
ocean liner and trying to make it change directions. As you 
know, we have examined other organizations that have 
successfully transformed their operations. The absolute key to 
their success was the human capital aspect of their plans. From 
Social Security's standpoint, they have to have a strong human 
capital management plan. However, when we looked at the DDS 
part of it recently we saw some things lacking.
    Mr. Daub. The comment was made earlier that it takes about 
2 years to train a person to make disability determinations and 
learn the medical listings. It's a very complex process. And 
that is just to recruit and then to retain that person in the 
State process long enough to get them trained. Now we are going 
to put them through a process of getting on-line and 
understanding that whole new complicated process. We see a 
turnover factor on human capital in this agency of about 13 
percent. It's a resource issue. The 5-year budget plan that the 
Commissioner developed would have eliminated backlogs. That 
budget proposal did not occur but they'll do their very best, 
I'm sure, to try to handle that increasing case load. It is 
clearly a resource and training commitment that has to be made 
to turn this ship around.
    Senator Voinovich. Mr. Williamson, one of the things that 
the Commissioner mentioned was the fact that those States, for 
example, Mississippi have gone forward and implemented the 
program and seems to be happy about it. And the word at least 
around the country is it's a good system. First, do you hear 
good things about the system and, second, you mentioned 
something about training and I would like to know what you are 
doing in order to train your people so they can use the new 
system when it comes in. I know that's a lot of work because 
when I was county auditor we went from paper files to 
electronic files and frankly we had to retrain employees and 
some of them we weren't able to retrain. They weren't able to 
do it. This is a whole business of computer familiarity and all 
of the other tasks that are necessary. Also, from what I read 
about your operation I understand you've had some turnover 
problems.
    Let's put it this way, are your employees going to be 
trained enough when AeDib reaches Ohio? Are you going to be 
able to handle this system? Do you have training going on, do 
you have the number of people you need and so on?
    Mr. Williamson. Thank you, Mr. Chairman. We have been doing 
significant training. We started E-learning to get everyone's 
skills up, computer skills assessment. We have training that 
Social Security provided us on what employees can expect in the 
new environment. We have a technological issue of getting all 
the equipment in and working, and working with our Legacy 
software and to make sure it's user friendly and working 
properly for our staff.
    We named one of our managers as project manager to oversee 
it from start to finish. And as I said, we have some concerns 
but we are very enthusiastic about getting the electronic 
folder in. And think it's going to provide significant 
benefits. While we are concerned somewhat about training, we 
think if we have the resources and staff we'll be able to meet 
that challenge.
    Senator Voinovich. You said two big ifs, resources and 
staff. What is the likelihood you are going to have resources 
and staff.
    Mr. Williamson. I think we'll get some of the staff we need 
and I think we'll get a fair number of the resources. Frankly, 
it remains to be seen. Our budgets aren't all final in terms of 
how much the DDS will get as it rolls out. We have been assured 
as we roll out with Levy Corporation, we'll have their full 
support in bringing it on and teaching our staff how to 
physically use it.
    Senator Voinovich. I would like to have something in 
writing from you about that, where you are, what you think you 
need, what your resources are, and what is the probability you 
are going to be able to achieve what it is you are supposed to. 
And also is the amount of the money that you are getting from 
the Federal Government adequate enough to hire staff. For 
example, how about your classification and your salary, are 
they competitive enough you can bring people?
    Mr. Williamson. I think they are relatively competitive.
    Senator Voinovich. Why do you have the turnover you have?
    Mr. Williamson. Our turnover is not quite as high as many 
DDS experience. For fiscal year 2002 we had 6.7 percent 
attrition. If you took our retirees, it's 3.48 percent. I don't 
think we are having quite the problem with that. Ninety-two 
percent of our workforce has 20 years experience or less. Where 
we are seeing the growing pains, we have approximately 54 
percent of our workforce with less than 5 years experience.
    Making sure they have adequate training is one of our 
primary goals. Interestingly, though, as far as rolling out 
electronic folder the people just from college are familiar 
with the electronic environment and aren't struggling with that 
transition at all.
    Senator Voinovich. What about the ones that weren't doing 
it?
    Mr. Williamson. They are responding very well to our 
training. Like I said, we put in our electronic learning. We 
asked all staff to complete a certain amount of courses by May 
before the folder comes and they are responding quite well. A 
lot of people are saying, gee, I wish I tried this sooner. This 
isn't as bad as I thought it was. We had a lot of electronic 
forms up on our system and use the E-View system so we can look 
at the same application on the screen that the field office 
does. In a sense we implemented several parts of what we'll be 
doing and we feel relatively well prepared for both our future 
staff and existing staff to make that transition.
    Senator Voinovich. Did you teach Q-Step?
    Mr. Williamson. No, sir.
    Senator Voinovich. How long have you been with the agency?
    Mr. Williamson. Fourteen years.
    Senator Voinovich. When we started quality service through 
partnership you weren't part of that program?
    Mr. Williamson. No, sir.
    Senator Voinovich. Are you familiar with it at all?
    Mr. Williamson. I'm not.
    Senator Voinovich. We'll send you some stuff on it.
    Mr. Daub. The Commissioner also emphasized in-line quality 
review from the beginning to the end. That is a real need as 
you implement a new system. I take it you took a similar 
approach, in your work as governor. I think the reviewing 
officer and the closing of the record at the administrative law 
judge level will help. The number of days that it takes once a 
denial is turned into an appeal is somewhat misleading because 
if you don't like the judge you are assigned and you know 
there's another judge that's a little easier or a little more 
willing to overturn a decision, your attorney might just be 
busy that day and take a continuance or postpone the case in 
hopes that another judge will hear it. Forum shopping to a 
degree does occur. I think GAO discovered this.
    Also, if the record is kept open as it has been up to now, 
you can hold back information and wait to see how you are doing 
on overturning the disability determination from the beginning 
all the way to the final review. What that does is simply adds 
more days in the averaging as that case stays in the system 
longer. With the closing of the record and the other changes 
the Commissioner is thinking about we are going to get, I 
think, better due process to the claimants who rightfully 
should have a chance for an appeal and rightfully have their 
case reconsidered. It's going to work a lot more efficiently 
for the claimants.
    Senator Voinovich. We are going to have people representing 
claimants in the next panel. I would like to hear what their 
reaction is.
    Mr. Daub. It's going to take some time to get the system 
going. We have been without all the judges that we needed to do 
some of the work for a long, long time. And then, as you know, 
the Congress just passed the drug bill which is also going to 
change the situation--about 50 to 70 judges are going to leave 
SSA and go over to HHS to handle Medicare appeals. That will 
make the SSA system short again a number of judges. Again it is 
a resource issue and funding issue.
    Senator Voinovich. Seems to me that at this stage in the 
game, and I am going to have a hearing on April 8 next month on 
the new prescription drug program. I'm bringing HHS in to talk 
to about whether they have the capacity to implement the new 
Medicare modernization program and prescription drug program. I 
think it's important that we find out about this portion of it 
because one of the things we are trying to do is to make sure 
we have enough employees focusing on enforcement. As we are 
looking through and comparing all the employees in Homeland 
Security we may find large discrepancy in salaries in relation 
to enforcement positions at other agencies. We have people 
outside of DHS in the other agencies and we don't want to see 
employees flowing from one agency to the other because they are 
going to get a big bump in their salary.
    What you are saying to us today is you are concerned that 
some of your judges are going to be moved out of SSA over to 
Medicare to deal with their appeals process?
    Mr. Daub. That's a major situation. Somebody ought to 
relook at that whole big picture in terms of capacity.
    Senator Voinovich. That gets back to you, Mr. Robertson. 
How do you feel? You looked at this thing. Where are they in 
terms of capacity to do this?
    Mr. Robertson. I know what I would like to say. Part of me 
would like to sit here and say we have a big resource concern. 
When we did our work on the DDS human capital side of things, 
many of the DDS directors we talked with noted that there are 
some resource constraints. The problem I would have with saying 
there's a resource problem, however, is that, in that same 
review, we found that the planning wasn't there. So, it's hard 
to say there's definitely a resource problem when we haven't 
seen the plan either at the DDS level or Social Security level. 
That's where we come out on that question.
    Senator Voinovich. The point is, that the plan has not been 
finalized and it's difficult for you to determine if they have 
adequate staffing.
    Mr. Robertson. Yes.
    Senator Voinovich. I'm interested in that and as chairman 
of the Advisory Board you ought to be also. I would like to 
know when you think that is going to come to be.
    Mr. Daub. Your mandate says the conversion has to be by 
October 2005. So it's between now and then that the details of 
the plan have to be finalized.
    Senator Voinovich. In the meantime the Medicare thing is 
going in 2006.
    Mr. Daub. You are going to have a hearing on Part D. It's 
going to be interesting to see what you discover.
    Senator Voinovich. We are having it because you are 
concerned.
    Mr. Daub. Congress has provided funding for SSA to hire the 
people needed to implement the new Part D. Once that system, 
Part D, is implemented, there's going to be a real pool of 
talent that was hired to accomplish that initial start up for 
Medicare eligible individuals. It would be a shame to have them 
hired only temporarily and then to leave the system again 
short. We need to look at this as a human resources potential.
    Senator Voinovich. To see the opportunity that is there.
    Mr. Daub. It can be very helpful. Some of those folks may 
be available for State DDS work, too, which would be terrific.
    Senator Voinovich. Probably what we ought to do is call a 
meeting with OPM and Clay Johnson and get some folks together 
and talk about that to see if there is some way to expedite it 
within the framework of the current law or whether we need some 
changes in the law to have it.
    Mr. Daub. Along with electronic folders and with better 
planning for resource allocation, we also need judges to be 
better trained and continuously trained on medical evidence 
because medicine changes. Getting all of this in the system 
would eliminate the need to hire more people over time. It 
would take a couple or 3 years to accomplish all of this.
    Senator Voinovich. One thing I would like to mention to 
you, Mr. Williamson, is the issue of the quality of people that 
you have working. You have medical doctors on your staff. There 
has been some controversy about your head doctor because he 
lost his ability to treat patients. That's been pretty well 
vetted. But my concern, I don't know whether you recognize it 
or not, you are going to have less doctors because we are 
losing doctors right and left today giving up the practice of 
medicine because of malpractice lawsuits, premiums are going 
sky high. And, frankly, we are starting to see that in terms of 
medical school. It's having an impact on the number of people 
that want to go into medicine.
    So if you look at agencies that need M.D.'s to review the 
disability cases, we may have a human capital crisis in that 
area.
    Mr. Williamson. It's definitely a concern for us. We need 
to attract quality physicians and psychologists to do what is a 
very unprecedented growing rate of claims. So certainly that's 
a concern of ours and we may need to review what resources we 
may need.
    Senator Voinovich. Are you seeing anything like that now in 
terms of your situation?
    Mr. Williamson. We have been retaining fairly well. We have 
92 doctors or M.D.'s and psychologists. And we, for the most 
part, have been retaining them without a lot of difficulty. But 
attracting new candidates has been an issue for us.
    Mr. Daub. Are they contracted mostly or employees?
    Mr. Williamson. All consultants.
    Mr. Daub. Some States are mixed--employed and contracted.
    Senator Voinovich. I read an article about it and about 
this particular individual, why don't you share that because 
there may be people in the news media that want to get your 
statement in regard to that.
    Mr. Williamson. I would say first, Dr. Cantor does hold a 
medical license. He has more than 20 years experience with our 
organization. He's very knowledgeable of the SSA program and is 
well respected and he meets the position requirements set forth 
by SSA. So at this point we are very comfortable with him 
continuing in that position.
    Senator Voinovich. The fact he lost his ability to treat 
patients because he was administering drugs to his family and 
friends doesn't give you any pause.
    Mr. Williamson. He did lose his ability to prescribe 
medication, that is true. Although that does not interfere with 
his ability to do his duties with our organization.
    Senator Voinovich. And you are sure that you monitored him 
so he's no longer----
    Mr. Williamson. Yes, sir.
    Senator Voinovich. You feel very confident of that?
    Mr. Williamson. Yes, sir.
    Senator Voinovich. From your perspective he's a competent 
individual doing the job he's doing but he's not able to 
practice medicine is not a concern to you, or see patients?
    Mr. Williamson. I understand. Many of our physicians do not 
practice medicine. Many of them are retired or for one reason 
or another not practicing, including their medical insurance 
premiums.
    Senator Voinovich. You may be getting more.
    Mr. Williamson. We may have the opposite happen because of 
that, because they don't need that coverage with us. My answer 
would be I'm comfortable with him and we did monitor his work.
    Mr. Daub. There's another point you raised serving the 
rural populations of a State, and there the medical physician 
shortage that you are talking about is very serious. The 
Commissioner, in thinking through how to make good decisions at 
the in-take level is particularly interested in a regional kind 
of medical unit. It won't take away anybody's job currently 
working in the process, but to have regional specialists 
available to consult, particularly in a smaller community, can 
help expedite a person's application. GAO pointed this out in a 
number of studies, and it can be very important to a State like 
this for the determination folks to have the ability to pick up 
the phone or to video conference with physician subspecialists.
    Senator Voinovich. There is lot of that going on today in 
terms of video conferencing and diagnosis in rural areas 
because of lack of physicians that are in those areas.
    Mr. Robertson. Those regional units will help with the 
consistency of the decisions, too.
    Senator Voinovich. Has there been any study made as to why 
you have this large discrepancy in initial disability 
determinations. The range falls between 79 percent rejection 
and 35 percent? How do you reconcile that?
    Mr. Daub. It's very hard to explain. That's probably the 
most baffling part of the system. I think that it gets down to 
a training issue. In the system of administrative law judges 
there isn't any published precedent from one State to another 
as to how a particular diagnosis would be looked at on appeal. 
So from different parts of the country different judges and 
different doctors look at each human being differently as a 
separate unique case. I'm not sure we should get fully alarmed 
by the inconsistency but it's enough that I think part of the 
answer is in better training, and I said it a minute ago, more 
and regular medical training for ALJs.
    Senator Voinovich. How about DDS?
    Mr. Daub. I think if the judges had the same training the 
DDS had, you would see a lot more uniformity.
    Senator Voinovich. But the fact is the rejection rate on 
the State level is marked. Ohio has one the highest rejection 
rates, don't we?
    Mr. Williamson. Yes, sir.
    Senator Voinovich. Why are we rejecting more people than 
other States?
    Mr. Williamson. Mr. Chairman, we looked at several facts of 
whether we can draw comparison with unemployment rates, 
demographics or downturns in the economy and we have not been 
able to draw a direct nexus to those factors. We have to rely 
on quality statistics from Social Security Administration to 
make sure we are following rules and regulations and so far our 
quality has been very good.
    I do think, as Mr. Daub said, the Commissioner's approach 
to centralized quality review would be a great benefit to all 
the States in terms of providing consistency.
    Senator Voinovich. It's important somebody from Indiana and 
somebody from Ohio, Indiana says OK and Ohio rejected, why is 
one approved and why is one not approved, I think that in terms 
of fairness to individuals.
    Mr. Daub. One of the biggest difficulties is the review of 
mental illness disability. Physical disabilities, there's a lot 
more uniformity but it's less clear in the attempt to determine 
that someone is mentally unable to continue to perform the work 
they did do. And, of course, with medications today and other 
improvements there's so many more ways somebody can go back to 
work and be productive. But the definition of disability 
doesn't take that into account. And so everybody is working 
really hard to make sure you give the benefit of the doubt to 
that individual. I think that mental impairment in the most 
difficult one.
    Senator Voinovich. What percentage of the cases are for 
mental impairment.
    Mr. Daub. It's over half, well over half of disability 
claims involve mental issues.
    Senator Voinovich. I would like to see a breakdown of where 
the claims are coming from and I would like to have somebody 
dissect the thing a little bit and come back with some real 
thoughts. What are you doing with it, is anybody looking at 
this and if people who claim to have mental impairments--how 
are those being decided. The issue becomes quality of the 
individual that is reviewing their case and if one is reviewed 
and the situation can be remedied with the use of medication, 
you are saying that that doesn't count in terms of whether 
somebody should be disabled or not.
    Mr. Daub. It is a very difficult thing to look at 
aggressively with a degenerative circumstance in an individual 
and to know whether at some point that person will be able to 
work or not. There are so many people making judgments. To move 
that case along through the system you don't get time to check 
to see, if we prescribe medication, will that person be able in 
6 months to go back to their job which they lost in the 
meantime. It's a difficult process.
    Senator Voinovich. It's one that would be worthwhile if you 
are talking about half the cases we are seeing such a dramatic 
change today in terms of mental illness. That is one I think we 
should really look after.
    Mr. Daub. Looking at other countries, Scandinavian 
countries, Netherlands, you are seeing, I want to put this in a 
tactful way as I can, the process of disability is becoming so 
easy, with all due respect, that it's become a much better way 
to take early retirement until you are 62 or 65. In our system 
it's not to say we have malingerers or people are cheating. I 
don't know that at all.
    The process makes so many judgments along the way that in 
the process of appealing, if you appeal long enough, you are 
going to win. And some of it is due to degeneration in the 
claimant's condition over the 2 or 3 years that the case stays 
in the system. Rather than pointing to any fault I think it's 
time in our modern society to take a look at how we define 
disability.
    Senator Voinovich. I want to thank you very much for coming 
today. It's been very instructive today. I appreciate you 
getting back to me.
    I'm going to recess the hearing for 5 minutes.
    [Recess.]
    Senator Voinovich. The hearing will come to order. We have 
our next panel and we are fortunate to have the Hon. Kevin 
Dugan, administrative law judge in Charlotte, North Carolina, 
collective vice president of the Association of Administrative 
Law Judges. I take it that all your judges belong to this, is 
that right?
    And James Hill, Attorney Advisor in the Cleveland office of 
hearing and appeals. He's also President of Chapter 224 of the 
National Treasury Employees Union 224 and we are here to hear 
from you. I'm interested in hearing professionals and members 
of unions, and Colleen Kelly is a great friend of mine and has 
been very helpful to us in all of the work that we have done in 
human capital, not necessarily agreeing with all of it but 
she's been very constructive. I want you to know as a member of 
her union she's an outstanding individual trying to find a way 
to make things work.
    Marcia Margolius who is an attorney with Brown & Margolius 
in Cleveland and I saw a couple people shaking their heads 
during some of the testimony and hopefully she will give us a 
perspective of the individual that represents the clients who 
go through this whole system.
    We'll begin the testimony with you, Mr. Dugan.

     TESTIMONY OF HON. D. KEVIN DUGAN,\1\ VICE PRESIDENT, 
            ASSOCIATION OF ADMINISTRATIVE LAW JUDGES

    Mr. Dugan. Thank you, Senator. Thank you for the 
opportunity to testify today. This statement is presented in my 
capacity as Vice President of the Association of Administrative 
Law Judges (AALJ). It represents the professional interest of 
900 administrative law judges in the Department of Health and 
Human Services where the new Medicare is going, by the way.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Dugan with an attachment appears 
in the Appendix on page 126.
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    One of the stated purposes of the AALJ is to promote and 
preserve the claimants right to full due process hearings. As 
such our association has spent a substantial amount of time and 
resources to create a system that will deliver fair and 
expeditious adjudications for the American public.
    The SSA administrative hearing system began in 1940 with 12 
referees and it has grown to the largest adjudicative system in 
America. Along with the growth in size, there has been a growth 
in complexity. Unfortunately SSA has been unable to adequately 
address the difficulties that are inherent in the high volume 
but complex area of law. We are of the strong opinion that 
changes must be made if we want an efficient and fair 
adjudicative system.
    The Association of Administrative Law Judges believes the 
plan put forth by Commissioner Barnhart promises lasting and 
meaningful changes that will produce high quality decisions in 
an expeditious manner. We applaud her for her bold and 
courageous leadership.
    The plan makes many changes to the current system but 
promise to preserve the right of the claimant to a due process 
hearing. The changes that are proposed are predicated on the 
premise that the way to increase speed of adjudication is to 
first improve the quality. This is a stark contrast to many 
past initiatives.
    We agree that improving quality at the beginning of the 
adjudicative system confers benefits throughout the system as 
the cases move forward. If cases are fully developed and fairly 
evaluated from the beginning some cases will be paid more 
quickly and the more difficult cases will be properly prepared 
and presented for hearing, this will lead to more consistency 
at all levels of adjudication.
    As Commissioner Barnhart noted, however, the changes, 
technological changes she needs to do this will not be 
completed before October 2005. Meanwhile we must acknowledge 
that the pending backlog demands our best efforts with the 
tools we have now.
    The consensus is that the past initiative HPI failed to 
such a degree it caused an immediate decrease in cases decided 
in OHA offices here and nationwide. Fortunately, the best 
managers in local and regional offices were able to adapt and, 
to some degree, lessen the negative impact of HPI. Those 
offices are often characterized by a cooperative atmosphere 
which utilizes the skills and resources of the judges and 
staff. Other offices, however, were not able to soften that 
negative impact and they failed to a greater degree. We believe 
such offices should look to the practices used by the more 
successful managers.
    The AALJ has long been concerned about the growing backlog 
in Cleveland, as well as throughout the region. We have made 
informal suggestions and more recently put together a more 
comprehensive plan for the consideration of SSA managers. A 
copy of that letter is attached to my testimony.\1\ Our 
suggestions include reorganizing staff to providing additional 
management training and increasing resources. Until OHA returns 
to a modified unit staffing system, however, we will not be 
able to fully and effectively utilize your current resources.
---------------------------------------------------------------------------
    \1\ The letter referred to appears in the Appendix on page 149.
---------------------------------------------------------------------------
    We have also suggested changes in case practices that could 
quickly increase case dispositions without additional 
resources. Some of the suggestions include using prehearing 
orders that fully involve the claimant bar in the process. This 
would shift some of the case preparation from the overworked 
staff. On a national level we have urged the adoption of rules 
of practice and procedure and the ABA Ethical Code of Conduct 
for administrative law judges.
    The plan presented by Commissioner Barnhart promises to 
transform the disability system into an efficient and fair 
system and we ask that you and the rest of your Subcommittee to 
fully support her efforts, her budgets requirements. The 
association will continue to work on improving the hearing 
process for the benefit of the American people.
    Thank you again, Senator, and I am happy to answer any 
questions.
    Senator Voinovich. Thank you very much. I appreciate you 
coming here today. Mr. Hill.

TESTIMONY OF JAMES A. HILL,\1\ PRESIDENT, CHAPTER 224, NATIONAL 
   TREASURY EMPLOYEES UNION, OFFICE OF HEARINGS AND APPEALS, 
                 SOCIAL SECURITY ADMINISTRATION

    Mr. Hill. Good morning. My name is James Hill. I'm the 
Attorney Advisor at the Cleveland hearing office for over 21 
years. I'm also the President of Chapter 224 of the National 
Treasury Employees Union (NTEU) that represents attorney 
advisors and other staff members in the approximately 110 OHA 
hearing and regional offices across the United States. I thank 
you for inviting me to testify at this hearing.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Hill appears in the Appendix on 
page 133.
---------------------------------------------------------------------------
    The disability backlog problem at OHA is neither recent nor 
unique to the Cleveland Hearing Office. From the mid-1990s the 
backlog grew to approximately 550,000 cases nationally and WITH 
over 9,000 cases in Cleveland. Several highly focused 
initiatives, most notably the senior attorney program, produced 
over 220,000 fully favorable on the record decisions with an 
average processing time of just over 100 days. By October 1999 
it reduced the number of cases pending to 311,000 nationally 
and slightly over 4,000 cases in Cleveland. I point out 
currently there are 625,000 cases pending nationally and over 
8,500 in Cleveland.
    Since that time a number of factors including the 
termination of the senior attorney program, increased receipts, 
inadequate staffing and implementation of the disastrous 
Hearing Process Improvement plan have resulted in the record 
number of cases currently pending. The sheer mass of cases 
pending has raised the processing time to nearly 400 days 
nationally and over 550 days in Cleveland. This is simply 
unacceptable.
    There is no question that the current disability system is 
fundamentally flawed and wide ranging systemic changes are 
necessary.
    Commissioner Barnhart and Deputy Commissioner Martin Gerry 
conducted a truly objective review of the entire disability 
system accurately identifying its strengths and weaknesses. I 
believe that for the first time a senior SSA official truly 
understands the strengths and efficiencies of the current 
system. This insight combined with the Commissioner's 
commitment to create a process that serves the needs of the 
public rather than the dictates of the bureaucracy has lead her 
to propose a plan for implementing fundamental process changes 
that will provide a level of service of which we can all be 
proud.
    The plan is comprehensive and involves extensive changes 
such as replacement of paper folders with electronic folders, 
elimination of the reconsideration determination, elimination 
of the appeals counsel, a completely revamped quality assurance 
system and creation of a reviewing official process to provide 
an intermediary between the State agency and administrative law 
judges.
    I am convinced this plan, if implemented, will result in 
efficient, effective and most importantly a fair adjudicatory 
reprocess.
    As good as this plan is, it does not provide immediate 
reprieve for the Cleveland office. SSA has implemented some 
temporary measures that are limited in scope and have little 
effect nationally or in the Cleveland office.
    The Cleveland office faces an emergency and fortunately 
actions have been taken to significantly improve the level of 
public service. Three additional ALJs will shortly be assigned 
to the Cleveland hearing office. Additionally during the past 
several months over 4,000 Cleveland cases have been transferred 
to ALJs at other hearing offices for hearings held in Cleveland 
in person or via video teleconferencing. More could be done. 
But it is essential that SSA be provided with the funding 
necessary to promote current and long-term initiatives to 
improve the level of service.
    However, not every improvement is extensive. Revising the 
senior attorney program would during the next year result in 
over 60,000 fully favorable on the record decisions without a 
significant drain on SSA resources. The Social Security 
Administration and its employees recognize that significant 
improvement in the disability must be made if the public is to 
receive the level of service it has every right to expect.
    I know you, Mr. Chairman and Commissioner Barnhart are 
committed to the SSA disability system on a short-term and 
long-term basis, as well as providing resources necessary to 
the Cleveland hearing office to provide the wealth of services 
that the people of this community expect. Thank you.
    Senator Voinovich. Ms. Margolius.

 TESTIMONY OF MARCIA MARGOLIUS, ESQ.,\1\ BROWN AND MARGOLIUS, 
                             L.P.A.

    Ms. Margolius. First, I would like to thank you, Senator 
Voinovich, for initiating this field hearing to address delays 
in the Social Security claims.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Margolius appears in the Appendix 
on page 144.
---------------------------------------------------------------------------
    Under the current system people with severe disabilities 
are forced to wait years for an ALJ decision. These delays are 
harmful to the individual, undermine public confidence in the 
program and damage the integrity of the whole system. As a 
disability advocate I support any efforts and initiatives to 
make the process more efficient. However, any changes must 
ensure fairness and protect the rights of people with 
disabilities.
    The Commissioner's plan includes several changes at the 
front end of the program that can have an immediate impact on 
new applicants and improve backlogs and delays later. Hopefully 
this will move forward at all possible speed and I hope it is 
up and operational by June 2005. However, like our Federal 
court system there needs to be a read-only online access to the 
program for the attorneys so that all parties involved can have 
the information and be involved in the processing of the 
claims. The current proposal does not allow such read-only 
online access that has been provided, for example, in the 
Federal courts.
    The position of the reviewing officer is very promising as 
it provides that necessary point person to help expedite 
critical cases. However, an appeal from the reviewing official 
to the ALJ which is currently proposed is a duplication in the 
reconsideration level. Beyond duplicating a step, the way the 
Commissioner has proposed to rid the system of it will be 
confusing to the public. The way the program is proposed 
currently there will be an appeal from the initial level to the 
reviewing official and then again to the administrative law 
judge. However there should be one appeal from the initial 
level to both the reviewing official and ALJ together.
    As currently proposed the reviewing official and 
administrative law judge will be in the same office of hearings 
and appeals. This is going to be very misleading to the public 
and people will mistakenly give up appeal rights.
    Senator Voinovich. Will you repeat that? I'm not sure I 
understand.
    Ms. Margolius. The way the program is now, the reviewing 
official and administrative law judges will be housed in the 
same office of hearings and appeals. The Commissioner is 
proposing if a claimant is denied initially, they will be 
appealed to a reviewing official and if a favorable decision 
isn't issued you appeal from the reviewing official to the----
    Senator Voinovich. Eliminate the reconsideration at the 
local and go right to a reviewing official. Would that 
reviewing official be working in the State operation or for the 
Social Security Administration?
    Ms. Margolius. For the Social Security Administration.
    Senator Voinovich. That should help to alleviate some of 
the burden on the State offices in terms of the 
reconsideration.
    Ms. Margolius. At the State office. But to be true to the 
position of reviewing official one appeal from the initial 
level should get the individual to the SSA level rather than 
making them go through two appeals. It's duplicating.
    Senator Voinovich. The State does it, State denies, goes to 
the reviewing official and from reviewing goes to a judge.
    Ms. Margolius. But you have to appeal from the reviewing 
official to the judge. You are shifting focus from the State to 
Federal but still making the claimant undergo as many hurdles.
    Senator Voinovich. What would you do, eliminate the 
reviewing official?
    Ms. Margolius. Appeal of the initial decision goes to the 
Federal branch of the Social Security Administration, let the 
reviewing official approve it or make a recommendation to the 
judge and then have it go right to the judge without an 
additional appellate procedure.
    Senator Voinovich. I see. In order so that you don't have 
the paperwork that is involved, the reviewing official gets the 
file, looks it over, they approve it and it's done.
    Ms. Margolius. Correct.
    Senator Voinovich. You don't think it should be I will take 
the file and move it, any appeal is to the judge.
    Ms. Margolius. Correct. Continuation of the appeal also 
protects the claimants. The current review process satisfies 
the claimants' need to have oversight of the administrative law 
judges decision. A major basis for remand by the appeal counsel 
is not submission of new evidence but legal error committed by 
the ALJ. The Commissioner should maintain this process for 
rectifying errors administratively rather than forcing a court 
review.
    To date, though, Senator, the fundamental problem has been 
staffing at the Office of Hearing and Appeals. However, judges 
are only part of the solution. Support staff is based on the 
number of judges not the number of cases. So as long as we have 
the current backlog that exists at the Office of Hearing and 
Appeals, the delays are endemic and will continue without that 
much needed support staff.
    Senator Voinovich. What you are saying is even though you 
think we are going to bring two or three----
    Ms. Margolius. Three more judges by June.
    Senator Voinovich. And of course they are farming out a lot 
of these cases to other offices, I would be interested to hear 
from you how you feel about that, maybe not in your testimony 
but as a question, but it's the old staff thing.
    Ms. Margolius. Correct.
    Senator Voinovich. The thing that would be interesting to 
know why it is that Ohio has all these backlogs versus other 
offices, why is it we are farming cases out to someplace else 
and is it reflective. I thought this over, not in this area but 
even with immigration, same problem, it seems like we get 
shortchanged. So it would be interesting based on case load to 
see how the staffing levels fit with the judges. And, Mr. Hill, 
you might comment on that. Put that one down as a question.
    Ms. Margolius. Finally, to respond to Mr. Daub's comment, I 
believe, forum shopping is not part of the system. If a case 
must be delayed, the claimant is unhappy. The case gets 
rescheduled with the same judge who also is not happy with any 
of the delays. So delays are avoided at all costs. You cannot 
postpone a case and have it reassigned to another judge. It 
goes back to the same judge.
    That's the same procedure with appeal counsel remands also. 
If you do appeal, you get a remand, it's returned to the same 
administrative law judge to deal with the issues that were 
raised on remand. That's the end of my comments.
    Senator Voinovich. Thank you very much. That's a good 
suggestion. Mr. Hill, what is your comment in terms of the 
staffing level here?
    Mr. Hill. Staffing, there are two distinct problems. You 
don't have the funding for enough staffing. And I think the 
second is----
    Senator Voinovich. Have you looked at your staff here 
versus other parts of the country to ascertain whether or not 
you are being shortchanged.
    Mr. Hill. We are being shortchanged I suppose if you look 
at it that way in terms of we have fewer judges than we need. 
And it has been pointed out staffing is based on the number of 
judges. So if you are short of judges, you are going be short 
of staff. If you don't have enough staff, you are not going to 
get more judges.
    Senator Voinovich. I think to start off with you need 
judges. But the question I have is for the judges that you have 
in terms of staffing compared to other places, are the staffing 
levels to support the judges same as in other jurisdictions.
    Mr. Hill. It's slightly higher. When we get the three new 
judges it will be about the national average.
    Senator Voinovich. You have more staff then you need right 
now.
    Mr. Hill. Temporarily, only temporarily because we have 
lost three judges in the last year and we are acquiring three 
judges.
    Senator Voinovich. You lost three, you got the staff that 
supported those judges, now you are going to get the three 
judges.
    Mr. Hill. I don't believe we have had any hiring in quite 
some time as far as staff.
    I think the second problem we need to look at with staff is 
one of the problems HPI introduced is the group system where 
you group employees with a group administrative law judges. In 
my opinion that has been a disaster. I do support Judge Dugan 
when he says we need to go back to a modified unit system where 
we have specific people working toward specific judges rather 
than a generalized system.
    Senator Voinovich. Like a pool.
    Mr. Hill. It's hasn't worked as well as some of the people 
in Baltimore thought it would. It's not very efficient.
    Senator Voinovich. Commission Barnhart is going to change 
that, right?
    Mr. Hill. I hope so. We haven't changed it as of yet.
    Senator Voinovich. That's an aftermath of the----
    Mr. Hill. HPI.
    Senator Voinovich [continuing]. HPI and it hasn't been 
changed and you are hopeful for it to be changed. The question 
to the Commissioner is it one of the things she's going to 
change. Mr. Dugan.
    Mr. Dugan. On that issue it's kind of funny, it has been 
changed in some offices to some degree. It has been finessed a 
little better in others but in Cleveland it hasn't for some 
reason. They brought more accountability in other offices where 
you can match people up so people know what cases belong to who 
and who you go to but when you have this group thing you have a 
whole bunch of people responsible for a whole bunch of stuff. 
No one is responsible for anything and it makes it--that's why 
when an attorney sends in evidence, it doesn't get into files, 
that's why sometimes these hearings get delayed. By the date of 
the hearing the judge gets a stack like that. It's not the 
attorney's fault. The attorney is probably sending it a month 
ago or 6 months ago.
    Senator Voinovich. The question is you are saying where 
they have changed it----
    Mr. Dugan. I can get you some offices where it's been 
changed for the better.
    Senator Voinovich. It seems to me that your organization 
should be looking at best practices and try to share that 
information with your colleages. Who is the boss in Cleveland 
in terms of the office procedures, are you, Mr. Hill?
    Mr. Dugan. The chief judge is Alan Ramsay.
    Senator Voinovich. So your organization could compile best 
practices and send it to Chief Judge Alan Ramsay. If some 
offices have changed the process from HPI, why don't the rest 
of the offices?
    Mr. Dugan. We have sent suggestions, I said in my 
testimony, sent them up to the associate commissioner. I'm not 
in a position to suggest to Judge Ramsay how he is going to run 
his office. We sent them to the head of the organization. It's 
up to them to decide. That would be outside of my realm.
    Senator Voinovich. I would think that Ms. Barnhart would be 
interested if this is working some places. We ought to see if 
we can't get it done. So you could do that in Cleveland, right?
    Mr. Hill. Yes, I suppose. Again, it's bureaucracy whatever 
the instructions are above you. Currently it's a group system. 
Because all of the offices are located all over the country 
there are probably more variances than a lot of organizations 
but technically speaking according to the rules, the group 
system is still in place.
    Senator Voinovich. Why don't you let me know when you are 
going to get it changed. I want you to personally look into 
this, Mr. Hill, and get a letter to Mr. Ramsay. I want to get a 
letter to Mr. Ramsay, I want to know what other places are 
doing and get that to Ms. Barnhart so she can give her blessing 
that he get going on this thing. Ms. Margolius, do you think 
that would help a lot?
    Ms. Margolius. It would help because it would allow 
assignment to individual judges quicker.
    Senator Voinovich. How long have you practiced?
    Ms. Margolius. Twenty years.
    Senator Voinovich. So you've had a chance to compare the 
old system versus the new system?
    Ms. Margolius. Yes.
    Senator Voinovich. What is your comment about the new 
system?
    Ms. Margolius. Cleveland hasn't seen the new system yet.
    Senator Voinovich. Before they came up with HPI, they had 
staff that would be working directly with a judge, working the 
cases up, they would be responsible for it and then apparently 
they changed the process with HPI. Did you see it at that 
stage?
    Ms. Margolius. I did. And it was much better before.
    It gets to the issue of accountability, a judge could be 
accountable for cases earlier on, his staff was accountable, it 
gave you individuals to talk to. If you have a case that is 
sitting in the Office of Hearings and Appeals for years not 
assigned to a judge, it's sort of hit or miss if you can find 
someone for a dire need case, critical case to pick up that 
file and deal with it. It's an issue of accountability.
    Senator Voinovich. You have heard testimony of Ms. Barnhart 
and others about the fact that they are farming these cases out 
to other places. Have you had any experiences with cases in 
that new system?
    Ms. Margolius. Yes, both farmed out and with video 
conferencing. It's a short-term help, I mean, again, like 
looking at the crisis that we are trying to deal with.
    Senator Voinovich. Is it working?
    Ms. Margolius. It is working.
    Senator Voinovich. And your clients don't feel like they 
are getting shortchanged because of it?
    Ms. Margolius. No, sir, not at all.
    Senator Voinovich. The idea would be getting more judges 
here, replace the three that you didn't have. Are you sure if 
you are replacing three you didn't have, seems to me you need 
more than three. You have this backlog building up. How many 
judges do you need?
    Mr. Hill. I think Cleveland probably needs about 14 judges 
to be fully staffed.
    Senator Voinovich. How many do we have?
    Mr. Hill. We have eight right now.
    Senator Voinovich. We go from 8 to 11 and you think we need 
an additional three judges?
    Mr. Hill. Yes.
    Senator Voinovich. We should ask about these 50 coming in. 
I will send a letter to the Commissioner on this. The 50 new 
individuals coming on, maybe you can respond to this, are just 
to replace those who have retired?
    Mr. Dugan. Yes. Commissioner Barnhart testified in 
September that she was short 200 judges nationwide. So this 50 
is kind of you lose about 50 a year so it really just keeps us 
treading water as far as that is a concerned.
    And connected to that is the Medicare that is coming on 
line. And they are going to probably take 70 immediately but 
eventually going to need close to 200 judges themselves.
    Senator Voinovich. And they are going to go over and do 
what again?
    Mr. Dugan. Medicare Part B and hearing all the appeals from 
denials or overpayments under the Medicare system. And they are 
going to go into HHS, Congress is moving HHS.
    Senator Voinovich. You are saying these are appeals with 
the current Medicare system?
    Mr. Dugan. Yes.
    Senator Voinovich. This has nothing to do with the new 
system?
    Mr. Dugan. With the current system. All the Medicare cases, 
SSA is currently handling. They handle a contract with CMS. 
That is now moving on October 2005 into HHS and all those 
judges will have to move plus they are going to pick up some 
more because of the new system.
    The point I am trying to make is that over the next 4 years 
it looks like the Federal Government is going to be hiring 
close to 400 to 500 administrative law judges. The problem is 
that Office of Personnel Management which has been responsible 
for that has abolished its office of administrative law judges 
and it is not focused like it used to be on the administrative 
law judge system. And that is a problem.
    Senator Voinovich. Where has that gone?
    Mr. Dugan. They farmed it out as we can tell to different 
functions within the agency.
    Senator Voinovich. Who did they farm it out to.
    Mr. Dugan. In their own system. It was in one office and 
farmed out the function to a different division within OPM. 
There is no one person in charge of the overall function.
    Senator Voinovich. When did that happen?
    Mr. Dugan. That abolishment was probably in the last 2 to 3 
years. Meanwhile we had that stay as well and they were not 
creating, part of the Azdell case that was whether they were 
going to create a new system and OPM never moved forward with 
that. Now that the stay is lifted, we have the old register and 
from what I was told recently, OPM is going to close that 
register and create a whole new one with their new system but 
they haven't started that yet. That could be awhile down the 
road. It takes a year to get another register.
    Senator Voinovich. Could you put that down in a letter to 
me and I will send it over to Kay Coles James and get a 
reaction from her, she is the head of OPM.
    Mr. Dugan. I would be glad to.
    Senator Voinovich. You see how many you need, and it's also 
phasing in people over a period of time. Somebody has to look 
at what kind of capacity you are going to need to meet some of 
these responsibilities that are coming up.
    Ms Margolius, do you have some other comments you would 
like to make? You had a chance to sit in and listen to the 
other witnesses and I think you may have some colleagues 
attending the hearing that also represent clients. Could you 
comment about some of the things that you heard and what do you 
think of them?
    Ms. Margolius. Yes, sir. First the greatest concern which I 
touched on very briefly was the issue of forum shopping. And I 
just want to make it clear that is not a practice. Certainly 
anyone representing disabled people wouldn't take such a step 
that would harm them and it would be an action very much 
frowned upon by judges we appear in front of repeatedly. It's 
just not an issue.
    Second, on the issue of closing the record, the hearing 
record is closed after the judge's decision. There are good 
cause standards to get new evidence in at later appeals but 
this has been dealt with by the Sixth Circuit Court of Appeals 
which covers new material evidence and good cause standards. I 
don't think closing the record after the judge's hearing is 
really an important issue either since this is closely 
monitored and taken care of.
    Concerning Commissioner Barnhart, I think the bar 
associations are very impressed with her and with her 
initiatives and what she wants to do. Again, I see most of her 
initiatives at this point being at the front end and that's not 
dealing with the crisis that your constituents and our clients 
are dealing with now and that the actions being taken as far as 
video teleconferences and farming out the cases to other 
regions and more judges hopefully will deal with the backlogs 
and what we see as a greater crisis currently.
    Senator Voinovich. You were saying something about the read 
only files for attorneys. Tell me about that.
    Ms. Margolius. Yes. With the AeDib program what they are 
proposing that the electronic folder is going to be available 
only to Social Security personnel. When we get up to a level 
where we will be appearing in front of a judge, they'll burn a 
disk for us so we can see the records. I see that as a great 
problem. For one thing, no judge wants me to turn in duplicate 
evidence but if I can't see the electronic file I'm going to be 
submitting evidence sort of in the dark. I don't know what they 
have, I am duplicating information, even though I'm submitting 
the most pertinent information.
    The Federal courts have a read-only file, everything is 
electronically filed with the Federal court. We can get in and 
read the decisions and court order. If this can be done with 
the court system, it seems like Social Security could duplicate 
that system, where we can go on line, read the records, read 
what is transpiring in the case but not have any right to alter 
any of the documents at all.
    Senator Voinovich. So the point is that the electronic file 
would be worked up on the State level with all the information. 
If we eliminate the reconsideration in going to a hearing 
officer then that information the hearing officer puts in would 
be in the record and you would be able to access it.
    Judge Dugan, can you tell us what do you think about the 
suggestion she's making?
    Mr. Dugan. I'm really not up to date on what she's saying. 
But it's clear the representative has to have access to what it 
is. How they are going get it, I suspect they'll work it out. 
We would support them having access one way or the other.
    Some kind of read only file it's a little more complicated 
because there's a security problem when we are accessing these 
medical problems and getting into the database. I think that's 
what they are struggling on how to solve security problems and 
what the system needs and they are well aware of that need but 
I think they haven't solved it yet.
    Senator Voinovich. Ms. Margolius, why don't you get me a 
letter on that. I will send it over to the Commissioner and ask 
her to respond to me where they are with that and if it's 
allowed in the Federal courts why can't we be doing it with 
your files if you think that would help expedite things.
    What some of the difference you are asking for, I suspect a 
lot of the case material in Federal cases is similar to the 
information contained in disability files. I don't know why it 
could be a problem.
    Mr. Hill. Probably one of the underlying problems is 
privacy. The medical records associated obviously with Social 
Security are numerous. What needs to be worked out is a secure 
way to transmit that information to only the people who are 
entitled to it. District court information is public 
information. I can go on and look at any case. I think we are 
really trying to shy away from that kind of situation. It's a 
technical matter IT people are going to have to work out. There 
is no question the representatives and claimants themselves 
have a need and right to see the material that Social Security 
Administration has, no question. I think it's a technical 
matter to get it straightened out. A little push would help.
    Senator Voinovich. I would like your consensus, 
particularly Mr. Dugan and Mr. Hill, about this marked 
difference between the rejection of cases around the country as 
little as 35 percent, as high as almost 70 percent. Shouldn't 
we try to get more uniformity? We talked about having the State 
DDS employees better trained. You think that having a common 
school that they go to, is that it, and Ms. Barnhart talked 
about this forum, is there a uniform forum you use, Mr. 
Williamson, on the State level, is your forum taking 
information exactly the same as other States?
    Mr. Williamson. Yes.
    Senator Voinovich. So it's uniform. That seems to be 
something that really needs to be looked at.
    Mr. Dugan. I agree. But before I get into that, I have to 
say that I am familiar with DDS throughout the Nation. And 
these people are very knowledgeable, hard working people. They 
are under a crush. There's a bias at the DDS level to deny a 
claim. If you pay a claim, you have to work a little harder to 
pay it and that----
    Senator Voinovich. You what?
    Mr. Dugan. You have to justify it a little more. Just like 
OHA level, if you are going to deny, you justify more than if 
you pay a claim. It builds in a bias at different levels. Why 
is there an inconsistency? It's very difficult to answer. But I 
think what the Commissioner is doing with that reviewing 
official is going to be a key to getting that consistency that 
we want nationwide because that reviewing official is going to 
be able to send cases back, as I understand it, with 
instructions so that you'll get some feedback. Currently there 
is no feedback in the system.
    Senator Voinovich. So if she gets her way and you have the 
reviewing officer that would be kind of the quality control 
person that would look at the case and maybe send it back to 
the agency and say I have observed certain cases coming here by 
certain people that appear not to have enough information or 
there seems to be some lack of effort there to do the job, is 
that what you are saying?
    Mr. Dugan. I think it would be along that way. She calls it 
in-line quality control.
    Senator Voinovich. Your DDS people in Ohio, do they go to 
the same training nationally?
    Mr. Williamson. We have our own training department.
    Senator Voinovich. In terms of the consistency of the 
training in various places, it may vary substantially.
    Mr. Williamson. Ours is based on SSA rules and regulations 
but we do.
    Senator Voinovich. That's another area somebody ought to 
look at with the training. Do you have continuous upgrading of 
training, your judges do. Don't you have training programs for 
judges?
    Mr. Dugan. When I came to SSA I was shocked by the lack of 
training that they provided. The training provided to judges 
primarily is provided by the judges. We pay our own way. Only 
recently with the prodding of Congress did we get time off and 
get some small stipend but not a per diem or anything like 
that. It's put on by our association.
    Commissioner Barnhart and Martin Gerry have worked hard to 
try to upgrade that but we don't get the type of training at 
the level we should.
    Senator Voinovich. So that's another issue, training. That 
doesn't surprise me. When I came in I was trying to bring 
quality management to the Federal Government and I realized 
they had a human capital crisis. I sent out letters to 12 
agencies and asked how much money they spend on training and 11 
came back and said they didn't know. One letter came back and 
said they did know but wouldn't tell me. It's a major problem I 
think right across the board even with, I'm sure, these people 
that work these cases up that they need better training.
    Are you able to attract the right people in these cases, 
Mr. Hill? Do you have any problems hiring people? Is the salary 
level adequate?
    Mr. Hill. OHA level it's adequate. I don't think there's a 
significant problem. I think there might be a problem retaining 
people. Again, a lot of that is--a lot of things are involved 
when you have a national program. There are cultural 
differences and regional differences. I think you tend to find 
OHA employees in the Rust Belt stay a lot longer than they do 
in California where we have a steady turnover of attorneys. 
It's very unusual in the Rust Belt. A lot has to do with the 
economic well-being of the area.
    I think to some extent regional differences show their 
faces in a number of areas, not the least of which may be even 
payment rate.
    Senator Voinovich. In what way?
    Mr. Hill. Pay rate of DDS. I don't have the statistics. I'm 
not management.
    Senator Voinovich. Who determines the wage level of DDS 
people?
    Mr. Hill. States.
    Senator Voinovich. You could have marked differences 
between the pay somebody is getting in Mississippi versus Ohio 
or Indiana and so on?
    Mr. Hill. Yes, sir.
    Senator Voinovich. I would like to get that, too. Find out 
what the pay level of these people are across the country and 
get an idea what it is.
    Mr. Dugan. May I respond? First of all, we want to thank 
you for introducing our pay bill in the Senate. Part of the 
problem with regard to pay is that in 1990 the entry level for 
administrative law judges was about 15 step 6 or so. Because of 
a pay cap that has dropped to a level of 14 step 7. So someone 
like Ms. Margolius if they were to take a job as an 
administrative law judge not only would she have to probably 
take a pay cut, she would be closing down her practice and so 
are we getting the best people on that list is the problem. So 
that pay bill is important to us and we have been working on 
trying to put together some kind of pension so it recognizes 
people coming in from private industry for a shorter period of 
time for a career that we have put forward with your staff.
    Senator Voinovich. One of the things we did in this 
legislation is it's simple but gets to the issue of whether 
someone is going to be willing to come to the Federal 
Government. But if you come in to work for the Federal 
Government the first year you get 2 weeks of vacation and 3 
years you get 3 weeks and then at 15 years of service you get 4 
weeks. So we changed that. We provided this flexibility for 
Sean O'Keefe, at NASA. It's a simple thing, but it's a big deal 
to someone out there working. Perhaps it will help recruit 
successful business professionals to Federal service. By the 
way you are here 15 years, you are going to get time off, I'm 
not sure how much time you get off anyhow in private practice. 
I didn't get that much. But those are some of the practical 
things that we are dealing with but I really would, Mr. Hill, 
get your point of view or from the judge that runs the 
Cleveland office.
    Mr. Hill. Judge Ramsay.
    Senator Voinovich. I would be interested to see just how 
our staffing levels compare with other places. That just seems 
like we are shortchanged. What we should be striving for is 
getting the three judges, replace those we have and try to get 
three more. Do you think that would help a lot?
    Ms. Margolius. Greatly, Senator. But one point on the 
staffing levels, though, that the staff is tied to the number 
of judges but if you have judges already over worked if you are 
going to have too many cases for any one judge you really need 
to base the staff on the number of cases rather than the number 
of judges.
    Senator Voinovich. The thing to look at--are these places 
being allocated because right now they are going to be sitting 
in Washington or Baltimore looking at the deal? Where are we 
going to put these judges and we should be putting in a real 
effort to say, look, we need these judges and part of the 
problem that we have is we just haven't had them.
    Ms. Margolius. When I started 20 years ago, Cleveland had 
the highest number of judges they ever had. They were up to 18. 
And Mr. Hill says that he thinks they need 14 to work 
efficiently but we had 18 with fewer cases and the waiting 
period was minimal at that point in time.
    Senator Voinovich. Mr. Dugan, do you have any kind of 
standard that you use? I'm getting into the nitty-gritty here 
but that kind of stuff really makes a difference in terms of 
case loads of various judges and in terms of productivity or 
anything like that if you got X number of cases that's a pretty 
good year or pretty good docket and when you get to this point 
maybe it's a little bit more than it ought to be in standards.
    Mr. Dugan. If you are looking for something like that, look 
at preHPI because HPI skewed everything. You can see judges 
doing somewhere between 25 or 50 cases.
    Senator Voinovich. How many?
    Mr. Dugan. Twenty-five to 50 if they have the staff. If 
they have the staff that's the key. If the staff was assigned 
to them and can get the cases worked up. What happened after 
HPI was a terrible thing. There were judges sitting nationwide 
in their offices waiting for cases to come to hearing but they 
were not being prepared. I could ask for 45 cases to be 
scheduled, that's 45 hearings, they say we can only give you 
20. And as that was happening, that happened for a couple 
years, and the backlog just continued.
    If I may, that letter you wrote, someone wrote me a letter 
once, and this was before HPI, I paid this claim after a 
hearing and paid it pretty quickly, a week or two. It wasn't a 
hard case. And about 3 weeks after that I got a letter from his 
wife, she told me he had died. And she said, you don't know how 
important it was to him that he was validated before he died.
    If that same thing were to happen today, that poor man 
would be dead before he would even get to the hearing much less 
before I could get a decision out. That's how bad it is. That's 
how angry we got about what was happening in the system.
    Senator Voinovich. And you think that the Commissioner 
really has listened and has a good idea what to do now? The 
issue is, is she going to have the resources to get the job 
done.
    Mr. Dugan. I absolutely do. I have never met anyone in 
government who is so knowledgeable and open and ready to make 
the changes that need to be made. This is a big plan she's got. 
It takes a lot of courage to do it. She has a good guy, Martin 
Gerry, working with her. A hundred percent, the right person. 
Now she just needs the tools.
    Mr. Hill. I concur with that 100 percent.
    Senator Voinovich. That's good news. What we want to do is 
to take care of Cleveland and get those cases down and get this 
office geared up to what it ought to be and deal with the 
national problems to get moving. Any other comments anybody 
would like to make?
    I thank you for coming here. This has been a really great 
hearing. I'm so glad you came and we decided to do this. 
Hearing is adjourned.
    [Whereupon, the Subcommittee was adjourned.]


                            A P P E N D I X

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