[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]




 
                CLEARING THE DISABILITY CLAIMS BACKLOGS:
    THE SOCIAL SECURITY ADMINISTRATION'S PROGRESS AND NEW CHALLENGES
                       ARISING FROM THE RECESSION

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

                                HEARING

                               before the

                    SUBCOMMITTEE ON SOCIAL SECURITY

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                           NOVEMBER 19, 2009

                               __________

                           Serial No. 111-38

                               __________

         Printed for the use of the Committee on Ways and Means




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                      COMMITTEE ON WAYS AND MEANS

                 CHARLES B. RANGEL, New York, Chairman

FORTNEY PETE STARK, California       DAVE CAMP, Michigan
SANDER M. LEVIN, Michigan            WALLY HERGER, California
JIM MCDERMOTT, Washington            SAM JOHNSON, Texas
JOHN LEWIS, Georgia                  KEVIN BRADY, Texas
RICHARD E. NEAL, Massachusetts       PAUL RYAN, Wisconsin
JOHN S. TANNER, Tennessee            ERIC CANTOR, Virginia
XAVIER BECERRA, California           JOHN LINDER, Georgia
LLOYD DOGGETT, Texas                 DEVIN NUNES, California
EARL POMEROY, North Dakota           PATRICK J. TIBERI, Ohio
MIKE THOMPSON, California            GINNY BROWN-WAITE, Florida
JOHN B. LARSON, Connecticut          GEOFF DAVIS, Kentucky
EARL BLUMENAUER, Oregon              DAVID G. REICHERT, Washington
RON KIND, Wisconsin                  CHARLES W. BOUSTANY, JR., 
BILL PASCRELL, JR., New Jersey       Louisiana
SHELLEY BERKLEY, Nevada              DEAN HELLER, Nevada
JOSEPH CROWLEY, New York             PETER J. ROSKAM, Illinois
CHRIS VAN HOLLEN, Maryland
KENDRICK B. MEEK, Florida
ALLYSON Y. SCHWARTZ, Pennsylvania
ARTUR DAVIS, Alabama
DANNY K. DAVIS, Illinois
BOB ETHERIDGE, NORTH Carolina
LINDA T. SANCHEZ, California
BRIAN HIGGINS, New York
JOHN A. YARMUTH, Kentucky

             Janice Mays, Chief Counsel and Staff Director

                   Jon Traub, Minority Staff Director

                                 ______

                    SUBCOMMITTEE ON SOCIAL SECURITY

                  JOHN S. TANNER, Tennessee, Chairman

EARL POMEROY, North Dakota           SAM JOHNSON, Texas, Ranking Member
ALLYSON Y. SCHWARTZ, Pennsylvania    KEVIN BRADY, Texas
XAVIER BECERRA, California           PATRICK J. TIBERI, Ohio
LLOYD DOGGETT, Texas                 GINNY BROWN-WAITE, Florida
RON KIND, Wisconsin                  DAVID G. REICHERT, Washington
JOSEPH CROWLEY, New York
LINDA T. SANCHEZ, California
JOHN A. YARMUTH, Kentucky

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


                            C O N T E N T S

                               __________
                                                                   Page

Advisory of November 12, 2009 announcing the hearing.............     2

                               WITNESSES

The Honorable Bob Filner, a Representative in Congress from the 
  State of California............................................     6

                                 ______

The Honorable Michael J. Astrue, Commissioner, Social Security 
  Administration.................................................    11

                                 ______

The Honorable Barbara B. Kennelly, Acting Chair, Social Security 
  Advisory Board.................................................    86
Beth Bates, Claimants' Representative, on behalf of the 
  Consortium for Citizens with Disabilities, Jackson, Tennessee..    91
The Honorable Patrick O'Carroll, Inspector General, Social 
  Security Administration........................................   106
Ann P. Robert, Vice President, National Council of Disability 
  Determination Directors, Springfield, Illinois.................   110
The Honorable Larry A. Auerbach, Administrative Law Judge, on 
  behalf of the Federal Bar Association, Atlanta, Georgia........   114

                       SUBMISSIONS FOR THE RECORD

Council of State Administrators of Vocational Rehabilitation.....   170
Corporation for Supportive Housing Advocacy and Training Center..   180
Council of State Administrators of Vocational Rehabilitation.....   182
Eunmi Choi, statement............................................   189
Ibrahim Dere, statement..........................................   194
James F. Allsup, statement.......................................   201
Leri Harper, statement...........................................   203
National Council of Social Security Management Associations, Inc.   205
Social Security Disability Coalition.............................   207
The Huntington's Disease Society of America......................   220


                     CLEARING THE DISABILITY CLAIMS
                     BACKLOGS: THE SOCIAL SECURITY
                   ADMINISTRATION'S PROGRESS AND NEW
                 CHALLENGES ARISING FROM THE RECESSION

                              ----------                              


                      THURSDAY, NOVEMBER 19, 2009

             U.S. House of Representatives,
                       Committee on Ways and Means,
                           Subcommittee on Social Security,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 1:54 p.m., in 
Room B-318, Rayburn House Office Building, the Honorable John 
S. 
Tanner [Chairman of the Subcommittee] presiding.
    [The advisory announcing the hearing follows:]

HEARING ADVISORY FROM THE COMMITTEE ON WAYS AND MEANS

                Subcommittee on Social Security Chairman

               Tanner Announces a Hearing on Clearing the

            Disability Claims Backlogs: The Social Security

Administration's Progress and New Challenges Arising From the Recession

November 12, 2009

By (202) 225-9263

    Congressman John S. Tanner (D-TN), Chairman, Subcommittee on Social 
Security of the Committee on Ways and Means, today announced a hearing 
on Clearing the Disability Claims Backlogs: The Social Security 
Administration's Progress and New Challenges Arising From the 
Recession. The hearing will take place on Thursday, November 19, 2009 
in Room B-318, Rayburn House Office Building, beginning at 1:30 p.m.
      

BACKGROUND:

      
    This hearing continues the Subcommittee's examination of the Social 
Security Administration's (SSA) efforts to reduce its unprecedented 
backlog in disability claims. Due in part to prolonged underfunding, 
the backlog of disability appeals hearings grew significantly in recent 
years. By December 2008, more than 768,000 Americans were waiting for a 
hearing decision--a historic high. Total waiting times for a decision 
on a claim can extend to three or four years, and testimony before the 
Subcommittee has included personal stories of those who have lost their 
homes, depleted life savings, or even died while awaiting a decision.
      
    In FY 2008 and 2009, Congress provided SSA with additional 
administrative funding to begin to reduce the hearings backlog and 
address other service delivery shortfalls. This allowed SSA to hire 
additional Administrative Law Judges (ALJ) and hearing office support 
staff. SSA has also made eliminating the hearings backlog a top agency 
priority and has taken measures to increase efficiency and 
productivity. All of these changes have had an impact: since January 
2009, the hearings backlog has begun to slowly decline, and dropped 
below 723,000 by the end of the fiscal year.
      
    SSA is facing new challenges due to the recession, however, that 
are threatening backlog reduction efforts. In FY 2009, incoming 
disability claims increased by nearly 15 percent. Incoming claims are 
projected to increase by an additional 12 percent in FY 2010 and 
continue at elevated levels through 2013. Congress provided additional 
funding for FY 2009 and 2010 in the American Recovery and Reinvestment 
Act of 2009 (P.L. 111-5) to help SSA process these increased claims.
      
    Even with this funding, however, the capacity of the state 
Disability Determination Services (DDS)--which process initial 
disability claims--cannot be expanded quickly enough to keep up with 
such steep claims increases. This problem is made worse because a 
number of states have instituted hiring freezes or furloughs for state 
employees as a way to address state budget shortfalls, and have not 
exempted DDS employees even though the DDSs are completely federally 
funded. As a result, SSA now projects that by the end of FY 2010, more 
than one million Americans will be awaiting a decision an initial 
disability claim, up from about 567,000 at the end of FY 2008. The 
increase in initial claims also affects the DDSs' capacity to process 
reconsideration appeals and conduct continuing disability reviews, 
which are important to program integrity.
      
    The steep increase in new disability claims will also result in 
more appeals to the hearing level that will challenge the capacity of 
SSA's hearing offices in the next several years. Without sufficient 
resources in FY 2011, SSA will not be able to stay on track to 
eliminate the hearings backlog by 2013 while also addressing the 
emerging DDS backlog and processing the large volume of claims 
anticipated in FY 2011.
      
    In announcing the hearing, Social Security Subcommittee Chairman 
Tanner said, ``I am very pleased to see that Congress' commitment to 
reducing the Social Security Administration's backlog is finally 
resulting in an overall decline in pending disability hearings. I 
commend SSA and its hardworking employees for the success of their 
efforts. However, SSA is now facing large increases in disability 
claims due to the recession, and this is threatening to undo the hard-
won progress we have made. The rapidly growing backlog at the initial 
claims level is a particularly serious concern. I am committed to 
ensuring that SSA aggressively addresses these problems, and that the 
agency has the tools to ensure that Americans who are in dire need of 
disability benefits can receive prompt consideration of their claim.''
      

FOCUS OF THE HEARING:

      
    This hearing will focus on the effect of SSA's unprecedented 
backlog in disability claims on applicants with disabilities, and the 
agency's efforts to address these challenges, including SSA's recent 
progress in reducing its hearing backlog and its plans for addressing 
the emerging backlog at DDSs. The hearing will also examine the impact 
of the recession on disability claims processing, including projected 
claims increases, and the need for adequate resources to reduce the 
backlogs and adjudicate recession-driven claims.
      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Please Note: Any person(s) and/or organization(s) wishing to submit 
for the hearing record must follow the appropriate link on the hearing 
page of the Committee website and complete the informational forms. 
From the Committee homepage, http://democrats.waysandmeans.house.gov, 
select ``Committee Hearings''. Select the hearing for which you would 
like to submit, and click on the link entitled, ``Click here to provide 
a submission for the record.'' Once you have followed the online 
instructions, complete all informational forms and click ``submit'' on 
the final page. ATTACH your submission as a Word or WordPerfect 
document, in compliance with the formatting requirements listed below, 
by close of business Thursday, December 3, 2009. Finally, please note 
that due to the change in House mail policy, the U.S. Capitol Police 
will refuse sealed-package deliveries to all House Office Buildings. 
For questions, or if you encounter technical problems, please call 
(202) 225-1721.
      

FORMATTING REQUIREMENTS:

      
    The Committee relies on electronic submissions for printing the 
official hearing record. As always, submissions will be included in the 
record according to the discretion of the Committee. The Committee will 
not alter the content of your submission, but we reserve the right to 
format it according to our guidelines. Any submission provided to the 
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printed record, and any written comments in response to a request for 
written comments must conform to the guidelines listed below. Any 
submission or supplementary item not in compliance with these 
guidelines will not be printed, but will be maintained in the Committee 
files for review and use by the Committee.
      
    1. All submissions and supplementary materials must be provided in 
Word or WordPerfect format and MUST NOT exceed a total of 10 pages, 
including attachments. Witnesses and submitters are advised that the 
Committee relies on electronic submissions for printing the official 
hearing record.
      
    2. Copies of whole documents submitted as exhibit material will not 
be accepted for printing. Instead, exhibit material should be 
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these specifications will be maintained in the Committee files for 
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    3. All submissions must include a list of all clients, persons, 
and/or organizations on whose behalf the witness appears. A 
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company, address, telephone, and fax numbers of each witness.
      
    The Committee seeks to make its facilities accessible to persons 
with disabilities. If you are in need of special accommodations, please 
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four 
business days notice is requested). Questions with regard to special 
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materials in alternative formats) may be directed to the Committee as 
noted above.
      
    Note: All Committee advisories and news releases are available on 
the World Wide Web at http://democrats.waysandmeans.house.gov

                                 

    Chairman TANNER. In the interest of time we will begin now. 
There will be another series of votes in about an hour, is that 
correct? So we will start.
    Thank all of you for being here. This hearing is both 
timely and important, as you know. Our hearing today focuses on 
the oversight of the Social Security Administration's efforts 
to reduce an unprecedented backlog in disability claims. The 
backlog works a severe hardship, as many of you know, on those 
who are waiting. I know that all Members have heard from 
constituents about it.
    There is some good news. The hearing backlog has begun to 
decline from 768,000 to 718,000, partly because of our 
investment last year that could have been considered overdue. 
The bad news is the recession is threatening to overtake what 
gains we have been able to make in the backlog.
    The further complicating problem, of course as you know, is 
the state Disability Determination Services (DDS). Some are 
being furloughed, and some are cutting back. As far as I know, 
none are being enlarged to deal with this, and so, as it 
relates to the backlog and to the credibility of the program, 
the continuing disability reviews, it's clear we have a 
problem. So, in this hearing we are going to try to highlight 
some things that will help.
    We are delighted that we are able to have this hearing now, 
because we think it's very, very timely.
    [The prepared statement of Mr. Tanner follows:]

                 Prepared Statement of Chairman Tanner

    Today's hearing continues the Subcommittee's ongoing oversight of 
the Social Security Administration's (SSA's) efforts to reduce its huge 
and unprecedented backlog in disability claims. In 2000, there were 
about 310,000 Americans awaiting a hearing on a disability claim. By 
December 2008, that number had more than doubled, reaching 768,000--a 
historic high. This has led to long wait times for applicants, 
sometimes as long as three or four years.
    Because applicants often have little or no income while awaiting a 
decision on benefits, the backlog has caused severe hardship to 
hundreds of thousands of Americans with significant disabilities. We 
will hear some of their stories today. We also hear about this issue 
every day from our own constituents in Tennessee who are often in 
desperate need.
    Today we have good news and bad news to report. First, the good 
news. After many years of growing backlogs in SSA's hearing offices, we 
have finally turned a corner. Since the beginning of 2009, the hearings 
backlog has begun to slowly decline, and is now down to 718,000. This 
shows that Congress' investment in SSA is starting to pay off. The 
Subcommittee particularly wants to commend all the dedicated SSA 
employees who have contributed to this success.
    The bad news, however, is that this hard-won progress is now being 
threatened. Due to the recession, new disability claims have increased 
significantly. From FY 2008 to FY 2009, these claims increased by 
almost 15 percent, and they are projected to increase by another 12 
percent in FY 2010, and to continue at higher levels for several years.
    Congress recognized the need to address this problem last year when 
it provided funds in the American Recovery and Reinvestment Act to help 
SSA process additional recession-driven claims in FY 2009 and 2010. But 
even with this funding, the state Disability Determination Services 
(DDSs), which make decisions on initial disability claims, cannot 
expand their capacity quickly enough to handle this very large, 
unexpected workload. This problem has been made worse because a number 
of states have instituted hiring freezes or furloughs for state 
employees and have not exempted DDS employees, even though the DDSs are 
completely funded by SSA.
    As a result, another severe backlog is emerging, this time at the 
initial claims level. By the end of FY 2010, an astonishing 1 million 
Americans will be awaiting a decision on their initial disability 
claims--nearly double the number that were waiting just two years 
before. The initial claims backlog has already topped 780,000 
nationwide--a 35 percent increase from this time last year. In my own 
state of Tennessee, we have seen an even bigger increase, with the 
initial claims backlog increasing by more than 60 percent since last 
year.
    And because the same DDS employees who evaluate initiate claims 
also perform continuing disability reviews (CDRs) to determine if 
current beneficiaries remain eligible, the DDS backlog also poses 
serious challenges to SSA's program integrity efforts. SSA has fallen 
far behind in conducting CDRs, even though these reviews have been 
demonstrated to generate considerable savings.
    This situation is clearly unacceptable. SSA has expressed its 
commitment to addressing the DDS backlog problem, and I understand that 
today the SSA Commissioner will present to us his plan for expanding 
the agency's capacity to process initial claims. I look forward to 
hearing it.
    Just as alarming is the potential impact of these recession-driven 
claims on SSA's hearings backlog. The claims increases the DDSs are now 
seeing will soon result in increased appeals to the hearing level. If 
SSA's hearing offices do not have the resources to handle this added 
workload while still tackling the existing backlog, SSA will not be 
able to fulfill its goal of eliminating the hearings backlog by the end 
of FY 2013. In fact, the hearings backlog could begin to rise again.
    All of this adds up to very significant challenges for SSA in FY 
2011. The agency will be faced with three difficult tasks. First, 
because the impact of the recession on claims is expected to continue, 
to keep up with incoming claims, SSA will need to process a much higher 
number of claims than the agency has in the past. Second, it is 
imperative that SSA begin reducing the initial claims backlog, which by 
FY 2011 will have reached more than 1 million. Third, we cannot afford 
to let the hearings backlog reduction plan falter. We must stay on 
track with this plan's targets even though the recession will bring 
increased appeals to SSA's hearings offices.
    Today we should pause to celebrate the progress that is being made. 
But we also need to prepare to move forward with even more conviction. 
I look forward to hearing about SSA's plans for meeting these 
challenges. And I look forward to the insights of our other witnesses 
about what is needed--from Congress and from the Administration--to 
ensure that we do not backslide.
    Millions of Americans pay Social Security taxes every year with the 
promise that if they become severely disabled, Social Security will be 
there for them. But the lengthy delays many face when they apply for 
benefits means that we now are falling short on that promise. I am 
committed to ensuring that these problems are addressed, so that 
Americans who apply for disability benefits can receive timely 
consideration of their cases.
                                 

    Chairman TANNER. Congressman Filner, thank you for coming. 
We appreciate your interest in this subject today. I have 
assurance that Mr. Johnson is on his way, so, in the interest 
of time, I would like to go ahead and recognize you for the 
purpose of hearing your testimony. If any of our Members have 
an opening statement, I would ask unanimous consent that it be 
placed in the record.
    Mr. Filner, you are recognized, sir.

  STATEMENT OF THE HONORABLE BOB FILNER, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. FILNER. Thank you, Mr. Chairman. I appreciate the 
opportunity to be here, and your timeliness in holding this 
hearing. As bad as those backlog statistics that you mentioned 
are, I think that certainly in my state of California, the 
backlog may be understated, due to several policies in 
California that are being implemented, to hide that backlog. I 
think we need to take action on that.
    You guys have, I think, all read the Inspector General 
reports, and he is going to--he is here today. On March 24th, 
he testified before the Subcommittee that since January 1st of 
this year, California's initial claims pending have increased 
by 9.7 percent, and its reconsideration claims pending by 6.1 
percent, as a result of the increased applications and state 
furloughs.
    Unfortunately, since the March 24th Subcommittee hearing, 
the situation has continued to deteriorate, in California 
especially, now that the California Disability Determination 
Services workers are furloughed three days a month.
    In a report, in fact just released yesterday, a review by 
the inspector general shows that the rate of increased 
applications continued to grow through fiscal year 2009, 
totaling about 15 percent above the previous year. The growth 
in new claims has outpaced the DDSs ability to keep up with the 
new workload.
    By the end of fiscal 2009, the number of initial cases 
pending had grown, as you said, to almost 770,000, about 38 
percent higher than the end of fiscal year 2008. Social 
Security plans to spend $2 billion in fiscal year 2010 on DDS 
operations, and expects the DDSs to process almost 4 million 
claims.
    But state furloughs have had an effect on that ability to 
process. There are nine states, as I understand it, furloughing 
or considering furloughing the DDS employees for fiscal year 
2010, which will result in a significant shortfall of capacity. 
The OIG expects approximately 69,000 disability cases to be 
delayed in processing over the next year.
    This wait will result in about $162 million in benefits 
that will not be paid to disabled beneficiaries during this 
period that would have been paid, had the furloughs not 
occurred, and, of course, these states will lose over $39 
million in Administration funding from Social Security because 
the employees are furloughed.
    Now, what doesn't show up in the statistics--in fact, I 
believe there is a deliberate attempt in California to hide the 
impact of the furloughs--for example, prior to the furloughs, 
DDS assigned all initial and reconsideration cases to line unit 
examiners within 24 to 48 hours. In September 2009, California 
DDSs began, as they call, staging initial and reconsideration 
claims.
    What this meant was the assigning of a case to a fictional 
examiner. Those cases are, in essence, a backlog although I 
don't think they're counted in a backlog. Those cases are 
simply set aside with no development initiated, until some 
later point, when they can be assigned to a real person.
    California has, in just the last two months, has a staged 
case category of 15,000 cases. The increased backlog and 
decreasing work hours because of the furlough have also led to 
California DDS reinterpreting a Federal regulation that allows 
cases to be closed, and denied when a claimant fails to pursue 
or cooperate with the processing of their claim. This is a 
change in the state DDS policy from the pre-furlough situation.
    Employees of California DDS have been instructed to close 
and deny claims for disability benefits if, within 20 days of 
receiving the case, if the claimant fails to complete and 
return a long, detailed form known as a function report. This 
form has a supplement which requires the claimant to find a 
third party to complete a portion of the form. This is a 25-
page form, and if it's not in the file case within 20 days, the 
DDS workers are pressured to close and deny the case without 
any further case development.
    So, the statistics show ``case closed.'' This is despite 
the fact that the very nature of these disabilities--they can't 
complete the task in 20 days. These forms are sent to homeless 
claimants, cancer patients, illiterate claimants, even blind 
claimants. Their inability to complete these forms is resulting 
in denial of benefits without a substantive disability 
determination. This is criminal, in my view.
    And, under the pre-furlough days, the workers would go out 
and help the people develop their claims, help them with this 
25-page form. One branch--and I have talked to people in 
branches all over the state, by the way, Mr. Chairman, I would 
be happy to provide documentation to your staff of the 
situation--one branch in Northern California reported that 30 
percent of their cases had been closed in this manner. Another 
California branch, an internal quality review, showed that the 
quality was at 60 percent, meaning 40 percent of the cases 
reviewed contained significant errors.
    A study of the last three fiscal years on quality reveals a 
significant decline in case accuracy. Since the inception of 
the furloughs, the quality has twice dipped below the Federal 
minimum threshold of 90 percent.
    Mr. Chairman, I think the Social Security Administration 
has some recourse in this. They have asked governors not to do 
the furloughs. By the way, the furloughs do not save money. Let 
me make sure everybody understands that. If you furlough a case 
worker, the Federal pay is just not made. The state doesn't 
save any money. In fact, the state loses its administration fee 
for that.
    We have begged Governor Schwarzenegger to not do it, but he 
apparently wants all the workers through the state to be 
furloughed together, even though it doesn't save them any 
money, it's costing, I think, thousands of claimants to lose 
their beneficiary.
    I have written a bill, Mr. Chairman, which I will introduce 
shortly, which tries to deal with the situation. Current 
Federal law allows the Social Security Administrator to 
federalize DDS employees if a state ``substantially fails'' to 
live up to its responsibility to process claims. My bill, the 
Don't Delay Services Act, is intended to prevent the state 
furloughs in this situation. My bill would deem furloughs of 
DDS employees a substantial failure, triggering the provision 
of existing Federal law that allows SSA to federalize DDS.
    There are some costs and other implications of that. But I 
think it ought to be studied, get the cost figures, and tell 
the states that if they don't do this properly, they're going 
to be federalized. I hope the committee will look at that 
legislation.
    I appreciate the opportunity to be here today.
    [The prepared statement of Mr. Filner follows:]

            Prepared Statement of The Honorable Bob Filner,
       A Representative in Congress from the State of California

    Mr. Chairman, Thank you for allowing me to testify today before the 
House Ways and Means Subcommittee on Social Security. I appreciate the 
opportunity to tell the Subcommittee Members about how state furloughs 
are impacting my home state of California. I am also interested in 
letting you know about legislation that I will soon introduce to 
address this issue.
    I understand that the Subcommittee has held hearings on this 
important issue already. In March, you heard from many distinguished 
witnesses, including the Social Security Administrator, Michael Astrue, 
and Inspector General, Patrick O'Carroll.
    As you know, Mr. O'Carroll has written several reports about the 
impact of state furloughs and hiring freezes on disability claims 
processing. On March 24th, he testified before the Subcommittee that: 
``Since January 1, 2009, California's initial claims pending have 
increased by 9.7 percent and its reconsideration claims pending by 16.1 
percent as a result of increased applications and the State 
furloughs.'' Unfortunately, since the March 24th Subcommittee hearing, 
the situation in California has only gotten worse.
    While some states have exempted Disability Determination Service 
(DDS) employees from the furloughs at the urging of the Social Security 
Administration, the State of California has not exempted DDS employees. 
This is despite the fact that DDS employee salaries are fully funded by 
the Federal Government.
    The unnecessary furloughs for California DDS employees are pushing 
back the decisions on individuals' benefits by months and harming 
thousands of disabled residents who are needlessly waiting for their 
claims to be processed. A new report issued by the Inspector General 
estimates that 53,136 cases will be delayed in 2009 as a result of the 
State of California's furloughs!
    The furloughs are also impacting state DDS employees by reducing 
their salaries, making it harder for families to make ends meet. Since 
July 10th, State of California employees have been furloughed 3 days 
per month for a total of at least 36 days in 2009. These 3 furlough 
days translate to an approximate 13.8% reduction in monthly pay.
    Finally, furloughing DDS employees is actually making the State of 
California's budget crisis worse because the state has to pay benefits 
until the federal claim is approved and the state if forgoing income 
tax revenue from furloughed employees.
    Governor Schwarzenegger's insistence on furloughing DDS employees 
is not helping the people of California, not helping the State of 
California solve its budget crisis, and is simply an indefensible and 
illogical policy!
    Earlier this year, the Social Security Inspector General released a 
report outlining several options for addressing the crisis, including 
working with States to stop DDS furloughs, transferring work to other 
disability examiners and/or hiring private contractors, and 
federalizing the DDS.
    To date, Vice President Biden and others have succeeded in working 
with many states to ensure that DDS employees are exempted from 
furloughs. Unfortunately, the State of California and other states have 
ignored the facts and continue to furlough DDS employees.
    That is why I think it is time for Congress to consider other 
options to stop the state furloughs.
    Current federal law allows the Social Security Administrator to 
federalize DDS employees if a state ``substantially fails'' to live up 
to its responsibilities to process claims. I will soon introduce The 
Don't Delay Services Act, which is intended to prevent state furloughs 
of DDS employees.
    My bill would deem furloughs of DDS employees a ``substantial 
failure,'' triggering the provision of existing federal law that allows 
SSA to federalize DDS. As drafted, the Don't Delay Services Act would 
not change any provisions of federal law concerning the rights and 
protections of these workers.
    I understand that federalizing DDS employees is not a perfect 
solution. However, in passing the legislation, Congress would be 
sending a wake-up call to Governor Schwarzenegger. As the Subcommittee 
continues to work to eliminate the disability claims processing 
backlog, I hope the Subcommittee will consider my bill.
    Thank you again for allowing me to testify before the Subcommittee.

                                 

    Chairman TANNER. Thank you, Mr. Filner. We will take your 
testimony to heart and under advisement, and we will be back 
with you.
    Mr. FILNER. I thank you. Again, I have documentation for 
your staff of this.
    Chairman TANNER. If you could give that to the Subcommittee 
staff, that would be great. Thank you very much.
    Mr. Johnson, in the interest of time we decided to hear Mr. 
Filner's testimony. Would you like to give your opening 
statement
    now?
    Mr. JOHNSON. Can I?
    Chairman TANNER. Yes, sir. Absolutely, you can.
    Mr. JOHNSON. Thank you, Mr. Chairman. You know, Republicans 
and Democrats alike on this committee have long worked together 
to make sure Social Security has the resources it needs to 
effectively administer their benefit programs. During the last 
two fiscal years, Social Security received funding at levels 
higher than the President's request, along with an additional 
$1 billion to build a new computer system center, and to 
process rising numbers of claims for disability benefits.
    Today, Social Security is going to, again, report to 
taxpayers what return they are getting on their money. Here, we 
will see some long overdue good news on the appeals front. 
Hearing offices have increased productivity, and this has 
resulted in lower wait times for those who have been waiting 
well over a year for a decision.
    Beyond addressing today's service delivery challenges, 
lasting returns on investment depend on Social Security 
modernizing its technology, infrastructure, and consistently 
addressing program waste, fraud, and abuse, including 
conducting continuing disability reviews in order to save 
billions in program dollars and build taxpayer confidence. So, 
I will be listening for real progress in those areas.
    Although clearing disability backlogs is important, today 
marks the fourth hearing of this Subcommittee this Congress, 
and the third hearing on backlogs, while we continue to ignore 
the fiscal challenges that Social Security faces. In August, 
the Congressional Budget Office reported that Social Security 
cash surpluses will turn into cash deficits in the next two 
years, and that the disability insurance trust fund will be 
unable to pay full promised benefits in just nine years.
    President Obama expressed his commitment to advance Social 
Security reform, and we know the sooner we act, the better it 
is.
    Further, we have had no hearings on other key agency 
challenges, including the ongoing problem of identity theft and 
Social Security number misuse by those attempting to work 
illegally in this country. I hope this committee will turn to 
those issues, on a bipartisan basis, as soon as possible, and 
examine the options for change and solutions.
    I thank the witnesses for joining us today, and thank you, 
Mr. Chairman, for allowing me to make this comment.
    [The prepared statement of the Honorable Sam Johnson 
follows:]
[GRAPHIC] [TIFF OMITTED] T3016A.001


                                 

    Chairman TANNER. Yes, sir. Thank you. Our second panel is 
the Commissioner, Mr. Astrue, who was sworn in on February 12, 
2007 for a 6-year term. Commissioner, you have a long biography 
here, a highly successful biotechnology lawyer, I see. I don't 
know, maybe we could use some expertise around here, but, 
anyway, we're delighted you're here. Without any further ado, I 
will recognize you, sir, and, if I may, ask for your complete 
statement to be put in the record. If you could hold your oral 
comments to five minutes, we would appreciate it.

         STATEMENT OF MICHAEL J. ASTRUE, COMMISSIONER,
                 SOCIAL SECURITY ADMINISTRATION

    Mr. ASTRUE. Yes, Mr. Chairman. I have a longer statement 
for the record, and I will make a brief oral statement.
    Mr. Chairman, Mr. Johnson, Members of the Subcommittee, 
thank you for this opportunity to discuss our progress in 
driving down the hearings backlog and in managing the emerging 
backlog at the DDSs.
    Overall, the news is good. For my first 22 months, we 
steadily reduced the rate of increase in pending hearing cases. 
We hit the turning point this past January. In every month 
since then, the number of pending cases has dropped. The rate 
of decline is accelerating in the last three months, we reduced 
the hearings backlog by a greater percentage than we did in the 
previous seven months.
    We have steadily reduced the number of cases that have 
waited the longest. In fiscal year 2007, we started by 
resolving virtually all 65,000 cases pending over 1,000 days. 
This fiscal year we are ahead of schedule in resolving over 
135,000 cases pending 825 days or longer.
    Mathematically, our targeted effort with older cases meant 
that average processing time remained artificially high for a 
while, but that figure is also starting to drop now. Since 
June, we have kept it below 500 days, and last month it was 446 
days.
    Moreover, the average processing time for our most 
backlogged offices is coming down faster than for other 
offices. In February 2007, the average processing time for 
Atlanta was 852 days, and we had 6 offices with processing 
times between 650 and 820 days. Last month, our most backlogged 
office was Dayton, at 651 days.
    Let me be clear that 651 days for a hearing is not 
acceptable, but shortly, such performance will be a disturbing 
piece of history. By the middle of next year, seven new offices 
will open in Michigan, Ohio, Georgia, North Carolina, and 
Indiana, our five most congested states. With plans for 25 new 
hearing offices, 7 new satellite offices, and scores of office 
modifications and expansions, we are adding the capacity for 
the cases that continue flooding in.
    Our hearing offices should also be very proud of their 
three consecutive years of greatly improved productivity. 
Without that achievement, we would not have reduced the backlog 
this past year.
    We have a number of ways to track productivity, but an 
important bottom-line measure is the percentage of 
Administrative Law Judges who reach our expectation for a 
minimum annual disposition of 500 cases. That number is 
steadily increasing each year. In 2007, 46 percent of our 
judges reached that level. In fiscal year 2009, 71 percent 
reached that level. That individual success is also a team 
success. Each judge now receives support from a recent high 
average of 4.6 support staff per judge.
    Success comes from hard work, better systems, better 
training, and better business processes. We designed National 
Hearing Centers to quickly help the most beleaguered offices. 
More and more applicants in remote locations are asking for 
video hearings, which are not only more efficient, but also 
more professional for judges and applicants than holding 
hearings in motels or other makeshift places.
    Improvements at the DDSs also help with backlog reduction. 
We are fast-tracking more cases for approval in a matter of 
days: about 100,000 last year; and about 140,000, we project, 
this year. A new system called e-CAT improves the quality and 
consistency of decisions. Every state in the nation will have 
this upgrade before we move from 54 separate COBOL-based 
systems to begin testing a common state-of-the-art web-based 
system in April 2011.
    Unfortunately for the DDSs, not all the news is good. Case 
filings are rising faster than we can hire and train new 
employees, and the number of pending cases is increasing. State 
furloughs aggravate the problems created by the recession. As 
nonsensical as it is for states to respond to fiscal crisis by 
furloughing DDS employees, many of them have done so. I am 
grateful to Vice President Biden and the many members of this 
Subcommittee who have helped me persuade some governors not to 
take this misguided action.
    In short, we have made solid progress. We are applying the 
same thoughtful planning and best practices from our hearing 
plan to handle the additional initial disability claims. We are 
expanding our capacity at the initial level. By the end of 
fiscal year 2010 we expect to have nearly 2,800 more DDS 
employees than we had at the end of fiscal year 2008, and we 
are increasing the number of Federal workers who are reviewing 
these cases. With your support, we hope to beat our target date 
of 2013 for elimination of the disability backlog, despite all 
the new cases from this recession.
    We understand, too, that we have many other service 
challenges--from the work CDR issues, to reduced waiting times, 
clearer notices, better telephone services, and other areas. We 
are going to do our best to live up to your expectations.
    Thank you. I would be happy to answer any questions you may 
have.
    [The prepard statement of Mr. Astrue follows:]

 Prepared Statement of The Honorable Michael J. Astrue, Commissioner, 
                     Social Security Administration

    Chairman Tanner, Ranking Member Johnson, and Members of the 
Subcommittee:
    Thank you for the opportunity to discuss our progress in driving 
down the hearings backlog, our strategy to manage the surge of initial 
disability applications, and our ongoing efforts to improve service 
delivery and program integrity.
    I am proud to report to you today that last year we improved 
service across the agency, and we are currently maintaining that 
momentum as we begin fiscal year (FY) 2010.
    For nearly 75 years, our programs and responsibilities have 
continued to change and expand. Our employees worked hard to keep up by 
creating new systems and streamlining policies and processes that 
helped us improve productivity by an average of 3 percent each year 
over the last 5 years. Even though, until recently, we had not received 
sufficient funding to keep pace with our increased workloads.
    Your help in changing this pattern of chronic underfunding came at 
a most critical time, just as the recession and the aging Baby Boomers 
were exacerbating our already fragile situation. We greatly appreciate 
the funding Congress provided in our FY 2009 appropriation and in the 
American Recovery and Reinvestment Act of 2009 (Recovery Act). Our use 
of these additional resources demonstrate--to you, to the President, 
and most importantly, to the American public--that we are a sound 
investment.
    In FY 2009, we processed more retirement, initial disability, and 
hearing applications than ever before. We increased our average agency-
wide productivity by 4.49 percent over FY 2008.
    We made solid and sustained progress in eliminating our hearings 
backlog by reducing both our pending hearings for the first time in a 
decade and the time applicants waited for a hearing. These 
accomplishments are all the more impressive considering that, at the 
same time, we continued to focus on the oldest, most complex, and time-
consuming cases.
    In FY 2009, we processed over 175,000 more initial disability 
claims than we had expected to process in that year. We kept the 
pending level below 800,000 even though we received nearly 400,000 more 
applications than we had in FY 2008. We also reduced the initial 
disability claims average processing time by 5 days. We decided the 
cases of about 100,000 Americans with the most severe disabilities 
through our Quick Disability Determination and Compassionate Allowance 
initiatives in about ten days from the date of receipt in the State 
Disability Determinations Services (DDS).
    We launched our new online application, iClaim, in December 2008. 
This quick, easy-to-use online service helped us deal with the increase 
in benefit applications. We decreased waiting times in our field 
offices and on our 800 Number.
    During this difficult economic crisis, Americans are turning to us 
for help more than ever before. In FY 2010, we expect to receive 1.2 
million more claims than we received in FY 2008. I weighed the risks of 
an uncertain budget against the need to sustain our progress and 
decided to authorize our components to continue hiring and working 
maximum overtime during the continuing resolution (CR). Therefore, we 
are using the multi-year Recovery Act funding to help sustain our 
momentum this fiscal year during the CR. We, nevertheless, are counting 
on your support to pass the President's full FY 2010 budget. This 
budget will help sustain the substantial progress made in the past 
year.
Plan to Address Rising Workloads
    We have detailed, achievable plans in place to address our soaring 
workloads, and our employees are dedicated to eliminating the hearings 
backlog by 2013. They are also poised to keep up with the recession-
driven increase in initial disability claims. We will not, however, be 
able to achieve these goals without timely, adequate, and sustained 
funding.
    In FY 2009, Congress provided us with $126.5 million above the 
President's budget request and authorized $500 million of the Recovery 
Act funds to help us process our rapidly rising retirement and 
disability workloads and to reduce the hearings backlog.
    In FY 2009, we hired approximately 8,600 new employees, most of 
them in less than six months, which was our largest hiring effort since 
the creation of the Supplemental Security Income (SSI) program about 
thirty-five years ago. Management at every level of the agency 
responded to this hiring opportunity with the urgency that tough times 
require. Given all of the conditions and hurdles involved with hiring 
in the civil service and the obstacles created by some governors and 
State legislatures in staffing the DDSs, this accomplishment is a great 
testament to the skill and dedication of everyone involved. Along with 
that hiring, we also maximized the use of overtime across the agency.
    We recognize, though, that merely adding employees, while critical 
to our success, will not solve all of our problems. Expanding our use 
of technology is essential--we become more efficient as we automate 
additional processes. We used Recovery Act funds to purchase additional 
computers for our new employees, as well as video conferencing 
equipment for hearings and increased bandwidth to improve the 
availability of our systems. In January 2009, we took possession of our 
second data support center, and by May, began moving some of our 
workloads to the new center. These enhancements allowed us to reduce by 
two-thirds the time our disability systems were down.
    In August 2009, we released a request for proposals to expand our 
use of health IT to gather electronic medical records. Obtaining 
medical records is one of the most critical and time-consuming aspects 
of making disability decisions. Health IT holds the promise to 
drastically reduce our disability processing times. In January 2010, we 
will use Recovery Act resources to issue $24 million in contracts with 
additional medical providers and networks.
    Early in my tenure, I recognized the need for a new, state-of-the-
art data center. It is vital that we have a stable, reliable data 
center to protect the sensitive data we maintain and to achieve our 
ongoing efforts to improve automation and increase the use of online 
services. In the Recovery Act, Congress gave us $500 million to build 
and partially equip a new, modern data center that will incorporate 
green building technology. It is a complicated process to plan and 
build a new data center, and it will not be completed until 2013. We 
have been planning for the new facility for some time, and in August, 
2009, the General Services Administration (GSA) issued a request for 
expressions of interest for site selection. We anticipate awarding the 
contract in early 2010.
    In addition to handling our customary work, we played a critical 
role in issuing $250 economic recovery payments, ahead of the statutory 
deadline, to over 55 million beneficiaries who received Social Security 
and Supplemental Security Income benefits. These payments injected more 
than $13 billion into the struggling economy.
Maintaining Momentum to Eliminate the Hearings Backlog
    As I have said many times, eliminating the hearings backlog is a 
moral imperative. In FY 2009, we received over 30,000 more hearing 
requests than in FY 2008. Despite this increase in the number of 
requests, I am pleased to report the news is good. For my first 22 
months, we steadily reduced the rate at which the number of pending 
cases increased. We hit the turning point this past January, and in 
every month since then, the number of pending cases dropped. The rate 
of decline is accelerating--in the last three months, we reduced the 
hearings backlog by a greater percentage than we did in the previous 
seven months. By the end of FY 2009, we had reduced our pending 
hearings by nearly 38,000 cases.
    Morally and operationally, we should focus our attention on 
applicants who have been waiting the longest for their hearings; no one 
should have to wait years for a decision on their benefit claim. We 
have steadily reduced the number of cases that have waited the longest. 
In FY 2007, we started by resolving virtually all 65,000 cases pending 
over 1,000 days. In FY 2008, we cleared nearly all 135,000 cases 
pending over 900 days. In FY 2009, we resolved nearly all 166,000 cases 
pending over 850 days. For FY 2010, we are ahead of schedule in 
resolving the over 135,000 cases pending 825 days or longer.
    Mathematically, our targeted effort with older cases meant that 
average processing time remained artificially high for a while, but 
that figure is also now starting to drop. We have kept it below 500 
days since June 2009, and last month it was 446 days. Moreover, the 
average processing time for our most backlogged offices is coming down 
faster than for other offices. In February 2007, the average processing 
time for Atlanta was 852 days, and we had six offices with processing 
times between 650 and 852 days. Last month our most backlogged office 
was Dayton, Ohio at 651 days.
    While 651 days for a hearing is not acceptable, but shortly such 
performance will be a disturbing piece of history. By the middle of 
next year, seven new offices will open in Michigan, Ohio, Georgia, 
North Carolina, and Indiana, our five most congested states. With plans 
for 25 new hearing offices, 7 new satellite offices, and scores of 
office modifications and expansions, we are adding the space we need to 
address the cases that continue flooding in.
    The expansion of our physical infrastructure will allow us to 
accommodate additional ALJs and support staff. While we still have work 
to do to reach our goal of an average processing time of 270 days, we 
have made significant progress and have a clear plan in place to reach 
that goal.
    In FY 2009, we hired 147 ALJs and over 1,000 support staff in the 
Office of Disability Adjudication and Review (ODAR), which is 
responsible for our hearing offices. In FY 2010, we plan to hire 
another 226 ALJs and maintain an average support staff ratio of at 
least 4.5 support staff per judge. By the end of FY 2010, we should 
have about 1,450 ALJs on board.
    The Government Accountability Office recently agreed that under our 
hearings backlog reduction plan, we should be able to reduce our 
backlog, but noted that reaching our goal by 2013 is largely dependent 
on our ability to improve ALJ hiring, availability, and productivity. 
Sufficient resources and a strong pool of candidates from which to hire 
additional ALJs are vital elements to our success. Office of Personnel 
Management (OPM) Director John Berry has worked very closely with us to 
address our need to maintain a qualified pool of candidates through the 
ALJ examination process. I am extremely appreciative of John's decision 
to open a new ALJ register because OPM's continued support is critical 
for us to achieve our ALJ staffing needs.
    ODAR should be proud of its three consecutive years of greatly 
improved productivity. Without that achievement, we would not have 
reduced the backlog last year.
    We have a number of ways to track productivity, but an important 
bottom-line measure is the percentage of ALJs who reach our minimum 
annual disposition expectation of 500 cases. The number of ALJs, who 
reach that level, is steadily increasing. In FY 2007, 46 percent of our 
ALJs reached that level. In FY 2008, 56 percent reached that level, and 
in FY 2009, 71 percent reached that level. In fact, last fiscal year 89 
percent of the ALJs disposed of over 400 cases. That individual success 
is a team success because the ALJs need sufficient support staff to 
prepare the cases for a hearing and write up the decisions after the 
hearing has been held. Last year, our ALJs received support from a 
recent high average of 4.6 support staff per ALJ.
    Success has come from hard work, better systems, better training, 
and better business processes. We designed National Hearing Centers 
(NHCs) to quickly help the most beleaguered offices. In 2009, we opened 
three new NHCs, in addition to Falls Church, Virginia: Albuquerque, New 
Mexico; Chicago, Illinois; and Baltimore, Maryland. In May 2010, we 
plan to open our fifth NHC in St. Louis, Missouri.
    The ALJs in the NHCs hold hearings remotely using video 
conferencing equipment, providing us the flexibility to better balance 
pending workloads across the country. We are seeing results in some of 
the most-backlogged offices that transferred cases to our first NHC in 
Falls Church, Virginia. Average processing times in Atlanta, Georgia; 
Cleveland, Ohio; and Flint, Michigan have dramatically improved with 
the assistance of the NHC. In FY 2009, the NHCs issued over 9,000 
decisions.
    We continue to expand our use of video technology. We are 
furnishing more hearing offices with video equipment so offices with 
available resources can assist offices with the greatest backlogs. More 
and more claimants in remote locations are asking for video hearings, 
which are not only more efficient, but also more professional and 
appropriate for ALJs and claimants than holding hearings in motels or 
other makeshift places. We are reducing the use of these temporary 
hearing sites, replacing them with video hearing rooms in field offices 
and other Social Security facilities. We implemented the Representative 
Video Project to allow representatives of disability claimants to use 
their personal equipment to participate in hearings from their own 
offices.
    In addition to processing the most aged cases, we are taking a 
number of steps to expedite fully favorable decisions. We reinstituted 
the Attorney Adjudicator program to allow our most experienced 
attorneys in appropriate cases to make on-the-record, fully favorable 
decisions without a hearing. In FY 2009, attorney adjudicators issued 
over 36,000 favorable decisions. We have also instituted special 
Federal Quality Reviewer screening units and a Medical Expert Screening 
process to help identify cases that we can allow without the need for a 
hearing.
    We identified cases that were likely allowances and electronically 
transferred them back to the DDSs for further review. As a result of 
this initiative, the DDSs allowed nearly 15,000 claims in FY 2009, and 
we were able to dismiss those requests for hearing.
    The DDSs will not be able to provide the same level of assistance 
this year--they will be handling a flood of new initial disability 
applications. But our backlog reduction plan is not static. We continue 
to look for new ways to achieve our goals. We are using predictive 
modeling to help us decide which new techniques will most effectively 
help eliminate our backlog and improve our business process.
    We are testing a new, more sophisticated screening tool to identify 
cases for senior attorneys to review. We used predictive modeling to 
help us determine the proper balance between the number of attorneys 
screening cases and the number who are writing decisions for ALJs. 
Based on our analysis, we are identifying 100 senior attorneys to work 
in a virtual screening cadre to review the disability hearing backlog 
for potential allowances. We believe that this innovative solution 
using our improved screening methodology and the electronic folder to 
move work to the members of the virtual unit will identify about 14,600 
on-the-record, fully favorable allowances this year. These cases will 
not require a hearing before an ALJ. This new initiative will allow the 
DDSs to focus on processing initial disability claims without 
jeopardizing our progress in reducing the hearings backlog. In 
addition, we are adding centralized, regional units to pull cases and 
write decisions to more quickly address emerging issues.
    We are working more efficiently in our hearing offices. In FY 2009, 
we made significant progress to eliminate the remaining paper hearings 
folders and to transition to an all-electronic environment. In this 
electronic environment, we are establishing a standardized electronic 
hearings business process. This process standardizes the day-to-day 
operations and incorporates best practices for hearings offices 
nationwide. We began rolling out this process to 30 hearing offices in 
FY 2009. We will implement it in all hearing offices by the end of FY 
2010.
    As we increase our capacity to hear and decide cases, we must 
consider the resulting workload for the Appeals Council (Council). The 
Council's receipts are outpacing dispositions, with an almost 16 
percent increase in receipts in FY 2009 over FY 2008. We expect that 
receipts will continue to increase by another 12 percent in FY 2010. 
Last fiscal year, we began preparing for the increase by hiring 16 new 
administrative appeals judges, 45 new appeals officers, and almost 200 
new paralegals and attorney advisers. We revamped the new analyst 
training course with the goal of shortening the historic learning 
curve. The new training curriculum has been a success, and productivity 
has exceeded expectations for the class of analysts that graduated in 
July 2009.
    In FY 2009, the Council had many successes. It processed over 
89,000 requests for review, 7 percent more than it processed in FY 
2008. Despite increasing receipts, it exceeded its case processing goal 
with an average processing time of 261 days, even while eliminating 
cases over 750 days old.
    Since I became Commissioner in 2007, I have repeatedly stated that 
reducing the hearings backlog is our number one priority, and that is 
still the case. We have implemented a solid plan and have demonstrated 
that it is working. With your continued support, I am confident that we 
will eliminate the hearings backlog by 2013.
Strategy for Unprecedented Increase in Disability Claims
    However, we currently face another serious challenge--the flood of 
initial disability claims resulting from the economic downturn. The 
unemployment rate affects the number of disability claims we receive, 
and with the recent unemployment numbers at over 10 percent, the number 
of our disability applications will peak in 2010 at over 3.3 million. 
We are using our experience and some of our strategies from the 
hearings backlog reduction plan to implement a complementary plan to 
process the additional initial disability claims resulting from the 
recession.
    We expect nearly 700,000 more initial disability claims in FY 2010 
than we received in FY 2008. We simply do not have the capacity to 
process all of the incoming applications with the same timeliness of 
the past year.
    Processing disability claims is our most labor-intensive workload. 
We cannot address our current challenge without additional staff, 
particularly disability examiners and medical consultants in the State 
DDSs. We developed a strategy to increase our capacity and optimize our 
productivity to return to the pre-recession initial claims pending 
level by 2013.
    The increase in our FY 2009 appropriation and Recovery Act funding 
allowed us to begin implementing our strategy last fiscal year. We 
hired 2,600 employees in the DDSs, ending FY 2009 with 1,400 more 
employees than at the end of FY 2008. While these hires helped us 
process over 200,000 more disability claims last year than we did in FY 
2008, they spent a lot of their time in training and were not fully 
productive. This year we expect that the additional fully-trained staff 
will process substantially more cases.
    Despite the nearly 17 percent increase in initial disability claims 
in FY 2009, the DDSs increased productivity by 3 percent, and so far 
their quality and average processing times are generally holding up 
well. Average initial disability processing time decreased 5 days to 
101 days, and nationally the DDSs achieved the highest level 
performance accuracy in the past decade.
    For the DDSs, not all the news is good. Disability applications are 
rising faster than we can hire and train, and the number of pending 
cases is increasing--escalating the pressure on the DDSs. Despite our 
employees' heroic efforts to process initial disability claims timely 
and accurately, our pending cases had grown to nearly 780,000 by the 
end of FY 2009--over 200,000 more cases than at the end of FY 2008. Our 
pending disability claims could reach as much as 1 million this year. 
We know this pending level is unacceptable and are working diligently 
to minimize the increase.
    State furloughs aggravate the problems created by the recession. As 
nonsensical as it is for States to respond to the fiscal crisis by 
furloughing employees whose salaries and benefits we fully fund, many 
of them have done so. I have spent a lot of time over the last year 
trying to educate State officials on the unnecessary and harmful 
effects of furloughing DDS employees. I have personally spoken to many 
governors or State officials, and I wrote letters to every governor and 
to the National Governor's Association. In addition, each of our ten 
Regional Commissioners has been aggressively pursuing DDS furlough 
exemptions at the local level.
    We have received considerable support from you and the 
Administration. I am grateful to Vice President Biden and the many 
Members of this Committee who have helped me persuade some governors 
not to take this misguided action.
    We were successful in gaining exemptions or partial exemptions in 
several States, like Michigan, Nevada, New York, and Colorado. Other 
States, such as California, Wisconsin, Ohio, and Hawaii, have ignored 
our clear logic and have imposed destructive furloughs on our DDS 
employees. Currently twelve States have implemented furloughs that 
affect our DDS employees. I know that, like me, you are frustrated by 
these decisions.
    While some States have argued that the furloughs are not affecting 
their ability to make disability determinations, these assertions are 
simply not true. For example, California is furloughing DDS employees 
three days each month. In FY 2010 this decision will delay $11 million 
in disability benefits to over 40,000 of California's most vulnerable 
residents at a time when the State already has one of the highest 
unemployment rates in the country. There are many clear signs of the 
deterioration in service. In spite of the hard work of the dedicated 
DDS employees, the number of initial claims currently pending in 
California is 22 percent higher than in 2008. The percentage of 
California cases pending over 90 days has grown. In the first calendar 
quarter of 2009, California's Initial Claims Performance Accuracy was 
below the Federal regulatory threshold.
    The residents of California should not be penalized for the actions 
of their officials. We are trying to mitigate the problems in 
California by deferring 9,000 continuing disability reviews so that the 
DDS can concentrate on initial applications, maximizing the use of 
overtime, obtaining medical consultant assistance from another State, 
and providing Federal assistance with State medical reviews.
    As we began developing our strategy to process the additional 
recession-driven disability claims, we knew that certain States and 
regions had been harder hit by the recession than others. Since 
unemployment rates correlate directly with the number of disability 
claims we receive, we began to take a closer look at the unemployment 
rates and forecasts of disability receipts at the State level. We are 
using this information to decide how to allocate our resources--based 
on not only the current situation, but also on future population and 
unemployment trends.
    In addition, we are analyzing a combination of DDS key indicators 
to determine a State's ability to keep pace with its current and future 
receipts. We focus on the indicators that most directly demonstrate the 
State's ability to handle additional claims, such as how old the cases 
are, how long they have been pending, the level of receipts, the 
processing time, the rate at which we are losing our employees, and 
whether the DDS is under a hiring freeze or furlough. By monitoring 
these indicators, we can quickly provide assistance to the most 
overwhelmed States.
    This year we will continue to implement our strategy to process the 
increased receipts. With the President's FY 2010 budget, we plan to add 
1,400 new DDS employees. By the end of FY 2010, we expect to have 2,800 
more DDS employees on board than we did at the end of FY 2008.
    We are using our best practices from the hearings backlog reduction 
plan to create centralized units--similar to the National Hearing 
Centers--that will assist States across the Nation. These new units, 
called Extended Service Teams, will be placed in States that have a 
history of high quality and productivity and the capacity to hire and 
train significant numbers of additional staff. In FY 2010, we plan to 
place 280 new employees in four States (Virginia, Arkansas, Oklahoma, 
and Mississippi) to help staff the teams that will be able to quickly 
take cases from the hardest hit States.
    We are also expanding our Federal capacity to process cases. We 
currently have a Federal unit in each of our ten regions and two units 
in Baltimore that assist the DDSs in processing cases. In FY 2010, we 
plan to provide 237 additional hires in these units.
    In addition to hiring more disability examiners to process the 
claims, we also need to increase our medical consultant staff to 
support the examiners. Traditionally, the medical consultants work 
onsite in the DDSs to review the medical evidence, provide guidance to 
the examiners on the severity of the applicants' conditions, and, in 
many cases, sign off on disability determinations.
    If we do not have sufficient evidence to make a disability 
determination, we often send applicants for a consultative examination 
with a medical professional. These exams can increase the cost and 
waiting times for a disability decision. It is sometimes challenging to 
find medical providers with the appropriate specialty necessary for the 
exam. For example, psychiatry is a specialty that can often be 
difficult to obtain. We plan to use our video conferencing technology 
to conduct psychiatric consultative exams remotely. This technology 
will help us save money and time by reducing the claimants' travel to 
these exams.
    We will continue to enhance our Quick Disability Determination 
(QDD) and Compassionate Allowances (CAL) initiatives to fast-track 
cases that are likely allowances. QDD uses a predictive model to 
identify certain cases that are likely allowances, such as low birth-
weight babies, cancer, and end-stage renal disease. CAL allows us to 
quickly identify applicants, who are clearly disabled based on the 
nature of their disease or condition. The list of CAL conditions 
currently contains 25 rare diseases and 25 cancers. We have held five 
public hearings to obtain critical information to develop and enhance 
this list of conditions. In July, we held a hearing on Early-Onset 
Alzheimer's disease, and yesterday in San Francisco, I presided over 
our latest hearing on schizophrenia. We plan to increase the number of 
conditions on the CAL list in early calendar year 2010. In 2010, we 
expect that our enhancements to QDD and CAL will allow us to fast-track 
about 140,000 decisions for the most severely disabled Americans while 
maintaining accuracy. These improvement at the DDSs also help reduce 
the hearings backlog.
    We are also exploring options for expansion of single decision 
maker (SDM) authority to cases that are identified as QDD or CAL. SDM 
allows a disability examiner to adjudicate a case without the approval 
of a medical or psychological consultant.
    Another automated tool, the Electronic Claims Analysis Tool (eCAT), 
is proving to be extremely valuable to the disability decision process. 
eCAT improves the quality and consistency of our decisions by aiding 
examiners in documenting, analyzing, and processing the disability 
claim in accordance with regulations. We expect that the use of eCAT 
will produce well-reasoned determinations with easy-to-understand 
explanations of how we reached our decision. This documentation is 
particularly useful for future case review if an appeal is filed. We 
are beginning to look at adapting eCAT for use at the hearing level.
    In addition to enhancing the documentation, quality, and 
consistency of our disability decisions, eCAT has been an extremely 
useful training tool for the many new examiners we are hiring in the 
DDSs. All states have the training version of eCAT. Training through 
eCAT is helping new examiners more quickly gain proficiency in 
processing complicated cases.
    We are accelerating the expansion of eCAT since we have determined 
that it is working well in the DDSs that have piloted it. We have 
already started rolling it out in eight States, and we are currently 
planning to roll it out to all DDSs by December 2010.
    Every state in the Nation will have this upgrade before we 
implement the common Disability Case Processing System (DCPS). 
Currently each of the DDSs has its own unique case processing system, 
many of them COBOL-based. In April 2011, we will begin beta testing a 
common, state-of-the-art web-based system that will provide additional 
functionality and the foundation for a seamless disability process. It 
will make it easier to implement technology changes and will position 
us to take advantage of health IT.
    For more than a year, we have been piloting the use of health IT to 
help speed decisions on disability claims. Applicants who have been 
treated at Beth Israel Deaconess Medical Center in Boston, 
Massachusetts or at MedVirginia facilities in Richmond, Virginia can 
authorize their medical records to be transferred electronically to the 
DDSs. Generally, we receive medical records from these facilities in 
less than a minute.
    In these two pilots, the receipt of electronic medical records has 
reduced the average DDS processing time to about 48 days, a nearly 50 
percent decrease. In fact, we are making medical decisions within 48 
hours of taking the claim in 11 percent of the pilot cases.
    Using Recovery Act funding, this fiscal year, we are expanding our 
use of health IT to more health care providers and States. In January, 
we will award competitive contracts to providers and networks that will 
give us standard medical data needed to make disability decisions. A 
key requirement of these contracts is that data must be delivered over 
the Nationwide Health Information Network that ensures secure 
transmission of personal health information. We are actively 
participating in the Department of Health and Human Service efforts to 
produce technical standards for widespread use, including in our health 
IT systems.
Improving Service Delivery
    We understand, too, that we have many other service challenges--
from the work CDR issue that Chairman and Mr. Johnson highlighted last 
Thursday to prompt telephone service, reduced waiting times, clearer 
notices, and many other services.
    We knew the aging baby-boomers would put pressure on our 800 Number 
and field offices. As this generation is becoming more comfortable 
conducting business on the Internet, we must offer more online services 
to meet their demands and relieve some of the strain on our field 
offices. In addition, Americans of all ages began turning to us for 
assistance during this economic crisis. Our online services, automated 
telephone services, and additional agents answering the 800 Number are 
providing the public with service options to conduct their business 
from the comfort of their own homes.
    The implementation of iClaim in December 2008, combined with our 
effective marketing campaign starring Patty Duke, provided an instant 
spike in both online retirement and disability applications. Online 
retirement applications increased from 26 percent to 35 percent in less 
than one month. Online disability applications also increased from 14 
percent to 21 percent. We have maintained the increase in Internet 
claims with online retirement applications currently at 34 percent and 
disability applications at 22 percent. In FY 2009, over 400,000 more 
applicants filed for benefits on the Internet, more than twice as many 
as the year before.. This increase helped us deal with the additional 
recession-driven claims and helped us reduce our waiting times in field 
offices.
    Our online applications took the top three rankings in the most 
recent American Customer Satisfaction Index (ACSI). The ACSI tracks 
trends in customer satisfaction and provides valuable benchmarking 
insights of the consumer economy for companies, industry trade 
associations, and government agencies. Our Retirement Estimator led all 
scores, iClaim followed closely, and our Medicare Subsidy application 
came in third place.
    This year we are implementing several new projects to improve our 
current online services and to provide additional online options to the 
public. In February 2010, we plan to expand the capability of iClaim to 
allow persons to file for Medicare-only benefits at age 65 if they 
choose to delay retirement benefits while they continue to work. We 
plan to increase the number of our online services in Spanish. We will 
start by creating a Spanish version of our retirement estimator. With 
enhancements to iClaim and new marketing strategies, we expect to 
increase the percentage of online retirement applications to 38 percent 
this year.
    Even though we did not market our online disability application 
when we launched iClaim, online applications for disability have also 
increased. We expect this positive trend to continue when we release a 
simplified electronic version of the Adult Disability Report in January 
2010. We use this form to obtain basic information on the applicant's 
medical condition and treating sources. This improvement will reduce 
the time needed to complete the disability application and improve the 
quality of the information we receive. We expect to increase the 
percentage of online disability applications to 25 percent this year.
    In October, we began rolling out the first phase of the Appointed 
Representative Suite of Services. This process allows appointed 
representatives of disability applicants to view their clients' 
electronic folders through secure online access. Additional phases of 
this initiative will provide folder access to more representatives, 
simplify the process for submitting appeals, and document a 
representative's appointment. This online service will alleviate 
workloads in our field offices.
    This year we will also pilot a Claims Data Web Service. Each year 
we receive over 100,000 paper applications and appeals filed by third 
party organizations, such as representatives, hospitals, and social 
workers. Our field office employees must manually enter all of this 
information into our systems. This pilot will allow selected third 
parties to submit application information electronically to field 
offices, eliminating the time our employees spend manually keying this 
data.
    Our 800 Number is often the first point of contact the public makes 
with us. If they are greeted with a busy signal or placed on hold for 
an extended period of time, they may become frustrated and come into 
our field offices instead. Last year, we significantly reduced waiting 
times and busy signals on the 800 Number.
    Our 800 Number call volume has been increasing each year, exceeding 
82 million calls in FY 2009. To handle the increasing number of calls, 
we hired about 260 additional telephone agents last year, and we used 
technology to effectively forecast call volumes, anticipate staffing 
needs, and better distribute calls across the network. As a result, we 
improved our speed of answering calls by 25 percent. We answered calls 
within an average of 245 seconds, the lowest average wait time in 6 
years. We also reduced our average busy rate from 10 percent in FY 2008 
to 8 percent last year.
    As we expect call volumes to increase this year, we plan to hire 
additional telephone agents to maintain our 800 Number services. To 
position ourselves for the future, we started exploring click-to-
communicate technologies to allow telephone agents to assist users as 
they use our online services. We started the process to replace our 800 
Number system with more-modern technology and began working with GSA to 
build a new teleservice center in Jackson, Tennessee. The new 
teleservice center, the first to be opened in more than a decade, will 
open in 2011.
    Even with our efforts to improve our online and telephone service, 
we have experienced a steady increase in the number of field office 
visitors. Field offices averaged 806,000 visitors per week in FY 2006, 
825,000 in FY 2007, and 854,000 in FY 2008. In FY 2009, we averaged 
over 866,000 visitors each week.
    With the additional funding we received from Congress last year, we 
were able to add about 1,400 more employees in our front-line 
operational components and made maximum use of overtime to take claims 
and answer our 800 Number calls. In addition to processing more claims 
than ever before, we reduced office wait times despite increasing field 
office traffic. With the President's FY 2010 budget, we plan to 
maintain our staffing level and work maximum overtime to minimize wait 
times and provide the best possible service to the unprecedented number 
of Americans, who continue to turn to us for assistance in this 
difficult economic environment.
    In addition to using video technology to reduce our hearings 
backlog, we are exploring ways that it can help us process our initial 
disability claims, and we are using it in our field offices to connect 
to persons who live in remote areas or find it difficult to visit a 
field office. We are piloting video service delivery by using available 
staff in a less-busy office help other offices that may be overwhelmed 
with visitors waiting for service. In addition, we are placing video 
equipment at third-party sites, such as hospitals, community centers, 
libraries, and Indian reservations to provide field office service.
    We continue to pilot self-help computers in our waiting rooms. 
These computers offer access to our online services. Currently, about 
60 offices are testing this service. In addition, we are piloting 
Social Security TV in some of our field office reception areas. The 
televisions broadcast information about our programs and services, such 
as explaining what documents are needed when applying for benefits or a 
Social Security number. We can tailor the broadcasts to the local 
demographics, providing information in multiple languages. We currently 
offer this service in 18 field offices, but we are expanding its use to 
150 more offices this year.
Increasing Our Program Integrity Efforts
    One of our ongoing challenges is how to effectively balance our 
important program integrity work with the growing need to serve the 
public. Both efforts profoundly affect peoples' lives as well as the 
economic health of the Nation. Sustained, adequate, and timely funding 
is vital to helping us achieve this balance.
    The primary tools we use for ensuring proper payments are 
continuing disability reviews (CDR), which are work or medical reviews 
to determine if disability beneficiaries are still disabled, and 
Supplemental Security Income (SSI) redeterminations, which are 
reevaluations of the non-medical factors of SSI eligibility.
    Recently, however, we have paid the price for the growth in 
workloads and tight budgets. Resource limitations have reduced the 
number of CDRs and SSI redeterminations we can handle. We do not want 
to defer this important work because these reviews help ensure that we 
pay the right beneficiary the right amount at the right time.
    In addition to increasing our capacity to serve the public, the 
President's FY 2010 budget makes a renewed funding commitment to our 
program integrity efforts as part of a government-wide initiative to 
make government more effective and efficient. Specifically, the FY 2010 
budget provides $758 million for our program integrity efforts, an 
increase of $254 million from FY 2009. If enacted, this additional 
funding will assist us in protecting the public's tax dollars.
    With the funding proposed in the FY 2010 budget, we can complete a 
total of 794,000 CDRs, of which 329,000 will be full medical CDRs, and 
2,422,000 SSI redeterminations. We estimate that every dollar spent on 
medical CDRs yields at least $10 in lifetime program savings.
    In FY 2008, our payment accuracy for OASDI was 99.7 percent with 
respect to overpayments and 99.9 percent with respect to underpayments. 
For SSI, the rate was 89.7 percent with respect to overpayments and 
98.2 percent with respect to underpayments. Clearly, payment accuracy 
is very high in the OASDI program and with respect to SSI 
underpayments; nonetheless, we believe we can do better. SSI 
overpayments accuracy is another story. This is the lowest accuracy 
rate in the program since its early days. We are committed to improving 
our payment accuracy and reducing the volume and magnitude of improper 
payments we make in both programs. I recently appointed an agency 
executive to enhance our efforts.
CDRs
    We initiate work CDRs based on work activity when a beneficiary 
voluntarily reports that he or she is working, when wages are posted to 
a beneficiary's earnings record, or when a beneficiary has completed a 
trial work period. Last year, we completed more than 165,000 work CDRs 
in our field offices.
    Generally, the Social Security Act requires us to conduct medical 
CDRs on a periodic basis to ensure that only beneficiaries who continue 
to be disabled receive benefits. In conducting these CDRs, we use one 
of two methods. We send some cases to the DDSs for a full medical 
review; others may be completed using the mailer process.
    We have seen a rise in our full medical CDRs pending since FY 2002. 
I must caution that, even with the proposed increase in dedicated 
funding this year, we project the number of pending full medical CDRs 
will increase by over 100,000 cases to roughly 1.5 million. We know we 
need to do better.
    We must also ensure that we pay SSI in the correct amounts. One of 
the ways we ensure accurate payments is by periodically completing 
redeterminations to review all the non-medical factors of SSI 
eligibility, such as resource and income levels and living 
arrangements.
    There are two types of SSI redeterminations: scheduled and 
unscheduled.
    Generally we periodically schedule all recipients for a 
redetermination at least once every six years. Moreover, we target the 
most error-prone cases each year using a statistical model. We conduct 
unscheduled redeterminations when recipients report, or we discover, 
certain changes in circumstances that may affect the SSI payment 
amount.
    In FY 2009, we completed over 1,730,000 SSI redeterminations. This 
fiscal year, we plan to process nearly 700,000 more redeterminations 
than last fiscal year.
    In addition to CDRs and SSI redeterminations, we have developed 
other program integrity initiatives that use cost-effective means to 
help us further manage and protect the programs we administer. 
Electronic data matching provides a foundation for our ongoing program 
integrity work. To identify both OASDI and SSI beneficiaries who are no 
longer eligible for benefits, we match data in our records with over 
400 State and local government organizations and 65 Federal agencies.
    We are using modern technology in innovative ways to help us detect 
and prevent payment errors. To maximize our return on investment, we 
focus on addressing the leading causes of error. For SSI beneficiaries, 
unreported resources and changes in earnings from work are two 
significant factors that contribute to payment errors. We have recently 
expanded two projects targeted to improve our ability to identify bank 
accounts for SSI applicants and to make it easier and more convenient 
for beneficiaries to report their wages each month.
    The Access to Financial Information project automates our access to 
financial data. This process allows us to identify and verify bank 
accounts held by SSI applicants and recipients. We have tested the 
process in New York, New Jersey, and California.
    The President's FY 2010 budget includes up to $34 million for us to 
expand this project. We are encouraged by these early results, but 
there is a lot of work ahead as we expand and continue to develop plans 
for implementing this project in additional States and accessing data 
from more financial institutions.
    Receipt of wages is another leading cause of SSI overpayments. To 
make it more convenient and easier for beneficiaries to report wages, 
we have recently implemented nationally an automated monthly telephone 
wage reporting process. The process uses both touch-tone and voice 
recognition telephone technology to collect the wage report. Our 
software automatically enters the wage data into the SSI system, which 
is much more efficient than if the beneficiary visited a field office, 
and we manually enter the report into our system. We are encouraging 
beneficiaries to use the telephone reporting system.
    At the same time, we continue working with the law enforcement 
community to pursue cases of fraud and abuse in our programs. Through 
our Cooperative Disability Investigations (CDI) program, a joint 
venture with the Office of the Inspector General (OIG), DDSs, and State 
and local law enforcement personnel, we work collaboratively to 
investigate allegations of fraud and abuse related to initial 
disability claims. We currently have 20 units in 18 States. We plan to 
open two new CDI units this year in South Carolina and Missouri. Last 
year, we estimate that the program yielded an additional $240 million 
in program savings. Our Inspector General estimates the CDI program 
returns $14 in program savings for every $1 invested.
Sustaining Momentum Under the President's FY 2010 Budget
    Prior to FY 2008, we had been under-funded for 14 straight years by 
a total of over $2 billion, and the recession continues to increase our 
workloads beyond what we projected. We now expect about 100,000 more 
retirement and 350,000 more disability claims this year than we 
projected in the FY 2010 President's budget.
    Since I became Commissioner, even before the recession hit, I have 
been informing you that we were facing an avalanche of retirement and 
disability claims at the same time we were addressing a large hearings 
backlog. In the past two years, you have heard our pleas and provided 
additional funding. I greatly appreciate your support.
    Recent appropriations have allowed us to hire thousands of new 
employees and provide the space and equipment they need to serve the 
public. These new employees are helping us improve our services, but 
they require extensive training to handle our complex work. This 
training time delays the positive effect that they will have on our 
workloads. Thus, our greatest opportunity for success is directly tied 
to timely, adequate, and sustained funding.
    We are acutely aware of the Nation's difficult economic situation, 
and we take our responsibility very seriously. We have prudently used 
the additional resources you have provided to make comprehensive 
improvements to our services to the American public at a time when they 
need us most. We have demonstrated sound, yet flexible, planning that 
we can adapt to the changing economic situation.
    Even though we are currently operating under a CR, our Recovery Act 
funding is allowing us to maintain the momentum we gained in the last 
year.
    For FY 2010, the President proposed a significant investment in 
us--$11.6 billion, a 10 percent increase over FY 2009. This increase is 
essential to maintain our progress. Without it, the hearings backlog 
will worsen, and we will drown in the flood of additional disability 
claims.
    With the President's FY 2010 budget, we plan to hire a total of 
about 7,500 employees, which will allow us to maintain our staffing 
levels in our front-line operational components and add 1,400 employees 
in the DDSs and 1,300 employees in our hearing offices. We will process 
nearly 270,000 more initial disability claims than we did in FY 2009. 
We will minimize the increase in pending initial disability claims, and 
maintain our course to return the pre-recession pending level by 2013.
    We will process nearly 65,000 additional hearing requests and 
ensure that the hard-earned progress we have made to reduce the backlog 
is not lost because of the economic downturn. We will remain on track 
to eliminate the backlog by 2013.
    We will make progress on the program integrity workloads that we 
have deferred processing. Finally, we will continue to modernize our 
information technology, which will enable us to pursue 21st-century 
modes of service delivery. All of these investments are critical to 
ensuring that we can overcome the dual challenges of accurately and 
efficiently processing our ever-increasing workloads and meeting the 
public's demand for our services into the future.
    In short, we have made solid progress, and hope to beat our target 
date of 2013 for the elimination of the hearings backlogs despite all 
of the new cases stemming from the recession. We are committed to 
working with Congress and the American people to achieve our goals and 
improve service in the years ahead. With your support, we will 
successfully overcome our challenges, but it will take a few years, and 
we will continue to need timely, adequate, and sustained funding.

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    Chairman TANNER. Thank you, Commissioner. You mentioned the 
DDS backlog in 2013. The DDS backlog really is a rather recent 
phenomenon, isn't it?
    Mr. ASTRUE. Yes.
    Chairman TANNER. Why would it take to 2013?
    Mr. ASTRUE. It's a product of the recession, Mr. Tanner. We 
were hit last year with, I believe about 400,000 more cases 
than the actuaries originally projected. We will probably take 
in about 700,000 more cases this fiscal year than were 
projected. We were just not set up to handle an extra million 
cases, because we were struggling a bit with staffing. It also 
takes time to hire and train new employees.
    So, we have moved as aggressively as we can. We have beefed 
up the DDSs as much as we can. We are moving some Federal 
workers to the processing of cases. There are some states that 
have looked at other states that are furloughing and understand 
that there is an issue. They have volunteered to set up special 
units to handle work from other states.
    We have special units called Extended Service Teams in four 
states that are going to help us pick up from some of the 
states that are going to be lagging with the furlough issue and 
the impact of the recession.
    Chairman TANNER. Do you have any comment about what Mr. 
Filner said about the situation in California?
    Mr. ASTRUE. The situation in California is a source of 
great concern. Right now, the number of pending cases is 
building up, and that's usually what happens right before our 
average processing times start to deteriorate. The average 
processing times have not significantly deteriorated yet, but 
that's likely to happen in the next few months.
    California is a state that has had issues in quality. 
They're right near the bottom of the States in quality, even 
before what's been going on lately. We have been having trouble 
getting clear information about some of the things happening in 
California. I believe both the director of the DDS and the 
number two retired recently. It's a little confusing in 
California. We do have concerns.
    We don't have recent, as I understand it, quality review 
information that would verify some of the complaints that Mr. 
Filner is making, but we are monitoring it as closely as 
possible. We certainly share the concern that California may be 
heading toward a very inappropriate situation.
    Chairman TANNER. Well, if the situation is as concerning as 
Mr. Filner testified, California may deserve some special sort 
of attention from you. If a judge is instructed to close cases 
for the wrong reasons, that is very concerning. We are really 
interested, and would appreciate you letting us know what you 
find out.
    Mr. ASTRUE. We are on this. We are trying to----
    Chairman TANNER. It is sort of unusual for a Member to come 
here with those sorts of statements, so we are concerned.
    Mr. ASTRUE. Yes.
    Chairman TANNER. It is not something we take lightly.
    Mr. ASTRUE. We will report regularly to the Committee on 
the California situation.
    Chairman TANNER. Good.
    Mr. Johnson.
    Mr. JOHNSON. Thank you, Mr. Chairman. Mr. Astrue, we have 
talked before about the Agency's outdated technology that 
includes computer programs that are still COBOL-based.
    Mr. ASTRUE. Yes.
    Mr. JOHNSON. That's 1950s technology.
    Mr. ASTRUE. Yes, sir.
    Mr. JOHNSON. Today we have got a lot better stuff.
    Mr. ASTRUE. We do.
    Mr. JOHNSON. Can you tell me what you're doing to modernize 
your system?
    I am told that it could take as long as seven years for you 
guys to get it updated. Can you talk about that to us?
    Mr. ASTRUE. Yes. We are trying to do as much as we can as 
fast as we can, in terms of systems modernization. It is a 
daunting task, because, first of all, we have got 38 million 
lines of COBOL code.
    We have to be very careful as we replace code, that we 
don't disrupt service. A lot of the programs are tied in with 
each other in intricate ways, and sometimes it's very 
difficult. When you pull out a piece of it, you have to be very 
careful that you're not having unintended consequences. We are 
moving to do that as aggressively as we can.
    The first big step is, when we went electronic with the 
DDSs, we kept the COBOL. That will be replaced. We should have 
the----
    Mr. JOHNSON. When?
    Mr. ASTRUE. April 2011 is the target date for when the beta 
will be ready on that, and then it will probably be a roll-out 
over another 18 months.
    Mr. JOHNSON. Why is that taking so long? Goodness gracious, 
we've got technology out there. I mean, everybody in this 
audience can go out there and get a new computer and be 
upgraded today. Why can't you guys do that?
    Mr. ASTRUE. Well, it's not just a question of the hardware. 
The hardware is fairly simple to do. It's the software that 
takes a long time to rewrite and to tie in with all of the 
other software.
    To give you some sense, the effort to come up with a much 
better online retirement form, if I remember correctly took 
some time. The online retirement form had to cut across 39 
separate COBOL-based programs that then had to be retied 
together. It is a long and difficult task. My sense is we may, 
over the next three years, be able to replace half of it.
    However, I don't think it's realistic, particularly in the 
core of the program, the data on everybody. That's a big task, 
and it's going to take us a while to get to that. If we had 
more resources we could do it faster, but there are trade-offs. 
There is a lot of pressure to supply----
    Mr. JOHNSON. So you're telling me it's true, it might take 
you seven years to get the program fixed?
    Mr. ASTRUE. Yes, sir.
    Mr. JOHNSON. That's gross. I think you ought to get into 
that and figure out how to do it a little better.
    You know, you said by early calendar year 2010 you would 
have enough hardware and software in Durham to build up all the 
Agency claims and data processing center systems, should there 
be a catastrophic event at your center in Baltimore. Is that 
still true? And what does ``early calendar year 2010'' mean?
    Mr. ASTRUE. The situation for the back-up center now is 
that the building is completed and the equipment is in there. 
They are moving a little bit faster than, I think, originally 
planned on getting some of the equipment in.
    We are now--let me just double-check. We will be able to 
fully back up and recover in just a few months, Mr. Johnson. So 
we are ahead of the old schedule.
    Mr. JOHNSON. That's new technology down there?
    Mr. ASTRUE. Yes, that is substantially new technology. We 
try to stay away from----
    Mr. JOHNSON. That's a back-up?
    Mr. ASTRUE. It's a back-up.
    Mr. JOHNSON. Why can't you use it as primary, then?
    Mr. ASTRUE. We are going to start using it as partial 
primary, probably increasingly over the next two years, because 
we run out of capacity at the National Computer Center in 2012. 
We won't have the replacement for the National Computer Center 
completed until then, so we are gradually shifting some 
functions over to the back-up center, and will be tying 
together the old National Computer Center and the new back-up 
center until we have the new National Support Center up and 
running. That should start coming on probably mid-2013.
    Mr. JOHNSON. Mr. Chairman, I think we ought to be getting a 
report about every six months on the progress of that thing, 
because I think it's gross to have systems that old that don't 
work right. My opinion. Thank you, sir. Thank you for your 
testimony.
    Chairman TANNER. We might do it a little more often than 
six months, if that would be all right.
    Mr. JOHNSON. Every month would be fine.
    [Laughter.]
    Chairman TANNER. That's what I was thinking, too.
    Mr. Pomeroy.
    Mr. POMEROY. Thank you, Mr. Chairman. Mr. Astrue, it's nice 
to see you again. I like the straightforward tone of your 
testimony. I mean, I don't think you make any bones about it. 
The backlogs that we have are not acceptable. The Agency 
performance, certainly with plenty of congressional culpability 
because of funding, allowed a situation to grow to absolutely 
unacceptable levels of backlog. I appreciate the headway that 
you're making.
    A couple of interesting items in your testimony. You 
indicated that in 2009 you hired 8,600 new employees, the 
largest hiring effort since the creation of the Social Security 
program.
    Mr. ASTRUE. Yes.
    Mr. POMEROY. Would you care to elaborate on that?
    Mr. ASTRUE. In fact, I think what is more remarkable, and a 
great tribute to the people in the Agency, is we hired about 
8,300 of those in 5\1/2\ months. We were on a hiring freeze 
because of the continuing resolution until early March of this 
year, and I believe we hired something like 325, 350 employees 
for the whole agency, from October 1 until mid-March.
    With the combination of the funding in the Appropriations 
bill and the funding in the American Recovery and Reinvestment 
Act, we went pedal to the metal, and we hired over 10 percent 
of the agency in 5\1/2\ months.
    Mr. POMEROY. Are you on track with the resources now given 
to staff up to where you need to get?
    Mr. ASTRUE. We are for now. I don't know yet what the 
situation is going to be for 2011. There is sort of the good 
news/bad news with the Recovery Act. Technically that's not 
part of the baseline budget for the Agency. Therefore, I think, 
whether you view my request for this year as overly aggressive 
or fair depends a little bit on how you look at the Recovery 
Act.
    Certainly the Recovery Act money for the new National 
Support Center, I think, should be conceptualized as a one-off. 
It would not be fair to view that as part of the baseline. 
However, I do think that the backlog money, in my view, really 
is a recognition that that should have been in the baseline all 
along, and ought to be viewed----
    Mr. POMEROY. How is OMB viewing it?
    Mr. ASTRUE [continuing]. In context of this----
    Mr. POMEROY. Is it being added to baseline?
    Mr. ASTRUE. I don't know. We don't have the pass-back yet, 
so I don't know how they're going to view it.
    Mr. POMEROY. That might be something we might want to 
inquire--I am sure staff is noting this. The staffing component 
of the stimulus money needs to be continued. No one viewed that 
that staffing up was required for the duration of the stimulus 
bill only, or 2009. It is part of getting the Agency back to 
where it needed to be.
    Mr. ASTRUE. Without talking out of school, I think it's 
fair to say that that's one of the premises of my budget 
request.
    Mr. POMEROY. I would hope, Mr. Chairman, that the 
Subcommittee might write a letter of inquiry to OMB, exploring 
this topic, or I will personally, if the Subcommittee doesn't 
care to.
    Chairman TANNER. We already have.
    Mr. POMEROY. We have already? Ah, that's cracker jack 
staff.
    [Laughter.]
    Mr. POMEROY. Now, speaking of cracker jack staff, let's 
move to ALJs. As my cracker jack staff was saying, ``Ask him 
how they're doing, relative to when you threw a fit,'' and so, 
I will try and----
    [Laughter.]
    Mr. POMEROY. I will try and rephrase that. I believe it was 
your second day in office, but I was absolutely appalled that 
the litigation at the early part of the decade, then resolved, 
didn't break loose hiring because hiring had been frozen for 
some time. Indeed, three or four more years went on with OPM 
absolutely screwing this thing up, and the Agency not 
unscrewing it up.
    Actually, as a member of the Committee of oversight, I felt 
like we were led down a primrose path with representations by 
everybody that were completely inaccurate, relative to the 
staffing up of ALJs. How are we doing, relative to where we 
need to be?
    In the end, I absolutely believe this is a critical 
component of the backlog question.
    Mr. ASTRUE. Right. I certainly share your sense it was a 
rocky start, Mr. Pomeroy, and you had a lot of company in that 
regard. I do want to thank the Subcommittee as a whole, and 
you, in particular, as the primary point person for influencing 
OPM, because certainly it wasn't going very well, just us 
trying to do it directly. Without your help, I don't think it 
would have happened.
    We had a little bit of a replay of some of those issues 
recently, but we have an ally in John Berry, the new head of 
OPM, who is very attuned to these issues. I think he is in 
sympathy with where the Subcommittee and I are on this. It's a 
shame that we have had to take some of these issues up to Mr. 
Berry to get them resolved, but we have had some great 
progress. They have opened up the register again. They won't 
tell us how many people were on the register, though we have 
heard that there were 900 people as of eight o'clock the night 
they cut it off, and that there are probably 1,200 to 1,400, 
we're guessing, that are on the register. We don't know, but 
that should be more than ample for our needs.
    We have hired already--well, actually, no, not yet. 
Tomorrow you will help us swear in 43 more Administrative Law 
Judges. We are scheduled to hire 226 for the year.
    Mr. POMEROY. Where will that bring the number?
    Mr. ASTRUE. That will bring the number up to about 1,450. I 
believe, that is what we're aiming at.
    Mr. POMEROY. About 1,450?
    Mr. ASTRUE. Let me just make sure I'm getting my years 
right. Yes. We will be aiming for about 1,450, and the Fiscal 
Year 2011 budget shoots for a slightly higher number than that.
    Right now, as long as OPM does what it needs to do between 
now and roughly the end of February, it's on the critical path, 
because the truth is, right now we don't have space to put 
them. With this class that we're swearing in tomorrow, we're 
putting judges into pretty much every office that we have 
available for Administrative Law Judges.
    So, the hiring for the summer is predicated on an awful lot 
of office space being open. It looks like GSA is going to hit 
the mark on that. Most of it is coming----
    Mr. POMEROY. Does this Committee--I know my time is up. Do 
we need to be corresponding with GSA, as well as OPM on making 
certain that we don't have an office backlog?
    Mr. ASTRUE. I think you can send them a general letter 
congratulating them on good progress and sharing your concern. 
We have had a couple of isolated incidents a few places around 
the country, but generally, the GSA work has really been 
outstanding on this. I want to give them credit, because when 
we first started opening up offices, we were about the only 
game in town. But with the Recovery Act, they have been very 
busy.
    So, we actually have a list of the offices that are 
supposed to be open. I can append to my testimony. But we have 
one that----
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    Mr. POMEROY. You know, my time is so far over. Mr. 
Chairman, we might want to consider Subcommittee letters to OPM 
and GSA both, asking that they do everything possible to 
facilitate the work of the Agency in getting the ALJ number to 
where it needs to be.
    I thank you, and yield back.
    Mr. ASTRUE. Okay.
    Chairman TANNER. Thank you, Earl. I agree, and maybe we 
will have a hearing sooner than later to follow up on some of 
these questions that are coming out. They are very good.
    Ms. Schwartz, please?
    Ms. SCHWARTZ. Thank you, Mr. Chairman. Thank you for this 
hearing. I do want to follow up on what both looks like good 
work and good progress. Still, the numbers seem really shocking 
to us. We get calls all the time, of course, in our offices, 
and I noticed in Pennsylvania, it's still a year wait, 
basically, you know.
    So, it's hard to tell people ``If you're lucky, it will be 
a year,'' you know?
    Mr. ASTRUE. Yes.
    Ms. SCHWARTZ. That's kind of where we are. I both want to 
compliment you on all the progress you're making, and also say 
it's just not quite enough; we want more. We want it to be 
better, we want it to be faster.
    Mr. ASTRUE. If there were a magic bullet and I could do it 
faster, I would. I think the problem has been that the system 
hasn't really been managed carefully. A lot of this is just 
good management but it takes time.
    Then part of it is capacity. It's a combination of the 
systems in operation not being good enough and not having 
enough capacity in the right places, which we're also working 
very hard to try to equalize around the country.
    When this large group of new offices start coming on stream 
this summer, by the end of the year, calendar year, you should 
see huge differences in certain parts of the country.
    Ms. SCHWARTZ. I wanted to follow up on some questions I had 
at the last hearing on this subject, I guess, in April.
    Mr. ASTRUE. Yes.
    Ms. SCHWARTZ. It was particularly about the use of the 
medical exchange of information system.
    Mr. ASTRUE. Yes.
    Ms. SCHWARTZ. I want to follow up on the exchange of the 
information through technology, and understanding that you, 
through the Recovery Act, had additional dollars for the 
exchange of what is very complicated and sometimes very time 
consuming information to get, and that is the actual 
information on the medical condition.
    Could you update us on how much of that is information is 
now being transferred or transmitted electronically?
    Mr. ASTRUE. Sure.
    Ms. SCHWARTZ. Has that, in fact, helped to speed things up?
    Mr. ASTRUE. Sure.
    Ms. SCHWARTZ. Also, how do you see this process moving 
forward? To what degree is that sort of universally being 
applied across the board, and helping in reducing the number of 
days?
    Mr. ASTRUE. I think I and most of the senior people in the 
Agency are really excited about this development, because this 
is the one big paradigm changer in disability processing that 
we see coming forward in the next couple of years.
    We spend an enormous amount of our administrative time, 
money, and effort chasing down medical records, and if that can 
be more efficient and complete it will help tremendously. Even 
without trying very hard in the couple of pilots we have been 
able to actually see what would work, we have been able to cut 
our processing times roughly in half.
    It also is going to improve quality, because a major source 
of error is we often don't realize that the medical record is 
incomplete. The claimant's attorneys often don't recognize that 
it's incomplete; particularly for certain psychiatric and 
sexually transmitted diseases, claimants are often very 
reluctant to volunteer that that's really a major issue for 
them. So, it's huge, in terms of timeliness, it's huge in terms 
of quality.
    What's frustrating is that we're not there yet. It would 
make my life so much easier, and life for the people we serve 
so much easier, if they were ready. So what we're trying to do 
is make sure, with the money, that the systems that are being 
built by others are going to be compatible with ours.
    Ms. SCHWARTZ. Interoperability, yes.
    Mr. ASTRUE. Jim Borland has had the lead for SSA over at 
HHS, as they helped design the standard. We are spending a lot 
of time with VA and DoD, as they design their standards to try 
to make sure that it's as seamless as possible.
    I am hoping that, at the back end of this recession, there 
are at least a few early adopters in the private sector that 
would make our life a lot easier. For instance, Kaiser 
Permanente seems to be further ahead than a number of others. 
If they were to have even a third of their members in 
California on this, it could make a huge difference in fixing 
the mess in California.
    Ms. SCHWARTZ. Well, they are moving ahead, and as you know, 
the Recovery Act also provided an additional $19 billion for 
the private sector doctors and hospitals to implement 
electronic medical records. Those standards for 
interoperability and those Federal standards, HHS is moving 
ahead on that, and should help. Although it's clearly not 
universal yet.
    Could you give us some idea, though, about what percentage 
or number of records you are now actually being able to obtain 
electronically?
    Mr. ASTRUE. It's time. I am with you on that. I would like 
to see this today.
    Ms. SCHWARTZ. Yes.
    Mr. ASTRUE. I am impatient. So we're piloting in 
Massachusetts with Beth Israel Deaconess, and with Med 
Virginia, which has been active in building the system that I 
think everyone is going to be using for the transfer of this 
kind of health care information.
    We have additional pilots that we're using. With the 24 
million dollars under the Recovery Act, they're allowed to 
expand this and accelerate it as quickly as possible, but it's 
a little premature for actual results yet.
    Ms. SCHWARTZ. Because I would certainly like to see SSA, 
and I mentioned this before, use electronic records similarly 
to the Veteran's Administration, which does have electronic 
medical records, and it is interoperable.
    Mr. ASTRUE. Yes.
    Ms. SCHWARTZ. Any veteran anywhere in the country can 
access their records, or at least their providers can, so that 
should help reduce some of the wait. In many cases, we're 
obviously trying to push states and networks and regional 
networks.
    But again, maybe not for right now, but I would be 
interested, as you are monitoring this, to see both how fast 
it's going--I mean, you can't do this all yourself, you have to 
have them electronic on the other end, you're absolutely right.
    Mr. ASTRUE. Right.
    Ms. SCHWARTZ. But to the degree of how much it's helping 
the Agency, how many days it's saving, it's pretty impressive 
to think it could cut time in half. That's pretty good.
    Mr. ASTRUE. We haven't built changes from this into any of 
our assumptions yet. I think our actuaries need to see 
something a little bit more concrete before they're going to do 
it.
    But I think when that curve starts to accelerate, it's 
going to move a lot of our numbers in a positive direction. 
It's a very exciting prospect, and that's why we're spending 
time and money on it now. Because the sooner it gets here, the 
better it's going to be for everybody.
    Ms. SCHWARTZ. I appreciate your efforts on this, and I know 
that so do so many of our constituents who rely on this 
information. I thank you, and we will continue to talk about 
it.
    Mr. ASTRUE. Thank you.
    Chairman TANNER. Thank you, Ms. Schwartz. Mr. Becerra.
    Mr. BECERRA. Thank you, Mr. Chairman. Mr. Commissioner, 
good to see you again.
    Mr. ASTRUE. Thank you.
    Mr. BECERRA. Thank you for the work that you have done. I 
appreciate that you were able to come back to us and tell us 
that you have made some progress in reducing the backlogs. We 
should heed your warnings about what could happen in the future 
if we don't provide you with the resources that you need.
    I want to focus on California. I know you have tried to get 
the governor in our state of California to exclude the DDS 
workers from the furloughs that he has instituted for state 
employees. I know that we all know that he has not done that.
    Now, the impact of those three-day furloughs per month is 
that, essentially, 15 percent of the work is not being done on 
any given month. If you take into account the size of the 
backlogs that already exist throughout the country, but 
certainly in California as well, and you reduce the 
availability of services by 15 percent, just across the board, 
not taking into account anything else, along with the fact that 
you and others have testified and provided information about 
the increasing caseload that's coming in, the claims that are 
coming in, an increase of about 15 percent in the last fiscal 
year from 2008 to 2009, and expecting another 10 to 15 percent 
over 2009 to 2010. Through probably 2013, I'm told, the 
estimate is that we will continue to see an increase in case 
claims coming in for disabilities.
    To lose 15 percent for no reason whatsoever--because we're 
willing to pay the money, the Federal taxpayers are willing to 
pay each state the money to provide the services; the state of 
California, the governor is not spending one red cent to 
provide a salary to the people who would do these 
determinations--15 percent, more or less, cut right off the 
top, on top of the fact that you see an avalanche of another 15 
percent of claims coming, does that, to you, lead you to 
conclude that the governor and the State of California are 
making a good faith effort to provide effective services to 
California's disability applicants?
    Mr. ASTRUE. Well, I think that you can't take an action 
like this without, at a minimum, harming timeliness, and 
potentially hurting quality, as well.
    A number of states are furloughing managers, but not staff. 
I do not know what they think that does, but that is surely 
going to create quality issues, too.
    Mr. BECERRA. So, is that an effective way to administer 
that program?
    Mr. ASTRUE. No. This caught me off guard. I don't think any 
previous Commissioner has had to deal with anything like this 
before. The first state was California last December. It was, 
to me, so nonsensical that, I will be honest, I was caught off-
guard again, because I thought it was a one-off.
    I said, ``Well, okay. This is a strange decision. What 
other state is going to do this?'' But then there was a steady 
pitter pat, and I have probably spent 10 percent of my time 
this year trying to get states not to do this.
    Mr. BECERRA. Your use of the word ``nonsensical'' is 
perhaps the best word I have heard so far about this process 
that the governor in California is implementing.
    I can't imagine that it helps with any kind of uniform 
administration of those disability services when you have 
people who can't come in to work, simply because the governor 
said, ``You can't come in, even though the Federal taxpayers 
are paying the salaries of those individuals as well.''
    Mr. ASTRUE. Oh, yes. It's devastating for morale, and we 
have seen this. We have had about a dozen states where----
    Mr. BECERRA. Right. So let me ask you this, Commissioner. 
Under the statutes, you have the ability to declare that the 
governor and the State of California are not fulfilling their 
obligations under our Federal laws to administer the programs 
that they have said that they would accept under the Social 
Security Administration's duties, and under the Social Security 
Act.
    You have written a letter. The response was not positive. 
You tell me now what you, as a Commissioner of the Social 
Security Administration, and therefore responsible for those 
thousands of Californians who are trying to get their claims 
processed, will do.
    Mr. ASTRUE. We have some statutory authority.
    Mr. BECERRA. You have lots of statutory authority. I can 
cite you the section. I can read you the underlying portions or 
the yellow highlighted portions. You have lots of authority. 
You said it. The governor has been acting in a nonsensical 
manner when it comes to the ability of Californians who are 
disabled, or at least claim to be disabled, to have their 
claims processed.
    With backlogs that take hundreds of days to process, you 
have a governor who has said, ``You're not going to go to work 
and process the claims of disabled Californians, even though I, 
as governor, have nothing to do with paying you for the work 
that you are going to do on behalf of those Californians who 
work very hard to have a system in place so they could get 
their claims heard.''
    Mr. ASTRUE. Right. Certainly there is a factual predicate, 
where we would have an obligation to step in. I am not sure I 
particularly want to advertise what that line is right now. I 
don't think that does anyone any good.
    But what I would say is perhaps we should talk offline 
about what some of the considerations----
    Mr. BECERRA. I will give you my personal phone number, if 
you like.
    Mr. ASTRUE. Okay.
    Mr. BECERRA. Mr. Chairman, you have been gracious with the 
time. But, Commissioner Astrue, I hope that you will do 
something more than just write a letter, because it is 
unconscionable that a chief of state would tell his people that 
they will not get services, even though another level of 
government is providing every single penny to provide those 
services. I think that is only nonsensical, as you said, it's 
unconscionable.
    I thank you, Mr. Chairman, for the time.
    Mr. ASTRUE. If I could just note, Mr. Chairman, we have 
actually done a lot more than writing a letter, too. We 
actually have been working very closely with the unions and 
employee groups. We have intervened and filed, essentially, a 
friend-of-the-court brief in one of those cases in support of 
one of the unions.
    We have been talking to editorial boards. I was actually in 
touch with one of the major papers the day before yesterday in 
California, talking at some length about this issue. So we are 
trying to work this as best we can.
    Mr. BECERRA. I apologize if I made the representation that 
you were not doing more.
    Chairman TANNER. Well, yes, I know you have spoken out in 
editorial boards on the East Coast, and I would hope that you 
would do so again on the West Coast.
    Mr. ASTRUE. Yes.
    Chairman TANNER. Ms. Sanchez.
    Ms. SANCHEZ. Thank you, Mr. Chairman. Commissioner Astrue, 
first I really want to applaud you for the work that SSA has 
done over the past year, you know, in the face of, obviously, 
very increased demand. SSA has managed to reduce the backlog, 
and although it's still longer than many of us would like to 
see, progress is being made. First of all, I just want to 
commend you for that.
    I also want to commend you on your efforts to fight the 
furloughs for DDS employees. As somebody from California, 
obviously that is an issue that is of special concern to me, 
especially given that, as my colleague, Mr. Becerra, said, 
California is going to face an increase in the number of 
applications, and we are actually seeing a decrease in the 
number of those applications that are being processed.
    I, too, agree that the furloughing of employees, when it 
doesn't cost the state any money to have them working on those 
days, is completely unconscionable. I was interested in your 
testimony saying that you at first thought California was kind 
of an anomaly, and then you had other states come on board. How 
many states, all together, are furloughing DDS employees?
    Mr. ASTRUE. It fluctuates almost on a week-to-week basis. 
The current count is 9 across the board, and I think it's been 
higher than that. One of the frustrating things is you put a 
lot of effort in and sometimes you think you've won the 
discussion. Then all of a sudden there is another round of 
fiscal crisis, and then a state legislative meeting and you've 
lost.
    So, we have put a lot of time and effort into it. I think 
at one point we were as high as maybe 15 states.
    Ms. SANCHEZ. So you have had a little bit of success in 
convincing some of the governors not to do this.
    Mr. ASTRUE. We have. Often, to give credit where credit is 
due, we have gone to the members of our committees of 
jurisdiction, both here and in the Senate, to ask for help, 
because often, you carry a lot more weight with governors. 
Matter of fact, you always carry more weight with governors 
than I do.
    Ms. SANCHEZ. Not to, you know, pat the California 
delegation on the back, but in February I got members of the 
California delegation to send a letter to the governor, 
specifically.
    Mr. ASTRUE. Yes, you did.
    Ms. SANCHEZ. The letter requested the Governor to not 
furlough these employees. We got a response back that was 
pretty much a non-response.
    Do you have a more thorough explanation? Are they giving 
you a rationale for why they want to continue to furlough these 
employees?
    Mr. ASTRUE. Well, the original rationale that they gave us 
turned out not to be true, which is that the unions were 
insisting on it. In some states, that turned out to be true, 
because I think the union positions around the country have 
been inconsistent. In California, it turned out that that was 
not, in fact, accurate. We ended up, as I mentioned, supporting 
litigation from one of the unions in California.
    Ms. SANCHEZ. What more can Members of Congress do to help 
you try to combat this?
    Mr. ASTRUE. I think what you can do, which is not easy, and 
maybe in some cases not even fully appropriate for me to do, is 
that you are all part of political networks in your home 
states. Your majority leaders and minority leaders in your 
state legislatures, they need to hear from you on these things.
    Sometimes I can't get to the governors. They get walled off 
by staff or budget directors, or that type of thing. Usually I 
can get through, but not always.
    You need, I think, if you're in a state that is having 
these issues, to try to educate the political establishment 
broadly. Because just getting to one person won't necessarily 
solve it over the long run. So, anything that you can do in 
that regard would be enormously helpful to us, and we would be 
very grateful.
    Ms. SANCHEZ. Okay. Switching topics really briefly, last 
April I read a New York Times article, the title of which is, 
``Insurers faulted as overloading Social Security.''
    The story discussed these whistleblower lawsuits against 
insurance companies who were forcing their beneficiaries number 
one, to file for disability claims with Social Security, and 
then to continue to appeal them over and over again if they're 
denied. Otherwise, they're not going to pay them benefits under 
their policies. I was quite surprised and appalled by this sort 
of movement, and the impact that it has on Social Security 
resources to process claims.
    How much effort is the Administration putting into looking 
at the role that outside entities are having in adding to that 
backlog?
    Mr. ASTRUE. Sure. This issue has sort of heated up in 
recent years. We've got a couple of studies going. We've got 
some results for private insurers. We are also looking at the 
extent to which states are requiring an application to us as 
perhaps an inappropriate barrier to welfare benefits in their 
own states, as well.
    Certainly, we don't condone either of these practices. In 
the qui tam action in Boston that I believe generated a lot of 
the media coverage, it was a split decision. The insurance 
companies lost a few of those cases, they won a few of those 
cases. So, clearly, there is abuse. We don't condone that.
    Our take so far is that the workload burden from the 
private insurance companies from these abuses is relatively 
small. We are not persuaded yet that, in certain states, the 
comparable practice on the public side might not be more of a 
problem. But it has been difficult, getting the data to 
determine that. It is taking us longer to run those studies.
    So, I would say that for private insurance companies, it's 
an issue, but a very small one. We are not sure yet, with the 
state agencies, how big a problem it is. We hope by some point 
next year to have a better answer to that question.
    Ms. SANCHEZ. Okay, thank you. Mr. Chairman, I would just 
ask unanimous consent to be able to enter that article into the 
record. I will yield back my time.
    Chairman TANNER. Without objection.
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    Chairman TANNER. Commissioner, before we move to a non-
Californian, may I----
    [Laughter.]
    Chairman TANNER. May I ask you to provide us with a copy of 
the legal filing that you all made in the California case?
    Mr. ASTRUE. I would be delighted to, thank you.
    [The information follows:]

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    Chairman TANNER. Thank you. Mr. Kind, you are recognized.
    Mr. KIND. Thank you. I may not be from California, but my 
answers may not be any easier. But, first of all, thank you, 
Mr. Chairman, for holding this very important hearing. Mr. 
Astrue, thank you for being here.
    While progress is being made, and I congratulate you and 
thank the Agency for the priority you have placed on the 
backlog issue, it's clear more work needs to be done.
    Mr. ASTRUE. Absolutely.
    Mr. KIND. I also want to thank you for the quick response 
that the Agency provided in my request to have video 
teleconferencing equipment installed in Lacrosse, Wisconsin, 
which had a large number of backlogs.
    But that was quickly responded to. The equipment is in. 
It's going to reduce now the travel time and the expense and 
burden for applicants and their representatives, and the 
administrative judges, as far as moving around the state in 
order to deal with the huge backlog in western Wisconsin.
    Having said that, I also took a chance or a moment before 
coming over here to take a look at the processing time in 
Madison and Milwaukee, in particular. I know we're facing some 
big issues, but if you look at the average processing times for 
the hearing offices around the country, I see that Madison 
hearing office has an average processing time of 588 days, 
which ranks 135 out of 143 offices, nationwide. Milwaukee is 
552 days, which is 124 out of 143, both of which have more than 
doubled the processing time of the fastest office.
    And I am wondering if you have any information to share why 
this is occurring in Wisconsin, why the processing time is so 
slow there.
    Mr. ASTRUE. That's a very fine question. One of the things 
that I figured out a few months after I became Commissioner was 
that I was walking into a situation with horrible national 
backlogs. But when I really had a chance to get deep into the 
numbers, it was clear that we had a distribution issue around 
the country.
    Essentially, the infrastructure of our hearings office 
hadn't changed in 20 years. It was the same number of offices 
in the same locations with the same number of judges, and the 
demographics of the country have changed enormously in that 
time period.
    As bad as the backlog was in many places in the country, if 
I you actually take your fingers on a map of the United 
States--I used Madison, Wisconsin on the west, and the eastern 
shore of Michigan on the other--and slide down, then start 
angling to the east, and then end up in Florida, you see case 
filings per administrative law judge a few years ago of three 
or four per day. As much as we're pushing for more 
productivity, no judge is fast enough to decide that many each 
day.
    Mr. KIND. Right.
    Mr. ASTRUE. In my lifetime, no judge is going to be 
deciding, four cases per day. We've got other places, like New 
Haven, Connecticut, where they're only taking in half a case 
per judge per day. So, there is a misallocation around the 
country.
    So, we spent a lot of time with the selection of these new 
offices looking at the demographics of the country for 
population growth and also looking at filing incidence, because 
there are some places, like Michigan, that have been in chronic 
recession since 2001, where the filing rates are very high, and 
we're trying to equalize that around the country.
    Mr. KIND. Well, I am glad to hear that you are sensitive to 
the caseloads.
    Mr. ASTRUE. For Wisconsin, the key thing is that we are 
upgrading the satellite office in Madison to a full hearing 
office.
    Mr. KIND. Yes.
    Mr. ASTRUE. GSA is on schedule for that for June of next 
year.
    Mr. KIND. Well, I appreciate that. Obviously, there are 
some issues still.
    But, Mr. Chairman, I just received, on November the 6th, a 
letter from a friend, an attorney, who represents many Social 
Security applicants from western Wisconsin. I would like 
unanimous consent to have this introduced to the record at this 
time.
    Chairman TANNER. Without objection.
    [The information follows:]

    [GRAPHIC] [TIFF OMITTED] T3016A.049
    
    [GRAPHIC] [TIFF OMITTED] T3016A.050
    
    Mr. KIND. But I want to also just quote from him. There are 
some examples of what he has been seeing out there, and in one 
particular example, he stated, ``A middle-aged Eau Claire area 
woman became disabled when her knees deteriorated to the point 
where she needed knee replacements. Her knee conditions have 
led to back problems causing chronic pain, for which she has 
had to take highly potent narcotic drugs. After waiting nearly 
three years for a hearing, the judge finally granted her 
benefits within just 10 minutes. And while waiting for her 
hearing, her family lost its home to foreclosure, and had to 
file for bankruptcy. And after the hearing, he had asked her if 
they would have lost their home and had filed for bankruptcy if 
she had been getting her Social Security check all along. And 
tearfully, she replied, absolutely not.''
    ``And to add insult to injury, I just received a telephone 
message from her just a few days ago, that even though this 
client's fully favorable decision was dated August 31 of 2009, 
she has still not received her first check or her back pay. She 
called the Social Security district office last week, and was 
told it could take 90 days for the payment center to get her 
into pay status, and to issue her payment for past due 
benefits.''
    Now, this is not all that atypical, unfortunately, and 
this, I think, is the human dimension to the backlog urgency 
that we're facing: real people, real problems, and, typically, 
some of the poorest and most vulnerable members of our society.
    So, the more we can concentrate on that the better, and I 
know we have a dual role here, as far as your implementation 
and our support in Congress to getting this done. I think it is 
important that we continue to see that we do everything we can 
to alleviate this type of suffering throughout the country.
    Mr. ASTRUE. I'm in absolute agreement. I do think that when 
we get through the recession and we go to health IT, we will be 
able to cut the time at the state level by more than half.
    In the strategic plan that we have laid out, the goal is to 
get to an average processing time of 270 days. We still have a 
way to go, but that's what we're trying to do.
    Mr. KIND. Mr. Chairman, with your indulgence, I just 
received word that one of our outreach rural SSA offices has to 
be shut down now, because of threats that were being delivered 
to the staff there, and, therefore, protective services have 
been brought in. They're going to investigate and make sure 
that those threats aren't carried out, and something bad 
doesn't happen, but I hope this isn't a trend that you are 
seeing out there, as far as threats of violence.
    Mr. ASTRUE. Sadly, it is. We have a violence report when 
there is an actual assault or a serious threat to an employee. 
I insist on reading every single one of those. When I started, 
I was probably seeing about three of those a week. As the 
economy started to unravel, you could see it in these reports, 
and I sometimes get 10 a day now. So it's been a very serious 
issue.
    It is remarkable to me we haven't had any actual loss of 
life yet. We have had some very close calls, and it is a scary 
thing. I think a lot of times people don't appreciate the 
courage of the people on the front line in our offices. They 
face a lot of very disturbed, angry people day in, day out and 
don't know what people like that are going to do.
    Mr. KIND. I echo that. I thank you for acknowledging the 
fine work that's being attempted out there for us, too. Thank 
you. Thank you, Mr. Chairman.
    Chairman TANNER. Thank you. I will call on Mr. Johnson, you 
are recognized for a follow-up.
    Mr. JOHNSON. Thank you, Mr. Chairman. You know, the idea of 
states preventing people from working, like in California as 
you just talked about is concerning. How many states are doing 
that, do you know?
    Mr. ASTRUE. We're up to 10 right now.
    Mr. JOHNSON. Ten of them?
    Mr. ASTRUE. Mr. Johnson, 10, yes.
    Mr. JOHNSON. Have you talked to all of them?
    Mr. ASTRUE. I have talked to pretty much all of them, or at 
least tried to. I----
    Mr. JOHNSON. Well, we pay their salaries, don't we?
    Mr. ASTRUE. Yes, and we pay their overhead. Of course, it's 
also state taxes that are foregone, too. So they're actually 
directly hitting their coffers, as well.
    On top of it--and, again, it is more important than just 
the fiscal--the people who don't get cash and health benefits 
from us are often tapping their other state programs, too. So 
it's just a devastatingly nonsensical thing for states to be 
doing, from both a moral and fiscal point of view.
    Mr. JOHNSON. It's both parties, right?
    Mr. ASTRUE. Yes, it's bipartisan. It's split pretty evenly, 
Mr. Johnson.
    Mr. JOHNSON. Yes.
    Mr. ASTRUE. That's right.
    Mr. JOHNSON. Thank you. Let me ask you another one. In 
August you responded to a letter where you confirm that 1,700 
prisoners received benefits erroneously. We know that over 
8,000 payments were sent in error to those who died.
    Have you recovered all that? And if Congress decides to 
send another $250 payment, can you assure us that those 
mistakes won't happen again?
    Mr. ASTRUE. Not quite. We're almost there, Mr. Johnson. So, 
first of all, one of the things it's important, I think, to 
recognize is that not all of the prisoner payments were errors. 
The legislation was written in a manner that we were supposed 
to pay some prisoners. We did indicate at the time----
    Mr. JOHNSON. I understand that.
    Mr. ASTRUE [continuing]. That we didn't have the databases 
for that, and everyone was in a rush----
    Mr. JOHNSON. That's because your computer system isn't up 
to date.
    [Laughter.]
    Mr. ASTRUE. Well----
    Mr. JOHNSON. Come on.
    Mr. ASTRUE. Normally we're not in the business of tracking 
prisoners. So, I would certainly encourage you, if there is a 
return to another $250 payment, which the Administration and I 
support, that Congress reconsiders the approach to prisoners. 
That would eliminate the problem, all together.
    But we are embarrassed by this. It's not a large amount of 
money in the context of $13 billion. We have gone through 
several exercises to say, ``What are the lessons learned,'' 
``Are we ready if we're asked to do this again?''
    For the widows, there is almost no lost money. That's all 
pretty much been taken care of. They're whittling down on the 
prisoners. It's often difficult to get cooperation from the 
states. I believe--I will confirm this for the record--it's 
fewer than 500 that we're still working on at this point. It's 
a work in progress. Hopefully within the next few months we 
will have done everything that we need to do on that.
    [The information follows:]
    [GRAPHIC] [TIFF OMITTED] T3016A.051
    
    Mr. JOHNSON. Thank you, Mr. Chairman.
    Mr. ASTRUE. But we're not quite done yet.
    Chairman TANNER. Well, in the next few months we want to 
stay updated. We may have a follow-up right after the first of 
next year, to see how we're doing and see what we can do with 
this.
    Mr. ASTRUE. Okay.
    Chairman TANNER. There are, as Mr. Kind indicated, people 
suffering.
    Commissioner, thank you very much.
    Mr. ASTRUE. Thank you, Mr. Chairman.
    Chairman TANNER. We will be back in touch with you quite 
soon.
    Mr. ASTRUE. Okay. Thank you, Mr. Chairman. Again, thank you 
for all your support. We very much appreciate it.
    Chairman TANNER. I am going to introduce the next panel 
while they are taking their place. Ms. Barbara Kennelly, of 
course, is the President and Chief Executive Officer of the 
National Committee to Preserve Social Security and Medicare, 
and she was here for 23 years and survived, so, Barbara, it is 
always good to see you again. We are always glad to have you 
back, and we're going to look forward to your testimony.
    Also on the panel is Ms. Beth Bates. She works in my 
district, in Tennessee, and she is a lawyer who is quite 
knowledgeable in these matters. Beth, we are delighted to have 
you here.
    We also have the Honorable Patrick O'Carroll. Mr. 
O'Carroll, of course, as you know, is the Inspector General at 
the Social Security Administration. Mr. O'Carroll, thank you 
for coming today. I am going to speed this list up.
    Ms. Robert, thank you for being here. She is from Chicago, 
Illinois, and has much experience in matters of this nature.
    Mr. Larry Auerbach, who is the Administrative Law Judge at 
the Social Security Administration in the Atlanta office is 
also here. We are delighted to have all of you. I apologize for 
the hurried introductions, but we've got a time problem, and 
it's not our friend at the moment.
    Sam, do you have any comments?
    Mr. JOHNSON. No.
    Chairman TANNER. Congresswoman, you are recognized.
    Ms. KENNELLY. I was not here in Congress for 23 years.
    Chairman TANNER. You weren't?
    Ms. KENNELLY. No.
    Mr. JOHNSON. Turn your mic on.
    Chairman TANNER. Let's see. It says, ``After a 
distinguished 23 years'' in elected public office. I get it.
    Ms. KENNELLY. Yes.
    Chairman TANNER. Okay.
    Ms. KENNELLY. I was a city councilwoman for many years.
    Chairman TANNER. Yes.
    Ms. KENNELLY. Then I was Secretary of the State of 
Connecticut. I was here in Congress for 17 years.
    Chairman TANNER. Okay.
    Ms. KENNELLY. I was on this Committee.
    Chairman TANNER. Well, you escaped all right.
    Ms. KENNELLY. Yes. No, no, no. I was on this Committee 16 
years.
    Chairman TANNER. I know.
    Ms. KENNELLY. I loved every single moment that I was here.
    Chairman TANNER. Well, we are glad to have you back. Thank 
you.
    Ms. KENNELLY. I want to tell you, Congressman Johnson, I am 
the Acting Chair of the Social Security Advisory Board, and I 
was getting prepared for this hearing. I was really kind of 
nervous about testifying so I studied last night questions you 
asked Syl Scheiber. They were very good questions. Do you 
remember them? They were very complicated. I read them three, 
four, five times.
    Now, you're not going to ask me those today, are you?
    [Laughter.]
    Ms. KENNELLY. They were wonderful questions. I think that's 
what we have to remember, is how important this Committee is, 
and how important Social Security is.
    Now, I will read my testimony.

STATEMENT OF BARBARA B. KENNELLY, ACTING CHAIR, SOCIAL SECURITY 
                         ADVISORY BOARD

    Ms. KENNELLY. I am pleased to appear before you today in my 
capacity as the Acting Chair of the Social Security Advisory 
Board to discuss the progress SSA has made in clearing the 
disability backlogs.
    Is the Commissioner still here? Well, he has done a very 
good job. There were some old, old, old cases, and he came in, 
and he really went at those old cases. I don't have the 
figures. Kim, do you have them, or does somebody have them? I 
mean, what he did was exceptional, and I think he should get 
credit for that.
    What I really wanted to thank the Committee for is the 
active interest it has taken in reducing the disability 
backlogs. But you only could do it as a result of your work. 
The appropriation for SSA was nearly $10.5 billion, and the 
Recovery Act included an additional $500 million to address the 
increased claims due to the recession, and attack the backlog 
that had been choking the system, forcing applicants to wait 
for years to receive a Social Security check.
    As you know, SSA has long struggled with managing its 
disability hearings workload. The chief source of the problem 
has been years of under-funding, coupled with a growing 
caseload. As a result, the President requested $11.45 billion 
for SSA, in administrative costs. If SSA had any chance of 
keeping up with the influx of claims it will need its full 
appropriation.
    The fiscal year 2011 budget is now being prepared by OMB. 
It is my hope that the President and the Congress will include 
sufficient funds in the fiscal year 2011 appropriation to 
address both current backlog cases and new claims triggered by 
the recession. SSA will need about $950 million, just to 
maintain current staffing. In addition, they will need funds to 
expand capacity at the disability and the hearing offices to 
address backlogs and increased claims.
    Earlier this year, the Subcommittee sought the perspectives 
of the Advisory Board on the progress made by SSA in using 
Recovery Act resources to reduce its disability claims backlog. 
In the seven months since the hearing, we have been watching 
closely as the Agency has carried out its backlog reduction 
initiatives, including 148 new Administrative Law Judges, which 
is wonderful.
    I mean, hiring 1,000 hearing office support staff, 
establishing three national hearing centers, and eliminating 
cases that were over 850--and that's what the Commissioner 
did--850 days old. That is unacceptable, absolutely 
unacceptable. Productivity in the hearings offices has been 
steadily increased. ALJs have improved their production, and 
nearly three quarters of the judges are clearing between 500 
and 700 cases per year.
    The Board was briefed on several initiatives underway at 
the office of hearings and review that will emphasize data 
analysis and processes. One initiative was the development of a 
model that stimulates the current work process in order to 
identify steps in a process that creates bottlenecks. Some of 
these initiatives hold promise.
    However, in my view, as the Agency continues to streamline 
the hearing process, it is critical that due process for 
beneficiaries be maintained. We focused on that when I was on 
the Committee. The recent gains in reducing the hearings 
backlog are a significant accomplishment. We anticipate that 
the Agency will continue to improve its process at that level.
    However, SSA is being confronted with a tremendous growth 
of new claims. This year SSA received 3 million new disability 
claims, 380,000 more than previously expected. This is already 
placing significant stress on the DDSs. They have now 783,000 
initial claims pending, an 18 percent increase from April.
    The rapid increase in unemployment is a major reason for 
the unexpected increase in disability applications. Historical 
trends document that disability applications rise and fall in 
tandem with the unemployment rate. People with disabilities who 
previously worked despite their medical conditions are now 
unable to find work, and may decide to apply for disability 
benefits. These people, combined with the Baby Boomers--I hate 
that word ``Baby Boomers,'' it's overused--who are reaching 
prime disability age, could raise DDSs claims to 2010 to 3.3 
million, according to SSA actuaries.
    Although the number of new claims will drop as the 
recession eases, earlier cases will still be clogging the 
process. A rapid rise in the backlog claims at the initial 
stage will have significant consequences for applicants. These 
are people facing dire economic circumstances, if they do not 
receive a fair and timely disability decision. SSA has pledged 
to bring down the current number of initial claims from 783,000 
to 525,000 by 2013. But they will need the comprehensive 
strategy in order to be successful.
    Between now and 2013, SSA may realize some gains in 
productivity and efficiency, as more electronic initiatives 
come online. But these do not provide relief in the near term. 
DDS needs to be adequately funded, and have sufficient staff to 
carry out their mission.
    In addition, I must remind you that the state furloughs 
that have been--you talked about those--are making this problem 
worse.
    As we look down the road, it is clear that 2010 and 2011 
will present extraordinary workloads for the Social Security 
Administration. It is imperative that we have the resources and 
plans in place to meet the challenge, and to be able to 
continue to provide the high quality public service for which 
they are known.
    Let me tell you. One of the few regrets I have in my life 
is I didn't work harder on Social Security when I was on this 
Committee. I know you do work hard, Sam. John, you're Chairman, 
but let me tell you, this is a huge program. For years, Social 
Security was like a nice Subcommittee. It had retirement, it 
had disability and it had spousal benefits, but you know what? 
It's got much bigger than that. Social Security benefits are a 
huge part of our country.
    Right now, with the economic situation that we're in, I ask 
the two of you to work really hard to make sure that the people 
of this country are taken care of, because I've got to tell 
you, Social Security is very important to this country.
    [The prepared statement of Ms. Kennelly follows:]

Prepared Statement of The Honorable Barbara B. Kennelly, Acting Chair, 
                     Social Security Advisory Board

    Chairman Tanner, Mr. Johnson, Members of the Subcommittee. I am 
pleased to have this opportunity to appear on behalf of the Social 
Security Advisory Board to present the Board's view on the progress 
made by the Social Security Administration (SSA) in clearing the 
disability backlogs. As you have noted, the agency is facing 
unprecedented workloads in the Disability Determination Services at the 
same time they are diligently working to bring down the backlogs in the 
hearings offices.
    Mr. Chairman, I want to thank the Congress and especially this 
Subcommittee for the much-needed investment that you have already made 
in the Social Security Administration. In FY 2009, Congress provided 
SSA with an administrative budget of $10.4 billion--$126.5 million 
above the President's budget request. I also want to thank you for the 
enactment of the American Recovery and Reinvestment Act, which provided 
SSA with another $500 million to process the growing backlog of 
disability claims. These funds have helped ensure that the agency is 
able to fulfill its vital role in serving the American public.
    Through the services it provides, the Social Security 
Administration touches the lives of nearly 60 million beneficiaries, 
145 million workers and nearly every American. One out of every six 
individuals receives monthly cash benefits from Social Security or 
Supplemental Security Income (SSI), the major programs that SSA 
administers. This fact alone should be an indicator of the importance 
of continuous, smooth operations of this agency.
    Social Security is an important economic lifeline for millions of 
America's most vulnerable people, including aged individuals and 
persons with disabilities, as well as their spouses, dependents, and 
survivors. In fiscal year 2009, 42.6 million people were receiving 
retirement and survivor benefits and another 15.1 million were 
receiving disability benefits. SSA processed over 4.7 million 
retirement and survivor claims, 2.8 million initial disability claims, 
and 661,000 disability hearings during the fiscal year that has just 
ended. The agency provided services to the public in general by 
processing over 19 million requests for new or replacement Social 
Security cards, posting 273 million earnings items to individual 
earnings records, answering 67 million calls to its 800-number and 
receiving over 45 million visitors to the local field offices.
    Over the past 74 years, the agency has been a diligent steward of 
the public's trust, overseeing the benefit programs upon which so many 
individuals and families depend. In recent years, however, SSA's 
ability to fulfill its mission has been severely strained. Chronic 
underfunding despite growing workloads has been the chief source of the 
problem. In his fiscal year 2010 budget, the President has requested 
$11.45 billion for the Social Security Administration. If SSA has any 
chance of keeping up with its growing workload, it will need this full 
appropriation. The fiscal year 2011 budget is now being prepared by the 
Office of Management and Budget. It is my hope that the President and 
the Congress will include sufficient funds in the fiscal year 2011 
appropriation to address the current backlog of cases as well as the 
new recession-driven claims.
Fiscal Year 2009 Accomplishments
    It is well known to this Subcommittee that SSA has long struggled 
with managing its disability hearings workload. This year, indeed, may 
well be a watershed year for the hearing process where new business 
processing and management analysis tools have been developed, 
electronic service delivery has been improved, and much-needed staff 
has been added.
    The investment made in SSA has had a significant impact on the 
agency's ability to address the disability backlog. They have been able 
to do unprecedented hiring--nearly 9,000 new employees. These new 
personnel have allowed them to replace retiring staff and expand 
critical front-line service in the field offices, the state disability 
determination services, and the hearings offices. For the hearings 
process, this additional funding gave the Office of Disability 
Adjudication and Review (ODAR) the ability to hire 148 Administrative 
Law Judges (ALJs), bringing the total ALJ corps up to 1,238 judges as 
well as adding 1,000 support staff.
    Earlier this year, this Subcommittee sought the perspectives of the 
Social Security Advisory Board on the progress made by SSA in using 
ARRA resources. When that hearing was held last April, the effects of 
the recession were not evident in the hearing appeals process. The 
backlogs and long waiting times for a decision were-and still are-a 
function of understaffing, lack of a standardized business process, and 
fledgling electronic tools that were still being tested. At that time 
over 760,000 people were waiting on average nearly 500 days for 
disability decisions from Administrative Law Judges.
    In the seven months since that hearing, productivity in the 
hearings offices has steadily increased; each month the number of 
pending claims has declined and the number of people now waiting for a 
hearing has decreased nearly five percent. Administrative Law Judges 
have improved their average daily production. Nearly three-quarters of 
the ALJs are clearing between 500-700 cases per year; this is a 15 
percentage point increase over fiscal year 2008. SSA exceeded its 
productivity goals by processing almost 14,000 more hearings than 
originally estimated and ended the fiscal year with an average 
processing time 25 days lower than anticipated in earlier FY 09 budget 
estimates.
    When SSA developed its hearings backlog reduction plan in 2007, 
they acknowledged that too many claims had been allowed to languish 
unadjudicated far too long. This year, under the most recent phase of 
the ``aged case initiative'' ODAR has cleared over 166,610 cases that 
were over 850 days old. At the end of FY 09, less than 1 percent of 
hearings pending was 850 days or older. The aged case backlog is now 
sufficiently stabilized that they have been able to incorporate new 
standard operating business rules that will ensure that the oldest 
cases are routinely adjudicated first.
    In several of the Board's reports, and most recently in our April 
2009 report on improving public service through technology, we stated 
that SSA needed to do a better job of integrating electronic service 
delivery options into its business process. Growing workloads coupled 
with the public's increasing demand for alternative ways to do business 
with the agency requires that SSA explore new ways of meeting with 
claimants and their representatives and holding hearings. With the 
funding received from Congress, SSA has been able to meet that 
challenge and the agency has opened three new National Video Hearings 
Centers to help process workloads for hearings offices with 
exceptionally large backlogs. This increased capacity has resulted in 
over 86,000 hearings being held sooner rather than much later.
    The recent gains in productivity are a significant accomplishment, 
and we fully expect the agency to continue to improve its process. 
However, they are now confronted with a tremendous growth in new 
claims. As a result, productivity improvements alone will not be 
sufficient. There needs to be additional investment in staff. SSA 
projects it may lose up to 44 percent of its current employees by 2016. 
Within the ALJ corps, 59 percent are retirement-eligible and another 31 
percent will become eligible to retire between FY 2010 and FY 2019. 
Moreover, new workload projections indicate that they will need to add 
approximately 400 more ALJs, bringing the total ALJ corps up to 1,600.
    Last April, the Board was briefed on several new initiatives 
underway in ODAR. The agency is placing a growing emphasis on data 
analysis and process management. They have developed an electronic 
business process model that simulates how work currently is processed, 
and for the first time, will be able to systematically identify steps 
in the process that create bottlenecks or do not add value to the 
process. While this initiative is very new, it holds promise for 
improving workload management throughout the hearings process. Through 
this modeling, ODAR will be able to plan proactively for changes in 
receipts and how to redistribute workload, anticipate the need for 
changes in staffing mix, and determine what can be mitigated by 
improved management practices. The current use is focused on assuring 
the success of the agency's plan to reduce the backlog. Going forward, 
it will give ODAR the capability to manage proactively, not just 
reactively. It is a new direction for ODAR and we hope it will prove 
effective.
Growth in workload
    The hearings backlogs are still of tremendous concern but become 
even more so when they are coupled with the anticipated rise in claims 
over the next 10 years. SSA's workload will increase dramatically. 
Projections indicate that retirement claims are likely to jump by over 
40 percent and disability claims could rise by nearly 10 percent. The 
2009 OASDI Trustees Report estimated that by 2015 there will be 50 
million retirees, widows and widowers, and dependents receiving 
benefits. Those individuals will be expecting efficient and modern 
service from the Social Security Administration.
    But the anticipated growth in claims does not stop there. The baby 
boomers are entering their disability prone years and the number of 
initial disability claims is projected to rise steadily over the next 
several years, and indeed it has. The Office of the Chief Actuary 
(OACT) has carefully tracked the anticipated growth in disability 
claims that will be due to the baby boom population. Projections made 
in 2007-2008 for the fiscal year 2009 hovered just around the 2.6 
million mark. But the reality has been significantly different. In 
2009, SSA actually received 3 million new disability claims this year, 
about 380,000 more than originally expected.
    The most obvious factor impacting the volume of disability 
applications today is the recession with its significant increase in 
unemployment. Recent history demonstrates that disability applications 
generally rise and fall in tandem with the unemployment rate. The DI 
application rate per 1,000 workers among non-elderly adults rose 37% 
from 1989 to 1993 (from 8.3 per 1,000 workers to 11.5), and by 49% from 
1999 to 2003 (from 8.8 per 1,000 workers to 13.1). One exception was 
seen from 1980 to 1984 when eligibility for disability was 
significantly curtailed while unemployment soared.
    The logic is straightforward. In a recession with widespread 
unemployment, people with disabilities who previously worked despite 
their condition may find themselves without a job, especially people 
with fewer skills or who are approaching retirement. These people may 
be more likely to apply for disability benefits to support themselves 
and their families. The recession may speed up an application that 
might have been made later or it may encourage more individuals who 
think that they might have a disabling condition to apply for benefits.
    What does this mean for SSA's disability workload? The 15 percent 
increase in new initial claims experienced in fiscal year 2009 has put 
extraordinary stress on the DDS system. Backlogs are climbing and there 
are now 783,000 initial claims pending in the DDSs. This is an 18 
percent increase since April. And it is anticipated that these backlogs 
will grow. More recent projections by SSA's actuaries estimate that DDS 
claims in 2010 will peak at 3.3 million, and stay just above 3 million 
through 2012. SSA expects pending claims in the DDS to climb to 1 
million by the end of 2010. These claims forecasts may increase or 
decrease as unemployment figures change.
Tackling the Initial Claims Workload
    SSA has acknowledged that the pending level of initial claims in 
the DDSs is unacceptable and they have pledged to bring the pending 
workload down to 525,000 by fiscal year 2013. Their strategy to reduce 
this backlog includes additional hiring and overtime in the DDSs. With 
the additional funding provided by Congress this year, the DDSs were 
able to hire 1,400 new disability examiners. Even though they were not 
fully engaged for the entire year, these new hires were instrumental in 
processing an additional 30,000 claims.
    SSA's electronic folder makes it fairly easy to transfer work to 
other offices. An element of the agency's current plan includes 
shifting work out of heavily-impacted DDSs and into offices, including 
the federal quality assurance units, where there is excess capacity. In 
addition, SSA is in the process of establishing four ``mega-DDSs''. 
Similar to the National Hearings Centers, these state mega-DDSs will be 
able to provide assistance to overloaded DDSs from anywhere in the 
country.
    The agency also continues to improve and expand their 
``compassionate allowance'' and ``quick disability decision'' 
processes. These tools, combined with ongoing policy simplification 
initiatives may help to speed up decision making and free up valuable 
disability examiners for the more complex cases.
Need for a comprehensive workload strategy
    As SSA works to reduce its disability backlog and address the 
influx of new claims, the agency should be encouraged to develop a 
comprehensive strategy. This would include establishing a plan for 
processing initial claims just as it has created a plan for processing 
appeals in a more timely and efficient manner.
    It strikes me that the DDSs are in a position similar to the one 
that the hearings offices were in about two years ago. They have 
suffered staffing losses and had some success with electronic 
adjudication tools. However, electronic tools alone are not enough to 
offset the reductions in disability examiners and medical staff and the 
increase in caseloads. SSA has relied to date on shifting workloads 
across offices and ramping up productivity, but nothing will work 
without funding for additional staff. We do not want to produce 
efficiency at the expense of due process.
    SSA has a number of electronic initiatives under development 
including electronic medical evidence (EME) and health information 
technology (HIT) tools that may hold long-term promise. Recently, the 
Board was briefed on the scope and timeline for the EME and HIT 
initiatives. We are encouraged by these initiatives. SSA has a basic 
plan for development and implementation and is making good use of the 
ARRA funding. We appreciate the work that is going on within the 
organization. Over the next three years, SSA should have several 
projects underway which could greatly enhance the electronic exchange 
of medical evidence. If effectively implemented, they should improve 
timeliness of disability decisions and enhance public service.
    Similarly, work continues on the development of a single DDS case 
processing system which will streamline case processing, improve data 
sharing, and help to improve management.
    The longer-range strategies for improving the disability process 
are necessary, but they do not provide relief in the near term for the 
hundreds of thousands of vulnerable individuals who have turned to the 
Social Security Administration for assistance. We believe that a 
comprehensive backlog reduction plan-similar to the one developed for 
ODAR--should be instituted for the DDSs. Working with the DDSs, the 
agency should be able to identify and adapt the best practices from the 
hearings backlog reduction plan; in addition consideration should be 
given to accelerating the eCat disability adjudication analysis tool. 
SSA and its state partners must move swiftly to staff fully the mega-
DDSs and establish the criteria that will be used for obtaining 
workload assistance from these centers.
    There is one caution I need to raise: the backlog reduction plan in 
the DDSs cannot come at the expense of well-reasoned and high quality 
decisions based on a well-developed evidentiary record. Rushing cases 
out the door to meet production goals does not, in the end, improve 
service to the American public. DDSs need to be adequately funded and 
have sufficient staffing to carry out the job. I do not need to remind 
this Subcommittee that the furloughs that have been imposed by States 
on nine DDSs slow the progress in reducing the backlogs and undermine 
the quality of public service. These issues need to be resolved as 
quickly as possible.
Beyond 2010
    It is only a matter of time that the surge in initial claims is 
felt in ODAR. If the traditional waterfall of appeals occurs, about 45 
percent of those denied at the initial level will request 
reconsideration, and then approximately three-quarters of the 
individuals who are denied at the reconsideration level will appeal to 
the ALJ. It takes about 250 days, on average, for an initial claim that 
has been appealed to reach ODAR and then several more months before the 
case is on an ALJ's desk. This means that the increased caseloads in 
the DDSs will begin to materialize in ODAR in the second half of 2010 
or in early 2011. Without continuing assistance from the Congress, 
these disability cases could take several years to work their way 
through the agency.
    As we look down the road, it is clear that fiscal year 2011 will 
present extraordinary workload levels throughout the Social Security 
Administration. It is imperative that the agency has the resources and 
tools in place to meet this challenge and to be able to continue to 
provide the high-quality public service for which it is known.
    Thank you for inviting me to appear before you today. I will be 
pleased to answer any questions you may have.
                                 

    Chairman TANNER. Thank you. Thank you for all your service, 
and your testimony. We will ask unanimous consent that Members 
may submit written questions to you all if we run out of time 
here. Thank you.
    Ms. Bates, welcome from west Tennessee. You're recognized 
for five minutes.

 STATEMENT OF BETH BATES, CLAIMANTS' REPRESENTATIVE, ON BEHALF 
  OF THE CONSORTIUM FOR CITIZENS WITH DISABILITIES, JACKSON, 
                           TENNESSEE

    Ms. BATES. Thank you, Mr. Chairman, Ranking Member Johnson, 
and Members of the Subcommittee. Thank you for inviting me to 
testify here today on behalf of the Consortium for Citizens 
with Disabilities Social Security Task Force.
    I have represented individuals with Social Security and SSI 
claims for more than 25 years. I would like to thank the 
Chairman and his district office staff in Union City and 
Jackson for a great deal of help over the years.
    Social Security finds itself at a critical crossroads. For 
the first time in a decade in fiscal year 2009, the backlog at 
ODAR, the third level of disability adjudication, was reduced 
from the previous year. That was both in number of pending 
cases, the length of time that they pended, and in processing 
time.
    At the same time, we think because of the recession, there 
was a huge increase in the backlog of cases at the first two 
levels of adjudication, the State DDSs. About 40 percent, 
nationwide. I suggest respectfully that this increase in the 
backlog there, largely due to the numbers of new cases, 
threaten the goal of Social Security to eliminate the backlog 
at ODAR by the year 2013.
    I am honored to be here, but I am saddened, because I see 
the suffering caused by the backlog with my clients. My client, 
Mr. H, who lives in Huntington, Tennessee is all too typical. 
When I met him in early 2008, he and his teenage son were 
homeless. They were staying in a dangerous area, and in a 
motel.
    He had a--Mr. H had a history of arthritis, liver disease, 
coronary artery disease, depression, adult attention deficit 
disorder. He had worked as a grocery bagger and as a sawmill 
laborer. He had been out of the work force for some time, 
caring for his invalid mother, who subsequently became too ill 
to stay at home, and had to go to a nursing facility.
    Unfortunately, Mr. H was turned down twice at the 
Disability Determination Section, and requested a hearing in 
January of 2009. He is still waiting. He is waiting at 
Nashville ODAR. The ODARs where I practice, Nashville and 
Memphis, while slightly better than Madison and Milwaukee, they 
had lost ground in the year 2009, and the processing time has 
actually increased.
    I think that Tennessee, unfortunately, is a good example of 
the problems with the backlog. In 2009, Tennessee's backlog 
increased from--increased to 66 percent at the first 2 levels. 
That was in the top 10 in the nation. That was above the 40 
percent, nationwide.
    The director of DDS has been good to work with. Other 
advocates, colleagues of mine, have tried to improve the 
process. But Tennessee is third from the bottom in approvals at 
the initial and reconsideration stage. I say that's a double 
whammy that's going to hit the five ODARs in Tennessee, and in 
particular, Memphis and Nashville, that seem to have the 
biggest backlog.
    I am an optimistic person. But, absent additional resources 
in 2010, which I think are on target, and 2011, I can't say but 
that it will get worse, because we have cost of living and 
overhead type issues there.
    I do appreciate what the committee has done, and the 
Congress has done in 2008 and 2009--as other witnesses have 
indicated--and have marked up for 2010, but I think we are 
going to need even more in 2011 to maintain the progress that 
has been made.
    We support many of the other non-dollar initiatives that 
the Commissioner has suggested, such as increased technology, 
the senior attorney adjudicator program. We just have one word 
of caution, that any proposals--we don't want our clients' due 
process rights to be jeopardized. We want the folks who are 
eligible under the law to receive the benefits that they need 
for their basic necessities of life.
    Thank you.
    [The prepared statement of Ms. Bates follows:]

Prepared Statement of Beth Bates, Claimants' Representative, on behalf 
  of the Consortium for Citizens with Disabilities, Jackson, Tennessee

    Chairman Tanner, Ranking Member Johnson, and Members of the House 
Ways and Means Social Security Subcommittee, thank you for inviting me 
to testify at today's hearing on ``Clearing the Disability Claims 
Backlogs: The Social Security Administration's Progress and New 
Challenges Arising From the Recession.'' I am honored to testify today 
but am saddened that the reason is because my clients have waited so 
long and endured many hardships before receiving the disability 
benefits to which they are entitled.
    I am an attorney in Jackson, TN, and a member of the National 
Organization of Social Security Claimants' Representatives (NOSSCR). 
For more than 25 years, I have represented individuals with 
disabilities in their claims for Social Security and Supplemental 
Security Income (SSI) disability benefits. I am testifying today on 
behalf of the Consortium for Citizens with Disabilities (CCD) Social 
Security Task Force, of which NOSSCR is an active member. CCD is a 
working coalition of national consumer, advocacy, provider, and 
professional organizations working together with and on behalf of the 
more than 54 million children and adults with disabilities and their 
families living in the United States. The CCD Social Security Task 
Force (hereinafter CCD) focuses on disability policy issues in the 
Title II disability programs and the SSI program.
    The focus of this hearing is extremely important to people with 
disabilities. Title II and SSI cash benefits, along with the related 
Medicaid and Medicare benefits, are the means of survival for millions 
of individuals with severe disabilities. They rely on the Social 
Security Administration (SSA) to promptly and fairly adjudicate their 
applications for disability benefits. They also rely on the agency to 
handle many other actions critical to their well-being including: 
timely payment of the monthly Title II and SSI benefits to which they 
are entitled; accurate withholding of Medicare Parts B and D premiums; 
and timely determinations on post-entitlement issues that may arise 
(e.g., overpayments, income issues, prompt recording of earnings).
    Because the economic downturn has led to an unexpected surge of new 
applications, SSA finds itself at a critical crossroads. The wave of 
new claims is having a very significant impact at the state Disability 
Determination Services (DDSs) that will eventually affect the hearing 
level. At the DDS levels (initial and reconsideration), the number of 
new applications, applications waiting for a decision, and processing 
times are all on the rise. In fiscal year (FY) 2009, SSA received 
385,000 new claims, an increase of nearly 15% since the end of FY 2008. 
Even more worrisome is the growing backlog of pending initial claims at 
the DDSs, i.e., those waiting for a decision, up nearly 40% since the 
end of FY 2008.
    In FY 2009, the news was more positive at the hearing level. For 
the first time in a decade, SSA finished FY 2009 with fewer hearing 
level cases waiting for a hearing and decision than at the beginning of 
the year. But we are deeply concerned that any progress in eliminating 
the hearing level backlog will be delayed as the surge of new 
applications are denied and then are appealed, putting SSA's plan to 
eliminate the hearing level backlog by 2013 at risk.
    While recent appropriations have allowed SSA to hire some new staff 
and to reduce processing times at the hearing level, these amounts will 
not be adequate to fully restore the agency's ability to carry out its 
mandated services. Given the many years of under-funding and the need 
for more than a $600 million annual increase just to keep up with fixed 
costs, additional funding is required to reduce and eliminate the 
backlog at the DDS and hearing levels and to provide essential services 
to the public. While the current situation is dire, without adequate, 
ongoing appropriations to fund SSA, the forward progress recently made 
by the agency will deteriorate, leaving people with severe disabilities 
to wait years to receive the benefits to which they are entitled.
THE IMPACT ON PEOPLE WITH DISABILITIES
    As the backlog in decisions on disability claims continues to grow, 
people with severe disabilities have been bearing the brunt of the 
delays. Behind the numbers are individuals with disabilities whose 
lives have unraveled while waiting for decisions--families are torn 
apart; homes are lost; medical conditions deteriorate; once stable 
financial security crumbles; and many individuals die.\1\ Numerous 
recent media reports across the country have documented the suffering 
experienced by these individuals. Your constituent services staffs are 
likely to be well aware of the situations faced by people living in 
your districts and they provide valuable assistance. I have had many 
contacts with Chairman Tanner's district offices in Jackson and Union 
City, Tennessee. His staff has been extremely helpful, when they are 
able to assist.
---------------------------------------------------------------------------
    \1\ If a claimant dies while a claim is pending, the SSI rule for 
payment of past due benefits is very different--and far more limited--
than the Title II rule. In an SSI case, the payment will be made in 
only two situations: (1) to a surviving spouse who was living with the 
claimant at the time of death or within six months of the death; or (2) 
to the parents of a minor child, if the child resided with the parents 
at the time of the child's death or within six months of the death. 42 
U.S.C. Sec. 1383(b)(1)(A) [Section 1631(b)(1)(A) of the Act]. In Title 
II, the Act provides rules for determining who may continue the claim, 
which includes: a surviving spouse; parents; children; and the legal 
representative of the estate. 42 U.S.C. Sec. 404(d) [Section 202(d) of 
the Act]. Thus, if an adult SSI claimant (age 18 or older) dies before 
actually receiving the past due payment and if there is no surviving 
spouse, the claim dies with the claimant and no one is paid.
---------------------------------------------------------------------------
Backlog in Appeals of Disability Claims: The Human Toll
    I have represented individuals in their Social Security and SSI 
disability claims since 1984 at all administrative and judicial levels. 
My clients' hearings are held by Administrative Law Judges (ALJs) in 
the Memphis and Nashville, TN, hearing offices of SSA's Office of 
Disability Adjudication and Review (ODAR). Like the growing number of 
initial applications and hearing requests, my client caseload has grown 
by 40%. I have noticed that my clients are waiting longer and longer 
for hearings to be scheduled. The experiences of several of my clients 
illustrate the hardships endured by many claimants waiting for a 
decision on their claims and for payment of awarded benefits:

      Mrs. W lives in Dyersburg, TN, with her husband and 
young family. She is illiterate and reclusive. She and her family 
receive much assistance from older family members. She applied for 
disability benefits on August 7, 2008, based on mental retardation. She 
was denied despite psychological evaluations showing IQ scores in the 
60s and deficits in adaptive function. As her attorney, I asked for a 
decision on the record both at the Disability Determination Services 
(DDS) and hearing levels. Her claim was denied by the DDS and her 
hearing request was filed on February 20, 2009. She is still waiting 
for a hearing date.
      Mr. H lives in Huntingdon, TN. When he first retained me 
on April 3, 2008, he and his teenage son were homeless. They were 
forced to stay in a motel in a dangerous area. I filed an online 
disability report; Mr. H completed SSI and Social Security disability 
applications. Mr. H had worked as a sawmill laborer and a grocery 
bagger. He had been out of the workforce for a time caring for his 
invalid mother until her health worsened and she had to enter a nursing 
facility. Mr. H suffers from liver disease, arthritis, coronary artery 
disease, depression and adult attention deficit disorder. Fortunately, 
he and his son were able to move into public housing. He was denied at 
the first two levels by the Tennessee DDS and requested a hearing on 
January 23, 2009. He is still waiting for a hearing date. Mr. H and his 
son live on state welfare benefits of approximately $185 per month plus 
food stamps.
      Mr. M is homeless and has been diagnosed with bipolar 
disorder. He has recent suicide attempts. I began to represent him in 
April 2008. He had previously requested a hearing while living near 
Tampa, FL. His brother, who lives in rural western Tennessee, attempted 
to rescue Mr. M. However, Mr. M decompensated in the summer of 2008 and 
had to be hospitalized at Western State Mental Hospital in Tennessee. 
Upon discharge, he was released to a group home in Nashville, some 100 
miles away from his brother. He lived for almost a year in the group 
home and now has a supportive housing apartment. He has no income. Mr. 
M's hearing is scheduled on December 17, 2009, some 18 months after he 
came to Tennessee. I have previously requested on the record decisions 
twice, but have received no response to my requests.

    Most claimants' representatives have clients who have faced similar 
difficult circumstances to those endured by mine, including 
deteriorating health and even death, due to lack of health insurance 
and access to necessary medical treatment, sometimes as simple as 
antibiotics. Foreclosures and bankruptcies have increased, with 
claimants losing their homes and vehicles and their economic stability. 
I have included more descriptions of other claimants and the hardships 
they have faced at the end of my statement, starting on page 12.
SSA'S NEED FOR ADEQUATE RESOURCES TO ADDRESS GROWING BACKLOGS
    For many years, SSA did not receive adequate funds to provide its 
mandated services, a key reason for the hearings backlog. Between FY 
2000 and FY 2007, the resulting administrative funding shortfall was 
more than $4 billion. The dramatic increase in the hearing level 
disability claims backlog coincided with this period of significant 
under-funding.
    Recent Congressional efforts to provide SSA with adequate funding 
for its administrative budget have been encouraging. In FY 2008, the 
tide finally changed for the first time in a decade, when Congress 
appropriated $148 million over the President's budget. The FY 2009 SSA 
appropriation provided SSA with more than $700 million over the FY 2008 
appropriation.
    We are extremely grateful to Congress for recognizing SSA's need 
for adequate resources and including additional funds for SSA in the 
American Recovery and Reinvestment Act of 2009 (ARRA). ARRA provided 
SSA with $500 million to handle the unexpected surge in both retirement 
and disability applications due to the economic downturn. SSA also 
received badly needed funds to replace its aged National Computer 
Center. With the FY 2009 appropriation and the ARRA funding, SSA 
planned to hire 5,000 to 6,000 new employees, including 147 new ALJs 
and 850 hearing level support staff. This additional staff undoubtedly 
led to SSA's ability to make progress on the backlog at the hearing 
level.
    Congress appears to be moving towards providing SSA with an FY 2010 
appropriation approximately the same as President Obama's request of 
$11.45 billion for SSA's Limitation on Administrative Expenses (LAE), a 
10 percent increase over the FY 2009 appropriation. While the agency is 
operating under a Continuing Resolution, we are optimistic that SSA's 
final FY 2010 appropriation will be similar to the $11.45 billion 
amount, allowing SSA to hire more staff, including 226 additional ALJs 
and support staff.
WILL THE HEARING LEVEL BACKLOG BE ELIMINATED BY 2013?
    The most significant delays in SSA's disability determination 
process are at the hearing level. The average processing time for cases 
at the hearing level has increased dramatically since 2000, when the 
average time was 274 days. In FY 2009, the average processing time for 
disability claims at the hearing level was 491 days, about 16.5 months. 
We appreciate the effort by SSA to reduce the processing time, but an 
average of 16.5 months--close to one and a half years--is still too 
long for individuals waiting for a hearing decision. In addition, the 
average processing times at the initial and reconsideration levels are 
increasing. For individuals with disabilities who have no health 
insurance, have lost their homes, have declared bankruptcy, or who have 
died, that is simply too long to wait.
    The current processing times in some hearing offices are striking, 
and much longer than the 491-day average at the end of FY 2009. It is 
important to keep in mind that this is an ``average'' and that many 
claimants will wait longer. In September 2009, the average processing 
time at 48 hearing offices was above the 491 day national average, with 
20 offices over 600 days.
    Is the Hearing Backlog Improving? By the end of FY 2009, it was 
clear that ODAR was making slow but steady process in key areas to 
address its backlog and improve processing times, thanks to the hard 
work of ODAR ALJs and staff and the additional resources available due 
to Congressional appropriations, including the ARRA funding.

      Pending cases. For the first time in a decade, ODAR 
finished FY 2009 with fewer hearings pending than in the prior year. 
The increased resources, including 147 new ALJs and support staff are 
having a positive impact at the hearing level. The pending number of 
cases dropped for nine straight months from a record high of 768,540 in 
December 2008 to 722,822 in September 2009. This is the lowest pending 
number of ODAR cases since February 2007. The pending number dropped by 
11,377 in September 2009 alone, the biggest drop in FY 2009. The 
reduction in pending cases is even more notable since the number of 
requests for hearing increased in FY 2009, up to 625,003, a 5.7% 
increase over the 591,888 received in FY 2008.
      Processing times. The average process time in September 
2009 was 472 days, the lowest monthly processing time since November 
2005. The average processing time for all of FY 2009 was 491 days, down 
from 514 days in FY 2008.
      Dispositions. The number of dispositions cleared by ALJs 
on a daily basis was 2,940.47 in September. This is the highest monthly 
average since records have been kept, beginning in FY 2004. The 
increase is concomitant with the record number of ALJs now on duty. For 
the year, dispositions were up about 20%.
      Age of pending cases. The length of time cases are 
pending is also improving. The percentage of requests for hearing 
pending over one year was 31% in September 2009. This is the lowest 
percent since October 2004. The average age of a pending case is 282 
days. It peaked this year at 317 days in January 2009.

    Improvement Is Not Uniform. Despite the overall improvement in the 
hearing level statistics, not every hearing office has benefited and 
some claimants are waiting even longer than one year ago. On one hand, 
some offices have experienced exceptional improvement in processing 
times, as much as 4 to 5 months in just one year, for example: Madison, 
WI; Houston-Bissonet, TX; and Long Beach, CA. In contrast, other 
offices continue to experience worsening times that are several months 
longer than last year, for example: Memphis, TN; Louisville, KY; and 
Bronx, NY. A comparison of processing times at the end of FY 2009 and 
FY 2008 for hearing offices in or near the districts of Subcommittee 
Members reflects this disparity and the fact that much work lays 
ahead.\2\
---------------------------------------------------------------------------
    \2\ The processing times reflect the times at the end of September 
in the respective fiscal year.
---------------------------------------------------------------------------
    California: Los Angeles Downtown: 362 days (FY09) vs. 376 days 
(FY08); Los Angeles West: 492 days (FY09) vs. 525 days (FY08); Long 
Beach: 351 days (FY09) vs. 533 days (FY08)
    Florida: Tampa: 539 days (FY09) vs. 622 days (FY08)
    Kentucky: Lexington: 452 days (FY09) vs. 448 days (FY08); 
Louisville: 545 days (FY09) vs. 465 days (FY08)
    New York: Bronx: 605 days (FY09) vs. 516 days (FY08); Manhattan: 
490 days (FY09) vs. 420 days (FY08); Queens: 482 days (FY09) vs. 446 
days (FY08)
    North Dakota: Fargo: 448 days (FY09) vs. 485 days (FY08)
    Ohio: Columbus: 630 days (FY09) vs. 771 days (FY08)
    Pennsylvania: Elkins Park: 360 days (FY09) vs. 402 days (FY08); 
Philadelphia: 350 days (FY09) vs. 386 days (FY08); Philadelphia East: 
377 days (FY09) vs. 422 days (FY08)
    Tennessee: Memphis: 538 days (FY09) vs. 442 days (FY08); Nashville: 
501 days (FY09) vs. 475 days (FY08)
    Texas: Dallas Downtown: 367 days (FY09) vs. 463 days (FY08); Dallas 
North: 331 days (FY09) vs. 403 days (FY08); Fort Worth: 306 days (FY09) 
vs. 372 days (FY08); Houston-Bissonet: 328 days (FY09) vs. 471 days 
(FY08); Houston Downtown: 340 days (FY09) vs. 298 days (FY08); San 
Antonio: 330 days (FY09) vs. 427 days (FY08)
    Washington: Seattle: 511 days (FY09) vs. 551 days (FY08)
    Wisconsin: Madison: 488 days (FY09) vs. 652 days (FY08); Milwaukee: 
627 days (FY09) vs. 658 days (FY08)
SIGNIFICANT INCREASE IN NEW CLAIMS FILED AND GROWING DDS BACKLOGS
    Since the end of FY 2008, new disability claims filed have been 
climbing steadily, up nearly 15% by the end of FY 2009. But what is 
more troubling is how the increase grew throughout FY 2009: December 
2008 Quarter: 6.92%; March 2009 Quarter: 15.23%; June 2009 Quarter: 
16.32%; September 2009 Quarter: 20.25%.
    The most alarming trend is the increase in the number of pending 
claims (initial and reconsideration levels), up 38.8% since the end of 
FY 2008 and climbing from 763,183 to 1,059,241. This means that, at the 
end of FY 2009, more than 1 million disability applicants were waiting 
for a decision on their claims at the initial and reconsideration 
levels. When you add the 722,822 pending cases at the hearing level, 
nearly 1.75 million people with disabilities were waiting for a 
decision. If the new applications continue to increase at the higher 
level seen in recent months, the total number of pending initial 
applications alone in the DDSs could hit over 1,000,000 claims by the 
end of FY 2010. This would be an 80% increase in pending initial claims 
in just one year.
    Claimant representatives in some states, including myself in 
Tennessee, have noticed the increase in processing times. This is not 
surprising since the percentage increase of pending cases in some 
states is much higher than the national average. For example, at the 
initial level, the number of pending claims increased nationwide by 
38.1% at the end of FY 2009, compared to the end of FY 2008. However, 
in my state of Tennessee, the increase was 66.2%. Other states with 
significantly higher percentage increases in pending initial level 
claims include: North Dakota (68.5%); Ohio (59.3%); and Texas (55.8%).
    What does the increase in applications and pending claims at the 
DDSs mean for the hearing level? Approximately 22% of the initial 
claims will result in a hearing request. This means there is a 
potential increase of 85,000 additional hearings just from the FY 2009 
applications, a statistic that underscores the fragility of the ODAR 
progress accomplished in FY 2009.
    Looking more closely at the situation in my state of Tennessee, 
there is reason to be concerned. The increase in new claims will 
contribute to worsening a difficult situation at the hearing level. 
Tennessee had one of the biggest increases in pending claims in FY 2009 
(66.2%), which was much higher than the national average. Historically, 
Tennessee has had one of the lowest DDS allowance rates. In FY 2008, 
the Tennessee DDS allowed only 25.1% of initial claims (vs. a 36.0% 
national average) and only 8.7% of requests for reconsideration (vs. a 
13.8% average). Out of 52 DDSs, Tennessee rated 50th, slightly better 
than only Mississippi and Georgia. As noted above, the processing times 
at both the Memphis and Nashville ODAR hearing offices did not improve 
in FY 2009 but rather grew worse--Memphis by nearly 100 days or more 
than 3 months, and Nashville by 26 days or nearly one month. All of 
these trends--increased applications, a very low DDS allowance rate, 
and worsening hearing level processing times--do not bode well for my 
clients and other individuals in the state. As a result, I fear that 
things will get worse before they get better.
    Exacerbating the problem of a significant increase in new claims is 
the impact on DDSs of state budget crises. Even though DDS salaries, 
offices, and overhead are fully funded by SSA, some states are imposing 
hiring restrictions and furloughs of employees, including DDS workers, 
because of budget problems. Earlier this year, Commissioner Astrue 
wrote to Governors, asking them to exempt DDSs from hiring freezes and 
furloughs. In September 2009, Vice-President Biden sent a letter to 
Gov. Edward Rendell, the Chair of the National Governors' Association, 
also urging that states exempt DDS employees from state furloughs. 
These furloughs lead to loss of administrative funding for the state 
DDSs and, more importantly, delay payment of benefits to disabled 
beneficiaries.
SSA's ABILITY TO PERFORM OTHER IMPORTANT WORKLOADS
    Program Integrity Workloads. The processing of continuing 
disability reviews (CDRs) and SSI redeterminations is necessary to 
protect program integrity and avert improper payments. Failure to 
conduct the full complement of CDRs would have adverse consequences for 
the federal budget and the deficit. According to SSA, CDRs result in 
$10 of program savings and SSI redeterminations result in $7 of program 
savings for each $1 spent in administrative costs for the reviews. 
However, the number of reviews actually conducted is directly related 
to whether SSA receives the necessary funds. In addition, it is 
important, when it conducts work CDRs, that SSA assess whether reported 
earnings have been properly recorded and ensure that it properly 
assesses whether work constitutes substantial gainful activity (SGA).
    Impact on Post-Entitlement Work. Staffing shortages also have led 
to SSA's inability to fully carry out many other critical post-
entitlement workloads. One area that has slipped, often with a very 
detrimental impact on people with disabilities, is the processing of 
earnings reports by beneficiaries. When beneficiaries faithfully notify 
SSA of earnings or other changes that may reduce their benefit payment 
amounts, it may be months or years before SSA sends an overpayment 
notice to the beneficiary, demanding repayment of sometimes tens of 
thousands of dollars of accrued overpayments. It is shocking to 
beneficiaries to receive these notices, when they reasonably assumed 
that SSA had processed the information they submitted, and it is 
challenging, if not impossible, for someone subsisting on benefits 
alone to repay the overpayments. Many individuals with disabilities are 
wary of attempting a return to work out of fear that this may give rise 
to an overpayment, resulting in a loss of economic stability and health 
care coverage upon which they rely.
    SSA needs to develop a better reporting and recording system and 
promptly adjust benefit payments--thus preventing these overpayments. 
It is important to note that, in and of themselves, overpayments do not 
indicate fraud or abuse as beneficiaries are encouraged to work if they 
are able. The problems arise when reported earnings are not properly 
recorded and monthly overpayments are not properly adjusted.
CCD RECOMMENDATIONS REGARDING SSA's ADMINISTRATIVE FUNDING
    We are optimistic that SSA will receive a final FY 2010 
appropriation of $11.451 billion for SSA's LAE, the same amount 
proposed by the President. SSA will use this funding and about $350 
million from the ARRA funding to address the growing workloads facing 
the agency. Based on these funding levels, during FY 2010, SSA will be 
spending at least $11.8 billion to address the current staffing levels 
and associated costs necessary for the agency to function.
    In FY 2011, SSA will be faced with additional costs of nearly $620 
million just to deal with inflationary costs associated with items such 
as salaries, benefits, rents, and facility security. The resulting 
funding level, $12.42 billion will not address the increased number of 
new claims, the newly created DDS backlog, and SSA's plan to eliminate 
the hearing level backlog by 2013. To address these workloads, SSA will 
need additional resources. We estimate that an additional $780 million 
will be necessary--at least $480 million to address the increased 
number of disability claims and at least $300 million to continue 
making progress in reducing and eliminating the hearings backlog by 
2013.
    To address the unprecedented increase in workloads and to prevent a 
severe disruption in service delivery, we recommend that a minimum of 
$13.2 billion be included in the FY 2011 President's budget request for 
SSA's administrative funding.
RECOMMENDATIONS FOR IMPROVING THE DISABILITY CLAIMS PROCESS
    Money alone will not solve SSA's crisis in meeting its 
responsibilities. Commissioner Astrue is committed to finding new ways 
to work better and more efficiently. CCD has numerous suggestions for 
improving the disability claims process for people with disabilities. 
We believe that these recommendations and agency initiatives, which 
overall are not controversial and which we generally support, can go a 
long way towards reducing, and eventually eliminating, the disability 
claims backlog.
Caution Regarding the Search for Efficiencies
    While we generally support the goal of achieving increased 
efficiency throughout the adjudicatory process, we caution that limits 
must be placed on the goal of administrative efficiency for 
efficiency's sake alone. The purposes of the Social Security and SSI 
programs are to provide cash benefits to those who need them and have 
earned them and who meet the eligibility criteria. While there may be 
ways to improve the decision-making process from the perspective of the 
adjudicators, the critical measure for assessing initiatives for 
achieving administrative efficiencies must be how they affect the very 
claimants and beneficiaries for whom the system exists.
    People who find they cannot work at a sustained and substantial 
level are faced with a myriad of personal, family, and financial 
circumstances that will have an impact on how well or efficiently they 
can maneuver the complex system for determining eligibility. Many 
claimants will not be successful in addressing all of SSA's 
requirements for proving eligibility until they reach a point where 
they request the assistance of an experienced representative. Many face 
educational barriers and/or significant barriers inherent in the 
disability itself that prevent them from understanding their role in 
the adjudicatory process and from efficiently and effectively assisting 
in gathering evidence. Still others are faced with having no ``medical 
home'' to call upon for assistance in submitting evidence, given their 
lack of health insurance over the course of many years. Many are 
experiencing extreme hardship from the loss of earned income, often 
living through the break-up of their family and/or becoming homeless, 
with few resources--financial, emotional, or otherwise--to rely upon. 
Still others experience all of the above limits on their abilities to 
participate effectively in the process.
    Proposals for increasing administrative efficiencies must bend to 
the realities of claimants' lives and accept that people face 
innumerable obstacles at the time they apply for disability benefits 
and beyond. SSA must continue, and improve, its established role in 
ensuring that a claim is fully developed before a decision is made and 
must ensure that its rules reflect this administrative responsibility.
Technological Improvements
    Commissioner Astrue has made a strong commitment to improve and 
expand the technology used in the disability determination process. CCD 
generally supports these efforts to improve the disability claims 
process, so long as they do not infringe on claimants' rights. Some of 
the technological improvements that we believe can help reduce the 
backlog include the following:

        1.  The electronic disability folder. The initiative to process 
        disability claims electronically has the prospect of 
        significantly reducing delays caused by the moving and handing-
        off of folders, allowing for immediate access by different 
        components of SSA or the DDS, and preventing misfiled evidence.
        2.  Expanding Internet access for representatives. Under 
        Electronic Records Express (ERE), registered claimant 
        representatives are able to submit evidence electronically 
        through an SSA secure website or to a dedicated fax number, 
        using a unique barcode assigned to the claim. This initiative 
        holds great promise, given that significant problems with the 
        current process exist.
             Under the current process, representatives are to be 
        provided with a CD of the exhibited or ``pulled'' file shortly 
        before the hearing and earlier in the process after the appeal 
        has been filed but before the file is exhibited. Due to 
        staffing shortages in hearing offices, I have had problems 
        obtaining the CDs and even obtaining barcodes, which allows me 
        to submit evidence electronically. Receiving incomplete CDs 
        leads to problems. I am unable to know what evidence is in the 
        record so that I can determine what evidence I need to obtain 
        and submit. This also can lead to submission of duplicate 
        evidence, which is time-consuming for ODAR staff but is the 
        only way that I can ensure that ODAR has received the evidence. 
        This can cause significant delay both during and after the 
        hearing.
             We are optimistic that these problems will be resolved in 
        the near future. I am very much looking forward to having 
        direct access to my clients' electronic folders. A small group 
        of representatives is involved in an SSA pilot that gives them 
        direct access to their clients' electronic folders, allowing 
        them to download the contents through the ERE website. SSA has 
        been working on security and authentication issues and has a 
        plan to gradually rollout this initiative. I believe that it 
        will make the hearing process more efficient for all parties 
        involved--claimants, their representatives, and SSA.
        3.  Use of video hearings. Video hearings allow ALJs to conduct 
        hearings without being at the same geographical site as the 
        claimant and representative and have the potential to reduce 
        processing times and increase productivity. We support the use 
        of video teleconference hearings so long as the right to a full 
        and fair hearing is adequately protected; the quality of video 
        teleconference hearings is assured; and the claimant retains 
        the absolute right to have an in-person hearing as provided 
        under current regulations.\3\ However, we have received 
        complaints from representatives that, in some cases, ALJs are 
        discouraging claimants from exercising their right to an in-
        person hearing. A new SSA pilot allows representatives to 
        participate in video hearings from their own private offices, 
        with their clients present in the representative's office. The 
        representative must agree to the terms established by SSA. This 
        pilot provides claimants with another option for their 
        hearings.
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    \3\ 20 C.F.R. Sec. Sec. 404.936 and 416.1436.

Other Improvements at the Hearing Level
    1. The Senior Attorney Program. This program allows senior staff 
attorneys in hearing offices to issue fully favorable decisions in 
cases that can be decided without a hearing (i.e., ``on the record''). 
I have had clients approved for benefits by senior attorneys in both 
the Memphis and Nashville hearing offices. This cuts off many months in 
their wait for payment of benefits. I am pleased that Commissioner 
Astrue decided to authorize the program for at least the next two 
years.\4\ In FY 2009, senior attorneys decided more than 36,300 cases, 
a 50% increase over FY 2008. This means that more than 36,000 claimants 
were able to receive their disability benefits months sooner.
---------------------------------------------------------------------------
    \4\ The program is extended through August 10, 2011. 74 Fed. Reg. 
33327 (July 13, 2009).
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    2. Findings Integrated Templates (FIT). FIT is used for ALJ 
decisions and integrates the ALJ's findings of fact into the body of 
the decision. While the FIT does not dictate the ultimate decision, it 
requires the ALJ to follow a series of templates to support the 
ultimate decision. Representatives can use the FIT template, which is 
available on the SSA website, to draft proposed favorable decisions. 
Many representatives are now using the template either when requested 
by the ALJ or on their own initiative. When the draft proposed decision 
is submitted to the ALJ, it can lead to a speedier decision.
    3. Increase time for hearing notice. We have previously recommended 
that the time for providing advance notice of the hearing date be 
increased from the current 20 days to 75 days. Based on my experience, 
I strongly believe that this increase will allow more time to obtain 
medical evidence before the hearing and makes it far more likely that 
the record will be complete when ALJ reviews the file before the 
hearing. The 75-day time period has been in effect in SSA's Region I 
states since August 2006 \5\ and, based on reports from 
representatives, has worked well.
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    \5\ 20 C.F.R. Sec. 405.315(a).
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Improvements at the Initial Levels
    CCD supports initiatives to improve the process at the initial 
levels so that the correct decision can be made at the earliest point 
possible and unnecessary appeals can be avoided. Improvements at the 
front end of the process can have a significant beneficial impact on 
preventing the backlog and delays later in the appeals process.
    1. New Screening Initiatives. We support SSA's efforts to 
accelerate decisions and develop new mechanisms for expedited 
eligibility throughout the application and review process. We encourage 
the use of ongoing screening as claimants obtain more documentation to 
support their applications. However, SSA must work to ensure that there 
is no negative inference when a claim is not selected by the screening 
tool or allowed at that initial evaluation. There are two initiatives 
that hold promise:

          Quick Disability Determinations. We have supported 
        the Quick Disability Determination (QDD) process since it first 
        began in SSA Region I states in August 2006 and was expanded 
        nationwide by Commissioner Astrue in September 2007.\6\ The QDD 
        process has the potential of providing a prompt disability 
        decision to those claimants who are the most severely disabled. 
        Since its inception, the vast majority of QDD cases have been 
        decided favorably in less than 20 days, and sometimes in just a 
        few days.
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    \6\ 20 C.F.R. Sec. Sec. 404.1619 and 416.1019.
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          Compassionate Allowances. This initiative allows SSA 
        to create ``an extensive list of impairments that we [SSA] can 
        allow quickly with minimal objective medical evidence that is 
        based on clinical signs or laboratory findings or a combination 
        of both. . . .'' SSA has published an initial list of 50 
        conditions on its website, with more to be added at a later 
        date. Unlike the QDD screening, which occurs only when an 
        application is filed, screening for compassionate allowances 
        can occur at any level of the administrative appeals process. 
        SSA has held recent Compassionate Allowance outreach hearings 
        with expert panels to consider early onset Alzheimer's disease 
        and schizophrenia.

    2. Improve development of evidence earlier in the process. In 
previous testimony, CCD has made a number of recommendations to ensure 
that disability claims are properly developed at the beginning of the 
process. Claimants' representatives are often able to provide evidence 
that we believe could have been obtained by the DDSs earlier in the 
process. Our recommendations include:

          Provide more assistance to claimants at the 
        application level. At the beginning of the process, SSA should 
        explain to the claimant what evidence is important and 
        necessary. SSA should also provide applicants with more help 
        completing the application, particularly in light of electronic 
        filings, so that all impairments and sources of information are 
        identified, including non-physician and other professional 
        sources.
          DDSs need to obtain necessary and relevant evidence. 
        Representatives often are able to obtain better medical 
        information because they use letters and forms that ask 
        questions relevant to the disability determination process. 
        However, DDS forms usually ask for general medical information 
        (diagnoses, findings, etc.) without tailoring questions to the 
        Social Security disability standard. One way to address this 
        would be for SSA to encourage DDSs to send Medical Source 
        Statement forms to treating and examining doctors. These simple 
        forms translate complex, detailed medical source opinions into 
        practical functional terms useful to the vocational 
        professionals at DDSs and hearing offices.
          Increase reimbursement rates for providers. To 
        improve provider response to requests for records, appropriate 
        reimbursement rates for medical records and reports need to be 
        established. Appropriate rates should also be paid for 
        consultative examinations and for medical experts.
          Provide better explanations to medical providers. SSA 
        and DDSs should provide better explanations to all providers, 
        in particular to physician and non-physician treating sources, 
        about the disability standard and ask for evidence relevant to 
        the standard.
          Provide more training and guidance to adjudicators. 
        Many reversals at the appeals levels are due to earlier 
        erroneous application of existing SSA policy. Additional 
        training should be provided on important evaluation rules such 
        as: weighing medical evidence, including treating source 
        opinions; the role of non-physician evidence; the evaluation of 
        mental impairments, pain, and other subjective symptoms; the 
        evaluation of childhood disability; and the use of the Social 
        Security Rulings.
          Improve the quality of consultative examinations. 
        Steps should be taken to improve the quality of the 
        consultative examination (CE) process. There are far too many 
        reports of inappropriate referrals, short perfunctory 
        examinations, and examinations conducted in languages other 
        than the applicant's.

    3. Eliminate reconsideration. To create a more streamlined process, 
we have supported elimination of the reconsideration level and adding 
some type of pre-decision contact with the claimant. SSA has tested the 
elimination of reconsideration in ten ``prototype'' states [AL, AK, 
CA--Los Angeles, CO, LA, MI, MO, NH, NY--Albany and New York City, PA] 
for nearly ten years and it was recently extended through September 28, 
2012.\7\ Claimants' representatives in those states report that the 
process works well without a review level between the initial 
determination and the ALJ level.
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    \7\ 74 Fed. Reg. 48797 (Sept. 24, 2009).
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ADDITIONAL RECOMMENDATIONS
    In addition to addressing the backlog and SSA's funding issues, 
there are several other legislative proposals that the Subcommittee may 
be considering this year.

          Protecting claimants' privacy rights. We understand 
        that it can be cumbersome for SSA to obtain medical records, as 
        it is for claimants and their representatives, and that SSA is 
        exploring more efficient ways to secure the necessary evidence. 
        While we support ways to make this process more efficient, we 
        believe that claimants' privacy rights must be protected. We 
        will work with SSA to find a way to obtain, as efficiently as 
        possible, a claimant's authorization for release of medical 
        records to SSA, while protecting the individual's privacy 
        rights.
          Extension of the fee demonstrations in the SSPA. 
        Access to experienced and qualified representatives through the 
        lengthy and complex application process is critically important 
        to claimants. To this end, we support allowing claimants to 
        enter into voluntary agreements with representatives for fee 
        withholding and direct payment procedures whether under Title 
        II or Title XVI. The Social Security Protection Act of 2004 
        established two demonstration projects that should be made 
        permanent because they have proven to be effective in 
        increasing claimants' access to effective representation: (1) 
        Extension of the Title II attorney fee withholding and direct 
        payment procedures to SSI claims; and (2) Allowing nonattorney 
        representatives to qualify for fee withholding and direct 
        payment, provided they meet certain requirements. Unless they 
        are extended or made permanent, the demonstrations will sunset 
        March 1, 2010.
          Increase and indexing of the fee cap. Rep. John Lewis 
        has introduced H.R. 1093, which contains two provisions 
        regarding the current $5,300 fee agreement fee cap: (1) 
        Increase the current fee cap to $6,264.50 (which represents the 
        figure if it had been adjusted for inflation since the last 
        increase in 2002); and (2) Index the fee cap for future years 
        to the annual COLA. We support these changes since they ensure 
        that there will be a knowledgeable, experienced pool of 
        representatives available to represent claimants.
          Work incentives. The Ticket to Work and Work 
        Incentives Improvement Act was enacted nearly ten years ago and 
        is overdue for evaluation of its effectiveness in employment of 
        those receiving Title II and SSI disability benefits. We urge 
        renewal, strengthening, and permanent extension of expired/
        expiring provisions including (1) SSA's Title II demonstration 
        authority to test promising approaches for work incentives and 
        related provisions; (2) Demonstration to Maintain Independence, 
        set to expire this year, to provide Medicaid buy-in coverage to 
        working individuals whose conditions or disabilities are not 
        yet severe enough to qualify them for disability benefits; (3) 
        Protection and Advocacy for Beneficiaries of Social Security to 
        protect the rights of beneficiaries as they attempt to return 
        to work; and (4) Work Incentives Planning Assistance, which 
        provides state grants for outreach and education to individuals 
        with disabilities about supports and services regarding 
        employment.

CLAIMANT STORIES PROVIDED BY REPRESENTATIVES IN 2009 \8\
---------------------------------------------------------------------------
    \8\ Some of these claimant descriptions appeared in testimony 
presented by Peggy Hathaway on behalf of the CCD Social Security Task 
Force at a Joint Hearing of the House Ways and Means Subcommittees on 
Social Security and Income Security and Family Support on Eliminating 
the Social Security Disability Backlog, March 24, 2009. The testimony 
is available at http://democrats.waysandmeans.house.gov/
hearings.asp?formmode=view&id=7618.
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CALIFORNIA
     Mr. B is a 57-year-old man from Los Angeles, CA. He 
worked in construction for over 30 years before he became disabled. He 
has been unable to work since 2003 and is homeless. His only income is 
$221 per month from General Relief. He has congestive heart failure, 
torn rotator cuffs in both shoulders, severe arthritis in his knees, 
severe depression, and possible cerebral atrophy. He applied for 
benefits in October 2007. After his claim was denied, Mr. B obtained 
representation and he filed a request for a hearing in April 2008. He 
has been homeless the entire time while he waited for a hearing. During 
the wait, his depression and physical health have worsened. Mr. B's 
condition requires him to rest during the day and keep his feet 
elevated, however he was unable to comply because shelters do not allow 
residents to remain during the day. Not having a place to rest caused 
his feet and legs to swell, resulting in a great deal of pain and 
discomfort. He also was hospitalized after coming down with an 
infection in one of the shelters.
    Mr. B's hearing finally took place in July 2009, more than 14 
months after requested. The ALJ issued a favorable decision on November 
2, 2009, more than two years after Mr. B applied for benefits. Once he 
begins to receive benefits, in another 3 or 4 weeks, he will finally be 
able to find a permanent home and start working on improving his 
health.
FLORIDA
     Mr. M is a 57-year-old man who worked as a Vocational 
Rehabilitation Specialist for over 20 years in Florida. He developed 
severe arthritis throughout his body, wears bilateral hand splints, 
knee splints, has developed severe joint degeneration, spinal cord 
degeneration, is agoraphobic, depressed, and anxious. He cannot take 
care of himself and he has no family to help him. He is about to lose 
his home. Mr. M has exhausted his savings and his attorney writes 
monthly letters to his mortgage company asking for extensions on his 
payments while he is waiting for his hearing. Nevertheless, the company 
is about to foreclose on his home.
NEW YORK
     A 46-year-old man from Queens, NY, diagnosed with severe 
asthma, cardiac disease, and severe depression, requested a hearing in 
August 2008. He last worked as a truck driver and warehouseman. He died 
from cancer in September 2009. Based on information received by his 
attorney, his hearing will not be scheduled any time soon.
NORTH DAKOTA
     Mr. N worked as an assistant manager of an automotive/
tire shop in Fargo, ND. He was injured while on the job in June 2006. 
He did not apply for Social Security disability benefits until August 
2007. He has severe, chronic myofacial pain and dysfunction syndrome, 
joint dysfunction, and lumbar and thoracic musculoligamentous sprain/
strain. He also has severe major depressive disorder and panic disorder 
related to his injury, which has resulted in hospitalization. Mr. N 
requested a hearing on March 21, 2008. He was finally found disabled by 
a decision of an ALJ (without a hearing) on February 19, 2009. Correct 
payment of his Social Security benefits was delayed due to an erroneous 
calculation of benefits based on his North Dakota workers compensation 
claim. Benefits for his wife and dependent children also were 
miscalculated. He received only a small portion of his regular monthly 
benefit (less than $100 per month) and had to wait over seven months 
before he received his past due benefits and began receiving the 
correct monthly benefit amount. He was not receiving any wage loss 
benefits from workers compensation during this timeframe.
OHIO
     Mr. N is a 55-year-old former maintenance supervisor who 
lives in Chillicothe, OH. He has small vessel ischemia, cerebrovascular 
disease, lumbar scoliosis, degenerative joint disease, vision loss, 
migraine headaches, depression, anxiety, fatigue, memory loss, and 
partial paralysis to his left side caused from two strokes. Mr. N filed 
his request for hearing in September 2007. While waiting for a hearing, 
he has had five liens put on his home, and does not have medical 
insurance to receive the medical treatment that he needs. His primary 
care physician has discussed his treatment options and has explained 
that his health will continue to decline, and that it is crucial for 
him to receive treatment as soon as possible.
     Mr. W, a 37-year-old fork lift driver from Columbus, OH, 
has a head injury and bipolar disorder, which prevent him from working. 
He filed his application for disability benefits in November 2006. 
While waiting for a hearing, he and his family were evicted from their 
apartment and his wife left him. He is living in a house with a friend 
and is unable to pay rent. However, when he is awarded benefits, he 
will owe back payment for the rent and continues to fall further into 
debt.
     Mr. P, a 60-year-old data entry person who lived in 
Columbus, OH, had back and knee problems, epilepsy, and a number of 
infections that kept occurring throughout his body. He filed his 
application for disability benefits on April 25, 2006. While waiting 
for a hearing, Mr. P became increasingly ill due to infection and 
chronic lymphedema. He died on December 11, 2007. An on-the-record 
favorable decision was made on October 9, 2008, ten months after his 
death. Mr. P was found disabled as of May 1, 2002 (four years before he 
applied for benefits) through the date of his death.
PENNSYLVANIA
     An attorney in Fort Washington, PA, reports that many 
clients have difficulties applying for Title II or SSI disability 
benefits because they do not have health insurance or the means to pay 
for medical treatment. They cannot treat their impairments, so their 
conditions get worse, and they cannot prove the existence of 
disability. If they apply and are denied, there is a two-year wait for 
a hearing to be scheduled. For SSI applicants awarded benefits, past 
due benefits are paid in installments, even if they are threatened with 
eviction or foreclosure or are unable to pay for their medical 
treatment. One client, a former fast food worker, received an ``on the 
record'' decision in November 2008, but received half of her back 
benefit despite facing a foreclosure and has not yet received the other 
half of her benefits. She cannot pay for her medication or co-pays. Her 
attorney suggested she go to the SSA field office, but she is too sick 
and disabled to travel there and her cognitive impairment prevents her 
from effectively communicating.
     Mr. D lives in Dalmatia, PA. He is a veteran of the 
Vietnam War and is a victim of Agent Orange and has other war-related 
health and mental problems. He had obtained a favorable decision on his 
Social Security disability claim. However, because of a mix-up at SSA, 
it was nearly two years until his attorney was able to straighten out 
his payments. He has a son with the same name and the SSA system had 
the two individuals mixed in with each other. While waiting for his 
payments, Mr. D's house went up for a Sheriff's sale after foreclosure. 
Two days before the sale, he called his attorney, crying, and said that 
he had no more reason to live. Out of sheer desperation, they called 
Rep. John Kanjorski's office, which was able to help get the Sheriff's 
sale postponed. Further, within two weeks, someone at SSA was trying to 
straighten out the mix-up. Within two months, the payments started. Mr. 
D's attorney notes that he does not believe this would have been 
accomplished if Rep. Kanjorski's office had not intervened.
     Ms. L is 50 years old and lives in Pennsylvania. She has 
been diagnosed with cirrhosis of the liver caused by Hepatitis C. 
Although she has finally received a hearing date, the wait has been a 
struggle for her. She has had her utilities shut off, her car 
repossessed, and her health has worsened. Ms. L's medical care is very 
costly. She has been non-responsive to certain treatments for her 
cirrhosis and is now on the liver transplant list.
TENNESSEE
     Mrs. C, a 43-year-old radiology/CT scan tech, lives in 
Clarksville, TN. She is unable to work due to diabetes, depression, 
anxiety disorder, fluid and arthritis in her knees, spondylothesis, 
spinal stenosis, degenerative disc disease, broad based disc bulges and 
severe pain and weakness in both legs. She filed her application for 
disability benefits in June 2007. While waiting for her hearing, Mrs. X 
and her family have been evicted from their home. Both of their 
vehicles have been repossessed, and they are having extreme 
difficulties paying for their day to day living. Her husband is on the 
verge of being laid off and, if that happens, there will be no income 
at all for this family. Due to the backlog, this claimant and her 
family may lose everything before she is able to get a hearing date and 
decision.
     Ms. A is 61 years old and lives in Milan, TN. She has 
Major Depressive Disorder, which prevents her from working. She filed 
her application for benefits in 2007. Ms. A's hearing has not yet been 
scheduled but her attorney has requested an on-the-record decision. She 
and her husband, who is currently employed, were forced to file for 
Chapter 7 bankruptcy in order to keep their house. The majority of her 
husband's check is going to the bankruptcy trustee each pay period, 
leaving them with only $4 to $27 per pay period for all of their other 
expenses, such as groceries and utilities
     Mr. D, a 48-year-old man who lives in Gibson County, TN, 
has musculoskeletal impairments. He filed his application for 
disability benefits in 2007. Mr. D's hearing has not yet been 
scheduled. He has lost his home and his wife left him. He is 
essentially homeless, living with various family members and friends.
     Mr. W is 53 years old and currently lives in Haywood 
County, TN. He has been diagnosed with musculoskeletal impairments. He 
filed his application for disability benefits in late 2004. It was 
denied and he had to appeal the case to federal district court. The 
court remanded the case, but not until mid to late 2008. After a remand 
hearing in 2009, his claim was allowed. However, while waiting for the 
decision, he lost his home and has had to live with various family 
members.
TEXAS
     Ms. A is a resident of Austin, TX, who filed a claim for 
disability benefits on April 27, 2006, after undergoing a quadruple 
coronary bypass. Ms. A's claim was denied initially and on 
reconsideration, and she requested a hearing on April 3, 2007, which 
was held on February 4, 2008. While awaiting the hearing, Ms. A 
experienced extreme financial hardship resulting in the foreclosure of 
her home and increased depression and anxiety. Unfortunately, her claim 
was denied by the ALJ in a April 2, 2008, decision. She appealed to the 
Appeals Council, which resulted in a remand order, dated August 27, 
2008, for another hearing. As of this date, the remand hearing has not 
been scheduled, 15 months after the Appeals Council remanded the case. 
While waiting for her new hearing, Ms. A has continued to experience 
extreme financial hardship and, on several occasions, homelessness was 
a very real possibility.
     Mr. A is 45 years old and lives with his wife in Mission, 
TX. He has degenerative disc disease of the lumbar spine status post 
lumbar laminectomy, major depressive disorder, and borderline 
intellectual functioning, which prevent him from working. He filed his 
application in September 2003. The claim was denied initially in 
November 2003 and at reconsideration in February 2004 and he requested 
a hearing a few days later. While waiting for a hearing, Mr. A's house 
burned down in November 2004. His hearing was finally held in June 
2006, more than two years after he filed his appeal. The hearing was 
continued in order to obtain a psychological consultative examination 
and a supplemental hearing was held in July 2007. The ALJ denied the 
claim and on appeal, the Appeals Council remanded the case back to the 
ALJ. During this period, Mr. A was forced to file for bankruptcy. He 
had a remand hearing in February 2009 before the same ALJ who 
previously denied his case. At the remand hearing, the ALJ announced he 
would be awarding a fully favorable decision.
     Mr. R is 48 years old and lives in San Antonio, TX. He 
has back pain, joint pain, hearing problems, Hepatitis C, and a head 
injury, which prevent him from working. He filed his application for 
benefits in January 2007. While waiting for a hearing, he became 
homeless and cannot receive proper medical attention. Mr. R has to rely 
on the kindness of friends for his basic necessities.
WISCONSIN
     A middle-aged Eau Claire area woman became disabled, when 
her knees deteriorated to the point where she needed knee replacements. 
Her knee conditions led to back problems, causing chronic pain for 
which she has to take highly potent narcotic drugs. After waiting 
nearly three years for her hearing, the ALJ allowed her case after ten 
minutes. While waiting for her hearing, her family lost their home to 
foreclosure and she had to file for bankruptcy. After the hearing, her 
attorney asked if they would have lost their home or had to file for 
bankruptcy if she had been getting her Social Security disability 
benefits sooner. Tearfully, she replied, absolutely not. To add insult 
to injury, her attorney just received a telephone message from her in 
early November 2009. Even though this client's fully favorable decision 
was dated August 31, 2009, she has still not received either her first 
check or her past due benefits. She called the Social Security District 
Office and was told it could take 90 days for the Payment Center to get 
her into pay status and to issue her payment for past due benefits.
     In early November 2009, a man from Humbird, WI, received 
his fully favorable decision, almost three years after filing his 
Social Security disability application. Unfortunately, he was served 
one day later with a Summons and Complaint to foreclose his home. (His 
monthly mortgage payment had been increased from $327 per month to over 
$900 per month, because the mortgage lender had to pay his property 
taxes last year.) He is now hoping to negotiate a redemption, but it is 
unclear whether the mortgage holder will do so. If not, he will have to 
file for bankruptcy. His attorney is hoping that the SSA Payment Center 
will not delay payment of his case, so he will have his past due 
benefits to use in his attempts to work something out with the mortgage 
holder.
     Also in early November 2009, the husband of a claimant 
from Chippewa Falls, WI, came to the wife's attorney's office to ask if 
there is anything the attorney could do to expedite payment of the 
wife's benefits. His wife had filed her application in July 2006. 
Nearly three years later, she received a fully favorable hearing 
decision, dated June 19, 2009. Five months after the ALJ found her 
disabled, she still has not received either a monthly benefit payment 
or her past due benefits. The client and the attorney's staff have 
placed calls to the SSA field office. They have been told that the 
delay is caused by the Payment Center and that all the field office can 
do is try to prod the payment center to pay the benefits.
     While waiting for his hearing, Mr. L became homeless. He 
lived in the La Crosse, WI, area and was waiting for a traveling ALJ to 
schedule his hearing in La Crosse. Over a one and a half year wait, Mr. 
L's attorney tried to expedite the hearing since he was homeless and 
winter was approaching. In January 2009, his attorney sent the ALJ 
another letter indicating that Mr. L was living in a shanty in the 
woods, hunting rabbit for food, and using a campfire to keep warm. 
Eventually, his hearing was scheduled for April 2009, but the ALJ 
approved the case without the need for a hearing. By that time, Mr. L 
had moved to another state to stay with someone.

* * * *
CONCLUSION
    As you can see from the circumstances of these claimants' lives and 
deaths, delays in decision-making on eligibility for disability 
programs can have devastating effects on people already struggling with 
difficult situations. On behalf of people with disabilities, it is 
critical that SSA be given substantial and adequate funding to make 
disability decisions in a timely manner and to carry out its other 
mandated workloads. We appreciate your continued oversight of the 
administration of the Social Security programs and the manner in which 
those programs meet the needs of people with disabilities.
    Thank you for the opportunity to testify today. I would be happy to 
answer questions.
ON BEHALF OF:

American Association on Intellectual and Developmental Disabilities

American Council of the Blind

American Network of Community Options and Resources

Association of University Centers on Disabilities

Bazelon Center for Mental Health Law

Community Access National Network (TIICANN)

Epilepsy Foundation

National Alliance on Mental Illness

National Association of Disability Representatives

National Disability Rights Network

National Health Care for the Homeless Council

National Organization of Social Security Claimants' Representatives

National Spinal Cord Injury Association

Paralyzed Veterans of America

Research Institute for Independent Living

The Arc of the United States

United Cerebral Palsy

United Spinal Association

World Institute on Disability
                                 

    Chairman TANNER. Thank you very much, Ms. Bates. Of course 
I should mention we will accept all your statements for the 
record in their entirety.
    Mr. Inspector General, welcome. You are recognized, sir.

  STATEMENT OF PATRICK P. O'CARROLL, JR., INSPECTOR GENERAL, 
                 SOCIAL SECURITY ADMINISTRATION

    Mr. O'CARROLL. Good afternoon, Mr. Chairman and Mr. 
Johnson. Thank you for calling this hearing, and giving me the 
opportunity to testify about SSA's efforts to reduce the 
backlog of initial disability claims. This has been a 
challenging time for the American economy and the American 
people. At such times, people turn to the safety net of Social 
Security in record numbers.
    In fiscal year 2009, SSA received almost 3 million 
applications for disability benefits, which was an increase of 
some 15 percent over the previous year. The State Disability 
Determination Services, or DDSs, were able to process eight 
percent more claims than the year before. However, this still 
created a net deficit, leaving the backlog at its current level 
of three-quarters of a million claims.
    One significant threat to SSA's efforts to decrease this 
backlog has been the furloughing of DDS employees by states 
struggling with budget issues. Federal regulations discourage, 
but do not prohibit, this practice. To date, nine states are 
furloughing all of their DDS employees, and three states are 
furloughing some of their DDS employees. In states furloughing 
all DDS employees, this has created a 14 percent shortfall of 
capacity for processing applications.
    In our report, ``Impact of State Budget Issues on SSA's 
Disability Programs,'' issued earlier this week, we estimate 
that the furloughs will cause delays in 69,000 claims, and 
delays in issuance of $126 million in benefits to those in 
need.
    Also troublesome from an integrity perspective is the 
resulting increase in the backlog of medical continuing 
disability reviews, or CDRs. These reviews result in program 
savings of $10 for every dollar that's invested. Resources that 
could be used for CDRs are being reallocated to processing 
initial claims, and program dollars are lost.
    Significant efforts have been made to limit the impact of 
the furloughs. The Commissioner contacted all the state 
governors and many state legislators. Vice President Biden 
wrote to the National Governors' Association. There was even 
litigation in California that sought to preclude the furloughs.
    As a result of these and other efforts, two states exempted 
their DDSs from the furloughs, and three states partially 
exempted their DDS employees, saving another 11,000 claims and 
$24.4 million from being delayed. SSA has hired 192 new staff 
for Federal units that process initial claims. The Agency 
transferred cases facing delays from states to those Federal 
units to ensure timelier processing.
    SSA should be commended for its efforts to minimize the 
impact of state furloughs and other hiring and staffing issues. 
Still, these state actions have clearly resulted in delays and 
increased the backlog.
    SSA staffing is another issue critical to the reduction of 
this backlog. Congress was aware of the increased workload that 
the economic downturn would engender when it passed the 
American Recovery and Reinvestment Act. The act provides $500 
million to SSA to process retirement, disability, and survivors 
insurance workloads, and SSA has put that money to good use.
    Of the $500 million, SSA invested $251 million in its 
office of operations, which has now hired 1,531 additional 
staff. We reviewed SSA's plan for these funds, and found that 
the plan and the placement of the new hires was appropriate. 
Most of the other $249 million was invested in hiring 300 
additional staff in the DDSs, and 35 ALJs and 556 support staff 
in the Office of Disability Adjudication and Review. We are now 
conducting similar reviews of SSA's use of these funds.
    Finally, I would be remiss if I didn't use this opportunity 
to encourage continued vigilance, with respect to program 
integrity. In attending to the backlog of initial claims, it is 
critical that SSA and the DDSs continue to conduct CDRs and 
refer suspicious claims to the OIG's cooperative disability 
investigative units and field divisions.
    The efforts that Congress, SSA, and the OIG have put 
forward are important elements in ensuring that the backlog of 
initial claims is ultimately reduced to an acceptable level. I 
pledge the OIG's continued support in this effort, and I thank 
you for the invitation to be here today. I will be happy to 
answer any questions.
    [The prepared statement of Mr. O'Carroll follows:]

   Prepared Statement of The Honorable Patrick O'Carroll, Inspector 
                General, Social Security Administration

    Good morning, Mr. Chairman, Mr. Johnson, and Members of the 
Subcommittee. As always, it's a pleasure to appear before you, and I 
thank you for the invitation to be here today. I've appeared before you 
several times to discuss the backlog of disability appeals, and the 
Social Security Administration's (SSA) efforts to reduce that backlog 
to ensure that appellants eligible for benefits receive them in as 
timely a fashion as possible. Today, we are looking at SSA's backlog in 
initial disability claims, a backlog of over three-quarters of a 
million people currently waiting for sorely needed benefits.
    The past two years have been challenging ones for the American 
people, as the economy struggled. In times such as these, people turn 
in ever-increasing numbers to the world's largest social insurance 
program. In Fiscal Year (FY) 2009 alone, SSA received almost 3 million 
initial disability claims, an increase of 15 percent over FY 2008. 
These numbers challenge SSA's ability to provide world-class service 
delivery, creating workloads that exceed resources and causing delays 
and backlogs. These numbers also create challenges for both SSA and the 
Office of the Inspector General (OIG) with respect to stewardship, as 
we strive to ensure that only those eligible for benefits are granted 
them.
    To make the challenges even more daunting, the financial strain on 
the states caused by the faltering economy have resulted in furloughs 
that further slow the application process; and the increase in 
applications has forced the dedication of resources to processing 
applications, rather than conducting medical continuing disability 
reviews (CDR) or work CDRs, or taking other steps to ensure integrity.
    It is critical that Congress and the American people have reason to 
be confident that Social Security benefits will be provided to those 
who need them, and equally confident that their tax dollars are being 
spent well and wisely. The OIG is at work on both sides of this 
equation, helping SSA to maintain its high level of service through 
timely audits and recommendations, while also acting as a watchdog, to 
ensure that benefits are paid properly, and that appropriated resources 
are used as intended.
    Congress was certainly well aware of the challenges SSA would face 
in the current economy when it provided SSA with $500 million under the 
American Recovery and Reinvestment Act (ARRA) to process disability and 
retirement workloads, as well as $500 million to replace the National 
Computer Center and $90 million to process one-time economic recovery 
payments of $250 to beneficiaries. The OIG received $2 million to 
ensure that these funds were used properly, and I'd like to share some 
of our work in that area today.
    The funds provided to SSA to process initial claims were critical. 
As I mentioned, the current disability backlog stands at over three-
quarters of a million applications--some 38 percent higher than a year 
ago. This resulted from a 15 percent increase in claims filed, against 
only an 8 percent increase in claims actually processed by the State 
Disability Determination Services (DDS). These delays are caused not 
only by the increase in applications, however, but also by State 
furloughs, staffing problems, and other issues.
    The furloughs are particularly troublesome. Federal regulations 
discourage furloughs of DDS personnel, but this has not stopped 
furloughs from occurring. To date, nine states are furloughing all 
their DDS employees and three states are furloughing some DDS 
employees.
    In states that are furloughing all of their DDS employees, this has 
created a 14 percent shortfall of capacity for processing claims. In 
our report, Impact of State Budget Issues on SSA's Disability Programs, 
issued earlier this week, we estimate that the furloughs have caused 
delays in 69,000 claims, and delays in the issuance of $126 million in 
benefits to those in need. In addition to the furloughs themselves, 
other issues are contributing to this impact. Certain states have 
encountered high attrition rates among DDS employees, others have 
encountered pay freezes, and still others have hiring practices that 
are problematic.
    The Commissioner has made significant efforts to limit the impact 
of furloughs, and was able to make some progress. He contacted all of 
the State Governors and many State legislators. Vice President Biden 
wrote to the National Governors' Association, and there was even 
litigation in California that sought to preclude furloughs.
    As a result of these and other efforts, two States exempted their 
DDSs from State employee furloughs, and three States partially exempted 
DDS employees, saving another 11,000 cases and $24.4 million from being 
delayed. Several more States fully or partially exempted DDSs from 
hiring restrictions. Additionally, SSA hired 192 new staff for Federal 
units that process initial claims, and transferred cases facing delays 
from States to those Federal units to ensure timelier processing.
    While SSA should be commended for its efforts to minimize the 
impact of State furloughs and other hiring and staffing issues, it is 
indisputable that these State actions have resulted in delays and kept 
benefits out of the hands of those in need.
    Staffing at SSA is another critical factor in timely processing of 
applications, and the ARRA funds provided for that purpose have been 
put to use. Of the $500 million allocated to this purpose, SSA 
allocated $251 million to its Office of Operations, which is using the 
funds to process disability and retirement workloads. Operations hired 
1,531 new employees, and authorized the use of overtime pay to keep 
pace with applications.
    The Office of Management and Budget issued guidance on spending and 
accounting for ARRA funds, and this guidance included the publication 
of detailed plans for use of the funds. The OIG just issued a report 
evaluating SSA's plan for the $251 million allocated to the Office of 
Operations. Overall, we found that the plan was appropriate, and the 
placement of new hires was based on appropriate factors.
    The remaining $249 million was primarily directed to the DDSs, 
which hired 300 additional employees, and the Office of Disability 
Adjudication and Review, which hired 591 employees, of which 35 were 
Administrative Law Judges and 556 were new support staff. The OIG is 
conducting audits of the plans for the DDS' and ODAR's use of ARRA 
funds, similar to the audit conducted of the Operations plan.
    SSA's efforts to minimize the impact of State budget shortfalls, 
and its initial efforts with ARRA funds, have been important steps in 
ensuring that initial applications encounter as few delays as possible, 
but more needs to be done. While additional resources would be of 
significant immediate benefit, there are long-term issues that can be 
addressed to prevent future backlogs.
    For example, SSA received $500 million in ARRA funds to replace the 
National Computer Center (NCC), SSA's aging repository for the data and 
electronic processes that enable SSA to pay benefits to 50 million 
Americans. Replacement of the NCC is critical to the future of the 
Social Security system.
    The OIG is monitoring SSA's progress. At present, we continue to 
await specifications for the project, which we intend to subject to 
rigorous review. Our reports will ultimately be published on our 
website, as well as Recovery.gov, and we will remain involved in the 
process until a new data center is complete and operational.
    Infrastructure and hardware, however, are only part of the 
equation, as SSA's primary data applications require modernization. 
SSA's attempts to upgrade its software to improve service delivery and 
stewardship are ongoing, but need to be given a higher priority. It is 
important that SSA consider all software options carefully and ensure 
that it is taking the best approach. As we point out in our Financial 
Statement Audit, consideration must be given to the benefits gained 
from the administrative funds transferred to SSA's IT budget each year. 
In addition, the OIG strongly supports giving SSA's Chief Information 
Officer sufficient delegated authority and resources to fulfill 
required security responsibilities.
    Since I have mentioned two of the three ARRA mandates given to SSA, 
let me briefly state that the OIG also reviewed SSA's use of the $90 
million provided to process one-time $250 stimulus payments. We found 
that SSA implemented a comprehensive process to identify and report 
these costs, and met OMB's requirements for transparency and 
accountability. The process was not without its challenges, however, 
including the issuance of checks to some ineligible prisoners and 
deceased beneficiaries. While perfection is an unreasonable 
expectation, improvements can be made legislatively and procedurally to 
tighten the process for future stimulus payments.
    The primary focus of this hearing, however, is the disability 
application backlog, and in addition to the efforts I described 
earlier, SSA has made other inroads toward streamlining the initial 
disability determination process, reducing the backlog and, more 
importantly, getting benefits into the hands of those who qualify, and 
need them, as quickly as possible:

          Compassionate Allowances provide expedited approval 
        to disability applicants with confirmed diagnoses of certain 
        severe impairments. These Allowances let SSA quickly target the 
        most obviously disabled individuals for benefits based on 
        objective medical information that SSA can obtain quickly.
          Quick Disability Determinations (QDD) are cases that 
        are electronically identified as having a high potential that 
        the claimant is disabled, when evidence of the claimant's 
        allegations can be easily and quickly obtained, and when the 
        case can be processed quickly in the DDS. These cases are 
        prioritized for fast turnaround. We estimate that the 
        Compassionate Allowances and QDD initiatives will account for 
        approximately 3.7 percent of initial disability claims.
          Additional Administrative Law Judges and hearing 
        office support staff have been hired by SSA, and the 
        recommendations from our draft report, Hearing Office 
        Performance and Staffing, are being considered in ensuring that 
        staffing ratios in SSA hearing offices are optimized to make 
        the most of the new ALJ corps.
          SSA is developing a multi-year plan to reduce the 
        initial claim backlog. According to SSA, the key components of 
        this plan are:

                  increased adjudicatory capacity in the DDSs 
                and Federal processing components;
                  improved efficiency through automation;
                  expedited IT investments to optimize systems 
                performance;
                  expanded use of screening tools to assist in 
                identifying likely allowances; and
                  refined policies and business processes to 
                expedite case processing.

    The OIG will review the Agency's plan when it is available, and 
will monitor its progress closely.

          SSA has instituted a Senior Attorney Adjudicator 
        Initiative, which allows attorney adjudicators to issue fully-
        favorable on-the-record decisions. The goal is to expedite 
        decisions while preserving ALJ resources for the more complex 
        cases that require a hearing.
          SSA has also instituted an Informal Remand 
        Initiative, in which a hearing office can return a denied claim 
        to the DDS for review of the previous determination when there 
        is a strong likelihood that the denial will be reversed, again 
        saving hearing resources for more complex cases.

    Finally, I would be remiss if I did not point out that integrity 
continues to be a primary focus of the OIG. Our continuing support for 
increasing the number of CDRs has never wavered. As important as it is 
to ensure that applicants are eligible for benefits at the time of 
their initial application, it is equally important to ensure that they 
remain eligible as time goes by. However, SSA is expecting to have a 
backlog of 1.5 million medical CDRs by the end of FY 2010. SSA had 
eliminated the CDR backlog when Congress provided the Agency dedicated 
funding that could only be used for CDRs. After that funding ran out in 
FY 2002, the backlog grew again. When SSA performs a full medical CDR, 
it costs about $1,000, but provides an estimated return on that 
investment of $10 to $1.
    Similarly, the Cooperative Disability Investigative program, or 
CDI, is an important ingredient in the integrity formula. The CDI 
Program began in Fiscal Year 1998 as a joint effort by the SSA and the 
OIG, in conjunction with the DDS and State or local law enforcement 
agencies, to effectively pool resources for the purpose of preventing 
fraud in SSA's Title II and Title XVI disability programs and related 
Federal and State programs. In 1998, the CDI Units became operational 
in 5 states. The program currently consists of 20 units located in 18 
states, with 2 additional units to become operational in FY 2010. Since 
its inception, the CDI program has closed 26,448 cases, and generated 
about $1.35 billion in SSA program savings and another $829 million in 
non-SSA savings.
    As more individuals apply for benefits, allegations to these 22 CDI 
units across the country will increase. These units play a key role in 
ensuring that, while reducing the backlog of disability claims, SSA and 
the DDSs have an avenue available to them to further explore claims 
that may be suspicious or lack sufficient information to make a 
determination. Thus, the CDI program helps maintain the level of 
accuracy and integrity in these programs that the American public 
deserves.
    In summation, the OIG is dedicated to working with Congress and SSA 
to reduce the backlog of disability claims, and to ensuring that this 
takes place in an environment in which efficiency, integrity, and 
transparency are paramount. SSA's efforts to date are commendable, and 
we look forward to continuing to assist in this critical undertaking. I 
thank you again for the invitation to speak with you today, and I'd be 
happy to answer any questions.
                                 

    Chairman TANNER. Thank you very much, Mr. Inspector 
General.
    Ms. Robert, we are delighted you are here, and glad to hear 
from you in your capacity on the Disability Determination 
Services. So, welcome. Thank you for being here.

STATEMENT OF ANN P. ROBERT, VICE PRESIDENT, NATIONAL COUNCIL OF 
   DISABILITY DETERMINATION DIRECTORS, SPRINGFIELD, ILLINOIS

    Ms. ROBERT. Thank you very much, Mr. Chairman, Mr. Johnson. 
My name is Ann Robert, and I am honored to be here on behalf of 
the National Council of Disability Determination Directors. The 
NCDDD is comprised of managers and directors of the State DDSs.
    As you have heard today, the state DDSs process all kinds 
of claims, including initial applications, reconsiderations, 
and continuing disability reviews. You have also heard today 
about the increases in the initial applications. While there 
have been increases in recent years in funding for SSA--and the 
NCDDD thanks Congress for the resources that the DDSs have 
received to assist in giving the good public service that they 
have--those resource needs are certainly going to continue, in 
light of the increased applications.
    What's complicating the Disability Determination Services' 
ability to handle those increasing workloads are some of the 
other things that you've heard about today. For example, the 
furloughs. Despite the Commissioner's efforts to exempt all DDS 
employees from those furloughs, all of his attempts have not 
been successful.
    What a furlough costs is not just problems in processing 
time, or problems in working claims, but it also costs dollars 
from the State. You heard that today. For example, a one-day 
furlough in the State of Ohio costs the state $345,000 in 
administrative funding, $149,900 in delayed monthly benefits to 
claimants, and impacts 731 claims. So you can see that the 
impact of even one day of furlough is significant.
    While SSA has authorized hiring in the DDSs, the hiring has 
not always been optimized, because some other states have 
freezes and delays in hiring. Other states have been able to 
hire.
    But with hiring, you don't get immediate results for 
increased capacity or productivity. The Social Security 
disability program is complex, and requires significant 
training to bring an examiner to the point where they're 
independent and productive. The initial learning curve, coupled 
with the problems with attrition that the DDSs currently 
encounter are impacting the DDSs' ability to process this 
workload.
    Now, it's been interesting, as the DDSs move forward, they 
have always--even with limited resources--processed cases, 
stepped up to the plate, provided good public service. The days 
of increased applications currently--and as we move in the 
future--provide significant challenges to the DDSs, which 
certainly will require some additional funding.
    The Social Security Administration has requested, and 
Congress has provided, additional funding for technology. 
Technology forms a very important basis for improving claim 
processing, and it is critical that that funding continue to 
provide the capacity and the capability to provide good public 
service through an efficient and quality case-processing 
system.
    You've heard from the Commissioner today about a couple of 
the initiatives: the DCPS, or the common case processing 
system; the QDD and CAL initiatives, and also eCAT. Those 
initiatives are important. They combine both technology and 
policy. NCDDD supports the continuation of those initiatives, 
and will work with SSA for the further development and roll-out 
of all of those initiatives in the DDSs.
    Social Security is working right now on a----
    Chairman TANNER. If you did all that from memory, you're 
pretty impressive.
    [Laughter.]
    Ms. ROBERT. It's what we lawyers do, isn't it?
    Social Security is working right now, as you heard from the 
Commissioner, on workload planning issues. You have also heard 
from him how they are creating some ESTs, or extended service 
teams, which will provide national resources to some of the 
DDSs needing assistance. It's very critical that the DDS 
community be involved in every part of this process.
    State DDSs are used to doing workload sharing, and helping 
out with additional workloads. In fact, we helped with the ODAR 
reduction by taking some informal remand cases. But 
transferring cases from state to state can be both politically 
sensitive and technologically challenging. So, this move must 
move forward with much caution and much collaboration by the 
DDSs.
    NCDDD will continue to work with the SSA in development of 
an operational plan that is cost efficient, that is cost 
effective, ensuring success to address the workload while 
providing good, quality service, and program stewardship.
    We want to thank Commissioner Astrue for his collaboration 
and support of the DDS community. We want to thank this 
committee for their support of the funding for the Social 
Security Administration that assists the DDSs, and we also look 
forward to enhancing the partnership of the Federal-State 
relationship.
    So, in closing, the need for additional resources comes in 
a variety of ways. Certainly we need funding for staffing. We 
also need additional funding to continue with the initiatives, 
and funding for the robust infrastructure that needs to support 
this case processing system that can handle all these claims.
    So, thank you, Mr. Chairman, for inviting me to come here 
today, and for all your work in this regard.
    [The prepared statement of Ms. Robert follows:]

 Prepared Statement of Ann P. Robert, Vice President, National Council 
      of Disability Determination Directors, Springfield, Illinois

    Chairman Tanner, Mr. Johnson, Members of the Subcommittee, my name 
is Ann Robert and I am honored to have this opportunity to appear on 
behalf of the National Council of Disability Determination Directors 
(NCDDD) to comment on the effect of SSA's unprecedented backlog of 
disability claims, the agency's efforts to address those challenges, 
the impact of the recession on disability claims processing, and the 
ongoing need for adequate resources to address these issues.
    The National Council of Disability Determination Directors (NCDDD) 
is a professional association composed of the Directors and managers of 
the Disability Determination Services (DDS) agencies located in each 
state, the District of Columbia, Puerto Rico, and the Virgin Islands. 
Collectively, members of the NCDDD are responsible for directing the 
activities of approximately 15,000 employees who process nearly 4 
million claims per year for disability benefits under the Social 
Security Act. NCDDD goals focus on establishing, maintaining and 
improving fair, accurate, timely and cost-efficient decisions to 
persons applying for disability benefits. The mission of NCDDD is to 
provide the highest possible level of service to persons with 
disabilities, to promote the interests of the state operated DDSs and 
to represent DDS directors, their management teams and staff.
    The DDSs are entirely federally funded by SSA and make medical 
determinations for the Social Security disability programs. The DDSs 
adjudicate various claim types including initial applications, 
reconsiderations, and continuing disability reviews. Many SSA 
executives have referred to the DDSs as the ``best bang for the buck'' 
in promoting governmental efficiency and effectiveness. NCDDD believes 
the Federal-State relationship is an important piece of the solution to 
addressing the increasing backlog of disability claims.
    NCDDD appreciates the increases in SSA funding over the past few 
years and sincerely thanks Congress for the resources to assist the 
DDSs in providing the needed and necessary service to those Americans 
reaching out for help in desperate and difficult times. The recent 
funding increase has resulted in a decrease in the backlog and 
processing time at the hearings level. The DDSs received additional 
funding for overtime which they utilized for the Informal Remand 
process to assist ODAR with the backlog reduction.
    The DDSs have seen a significant increase in the filing of initial 
disability claims which started in early FY 2009 as Baby Boomers 
predictably began to leave the workforce in their disability prone 
years and the nation began to experience the consequences of the 
economic downturn. As workers unexpectedly lost their jobs, they sought 
any other source of income, including Social Security disability 
benefits. Between the end of FY 2008 and the end of FY 2009, the number 
of initial claims has increased 14.8%. The total number of initial 
pending claims is expected to exceed one million by the end of FY 2010.
    The full or partial furlough of DDS staff in several states has 
added additional hardship to processing the disability workload. These 
furloughs have continued despite the support of the Administration and 
the committed leadership and support of Commissioner Astrue to exempt 
these federally funded DDS employees from the furloughs. Currently 
there are thirteen (13) states with full or partial furloughs. These 
furloughs compromise efforts by DDS staff to allow claims, including 
extreme hardship claims, and the ability of the DDS to provide the 
necessary public service. A one (1) day furlough can cost a state like 
Ohio $345,000 in administrative funding and $149,900 in delayed monthly 
benefits while impacting 731 claims. In other cases, DDSs have not been 
able to optimize all the hiring authorized by SSA due to a state-
imposed hiring freeze or state hiring delays.
    SSA has requested significant funds to process the disability 
workloads and Congress has generously provided these funds. While the 
DDSs have worked to hire to optimal levels, the increasing complexity 
of the disability program criteria requires approximately 12-18 months 
of experience in the program for a disability examiner to become fully 
independent and productive. Therefore, hiring does not immediately 
translate to increased capacity and productivity. This initial learning 
curve, coupled with the current attrition in the DDSs (12.3% annually) 
is a significant challenge for the state DDSs in maintaining a 
qualified and experienced workforce. Historically, despite limited 
resources, the DDSs have worked to provide the much needed public 
service. However, the rising number of applications and the limited 
ability to hire and retain qualified and trained staff will have 
significant negative impact for the DDSs and the public we serve.
    SSA has, for the past few years, looked for ways to utilize 
technology to provide greater capacity and more efficient claim 
processing. The move to electronic claim processing was a significant 
task and one that came with some difficulty but much benefit to the 
disability claimant and to those components adjudicating disability 
claims. SSA has continued to request funds for technology and those 
funds have been and continue to be critical to ensuring the necessary 
capacity and capability to provide not only efficient but also high 
quality service to which the American public is entitled.
    Currently SSA has various initiatives combining policy and 
technology which have the potential to improve claim processing on 
several levels. The Disability Case Processing System (DCPS) is a SSA 
initiative partnering and collaborating with the States to design a 
case processing system to be used by all Disability Determination 
components. This case processing system should, when complete, provide 
a comprehensive process to produce efficiencies. DCPS must have 
sufficient infrastructure to provide a robust system that is stable, 
available, and responsive. DCPS should facilitate case processing not 
only in an individual DDS but when the need arises to assist with 
future workload challenges between Disability Determination components. 
The Quick Disability Determination/Compassionate Allowance (QDD/CAL) 
initiative is a process which allows the system to prioritize cases 
through technology providing for early identification of cases with a 
high potential of allowance thereby delivering expeditious service to 
those in desperate need. Another important but separate initiative of 
SSA is the Electronic Case Analysis Tool (eCAT). This tool can assist 
an examiner in working through a complex claim to reach the correct 
decision at the earliest point in the process. NCDDD supports each of 
these initiatives and will continue to work with SSA to further 
develop, refine, and roll out these processes.
    SSA has begun planning for the potential to achieve greater 
capacity to address additional claims. The strategies are, necessarily, 
multifocal and involve both state and federal components. For example, 
SSA has funded four DDSs to create Expanded Service Teams (EST) to 
produce work as a separate entity and as a ``national resource'' with a 
yet to be finalized methodology as to how states will quality for 
assistance and how this process would impact productivity for any 
affected component.
    The DDSs have a long and successful history of working 
cooperatively to assist with other workloads on an informal basis. With 
this background of success, the DDS community should be actively 
involved in all discussions to determine the best methodologies to 
provide assistance to any state while keeping in mind our primary focus 
of providing the best public service possible. Transferring work from 
state to state or to other components is both politically sensitive and 
frequently a technologically challenging venture that needs to be 
considered cautiously. Any plan to address the workload should be 
replete with appropriate mechanisms to assure accountability and 
consistency in decision-making regardless of which State Agency or 
federal disability component processes the claim. NCDDD will continue 
to advocate for DDS involvement in this plan and for a process that is 
well researched. NCDDD will assist in identifying and resolving 
potential problems or obstacles to ensure an efficient and effective 
process for those involved in this work flow process and those affected 
by it.
    SSA is facing unprecedented increases in workload and requires an 
appropriate level of funding to continue to serve the American public 
with timely and accurate decisions, for both new applications and 
continuing disability reviews. SSA and the DDSs must receive adequate 
resources to provide necessary staffing, continue important 
initiatives, and provide a robust infrastructure that delivers the 
system stability and availability for claim processing. NCDDD stands 
ready to work cooperatively with the SSA in developing an efficient, 
consistent, and cost-effective operational plan that will ensure the 
success of addressing this unprecedented workload while continuing to 
provide quality public service and program stewardship. We would be 
remiss if we did not publicly acknowledge the outstanding and 
unwavering support that Commissioner Astrue has provided to the DDS 
community. His collaboration and partnership have been invaluable to 
the identification of solutions and successes in the disability 
process.
    Mr. Chairman. On behalf of NCDDD, thank you again for the 
opportunity to provide this testimony. NCDDD has a long track record of 
success working with SSA to provide the highest level of service. I 
hope that this information is helpful to the Subcommittee. NCDDD is 
willing to provide any additional assistance you may need and I would 
be happy to answer any questions you may have.

                                 

    Chairman TANNER. Thank you very much, Ms. Robert. We agree 
that your organization has to be a critical part of this.
    Judge Auerbach? Your Honor, you are recognized.

 STATEMENT OF LARRY A. AUERBACH, ADMINISTRATIVE LAW JUDGE, ON 
    BEHALF OF THE FEDERAL BAR ASSOCIATION, ATLANTA, GEORGIA

    Judge AUERBACH. Thank you, Mr. Chairman. I am Larry 
Auerbach, from the Atlanta downtown hearing office of Social 
Security, and I believe I am required to give the disclaimer 
that I am not speaking on behalf of Social Security or the 
Federal Bar Association, but rather, the Social Security 
section of the Federal Bar Association.
    There has been, as there has to be, a lot of talk about 
statistics and data here. That is how we gauge what the problem 
is, and how we gauge our success in dealing with the problem. 
But Congressman Kind and Ms. Bates each talked about 
individuals who suffer because of the delay.
    As a judge, it is sadly common that I see individuals who 
are suffering those losses, individuals whose medical notes 
indicate that surgery is needed, but can't be done until 
disability is approved; individuals who are not taking their 
diabetes medication or their hypertension medication, because 
of a lack of funds while they are waiting on the approval of 
their disability.
    These people don't just suffer at that time, but their 
disabilities, which might sometimes be temporary, become 
permanent disabilities while they are awaiting adjudication. 
That's a devastating blow to those individuals, and it's also a 
blow to the American taxpayers, who will then be funding 
disability payments for these individuals and health care costs 
for the rest of their lives.
    I have seen individuals who have lost their homes, lost 
their cars while they are waiting on their determination. 
Without a car, people often don't have access to medical care. 
Without homes, they lose safety, stability for themselves and 
their families. Sadly, we find too often that we can't even 
find the individuals to notify them that their day in court has 
finally come.
    The human face of this is tragic. It has, as has been noted 
by everyone here, improved dramatically. When I started just 
three-and-a-half years ago as a judge with Social Security, the 
average claimant that I saw had applied for benefits about four 
years before the date of his hearing. Today, I am seeing 
claimants who applied about two years before the date of the 
hearing. That's still a really long time, and, tragically, too 
long.
    Progress has been made because of support from Congress and 
support from this committee, and initiatives that Commissioner 
Astrue talked about. The Social Security section applauds 
those. The improved technology has been a great benefit. The 
increased numbers of Administrative Law Judges and, just as 
importantly, the increased number of staff, has been vital to 
reducing the backlog and the wait times.
    Judge Cristaudo, who was here earlier, sitting behind the 
Commissioner, and his team have done a lot to implement the 
Commissioner's plans, but if you look at the data, some of 
which are cited in my written testimony, there is a wave of 
claims being filed now with the state DDSs. The resources now 
will not accommodate that wave.
    What will happen is that the backlogs will increase, the 
wait times will increase, and the tragic effects on human 
beings will increase, unless there is decisive action. In my 
written testimony there are a number of specific 
recommendations. The DDSs--and I know they are well represented 
here--they have been overburdened for years. With the increased 
load, they will be further overburdened.
    The Social Security section would support some 
congressional action to prevent the furloughs at DDS--not any 
particular bill; I'm not familiar with the specific bill which 
has been proposed, but we would support some action to prevent 
these State employees from being furloughed.
    We also think there is a need for improved adjudication at 
DDS to mitigate the problems and the downstream flow that comes 
to the hearing offices. I believe it was Congressman Becerra 
who talked about consistency. There really isn't consistency in 
state DDSs. If a claimant from your home State of Tennessee or 
my home State of Mississippi were to take the bridge right 
across the Mississippi River to Arkansas, their chance of 
initial approval would go up by 50 percent. That's really an 
unacceptable result. Justice, simple justice, demands that 
there be more consistency in the program.
    And we would urge that Congress ensure that Social Security 
Administration has the authority and has the mandate from 
Congress to remedy that. That needs to be done by closer 
oversight, the resources for that oversight, and enforcement 
action, training, or whatever is necessary.
    We fully support the improved increased technology that 
Social Security has implemented. It's been a tremendous 
benefit, having electronic files. I can conduct hearings in 
three states in one week without ever leaving Atlanta. That's a 
great benefit. But we have to remember that every case is a 
human being who needs his day in court, who needs his due 
process, and who needs to be able to tell an impartial judge 
his story.
    Technology can't do everything. Only people can do it, 
people who have the time, the ability, and the willingness to 
stop and listen and understand the details of that individual's 
case and their medical history.
    I believe the inspector general covered most of what I 
wanted to say about continued disability reviews. But I would 
like to point out that, beside being a tremendous benefit to 
the taxpayer, saving $10 for every $1 spent, they are also, in 
a way, are a benefit to the claimants. Claimants who know that 
they will face a continuing disability review are provided an 
added incentive to take advantage of medical care, vocational 
services, and other services to get themselves back into the 
workforce. Sometimes they need that extra push.
    But part of that process is that claimants who disagree 
with the findings have a right to a due process hearing before 
an administrative law judge. So we have to understand that when 
we fund CDRs, we also have to fund the judges and the staff to 
hear those disability claims.
    Thank you, Mr. Chairman, Mr. Johnson, for your time. I 
would be happy to answer any questions.
    [The prepared statement of Judge Auerbach follows:]

 Prepared Statement of The Honorable Larry A. Auerbach, Administrative 
 Law Judge, on behalf of the Federal Bar Association, Atlanta, Georgia

    I am Larry Auerbach and I am appearing here on behalf of the Social 
Security Section of the Federal Bar Association. I am an Administrative 
Law Judge (``ALJ'') in the Office of Disability Adjudication and Review 
of the Social Security Administration in the Atlanta, Downtown hearing 
office. While having only been an ALJ for three and one-half years, I 
have heard and decided approximately 1,700 appeals. Prior to becoming 
an ALJ, I was an attorney for 27 years with the Office of the 
Solicitor, U.S. Department of Labor; during the last 12 of those years 
I served in various management positions, including Deputy Regional 
Solicitor.
    I am pleased to be here today representing the Social Security 
Section of the Federal Bar Association. My remarks are exclusively 
those of the Social Security Section and do not necessarily represent 
the views of the Federal Bar Association as a whole. Moreover my 
remarks do not reflect the views of the Social Security Administration.
    Unlike other organizations associated with Social Security 
disability practice that tend to represent the interests of one 
specific group, the Federal Bar Association's Social Security Section 
embraces all attorneys involved in Social Security disability 
adjudication.\*\
---------------------------------------------------------------------------
    \*\ Our members include Attorney representatives of claimants, 
Administrative Law Judges, Administrative Appeals Judges, staff 
attorneys in the Office of Disability Adjudication and Review, 
attorneys in the Social Security Administration's Office of General 
Counsel, U.S. Attorneys and Assistant U.S. Attorneys, U.S. Magistrate 
Judges, District Court Judges, and Circuit Court Judges.
---------------------------------------------------------------------------
    The common focus of the FBA's Social Security Section is the 
effectiveness of the adjudicatory process at all phases including 
hearings in the Office of Adjudication and Disability Review (ODAR), 
the appeal process before the Appeals Council, and judicial review 
through the federal courts. Our highest priority is ensuring the 
integrity, fairness, independence, and effectiveness of the Social 
Security disability adjudication process to those it serves--both 
Social Security claimants themselves and the American taxpayers who 
have an interest in ensuring that only those who meet the criteria for 
eligibility receive these benefits.
    We appreciate the continuing commitment that the Social Security 
Subcommittee has shown for fair and effective adjudication of 
disability claims. As we will discuss in more detail below, your 
support has enabled the Social Security Administration to reverse the 
long-standing trend toward increased backlogs and longer wait times. 
Most importantly, this is being done without sacrificing due process. 
We strongly believe that the growing disability claims workload can, 
and indeed must, be addressed without limiting claimants' opportunity 
for full due process at every stage. In fact, we believe that affording 
due process at every stage is essential to fulfilling the 
Commissioner's objective of reaching the right decision at the earliest 
possible stage of the process. The ODAR hearing before an impartial 
judge is the method by which claimants have an opportunity to tell 
their story. This right must never be abridged.
    Increased staff and improved technology have had a dramatic and 
positive effect on the disability appeals process. By way of example, 
in October 2009 ODAR had 66,200 case dispositions. This is an increase 
of almost 60 percent from October 2007 when there were 41,361 
dispositions. We applaud Congress for the funding which has made this 
possible. Nevertheless, delays remain at unacceptable levels. 
Furthermore, increases in applications will strain even the increased 
resources. A growing adjudicatory backlog is foreseeable unless 
significant additional resources are provided.
    When we speak of anticipated increases in case filings due to the 
difficult economy, it is important to note that this is not based on 
mere speculation. ODAR hears cases which have been appealed from state 
Disability Determinations Services and in 2009 alone, there was a 38 
percent increase in the number of disability claims received by these 
state agencies. As we will discuss in more detail, projections call for 
even greater increases in coming years.
    We thank the Social Security Subcommittee for holding this hearing 
and for keeping the attention of the American public on the problems 
faced by hundreds of thousands of Americans who too often wait years 
for a determination of their claims. The Social Security 
Administration's Inspector General has reported that the long waits 
adversely affect as many as 80 percent of all claimants, with 30 
percent saying that the long waits impacted their access to health 
care.
    As a judge, I see the human face of these statistics. Few days pass 
during which I do not see severely disabled individuals who have 
suffered serious and even irreparable physical, emotional and economic 
harm while awaiting a decision. It is sadly common to see medical 
treatment notes which state, for example, that:

        1.  A claimant is awaiting approval of disability benefits so 
        he can have necessary back surgery.
        2.  A claimant could not afford his diabetes medication and has 
        now developed irreversible neuropathy or retinopathy.
        3.  A claimant's psychiatric condition has deteriorated because 
        of the lack of funds for therapy and medication.

    It is also common to see individuals who have lost homes and cars 
while awaiting a benefits determination. The losses do not just result 
in the loss of creature comforts for claimants. They result in the loss 
of safe and secure housing, the loss of transportation to medical care, 
and even the loss of a stable address where claimants can be contacted 
regarding their health or the status of their disability claim.
    It is important to avoid viewing that disability adjudication 
process as merely cold numbers and statistics. Each case represents a 
human being, and often a family, whose lives are on hold awaiting a 
decision. The time spent in each stage of the claims process--from 
initial application to final determination--is a seemingly endless wait 
to those in need. The maxim, ``Justice delayed is justice denied,'' is 
never more true than in the disability adjudication process.
    We commend the Commissioner on the great strides which have been 
made in reducing the backlog and reducing wait times. The Commissioner 
is in the fourth year of an ambitious program ensuring that those 
claimants who have waited the longest have their claims adjudicated. In 
the first year of this program, the Commissioner directed that all 
claimants whose hearing requests would have been pending for 1000 or 
more days received ALJ decisions by the end of fiscal year 2007. Each 
year, the Commissioner has set his goal as shortening this time, and he 
has achieved each goal.
    The current goal is that by the end of fiscal year 2010, ODAR will 
have held hearings and issued decisions for every claimant whose 
request for hearing would be 800 days old by that date. The goal is to 
ensure that all claimants who requested a hearing on or before July 18, 
2008 receive an ALJ-issued decision by September 30, 2010. This goal is 
achievable, but we must note that upon meeting this goal we will still 
have claimants who have waited for a decision well over two years since 
their request for hearing. It is also important to remember that these 
claimants all have been through the mandatory state Disability 
Determination Service (``DDS'') administrative process prior to 
requesting a hearing, a process that commonly takes six months to one 
year.
    Our testimony today advances five recommendations:

    1.  State Disability Determination Services should be provided 
significantly enhanced resources.
    2.  SSA should continue to hire Administrative Law Judges and 
support staff, and add needed hearing offices.
    3.  SSA should continue to develop and implement improved 
technological and other initiatives.
    4.  New efforts are needed to accomplish the Commissioner's goal of 
making the right decision at the earliest possible stage.
    5.  Continuing Disability Reviews should be fully funded at every 
stage of the process.

    Let's examine each of these recommendations:

1.  State Disability Determination Services should be provided 
        significantly enhanced resources.
        Initial disability determinations are made by state Disability 
Determination Services. These state agencies are funded by the Federal 
Government. Only claimants who are denied fully favorable decisions by 
these agencies may request hearings before an Administrative Law Judge 
in ODAR. These DDS decisions have a major impact on the workload of 
ODAR and play a vital role in the disability process. In these 
difficult economic times, the number of disability claims is increasing 
dramatically. In fiscal year 2009 there were 385,000 more claims filed 
than in the prior fiscal year. This is a one-year increase of 
approximately 15 percent. Estimates are that in 2010 there will be 
733,000 more disability claims filed than in fiscal year 2008. Current 
estimates by SSA's Office of Budget indicate that in fiscal years 2009 
through 2012 there will be over 2.25 million more disability claims 
filed than there would have been if the 2008 rate had remained 
constant. This is a staggering increase in the workload of DDSs.
        Aging baby boomers, inadequate healthcare, and decreased jobs 
in the economy all contribute to the projected increase in the number 
of claims. The increased numbers of claims do not represent simply 
unemployed individuals who are capable of competitive work. Many are 
individuals who, due to mental or physical impairments, were marginally 
productive workers in years past. In today's struggling economy, 
businesses find that they simply cannot afford to retain such workers. 
Of course, all claimants, whether or not they qualify for benefits, are 
entitled to a fair and timely adjudication of their claims.
        The DDSs are overburdened and improved efficiency cannot 
prevent the increased numbers of applicants from causing delayed 
decisions by the DDS. Further, increased pressure on state workers to 
decide more and more cases is likely to decrease the time spent on each 
determination and thus negatively impact the accuracy of the decisions 
made. Such a result would be detrimental to the claimants who may be 
wrongly denied benefits, as well as to American taxpayers who will bear 
the costs of improperly granted benefits.
        The problem is further exacerbated by the many states who, for 
economic reasons, have furloughed state employees, including DDS 
workers. Despite the fact that 100 percent of the salaries and overhead 
expenses of DDS employees is borne by the Federal Government, these 
states have decreased the number of DDS workdays available to process 
the increased number of cases. Some governors have continued their 
``savings'' despite the fact that two months ago Vice President Biden 
sent a letter to Governor Edward Rendell of Pennsylvania, the Chair of 
the National Governor's Association, urging that DDS employees be 
exempt from state furloughs.
        This situation requires immediate attention. We urge Congress 
to respond by not only providing adequate funding for DDS, but also 
requiring full work weeks for DDS employees.

2.  SSA should continue to hire Administrative Law Judges and support 
        staff, and add needed hearing offices.
        In the last 18 months, SSA has significantly increased the 
number of Administrative Law Judges and support staff. These increases 
are ongoing and many of the newest staff are still working their way to 
full productivity. This increase in resources already has resulted in a 
dramatic increase in the number of adjudications. It is important to 
note that ODAR has not simply added people; it has added a corps of 
highly competent and dedicated individuals. Each decision made by ODAR 
judges is important to the taxpayers and is critical to the claimant. 
Our newest judges have shown themselves to be capable adjudicators who 
understand how important it is to make the right decision and how to do 
so with speed and efficiency.
        The Commissioner has wisely matched increased numbers of ALJs 
with significant increases in support staff. It is critical that the 
numbers of ALJs and support staff continue to increase. As I commented 
at a recent staff meeting, statistics may indicate that I produced a 
certain number of dispositions, but that is misleading. I do not decide 
cases by acting alone. There are staff members who organize the 
evidence and schedule the hearings, others who obtain missing medical 
evidence and arrange for necessary consultative examinations, and still 
others who perform a myriad of tasks essential to the adjudicatory 
process. In addition, staff attorneys and paralegals turn decisional 
instructions into draft decisions. Each case disposition is the product 
of a team of individuals.
        Commissioner Astrue has recently increased the support staff to 
ALJ ratio from just over four support staff members per ALJ to about 
four and one-half support staff members per ALJ. We believe that this 
increase will add efficiency to the adjudicatory process. We commend 
the Commissioner for this staffing decision. As we move to greater 
reliance on technology, it is hard to predict what the most effective 
and efficient ratio will be. We urge the Commissioner to continue to 
monitor the staffing ratios so as to maximize the ALJ's ability to 
produce legally sound and just decisions.
        As discussed later, electronic processes have substantially 
increased efficiency. However, there is a critical limit to this. Each 
decision requires a judge to analyze and fully understand the medical 
evidence and other documentation in a file. The judge must then use 
good judgment to apply the law to the facts he finds. Electronics 
cannot replace human judgment. No matter how efficient our 
technological processes become, critical judgments must be made 
thoughtfully by human beings. If for no other reason, this immutable 
fact requires that there be increased staffing. Otherwise, the 
increased number of claims will exacerbate the unconscionable delays 
which have been faced by citizens who have come to their government in 
their time of need.
        The Commissioner has opened two national hearing offices and 
plans to open two more. These offices conduct video hearings in states 
where they are most needed. This has helped reduce the backlog and 
improve the disposition time. In addition, the Commissioner plans to 
build 13 traditional hearing offices around the country. If these are 
properly located and staffed, they should help reduce the backlog of 
cases.
        Efficient and fair adjudication can be advanced through greater 
use of technology, and SSA is making that happen. But we cannot rely on 
technology alone. SSA must continue to increase its cadre of well-
trained, skilled, motivated, and caring employees--both ALJs and 
support personnel.

3.  SSA should continue to develop and implement improved technological 
        and other initiatives.
        SSA is rapidly moving to implement a fully electronic business 
process. This process has significantly enhanced efficiency. I fully 
expect that the implementation of newer technology and processes will 
further enhance efficiency. Electronic files have also helped improve 
the decisional process by making it easier for the judge to fully 
review the evidentiary record.
        Improved use of technology has also enhanced the efficiency and 
productivity of ODAR. Funding hardware and software for full 
implementation of technological advances is undoubtedly expensive. 
However, we believe that doing so is essential to reduce the hearing 
backlog. In the long run, technology will save many times its cost and 
it will greatly assist SSA's ability to provide timely and just 
decisions.
        Video hearings enable judges to conduct hearings without 
traveling to remote hearing sites. Judges are able to interact with 
claimants by videoconferencing so that the claimants can be seen and 
heard as if they were in the hearing room with the judge. This has 
added to ODAR's flexibility in using resources where they will be most 
effective in accomplishing our mission and reducing our backlog. As an 
example, in a single week I have conducted live hearings in Atlanta, 
Georgia and video hearings with claimants in Greenville, North Carolina 
and Tampa, Florida. By teleconferencing, I did this without travel 
expenses and with no work time spent traveling.
        Video hearings may not be right for every claimant. Some of the 
Federal Bar Association Social Security Section's members have 
expressed concerns that video hearings may make it more difficult for 
judges to accurately decide issues such as pain or mental health, or 
may make some claimants unduly nervous or confused. The Commissioner's 
rules permit claimants who are concerned about video hearings to opt 
out of such hearings and to have an in-person hearing without undue 
delay in their cases. This option is an important protection for the 
claimants' right to due process. If this option were to be eliminated, 
the credibility of the hearing process would be undermined.
        ODAR is rapidly moving to the point where all evidence will be 
stored electronically and there will be no paper files. The advantages 
of this are numerous. When working with thousands of paper files, it 
was too common for staff to have to take valuable time to search for a 
file that had accidentally been misfiled, was being reviewed by an 
expert witness, or had simply been mislaid. This wasted time has been 
eliminated.
        In addition, the production of electronic copies of the record 
for use by claimant's representatives, or medical or vocational experts 
in advance of the hearing is much easier and faster. In the past, the 
claimants' representatives had to arrange to review voluminous files in 
ODAR offices or arrange for them to be copied. Now, in a fraction of 
the time previously required, an electronic copy can be created for the 
experts and the claimants' representatives.
        ODAR is implementing a technology referred to as the 
``Representatives Suite of Electronic Services.'' This will permit 
claimants' representatives to view the complete up-to-date evidentiary 
file on their own computers. Security safeguards are being built into 
this system to prevent unauthorized access to the obviously highly 
sensitive documents in claim files. When this system is fully 
implemented, it will save resources that are now spent providing 
claimant representatives computer disks with file information. 
Currently, this often occurs two or more times in a single case to 
ensure that the representative has current information during 
preparation. This technology will also reduce time spent in hearings 
ensuring that all evidence is in the file.
        ODAR has a number of judges and decision writers who work 
flexi-place on a regular basis. This is consistent with Government 
policies encouraging flexi-place and tele-work. Currently these 
employees must have computer disks made for each file. This consumes 
significant time and creates a huge number of disks that have to be 
destroyed. We recommend that the Commissioner explore improvements in 
technology to allow SSA employees to have the same secure access to 
electronic files that claimants' representatives will have.
        There are other, as yet unexplored, technological tools that 
will be of great value. These might include the ability to search all 
of the medical evidence in a file for key words or dates so that a 
judge can more readily review all medical evidence related to a 
particular impairment or a particular time period.
        Increased use of senior attorneys has been another important 
tool in enhancing ODAR's efficiency. We commend the Commissioner for 
permitting senior attorneys to review files and issue fully favorable 
decisions when warranted by the evidence. We look forward to the 
creation of the Virtual Screening Unit, whose establishment is under 
way. One hundred senior attorneys in this unit will review cases 
selected by a sophisticated computerized process as potentially 
appropriate for fully favorable decisions without a hearing. These 
initiatives involving senior attorneys will enable deserving claimants 
to get earlier decisions and free up ALJs to hear and decide more 
difficult cases.

4.  New efforts are needed to accomplish the Commissioner's goal of 
        making the right decision at the earliest possible stage.
        The DDSs make the initial determinations regarding disability 
claims and therefore have the first opportunity to make the correct 
decision. While these agencies operate with federal funds under a 
uniform set of federal rules and regulations, the outcomes are far from 
uniform. Even a cursory glance at approval rates by various DDSs shows 
that there are significant disparities among the states. In fiscal year 
2008, Georgia and Tennessee DDSs approved benefits on initial 
determination in only 25 percent of the claims filed. In contrast, in 
2008 Virginia DDS awarded benefits to 44 percent of its claimants on 
initial application, while New Hampshire DDS granted benefits to 52 
percent of its claimants at that stage. These disparities cannot 
reasonably be explained by state or regional population differences. In 
2008, Mississippi DDS approved 24.5 percent of claims at the initial 
stage while in the neighboring state of Arkansas, the rate was 36 
percent (almost 50 percent higher.) Similarly Connecticut DDS's rate 
was 33 percent approval compared to its neighboring states of New York 
(44 percent), Massachusetts (46 percent), and Rhode Island (38 
percent).
        My own personal experience is based upon a relatively small 
sampling of primarily Georgia disability claims. I do not see claims in 
which benefits are awarded by the state DDS, but I have had the 
opportunity to review a large number of claims that have been denied by 
the Georgia DDS. Other members of the Federal Bar Association have 
shared their experiences with me as well. Based upon this experience, 
it appears that all too often, the DDS has paid scant attention to the 
effect of pain and fatigue on a claimant's ability to work. This occurs 
despite Social Security Rulings that mandate consideration of these 
factors.
        The disparities among states should be addressed for a number 
of reasons. The first and foremost is basic justice. The outcome of a 
claimant's case should not depend on his or her state of residence. In 
addition, improper early stage denials cause undue hardship to 
claimants and increase the workload, and thus the backlog, of hearing 
offices. If higher approval rates are the result of improper approvals, 
this places an unnecessary burden on American taxpayers.
        SSA has a quality review process that is designed to ensure 
that state DDSs follow federal rules. This process should be enhanced 
to ensure accurate and fair determinations. Where SSA review shows a 
significant error rate, the Commissioner should take, or be required to 
take, action. This should include the delivery of enhanced training to 
DDS staff and management and closer oversight of the state's work until 
significant progress is made. For the benefit of the claimant and the 
taxpayer, SSA needs to receive and be a good steward of the resources 
and authority provided by Congress, and Congress needs to continue to 
exercise the necessary oversight.

5.  Continuing Disability Reviews should be fully funded at every stage 
        of the process.
        SSA conducts Continuing Disability Reviews (CDRs) to assure 
that recipients of disability benefits continue to satisfy eligibility 
requirements. CDRs serve two important purposes. First, they save 
taxpayer money. As Commissioner Astrue noted in his March 24, 2009 
testimony before this subcommittee, every dollar spent on CDRs yields 
ten dollars in program savings. Second, CDRs provide recipients an 
incentive to fully utilize available medical care, vocational 
rehabilitation services, and job training to help them re-enter the 
workforce.
        Because of inadequate funding levels for over a decade, SSA has 
accumulated a significant backlog of nearly 1.6 million full medical 
Continuing Disability Reviews. The failure to timely conduct these 
reviews has significantly affected the federal budget and the deficit. 
It has been estimated that, if these CDRs had been conducted on a 
timely basis, over $20 billion in long-term Social Security program 
savings would have been achieved. Unfortunately, current estimates 
project that SSA will only be able to conduct 329,000 full CDRs in FY 
2010.
        Funding of CDRs will not reduce the hearing backlog and, in 
fact, it may add to it. When benefit recipients are found to no longer 
be eligible for benefits, some will seek hearings challenging these 
determinations. These hearings are an important due process right that 
should not be abridged. Full funding for CDRs must include additional 
funding for ODAR to adjudicate CDR appeals. This will require funding 
above that needed to eliminate the backlog of initial claims. When 
considering this additional funding, it is important to keep in mind 
the savings created by CDRs. Conducting continuing disability reviews 
is the right thing to do for the taxpayers and for the recipients of 
benefits.

    Mr. Chairman, thank you once again for the opportunity to appear 
before you and the subcommittee today. The Social Security Section of 
the Federal Bar Association looks forward to working with you and the 
Social Security Administration in improving the disability adjudication 
process. I would be happy to answer any questions you may have.
                                 

    Chairman TANNER. As I said earlier, if you all would agree, 
Members will submit questions following the hearing. Would that 
be acceptable?
    Judge AUERBACH. Absolutely.
    Chairman TANNER. We got here late because of votes, we've 
got to leave early because of votes. I have got to say, and I 
know Mr. Johnson agrees because we have talked about this, we 
take this obligation very seriously. Your testimony will be 
carefully and closely considered and utilized. We appreciate 
you very much being here.
    Ms. KENNELLY. Mr. Chairman.
    Chairman TANNER. Barbara, do you want to say something?
    Ms. KENNELLY. Yes, I want to say one thing, and Ranking 
Member Johnson talked about it. The technology at Social 
Security is behind the times. When you're talking about 
hundreds and hundreds of thousands of cases that need to be 
determined, I feel we are not doing enough about the 
technology.
    You know what we're going to do? We're losing money, we're 
losing taxpayers' money about this. The COBOL system is 
terrible, and you two can change it. You could do it. That's 
all.
    [Laughter.]
    Mr. JOHNSON. It's going to take seven years to fix it.
    Ms. KENNELLY. No, you know Sam, you could do it.
    Chairman TANNER. We are trying, let me say that.
    I thank all of you all for being here, and we very much 
appreciate your efforts to alleviate what is the backbone, 
really, in many ways, of our society. Thank you a lot. We stand 
adjourned.
    [Whereupon, at 3:33 p.m., the Subcommittee was adjourned.]
    [Questions for the Record follow:]
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   Statement of the Corporation for Supportive Housing Advocacy and 
                            Training Center
Chairman Tanner, Ranking Member Johnson, and Members of the 
Subcommittee:

    Thank you for the opportunity to submit written testimony on the 
issue of the Social Security Administration's disability claims 
backlog.
    Our organizations are committed to providing housing, services and 
advocacy to individuals who have no or limited income and who have 
disabilities, especially those involving serious mental illness and/or 
co-occurring disorders. As part of this commitment, we particularly 
focus on individuals who have been or are homeless, many of whom have 
experienced homelessness for years. We appreciate the recent efforts of 
the Social Security Administration (SSA) to address the disability 
claims backlog, specifically those claims awaiting hearing level 
decisions. The reduction in this backlog that has started and the 
ongoing efforts to reduce it are commendable.
    We believe that aspects of the disability determination that 
contribute to denials for people who are homeless and, therefore, to 
the need for appeals include, the following:

          Lack of access to medical care and evaluations needed 
        to document individuals' physical and mental health conditions;
          Need for case managers or other community staff to 
        conduct outreach and to help homeless individuals to navigate 
        the complex disability determination process;
          Difficulties in accessing benefits for people who 
        have co-occurring disorders that include substance use;
          For people who have mental illness and/or cognitive 
        disorders, lack of recognition of long-term homelessness as an 
        indicator of marked functional impairment;
          General inability of individuals with serious mental 
        illness to access the innovative and creative strategies that 
        SSA has implemented such as Quick Disability Determination and 
        compassionate allowances;
          Need for specialized training of SSA and DDS staff in 
        understanding homelessness and its impact on individuals' 
        health; and
          Failure to identify claimants as homeless and failure 
        to flag claims from homeless individuals as in need of 
        expedited processing.

    To address some of the needs of this population, we advocate for 
changes that only Congress can enact as well as changes that are 
underway or could be considered at SSA. These include:

    SSA:

          Include schizophrenia and homelessness as a 
        compassionate allowance category, something already considered 
        by SSA as evidenced by the recent compassionate allowance 
        hearing on schizophrenia held in San Francisco on November 18;
          Consider compassionate allowances for homeless 
        individuals with other specified impairments, such as bipolar 
        disorders and certain cognitive impairments;
          Partner with community mental health and other health 
        providers to assist people who are homeless with navigating the 
        SSA disability application process. This would include training 
        such providers in the completion of the SSI application (SSA-
        8000) (until the SSI application is possible to do on-line) so 
        that such providers could submit such applications on behalf of 
        individuals without having to have the applicant come into the 
        SSA office;
          Implement promising practice models such as SOAR to 
        serve populations who need special assistance, adults who are 
        homeless and who have mental illness and partner with other 
        federal agencies including, SAMHSA, to coordinate 
        implementation of such models
          Conduct specialized training for SSA and DDS staff in 
        homelessness, mental illness, and co-occurring disorders, and 
        in identifying and expediting claims of individuals who are 
        homeless;
          specific staff at the SSA local offices and encourage 
        state Disability Determination Service offices to assign DDS 
        staff to expedite and do medical reviews of homeless claimants, 
        so as to have staff who become specialized in providing 
        services to people who are homeless and who have mental illness 
        and/or co-occurring disorders;
          Provide specific direction to the DDS regarding the 
        interpretation of current requirements for the consideration of 
        people with co-occurring disorders to improve consistency and 
        generate greater understanding of these requirements across the 
        country;

    Congress:

          Re-visit the 1996 statutory change regarding 
        substance use in the SSA disability determination process. 
        Currently, if a person has substance use that is deemed 
        ``material'' to one's disability, that individual is denied. 
        Such a consideration is often virtually clinically impossible 
        in the face of ongoing substance use. Most treating physicians 
        do not and cannot make this determination, let alone medical 
        reviewers who are asked to create this distinction based on an 
        individual's paper record. In addition, many individuals who 
        have these disorders use substances to address symptoms of 
        mental illness, e.g., auditory hallucinations, significant 
        depression, manic symptoms, etc. Much documentation proves the 
        link between mental illness and substance abuse. Yet, because 
        of the difficulty in deciding whether a person's substance 
        abuse is material to an individual's disability, homeless 
        people who are, in fact, disabled are often denied. Current 
        statutory requirements are contrary to the evidence regarding 
        assessment and treatment of people who have these disorders. It 
        would be an important step for Congress to reconsider this 
        statute and its impact after 13 years of its implementation.
          Provide funding to SSA to partner with community 
        providers to offer the necessary assistance to help individuals 
        who are homeless and who have serious mental illness and/or co-
        occurring disorders with navigating the SSA disability 
        application process.
          Begin to conduct a dialogue on the array of public 
        benefits that need to be available to assist individuals and 
        families to exit long-term poverty, and help these individuals 
        address poverty that results from loss of jobs, poor education, 
        health difficulties that do not rise to the level of 
        eligibility for SSA benefits.

    We thank you for the consideration of our comments.

            Sincerely,

    Corporation for Supportive Housing Advocacy and Training Center

                                 
      Statement of Council of State Administrators of Vocational 
                             Rehabilitation

    The Council of State Administrators of Vocational Rehabilitation is 
pleased to submit this statement for the record for the November 19, 
2009, House Ways and Means Social Security Subcommittee's hearing on 
the progress SSA has made in clearing the disability backlog.
    CSAVR's members are the Administrators of 80 state agencies that 
provide vocational rehabilitation services to persons with 
disabilities. For over 80 years the State-Federal Vocational 
Rehabilitation program has been providing a wide range of services to 
people with disabilities. The program has helped million of people with 
significant disabilities return to work and live better and more 
productive lives.
    The VR program is a cost effective program with a proven track 
record. In 2007 the Public VR program and its partners helped over 
200,000 people with disabilities find, return to, or retain employment. 
VR customers earned over $3.0 billion in wages, paid $966 million in 
federal, state, & local taxes, and generated 36,000 new jobs. In fact, 
on average every person VR helps find or retain employment will ``pay 
back'' through taxes the cost of their rehabilitation services in just 
two to four years.
    The VR program and the Social Security Administration have a long 
and mutually beneficial partnership helping people with disabilities on 
SSDI and SSI return to work. SSA reimburses VR agencies for the cost of 
services VR provides to SSDI and SSI beneficiaries after a beneficiary 
is at work for nine months. VR agencies are also strong partners in 
SSA's Ticket-to-Work program. The most recent data from the Social 
Security Administration reveals that for every dollar SSA reimburses 
VR, SSA has saved seven dollars in benefits that it would have paid 
out. This results in an annual net savings of $754 million to the 
Social Security (SSDI) and Supplemental Security Income (SSI) programs.
    CSAVR's interest in this hearing and on the issue of the backlog 
stems from the fact that nearly 60 percent of SSA's state Disability 
Determination Service (DDS) agencies are under the direction of state 
VR agencies. Our members see every day the growing burden caused by the 
lack of funding and the expanding demand for benefits caused by the 
current economic downturn.
    CSAVR has strongly supported the Subcommittee's efforts to boost 
appropriations for clearing the disability backlog at all levels. We 
applaud Commissioner Astrue and his team for their dedication to 
aggressively resolving this problem. This issue is extremely important 
to people with disabilities.
    Title II and SSI cash benefits, along with the related Medicaid and 
Medicare benefits, are the means of survival for millions of 
individuals with severe disabilities. They rely on the Social Security 
Administration (SSA) to promptly and fairly adjudicate their 
applications for disability benefits. They also rely on the agency to 
handle many other actions critical to their well-being including: 
timely payment of the monthly Title II and SSI benefits to which they 
are entitled; accurate withholding of Medicare Parts B and D premiums; 
and timely determinations on post-entitlement issues that may arise 
(e.g., overpayments, income issues, prompt recording of earnings).
    Because the economic downtown has led to an unexpected surge of new 
applications, SSA finds itself at a critical crossroads. The wave of 
new claims is having a very significant impact at the state Disability 
Determination Services (DDSs) that will eventually affect the hearing 
level. At the DDS level (initial and reconsideration), the number of 
new applications, applications waiting for a decision, and processing 
times are all on the rise. In fiscal year (FY) 2009, SSA received 
385,000 new claims, an increase of nearly 15% since the end of FY 2008. 
Even more worrisome is the growing backlog of pending initial claims at 
the DDSs, i.e., those waiting for a decision, up nearly 40% since the 
end of FY 2008.
    In FY 2009, the news was more positive at the hearing level. For 
the first time in a decade, SSA finished FY 2009 with fewer hearing 
level cases waiting for a decision and hearing than at the beginning of 
the year. But we are deeply concerned that any progress in eliminating 
the hearing level backlog will be delayed as the surge of new 
applications that are denied are appealed, putting SSA's plan to 
eliminate the hearing level backlog by 2013 at risk.
    While recent appropriations have allowed SSA to hire some new staff 
and to reduce processing times at the hearing level, these amounts will 
not be adequate to fully restore the agency's ability to carry out its 
mandated services. Given the many years of under-funding and the need 
for more than a $600 million annual increase just to keep up with fixed 
costs, additional funding is required to reduce and eliminate the 
backlog at the DDS and hearing levels and to provide essential services 
to the public. While the current situation is dire, without adequate, 
ongoing appropriations to fund SSA, the forward progress recently made 
by the agency will deteriorate, leaving people with severe disabilities 
to wait years to receive the benefits to which they are entitled.
THE IMPACT ON PEOPLE WITH DISABILITIES
    As the backlog in decisions on disability claims continues to grow, 
people with severe disabilities have been bearing the brunt of the 
delays. Behind the numbers are individuals with disabilities whose 
lives have unraveled while waiting for decisions--families are torn 
apart; homes are lost; medical conditions deteriorate; once stable 
financial security crumbles; and many individuals die.\1\ Numerous 
recent media reports across the country have documented the suffering 
experienced by these individuals. Your constituent services staffs are 
likely to be well aware of the situations faced by people living in 
your districts and provide valuable assistance and help, where 
possible.
---------------------------------------------------------------------------
    \1\ If a claimant dies while a claim is pending, the SSI rule for 
payment of past due benefits is very different--and far more limited--
than the Title II rule. In an SSI case, the payment will be made in 
only two situations: (1) to a surviving spouse who was living with the 
claimant at the time of death or within six months of the death; or (2) 
to the parents of a minor child, if the child resided with the parents 
at the time of the child's death or within six months of the death. 42 
U.S.C. Sec. 1383(b)(1)(A) [Section 1631(b)(1)(A) of the Act]. In Title 
II, the Act provides rules for determining who may continue the claim, 
which includes :a surviving spouse; parents; children; and the legal 
representative of the estate. 42 U.S.C. Sec. 404(d) [Section 202(d) of 
the Act]. Thus, if an adult SSI claimant (age 18 or older) dies before 
actually receiving the past due payment and if there is no surviving 
spouse, the claim dies with the claimant and no one is paid.
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SSA'S NEED FOR ADEQUATE RESOURCES TO ADDRESS GROWING BACKLOGS
    For many years, SSA did not receive adequate funds to provide its 
mandated services, a key reason for the hearings backlog. Between FY 
2000 and FY 2007, the resulting administrative funding shortfall was 
more than $4 billion. The dramatic increase in the hearing level 
disability claims backlog coincided with this period of significant 
under-funding.
    Recent Congressional efforts to provide SSA with adequate funding 
for its administrative budget have been encouraging. In FY 2008, the 
tide finally changed for the first time in a decade, when Congress 
appropriated $148 million over the President's budget. The FY 2009 SSA 
appropriation provided SSA with more than $700 million over the FY 2008 
appropriation.
    CSAVR is extremely grateful to Congress for recognizing SSA's need 
for adequate resources and including additional funds for SSA in the 
American Recovery and Reinvestment Act of 2009 (ARRA). ARRA provided 
SSA with $500 million to handle the unexpected surge in both retirement 
and disability applications due to the economic downturn. SSA also 
received badly needed funds to replace its aged National Computer 
Center. With the FY 2009 appropriation and the ARRA funding, SSA 
planned to hire 5,000 to 6,000 new employees. This additional staff 
undoubtedly led to SSA's ability to make progress on the backlog at the 
hearing level.
    Congress appears to be moving towards providing SSA with an FY 2010 
appropriation approximately the same as President Obama's request of 
$11.45 billion for SSA's Limitation on Administrative Expenses (LAE), a 
10 percent increase over the FY 2009 appropriation. While the agency is 
operating under a Continuing Resolution, we are optimistic that SSA's 
final FY 2010 appropriation will be similar to the $11.45 billion 
amount, allowing SSA to hire more staff.
SIGNIFICANT INCREASE IN NEW CLAIMS FILED AND GROWING DDS BACKLOGS
    Since the end of FY 2008, new disability claims filed have been 
climbing steadily, up nearly 15% by the end of FY 2009. But what is 
more troubling is how the increase grew throughout FY 2009: December 
2008 Quarter: 6.92%; March 2009 Quarter: 15.23%; June 2009 Quarter: 
16.32%; September 2009 Quarter: 20.25%.
    The most alarming trend is the increase in the number of pending 
claims (initial and reconsideration levels), up 38.8% since the end of 
FY 2008 and climbing from 763,183 to 1,059,241. This means that, at the 
end of FY 2009, more than 1 million disability applicants were waiting 
for a decision on their claims at the initial and reconsideration 
levels. When you add the 722,822 pending cases at the hearing level, 
nearly 1.75 million people with disabilities were waiting for a 
decision. If the receipts continue to increase at the higher level seen 
in recent months, the total number of pending initial applications in 
the DDSs could hit over 1,000,000 claims by the end of FY 2010. This 
would be an 80% increase in pending claims at the initial level in just 
one year.
    What does the increase in applications and pending claims at the 
DDSs mean for the hearing level? Approximately 22% of the initial 
claims will result in a hearing request. This means there is a 
potential increase of 85,000 additional hearings from the FY 2009 
applications, a statistic that underscores the fragility of the ODAR 
progress accomplished in FY 2009.
    Exacerbating the problem of a significant increase in new claims is 
the impact on DDSs of state budget crises. Even though DDS salaries, 
offices, and overhead are fully funded by SSA, some states are imposing 
hiring restrictions and furloughs of DDS workers because of budget 
problems. Earlier this year, Commissioner Astrue wrote to Governors, 
asking them to exempt DDSs from hiring freezes and furloughs. In 
September 2009, Vice-President Biden sent a letter to Gov. Edward 
Rendell, the Chair of the National Governors' Association, also urging 
that states exempt DDS employees from state furloughs.
    Nor are State budgets likely to see improvement in the near term. 
According to the National Governors Association/National Association of 
State Budget Officers (NGA/NASBO) Fall 2009 Report, Fiscal Survey of 
States-Preliminary Data, November 12, 2009, ``Fiscal conditions 
significantly deteriorated for states during fiscal 2009, with the 
trend continuing through fiscal 2010 and even into 2011 and 2012. The 
severe national recession drastically reduced tax revenues from every 
revenue source during fiscal 2009 and revenue collections are 
forecasted to continue their decline in fiscal 2010. As state revenue 
collections historically lag behind any national economic recovery, 
state revenues will remain depressed throughout fiscal 2010 and likely 
into fiscal years 2011 and 2012. The economic recession, which began in 
December 2007, has significantly affected state spending, as more than 
half the states decreased their General Fund expenditures in fiscal 
2009, and two-thirds of states enacted fiscal 2010 budgets with 
decreased General Fund spending.
    The weakening of state fiscal conditions is also reflected in the 
fact that states will have faced $250 billion in budget gaps between 
fiscal year 2009 and fiscal year 2011. Of this $250 billion, states 
closed $72.7 billion in budget gaps during fiscal 2009 and $113.1 
billion prior to the enactment of their fiscal 2010 budgets in order to 
bring them into balance with drastically declining revenues. However, 
even after solving these gaps, an additional $14.5 billion in budget 
gaps remains in fiscal 2010 and states face at least $21.9 billion in 
budget gaps for fiscal 2011. In order to help close these gaps, 42 
states cut their enacted fiscal 2009 budgets by $31.2 billion and 33 
states cut their fiscal 2010 expenditures by $53.5 billion. 
Additionally, states enacted tax and fee increases of $23.8 billion 
along with additional increases in other revenue measures of $7.7 
billion for fiscal 2010.''
    Despite this bleak fiscal picture in the states and in the face of 
furloughs and hiring freezes, some state agencies have been successful 
in working around the problem of DDS furloughs by negotiating overtime 
and other work arrangements that allow DDS staff to keep their caseload 
as current as possible. However, even these stopgap measures will 
become more difficult to maintain as fiscal pressures continue to mount 
within state budgets and the number of new claims increase.
WILL THE HEARING LEVEL BACKLOG BE ELIMINATED BY 2013?
    The average processing time for cases at the hearing level has 
increased dramatically since 2000, when the average time was 274 days. 
In FY 2009, the average processing time for disability claims at the 
hearing level was 491 days, about 16.5 months. We appreciate the effort 
by SSA to reduce the processing time, but an average of 16.5 months--
close to one and a half years--is still too long for individuals 
waiting for a hearing decision. In addition, the average processing 
times at the initial and reconsideration levels are increasing. For 
individuals with disabilities who have no health insurance, have lost 
their homes, have declared bankruptcy, or who have died, that is simply 
too long to wait.
    The current processing times in some hearing offices are striking, 
and much longer than the 491-day average at the end of FY 2009. It is 
important to keep in mind that this is an ``average'' and that many 
claimants will wait longer. In September 2009, the average processing 
time at 48 hearing offices was above the 491 day national average, with 
20 offices over 600 days.
    Is the Hearing Backlog Improving? By the end of FY 2009, it was 
clear that ODAR was making slow but steady process in key areas to 
address its backlog and improve processing times, thanks to the hard 
work of ODAR ALJs and staff and the additional resources available due 
to Congressional appropriations, including the ARRA funding.

          Pending cases. For the first time in a decade, ODAR 
        finished FY 2009 with fewer hearings pending than in the prior 
        year. The increased resources, including 147 new ALJs and 
        support staff are having a positive impact at the hearing 
        level. The pending number of cases dropped for nine straight 
        months from a record high of 768,540 in December 2008 to 
        722,822 in September 2009. This is the lowest pending number of 
        ODAR cases since February 2007. The pending number dropped by 
        11,377 in September 2009 alone, the biggest drop in FY 2009. 
        The reduction in pending cases is even more notable since the 
        number of requests for hearing increased in FY 2009, up to 
        625,003, a 5.7% increase over the 591,888 received in FY 2008.
          Processing times. The average process time in 
        September 2009 was 472 days, the lowest monthly processing time 
        since November 2005. The average processing time for all of FY 
        2009 was 491 days, down from 514 days in FY 2008.
          Dispositions. The number of dispositions cleared by 
        ALJs on a daily basis was 2,940.47 in September. This is the 
        highest monthly average since records have been kept, beginning 
        in FY 2004. The increase is concomitant with the record number 
        of ALJs now on duty. For the year, dispositions were up about 
        20%.
          Age of pending cases. The length of time cases are 
        pending is also improving. The percentage of requests for 
        hearing pending over one year was 31% in September 2009. This 
        is the lowest percent since October 2004. The average age of a 
        pending case is 282 days. It peaked this year at 317 days in 
        January 2009.
          Improvement Is Not Uniform. Despite the overall 
        improvement in the hearing level statistics, not every hearing 
        office has benefited and some claimants' areas are waiting even 
        longer than one year ago. On one hand, some offices have 
        experienced exceptional improvement in processing times, as 
        much as 4 to 5 months in just one year. In contrast, other 
        offices continue to experience worsening times that are several 
        months longer than last year.

SSA'S ABILITY TO PERFORM OTHER IMPORTANT WORKLOADS
    Program Integrity Workloads. The processing of CDRs and SSI 
redeterminations is necessary to protect program integrity and avert 
improper payments. Failure to conduct the full complement of CDRs would 
have adverse consequences for the federal budget and the deficit. 
According to SSA, CDRs result in $10 of program savings and SSI 
redeterminations result in $7 of program savings for each $1 spent in 
administrative costs for the reviews. However, the number of reviews 
actually conducted is directly related to whether SSA receives the 
necessary funds. SSA's Budget Justification refers specifically to CDRs 
based on medical factors. It is important when SSA conducts work CDRs 
that it assess whether reported earnings have been properly recorded 
and ensure that they properly assess whether work constitutes 
substantial gainful activity (SGA).
    Impact on Post-Entitlement Work. Staffing shortages also have led 
to SSA's inability to fully carry out many other critical post-
entitlement workloads. One area that has slipped, often with a very 
detrimental impact on people with disabilities, is the processing of 
earnings reports by beneficiaries. When beneficiaries faithfully notify 
SSA of earnings or other changes that may reduce their benefit payment 
amounts, it may be months or years before SSA sends an overpayment 
notice to the beneficiary, demanding repayment of sometimes tens of 
thousands of dollars of accrued overpayments. It is shocking to 
beneficiaries to receive these notices, when they reasonably assumed 
that SSA had processed the information they submitted, and it is 
challenging, if not impossible, for someone subsisting on benefits 
alone to repay the overpayments. Many individuals with disabilities are 
wary of attempting a return to work out of fear that this may give rise 
to an overpayment, resulting in a loss of economic stability and health 
care coverage upon which they rely.
    SSA needs to develop a better reporting and recording system and 
promptly adjust benefit payments--thus preventing these overpayments. 
It is important to note that, in and of themselves, overpayments do not 
indicate fraud or abuse as beneficiaries are encouraged to work if they 
are able. The problems arise when reported earnings are not properly 
recorded and monthly overpayments are not properly adjusted.
RECOMMENDATIONS REGARDING SSA'S ADMINISTRATIVE FUNDING
    CSAVR is optimistic that SSA will receive a final FY 2010 
appropriation of $11.451 billion for SSA's LAE, the same amount 
proposed by the President. SSA will use this funding and about $350 
million from the ARRA funding to address the growing workloads facing 
the agency. Based on these funding levels, during FY 2010, SSA will be 
spending at least $11.8 billion to address the current staffing levels 
and associated costs necessary for the agency to function.
    In FY 2011, SSA will be faced with additional costs of nearly $620 
million just to deal with inflationary costs associated with items such 
as salaries, benefits, rents, and facility security. The resulting 
funding level, $12.42 billion will not address the increased number of 
new claims, the newly created DDS backlog, and SSA's plan to eliminate 
the hearing level backlog by 2013. To address these workloads, SSA will 
need additional resources. We estimate that an additional $780 million 
will be necessary--at least $480 million to address the increased 
number of disability claims and at least $300 million to continue 
making progress in reducing and eliminating the hearings backlog by 
2013.
    To address the unprecedented increase in workloads and to prevent a 
severe disruption in service delivery, we recommend that a minimum of 
$13.2 billion be included in the FY 2011 President's budget request for 
SSA's administrative funding.
RECOMMENDATIONS FOR IMPROVING THE DISABILITY CLAIMS PROCESS
    Money alone will not solve SSA's crisis in meeting its 
responsibilities. Commissioner Astrue is committed to finding new ways 
to work better and more efficiently. CSAVR has numerous suggestions for 
improving the disability claims process for people with disabilities. 
We believe that these recommendations and agency initiatives, which 
overall are not controversial and which we generally support, can go a 
long way towards reducing, and eventually eliminating, the disability 
claims backlog.
Caution Regarding the Search for Efficiencies
    While we generally support the goal of achieving increased 
efficiency throughout the adjudicatory process, we caution that limits 
must be placed on the goal of administrative efficiency for 
efficiency's sake alone. The purposes of the Social Security and SSI 
programs are to provide cash benefits to those who need them and have 
earned them and who meet the eligibility criteria. While there may be 
ways to improve the decision-making process from the perspective of the 
adjudicators, the critical measure for assessing initiatives for 
achieving administrative efficiencies must be how they affect the very 
claimants and beneficiaries for whom the system exists.
    People who find they cannot work at a sustained and substantial 
level are faced with a myriad of personal, family, and financial 
circumstances that will have an impact on how well or efficiently they 
can maneuver the complex system for determining eligibility. Many 
claimants will not be successful in addressing all of SSA's 
requirements for proving eligibility until they reach a point where 
they request the assistance of an experienced representative. Many face 
educational barriers and/or significant barriers inherent in the 
disability itself that prevent them from understanding their role in 
the adjudicatory process and from efficiently and effectively assisting 
in gathering evidence. Still others are faced with having no ``medical 
home'' to call upon for assistance in submitting evidence, given their 
lack of health insurance over the course of many years. Many are 
experiencing extreme hardship from the loss of earned income, often 
living through the break-up of their family and/or becoming homeless, 
with few resources--financial, emotional, or otherwise--to rely upon. 
Still others experience all of the above limits on their abilities to 
participate effectively in the process.
    Proposals for increasing administrative efficiencies must bend to 
the realities of claimants' lives and accept that people face 
innumerable obstacles at the time they apply for disability benefits 
and beyond. SSA must continue, and improve, its established role in 
ensuring that a claim is fully developed before a decision is made and 
must ensure that its rules reflect this administrative responsibility.
Technological Improvements
    Commissioner Astrue has made a strong commitment to improve and 
expand the technology used in the disability determination process. 
CSAVR generally supports these efforts to improve the disability claims 
process, so long as they do not infringe on claimants' rights. Some of 
the technological improvements that we believe can help reduce the 
backlog include the following:

          1. The electronic disability folder. The initiative to 
        process disability claims electronically has the prospect of 
        significantly reducing delays caused by the moving and handing-
        off of folders, allowing for immediate access by different 
        components of SSA or the DDS, and preventing misfiled evidence.
          2. Expanding Internet access for representatives. Under 
        Electronic Records Express (ERE), registered claimant 
        representatives are able to submit evidence electronically 
        through an SSA secure website or to a dedicated fax number, 
        using a unique barcode assigned to the claim. This initiative 
        holds great promise, given that significant problems with the 
        current process exist.
          Under the current process, representatives are to be provided 
        with a CD of the exhibited or ``pulled'' file shortly before 
        the hearing and earlier in the process after the appeal has 
        been filed but before the file is exhibited. Due to staffing 
        shortages in hearing offices, representatives have had problems 
        obtaining the CDs and even obtaining barcodes, which allows me 
        to submit evidence electronically. We are optimistic that these 
        problems will be resolved in the near future.
          3. Use of video hearings. Video hearings allow ALJs to 
        conduct hearings without being at the same geographical site as 
        the claimant and representative and have the potential to 
        reduce processing times and increase productivity. We support 
        the use of video teleconference hearings so long as the right 
        to a full and fair hearing is adequately protected; the quality 
        of video teleconference hearings is assured; and the claimant 
        retains the absolute right to have an in-person hearing as 
        provided under current regulations.\2\ However, we have 
        received complaints from representatives that, in some cases, 
        ALJs are discouraging claimants from exercising their right to 
        an in-person hearing. A new SSA pilot allows representatives to 
        participate in video hearings from their own private offices, 
        with their clients present in the representative's office. The 
        representative must agree to the terms established by SSA. This 
        pilot provides claimants with another option for their 
        hearings.
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    \2\ 20 C.F.R. Sec. Sec. 404.936 and 416.1436.

Other Improvements at the Hearing Level
    1. The Senior Attorney Program. This program allows senior staff 
attorneys in hearing offices to issue fully favorable decisions in 
cases that can be decided without a hearing (i.e. ``on the record''). 
This eliminates many months in the wait for payment of benefits. We are 
pleased that Commissioner Astrue decided to authorize the program for 
at least the next two years.\3\ In FY 2009, senior attorneys decided 
more than 36,300 cases, a 50% increase over FY 2008. This means that 
more than 36,000 claimants were able to receive their disability 
benefits months sooner.
---------------------------------------------------------------------------
    \3\ The program is extended through August 10, 2011. 74 Fed. Reg. 
33327 (July 13, 2009).
---------------------------------------------------------------------------
    2. Findings Integrated Templates (FIT). FIT is used for ALJ 
decisions and integrates the ALJ's findings of fact into the body of 
the decision. While the FIT does not dictate the ultimate decision, it 
requires the ALJ to follow a series of templates to support the 
ultimate decision. Representatives can use the FIT template, which is 
available on the SSA website, to draft proposed favorable decisions. 
Many representatives are now using the template either when requested 
by the ALJ or on their own initiative. When the draft proposed decision 
is submitted to the ALJ, it can lead to a speedier decision.
    3. Increase time for hearing notice. We recommend that SSA provide 
advance notice of the hearing date 75 days prior to the hearing date 
rather than the current 20 days. The 75-day time period has been in 
effect in SSA's Region I states since August 2006 \4\ and, based on 
reports from representatives, has worked well.
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    \4\ 20 C.F.R. Sec. 405.315(a).
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Improvements at the Initial Levels
    CSAVR supports initiatives to improve the process at the initial 
levels so that the correct decision can be made at the earliest point 
possible and unnecessary appeals can be avoided. Improvements at the 
front end of the process can have a significant beneficial impact on 
preventing the backlog and delays later in the appeals process.
    1. New Screening Initiatives. CSAVR supports SSA's efforts to 
accelerate decisions and develop new mechanisms for expedited 
eligibility throughout the application and review process. We encourage 
the use of ongoing screening as claimants obtain more documentation to 
support their applications. However, SSA must work to ensure that there 
is no negative inference when a claim is not selected by the screening 
tool or allowed at that initial evaluation. There are two initiatives 
that hold promise:

          Quick Disability Determinations. CSAVR supports the 
        Quick Disability Determination (QDD) process, first begun in 
        SSA Region I states in August 2006 and expanded nationwide by 
        Commissioner Astrue in September 2007.\5\ The QDD process has 
        the potential of providing a prompt disability decision to 
        those claimants who are the most severely disabled. Since its 
        inception, the vast majority of QDD cases have been decided 
        favorably in less than 20 days, and sometimes in just a few 
        days.
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    \5\ 20 C.F.R. Sec. Sec. 404.1619 and 416.1019.
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          Compassionate Allowances. This initiative allows SSA 
        to create ``an extensive list of impairments that we [SSA] can 
        allow quickly with minimal objective medical evidence that is 
        based on clinical signs or laboratory findings or a combination 
        of both . . . .'' SSA has published an initial list of 50 
        conditions on its website, with more to be added at a later 
        date. Unlike the QDD screening, which occurs only when an 
        application is filed, screening for compassionate allowances 
        can occur at any level of the administrative appeals process. 
        SSA has held recent Compassionate Allowance outreach hearings 
        with expert panels to consider early onset Alzheimer's disease 
        and schizophrenia.

    2. Improve development of evidence earlier in the process. 
Claimants' representatives are often able to provide evidence that we 
believe could have been obtained by the DDSs earlier in the process. 
Our recommendations include:

          Provide more assistance to claimants at the 
        application level. At the beginning of the process, SSA should 
        explain to the claimant what evidence is important and 
        necessary. SSA should also provide applicants with more help 
        completing the application, particularly in light of electronic 
        filings, so that all impairments and sources of information are 
        identified, including non-physician and other professional 
        sources.
          DDSs need to obtain necessary and relevant evidence. 
        Representatives often are able to obtain better medical 
        information because they use letters and forms that ask 
        questions relevant to the disability determination process. 
        However, DDS forms usually ask for general medical information 
        (diagnoses, findings, etc.) without tailoring questions to the 
        Social Security disability standard. One way to address this 
        would be for SSA to encourage DDSs to send Medical Source 
        Statement forms to treating and examining doctors. These simple 
        forms translate complex, detailed medical source opinions into 
        practical functional terms useful to the vocational 
        professionals at DDSs and hearing offices.
          Increase reimbursement rates for providers. To 
        improve provider response to requests for records, appropriate 
        reimbursement rates for medical records and reports need to be 
        established. Appropriate rates should also be paid for 
        consultative examinations and for medical experts.
          Provide better explanations to medical providers. SSA 
        and DDSs should provide better explanations to all providers, 
        in particular to physician and non-physician treating sources, 
        about the disability standard and ask for evidence relevant to 
        the standard.
          Provide more training and guidance to adjudicators. 
        Many reversals at the appeals levels are due to earlier 
        erroneous application of existing SSA policy. Additional 
        training should be provided on important evaluation rules such 
        as: weighing medical evidence, including treating source 
        opinions; the role of non-physician evidence; the evaluation of 
        mental impairments, pain, and other subjective symptoms; the 
        evaluation of childhood disability; and the use of the Social 
        Security Rulings.
          Improve the quality of consultative examinations. 
        Steps should be taken to improve the quality of the 
        consultative examination (CE) process. There are far too many 
        reports of inappropriate referrals, short perfunctory 
        examinations, and examinations conducted in languages other 
        than the applicant's.

ADDITIONAL RECOMMENDATIONS
    In addition to addressing the backlog and SSA's funding issues, 
there are several other legislative proposals that the Subcommittee may 
be considering this year.

          Protecting claimants' privacy rights. We understand 
        that it can be cumbersome for SSA to obtain medical records, as 
        it is for claimants and their representatives, and that SSA is 
        exploring more efficient ways to secure the necessary evidence. 
        While we support ways to make this process more efficient, we 
        believe that claimants' privacy rights must be protected. We 
        will work with SSA to find a way to obtain, as efficiently as 
        possible, a claimant's authorization for release of medical 
        records to SSA, while protecting the individual's privacy 
        rights.
          Extension of the fee demonstrations in the SSPA. 
        Access to experienced and qualified representatives through the 
        lengthy and complex application process is critically important 
        to claimants. To this end, we support allowing claimants to 
        enter into voluntary agreements with representatives for fee 
        withholding and direct payment procedures whether under Title 
        II or Title XVI. The Social Security Protection Act of 2004 
        established two demonstration projects that should be made 
        permanent because they have proven to be effective in 
        increasing claimants' access to effective representation: (1) 
        Extension of the Title II attorney fee withholding and direct 
        payment procedures to SSI claims; and (2) Allowing nonattorney 
        representatives to qualify for fee withholding and direct 
        payment, provided they meet certain requirements. Unless they 
        are extended or made permanent, the demonstrations will sunset 
        March 1, 2010.
          Increase and indexing of the fee cap. Rep. John Lewis 
        has introduced H. R. 1093, which contains two provisions 
        regarding the current $5,300 fee agreement fee cap: (1) 
        Increase the current fee cap to $6,264.50 (which represents the 
        figure if it had been adjusted for inflation since the last 
        increase in 2002); and (2) Index the fee cap for future years 
        to the annual COLA. We support these changes since they ensure 
        that there will be a knowledgeable, experienced pool of 
        representatives available to represent claimants.
          Work incentives. The Ticket to Work and Work 
        Incentives Improvement Act was enacted nearly ten years ago and 
        is overdue for evaluation of its effectiveness in employment of 
        those receiving Title II and SSI disability benefits. We urge 
        renewal and permanent extension of expired/expiring provisions 
        including (1) SSA's Title II demonstration authority to test 
        promising approaches for work incentives and related 
        provisions; (2) Demonstration to Maintain Independence, set to 
        expire this year, to provide Medicaid buy-in coverage to 
        working individuals whose conditions or disabilities are not 
        yet severe enough to qualify them for disability benefits; (3) 
        Protection and Advocacy for Beneficiaries of Social Security to 
        protect the rights of beneficiaries as they attempt to return 
        to work; and (4) Work Incentives Planning Assistance, which 
        provides state grants for outreach and education to individuals 
        with disabilities about supports and services regarding 
        employment. However, it is critical that future efforts be 
        devoted to permanently extending and strengthening these 
        important return to work supports.

                                 
                        Statement of Eunmi Choi
Eunmi Choi
PAD 5106 PUBLIC ORGANIZATIONS
Nevin Smith
December 2, 2009
            THE REQUIREMENT TO IMPLEMENT THE PUBLIC OPTION:
         New Network and New Organization as an administrator,

                       NEGOTIATOR AND CONSULTANT

    The introduction of the public option where public sector could 
compete with private sector for selling health care insurances at the 
same market will need the well-structured network system as a major 
variable. The current situation in the United States is the worst 
health care system operated by the principle of market competition 
admitted as ideal type in everywhere. In other words, the optional 
insurance purchasing depending on one's own ability eventually causes 
the asymmetric structures of health care system and the national 
problems beyond the expected efficiency of market competition. At this 
point, the public option could be a watershed for health insurance 
reform, only if the health care network system execute adequately and 
fairly across each sector among public, private, and non-for-profit 
organizations. To implement the public option, there are several 
requirements the nation might need. Therefore, I am going to state 
about the current health care system in the United States and the ideal 
configuration of the network system with a new organization where the 
public option might be implemented.

HEALTH CARE SYSTEM
Part 1. Government
    Federal Government and state governments are involved in health 
care plan through either way, even though the government cannot cover 
all population in the United States. On the one hand, ``Medicare'' is 
regarded as a federal program with no insurance companies under Federal 
Government, which covers most persons aged 65 or elder, certain people 
on Social Security disability, and which is composed of a hospital 
insurance plan and a supplementary medical insurance plan. However, it 
is not limited by individual demand, but a single-payer system as an 
entitlement program. Firstly, Medicare hospital insurance (called Part 
A) assists patients in covering cost in-hospital, post-hospital nursing 
home care, and home care, and it is subsidized by Social Security 
payroll taxes. Secondly, Medicare medical insurance (called Part B) 
supplements welfare providing diagnostic laboratory costs, physical 
therapy, and surgeon service; moreover, it is associated with the 
hospital insurance plan. Thirdly, Medicare prescription drug coverage 
(called Part D) supports the costs of prescription medications in a 
bit.
    On the other hand, ``Medicaid'' is also a federal program, but it 
is administered by state government with different rules, which is for 
low-income and vulnerable people with children, under age 65, as well 
as over who already tired out their Medicare benefits. This Medicaid 
program provides fundamental medical services--e.g. hospital, nursing 
facility and home health care, and physical remedy Medicare does not 
cover, as well as family planning, preventive care, outpatient 
prescription drug, and eyeglasses. For instance, each state has a 
protection and advocacy agency funded from the Federal Center for 
Mental Health Services. The agencies have to provide the protections 
for mental illness people and conduct the investigations in order to 
care for them.
    The Medicare and Medicaid program are supported by Federal 
Government and state governments providing premiums, deductibles and 
share of costs. In addition, their finance is appropriated by general 
tax structure. While Federal Government is responsible of the general 
provision of health care plans, state governments support more specific 
services that are not covered by Federal Government.
Part 2. Non-for-profit
    As contracting out or privatization, the entire organization in 
non-for-profit sector is associated with linkage partners either 
directly or indirectly. As third-sector closely interrelated with 
governments or private sector, non-for-profit organizations play a 
major role to provide health care services, to allocate health plans 
through networks, and to provide multiple services that are fairly 
different among the organizations. Their funds are derived from 
federal, state, and county governments and they also reinvest their 
earnings in to their infrastructure. In other words, their pure premium 
is supposed to invest on actual health care services, not 
administrative costs. Through federal regulations, managerial 
responsibility and administration are transferred from the governments 
to non-for-profit organizations in order to improve health care 
services. For instance, the Health Care Financing Administration (HCFA) 
as the one of the state agencies in Kansas State rendered the 
administrative responsibility, case management, to nonprofit Area 
Agencies on Aging. Non-for-profit aims at reduce state payroll expenses 
and shrink the size of the state Medicaid bureaucracy. In addition, it 
is required to change clientele type, the volume of cases, and the 
urgency of care for those clients (Barbara S. Romzek and Jocelyn M. 
Johnston, 1999, p. 112)
    Non-for-profit organizations usually subcontracted with federal 
program under the governments to provide upgraded services, trustworthy 
services, and lower-price services unlike Medicaid program; on the 
other side, they in practice provide more beneficial services and build 
safer health care network than for-profit agencies do.
Part 3. For-profit
    Health care in for-profit sector is usually operated by one or two 
monopolistic mechanism rather than competitive mechanism. Almost 
private companies such as insurance agencies, private hospital, medical 
laboratory, pharmacy and so forth intend to focus on their benefit and 
profit of them in that they are designed with a variety of ways and for 
distinctive purposes. However, some quality of health plans by for-
profit organizations tends to against high costs, which is far from 
ideal market in terms of laissez-faire. Moreover, their policy inclined 
to vary depending on customers (divided into age, sex, and health 
status). According to Organizing the Health Insurance Market (1992), 
Peter Diamond indicates common pattern of health insurance companies. 
One is a variety of insurance premiums for people in different 
categories, with a wide range of premiums. Second is the underwriting, 
which is the technical term for screening applicants in order to 
determine risk class and acceptability, including the possibility of 
refusing to sell to individuals because they are not viewed as 
profitable given the risk classification and rates used. Third, in some 
state, there is a government organized residual pool, without 
underwriting so that everyone in that state can buy some coverage. 
These phenomena lead uninsured people and unfair tradeoff.
    Health plans through for-profit sector can be selected by certain 
customers who do not choose the public sector or non-for-profit sector, 
and then they usually expect the different policy and the more 
qualified services compared to prices. Therefore, for-profit sector can 
be operating through premium and marginal benefit, especially market 
incentives relied on their profit.
THE GOAL OF THE PUBLIC OPTION
    The public option mentioned below is based on President Barack 
Obama's Health Care Speech to Congress on September 12, 2009.
    The public option as per choice and competition will provide more 
realistic security and stability to those who have health insurance and 
to those who do not have yet. The public option will reduce the growth 
of health care costs for the families, businesses, and governments and 
then it gives responsibility to the government and insurance companies, 
as well as employers and individuals, which is related to multiple-
payer environment.
    First, nothing in this plan will require changing the coverage, if 
one already has health insurance through job, Medicare, Medicaid, or 
individual acquisition. Rather, this plan will make better health care 
condition; for example, insurance companies cannot drop the coverage 
any more whatsoever having severe illness. It means there will be no 
more arbitrary cap of coverage. Besides, insurance companies will have 
to serve preventive care and routine checkups. All in all this plan 
will lead saving money and lives in terms of more security and 
stability.
    Second, this plan will guarantee affordable and qualified insurance 
to everyone, if one has not health insurance, if lose one's job or 
change, or if have small business. For this plan, a new insurance 
exchange will be established for individuals and small businesses to 
purchase health insurance at competitive prices. In case of disability 
to afford the low-priced insurance, tax credits based on one's need 
will be provided. Therefore, insurance companies will be in the 
participation of the new insurance exchange having an incentive that 
can recruit millions of new customers. Based on second plan, 
improvement of health care system can work only if everyone has health 
insurance either way.
    In sum, three outlines are followed: (1) consumer protections with 
insurance, (2) an exchange where purchasing affordable coverage by 
individuals and small businesses, and (3) an obligation for affordable 
people to buy insurance.

TODAY'S PROBLEM
    Those who live in threatened bankruptcy are extraordinary hardships 
to have health insurance. They are not welfare people, but middle-class 
Americans. Most of them cannot afford high costs that are three times 
if one is self-employed rather than employer. Or, in spite of the fact 
that there are persons who are able or willing to pay, they are often 
denied to purchase insurance because of high risky to cover. While some 
purchase health insurance from public or non-for-profit sector, others 
obtain from private sector. However, it leads a number of problems such 
as low quality services, insufficient services, high price insurance, 
and so forth.
    As a rising costs problem in the United States, insurance premium 
is almost three times than wages. The reason is that small businesses 
require for their employees to pay high premium or give up the entire 
coverage. Moreover, hidden tax due in part to uninsured people causes 
the rising costs in emergency room or charitable care.
    These health care systems of nowadays mentioned above give 
disabilities deprivation and taxpayers tremendous burden. These 
problems cause greater costs to Medicate and Medicaid programs in terms 
of the red operation due in part to increased needs. Furthermore, there 
exist contradictory opinions. On the left, they argue that a single-
payer system that acutely separates the private insurance market and 
the government provision to the whole like Canada's is the solution. On 
the right, they insist that the employer-based system should be quit 
and then individuals should buy health insurance by themselves.
IDEAL NETWORK AMONG PUBLIC, PRIVATE, AND NON-FOR-PROFIT SECTOR
    For the public option, the new network is required to combine 
public, private, and non-for-profit sector with a new organization. 
This is because the size of health care system will be enlarged more 
than ever. The public option will be based on customers' choice and 
agencies' competition at the market. Public sector for the whole 
customer, private sector for qualified service, and non-for-profit 
sector for fairer trade should be established under the new network. 
Besides, goal consensus, efficient service delivery, and professional 
association through the adaptable policy are needed to implement the 
public option.
    First of all, the public option is to guarantee beneficiaries to 
keep security and stability. This goal can affect all sectors and then 
the organizations in public, private, and non-for-profit sector have to 
remind of it, not focus more on their lucrative results or marginal 
costs. While the governments are to merely provide subsidies from 
general taxation into Medicare and Medicaid programs and to contract 
with non-for-profit organization, companies in private are to only seek 
profits regardless of social equity so far. The result could lead 
serious national problems like the gap between wealth and poverty. When 
all of the organizations reach the same consensus, the goal of the 
public option will be enhanced. The policy among all sectors needs to 
include the definition of the goal, even though they compete with each 
other at the same market.
    Second, the network of public, private, and non-for-profit sector 
is required interrelating for efficient service delivery, not merely 
delivery focused on health care expenditure. This is because public 
sector will hire partial employees from private sector in order to 
implement the public option. On the public side, the governments do not 
provide direct service, but support the overall programs; non-for-
profit organizations contracted with the government intend to provide 
specific service than the governments. On the other side, private 
agencies can supply the best service to only limited customers who pay 
high costs or are healthier with no serious problems. At this point, 
incentive depending on each sector's characteristic will be a versatile 
solution in the new network. As a technical assistance incentive--e.g. 
intensive-service unit, concerted programs or education and advice-
monitoring, non-for-profit organizations can supply the improved 
service to customers who prefer the non-for-profit sector to others. As 
a participatory incentive in the new insurance exchange, private 
organizations can attract new customers in terms of their capacity, and 
public organizations also can be motivated in competition with private 
organizations. These incentives will affect to policymaker among the 
organizations.
    Finally, professional association related to all sectors will make 
the network as the whole. It means that through the new network, 
professional association can share the value of providers and the 
intention toward buyers, which will be able to build stronger 
relationship among them. It leads the similar tasks or reproductions in 
the new network as institutional isomorphism or internal structural 
similarities. Furthermore, they can negotiate to implement the public 
option with a kind of guidelines from professional association and then 
understand the reason of the implementation of the public option. As a 
result, professional association will be able to avoid disparity of the 
health care system

FOR THE PUBLIC OPTION, THE NEW ORGANIZATION AS AN ADMINISTRATIOR, 
        NEGOTIATOR, AND CONSULTANT
    The new organization will aim to cover full-scale, which limits 
exclusion of customers who cannot afford or already have health 
problems, which stimulates low quality services to improve and which 
controls exorbitant prices at health insurance, hospital, doctor, and 
etc. The new organization with new national programs is to execute 
health care reform, cover young adults, protect retiree health 
benefits, and generate a new federal grant for implementation of the 
public option.
    At health insurance exchange derived from health care reform, the 
new insurance market will be open to individuals and employers to 
purchase health insurance by their choice from the competition among 
public, private non-for-profit sector, even new health insurance 
cooperatives (co-ops). The new organization for the implementing public 
option will have to keep an eye on the health insurance exchange 
whether to be transparent or equitable to every participant. If 
necessary, the negotiation related to the prices would be required 
within all sectors. It does not mean of price-fixing or the formation 
of Cartel. All of agencies in public and private, even non-for-profit 
sector will appear their own policy to new customers. Moreover, these 
operations will be self-supporting by their profit and premium like 
present-day insurance agencies. In health care system, the methods of 
funding originate in direct payments, general tax payments and 
subsidies or donations. This is where the new organization will control 
the policy including the range of customers and the prices of health 
insurance in order to implement the public option appropriately.
    In addition, the new organization will be able to put pressure on 
the new network of public, private, and non-for-profit sector in order 
to make them to have their responsibility, as well as every individual 
and every employer having either small or big business. Again, public 
sector will have all-inclusive responsibility to implement the public 
option by encouraging high quality including the improvement of 
Medicare and Medicaid programs. Especially, state governments can 
decide on opt-in or opt-out system.i Either way, they cannot 
avoid their accountability to provide health services and products. 
Private sector will conduct more fairly under the public option. 
Because for-profit agencies will have to compete with public sector, 
their monopoly will turn into reasonable trade market.
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    \i\ While opt-in system is that state governments can produce a 
public plan or vice-versa, opt-out system the state governments have to 
set up a public option, however, they can stop providing the public 
plan.
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    What is more important thing is the new organization will blur the 
service boundary of public, private and non-for-profit sector if 
various health programs are gave the sector, respectively. This 
organization will be toward better health care system. It means that 
the same direction to new health care system can bring a successful 
result of supply-driven services away from obviously separated sectors, 
as if the one organization encourages providing qualified health 
service and as if the clearly separated sectors are the divided 
divisions within the one organization. It also means that the new 
organization will not impose the same rules and ways to deliver health 
services, but induce the same enthusiasm for better health care system 
in terms of the public option. On the other side, each individual or 
employer will purchase the health insurance through the new network. 
They will also need some advice to figure out which will be suitable to 
their own conditions. This is where the new organization will be 
applied as a consultant, which means the new organization should not 
merely determine the certain health insurance to the certain customer, 
but support to decide the proper health insurance with much 
information.
    Finally, in the new network with the new organization, insurance 
purchasing will be operated by customized health care in that all 
sectors are interrelated under the new organization as well as every 
individual and employer receive the guidelines or suggestions from the 
new organization. This new network will be within the market where 
public, private and non-for-profit sector will compete together, which 
leads the insurance industry.

[GRAPHIC] [TIFF OMITTED] T3016A.113


    Figure 1. The ideal network with the new organization: the new 
organization in the new network can control overall sectors to 
successfully implement the public option. As the provider, public, 
private and non-for-profit sector will serve various health programs 
and health insurance at the same market; as the buyer, each individual 
and self-employed will be able to purchase health insurance depending 
on their ability and give health care programs at the market.

CONCLUSION
    To rebuild health care system, trust from customers and conscience 
among each organization as organization-to-organization perspective are 
important. The public health care option announced by the president 
Barack Obama would deserve everyone in the United States. All of the 
programs related to health care are performed by the Federal Government 
and state government, for-profit organizations, and non-for-profit 
organizations respectively. As a result, it brings national problems 
and gives the realization to improve overall health care system. For 
successful implementation of the public option, the new organization 
that is not involved in public, private, or non-for-profit sector, but 
one of the administrators, negotiators and consultants could be 
required. If the ideal model I mentioned the new network with the new 
organization is possible, I would expect that every customer in the 
United States will have their own health insurance without any fear of 
contemporary health care system, as the nation tends to encourage the 
public option in spite of critical opposition that it is merely 
extended Medicare plan, and that if any policies implemented at 
national level should be accepted, it would acknowledge the big 
government leads the increased tax revenues and thereby it would 
restrict individual decision whether to purchase health insurance or 
not.
    To sum up, it is necessary to concern about the new network or the 
new organization to alternate the original system. The entire network 
system can be changed by the radical purpose or the social demands. 
Therefore, well-constructed network system can improve the overall 
efficiency, quality and acceptability.

REFERENCES
Diamond, P. (1992). Organizing the Health Insurance Market. 
        Econometrica, 60(6), 1233-1254.
Lee, S. D., Alexander, J. A., & Bazzoli, G. J. (2003). Whom Do They 
        Serve?: Community Responsiveness among Hospitals Affiliated 
        with Health Systems and Networks. Medical Care, 41(1), 165-179.
Provan, K. G., & Milward, B. H. (1991). Institutional-Level Norms and 
        Organizational Involvement in a Service-Implementation. Journal 
        of Public Administration Research and Theory, 1(4), 391-417.
Romzek, B. S., & Johnston, J. M. (1999). Reforming Medicaid through 
        Contracting: The Nexus of Implementation and Organizational 
        Culture. Journal of Public Administration Research and Theory, 
        9(1), 107-139.
Schneiberg, M. (2005). Combining New Institutionalisms: Explaining 
        Institutional Change in American Property. Sociological Forum, 
        20(1), 93-137.
Florida--State Resource Guide. (n.d.). Retrieved November 28, 2009, 
        from http://mentalhealth.about.com/cs/localandregional/a/
        florida.htm.
Medicare and Medicaid: What's the Difference? (2005). Retrieved 
        November 28, 2009, from http://www.nolo.com/legal-encyclopedia/
        article-29615.html.
Medicaid: A Program Overview. (2000, September). Retrieved November 28, 
        2009, from http://www.policyalmanac.org/health/archive/
        hhs_medicaid.shtml.
The Value of Nonprofit Health Care. (n.d.). Retrieved November 27, 
        2009, from http://www.nonprofithealthcare.org/reports/
        5_value.pdf.
White, J. (2007). Markets and Medical Care: The United States, 1993-
        2005. The Milbank Quarterly, 85(3), 395-448.

                                 
                       Statement of Ibrahim Dere
A healthcare system network design proposal for the U.S.:
``No uninsured left behind''
Ibrahim Dere PAD 5106--Public Organizations, Fall Semester
Instructor Nevin Smith
December 2, 2009

1. INTRODUCTION
    The healthcare system reform in the U.S. has been a hot topic from 
beginning of the 2008 presidential election campaign. The president 
Barrack Obama has promised to passed comprehensive health reform in 
order to control rising health care costs, guarantee choice of doctor, 
and assure high-quality, affordable health care for all Americans (The 
White House, retrieved on 11/25/2009 from http://www.whitehouse.gov/
issues/health-care).
    In this paper, I will try to design a healthcare system network in 
which the public organizations will actively participate in both policy 
regulation level and provision level in the healthcare industry and 
running by a public, private, and not for profit organizations 
collaboration.

2. THE CONCEPTUAL FRAMEWORK
a. The necessity of public-private-NPO partnership
    They are well known facts that, about 16% of the entire population 
has no health insurance in the U.S. (retrieved on 11/25/2009 from 
http://www.gallup.com/poll/121820/one-six-adults-without-health-
insurance.aspx) and healthcare is more expensive than many 
industrialized country. The reform should also aim to reduce the 
general level of price in health industry. Unavailability of the 
healthcare or accessing to the healthcare with unreasonable prices has 
some disadvantages for not only for individuals but also for the entire 
society.
    Public option is a type of service provision of not only 
healthcare, but also other public services, such as education, national 
security, etc. Public service production and/or provision is generally 
done by a collaboration of the governmental, for profit, and not profit 
organizations. Of course, like any goods and service, in healthcare 
issue, whole service can be served or ant necessary goods, such as 
medicine, drug, prosthesis, etc. can be provided by the government by 
health professionals who are working for government in the health 
institutions owned by the government. In this kind of provision option, 
``public option'' would be regarded just as an ``ideal type'' or a 
``pure type''. Max Weber suggest ``an ideal type is formed by the one 
sided accentuation of one or more points of view'' according to which 
``concrete individual phenomena . . . are arranged into a unified 
analytical construct''; in its purely fictional nature, it is a 
methodological ``utopia [that] cannot be found empirically anywhere in 
reality.'' (Stanford Encyclopedia of Philosophy, Aug 24, 2007, 
retrieved on 11/25/2009 from http://plato.stanford.edu/entries/weber/
#IdeTyp).
    Even in the national security which has been regarded as the ``pure 
public service,'' the ideal type does not exist. More or less private 
or nongovernmental stakeholders involve in the service provision 
process. No matter what kind of system will be implemented after the 
healthcare reform bill passed, not only the uninsured who will utilize 
the projected the system, but also under the insured individuals will 
be affected the healthcare reform. Therefore, all of the stakeholders, 
including private insurance companies, private health institutions, 
pharmaceutical industry, and medical industry will be affected 
positively or negatively. It is not an unexpected that such interest 
groups will make effort to influence policy making process to maximize 
their interest.
    According to Bozeman's dimensional model, few complex organizations 
are purely public or purely private. Instead, some mix of public and 
private authority influences the behavior o f most organizations. If 
publicness is independent o f the formal legal status o f the 
organization, it is convenient t o think that some government 
organizations are ``more public'' than others, that some business 
organizations are ``more private'' than others, and that it is possible 
for specific business organizations to be ``more public ``in some 
respects than specific government organization. Chaordic system 
thinking view emphasizes that systems flow or change naturally and 
perceives work organizations as complex adaptive systems. They also 
suggest that Chaordic system thinking perceives the member of an 
organization (a unit of the healthcare system) as operating in both 
horizontal (e.g. cross departmental) and vertical (e.g. cross-
hierarchical) heterarchical system aggregates in which more complex 
structures and mental models may develop (Bozeman & Bretschneider, 
1994).
    According to William F. West, bureaucratic structures are means of 
political control and political actors choose administrative 
institutions that will perpetuate their interests in the future. He 
also quotes from Terry Moe (1989 and 1990) has described the 
relationship between interest groups and bureaucratic structure in a 
more systematic way than traditional pluralist theory provides. Whereas 
members of the general public (and even well-informed voters) know 
little about the implications of administrative procedures and 
organizational arrangements, groups are highly attentive to issues of 
program design: Interest groups take an active part in the politics of 
structural choice, and politicians have strong incentives to be 
sensitive to their interests and demands (West, 1997).
b. The necessity of intergovernmental labor division
    If we consider the facts that the U.S. is one of the most populous 
and wealthiest nations in the world in terms of GDP and GDP per capita, 
and private healthcare and health insurance system have been dominated 
by the private entities/insurers throughout its history, the proposed 
healthcare design should include the private (nongovernmental) parties, 
more or less. Besides that the United States has a Federal Governmental 
system and it has been strong local government tradition.
    Amendment 10of the U.S. Constitution Ratified on 12/15/1791 states 
that ``The powers not delegated to the United States by the 
Constitution, nor prohibited by it to the States, are reserved to the 
States respectively, or to the people.'' (Retrieved on 11/25/2009 from 
http://www.house.gov/house/Constitution/Amend.html). The layers of 
government: in the U.S. three layers of government with sovereignty of 
their own (not a single government) provide public services, levy 
taxes, and borrow money. Indeed, there are more than 86,000 governments 
in the U.S., counting federal, state, and local entities (Frederickson, 
1997). Additionally, private and nonprofit stakeholders the proposed 
healthcare system will be a complex organizational network. The 
proposed healthcare systems in which the government involved has been 
illustrated as below in order to show how it will be complex by a 
Republican Congressman, Kevin Brady, 8th District of Texas. (Retrieved 
on 11/25/2009 from http://www.house.gov/apps/list/press/tx08_brady/
71509_hc_chart.html).

[GRAPHIC] [TIFF OMITTED] T3016A.114


    Any complex organization is made up of a number of subsystems 
[governmental layers], which in turn consist of sub-subsystems 
[departmental sections of the governments]. The smallest system level 
of any organization may be defined as the role performed by each 
contributing member, with the system parts consisting of those aspects 
of his personality required for role performance. These role-based sub-
systems should not be confused with organizational subdivisions, such 
as hospitals, insurers, physicians, or individuals (Lyden, 1975).
c. The necessity of governance and networking
    [Public service] [p]rovision means government intervention to 
ensure availability or, generally, to finance the service; it does not 
require production by the government.'' (Mikesell, 2007). Where 
traditional public administration emphasizes the internal dynamics of 
public agencies, the newer forms of action often involve elaborate 
partnership arrangements with nongovernmental actors (Salamon, 1989).
    Frederickson defines the governance as a wide range of types of 
organizations and institutions that are linked together and engaged in 
public activities and the patterns of interaction of multiple-
organizational systems or network (Frederickson, 1997). Newer tools [in 
public administration] share a significant common feature: they are 
highly indirect they rely heavily on wide assortment ``third 
parties''-- . . . private hospitals . . . , to deliver publicly 
financed services and pursue publicly authorized purposes. The upshot 
is an elaborate system of third-party government in which crucial 
elements of public authority are shared with a host of non-governmental 
or other governmental actors. . . . In a sense, the ``public 
administration problem'' has leaped beyond the borders of the public 
agency and now embraces a wide assortment of ``third parties'' that are 
intimately involved in the implementation, and often the management, of 
the public's business. . . . many countries in western Europe have non-
profit sectors quite a bit larger than that in the U.S., financed 
largely through grants and contracts from the state. In shifting the 
focus in public problem solving from agencies and programs to generic 
tools, the new governance also shifts the attention from hierarchic 
agencies to organizational networks. The defining characteristics of 
many of the most widely used, and most rapidly expanding, tools is 
their indirect character, their establishment of interdependencies 
between public agencies and a host of third-party actors. As a result, 
government gains important allies, but loses the ability to exert 
complete control over the operation of its own programs, instead of 
sharp division between the public and private spheres, [the new 
government tools] blend the two together (Salamon, 2002). In public 
private partnerships, contracts replace hierarchy. Instead of chain of 
authority from policy to product, there is a negotiated document that 
separates policymaker from policy output. (Donald F. Kettl, p 21).
    In most industries, routines, programs, goals, public accounts, and 
structures are subject to both competitive and institutional isomorphic 
pressures. Such pressures presumably dampen such behavioral 
consequences of legal form as might otherwise exist. Competition among 
for profit and nonprofit healthcare providers, for example, is said to 
make the latter more socially responsible and the former more efficient 
than they would otherwise be. Hollingsworth & Hollingsworth report 
declining differences on a range of structural and performance 
variables of nonprofit, for profit, and public hospitals between 1935 
and 1979. Thus form-related differences might emerge more strongly in 
comparisons among industries with differing compositions in one 
society, or between the same industries in different places (DiMaggio & 
Anheiner, 1990). Kessler & McClellan suggest that areas with a presence 
offer-profit hospitals have approximately 2.4% lower levels of hospital 
expenditures, but virtually the same patient health outcomes. They 
conclude that for-profit hospitals have important spillover benefits 
for medical productivity. (Kessler & McClellan, 2002).
    La Porte suggests that modern organizational life is characterized 
increasingly by a growing number of intra-, inter-, and trans-
organizational relationships. These phenomena are signaled by terms for 
(i) structure, such as complex systems, coalitions, various forms of 
federalism, for example, marble cake federalism, communication nets, 
and allusion to the computer/electric circuitry metaphor, (i.e., as 
networks); (ii) characteristics of component relationships, such as 
inter-dependence, tight (or loose) coupling, multiple horizontal or 
vertical relationships between elements/members of a network; and (iii) 
dynamics or process, such as bargaining, action, or information flows, 
and resource exchanges between net members. He adds that the metaphor 
of networks advances the descriptive discussion at least one useful 
step toward more specificity in characterizing the webs, interconnected 
systems, and interdependencies of modern public organization. He 
continues that the network metaphor connotes relationships, between net 
members, that are cooperative, and to a significant degree self-
reenforcing. The networks are likely to be large, spread over wide 
geographies. Salient descriptive characteristics would include (i) the 
scale and general structure of the net, (ii) the properties of its ties 
or connectivity, (iii) the patterns of exchanges among net members, and 
(iv) the problem more salient in public networks than in private, 
economic one (La Porte, 1996).
    Lee, Alexander, and Bazzoli suggest that health institutions which 
are affiliated with health systems and more diversified systems or 
networks (legally integrated or connected with a loosely and 
voluntarily network) tended to be more responsive to the communal needs 
compared to freestanding communal hospitals (Lee, Alexander, and 
Bazzoli, 2003). It can be argued that scale economics and high level of 
diversity in a network enhance the skills and resource for the health 
institutions.
d. Necessity of a self adaptive system
    Kira and Eijnatten suggest that, in order to promote work-
organizational sustainability, they consider organizations as chaordic 
open systems and propose to extend the foundations of socio technical 
system (purposefully designed and controlled to generate services or 
products) from operational ST to chaordic ST chaordic system thinking. 
At the work-organizational level, sustainability means an ability to 
find ways to deal with challenges and capability to create new 
opportunities for a productive existence (Kira & Eijnatten, 2008).

3. NETWORK DESIGN PROPOSAL
    I propose a public health insurance model that both governmental, 
for profit and non for profit organizations are acting their roles 
within a harmony to sustain the healthcare system which has been one 
the most complex industries in the U.S.
    The health insurance system is an inseparable part of the 
healthcare system in the U.S. In my model. every citizen, including 
legal residents must have at least one full coverage health insurance 
policy (primary policy). In addition to the existing private insurance 
companies, the Federal Government will create a publicly-owned 
insurance company which will be the last resort for obtaining a health 
insurance and the first source for the public employees. Individuals 
may purchase the policy either from private insurers or governmental 
health insurance company individually. Employers must purchase health 
insurance policy for their employees from either from private insurers 
or governmental health insurance policy. In this case, the half-cost of 
the primary policy will be charged to the employee. Employee's part 
will be retained/checked off from the employees' salaries and 
transferred to the insurer on behalf of the employee. Primary insurance 
policy will cover the employee's spouse--if the spouse is not working-, 
children under 18 years old. For each extra family member, the 
employee's part will increase slightly. Public employers will purchase 
the health insurance policy from the governmental health insurance 
company. Self employers will be subject to the rules which are applied 
to the employees. The employers cannot hire a part time employee who 
has no health insurance. Partial amount of the policy will be paid to 
the employee. Governmental insurance will cover all of the medical 
expenses including, medicine, eye care, dental plan. Aesthetics 
procedures will be out the policy unless there is medical necessity and 
will be paid by the patients. Governmental insurance policy will be 
purchased by the government for unemployed people or people who has no 
income or fortune. Federal Government will create a fund in order to 
subsidize the governmental health insurance company. By subsidization 
of the governmental health insurance for destitute individuals, the 
government will apply redistributive policy by transferring fiscal 
resources from one class or group to another (Lowi, 1972).
    The governmental health insurance company will collect its premium 
revenues just like the tax revenues and nonpayment of the governmental 
health insurance premiums will be evaluated like tax offense.
    None of the medical service or treatment will be provided free or 
co-pay free by the government. If the patients has no salary to pay for 
the co-pay, this amounts will be met by the government. Even in this 
case, the patients will pay a ``symbolic price, i.e. $1'' for each 
service as co-pay. The government will pay the insurance expenses 
instead of the medical expenses to the medical institutions.
    The healthcare service will be a federal issue. But the Federal 
Government will not be the healthcare service provider. It will be 
responsible for supervising the governmental health insurance company, 
organizing and supervising the healthcare system. The Federal 
Government will set the tariffs as price cap for each medical 
examination and medical supplies which will be applied by the 
governmental health insurance company to make payment to the health 
institutions. While this tariff will not be binding for private health 
insurance companies, private hospitals, and drug companies, it will be 
used in order to prevent the application exorbitant price policy for 
private entities. In other words, the government will not set the price 
of the services or medical materials, but it will limit to the 
governmental health insurance company for the payment of each payment. 
By doing this the government will apply a regulative policy to set 
standards in terms of price (Lowi, 1972). All of the stakeholders, such 
as representatives of consumers' organizations, pharmaceutical 
industry, private hospitals, and insurance companies, will participate 
in the regulatory process in accordance with the governance.
    The laws, rules, and regulations flexible as much as possible in 
order to cerate a well adaptive system to meet the requirement of new 
unpredictable circumstances.
    The public health institutions will be classified as three or four 
categories. ``The first category health institutions'' will take care 
of the basic health problems for instance tonsillitis etc. The second 
one will take care of more complex health problems that are not solved 
in the first step. Finally, at the third step, complex problems that 
are not solved health problems will be taken care of. Except for 
military institutions, the first and second category public health 
institutions will be transferred to the local governments, and the 
third category health institutions will be under the responsibility of 
the states. These facilities will be funded by the governmental health 
insurance company. If these institutions accept patients who hold 
private insurance policy, the co-pay's will be transferred by the 
institution and the private insurers' part will be transferred to the 
governmental insurance company by the private insurers.
    Healthcare system providers will consist of governmental, private, 
and nonprofit organizations. Private health insurance holders will keep 
going to the private institutions. The governmental health insurance 
holders will have three options:

        1- They will have option to go to the public health 
        institutions by paying reasonable co-pay.
        2- They will have option to go to the nonprofit health 
        institutions by paying co-pay, if the institution applies.
        3- They will have option to go to the private health 
        institutions by paying co-pay. But in this case co-pay will not 
        be fewer than the amount that public institutions apply. 
        Private health institutions will must charge and collect the 
        co-pay from the patients who hold the public health insurance 
        policy.

    The existing programs Medicare, Medicaid, the Children's Health 
Insurance Program and the Veterans Health Administration will be merged 
in the governmental health insurance program. Wealthy senior citizen 
will have to purchase their own health insurance. (Richard Epstein, 
retrieved on 11/25/2009 from http://healthaffairs.org/blog/2008/03/13/
health-care-disparities-deregulation-first-redistribution-last/).
    Every individual will have a medical record which is kept in a 
federal institution and every transaction will be recorded within the 
account. (Medical record privacy misuse will be a federal offense to 
protect privacy.) Every insurer, including the governmental company 
will notify each member's personal information, especially whether or 
not he or she has a valid policy. Frictional uninsured interims will be 
covered by the governmental health insurance company.
    The government (federal, state, and local) or governmental health 
insurance company will not produce or sell drugs or medical supplies. 
They will pay the governmental insurance policy holders medical 
expenses to the private providers such as private hospitals, 
pharmacies, medical supplies sellers, etc. Public health insurer, 
having a huge negotiation power, may obtain the medication form the 
drug companies from cheaper prices.
    In case of epidemic or pandemic, which is declared by the Federal 
Governmental nationwide or in partial in the country, urgent and/or 
compulsory health expenses for every citizen will be paid by the 
governmental health insurance company regardless of valid policy.
[GRAPHIC] [TIFF OMITTED] T3016A.115

4. CONCLUSION
    As a conclusion, I propose a public option model which will coexist 
private health insurance companies, private health institutions, 
private pharmaceutical companies, and nonprofit health institutions 
together with the public entities that are functioning at regulatory 
and/or street level. This model will be a public umbrella that provides 
a full coverage health insurance both to uninsured individuals together 
with people who utilizing the existing public medical aid programs and 
suffering from the unaffordable health insurance policies. Due to the 
fact that, in the public option, private and not for profit 
organizations will keep playing their important roles, governance will 
be a key concept to cooperate all three sectors in order to sustain the 
healthcare system. Instead of sharp division between the domains of 
public, private, and not for profit, they will form a self evolving -as 
much as possible- and complex structure. Redistribution will be another 
key characteristic of the system due to the fact that enlarging public 
interference/portion in the healthcare system will necessitate extra 
fiscal resources and taxpayers will have to pay more. In order to built 
up and pursue the good governance patterns, a well defined, well 
functioned, comprehensive, and adaptable organizational and 
technological networks should be created by beginning from the federal 
level through to the bottom level and from the governmental domain to 
the private and not for profit domains.

5. BIBLIOGRAPHY
    Amendment 10of the U.S. Constitution Ratified on 12/15/1791 states 
that (http://www.house.gov/house/Constitution/Amend.html).
    Kettl, Donald F., The Transformation of Governance, Public 
Administration for Twenty-First Century America, The Johns Hopkins 
University Press, Baltimore, Maryland, 2002.
    Bozeman, Barry & Bretschneider, Stuart, The ``Publicness Puzzle'' 
in Organization Theory: A Test of Alternative Explanations of 
Differences between Public and Private Organizations, Journal of Public 
Administration Research and Theory: J-PART, Vol. 4, No. 2 (Apr., 1994), 
pp. 197-223.
    DiMaggio, Paul J. & Anheier, Helmut K.,The Sociology of Nonprofit 
Organizations and Sectors, Annual Review of Sociology, Vol. 16 (1990), 
pp. 137-159.
    Frederickson, H. George, The Spirit of Public Administration, 
Jossey-Bass Publishers, San Francisco, 1997, 272 p.
    Gallup Inc. (2009). Retrieved on 11/25/2009 http://www.gallup.com/
poll/121820/one-six-adults-without-health-insurance.aspx.
    Kessler, Daniel P. & McClellan, Mark B., The Effects of Hospital 
Ownership on Medical Productivity, The RAND Journal of Economics, Vol. 
33, No. 3 (Autumn, 2002), pp. 488-506.
    Kira, Mari & van Eijnatten, Frans m., Socially Sustainable Work 
Organization: A Chaordic System Approach, System Research and 
Behavioral Science, (2008) 25, 473-756.
    La Porte, Todd R., Shifting Vantage and Conceptual Puzzles in 
Understanding Public Organization Networks, Journal of Public 
Administration Research and Theory: J-PART, Vol. 6, No. 1 (Jan., 1996), 
pp. 49-74.
    Lee, Shoou-Yih D., Alexander, Jeffrey A., Bazzoli, Gloria J., Whom 
Do They Serve?: Community Responsiveness among Hospitals Affiliated 
with Health Systems and Networks, Medical Care, Vol. 41, No. 1 (Jan., 
2003), pp. 165-179.
    Lowi, Theodore J., Four Systems of Policy, Politics, and Choice, 
Public Administration Review, Vol. 32, No. 4 (Jul.--Aug., 1972), pp. 
298-310.
    Lyden, Fremont James Lyden, Using Parsons' Functional Analysis in 
the Study of Public Organizations, Administrative Science Quarterly, 
Vol. 20, No. 1 (Mar., 1975), pp. 59-70.
    Mikesell, John, Fiscal Administration: Analysis and Applications 
for the Public Sector, 7th Edition, by Thomson Wadsworth, 2007, 707 p.
    Salamon, Lester M., Beyond Privatization: the Tools of Government 
Action, Washington D.C.: Urban Institute Press, 1989.
    Salamon, Lester M., The Tools of Government A Guide to New 
Governance, Action, Governance and the Tools of Public Action, Oxford 
University Press, 2002.
    Stanford Encyclopedia of Philosophy, (2007), Retrieved on 11/25/
2009 from http://plato.stanford.edu/entries/weber/#IdeTyp.
    West, William F., Searching for a Theory of Bureaucratic Structure, 
Journal of Public Administration Research and Theory: J-PART, Vol. 7, 
No. 4 (Oct., 1997), pp. 591-613.
    The White House, The, retrieved on 11/25/2009 from http://
www.whitehouse.gov/issues/health-care.

                                 
   Statement of James F. Allsup, President, CEO and Founder of Allsup

    Chairman Tanner and Members of the Subcommittee, thank you for 
considering my written testimony today regarding the Social Security 
Administration's challenges in managing the massive disability claim 
backlog during the current economic downturn.
    My name is James Allsup, and I am a former employee of the Social 
Security Administration and the founder and CEO of Allsup Inc., the 
largest non-attorney Social Security Disability Insurance (SSDI) 
representation company. Since 1984, we have helped more than 120,000 
individuals obtain disability benefits.
A Grave New Threat
    Earlier this year, I provided written testimony before the full 
Ways and Means Committee, commenting on an increasingly grave threat to 
the SSDI system, and most importantly, to hundreds of thousands of 
disabled individuals. Despite the best efforts of the Social Security 
Administration and policymakers to address an exploding backlog of 
claims at the hearing level, the highest unemployment levels in 25 
years were causing desperate Americans to flood the Social Security 
Administration with disability claims at an unprecedented rate.
    From 2004 through 2007, application levels were stable, with the 
SSA processing between 2.1 million and 2.2 million SSDI applications 
each year. Those numbers began increasing in 2008--when for the first 
time more than 2.3 million applications were filed. They grew even more 
dramatically, to more than 2.7 million, in the recently completed FY 
2009.
    It's amazing the difference one year can make. For years, 
disability advocates have been working to raise awareness of the 
massive backlog of claims at the hearing level. Congress and the 
Administration should be commended for providing the resources needed 
by the SSA to begin addressing that challenge. The men and women of the 
SSA deserve praise for using those resources wisely to reduce the 
number disability hearings pending for the first time since 1999.
    Unfortunately, the current crush of applications will undo that 
progress. The SSA recently reported that the level of initial claims 
pending now exceeds 1 million people--that's nearly a 40 percent 
increase over the level from FY 2008. It is quite clear that even as 
the backlog improves at the hearing level, the line for benefits 
continues to grow rapidly at the front end of the system.
If They Only Knew
    The long wait for benefits imposes real costs to applicants, 
according to a recent national claimant survey conducted by Allsup. 
People with disabilities experience financial crises, extreme stress 
and declining health while stuck in the federal disability backlog. An 
overwhelming majority of SSDI applicants face grave setbacks and wish 
they would have known from the start that expert representation was 
available to assist them.
    Arthur Blair, of Gaithersburg, MD., was a program manager at a 
group home before a combination of osteoarthritis, severe back pain and 
depression made it impossible for him to keep working. During his two-
year wait for SSDI benefits, Mr. Blair tapped deep into his savings and 
had to sell his home after he and his wife were unable to make their 
mortgage payments. His condition also worsened.
    According to Mr. Blair: ``I think the process takes away our 
humanity. There are no resources to help you. You are in a financially 
devastating position, and by the time you're approved, you have 
accumulated so much debt and lost everything you've worked for. It's 
almost impossible to recuperate what you lost.''
    Mr. Blair's experience is typical, according to Allsup's 2009 
survey of SSDI claimants. Of the nearly 300 successful SSDI claimants 
who came to Allsup for representation, 90 percent said they faced 
negative repercussions while waiting for their SSDI award. These 
included:

          Stress on family--63 percent
          Worsening illness--53 percent
          Draining of retirement/savings--35 percent
          Lost health insurance--24 percent
          Missed mortgage payments--14 percent
          Foreclosure--6 percent
          Bankruptcy--5 percent

    Nearly 80 percent of respondents reported facing ``barriers to 
handling the SSDI process on [their] own,'' including problems with 
understanding (48 percent) and completing (61 percent) the necessary 
forms. Three-fourths (75 percent) said the level of stress they 
experienced while applying for SSDI benefits was either ``extreme'' (39 
percent) or ``significant'' (36 percent).
    Only half (51 percent) of all applicants knew third-party 
representatives could help them apply for SSDI benefits. Almost nine in 
10 (85 percent) survey respondents said they would have found it useful 
for the SSA to inform them in advance of their options for receiving 
help with their SSDI application. Another 83 percent would have found 
it helpful or valuable if the SSA had provided them with a list of 
authorized third-party representatives from which to choose.
    Unfortunately, because applicants often are unaware help is 
available, too many initial claims are denied for reasons that have 
nothing to do with the applicant's disability status. If applicants 
only knew third-party assistance was available to professionally review 
their application and help properly and accurately document their 
disability, thousands of claimants could be processed faster and 
applicants could avoid the painful financial and personal repercussions 
of being stuck in the system.
Collaboration, Not Privatization
    As always, I emphasize that increasing the assistance offered by 
third-party SSDI representatives is not, as some have charged, a step 
toward privatization. It is a way for government to leverage the 
existing capabilities of expert disability representatives to help 
address a real and growing crisis. It is very similar to the Internal 
Revenue Service's acknowledgement of tax preparation professionals, who 
provide valuable assistance to taxpayers in navigating a complex tax 
system.
    Literally hundreds of thousands of government worker-hours could be 
saved if more applications processed by the Social Security 
Administration were professionally documented before being submitted. 
This would leave these employees free to accomplish their primary 
mission--reviewing applicants, adjudicating appeals and administering 
the SSDI process.
    Chairman Tanner and Members of the Subcommittees, I commend you for 
holding this hearing to raise awareness of these issues. Thank you 
again for the opportunity to provide testimony. I look forward to 
working with you to address this growing crisis.

                                 
                        Statement of Leri Harper

    The Social Security Administration's approach to disability, past 
and present, fails to address the problems and inadequacies of 
processing claims via the state Disability Determination Services 
(DDS), where there is ample evidence of regional differences in claims 
processing. AFGE strongly believes that if problems with inconsistent 
decisions at the initial claims level are addressed, appeals will 
diminish. Disability claimants deserve consistent initial claims 
decisions and payments as soon as possible in the claims process.
    The concurrent disability process shows inexplicable variable 
allowance rates depending on the state of residence. There is no 
evidence to show that residents of some states are twice as susceptible 
to become disabled as residents in other states. Obviously, different 
state initial claims approval rates have more to do with the bifurcated 
system than the health of residents of these states. Claimants are 
entitled to consistent decisions regardless of their state of residence 
or whether they are filing for Social Security or SSI disability 
benefits. The SSA Office of Quality Performance (OQP) is tasked with 
keeping track of nationwide consistency of disability claims, and their 
own studies reveal the disability process shows inexplicable variable 
allowance rates depending on the state of residence. For instance a 
study for fiscal year 2009 revealed that if a claimant applies in New 
Hampshire, they have nearly a 52% chance of being allowed at the 
initial level. If a claimant applies in Tennessee, they have a 24% 
chance of being allowed. These inequities have never been addressed, 
and there is an inherent inconsistency between states in what is 
supposed to be a national disability program with consistent program 
standards.
    http://ssahost.ba.ssa.gov/pmr/index.aspx.
    Regional differences are apparent, with many southern states at the 
low end of the spectrum for approving initial disability decisions; 
while many east and west coast states are at the high end for initial 
allowance determinations.
    The SSA Office of Quality Performance is the enforcer of the 
national disability claims standards, who are tasked to review initial 
disability claims under the same nationwide rules. We reviewed the most 
recent initial disability claim quality report from the Disability 
Quality Branch (DQB) of the Office of Quality Performance. 
Interestingly, no matter what state DDS is measured, the states' 
quality performance is all rated at a quality level of 91.5% or above 
in accuracy levels. All state DDS agencies are declared by OQP/DQB to 
provide good quality decisions, no matter how divergent their allowance 
or denial rate of initial claims. http://quality.ba.ad.ssa.gov/hq/
direports/qaper/pdf/itable1.pdf.
    During the past two years, the Office of Quality Performance 
decided to institute a change in the Disability Quality Review Branch 
process to try and iron out differences in their own national review 
process. In an attempt to resolve these inconsistencies, the Disability 
Quality Branch of the Office of Quality Performance now requires their 
employees to review cases from any state in the Union.
    Prior to this change in policy, Disability Quality Review branch 
employees were limited to reviewing cases only from their individual 
regions, meaning that the same federal reviewing staff would 
consistently review the same state DDS offices for whom they were 
responsible. These regional Disability Quality Branches reinforced the 
inequitable allowance rates time and again, which they recognized as a 
problem that needed resolution.
    Despite the Office of Quality Performance attempts to create a 
national virtual national review process, where Disability Quality 
Branch workers are called on to review cases from any state, we see no 
significant change in the state DDS' divergent allowance rates, meaning 
that the review program is ineffective. Even though we have a national 
quality review component that is well aware of the discrepancy, they 
have not been able to solve the problem, even with extensive hiring of 
new examiners during the past two years.
    We believe that policing the state DDS adjudication practices is a 
lot like herding cats, with various policy inconsistencies, political 
influences, and regional differences that have no place in a national 
disability adjudication program.
    Unfortunately, the chances for a claimant to be approved at the 
initial level have a lot to do with where they live and their income 
rather than the nature of their disability. That is inherent in the 
system. Each state has different criteria for hiring Disability 
Examiners. Each state provides them with different pay and benefit 
packages. Some state DDS offices are unionized, while others are not. 
Each state provides different training to their DDS employees. Employee 
retention rates vary dramatically from state to state. In effect, there 
are 50 different disability programs when there should be one.
    There is no evidence to show that residents of some states are 
twice as susceptible to become disabled as residents in other states. 
Obviously, different state initial claims approval rates have more to 
do with the bifurcated system than the health of residents in these 
states. Claimants are entitled to consistent decisions regardless of 
their state of residence or whether they are filing for Social Security 
or SSI disability benefits.
    According to the Government Accountability Office (GAO), a majority 
of DDS' do not conduct long-term, comprehensive workforce planning, 
which should include key strategies for recruiting, retaining, training 
and otherwise developing a workforce capable of meeting long-term 
goals. The State DDS agencies lack uniform minimum qualifications for 
Disability Examiners and have high turnover rates for employees and do 
not provide ongoing training for Disability Examiners. It is a key 
problem that must be reconciled in order to reform the disability 
system.
    Although the State DDS system is fully subsidized by SSA, state 
budgetary problems adversely affect the ability of SSA to provide 
disability services. For example, California State DDS workers were 
forced to accept weekly 8 hour furloughs due to the budget deficit 
situation in the State. Michigan DDS workers along with other MI State 
employees were furloughed due to State budget shortfalls even though 
DDS worker salaries were also fully funded by SSA.
    As many participants in the hearing testified, multiple state DDS 
offices followed suit, furloughing employees that were supposed to be 
earmarked for federal workloads, causing SSA to lose valuable initial 
case processing time, and resulting in worsening the disability backlog 
considerably.
    Social Security Commissioner Astrue recently made a decision to 
solve the initial case backlog by taking away work from states where 
there are average to high allowance rates, and creating mega-DDS 
offices in states where the allowance rates are lower. These states 
include Oklahoma, Mississippi, Arkansas, and Virginia. The Commissioner 
plans to reassign cases from states that supposedly need assistance. 
Commissioner Astrue calls these ``Extended Service Teams'' and says ``. 
. . they will be placed in States that have a history of high quality 
and productivity and the capacity to hire and train significant numbers 
of additional staff.''. However Mississippi has an initial disability 
allowance rate of 26.6%, Arkansas 37.1%, Virginia 40.4%, and Oklahoma 
38.6%.
    Interestingly, we noticed the Commissioner decided to locate these 
new centers in right-to-work states where union representation is 
absent. This will result in getting the work done more cheaply, but we 
think SSA will get a poorer quality of work and less well-documented 
claims that will ultimately end up at the hearings level. This will 
require the ODAR staff to obtain additional documentation and 
consultative exams that will again build more case processing delays 
into those claims.
    While we are concerned with the loss of union jobs nationwide, we 
are more concerned with consistency and fairness in the disability 
determination process. We would like to point out that Commissioner 
Astrue created this tier of mega-DDS offices ``under the radar'' 
without input from the congressional representatives whose states are 
affected, and this may be of concern to those representatives.
    AFGE predicts this backlog of disability claims will end up in 
multiple appeals that will glut the ODAR system once again, Because 
additional work will now be funneled to mega-DDS offices that have a 
historically low allowance rates, we predict the numbers of appeals 
will rise dramatically once the initial claims backlog is unclogged 
with the proposed temporary, stop-gap measures. This is not the best 
course of action for lasting change, consistency of decisions, and 
smooth workflow.
    We understand that everyone want to solve the problem of backlogged 
disability cases, but piecemeal solutions will not work when the 
underlying problem of consistency between the state DDS disability 
adjudication practices versus the federal adjudication rules are not 
addressed. The bifurcation of the disability program between Federal 
and State workers is an anachronism dating to 1956 when the SSA 
disability program was created by Congress. It is time to modernize and 
create a unified, comprehensive Federal disability system. AFGE 
recommends the federalization of the State Disability Determination 
Services; keeping the jobs in the states but supplying these skilled 
workers with federal jobs. At that point, national standards and 
training can occur where SSA actually has control of their own process. 
This will bring consistency to the initial claims decisions in the same 
way that the Supplemental Security Income program (that was federalized 
from the states in 1974) created a uniform system of benefits for low 
income, blind, disabled and aged population.
    AFGE believes the time to act is now to federalize DDS workers and 
provide consistent oversight and training that will bring timely, 
consistent nationwide decisions for the vulnerable disabled claimants 
that we are committed to serve in an unbiased and equitable fashion.

Submitted by,

Leri Harper
Disability Examiner/Social Insurance Specialist
For AFGE Local 3937
Seattle, WA

                                 
          Statement of the National Council of Social Security
                        Management Associations

    I am the President of the National Council of Social Security 
Management Associations (NCSSMA). I have been the District Manager of 
the Social Security office in Newburgh, New York for eight years and 
have worked for the Social Security Administration for 29 years. On 
behalf of our membership I am pleased to have the opportunity to submit 
this written statement for the record to the Committee.
    NCSSMA is a membership organization of nearly 3,500 Social Security 
Administration (SSA) managers and supervisors who provide leadership in 
1,262 Field Offices and 35 Teleservice Centers throughout the country. 
We are the front-line service providers for SSA in communities all over 
the nation. We consider our top priority to be a strong and stable 
Social Security Administration, one that delivers quality and prompt 
community based service to the people we serve, your constituents.
    We are certainly concerned about the tremendous challenges facing 
the Social Security Administration. We wholeheartedly agree with 
Commissioner Astrue's statement that it is a moral imperative that the 
disability backlogs be eliminated. On a daily basis, employees in our 
offices speak to thousands of individuals throughout the country who 
are desperate to receive a decision on their claims for disability 
benefits.
    We are very appreciative of the support that the House Ways and 
Means Social Security Subcommittee has provided to improve SSA's budget 
situation. The additional funding SSA received in FY 2008 and FY 2009 
has helped significantly to prevent workloads from spiraling out of 
control and assisted with improving service to the deserving American 
public. As an example, SSA has been able to provide additional 
resources for our Teleservice Center (TSC) operations, and recently 
announced the opening of a new TSC in Jackson, Tennessee, to assist in 
reducing our National 800 Number Network busy rates. We are also 
grateful for the Subcommittee's support for the President's proposed FY 
2010 budget for SSA. If this budget is approved by Congress, it will 
help SSA continue to make progress on the numerous workloads we are 
challenged with, and maintain the momentum that was so difficult to 
achieve.
    As a result of inadequate budgets received over the past decade 
through FY 2007, the number of staff in SSA Field Offices declined 
significantly. In fact, SSA's staffing levels were, until just 
recently, at the lowest levels since the SSI program started in 1974. 
Because SSA workloads were growing during this period, customer waiting 
times increased and call answering rates declined. With the more 
adequate funding for SSA in FY 2008 and FY 2009 there have been 
significant efforts to restore staffing levels to near where they were 
in FY 2004, but they are still lower than in previous years. This 
additional staff, along with the significant amounts of overtime we 
have been authorized to work, have assisted greatly with addressing our 
rapidly growing workloads and increased number of customers and 
callers.
    The following is a brief overview of the workload challenges that 
are confronting Field Offices.
    1. Additional Claims and Appeals. Field Offices are expected to 
receive 1.04 million more retirement claims and 1.08 million more 
disability claims in FY 2009 and FY 2010 above FY 2008 levels. In 
addition to the higher volume of disability claims received by Field 
Offices, as the DDSs and the Hearing Offices reduce their backlogs, 
many more additional claims are being approved and must be adjudicated 
to pay benefits due. The Hearing Offices' cases can require extensive 
development and are particularly time consuming for Field Offices to 
process.
    2. Improving SSI Quality and Additional SSI Redeterminations. 
According to a November 2009 OMB report, in FY 2009 SSA paid out 
approximately $45.0 billion to SSI recipients. However, there was an 
improper payment rate of $5.436 billion or nearly 12.1%, one of the 
largest in the Federal Government. A November 2009 study by the SSA 
Office of Inspector General stated that for the 5-year period ending in 
FY 2008 SSA paid $204.5 billion to SSI recipients. Of that total, $16.6 
billion was overpaid, representing 8.1% of outlays. Underpayments 
during this same 5-year period totaled $3.4 billion or 1.7% of outlays. 
Given the significant overall dollars involved in SSA's payments, even 
the slightest errors in the overall process can result in millions of 
dollars in improper payments.
    The SSA Office of Inspector General stated that completing 
additional SSI redeterminations will help to reduce this error rate 
because SSA will identify these incorrectly paid dollars earlier. In FY 
2010, Field Offices will work about 1.1 million more SSI 
redeterminations than FY 2008. This is nearly a 100% increase in SSI 
redeterminations. The staffs processing these cases are working at a 
very high rate of production. In fact, SSA productivity increased by 
3.17% in FY 2009. However, we are concerned that despite this increased 
production, there is insufficient time to review the cases adequately 
for accuracy. Improving the process means not only doing more SSI 
redeterminations, but also having sufficient time to review the work 
for accuracy.
    3. Medical Continuing Disability Reviews. Field Offices are also 
processing more medical Continuing Disability Reviews (CDRs). In FY 
2008 SSA processed 235,000 medical CDR cases. In both FY 2009 and FY 
2010, we are scheduled to process 329,000 cases. This increase in 
processing medical CDRs will assist significantly with addressing 
program integrity concerns. However, there is currently a backlog of 
1.5 million medical CDRs pending processing. Accomplishing this medical 
CDR backlog has the potential to save the American taxpayers 
approximately $20 billion. Additional resources will be needed in Field 
Offices and the DDSs to process medical CDRs and to ensure program 
integrity.
    4. Work Continuing Disability Reviews. Field Offices are also 
making a concerted effort to address the volume of work CDRs that are 
awaiting processing. Since April 2009, the number of pending work CDRs 
in Field Offices has been reduced from about 66,000 cases to the 
current 55,000 cases. During the same period, the number of ``over one 
year old'' cases has been reduced from approximately 7,650 to under 700 
cases. Reducing the number of pending work CDRs will help to minimize 
the large overpayments often encountered on these cases.
    5. Field Office Customers. Field Offices have worked diligently to 
redirect resources to reduce the amount of time a claimant waits to see 
an SSA interviewer. We are making significant progress despite our many 
challenges. In October 2009 a claimant waited an average of 19 minutes, 
as compared to 22.8 minutes a year earlier. This is a significant 
accomplishment considering the fact that the number of customers 
visiting SSA Field Offices continues to increase. In FY 2009, there 
were over 45 million customers, an increase of 600,000 customers from 
FY 2008.
    6. Field Office Telephone Calls. Field Offices are struggling to 
answer telephones with the increased workload demands. We handled about 
58 million calls in Fiscal Year 2009. This is an increase of 4 million 
calls from FY 2008. SSA studies by the Office of Quality Performance 
state Field Office telephone busy rates were about 58% in Fiscal 2009, 
which is an increase of 3% from the prior year. Many offices must 
direct staff to handle walk in traffic to reduce waiting times, and as 
a result have insufficient staff to answer telephone calls.
    7. Training. Field Office management is having difficulty with 
allocating sufficient time for ongoing staff training. Workload demands 
necessitate that direct staff be assigned to accomplish production work 
at the expense of much needed training.
    8. eServices or Internet. SSA is transitioning more work processes 
to electronic service delivery. The FY 2010 goal is to have 38% of 
Retirement claims and 25% of Title II Disability claims filed on the 
Internet. SSA Field Offices have had to address significant issues 
resulting from the increased volume of claims filed electronically. 
Almost all Disability Internet applicants must be recontacted to 
perfect the application. For Retirement claims, many claimants must be 
recontacted to address the error prone area of month of election. While 
electronic services have assisted Field Offices significantly with the 
unprecedented high number of SSA applications received, it is important 
to note that staff must still spend significant time processing many of 
these electronically initiated actions. Also, electronic services 
provide only minimal relief to inner city offices, offices with rural 
service areas, and areas with a high percentage of non-English speaking 
applicants, because these areas have populations not as likely to use 
or have access to computers or the Internet.
    It is essential that SSA continues to receive positive budgets to 
ensure that Field Offices are able to adequately serve the American 
public and to process important workloads. As illustrated above, even 
with the recent more favorable SSA budgets, Field Offices are still 
struggling with tremendous workload demands. We are also especially 
concerned about the program integrity workloads and the billions of 
dollars that are being lost due to the backlog of medical CDRs and 
overpayments in the SSI program.
    Commissioner Astrue's testimony indicates that Field Offices are 
expected to maintain their current staffing levels in FY 2010 and about 
2,700 additional positions are scheduled to be added to the Hearing 
Offices and DDSs. While additional staff is much needed for the Hearing 
Offices and DDSs to address the disability backlogs and these positions 
should not be reduced, additional staff for Field Offices would yield 
significant improvement in service to the American public and assist 
with the disability backlog. Our network of 1,262 community based Field 
Offices is an integral part of SSA's service delivery system, and the 
Field Office is where the disability process begins and ends. Increased 
staff for Field Offices would reduce workload backlogs, address program 
integrity concerns, improve SSI accuracy performance, and allow for the 
transmittal of a more accurate and complete disability product that 
would assist with expediting disability decisions.
    SSA's flexibility to continue to provide necessary resources in FY 
2010 will be determined much by the President's proposed budget in FY 
2011 and future years. If these budgets are not adequate to address the 
workload challenges, the progress made in the past two years will be 
eroded. Field Offices could redirect some of the overtime dollars 
currently expended to hire additional temporary or permanent employees 
if flexibility is provided due to the expectation of a favorable SSA 
budget in FY 2011.
    We believe a minimum of $13.2 billion is needed for SSA's FY 2011 
administrative funding. This level of funding would provide SSA with 
the resources necessary to continue the progress made, while at the 
same time protecting many Americans from severe and unnecessary 
economic hardship. Our community based staffs are very committed to 
serving the American public, but we must have the tools and resources 
to do so. We sincerely appreciate your ongoing support to provide 
adequate funding for the Social Security Administration. We remain 
confident that this increased investment in SSA will benefit our entire 
nation.
    On behalf of the members of NCSSMA I thank you for the opportunity 
to submit this written statement to the Subcommittee. NCSSMA members 
are not only dedicated SSA employees, but they are also personally 
committed to the mission of the agency and to providing the best 
service possible to the American public.

                                 
                        Linda Fullerton's Letter
Members of the Committee:

    My name is Linda Fullerton, President/Co-Founder of the Social 
Security Disability Coalition, and it is again with great sadness, 
anguish and despair that I submit this testimony to you today as I have 
done several times in the past. But as usual my testimony apparently 
must not ever be read by anyone there, from what I can tell, based on 
what I saw. I watched this entire hearing on the internet, and each 
hearing that I see continues to be a source of major frustration for 
me. It happened that this hearing took place on my 54th birthday. Most 
people would have celebrated their birthday doing joyous types of 
things. Unfortunately since I filed for my own Social Security 
Disability benefits on December 6th 2001, I no longer have reason to 
celebrate much of anything anymore.
    My life was permanently destroyed with the stroke of pen by a 
neglectful government employee, to whom I was just an SS number, and it 
is more than I can bear. So now, not only will I never recover from my 
illnesses, but I will never recover from the permanent financial and 
physical devastation this has had on my life. After fighting and 
waiting for 1\1/2\ years, and losing all my life savings, pension money 
and any chance of ever having financial security again, my claim was 
finally approved. Even though a person may eventually get their 
benefits, the devastation does not miraculously disappear once the 
checks start coming. It often leaves a permanent scar on one's life. 
The stress I endured during that time and continue to deal with, every 
day living on the edge of total ruin, on top of all my illnesses is 
unbearable beyond belief and it is killing me. My health problems have 
become worse, and new ones have arisen as a result of all this stress. 
Each day is worse than the one before, with no hope in sight for any 
type of relief. I don't know how I am going to survive without some 
miracle like winning the lottery. My ``American Dream'' will never be 
realized. I have now been forced to live the ``American Nightmare'' for 
the rest of my days, because I happened to get sick, and file a claim 
for Social Security Disability benefits, a Federal insurance policy 
that I was forced to pay into for over 30 years. I am now doomed to 
live in poverty for the rest of my life, in addition to all my medical 
concerns. I will never be able to own a home, or get another car. My 
current vehicle which is on death's door, is the ONLY method of 
transportation I have for survival. When things break down now, I 
cannot fix them and have to do without. I struggle every day to pay for 
food, medicines, healthcare, gas etc. having to decide which things I 
can do without till the next check comes, since I live strictly on the 
inadequate, monthly SSDI check I receive, always teetering on the brink 
of disaster. I did not ask for this fate and would trade places with a 
healthy person in a minute.
    As a result of that horrible experience, I thought it was extremely 
important to watch the hearing that you held on this issue that affects 
the very lives of millions of this nation's most vulnerable citizens. I 
would not wish this hell on anyone, and I did nothing wrong to deserve 
it, I just happened to get sick in America. I was forced to pay for an 
insurance policy out of my paycheck every week, and when I needed that 
benefit the most, the Federal Government tried to prevent me from 
getting it. Even more sad than my situation, are the ones who have died 
while waiting to get their benefits approved.
    During 2006 and 2007, at least 16,000 people fighting for Social 
Security Disability benefits died while awaiting a decision (CBS News 
Report--Disabled And Waiting--1/14/08). This is almost more than 4 
times the number of Americans killed in the Iraq war since it began.
    During 2007, two-thirds of all applicants that were denied--nearly 
a million people--simply gave up after being turned down the first time 
(CBS News Report--Failing The Disabled--1/15/08).
    PLEASE NOTE--I personally was the source behind these CBS News 
reports and was featured in the broadcast of ``Disabled And Waiting.''
    Something is seriously wrong, when even one person in this country 
should have to be put through this nightmare. You may think I am bitter 
but nothing could be further from the truth. I believe everything 
happens for a reason, and I learned a lot from this experience. I want 
to turn it into something positive, and use this knowledge I have 
gained to make sure that nobody else suffers again, when they need help 
from the SSA. In fact, in order to do that more effectively, I actually 
reached out to the SSA, in spite of my bad experience, and have met 
some wonderful people there as a result, who are in fact very dedicated 
and hard working individuals. I am forever grateful for their concern 
for our problems, but we need many more of them. I testify today, not 
to get your pity, but so you can get an accurate picture of what is 
really happening to the most vulnerable citizens of this nation. I want 
to illustrate how decades of neglect, lack of oversight, and under 
funding of the Social Security Administration's Disability program, has 
a very negative impact on the lives of disabled Americans such as 
myself whom you were elected to serve and protect. Therefore, I must 
ask: When are you going to stop this abuse?
Call For Open Congressional/SSA Disability Hearings
    I have been following these hearings, for over five years now, and 
I find it deeply disturbing, and glaringly obvious, that not one 
panelist/witness selected to appear, is an actual disabled American who 
has tried to get Social Security Disability benefits, and who has 
experienced this nightmare for themselves. Unfortunately this continues 
to be the case with this hearing as well. While the witnesses you 
continually rely on may be very reputable in their fields, unless you 
have personally tried to file a claim for Social Security Disability, 
you cannot begin to understand how bad this situation really is, and 
therefore the panelists you continue to rely on are not fully qualified 
to be the only authority on these issues.
    I was forced to watch this hearing on the internet, because my 
repeated requests over the last several years to testify in person, 
have been blatantly ignored. I have made it very clear in previous 
written testimony submitted for the hearing record, through faxes, e-
mails and phone calls, to all the Congresspeople in my district, others 
on this Subcommittee, and many others in both the House and the Senate 
Committees that affect the Social Security Disability Program in any 
way, that I want to testify in person at these important hearings that 
directly affect me and others like myself. As an actual disabled 
American, I again make the same request today, as I have in the past, 
that in future Congressional hearings on these matters, that I be 
allowed to actively participate instead of being forced to always 
submit testimony in writing, after the main hearing takes place. For 
some reason beyond my comprehension, you still will not let me do that.
    I often question whether anybody even bothers to read the written 
testimony that is submitted when I see the continued lack of results 
after previous hearings. I am more than willing to risk my very life 
for the opportunity to testify, should I be permitted to do so, since I 
believe so strongly in the importance of this program. In fact, I ask 
that you call another hearing, and allow me to be the sole witness, 
since the eye opening information I have to share with you would fill 
the entire 1- 2 hours, since this program is so badly broken, and 
filled with corruption at every level. I have also come up with 
solutions to all the problems as well, which I would also be discussing 
at that time. I want a major role in the Social Security Disability 
reformation process, since any changes that occur have a direct major 
impact on my own well being, and that of millions of other disabled 
Americans just like me. I also propose that Congress immediately set up 
a task force made up of SSDI claimants, such as myself, who have 
actually gone through the claims process, that has major input and 
influence before any final decisions/changes/laws are instituted by the 
SSA Commissioner or members of Congress. This is absolutely necessary, 
since nobody knows better about the flaws in the system and possible 
solutions to those problems, then those who are forced to go through it 
and deal with the consequences when it does not function properly.
    As a result of my repeatedly denied requests to testify, it is my 
opinion, that you don't want to know what is REALLY going on. Since my 
last written testimony I have released a video on the internet called:

        American Nightmare--It Can Happen To You!

    I made it to alert the American people to the ugly realities of 
what it is like to try and get the SSDI benefits that they have been 
forced to pay for, and may never survive to actually collect. They need 
to know how the Federal Government continually breaks its social 
contract with them on a daily basis. It seems to me that if you do not 
have to face someone such as myself, that has barely lived through this 
horrible nightmare, and has had their whole life permanently devastated 
as a result of continued neglect of this program, we remain just a 
bunch of SS numbers whose lives can be destroyed without guilt. We are 
in fact, your mothers, fathers, sisters, brothers, children, 
grandparents, friends, neighbors, and honorable veterans who have 
served this country. Something is severely wrong with this picture!
    When you question the SSA Commissioner at these hearings, why have 
you not ordered him to provide the data on how many Americans have 
actually died each year, or have been forced to use state provided 
services, while waiting for their SS Disability claims to be processed? 
Since the SSA also pays out a one time death benefit to a survivor's 
family, and contracts out the medical portion of disability claims to 
the states who provide the Social Service programs that disability 
applicants often need to use, this data should be readily available if 
you bothered to ask for it. These are important questions that need to 
be answered, but it seems to me you don't care enough about the 
disabled to ask them. How can you get an accurate handle on this 
situation without all the facts and appropriate witnesses who wish to 
testify? Who better to give feedback at these hearings than those who 
are actually disabled themselves, and directly affected by the 
program's inadequacies! It seems you have forgotten that WE are the 
customers, and the SSA and Congress work to serve us. I find it hard to 
believe that these hearings cannot be scheduled in such a way that 
different and more appropriate witnesses could be allowed to testify. 
If you continue to do the same thing over and over again, as you have 
for the past several years, you will continually get the same poor 
results, which is exactly what is happening. You ask the same 
questions, of the same people, and wonder why there is little to no, 
improvement between hearings. There is a major piece of the puzzle 
missing--the people you have been elected to serve--and until you 
really commit to getting the ALL the information needed to fix the 
Social Security Disability program, you are making decisions based on a 
lack of important information, which can be very detrimental, and the 
problems are going to continue to escalate, no matter how much money 
you put toward fixing them.
    There are five main reasons for the disability hearing backlogs:

          Lack of communication and educating the public
          States of denial
          State and private disability companies forcing 
        claimants to file disability claims with SSA or risk losing 
        private coverage
          Lack of oversight
          Lack of funding

Lack Of Communication Between Claimants, Doctors And SSA, Lack Of 
        Education On What Is Needed For A Claimant To Prove A 
        Disability Claim
    Currently there is little to no communication between the SSDI 
claimant and the SSA caseworkers handling their claims. More 
communication is needed and review of records by the claimant should be 
available at any time during all stages of the disability determination 
process. Before a denial is issued at any stage, the applicant should 
be contacted as to ALL the sources being used to make the judgment. It 
must be accompanied by a detailed report as to why a denial might be 
imminent, who made the determination and a phone number or address 
where they could be contacted. Also many times medical records 
submitted are lost or totally ignored.
    In case info is missing, or the SSA was given inaccurate 
information, the applicant can provide the corrected or missing 
information, before an actual determination at any level is made. This 
would eliminate many cases from having to advance to the hearing or 
appeals phase.
    Also many times doctors, hospitals etc often do not respond to SSA 
requests for medical information in a timely manner, or sometimes 
ignore these requests entirely. ALL doctors, and medical professionals 
including those at the VA should be required by Federal or State law, 
to fill out any medical forms and submit documents requested by the SSA 
within strict timelines or they will not be allowed to practice 
medicine in this country. Also as part of their continuing education 
program in order to keep their licenses, doctors should also be 
required to attend seminars provided free of charge by the SSA, in 
proper procedures for writing medical reports and filling out forms for 
Social Security Disability and SSI claimants.
    The major criteria used by the SSA to decide a disability claim, is 
residual functionality and the ``Blue Book Of Listings,'' yet this is 
not usually information that the general public is privy to when filing 
a disability claim. In fact it is a pretty well kept secret unless you 
know enough to do some research. In other words since the process is so 
nebulous from beginning to end, the deck is purposely stacked against a 
claimant from the very start. When the average person files a claim 
they seem to think that all they have to do is mention what is wrong 
with them, get their doctors to back up their medical claims, say they 
are disabled and cannot work, fill out a few forms and the checks will 
start coming in the mail. While in a ideal world the process should be 
that simple, nothing could be further from the truth. They do not 
realize, and are never told, that they must not only list their 
illnesses, but more importantly describe HOW their illnesses prevent 
them from doing work and daily activities. They are not told to list 
EVERYTHING that is wrong with them, and often only file a claim for one 
condition, that in itself may not be disabling, when they have several 
of them, that in combination, may in fact render them totally disabled. 
Many file claims because they cannot perform the job they have been 
doing for years, or cannot work as many hours that used to before they 
get sick. They do not fully understand that they have to not be able to 
work ANY job in the national economy, and that the SSA does not pay for 
partial disability. The SSA needs to do a much better job of educating 
the public at the onset of filing a disability claim to avoid 
confusion.
States Of Denial--The REAL Reason Behind The Social Security Disability 
        Hearing Backlogs
    Since Social Security Disability is a Federal program, where you 
live should not affect your ability to obtain benefits. Sadly this is 
not the case. While funding is a major problem that SSA faces, the 
other primary reason for these hearing backlogs, continues to be 
ignored during these proceedings, and that is the initial phase of the 
disability qualification process which is handled by the individual 
state DDS/Disability Determination Services offices. There, the most 
crucial part of your disability claim, the medical portion, is reviewed 
by a caseworker/adjudicator and medical doctor on their staff who never 
sees you, and in most cases never even communicates with you at all. 
Too much weight at the initial time of filing, is put on the SS 
caseworker's opinion of a claim. There needs to be more oversight that 
disability decisions be based with controlling weight given to the 
claimant's own treating physicians opinions and medical records in 
accordance with (DI 24515.004) SSR 96-2p: Policy Interpretation Ruling 
Titles II And XVI: Giving Controlling Weight To Treating Source Medical 
Opinions. Even though this policy ruling is in place, this is very 
often not happening.
    Excerpts from GAO-09-511T--Further Actions Needed to Address 
Disability Claims and Service Delivery Challenges--3/24/09:

           Although SSA is responsible for the program, the law calls 
        for initial determinations of disability to be made by state 
        DDS agencies. The work performed at DDS offices is federally 
        financed and carried out under SSA disability program 
        regulations, policies, and guidelines. See 42.U.S.C. 
        Sec. 421(a)(1).
           From September 1998 to January 2006, over 20 percent of 
        disability examiners hired during that period left or were 
        terminated within their first year. DDS officials said the loss 
        of experienced staff affects DDS' ability to process disability 
        claims workloads because it generally takes newly hired 
        examiners about 2 years to become proficient in their role.

        For example in November 2009:

          Mississippi had the lowest percentage of approvals at 
        the initial level of 24.4%
          Alaska and Colorado had the lowest percentage of 
        approvals at the reconsideration level of 0%
          Puerto Rico had the highest percentage of approvals 
        at the initial level of 61.9%
          Massachusetts had the highest percentage of approvals 
        at the reconsideration level of 30.5%

        Source: Social Security Administration--November 2009.

    That is a major fluctuation depending on what state you happen to 
apply for benefits in. Something is extremely wrong with this picture 
and proves the inconsistency of decision making by the state DDS 
offices in handing Federal disability claims.
    What would be an incentive for states to deny Federal claims? Since 
many Social Security Disability claims are SSI or both SSI/SSDI 
combined claims and many states offer to supplement SSI payments at a 
higher benefit amount, therefore they want to keep as many off the 
rolls as possible so they do not have to pay out this supplement. Also 
since there is a different pay scale for government vs state employees 
who are often underpaid, lack training, are overworked, and must meet 
quotas of cases processed, the tendency is greater to rubber stamp 
denials to move claims off their desk when a case needs too much 
development. Thus the explanation for the fluctuation in denial/
approval/backlog rates by state. Unfortunately there is very little if 
any training or oversight on the state DDS offices to make sure they 
are making the proper decisions on disability claims. This is why so 
many claimants appeal to the hearing level where a huge percentage of 
bad claims decisions are overturned and cases are finally approved. 
Anyone who doesn't see that a ``Culture Of Denial'' has become a 
pervasive part of an SSDI claimants encounter with the SSA, is either 
totally out of touch with reality or is reacting evasively to the 
subject.
    Excerpts from GAO Report GAO-04-656--SSA Disability Decisions: More 
Effort Needed To Assess Consistency of Disability Decisions--
Washington--July 2004:

           ``Each year, about 2.5 million people file claims with SSA 
        for disability benefits . . . About one-third of disability 
        claims denied at the state level were appealed to the hearings 
        level; of these, SSA's ALJ's have allowed over one-half, with 
        annual allowance rates fluctuating between 58 percent and 72 
        percent since 1985. While it is appropriate that some appealed 
        claims, such as those in which a claimant's impairment has 
        worsened and prohibits work, be allowed benefits, 
        representatives from SSA, the Congress, and interest groups 
        have long been concerned that the high rate of claims allowed 
        at the hearing level may indicate that the decision makers at 
        the two levels are interpreting and applying SSA's criteria 
        differently. If this is the case, adjudicators at the two 
        levels may be making inconsistent decisions that result in 
        similar cases receiving dissimilar decisions.''
           ``Inconsistency in decisions may create several problems . . 
        . If deserving claimants must appeal to the hearings level for 
        benefits, this situation increases the burden on claimants, who 
        must wait on average, almost a year for a hearing decision and 
        frequently incur extra costs to pay for legal representation . 
        . . SSA has good cause to focus on the consistency of decisions 
        between adjudication levels. Incorrect denials at the initial 
        level that are appealed increase both the time claimants must 
        wait for decision and the cost of deciding cases. Incorrect 
        denials that are not appealed may leave needy individuals 
        without a financial or medical safety net . . . An appeal adds 
        significantly to costs associated with making a decision. 
        According to SSA's Performance and Accountability Report for 
        fiscal year 2001, the average cost per claim for an initial DDS 
        disability decision was about $583, while the average cost per 
        claim of an ALJ decision was estimated at $2,157 . . . An 
        appeal also significantly increases the time required to reach 
        a decision. According to SSA's Performance and Accountability 
        Report for fiscal year 2003, the average number of days that 
        claimants waited for an initial decision was 97 days, while the 
        number of days they waited for an appealed decision was 344 
        days . . . In addition, claimant lawsuits against three state 
        DDS's have alleged that DDS adjudicators were not following 
        SSA's rulings or other decision making guidance . . . However, 
        according to DDS stakeholder groups, SSA has not ensured that 
        states have sufficient resources to meet ruling requirements, 
        which they believe may lead to inconsistency in decisions among 
        states. Furthermore, SSA's quality assurance process does not 
        help ensure compliance because reviewers of DDS decisions are 
        not required to identify and return to the DDS's cases that are 
        not fully documented in accordance with the rulings. SSA 
        procedures require only that the reviewers return cases that 
        have a deficiency that could result in an incorrect decision.''

    Excerpts from: Statement For The Record Of The National Association 
Of Disability Examiners--Georgina Huskey, President--Prepared For 
Subcommittee on Social Security/Subcommittee on Income Security and 
Family Support Of the Committee on Ways and Means Joint Hearing on 
Eliminating the Social Security Disability Backlog--March 24, 2009:

           ``Even at the DDS level, where few backlogs are publicly 
        reported and where the average processing time for an initial 
        claim is nearly 100 days, the stark reality is that there are 
        tremendous backlogs pending. Just because disability claims 
        have been assigned does not mean they are being worked and 
        disability examiners who carry caseloads two, three and even 
        four times the number deemed reasonable are, in essence, 
        housing a backlog of claims at their desk. Unfortunately, this 
        backlog of claims can lead to mistakes in case development and 
        contribute to mistakes in judgment, resulting in the potential 
        for erroneous decisions.''
           ``As experienced staff walk out the door, either due to 
        retirement or because of career changing decisions, SSA and the 
        DDSs have struggled in many parts of the country to attract the 
        kind of new hires that will keep the Agency at a level of 
        competence required in its service delivery. Prior to the 
        recent economic downturn, DDSs were reporting an annual 
        attrition rate approaching 15% with more than 22% of newly 
        hired disability examiners leaving by the end of their first 
        year. The result has been an increasing lack of experienced 
        personnel to process increasingly more complex disability 
        claims and forcing the DDSs to utilize limited training funds 
        to continually hire new staff, rather than provide ongoing 
        training for existing staff.''

Furloughs By States Of DDS Workers/Federalizing DDS Workers
    There has been a movement in many states over the past several 
months to furlough the DDS workers in an effort to ``save money'' for 
the states due to their increasing budget problems. What is not often 
communicated properly to the public is that these workers are in fact 
paid by the Federal Government and not the states. Therefore no actual 
money is saved by these furloughs and the public is harmed greatly due 
to their inability to be able to work. If federal disability claims 
take longer to process, then there becomes a greater need for these 
claimants to file for state services such as Medicaid, food stamps and 
cash assistance and in fact causes the more burden to the states. It 
amazes me that the state governments continually fail to see this 
connection.
404.1640 Performance Standards--General
    The following sections provide the procedures and guidelines we use 
to determine whether the State agency is substantially complying with 
our regulations and other written guidelines, including meeting 
established national performance standards. We use performance 
standards to help assure effective and uniform administration of our 
disability programs and to measure whether the performance of the 
disability determination function by each State agency is acceptable. 
Also, the standards are designed to improve overall State agency 
performance in the disability determination process and to ensure that 
benefits are made available to all eligible persons in an accurate and 
efficient manner. We measure the performance of a State agency in two 
areas--processing time and quality of documentation and decisions on 
claims. State agency compliance is also judged by State agency 
adherence to other program requirements. [56 FR 11020, Mar. 14, 1991]
404.1641 Standards of performance
    (a) General. The performance standards include both a target level 
of performance and a threshold level of performance for the State 
agency. The target level represents a level of performance that we and 
the States will work to attain in the future. The threshold level is 
the minimum acceptable level of performance. Performance below the 
threshold level will be the basis for the Commissioner's taking from 
the State agency partial or complete responsibility for performing the 
disability determination function. Intermediate State agency goals are 
designed to help each State agency move from its current performance 
levels to the target levels.
    (b) The target level. The target level is the optimum level of 
performance. There are three targets--one for combined Title II and 
Title XVI initial performance accuracy, one for Title II initial 
processing time, and one for Title XVI initial processing time.
    (c) The threshold level. The threshold level is the minimum 
acceptable level of performance. There are three thresholds--one for 
combined Title II and Title XVI initial performance accuracy, one for 
Title II initial processing time, and one for Title XVI initial 
processing time.
    (d) Intermediate goals. Intermediate goals are levels of 
performance between the threshold levels and the target levels 
established by our appropriate Regional Commissioner after negotiation 
with each State agency. The intermediate goals are designed to help the 
State agencies reach the target levels. Failure to meet these goals is 
not a cause for considering the State agency to be substantially 
failing to comply with the performance standards. However, failure to 
meet the intermediate goals may result in consultation and an offer of 
optional performance support depending on the availability of our 
resources. [46 FR 29204, May 29, 1981, as amended at 56 FR 11020, Mar. 
14, 1991; 62 FR 38452, July 18, 1997]
404.1642 Processing time standards
    (a) General. Title II processing time refers to the average number 
of days, including Saturdays, Sundays, and holidays, it takes a State 
agency to process an initial disability claim from the day the case 
folder is received in the State agency until the day it is released to 
us by the State agency. Title XVI processing time refers to the average 
number of days, including Saturdays, Sundays, and holidays, from the 
day of receipt of the initial disability claim in the State agency 
until systems input of a presumptive disability decision or the day the 
case folder is released to us by the State agency, whichever is 
earlier.
    (b) Target levels. The processing time target levels are:

        (1)  37 days for Title II initial claims.
        (2)  43 days for Title XVI initial claims.

    (c) Threshold levels. The processing time threshold levels are:

        (1)  49.5 days for Title II initial claims.
        (2)  57.9 days for Title XVI initial claims. [46 FR 29204, May 
        29, 1981, as amended at 56 FR 11020, Mar. 14, 1991]

404.1643 Performance accuracy standard
    (a) General. Performance accuracy refers to the percentage of cases 
that do not have to be returned to State agencies for further 
development or correction of decisions based on evidence in the files 
and as such represents the reliability of State agency adjudication. 
The definition of performance accuracy includes the measurement of 
factors that have a potential for affecting a decision, as well as the 
correctness of the decision. For example, if a particular item of 
medical evidence should have been in the file but was not included, 
even though its inclusion does not change the result in the case, that 
is a performance error. Performance accuracy, therefore, is a higher 
standard than decisional accuracy. As a result, the percentage of 
correct decisions is significantly higher than what is reflected in the 
error rate established by SSA's quality assurance system.
    (b) Target level. The State agency initial performance accuracy 
target level for combined Title II and Title XVI cases is 97 percent 
with a corresponding decision accuracy rate of 99 percent.
    (c) Intermediate Goals. These goals will be established annually by 
SSA's regional commissioner after negotiation with the State and should 
be used as stepping stones to progress towards our targeted level of 
performance.
    (d) Threshold levels. The State agency initial performance accuracy 
threshold level for combined Title II and Title XVI cases is 90.6 
percent.
404.1650 Action we will take if a State agency does not meet the 
        standards
    If a State agency does not meet two of the three established 
threshold levels (one of which must be performance accuracy) for two or 
more consecutive calendar quarters, we will notify the State agency in 
writing that it is not meeting the standards. Following our 
notification, we will provide the State agency appropriate performance 
support described in 404.1660, 404.1661 and 404.1662 for a period of up 
to 12 months. [56 FR 11020, Mar. 14, 1991]
404.1670 Substantial Failure--General
    After a State agency falls below two of three established threshold 
levels, one being performance accuracy, for two consecutive quarters, 
and after the mandatory performance support period, we will give the 
State agency a 3-month adjustment period. During this 3-month period we 
will not require the State agency to meet the threshold levels. 
Following the adjustment period, if the State agency again falls below 
two of three threshold levels, one being performance accuracy, in two 
consecutive quarters during the next 12 months, we will notify the 
State that we propose to find that the State agency has substantially 
failed to comply with our standards and advise it that it may request a 
hearing on that issue. After giving the State notice and an opportunity 
for a hearing, if it is found that a State agency has substantially 
failed to make disability determinations consistent with the Act, our 
regulations or other written guidelines, we will assume partial or 
complete responsibility for performing the disability determination 
function after we have complied with 404.1690 and 404.1692. [56 FR 
11021, Mar. 14, 1991]
404.1690 Assumption of Disability Determination function when we make a 
        finding of substantial failure
    (a) Notice to State. When we find that substantial failure exists, 
we will notify the State in writing that we will assume responsibility 
for performing the disability determination function from the State 
agency, whether the assumption will be partial or complete, and the 
date on which the assumption will be effective.
    (b) Effective date of assumption. The date of any partial or 
complete assumption of the disability determination function from a 
State agency may not be earlier than 180 days after our finding of 
substantial failure, and not before compliance with the requirements of 
404.1692.
    All phases of disability claims processing should be moved to and 
handled out of the Social Security individual field offices, including 
the DDS phase which is the medical determination phase currently 
handled by the states, and all hearing phases of the disability 
process. All people who process Social Security disability claims 
should be employees of the Federal Government to ensure accuracy and 
uniform processing of disability claims under Federal regulations and 
Social Security policies which is currently not the case. If the states 
are to continue to handle the DDS phase of the disability process, then 
all state employees handling Social Security claims should be required 
to receive a minimum of 3 months standardized training by the Social 
Security Administration, in SSA policies and Federal regulations 
governing SSDI/SSI claims processing. If more time and effort were put 
forth to communicate with claimants, and to make the proper decision at 
the onset, there would be no need for all these cases to be appealed to 
the hearings level in the first place. That in itself would be a huge 
factor in reducing the hearing backlogs, but this fact has been greatly 
ignored. Until you properly devote the time and energy to look into and 
reform this crucial part of the problem, the hearing backlogs will 
continue to grow at an uncontrollable rate, no matter how much money 
you give to the SSA.
Social Security Disability Program Problems--Contributing Burden Factor 
        on Medicaid/Social Service Programs For States
    There seems to be a relationship, between SSDI claims processing 
issues/backlogs, and the need for claimants to also apply for state 
funded Medicaid/Social Service programs. Many are forced to file for 
Medicaid, food stamps and cash assistance, another horrendous process. 
For example in New York State, about half the 38,000 people now waiting 
on disability appeals, for an average of 21 months, are receiving cash 
assistance from the state (New York Times 12/10/07). Those who file for 
these programs while waiting to get SSDI benefits, in many states, have 
to pay back the state out of their meager benefit checks once approved. 
As a result they're often kept below the poverty level, almost never 
able to better themselves since they can't work, and now are forced to 
rely on both state and federally funded programs instead of just one of 
them. This practice should be eliminated.
Regulation Is Necessary To Avoid Improper Social Security Disability 
        Claim Filings Due To State And Private Insurance Company 
        Policies
    There is a growing number of claims being filed by people who may 
not actually qualify for disability benefits under Social Security 
guidelines, but who are being forced to file Social Security 
Disability/SSI claims by their private disability and state disability 
carriers or risk not being eligible for benefits under those programs. 
Recently there has been media coverage on this issue which can be found 
here:

          Insurers Faulted As Overloading Social Security--NY Times--
        Mary Williams Walsh--4/1/08

                http://www.nytimes.com/2008/04/01/business/
                01disabled.html

          Exhibit D--Letter To Senator Charles Grassley From Disability 
        Claimant Who Was Required By Private Insurer To File Claim For 
        Social Security Disability Regardless Of Eligibility Or Risk 
        Loss Of Private Disability Insurance Benefits--1/21/09

                http://grassley.senate.gov/private/upload/Exhibit-D.pdf

          Exhibit E--Letter From SSA Commissioner To FTC Chairman 
        Regarding Private Disability Companies Requiring Their 
        Claimants To File For Social Security Disability Benefits--11/
        26/08

                http://grassley.senate.gov/private/upload/Exhibit-E.pdf

          Congress and the SSA needs to look into this issue and this 
        practice needs to be stopped immediately as this too greatly 
        adds to the disability backlog problem. In this case the 
        claimants should not be penalized but the insurance companies 
        should be.
       Lack Of Oversight Which Is Crucial To Resolving The Hearing 
            Backlogs
          It is obvious that for decades oversight of SSA practices has 
        been greatly, lacking which is one of the major reasons we have 
        the enormous hearing backlog you are dealing with today. At the 
        hearing you asked the Commissioner why he was not using the 
        Federal regulations listed above to help the states and 
        claimants deal with the furlough issue and he had no good 
        answer. The incredibly high denial rates at the initial and 
        reconsideration levels, are highly suspect, and eventual 
        approval of a majority of these cases at the hearing level 
        proves that lack of oversight at these phases contributes to 
        the hearing backlog as well. In an editorial letter from SSA 
        Commissioner Astrue dated 8/21/08 to the Atlanta Journal 
        Constitution in regards to the severe hearing backlogs it was 
        stated that ``We have taken a big step toward resolving that 
        problem by bringing onboard 175 additional administrative law 
        judges and additional staff to support them.''

          In reality:

               At of the end of fiscal year 2007 the amount of ALJ's 
        available to hear cases was at 1006, and at the end of fiscal 
        year 2008 the amount of ALJ's available to hear cases dropped 
        to 960.13. In fiscal year 2009 there were in fact only 1056.63 
        ALJ's available to hear cases.

        Source: Social Security Administration Reports

    The 175 new ALJ's that the SSA Commissioner hired has in reality 
only added 50 judges over the fiscal year 2007 level. Basically this is 
still inadequate amount of ALJ's, since it does not account for the 
fact that more judges may continue to leave for various reasons 
(retirement etc), and that the level of disability claims continues to 
increase instead of decrease, based on past history. The Commissioner 
has failed to publicly account for this fact, so he makes it sound like 
there is going to be several additional ALJ's above and beyond previous 
years, when he is in reality replacing judges who are leaving and not 
actually increasing by any substantial amounts, the number of the 
additional staff he truly needs. Also very often these judges have not 
even been allocated to the areas that have the largest hearing backlogs 
and there is no oversight on the SSA Commissioner to make sure they go 
where they are needed most. So the likelihood of the claims backlog 
being resolved with this so called ``fix'' is slim to none. In other 
words ``this is like putting a band aid on a gushing wound.'' More 
investigation of this problem by Congress, the Inspector General and 
GAO needs to happen immediately!
Horrendous Customer Service--Where Is The Oversight?
    In a January 2007 Harris poll designed to evaluate the services 
provided by 13 federal agencies, the public rated SSA at the bottom of 
the public acceptance list and it was the only agency that received an 
overall negative evaluation. SSA Field Offices have lost over 2,500 
positions since September 2005 and nearly 1,400 positions since 
September 2006. In 2007 SSA Field Offices saw about 43 million visitors 
a week, and that number is expected to increase by over a million more 
in 2008. Constituents visiting these local Field Offices continue to 
experience lengthy waiting times and the inability to obtain assistance 
via the telephone.
    Here is just a small sampling of some of the major problems with 
the current Social Security Disability program and State Disability 
(DDS) offices who process the initial phase/medical portion of 
disability claims:

          Severe under staffing of SSA workers at all levels of 
        the program Claimants waiting for weeks or months to get 
        appointments, and hours to be seen by caseworkers at Social 
        Security field offices Extraordinary wait times between the 
        different phases of the disability claims process
          Very little or no communication between caseworkers 
        and claimants throughout the disability claims process before 
        decisions are made.
          Employees being rude/insensitive, not returning 
        calls, not willing to provide information to claimants or not 
        having the knowledge to do so
          Complaints of lost files and in some states, case 
        files being purposely thrown in the trash rather than processed 
        properly
          Security Breaches--Complaints of having other 
        claimants information improperly filed/mixed in where it 
        doesn't belong and other even worse breaches
          Fraud on the part of DDS/OHA offices, ALJ's, IME's--
        purposely manipulating or ignoring information provided to deny 
        claims, or doctors stating that they gave medical exams to 
        claimants that they never did.
          Claimants being sent to doctors that are not trained 
        properly, or have the proper credentials in the medical field 
        for the illnesses which claimants are being sent to them for.
          Complaints of lack of attention/ignoring--medical 
        records provided and claimants concerns by Field Officers, IME 
        doctors and ALJ's.
          Employees greatly lacking in knowledge of and in some 
        cases purposely violating Social Security and Federal 
        Regulations (including Freedom of Information Act and SSD Pre-
        Hearing review process).
          Claimants cannot get through on the phone to the 
        local SS office or 800 number (trying for hours even days)
          Claimants getting conflicting/erroneous information 
        depending on whom they happen to talk to at Social Security--
        causing confusion for claimants and in some cases major 
        problems including improper payments
          Proper weight not being given to claimants treating 
        physicians according to SSA Federal Regulations when making 
        medical disability determinations on claims.
          Complaints of ALJ's ``bribing'' claimants to give up 
        part of their retro pay (agreeing to manipulation of disability 
        eligibility dates) or they will not approve their claims
          Poor/little coordination of information between the 
        different departments and phases of the disability process
          Complaints of backlogs at payment processing centers 
        once claim is approved

    Federal Quality Review process adding even more wait time to claims 
processing, increasing backlogs, no ability to follow up on claim in 
this phase.
    NOTE: These complaints refer to all phases of the SSDI claims 
process including local field offices, state Disability Determinations 
offices, CE/IME physicians, Office of Hearings and Appeals, the Social 
Security main office in MD (800 number).
Improper CE/IME Medical Exams Ordered By Social Security Result In 
        Higher Rate Of Denials, Hearings And Appeals
    Too much weight at the initial time of filing, is put on the 
independent medical examiner's opinion of a claim. CE/IME examiners are 
paid a fee by Social Security for each person they see, so the more 
claimants they process, the more money they make. Often times they are 
caught saying they performed exams that they in fact never performed, 
make mistakes, or make false, misleading statements about claimants. 
Many times the DDS offices or ALJ's are sending claimants to doctors 
that have very limited knowledge of their specific health conditions, 
who are not specialists, or even the proper type of doctor, to be 
examining a claimant for the type of medical conditions that they have. 
These doctors have no real idea how a patient's medical problems affect 
their lives after only a brief visit with them, and yet their opinion 
is given greater authority than a claimant's own treating physician who 
sees them in a much greater capacity? Something is way out of line with 
that reasoning, yet it happens every day. Even though a claimant's 
treating physicians are supposed to be given greater weight in decision 
making, this is often not the case. Whenever SSA required medical exams 
are necessary, they should only be performed by board certified 
independent doctors who are specialists in the disabling condition that 
a claimant has (example--Rheumatologists for autoimmune disorders, 
Psychologists and Psychiatrists for mental disorders). Common sense 
dictates that these poorly executed, and often unnecessary, medical 
exams result in a waste of time, money and energy, for both the 
claimants and the SSA, especially when the claimant ends up appealing a 
denial based on these improper SSA ordered examinations.
Utilize Hearing On The Record/Pre-Hearing Review Option To Reduce 
        Backlogs
    More emphasis and support staff need to be devoted to the pre-
hearing review process which could greatly reduce the current hearing 
backlog. This would obviously and should require more communication 
between hearing office staff and claimants or their representatives to 
update case files. Once the files have been updated, many would be able 
to be decided solely on the records in the file without having a full 
hearing in front of an ALJ.
Changes/Proper Funding Necessary For SSA To Accomplish It's Goals And 
        Properly Serve Disabled Americans
    I continually hear talk at these hearings about increasing the 
funding for the SSA, and you asking witnesses for answers, on how much 
the SSA will need to fix the current problems, and prevent new ones 
from arising in the future. One thing is said at the hearings, but when 
push comes to shove to vote for the SSA budget money, other programs or 
projects become higher priority, even though properly funding the SSA 
is literally a matter of life and death for millions of Americans. 
Nothing is more important than the health and well being of the 
American people, and as elected officials it is crucial that you never 
lose sight of that priority! Still I see that the SSA is under funded 
almost every year, and there is a continued challenge to get the money 
that the SSA requests. SSA should not have to compete each year for 
funding with the Departments of Labor, HHS and Education which are 
highly publicized and therefore, often more popular programs. All money 
that is taken out of American's paychecks for Social Security should 
not be allowed to be used for anything else other than to administer 
the program and pay out benefits to the American people.
    As stated in the previous testimony provided by Witlold 
Skierwczynski--President--National Council Of Social Security 
Administration Field Operation Locals to the House Ways And Means 
Committee on 4/23/08 it is recommended that:

           Congress should enact off budget legislation including SSA 
        administrative expenses with benefits which are already off 
        budget. Congress should retain appropriations and oversight 
        authority albeit unencumbered by artificial budget caps and 
        scoring restrictions.
           Congress should enact legislation requiring the Commissioner 
        to submit the SSA appropriation request directly to Congress.
           Congress should support the House Budget Committee 
        recommendation to increase the SSA administrative budget by 
        $240 million over the President's budget request.

Social Security Disability Claimants Face Permanent Devastation And 
        Death Resulting From The SSDI Claims Process
    Social Security Disability is an insurance policy which was created 
to be a safety net for millions of disabled Americans, and for many 
such as myself, it has become their only lifeline for survival. 
Unbearable stress, severe depression and suicidal thoughts are very 
common side effects of the disability claims process. I know this not 
only from my own personal experience, but from thousands of others that 
have contacted me to tell me their horror stories. The abuse and worry 
that applicants are forced to endure, causes even further irreparable 
damage to their already compromised health, and is totally 
unacceptable. Due to the total devastation on their lives and health as 
a result of the SSDI claims process, use of the SS Ticket to Work 
program, or any future chance of possibly getting well enough to return 
to the work force, even on a part time basis, becomes totally out of 
the question. Plus there is always the stress of having to deal with 
the SS Continuing Disability Review Process every few years, where the 
threat of having your benefits suddenly cut off constantly hangs over 
your head.
    I must report with great sadness and disgust, that all these 
hearings have not brought about much progress, if any at all, and 
things continue to worsen by the day. In our country you're required to 
have auto insurance in order to drive a car, you pay for health 
insurance, life insurance etc. If you filed a claim against any of 
these policies, after making your payments, and the company tried to 
deny you coverage when you had a legitimate claim, you would be doing 
whatever it took, even suing, to make them honor your policy. Yet the 
government is denying Americans their right to legitimate SSDI benefits 
everyday and this is an outrage! I continually hear you talk about 
hearing waiting times 200 days vs 600 days, like it was nothing but a 
number. Everyday that a disabled American must wait for their benefits, 
is a day that their life hangs on by a thread, or worse yet, they do 
not survive. The stress from that alone is enough to kill anyone. Since 
it has been proven over the years that the average American has about 
two weeks worth of savings, anything over a 14 day waiting period in 
any phase of the SSDI process is totally unacceptable. Cutting hearing 
wait times down to even 30 days, is nothing to tout as some great 
accomplishment on your part, as it still puts claimants lives in 
jeopardy. If any other private company/organization operated with as 
poor customer service, and processing times that the SSA currently 
does, subjecting people to hours, days, weeks, months, and worse yet 
years, to get their issues resolved, all employees would be fired, and 
they would be shut down within weeks. Nobody would even attempt to give 
them their business, yet Americans are held hostage to the SSA since 
they are required to pay for their services out of their wages, and 
rightfully expect to get what they have paid for. This is outrageous 
when something this serious, and a matter of life and death, could be 
handled in such a poor manner. Common sense would also lead you to the 
conclusion, that there is a strong correlation between the crisis that 
disabled Americans face while trying to get their benefits, and the 
housing, and economic meltdown this country is in the midst of. I 
challenge anyone of you to try and live for more than two weeks, not 
relying on your assets (since many SSDI applicants lose all their 
assets while waiting for a decision on their claims), with absolutely 
no income, and see how well you survive. Also keep in mind that you are 
not disabled on top of it, which adds its own challenges to the 
problem. Based on my own experience, and the experiences of thousands 
of others which have been shared with me, and current conditions, I 
firmly believe that the SSDI/SSI program is structured to be very 
complicated, confusing, and with as many obstacles as possible, in 
order to discourage and suck the life out of claimants, hoping that 
they ``give up or die'' trying to get their disability benefits! The 
statistics at the beginning of this testimony back up my statement:

           Disabled Americans Unite For Reform Of Social Security 
        Disability Insurance Program

           The Social Security Disability Coalition, of which I am 
        President/Co-Founder, is made up of Social Security Disability 
        claimants and recipients from all over the nation. It was born 
        out of the frustration of my own experience, and the notion 
        that others may be dealing with that same frustration. I was 
        proven to be totally correct beyond my wildest imagination. Our 
        group is a very accurate reflection and microcosm of what is 
        happening to millions of Social Security Disability applicants 
        all over this nation. We fill a void that is greatly lacking in 
        the SSDI/SSI claims process. While we never represent claimants 
        in their individual cases, we are still able to provide them 
        with much needed support and resources to guide them through 
        the nebulous maze that is put in front of them when applying 
        for SSDI/SSI benefits. In spite of the fact that the current 
        system is not conducive to case worker, client interaction 
        other than the initial claims intake, we continue to encourage 
        claimants to communicate as much as possible with the SSA in 
        order to speed up the claims process, making it easier on both 
        the SSA caseworkers and the claimants themselves. As a result 
        we are seeing claimants getting their cases approved on their 
        own without the need for paid attorneys, and when additional 
        assistance is needed we connect them with FREE resources to 
        represent them should their cases advance to the hearing phase. 
        We also provide them with information on how to access 
        available assistance to help them cope with every aspect of 
        their lives, that may be affected by the enormous wait time 
        that it currently takes to process an SSDI/SSI claim. This 
        includes how get Medicaid and other State/Federal programs, 
        free/low cost healthcare, medicine, food, housing, financial 
        assistance and too many other things to mention here. We 
        educate them in the policies and regulations which govern the 
        SSDI/SSI process and connects them to the answers for the many 
        questions they have about how to access their disability 
        benefits in a timely manner, relying heavily on the SSA website 
        to provide this help. If we as disabled Americans, who are not 
        able to work because we are so sick ourselves, can come 
        together, using absolutely no money and with very little time 
        or effort can accomplish these things, how is it that the SSA 
        which is funded by our taxpayer dollars fails so miserably at 
        this task?

    Social Security Disability Coalition--offering FREE information and 
support with a focus on SSDI reform.

    http://groups.google.com/group/socialsecuritydisabilitycoalition

    Please visit the Social Security Disability Coalition (ARCHIVE) 
website, or the Social Security Disability Reform petition website:

           Archive Of Old Social Security Disability Coalition MSN 
        Group Website

           http://ssdcoalitionarchive.multiply.com

    Sign the Social Security Disability Reform Petition--read the 
horror stories from all over the nation:

           http://www.petitiononline.com/SSDC/petition.html

    At these two sites you will see thousands of stories and over 8000 
signatures and comments on our petition, from disabled Americans whose 
lives have been harmed by the Social Security Disability program. You 
cannot leave without seeing the excruciating pain and suffering that 
these people have been put through, just because they happened to 
become disabled, and went to their government to file a claim for 
disability insurance that they worked so very hard to pay for.
Fraud/Program Integrity--The Stigma Encountered By Social Security 
        Disability Claimants
    SSDI is not welfare, a hand out, reward, golden parachute or 
jackpot by any means, and most people would be hard pressed to survive 
on it. Yet, often claimants are treated like criminals--viewed as 
frauds trying to scam the system, and that the SSA must ``weed out'' 
them out by making it as hard as possible to get benefits. Yes, I'm 
well aware as I write this, that there's some who've abused the system 
and that's a shame, because it casts a bad light on those who really 
need this help. The percentage of claims that in fact, aren't 
legitimate is very miniscule. In March 2009, the average monthly Social 
Security Disability Insurance (SSDI) benefit was only $1061.86. Nobody 
in their right mind would want to go through this process, and end up 
living in poverty on top of their illnesses, if they could in fact 
work. I have heard nothing in these hearings or this hearing today that 
addresses the fraud on the part of the Federal Government used to deny 
deserving claimants their benefits. I have heard nothing about the 
rubber stamping of denials, the tossing out of claimant files, the 
security breaches of highly sensitive data, the total disregard of 
overwhelming evidence by claimants treating physicians, subjecting 
claimants to unnecessary fraudulent CE/IME exams, and the cases of 
ALJ's ``bribing'' claimants to give up years of back benefits or they 
will not approve them. All these things are criminal at best. Most 
Americans do not know their rights under the law, that they are allowed 
to get copies of their SSA claim files. If more people exercised this 
right, they would be horrified to know what was happening behind their 
backs, and the true perpetrators of fraud would come to light. in a 
major way. The SSA currently spends way more resources to evaluate 
cases (Federal Quality Review Process) that are approved, more than any 
that are denied unjustly.
    In closing, in spite of my own horrible experience, I have vowed to 
do everything humanly possible to get total reform of the Social 
Security Disability program so that nobody else will ever have to 
endure the hell that I have had to. I ask that you please:

           Introduce and pass the: Fullerton--Edwards Social Security 
        Disability Reform Act:

                 http://groups.google.com/group/
                socialsecuritydisabilitycoalition/
                 web/fullerton-edwards-social-security-disability-
                reform-act

    Since my time is quickly running out, I hope you will join me soon 
in my quest to accomplish this final lifetime goal, to make our country 
a better place for our most vulnerable citizens. Thank you for your 
time and consideration.

Sincerely,

Linda Fullerton--President/Co-Founder--Social Security Disability 
Coalition

Social Security Disability Nightmare--It Could Happen To You!

http://www.frontiernet.net/lindaf1/SOCIALSECURITYDISABILITYNIGHT 
MARE.html

                                 
         Statement of The Huntington Disease Society of America

    On behalf of the Huntington Disease Society of America (HDSA), 
thank you to Chairman Tanner, Ranking Member Johnson, and distinguished 
Members of the Subcommittee for holding this important hearing and for 
the opportunity to submit written testimony today.
    Filing for Social Security Disability Insurance (SSDI) is a 
complex, burdensome process, especially for those living with a rare 
disease such as Huntington's Disease (HD). HD is a genetic 
neurodegenerative disease that causes total physical and mental 
deterioration over a 10 to 25 year period. The disease affects 30,000 
Americans, while another 250,000 are at risk of inheriting it from an 
affected parent. Symptoms of HD can include involuntary movement, 
dementia, obsessive-compulsive behavior, depression, mood swings, 
inability to concentrate and immobility. There is currently no cure for 
HD, and while medications may temporarily reduce the intensity of some 
symptoms, none halt the progression of the disease. Eventually, every 
person diagnosed with HD will lose the ability to live independently as 
the disease advances and ultimately claims their life.
    Documenting a disability like HD can be difficult because of the 
complexity of problems that prevent an individual from working. Given 
the often subtle onset of symptoms, it is hard to pinpoint exactly when 
a person with HD first became disabled. Further, the neurological 
listings under the Disability Evaluation Under Social Security, (also 
known as the Blue Book), have not been comprehensively revised in more 
than 20 years. As a result, people with HD who apply for Social 
Security disability benefits experience numerous delays and denials due 
to the continued use of outdated and insufficient medical criteria.
    The symptoms of HD that are absent from the current listing and 
result in the highest incidence of delays and denial of benefits are 
behavioral and cognitive impairments. These impairments include 
distortions of mood, and perception. Under the current Blue Book 
listing, HD is referred to as ``Huntington's Chorea,'' a name that 
captures the physical impairments typical of the latter stages of the 
disease but fails to recognize the triad of symptoms that include the 
less profound but equally debilitating cognitive and behavioral 
symptoms now widely accepted as characteristic of HD. Since HD affects 
each individual differently, these declines are often more debilitating 
than motor abnormalities. Despite this fact, the lack of visible 
dysfunction of motor abnormalities has caused many people affected by 
HD to remain undiagnosed and unable to receive badly needed benefits. A 
revised definition that captures the complex nature of the disease and 
its many emotional and cognitive manifestations beyond the ``chorea'' 
is needed to reduce the number of delays and reapplications of 
genuinely disabled HD individuals.
    In 2004, the SSA began a formal rule-making process to revise the 
medical criteria for all neurological conditions; a process that has 
been plagued with ongoing delays. According to SSA personnel the 
proposed final guidelines will be issued no sooner than December 2010 
with implementation likely to occur in 2012. The primary source of the 
delay is SSA need to revise the criteria for all neurological 
conditions.We believe that in order to successfully facilitate HD 
applicants through the disability process, clear and separate 
guidelines for determining disability due to HD are needed. By 
separating the guidelines for HD from the general neurological 
listings, the unique symptoms of HD will be identified and addressed. 
The backlog of disability claims will be decreased by allowing HD 
individuals to apply one time for disability rather than force them to 
make multiple applications.
    In furtherance of this goal, Representatives Bob Filner (D) and 
Brian Bilbray (R) of California introduced H.R. 678, the Huntington's 
Disease Parity Act of 2009. This legislation would direct the SSA to 
immediately revise the medical criteria for determining disability as a 
result of HD.It would also eliminate the two year waiting 
period.Currently, there are 56 Representatives who have cosponsored 
H.R.678.
    As Congress and SSA look for ways to reduce the growing backlog of 
disability claims, we ask that the Administrator expedite the rule-
making process, and update the medical criteria and outdated guidelines 
for HD. Updating the medical criteria of HD will support SSA's efforts 
to make timely and accurate disability determinations. Further, 
updating the guidelines would save time, money, resources and emotional 
energy on the part of the Social Security Administration and the 
individuals and families it serves who suffer the effects of this 
disease. Thank you again for holding this important hearing and for the 
opportunity to provide Members of the Subcommittee with written 
testimony this afternoon.

                                 
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