[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
   EXAMINING WAYS THE SOCIAL SECURITY ADMINISTRATION CAN IMPROVE THE 
                       DISABILITY REVIEW PROCESS 

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

                                HEARING

                               before the

                     SUBCOMMITTEE ON ENERGY POLICY,
                      HEALTH CARE AND ENTITLEMENTS

                                 of the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 9, 2014

                               __________

                           Serial No. 113-104

                               __________

Printed for the use of the Committee on Oversight and Government Reform

         Available via the World Wide Web: http://www.fdsys.gov
                      http://www.house.gov/reform


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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland, 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee       CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona               GERALD E. CONNOLLY, Virginia
PATRICK MEEHAN, Pennsylvania         JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee          MATTHEW A. CARTWRIGHT, 
TREY GOWDY, South Carolina               Pennsylvania
BLAKE FARENTHOLD, Texas              TAMMY DUCKWORTH, Illinois
DOC HASTINGS, Washington             ROBIN L. KELLY, Illinois
CYNTHIA M. LUMMIS, Wyoming           DANNY K. DAVIS, Illinois
ROB WOODALL, Georgia                 PETER WELCH, Vermont
THOMAS MASSIE, Kentucky              TONY CARDENAS, California
DOUG COLLINS, Georgia                STEVEN A. HORSFORD, Nevada
MARK MEADOWS, North Carolina         MICHELLE LUJAN GRISHAM, New Mexico
KERRY L. BENTIVOLIO, Michigan        Vacancy
RON DeSANTIS, Florida

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                    Stephen Castor, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director

      Subcommittee on Energy Policy, Health Care and Entitlements

                   JAMES LANKFORD, Oklahoma, Chairman
PATRICK T. McHENRY, North Carolina   JACKIE SPEIER, California, Ranking 
PAUL GOSAR, Arizona                      Minority Member
JIM JORDAN, Ohio                     ELEANOR HOLMES NORTON, District of 
JASON CHAFFETZ, Utah                     Columbia
TIM WALBERG, Michigan                JIM COOPER, Tennessee
PATRICK MEEHAN, Pennsylvania         MATTHEW CARTWRIGHT, Pennsylvania
SCOTT DesJARLAIS, Tennessee          TAMMY DUCKWORTH, Illinois
BLAKE FARENTHOLD, Texas              DANNY K. DAVIS, Illinois
DOC HASTINGS, Washington             TONY CARDENAS, California
ROB WOODALL, Georgia                 STEVEN A. HORSFORD, Nevada
THOMAS MASSIE, Kentucky              MICHELLE LUJAN GRISHAM, New Mexico



                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on April 9, 2014....................................     1

                               WITNESSES

Mr. Daniel Bertoni, Director, Education, Workforce and Income 
  Security, U.S. Government Accountability Office
    Oral Statement...............................................     6
    Written Statement............................................     8
Ms. Jennifer Nottingham, President, National Association of 
  Disability Examiners
    Oral Statement...............................................    23
    Written Statement............................................    25
Ms. Marianna Lacanfora, Acting Deputy Commissioner, Retirement 
  and Disability Policy, Social Security Administration
    Oral Statement...............................................    36
    Written Statement............................................    38
Ms. Jennifer Shaw Lockhart, State Director, Sooner Success, The 
  University of Oklahoma Health Sciences Center
    Oral Statement...............................................    47
    Written Statement............................................    50
Mr. Patrick P. O'Carroll, Jr., Inspector General, Social Security 
  Administration
    Oral Statement...............................................    68
    Written Statement............................................    70

                                APPENDIX

Entered into record by Chairman Lankford: Letter to Carolyn 
  Colvin, SSA Acting Commissioner from Chairman Lankford & 
  Ranking Member Speier..........................................   114


   EXAMINING WAYS THE SOCIAL SECURITY ADMINISTRATION CAN IMPROVE THE 
                       DISABILITY REVIEW PROCESS

                              ----------                              


                       Wednesday, April 9, 2014,

                  House of Representatives,
      Subcommittee on Energy Policy, Health Care & 
                                      Entitlements,
              Committee on Oversight and Government Reform,
                                                   Washington, D.C.
    The subcommittee met, pursuant to call, at 1:37 p.m., in 
Room 2154, Rayburn House Office Building, Hon. James Lankford 
[chairman of the subcommittee] presiding.
    Present: Representatives Lankford, Walberg, Massie, Speier, 
Cartwright, Duckworth, Lujan Grisham, Horsford, Cummings, and 
Woodall.
    Staff Present: Melissa Beaumont, Majority Assistant Clerk; 
Brian Blase, Majority Senior Professional Staff Member; Will L. 
Boyington, Majority Deputy Press Secretary; John Cuaderes, 
Majority Deputy Staff Director; Adam P. Fromm, Majority 
Director of Member Services and Committee Operations; Linda 
Good, Majority Chief Clerk; Mitchell S. Kominsky, Majority 
Counsel; Mark D. Marin, Majority Deputy Staff Director for 
Oversight; Emily Martin, Majority Counsel; Ashok M. Pinto, 
Majority Chief Counsel, Investigations; Jessica Seale, Majority 
Digital Director; Katy Summerlin, Majority Press Assistant; 
Sharon Meredith Utz, Majority Professional Staff Member; Jaron 
Bourke, Minority Director of Administration; Courtney Cochran, 
Minority Press Secretary; Devon Hill, Minority Research 
Assistant; Suzanne Owen, Minority Senior Policy Advisor; and 
Brian Quinn, Minority Counsel.
    Mr. Lankford. Good afternoon. The committee will come to 
order.
    I would like to begin this hearing by stating the Oversight 
Committee mission statement.
    We exist to secure two fundamental principles: first, that 
Americans have the right to know what Washington takes from 
them is well spent; second, Americans deserve an efficient, 
effective Government that works for them. Our duty on the 
Oversight and Government Reform Committee is to protect these 
rights.
    Our solemn responsibility is to hold Government accountable 
to taxpayers, because taxpayers have the right to know what 
they will get from their Government. We will work tirelessly in 
partnership with citizen watchdogs to deliver the facts to the 
American people and bring genuine reform to the Federal 
bureaucracy. This is the mission of the Oversight and 
Government Reform Committee.
    I will do a quick opening statement.
    The Social Security Administration oversees two large 
Federal disability programs: the Social Security Disability 
Insurance Program and the Supplemental Security Income Program. 
Both have grown rapidly over the last 25 years. The growth is 
unsustainable. It also poses a threat to the truly disabled, 
who are often pushed to the back of the line and face large 
benefit cuts in the future.
    In the vast majority of cases, a decision to allow benefits 
is an irrevocable commitment of taxpayer funds since favorable 
decisions are not usually appealed. Unfortunately, the growth 
in these programs has limited some people from reaching their 
full potential, and in many cases a program that was intended 
to fight poverty is perpetuating poverty.
    According to a 2010 paper published jointly by the liberal 
Center for American Progress and the left-of-center Brookings 
Institution said SSDI is ineffective in assisting workers with 
disabilities to reach their employment potential or to maintain 
economic self-sufficiency. Instead, the program provides a 
strong incentive to applicants and beneficiaries to remain 
permanently out of the labor force.
    I welcome the testimony of Jennifer Lockhart today--thank 
you for being here--a fellow Oklahoman, who has both personal 
and professional experience assisting children and young adults 
with both physical and intellectual disabilities. Ms. Lockhart 
will provide perspective today on how the Federal disabilities 
programs, while seemingly very well intentioned, can have 
devastating consequences on individuals and communities if not 
handled correctly. Tragically, many children are languishing on 
SSI programs, rather than being encouraged to pursue vocational 
and educational opportunities.
    In June of last year, the subcommittee heard testimony from 
two former and two current Social Security administrative law 
judges. One of the themes of the testimony was the agency's 
plan to reduce the backlog of initial claims, resulting in AJLs 
inappropriately putting people onto these programs. We also 
learned that the agency policy allows claimants and their 
attorneys to submit biased and incomplete evidence.
    While we have serious questions for the agency about its 
policies and management of these programs, I thank the agency 
for providing timely information to the committee requests. 
Agency personnel have conducted numerous briefings and 
transcribed interviews with the committee. During one of these 
interviews, Regional Chief Administrative Law Judge Jasper Bead 
testified that it raises a red flag for a judge when they allow 
75 to 80 percent of their decisions. It is stunning that 
between 2005 and 2012 more than 930,000 individuals were 
approved for benefits by an ALJ who approved more than 80 
percent of the claimants for benefits. During the same time 
period, more than 350,000 people were awarded disability by an 
ALJ with an allowance rate in excess of 90 percent.
    I appreciate, by the way, the bipartisan manner which the 
subcommittee has been able to approach this oversight. Ranking 
Member Speier and I both recognize there are significant 
problems with these programs and that reform is needed. I thank 
her very much for the work and the partnership in this issue.
    Yesterday, Ms. Speier and I sent Acting Commissioner Colvin 
a letter outlining 11 common sense recommendations for the 
agency in order to improve the integrity of the disability 
determination process. One of the recommendations is for the 
agency to conduct timely continuing disability reviews. The 
agency is currently out of compliance with its legal 
requirement to conduct timely CDRs and has allowed a backlog of 
1.3 million CDRs to develop.
    As Ms. Speier and I explained in our letter, an increase in 
CDRs must be coupled with a change to the medical improvement 
standard, because this standard does not allow the agency to 
remove claimants who were wrongfully awarded benefits in the 
first place. Under the current standard, the claimant's record 
must show that the claimant made significant medical 
improvement in order to end benefits. If the claimant was not 
disabled and wrongly received benefits initially, the standard 
of review will not remove them.
    Today the agency must address this question: Are the vast 
majority of people who the agency expects to improve failing to 
do so or is it just extremely difficult for the agency to cease 
benefits? The question highlights a significant problem that 
needs to be addressed and needs to be addressed quickly. 
Today's testimony will show that the state of disability 
determination offices that conduct CDRs suffer from a lack of 
clear guidance about the medical improvement standards.
    It will also reveal GAO made recommendations to the agency 
to correct problems with the CDR process, and made that 
recommendation years ago, yet the agency has failed to 
implement fully the GAO's recommendations to address these 
problems. It is in the works, but we have to be able to get it 
finished. Failure is not an option at this point. The agency 
must take steps to improve the disability review process and 
modify the review standards so that only individuals with 
genuine disabilities and who are unable to work continue to get 
benefits from these programs.
    This is a program designed to protect those most 
vulnerable. Through our inattention, if we don't protect the 
most vulnerable, it is our gross error, and this committee 
intends to stay on top of that.
    With that, I recognize the ranking member, Ms. Speier.
    Ms. Speier. Mr. Chairman, thank you.
    At the outset, let me say this. There aren't a lot of 
cameras in this room today, but this is precisely the kind of 
work that the Oversight and Government Reform Committee should 
be doing; in a bipartisan fashion, in a constructive fashion, 
with a number of experts who are here who are, in many 
respects, civil servants doing remarkable work. And I think we 
both know that part of our effort in making sure that this 
system is improved upon is making sure they have the resources 
to do the job.
    So I want to thank you, at the outset, for your commitment 
and the great work that you have shown, and the way we have 
collaborated and worked together and had meetings outside of 
hearings to try and come up with some solutions to this 
situation.
    The committee has been conducting oversight of the Federal 
disabilities program at the Social Security Administration. 
Just yesterday, as the chairman pointed out, together we sent a 
bipartisan letter to Social Security laying out a number of 
reforms and recommendations we believe the agency can implement 
to enhance the efficiency and effectiveness of disability 
adjudications and improve the integrity of Federal disability 
programs.
    Now, I believe that and I said that, but I also recognize 
part of what we are asking for is going to require more 
resources in order to do it well.
    Social Security disability and supplemental security income 
are important lifelines for millions of Americans with 
disabilities. Recent estimates project disability insurance 
benefits of about $145 billion to approximately 11 million SSDI 
beneficiaries and $59 billion to almost 8.5 million SSI 
recipients.
    In previous testimony before this committee, Social 
Security Administration recited a motto repeated at the agency: 
The right check to the right person at the right time. Making 
sure that only those who meet the eligibility guidelines 
receive benefits is important so the American public can have 
confidence in their Government's efficient and effective 
operation.
    The primary tool at SSA's disposal is the CDRs, the 
Continuing Disability Reviews. These reviews are critical to 
the integrity of the Social Security disability program. CDRs 
are a highly cost-effective measure, saving the Federal 
Government, on average, $9 for every $1 spent on CDRs. So it 
makes all the sense in the world that we invest in providing 
the resources so that more CDRs can be done so that we can be 
confident in knowing that those who are receiving SSDI and SSI 
are receiving it appropriately.
    SSA's most recent report on CDRs estimates present value 
savings of $5.4 billion in lifetime program benefits. These 
numbers speak for themselves as to why CDRs are so critical. 
Unfortunately, as the chairman mentioned, there is a backlog of 
1.3 million uncompleted CDRs. This is just unacceptable. We all 
get an F for not properly funding you and for not reducing that 
backlog in an appropriate fashion. We have had a backlog at the 
Veterans Administration on disability claims and we have thrown 
a whole lot of money at that agency to get them to reduce that 
backlog, and I am afraid we are going to have to do it here, 
but I think it is going to be cost-effective in the long run.
    An IG's report found that 79 percent of childhood CDRs were 
not conducted in a timely fashion. Additionally, GAO has found 
thousands of cases of child recipients who were expected to 
medically improve within 18 months, exceeded their scheduled 
review date by as much as six years or more. You know, this is 
unacceptable as well.
    Another IG found that even when a CDR is conducted and 
determines benefits are no longer medically justified, those 
benefits are not always terminated in a timely manner. That 
results in an estimated $83.6 million in improper payments. 
That is unacceptable.
    President Kennedy once said we can do better, and I really 
do believe we can. But so must Congress. Annual appropriations 
of funds for CDRs have fallen short of the levels authorized in 
the last few years, and that is unacceptable. This is not the 
first time Congress has allowed a backlog of CDRs to develop. 
Again, we have to take some responsibility here. In the 1980s, 
the mid-1990s, Congress also failed to provide adequate funds. 
Finally, in 1996, Congress acted by increasing funds for CDRs. 
The backlog was eliminated by 2002, but, again, it took six 
years to do it, even with the resources being put in place.
    We should once again recognize the importance of CDRs and 
this year finally provide the agency with the funds it needs. 
CDRs help protect taxpayer funds and the public's interest. 
Congress must dependably provide adequate funds so that 
backlogs and the improper payments that result from them never 
return.
    Today we will also hear from a representative of disability 
examiners who are well positioned to help detect and prevent 
fraud at the initial determination level and while conducting 
CDRs. It is important that disability examiners have the 
training and resources to perform their jobs effectively. It is 
also important that we support the work and achievements of the 
inspector general on initiatives like CDIs that allow 
coordination and collaboration on efforts to prevent, detect, 
and investigate fraud in Federal disability programs.
    Mr. Chairman, it is a pleasure to work with you on this 
issue, and I look forward to the testimony.
    Mr. Lankford. Members will have seven days to submit 
opening statements for the record.
    We will now recognize the panel.
    Mr. Daniel Bertoni is the Director of Education, Workforce 
and Income Security at the U.S. Government Accountability 
Officer.
    Ms. Jennifer Nottingham is the President of the National 
Association of Disability Examiners and a supervisor within the 
Ohio Disability Determination Service. We will have DDS thrown 
around a lot today.
    Ms. Marianna LaCanfora is the Acting Deputy Commissioner 
for Retirement and Disability Policy at the Social Security 
Administration.
    Ms. Jennifer Shaw Lockhart is the State Director for Sooner 
SUCCESS at the University of Oklahoma Health Sciences Center, a 
fellow Oklahoman.
    Mr. Patrick O'Carroll is the Inspector General for the 
Social Security Administration.
    Pursuant to committee rules, all witnesses are sworn in 
before they testify. If you would please stand and raise your 
right hand.
    Do you solemnly swear or affirm the testimony you are about 
to give will be the truth, the whole truth, and nothing but the 
truth, so help you, God?
    [Witnesses respond in the affirmative.]
    Mr. Lankford. Thank you. You may be seated.
    Let the record reflect that all the witnesses answered in 
the affirmative.
    We will have time for discussion and questions after your 
opening statements. We have assigned five minutes for each of 
your opening statements.
    Mr. Bertoni, you are first up.

                       WITNESS STATEMENTS

                  STATEMENT OF DANIEL BERTONI

    Mr. Bertoni. Thank you. Chairman Lankford, Ranking Member 
Speier, members of the subcommittee, good afternoon. I am 
pleased to discuss our work on the Social Security 
Administration's efforts to assess DI and SSI program 
recipients' continued eligibility for benefits.
    Last year, SSA provided nearly $200 billion in benefits to 
about 11 million DI and 8 million SSI recipients. Both the 
numbers of recipients as well as program costs have grown in 
recent years, and are poised to grow further due to economic 
and population changes.
    To ensure that only eligible individuals receive disability 
benefits, accurate determinations at the time of application 
and follow-up reviews after benefits are granted provide an 
important check on growth and are key to ensuring program 
integrity.
    Federal law requires that SSA conduct periodic Continuing 
Disability Reviews, or CDRs, of recipients and requires SSA to 
find substantial evidence of medical improvement before ceasing 
benefits, known as the medical improvement standard. My remarks 
today are based on our prior work and discuss SSA's efforts to 
assess recipients' continued benefit eligibility and aspects of 
the review standard that affect these efforts.
    In summary, SSA reported in January 2014 that it is behind 
schedule in conducting CDRs and has a backlog of 1.3 million 
reviews. The agency is also conducting fewer CDRs in general. 
From fiscal year 2000 to 2011, adult CDRs fell from over 
580,000 to 100,000, and child CDRs dropped from over 150,000 to 
45,000.
    For those children with mental impairments, CDRs declined 
80 percent, from 84,000 to just 16,000. Thus, in 2012, we 
reported that over 400,000 child SSI cases with mental 
impairments were overdue a CDR, with more than 24,000 overdue 
by six years or more, including thousands who were deemed 
likely to medically improve.
    When CDRs are not conducted as scheduled, especially for 
those children whose conditions are likely to improve, improper 
payments may occur. And although child benefits are more likely 
to be ceased after review, SSA has historically placed a higher 
priority on conducting adult CDRs, which generally result in a 
cessation rate of around 12 percent.
    Of the child CDRs SSA does conduct, we found that the 
average benefit cessation rate was 32 percent; and for those 
with mental impairments, such as personality disorder and 
speech and language delay, cessation rates were 39 and 38 
percent, respectively.
    In our report, we recommended that SSA work smarter to 
better target its limited resources and eliminate the backlog 
of child CDRs, with a specific focus on those likely to 
medically improve. SSA generally agreed with our 
recommendation, but cited resource limitations and competing 
workloads as a barrier going forward.
    Beyond the issue of SSA CDR prioritization, factors 
associated with the medical improvement standard pose a 
challenge to assessing recipients. During CDRs, individuals 
that SSA determines to have improved medically may have their 
benefits ceased. However, we reported in 2006 that only 1.4 
percent of recipients who left the rolls did so because they 
had medically improved.
    We also noted several factors that hindered us the ability 
to make this determination, including the limitations in SSA's 
guidance for determining what level of improvement would 
constitute a cessation and how to apply key exceptions; 
inadequate documentation of prior disability decisions, 
especially for cases decided at the appeals level; and the 
judgmental nature of the process, especially for those cases 
involving psychological impairments.
    In our report, we noted that these factors had implications 
for the consistency and fairness of decision-making and 
recommended that SSA clarify its policies for assessing medical 
improvement. Since then, SSA has taken some steps that may help 
address the issue, but has not fully implemented our 
recommendations. Thus, its guidance is likely to continue to be 
problematic for staff in their efforts to make sound and 
consistent decisions.
    Mr. Chairman, this concludes my statement. I am happy to 
answer any questions that you or other members of the 
subcommittee may have. Thank you.
    [Prepared statement of Mr. Bertoni follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Lankford. Thank you.
    Ms. Nottingham.

                STATEMENT OF JENNIFER NOTTINGHAM

    Ms. Nottingham. Chairman Lankford, Ranking Member Speier, 
and other members of the committee, thank you for inviting NADE 
to share the perspective of the frontline disability 
determination employee. After several years of high attrition 
rates and hiring freezes, combined with an increased number of 
people applying for disability, the DDS's caseload grew, 
particularly CDRs. With this year's budget, SSA was able to 
hire a DDS staff and is dramatically increasing the number of 
CDRs sent for review.
    NADE believes it is critical to invest and train for all 
staff. Employees at all levels of the disability adjudication 
process should receive more training opportunities and updates. 
This includes disability hearing officers and ALJs. It would be 
counterproductive to remind examiners of a policy, only to have 
it be not known by a hearing officer or ALJ.
    Medical improvement review standards shifts the burden of 
proof from the claimant to the DDS. SSA has a strict definition 
of disability, and to be found disabled the individual must 
prove that they meet the criteria. However, at the CDR the 
definition is removed. The medical improvement review standard 
policy dictates that benefit continue unless the beneficiary's 
disabling condition has shown to have demonstrated medical 
improvement related to the ability to work. This standard is 
very stringent and, as a result, few claims are actually 
ceased. It is important to note that, through appeals, a DDS 
cessation may end up being continued by the disability hearing 
officer or ALJ.
    In processing a CDR claim, the DDSs are required to compare 
a beneficiary's current condition to their condition at the 
time of the most recent medical decision. Because of MIRS, the 
DDS cannot fix what may be perceived as a mistake or wrong 
decision, as the DDS is not allowed to substitute judgment. 
There are many times during the processing of a CDR claim where 
the disability examiner would not currently find the 
beneficiary disabled, but must continue benefits because 
medical improvement has not been demonstrated. If an individual 
is allowed and had minimal or normal findings at the Comparison 
Point Decision, as long as they still have similar findings, 
they will be continued.
    There are exceptions to MIRS; most notably the fraud and 
error exception. These exceptions only apply in a small portion 
of CDRs. The error exception policy states that it cannot be 
used to substitute judgment, and it can only be used when a 
previous claim shows evidence that there was a clear objective 
error. An example would be a decision based off of records for 
the wrong patient. So even though the CDR examiner may consider 
the previous decision wrong, it is very difficult to prove an 
error, particularly if there is minimal rationale. The 
exceptions are underutilized and additional training is needed; 
however, the exception would still only apply to a small 
portion of CDRs.
    There has been significant attention on the allowance rate 
of ALJs. It is likely that fraud or error would not be found in 
most cases. The difference in the high allowance rate is more 
likely due to a difference in subjective conclusions or 
decisions based on limited information. Where this is often 
seen is in the assessment of credibility and the weight of 
medical source statements. The totality of the evidence needs 
to be considered. Factors such as objective medical evidence, 
medical history, consistency of the record, and activities of 
daily living should be considered when assessing the 
credibility and medical source opinions. If a statement is not 
well supported or inconsistent with the record, it should be 
given less weight. The credibility and medical source opinions 
can have a large impact on the outcome of a claim. They are 
subjective conclusions and the DDS is directed to not 
substitute judgment.
    In the adjudicative process, if a conclusion is not 
supported, poorly documented, or inconsistent with the 
available evidence, this would not be considered an error that 
can be cited, and if there is no clear objective error found, 
then MIRS directs us to determine if benefits continue. NADE 
recommends changing the CDR process and would support a 
discussion on a de novo decision at CDR.
    It is important to make sure the correct decision is made 
initially and only appropriate claims are allowed. NADE 
applauds SSA's recent focus on policy and medical training with 
ALJs. Many examiners complain of ALJ decisions where the 
medical source statements are not supported with evidence, yet 
given great weight. NADE feels it would be beneficial if the 
DDSs were able to be represented at the ALJ to help ensure 
policy compliance where display examiners receive more 
training.
    More review and oversight may be needed at all levels of 
the adjudication process. Currently, there is minimal review of 
ALJ in disability hearing officer decisions. Although most 
claims are now electronic, there are still paper claims and 
some end up lost. CDRs with lost folders end up being continued 
most often. If the DDS cannot reconstruct the prior decision in 
order to make a comparison, it will be continued. Steps should 
be taken to decrease the number of paper claims processed and 
to prevent lost folders.
    NADE continues to support the expansion of CDI units to 
help combat fraud. More emphasis on referrals to CDIU of CDR 
claims may be needed, along with additional fraud or similar 
fault training. At CDR, many beneficiaries do not have 
treatment, despite many having access to treatment. That means 
the examiner rely upon a decision from a consultative 
examination that they are only seen one time. It is hard to 
make a decision without longitudinal evidence, and it is 
discouraging to see beneficiaries that don't take advantage of 
medical treatment to improve their condition.
    That is all I have. Thank you for allowing me the 
opportunity to share NADE's views on CDRs.
    [Prepared statement of Ms. Nottingham follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Lankford. Thank you.
    Ms. LaCanfora.

                STATEMENT OF MARIANNA LACANFORA

    Ms. LaCanfora. Chairman Lankford, Ranking Member Speier, 
members of the subcommittee, thank you for this opportunity to 
continue the conversation on Social Security's disability 
programs. My name is Marianna LaCanfora and I am the agency's 
Acting Deputy Commissioner for Retirement and Disability 
Policy.
    Today, my testimony focuses on medical continuing 
disability reviews, or CDRs. These program integrity reviews, 
which cover both the Disability Insurance and Supplemental 
Security Income disability programs ensure that only those 
beneficiaries who remain disabled continue to receive benefits. 
While CDRs are essential, it bears acknowledging that they are 
only one of many critical workloads that millions of Americans 
depend on us to complete each year. Absent sufficient funding, 
we must make difficult tradeoffs as we balance our service and 
stewardship responsibilities.
    I would like to highlight a few important points regarding 
our CDRs. First, we have proven that our CDRs are an excellent 
investment and, when we receive adequate resources, we deliver. 
For example, we received a seven year commitment of special 
funding from Congress in fiscal year 1996 so that we could 
eliminate our backlog of CDRs. By the time the funding had 
expired, in 2002, we had eliminated the backlog and saved about 
$36 billion in taxpayer money.
    The second point I would like to make about our CDRs is 
that we strictly adhere to legal requirements and we 
consistently achieve high quality. Our adherence to the medical 
improvement review standard perhaps best illustrates this 
point. Congress enacted the medical improvement review standard 
in 1984 to address widespread concern that disability 
adjudicators were substituting their judgment to overturn the 
judgment of a prior adjudicator.
    In 1984, the law remedied this by generally requiring that 
we terminate benefits only if a beneficiary's condition 
medically improves and that improvement is related to the 
ability to work. This standard has remained unchanged for 30 
years. We continuously train our adjudicators on its correct 
application and our quality review of CDRs shows a high rate of 
decisional accuracy, 97.2 percent last year.
    My third point is that absent adequate funding, we are 
forced to make difficult tradeoffs and prioritize CDRs. We 
focus our limited funding on the CDRs most likely to produce 
the highest return on investment or the highest amount of 
taxpayer savings. Our highest priority CDRs are age 18 re-
determinations and low birth weight baby cases because they are 
statutorily required. We prioritize other CDRs using a 
statistical model that gathers data from our records to 
identify a high likelihood of medical improvement and a high 
return on investment. We complete of these cases as our funding 
permits.
    We began using our model in 1993 and we have been 
continuously validating and updating it in collaboration with 
the best outside experts. The model allows us to conduct some 
CDRs in an expedited manner, without the need for expensive 
medical development when the likelihood of cessation is remote.
    Despite our efforts to keep pace with the CDR workload, 
chronic under-funding has led to a backlog of 1.3 million 
cases. We did not receive the full funding for CDRs authorized 
by the Budget Control Act in each of the last two years, but I 
am pleased to say we did receive the full amount this year, and 
thank you to the committee. With the additional funding, we 
plan to complete 510 full medical CDRs this year, and we will 
also hire and train more employees. The President's budget for 
fiscal year 2015 also requests the full BCA level for Social 
Security. With this funding we plan to complete 888,000 full 
medical CDRs.
    Starting in fiscal year 2016, the President's budget 
proposes a dedicated dependable source of mandatory funding for 
our agency to conduct CDRs. The mandatory funding will enable 
us to eliminate the CDR backlog. We need your support of the 
President's budget to ensure that only those beneficiaries who 
remain disabled continue to receive benefits. Timely, 
sustained, and adequate funding is the single most important 
way to eliminate the CDR backlog.
    Thank you, and I am happy to answer any questions you may 
have.
    [Prepared statement of Ms. LaCanfora follows:]

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    Mr. Lankford. Ms. Lockhart.

              STATEMENT OF JENNIFER SHAW LOCKHART

    Ms. Lockhart. Thank you, Mr. Chairman and thank you, Ms. 
Speier. Thank you all for your time today.
    On behalf of Sooner SUCCESS and every individual with 
disabilities, I am here today. I am here today to speak with 
you about the state of our existing system. I am here to tell 
you it does not work and I am here to tell you why.
    You might ask what positions me to speak out so strongly 
about what I believe to be one the most undignified supports we 
have in our great Country. I have seen it firsthand and I have 
lived it. From the moment my family adopted four children with 
special needs over 30 years ago to the moment I stand here 
today, I have witnessed it up close and personal.
    First let me tell you about Sooner SUCCESS. Sooner SUCCESS 
was piloted over 10 years ago by Dr. Mark Walraich. At the 
time, Dr. Walraich left Vanderbilt University for the 
University of Oklahoma to fill the chief of developmental 
behavior pediatrics Shaun Walters Endowed Chair, also known as 
the University of Oklahoma Child Study Center. Dr. Walraich, 
realizing the same struggles he found at Vanderbilt, developed 
Sooner SUCCESS.
    Sooner SUCCESS was developed on a complex adaptive systems 
approach, CAS, allowing local coalitions to address their 
unique needs. We believe Sooner SUCCESS, exactly through this 
advancing and inclusive comprehensive unified system, does 
this. We do it within their community. Sooner SUCCESS embeds 
multiple levels of service delivery seamlessly so families can 
address both immediate and long-term goals and adaptive 
approaches.
    Through this approach we are not only able to analyze the 
multiple systems, but educational, health, and social families 
struggle to navigate, but also mobilize the system as warranted 
within the community when needed through adaptive agents. This 
is where our local coalitions and county coordinators are 
tremendous assets. Change is inevitable, so we must organize 
the system in a way, adapting to change, but also educate 
providers, caregivers, self-advocates, and families and 
patients to understand an ever-evolving system instead of 
multiple independent, static structures or agencies.
    Anecdotally speaking, we believe this model works. We see 
this observation in articles such as the recently published 
Newsweek article titled The Health Gap: The Worst Place in 
America for Mental Health, Child Poverty, and College 
Attendance Mapped. The article ranked counties in each State. 
Of the top 10 counties in Oklahoma, 5 are Sooner SUCCESS 
counties and part of the original program 10 years ago.
    Last year alone, in 2013, Sooner SUCCESS made over 31,000 
community linkages in our 13 pilot counties. Our 13 counties 
consist of Tulsa and Oklahoma City, Oklahoma's two most 
populated cities, and 11 rural communities. Within these 
demographics, we are able to serve close to half of Oklahoma's 
children with disabilities ages newborn to 21.
    We often serve transitional years 18 to 24 as well. With 
that said, you could say we have a pulse on the grassroots 
level, the view from the balcony, as to what our communities 
look like; each very different, with very unique needs. We are 
your eyes and ears on the ground. What does the view from the 
balcony look like? A victim of unintended consequences our 
system designed to assist individuals with disabilities is 
paralyzed by multiple levels of dysfunction.
    For the sake of understanding why, we will understand 
Sooner SUCCESS. Sooner SUCCESS based on this system, is able to 
see--and I am going to skip through here because I want you to 
hear this. This is the problem: system complexity; weak ties 
and poor alignment among professionals and organizations; a 
lack of funding; incentives to support collaborative work; a 
bureaucratic environment based on command approach and control 
management.
    Further, I quote from recent publication in the 
International Journal of Integrated Care: Lack of system change 
towards integration is that we have failed to treat the system 
as a complex adaptive system. The data suggests that future 
integration initiatives must be anchored in this perspective 
and focus on building the system's capacity to self-evolve. We 
conclude that integrating care for disabilities requires 
policies and management practices that promote system 
awareness, relationship building, and information sharing, and 
that recognized change as an evolving learning process rather 
than a series of programmatic steps.
    What does this mean on the system level and what does it 
have to do with our issues here today?
    Permission to continue further.
    Mr. Lankford. I give you unanimous consent to do another 
minute.
    Ms. Lockhart. I am sorry?
    Mr. Lankford. You want to close, then we will come back for 
questions, or do you need another minute?
    Ms. Lockhart. I need another minute, please.
    Mr. Lankford. Go for it.
    Ms. Lockhart. Thank you, sir.
    It means that unless the system fluid and adaptive, we 
leave it vulnerable. Those vulnerabilities expose themselves 
through certain outcomes, mostly gaps in service, system 
exploitation, duplicative services, and fragmentation or 
dissonance in services. Those vulnerabilities also tell us what 
often numbers cannot, what the system looks like from real-life 
application.
    So in real world terms what does that look like? In the 
words of our Oklahoma County coordinator, proud Democrat and 
mother of a child with Downs Syndrome, I am tired of seeing 
those who need help unable to get it because people who don't 
need it are using the system. We see it every day.
    From Donald Baily of South Carolina--I sent this to him; I 
wanted to be sure he was okay--I am testifying at a hearing 
next week in DC presenting testimony regarding disability 
reform. In my testimony, I hope to be discussing the higher Ed 
piece and referencing work with the College Transition 
Connection in South Carolina. Is this okay? Donald's reply--and 
I will tell you why this is important--good for you. Of course 
you can. Tell all. Thanks.
    Donald is a former trustee with the University of South 
Carolina, father of a son with autism, founder of the South 
Carolina College Transition Connection, a consortium of five 
universities in South Carolina providing higher Ed options for 
individuals with intellectual developmental disabilities. 
Donald and his wife, along with other parents, created the CTC 
because they wanted something more for his son than sitting at 
home after he aged out of the system.
    I have chosen Donald and Lori, and could provide you with 
many more parent provider statements as to the barriers in the 
system. The bottom line is due to the many gaps we have created 
a pervasive problem in which we have left not only the system 
vulnerable, but the individuals we are to be helping. We see 
children with impairments labeled disabled. We see parents and 
adolescents remain underemployed so they may sustain their 
benefits. We see thousands on a wait list in Oklahoma who 
receive no service because they are waiting for assistance.
    Aside from service gaps, we see something more concerning, 
deeply concerning. We see people with disabilities unknowingly 
segregated from their communities because the transition from 
the school support service stops often when the individual ages 
out of the system. Services stop; the sports system is gone 
instantly; and because transition services are programs rather 
than processes, we see individuals who should be out in their 
communities go from an active community life, that being their 
school, to nothing almost overnight.
    In observation, we are able to see a gap where most young 
adults with disabilities should be transitioning into the 
community. Why weren't they in their community all along?
    [Prepared statement of Ms. Lockhart follows:]

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    Mr. Lankford. Ms. Lockhart, we are going to move on. When 
we come back, we are going to pummel you with questions here in 
just a minute as well, so I want to make sure we have time for 
everybody, too.
    Ms. Lockhart. Thank you, sir. Yes, sir.
    Mr. Lankford. Mr. O'Carroll.

             STATEMENT OF PATRICK P. O'CARROLL, JR.

    Mr. O'Carroll. Good afternoon, Chairman Lankford, Ranking 
Member Speier, and members of the subcommittee. Thank you for 
inviting me to be here today.
    A 42-year-old man was living out a childhood dream: he was 
the lead singer of his own hard rock band and he also owned a 
popular cafe. For almost 20 years his band had toured the 
Country and performed at large music festivals. He talked up 
his band's success on social media, touting performances for 
millions of fans and worldwide sales of thousands of albums and 
t-shirts; even been interviewed for local newspaper articles 
and TV interviews. And during this entire time he was receiving 
Social Security Disability for mood disorders.
    Last year, during a continuing disability review, or a CDR, 
a disability examiner referred the man's case to one of our 
cooperative disability investigations, or CDI, units. The man's 
musical exploits made the examiner suspicious that he might not 
be eligible for benefits because he was more capable than he 
claimed. The CDI investigation confirmed that the man was able 
to work and perform activities contrary to his disability. With 
this information, SSA ceased the man's benefits in January.
    I share this example because it combines the value of two 
of our most effective integrity tools: CDRs and the CDI 
program. CDI efforts usually focus on initial claims, but 
disability examiners can also refer questionable in-pay cases 
to a CDI unit for investigation, as in this case. It is one of 
the many reasons we are pleased that the acting commissioner 
has agreed to expand CDI by up to seven units by the end of 
2015.
    Of course, CDRs on their own have proven to be effective 
guards against improper payments in the disability programs. My 
office has long urged SSA to conduct more CDRs every year. We 
also consistently encourage Congress to fund these critical 
reviews. With the return on investment of $9 saved for every 
dollar invested in CDRs, appropriating funds to conduct these 
reviews is sound fiscal policy. However, after dedicated 
funding ended in 2002, CDRs declined by over 75 percent, 
creating a significant backlog.
    Although SSA has been conducting more CDRs since 2009, the 
backlog still stood at $1.3 million last year. As a result, SSA 
continues to make payments that could be avoided. For example, 
according to past audit work, up to $1.1 billion in disability 
payments could have been avoided in 2011 alone if CDRs had been 
performed when due.
    Similarly, re-determinations can prevent improper payments 
in the SSI program. These non-medical reviews will yield an 
anticipated 5 to 1 return this year. From 2003 to 2008, re-
determinations decreased by 60 percent. Our audit work found 
that $3.3 billion in SSI payments could have been avoided in 
just two years if more reviews were completed.
    I am encouraged that SSA has completed more eligibility 
reviews in recent years. For this year, the agency has stated 
that it plans to complete 510,000 medical CDRs and almost 2.5 
million re-determinations. We are currently evaluating SSA's 
progress in completing these reviews and we plan to issue a 
report later this year.
    We have long focused our audit efforts on CDRs and re-
determinations because there are such sound reasons for funding 
and conducting them as scheduled. For example, in a recent 
audit we found that SSA hadn't conducted 79 percent of 
childhood CDRs or 10 percent of age 18 re-determinations within 
the time frames required by law. The cost over four years was 
$1.4 billion. Payments made because of delayed reviews are 
troubling because they are largely avoidable. We recognize that 
SSA is a difficult task in processing and increasing number of 
new claims, but the agency must continue to seek ways to 
balance customer service with stewardship responsibilities.
    Through our audit and investigative work, we keep working 
with SSA and Congress to protect these critical programs.
    Thank you again for the invitation to testify, and I would 
be happy to answer any questions.
    [Prepared statement of Mr. O'Carroll follows:]

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    Mr. Lankford. Thank you to all of our witnesses.
    I will begin our questions.
    Ms. Lockhart, I have a question. Your statement about 
undignified supports and then your statement of multiple levels 
of dysfunction.
    Ms. Lockhart. Yes, sir.
    Mr. Lankford. You tried to walk through some of those as 
well, but one of the key issues--you started to talk at the 
very tail end--I know I had to cut you off a little bit on your 
testimony. You started talking about the impact of families and 
individuals in communities and out of communities. What it 
seemed like you were saying is when these individuals are put 
into this, they are actually pulled out of society and they are 
separated out.
    The question I have for you is what do you think the goal 
of the disability program should be?
    Ms. Lockhart. The goal should be to provide a route back 
into their community. The overarching goal should be that 
people with disabilities have an independent life. Also, define 
what disability is. Impairment does not necessarily mean 
disability.
    Mr. Lankford. Okay. Now, hold on for just a moment on that 
one. You are right, impairment is not disability. The challenge 
of this is that once you get into the system, if you have an 
impairment and they define it as you are not able to do 
substantial gainful work, employment, then you may be impaired, 
but you are now tagged as disabled and you are actually 
prevented from employment. Is that what you are experiencing?
    Ms. Lockhart. Right.
    Mr. Lankford. So what does that look like?
    Ms. Lockhart. We have situations where either the children 
aren't getting services that would help them move forward or 
children that in our professional position might be impaired, 
but not disabled. We have experienced families that the parents 
at times will--what is the word I want to use?--sometimes stall 
the process.
    Mr. Lankford. You mean stall the process of re-engagement 
in society?
    Ms. Lockhart. Right. Right. So we see both. But we are 
saying that to those that do have disabilities, sir, we don't 
have a mechanism that is sure and sound that provides them a 
way into the community. We are still, for the first time, 
really understanding. And I know that we have programs, but 
what we see is we see the families on the system level here, so 
imagine two rails, and then we see commerce, private sector 
over here. And really what we need to see is they converge. So 
to say we want our disabilities to have jobs, people with jobs 
be paid fairly, those kinds of things, and be an integral part 
of our community, we have to prepare this side over here as 
well.
    Mr. Lankford. Okay.
    Mr. O'Carroll, you made a comment about increasing the CDRs 
and watching out for the reviews and such. Based on what Ms. 
Nottingham was saying, it is not just a matter of increasing 
the number of CDRs, it is actually the effectiveness of the 
CDRs. So what are you experiencing with the actual review when 
the review occurs?
    Can I put this up on the screen as well?
    [Slide.]
    Mr. Lankford. There is a stat that we have been able to 
locate here. Social Security Administration provided this. This 
is from 2003 to 2013, so it goes back a decade for us, asking 
the question of when CDRs actually occur, what happens at that 
point. Once they have been evaluated, when they go into the 
system, evaluated, are they expected to recover from this or be 
out of the system possible or not expected.
    So here is the number of reviews, the number of removals, 
and what we found interesting is over the decade there the 
people that were expected to at some point leave the system, 
there is only 18 percent of them that actually do. What is 
interesting to me is those that were not expected, 7 percent of 
the folks that were not expected leaving. It is really not that 
far apart, an 11 percent difference between the two.
    So what we see is people that are even expected to be out 
of the system really don't leave the system. It sounds like, to 
go back to what Ms. Nottingham was saying, there is an issue 
with not just doing CDRs, but the effectiveness of CDRs based 
on even the initial expectation.
    Mr. O'Carroll. Yes, Mr. Chairman. On that, I guess from 
some of the work that we have done, a lot of the expectations 
that they are having aren't found as we are finding here. One 
of those issues that is part of this hearing is talking about 
medical improvement on it and the issues with medical 
improvement. And with medical improvement, if you were found 
disabled, by the next time you come back to a DDS on it, unless 
you have improved from what you were found the last time, you 
are going to be found still disabled.
    And we are finding that if you use the standard that you 
use when you first come in, which would be different than the 
medical improvement, it would be an initial application, there 
would be a lot more findings in terms of a person improving. 
And what we found on that, we just did a report on it, we are 
waiting for comments back from the agency, but we found in that 
case about 4 percent of the people that were found disabled 
would not be found disabled if you used the initial disability 
application formula instead of the improvement formula.
    Mr. Lankford. I am sorry, I am just about out of time. Can 
you say that last part again?
    Mr. O'Carroll. The last one I said is it is about 4 percent 
of the people that we looked at that were found disabled would 
not have been found disabled had they come in on an initial 
application. So, in other words, what they are saying is that 
what they purport with was below the level of what they would 
have been put on disability, but since they were already on 
disability, they couldn't be taken off it.
    Mr. Lankford. Okay.
    Mr. O'Carroll. So we are seeing that 4 percent. To be 
truthful, it could be a much higher percentage. There is a 
problem, though, with the record-keeping that SSA was doing on 
it, and we find it could go as high as 12 percent, because 
there about 8 percent of the cases that we looked at were 
incorrectly cited. So, as an example, they said they were 
thrown off or they were taken off for a medical improvement, 
but when we read the file on it, we found it was really because 
they had returned to work.
    Mr. Lankford. Okay.
    Mr. O'Carroll. So we are asking for more accuracy on that 
so we can get a better standard. But that is an example of what 
you were saying here.
    Mr. Lankford. Thank you.
    Ms. Speier.
    Ms. Speier. Mr. Chairman, thank you, and thank you to all 
of our witnesses.
    The presentation that was made by the inspector general of 
this rock band that suggested they had lots of social media, 
you were able to access it on social media, Ms. LaCanfora, does 
the Social Security Administration have the authority to 
consult social media accounts when conducting CDRs?
    Ms. LaCanfora. Our adjudicators do not consult social 
media. And let me explain why, if I may. We understand the 
committee's interest in this issue, and we are certainly open 
to more discussions and discussions with the IG, but let me be 
clear about one thing. Right now, our adjudicators refer 22,000 
cases per year to the inspector general that they find to be 
suspicious. Our adjudicators are trained in fraud detection and 
they look at medical evidence, they look at the allegations of 
the individual, they weigh all of the evidence and they detect 
anomalies, and they do it very well.
    Ms. Speier. I have very limited time, so you just have to 
answer the question. Right now they do not, is that correct?
    Ms. LaCanfora. That is correct.
    Ms. Speier. Do they have the authority to and they just 
don't?
    Ms. LaCanfora. We do not allow them to look at social 
media.
    Ms. Speier. Do you, within the Social Security 
Administration, have the authority to require them to look at 
social media?
    Ms. LaCanfora. Yes.
    Ms. Speier. All right, so we don't need legislation to do 
that.
    Ms. LaCanfora. Correct.
    Ms. Speier. All right, so this is a decision that you made.
    Ms. LaCanfora. Correct.
    Ms. Speier. All right. I would disagree with that decision 
because I think that social media is a very fair and 
appropriate way of doing a CDR. So that is just one area that 
we need to pursue a little bit more.
    Inspector General, your office found that DI beneficiaries 
and SSI recipients improperly receive payments after medical 
cessation determinations, costing taxpayers $83.6 million. Does 
the Social Security Administration have a clawback provision 
for collecting improper payments?
    Mr. O'Carroll. Yes, they do, in two ways. One is that they 
can declare an overpayment and then of any benefits that are 
going in the future on it, they will take the penalty out of 
that. Then the other tool that we use is civil monetary 
penalties. So when we find that a person has lied, and if they 
aren't on benefits and we can't attach the benefits to get the 
overpayment from them, we will then charge them with a civil 
monetary penalty and get benefits back that way.
    Ms. Speier. So does that clawback actually take place, 
then? And you are in charge of the clawback, not----
    Mr. O'Carroll. No. Unfortunately, all we do is, if it is in 
a court and the court has a judgment that the person has to pay 
it back, it is up to the Justice Department to collect it. And 
in the other ones where overpayment is assessed by SSA, they 
monitor it and collect it, we don't.
    Ms. Speier. All right, so it is unclear whether or not we 
do any clawback. On the one hand, if someone is getting 
payments that shouldn't be getting them and it is our fault 
because it is a clerical error, I would not necessarily be 
supportive of a clawback.
    Mr. O'Carroll. Agreed.
    Ms. Speier. But if it was adjudicated, they know they are 
not supposed to be getting payments, they continue to get 
payments, then I think there is a reason to clawback; and you 
are saying they have the authority and it is unclear whether or 
not they use it.
    Mr. O'Carroll. Yes.
    Ms. Speier. All right. The IG report recommended that the 
Social Security Administration enhance its automated 
termination system following medical cessation decisions and 
the Social Security Administration agreed to that 
recommendation.
    So my question to you, Ms. LaCanfora, is when will that 
recommendation be implemented?
    Ms. LaCanfora. That recommendation has already been 
implemented. We discussed this at our hearing in November, if 
you might recall. We have made two systems changes to ensure 
automated cessation, so that there is no time delay between the 
decision at the DDS and the actual cessation. We have one more 
piece of that to implement, which we are going to do this 
fiscal year, to make sure that there is no gap at the hearings 
level. In addition to those systems changes, we are also going 
to continue to have a safety net in place where we do periodic 
runs to make sure no cases fall through the cracks. We fully 
support the idea that the cessations need to be made timely.
    Ms. Speier. So to you, inspector, does that then cover all 
the potential terminations that don't take place that should 
take place?
    Mr. O'Carroll. Yes. In fact, our recommendation was that 
systems enhancements be made so that it is automated and that 
it will be caught, and that is being implemented right now. So 
we haven't audited it, we haven't declared it a success, but at 
least they are in the right direction.
    Ms. Speier. All right, very good.
    Mr. Chairman, I am going to actually give you back 15 
seconds in the hopes that we will be able to have a longer 
second round.
    Mr. Lankford. We will. We will.
    Mr. Walberg.
    Mr. Walberg. Thank you, Mr. Chairman, and thanks to the 
panel for being here.
    Mr. Bertoni, as I understand, every two years a high-risk 
list is established of agencies and programs. Can you explain 
how the GAO designates a program to be high-risk?
    Mr. Bertoni. Sure. There is typically two criteria. The 
first criteria is whether they have significant management 
operational issues or problems that expose it to fraud, waste, 
and abuse, program integrity issues, mismanagement. The second 
part is organizations may need urgent transformation in many 
ways.
    Mr. Walberg. As I understand it, Federal disability 
programs have been designated as high-risk every time the list 
was issued since 2003. Can you explain why?
    Mr. Bertoni. On the first front, in terms of the management 
and operational side, we continue to see issues with their 
ability to get out in front of the backlogs, with their ability 
to make timely and accurate payments. We still have a 
significant overpayment situation. So even on that management 
and operational front, where we have seen some progress in some 
areas, it wouldn't be proper for us to remove it from the list.
    On the other side, the area of transformation, we have said 
for many years they need to take a more modern approach to 
disability.
    Mr. Walberg. More modern approach?
    Mr. Bertoni. More modern approach to disability. Disability 
today versus what it was 20 years ago, when we were a manual 
labor economy versus a service and knowledge-based economy is 
much different. Their criteria, their listings, their listings 
of jobs in the national economy have not kept up to date with 
the transitioning and what a disability looks like today, and 
we have had numerous recommendations that they address that.
    Mr. Walberg. Thus the illustration of the performing 
artist, being able to work and successfully raise a lot of 
funds.
    Mr. Bertoni. Well, in that case, that is a significant 
management and operational issue there, not having appropriate 
tools to get out in front of that problem.
    Mr. Walberg. Mr. O'Carroll, which reviews, of the multiple 
reviews, adult CDRs for SSI, SSDI, childhood CDRs for SSI, age 
18 re-determinations for SSI, which reviews are most cost-
effective?
    Mr. O'Carroll. Mr. Walberg, probably the most cost-
effective one would be the work CDRs, and work CDRs are the 
ones where we are showing wages are being posted against a 
person who is supposedly not working because they are disabled. 
Then, at that point, they would be brought in to SSA. But a 
little bit of texture to the conversation is that work CDRs are 
difficult to do; they are done by SSA, usually take a lot of 
study in terms of seeing if somebody had gotten a bonus or 
termination, another type of bonus like that. So, any way, they 
are difficult to do, but they have a very high return on 
investment.
    The next one down would be the medical reviews, and the 
medical reviews are, just as we said, because of the person 
having a disability, getting better, they are probably the more 
easily accepted and understood of the type of reviews that are 
done; and they are done by DDSs, and that is where the DDSs are 
doing those.
    So, anyway, I guess the best one to say on it is the word 
CDRs are the most effective.
    Mr. Walberg. Mr. Bertoni and Mr. O'Carroll, how much 
taxpayer money has been wasted because of SSA CDR backlog?
    Mr. Bertoni. I can't speak to the dollar amounts. I can say 
that we had over 400,000 cases that we identified in the SSI 
kids realm that were well overdue for a CDR, and we didn't 
project that to what that would be, but over time, a lifetime 
of benefits, that is a significant amount of dollars.
    Mr. Walberg. That was in the children's realm, you said?
    Mr. Bertoni. Yes.
    Mr. Walberg. Thank you.
    Mr. O'Carroll?
    Mr. O'Carroll. We are anticipating that several billion 
dollars are lost every year because of the backlog on the CDRs.
    Mr. Walberg. Four hundred thousand cases, several billions 
of dollars.
    Ms. LaCanfora, why did the agency allow a huge backlog of 
CDRs for children with conditions that tend to be temporary?
    Ms. LaCanfora. Well, with all due respect, I return that 
question in part back to the Congress. We have been 
inadequately funded over a series of years and unable to 
complete the number of CDRs that we need to complete. In fact, 
we have had to make very difficult tradeoffs in which CDRs we 
are going to do. And with respect to children, here is how we 
prioritize: we look for the greatest savings to the taxpayer; 
and the reality is the greatest savings to the taxpayer does 
not lie with children, because their benefits tend to be lower 
than adults. So we strictly look for savings to the taxpayer 
when we prioritize.
    Mr. Walberg. But the length of time is significantly more, 
correct, with children?
    Ms. LaCanfora. We take into consideration the fact that we 
do review all children at age 18, so the average lifetime 
savings is actually lower when you look at children.
    Ms. Speier. Would the gentleman yield?
    Mr. Walberg. I will yield.
    Ms. Speier. Ms. LaCanfora, my understanding is the 
difference between adult payments and child payments is about 
$100 a month, isn't that true?
    Ms. LaCanfora. I don't know off the top of my head what it 
is, but children's payments can be significantly less than 
adult payments. And, remember, the SSI program, there is all 
kinds of rules for children like deeming. Children's benefits 
are offset by income from the parents.
    Ms. Speier. All right. I don't want to take any more time 
of the gentleman. My understanding is that the actual payments 
are about $100 in difference.
    Mr. Walberg. In difference. Correct.
    I yield back.
    Mr. Lankford. Ms. Duckworth.
    Ms. Duckworth. Thank you, Mr. Chairman.
    Ms. LaCanfora, I would like to continue on the CDRs. My 
understanding is that the Federal Government saves about $10 
for every dollar spent on CDRs. Is that correct?
    Ms. LaCanfora. It is about one to nine, but close.
    Ms. Duckworth. One to nine? And I wanted to sort of touch 
on this history. You mentioned the fact that we had adequately, 
at one point, funded CDRs and you were able to catch up. In 
your opinion, what is your recommendation in terms of funding? 
You just said that you are not being adequately funded. Are you 
asking, recommending a similar funding to get rid of this 
particular backlog of, what is it, $1.3 million over a multi-
year period? What is your recommendation as an expert in the 
field?
    Ms. LaCanfora. Yes. Absolutely, the bottom line is you get 
what you pay for when it comes to CDRs. In fiscal year 2014 we 
received the Budget Control Act funding level, $1.197 billion, 
which will allow us to do 510 medical continuing disability 
reviews. If, in fiscal year 2015, we get the BCA level, we will 
be able to do 888,000 CDRs, and we are asking for $1.396 
billion to do that. Subsequent to 2015, the President's budget 
has a proposal for mandatory sustained funding separate from 
our administrative budget so that we can continue the momentum 
and eliminate the CDR backlog.
    Ms. Duckworth. So what you are saying is you need to get 
help covering the next two years to make a big dent in getting 
caught up in the backlog, and after that you have the mandatory 
that kicks in and then you will be able to work towards getting 
rid of the backlog and maintain parity with the new cases 
coming in? Am I saying that correctly?
    Ms. LaCanfora. Yes. Yes.
    Ms. Duckworth. Okay, thank you.
    Ms. LaCanfora. And that is our objective.
    Ms. Duckworth. Mr. O'Carroll, you wanted to say something?
    Mr. O'Carroll. Yes, Ms. Duckworth. Just to give a little 
context on that, what we are finding with that $1.3 million 
that is in the backlog on it, just doing the 510 on it won't 
touch the backlog at all. And under the current funding level, 
what we took a look at is in the next five years is four of the 
five plans on it will not reduce the backlog.
    So what we are finding is that, at least from our studies 
on it, they are going to have to be doing up in about the 
900,000 level to be able to have a significant impact on that 
backlog. So that is the biggest issue. They are keeping 
current, but they are not getting the backlog down, and that is 
where the more funding and more direction is needed.
    Ms. Duckworth. Are there any other reasons why a backlog 
has developed, other than inadequate funding, in your opinion?
    Mr. O'Carroll. No, because we can pretty much show from all 
the work that we have done is when SSA dedicates the resources 
to doing it and the dedication is coming from their funding, 
that they will reduce that backlog back. That is what we were 
talking about in the early 2000s, was when the money was there 
they did reduce the backlog.
    Then after that, when the funding wasn't there, the backlog 
kept growing, and then what would happen is they would be doing 
less and less each year, so the backlog kept growing. In fact, 
last year, even with funding on it, it went from $1.2 to $1.3 
million as the backlog of it. So it goes to show even with the 
current funding on it it is difficult for them to be getting 
any progress on the backlog.
    Ms. Duckworth. I just have a little time left. Inspector 
General, can you touch a little bit on CDIs and on how the CDI 
units have become effective in rooting out fraud and preventing 
disability overpayments? How do the CDI complement CDRs?
    Mr. O'Carroll. The CDI program is, I guess, one of our most 
effective anti-fraud programs going on; it is a group of 
between us and the SSA that we do it. And one of the things you 
were saying, how it ties in with the CDR is that we work very 
closely, because we have two DDS employees assigned to the CDI 
unit, and as the DDS is noticing anything suspicious either in 
an initial application or when somebody is brought in for a CDR 
and they need more information on it, they will refer it to the 
CDI unit. The CDI unit then will be using all the different 
tools that they have, between records to find out whether 
persons have licenses or other types of information that is 
contrary to the disability; social media; surveillances, and 
all those ones. So that usually there if there is a question on 
a CDR, the CDI unit can help.
    Ms. Duckworth. Thank you.
    I yield back the remainder of my time.
    Mr. Lankford. Mr. Cartwright.
    Mr. Cartwright. Thank you, Mr. Chairman, and I thank the 
chairman and the ranking member for bringing this important 
hearing, and certainly all of our witnesses for appearing here 
today to shed light on this important subject.
    The public trust in this Country really depends on the 
Social Security Administration's efforts and success at 
ensuring that people are not getting Social Security Disability 
payments who don't qualify for them and also that everybody who 
does qualify for Social Security and should be getting Social 
Security Disability is getting it. And I thank you for 
appearing here today.
    Ms. LaCanfora, I have a question for you. Your testimony 
lays out some of the steps SSA has taken to improve program 
integrity and to help ensure CDRs are done right and that their 
outcomes are based on consistent application of policy. These 
efforts demonstrate an organizational priority on improving the 
quality of CDRs, the efficiency of the process, and fair 
treatment of the beneficiaries. In fact, the truth is SSA's 
efforts have resulted in a very high CDR decisional accuracy 
rate. Am I correct in that?
    Ms. LaCanfora. You are correct.
    Mr. Cartwright. Okay. In prior testimony, SSA Deputy 
Commissioner Sklar stated, ``The aging of baby-boomers, the 
economic downturns, additional workloads, and tight budgets 
increase our challenges to deliver.'' Isn't it true that 
actuaries have known for years that the number of people 
eligible to receive Social Security Disability was going to 
grow? Is that true?
    Ms. LaCanfora. Yes.
    Mr. Cartwright. And how did they know that?
    Ms. LaCanfora. Not only the actuaries, but the Social 
Security trustees, as well as the Congress have known for a 
very long time that the program was not sustainable.
    Mr. Cartwright. It was as plain as the nose on your face, 
wasn't it?
    Ms. LaCanfora. Safe to say.
    Mr. Cartwright. Does SSA have the funds necessary to ramp 
up its program integrity efforts in view of the greater need 
created by this anticipated growth in SSD claims?
    Ms. LaCanfora. We are very pleased with the fiscal year 
2014 budget; it is the first time that we have received the 
money authorized in the Budget Control Act. It will put us on a 
trajectory that will allow us to eliminate the CDR backlog, 
yes.
    Mr. Cartwright. Does SSA have sufficient legal authority to 
protect the integrity of the disability program?
    Ms. LaCanfora. Yes.
    Mr. Cartwright. Okay, so we don't have to legislate new 
law; it is just about money, isn't it?
    Ms. LaCanfora. That is the single biggest determining 
factor, yes.
    Mr. Cartwright. All right. Well, I thank you for that.
    I think our witnesses have made clear that SSA has to have 
sufficient resources, and I appreciated your comments, 
Inspector General O'Carroll, about the return on investment, as 
I think you put it. We got an ROI of nine to one if we properly 
fund your efforts, and I think that the CDR proper funding is a 
subset of the entire question of proper funding of the SSA, 
again, to make sure not only that people who are getting 
disability checks are supposed to be getting them, and that is 
the work of the CDRs, but also that the people who should be 
getting disability checks and aren't getting them, that the 
process is sped up for those people, that justice is done for 
those people, and that the public trust in SSA is maintained 
and restored so that we clean up the backlogs not only in the 
CDR system, but also for the claimants to begin with.
    I thank you again for appearing today and I yield back to 
the chairman.
    Mr. Lankford. Thank you, Mr. Cartwright. I do agree that 
the CDR time--by the way, we are going to start a second round 
here to be able to jump in and we will have a more open 
conversation as we go through.
    CDRs are incredibly significant in this, but I go back 
again to Ms. Nottingham, and I want to be able to mention this 
to you and want to be able to pull something out. It seems to 
be that it is not just the quantity of CDRs, it is the quality 
of what they are able to actually accomplish with it.
    I want to go back to your comments earlier about the 
definition for medical improvement. Both what is coming out 
from the ALJs and what you see, the quality of that product, 
that work product that is coming and the determination of does 
this person actually have medical improvement, how is that 
working? Because with 18 percent of the people that were 
expected to be removed actually removed, those are CDRs that 
actually occurred, were paid for, and I am quite confident that 
many of them that were expected to be removed shouldn't be 
removed yet, they still qualify. But 18 percent seems like a 
very low number to me, and it goes back to your comment 
earlier, trying to deal with the definition of medically 
disabled. Can you help me with this?
    Ms. Nottingham. Most cases wouldn't get a medically 
improvement expected diary for when it should come back to CDR. 
Conditions, there are some that really are unknown that tend to 
get that, like certain cancers, where it really depends upon 
the result of the treatment, so we might give a shorter diary 
for that. I think that we tend to see an expected diary given 
from an ALJ, and I think, from what I have seen, or believe 
that there might be in a belief that the person will return to 
their own; they will get treatment, improve, and just return to 
work on their own. And that is just not what happens.
    Ms. Speier. By returning to work, is it returning to the 
same kind of work they were doing before or just being able to 
work in some job?
    Ms. Nottingham. That is not something that we would look 
at.
    Ms. Speier. No, but I was just wondering in terms of the 
definition.
    Ms. Nottingham. Oh. Depending upon their age and education, 
the vote grids is where that comes into play. We first look and 
see if they can return to their work as it was described or as 
it was performed in the general economy and if not, then is 
there other work out there, and that is where we take into 
consideration age and education.
    Mr. Lankford. Are you talking about at the CDR or are you 
talking about at the initial evaluation?
    Ms. Nottingham. The initial. The vocational grids and those 
factors only come into play on a CDR if we have already found 
that medical improvement has occurred; otherwise, we wouldn't 
look at that at all.
    Mr. Lankford. Okay, that is my preference on the question 
when we are coming back. Let me see if we can broaden this out.
    When you are doing the disability determination, you have 
it on a State level. Do you have access to social media? Are 
you doing some of your own investigations or are you dealing 
with just all the documents that are in front of you? Do you 
have authority to be able to do any of your own investigation 
as well?
    Ms. Nottingham. We would basically mainly look at medical 
records. We might get information from a third party if we have 
permission from the claimant to contact other people. Sometimes 
we might contact a former employer, but it is hard to actually 
get that information. The CDIUs have access to social media, 
the examiners do not have access.
    Mr. Lankford. Okay, wait. Run that passed me again. Who 
doesn't have access?
    Ms. Nottingham. Adjudicators or examiners would not, only 
CDIU.
    Mr. Lankford. Okay, so a typical case. But the CDI, that is 
not normal on that.
    Ms. Nottingham. Right.
    Mr. Lankford. That is a smaller number and only in certain 
regions, correct?
    Ms. Nottingham. Yes, only 22 office or States.
    Mr. Lankford. Okay, so in a typical disability 
determination you are taking only basically the documents that 
are in front of you. If you are going to contact a next door 
neighbor or if you are going to contact an employer, you have 
to actually get permission typically from the person that you 
are looking at the forms from.
    Ms. Nottingham. Yes. Usually when they file an application 
there is a place for them to list a contact person. Sometimes 
they don't have anyone or don't list anyone; generally they do. 
And we also use that just to follow up with them in case we 
lose contact with them. So if it is on there, then we already 
have permission to contact them, so we wouldn't necessarily ask 
during the middle of development.
    Mr. Lankford. Okay, what I am trying to figure out is there 
is really no investigation; you are taking the documents, the 
one-sided--and this is going to sound more caustic than it 
should--the biased documents, because everyone has a natural 
bias; they are applying for disabilities, they are going to 
make sure they write it, prepare it, or they have counsel that 
is helping them prepare it to make sure they get all the right 
words on there to be able to detail out here is what needs to 
be. That is really all you have to evaluate by.
    Ms. Nottingham. We are very limited in what we can get. 
That is why I mentioned the point about having only a 
consultative examination when someone doesn't have treatment. 
It is best when we have records for years because the 
consistency helps make sure we are making the right decision if 
there is a consistent history of how they have been doing. But 
when we only have an exam or one-time exam, it really leaves 
the decision a little bit more questionable.
    Ms. Speier. Can we have Ms. Nottingham go through her 
recommendations that were in her statement that I don't think 
you actually got to, did you, or you kind of rushed through?
    Ms. Nottingham. One of the things that we would like to 
look at the MIRS policy, the medical improvement review 
standard, in general.
    Ms. Speier. Right.
    Ms. Nottingham. Because we do see that very few people get 
off the rolls through this process.
    Ms. Speier. And you would attribute that to the MIRS 
process.
    Ms. Nottingham. Yes.
    Ms. Speier. So how would you have us change that?
    Ms. Nottingham. When the diaries do have a new decision to 
see if they are disabled at that point, following the initial 
rolls.
    Ms. Speier. So that is your reference to de novo review, is 
that what you are suggesting?
    Ms. Nottingham. Yes.
    Ms. Speier. So it basically would allow you to open up the 
entire case to look at, as opposed to just looking at 
documents. So you could, for instance, look at social media.
    Ms. Nottingham. By policy we are not allowed to look at 
social media.
    Ms. Speier. I have a hard time with that.
    Ms. Nottingham. I do have some concerns with social media.
    Ms. Speier. All right, tell me what they are.
    Ms. Nottingham. Just that it could be of some benefit, but 
someone posting on their social media, we would have to make 
sure you can confirm that that was actually them, and also a 
picture of them working on a truck or something like that could 
have been years prior to their actual injury. So it is a piece 
of information that could be useful, especially when you are 
looking into fraud or similar fault, but it is only one piece 
of information.
    Ms. Speier. All right, Inspector, how would you comment to 
that?
    Mr. O'Carroll. Thanks for asking. I have to say of course 
we have concerns what would happen if they rolled out social 
media to all SSA employees, and I think that is a management 
issue with SSA.
    But what we think in terms of the social media, and I used 
that in my example here, we have used it on other examples, we 
think it is a good tool. And as it happens now, we call it in 
the investigative world it is a clue. And you take a look at 
that clue, you take a look at other clues, and it is part of a 
big picture, not the picture itself.
    So one of the suggestions that I have been coming up with 
is with SSA we now have an national anti-fraud committee, which 
is co-chaired by myself and the CFO of the organization, and 
one of the subcommittees under it I would like us to do a pilot 
program when we start taking a look at giving different SSA 
employees access to social media and give it a pilot and see 
how it works out. So that is one of the things that I am taking 
to the national anti-fraud, is to see if we can start doing 
that.
    Ms. Speier. You know, I just am sitting here thinking if 60 
Minutes did a piece and showed all of the potential abuse, and 
then it was then turned on us and what are you doing about it, 
and we are basically saying, well, we don't allow people to 
look at social media. I think we would be laughed at.
    Mr. O'Carroll. I agree. That is why I am saying it is a 
good tool and it is something that SSA should start piloting 
and see. But it is one of those things that, in fairness to 
them, probably some caution needs to be done in doing it; is 
not something of the snap of the fingers. But I think it is 
something to move into the 21st century, that it has to be 
considered.
    Mr. Lankford. It doesn't solve everything, we understand 
that, but it is a tool. As you mentioned, it is a clue; it is 
something that could be out there. It just provides an 
opportunity for a question. Even if there was the opportunity 
to be able to say notice this, tell me about this. Just to be 
able to initiate the conversation. By the way, notice that you 
also have on your social media that you hire out to also mow 
lawns. That would be something that you would ask a question 
about at some point.
    I want to go back to this MIRS process. We need to drill 
down on this more. There is a difference between their initial 
evaluation and then what happens when we have a CDR. Talk to us 
about the differences here between the two.
    Ms. Nottingham. In my testimony, I mentioned that the 
definition of disability is removed from the CDR process.
    Mr. Lankford. Right.
    Ms. Nottingham. The initial claim process, we are looking 
at their conditions and making assessment of their functioning, 
and then applying the vocational grids and finding out, then, 
if they meet the criteria for disability. We don't consider 
that at all in a CDR with the MIRS, if there is no indication 
of significant medical improvement.
    Mr. Lankford. Okay, so help me understand. When you are 
dealing with this and you have to evaluate medical improvement, 
what is the grid that you are working through on that one? 
There is the grid that is the prior one. How do you make a 
decision of medical improvement? Because you really have two 
issues here, the medical improvement and then can they engage 
in substantial gainful activity. Or is this at this point, once 
we have left it, gainful activity is not there, it is just 
medical improvement?
    Ms. Nottingham. You have to consider medical improvement. 
If we can't establish that there is medical improvement, we 
would not go on to the vocational aspects.
    Ms. Speier. But the problem there is that if it was 
questionable in the initial evaluation, but they got benefits 
anyway, then you are perpetuating what may have been a bad 
decision to begin with, correct?
    Ms. Nottingham. Correct. That happens regularly.
    Mr. Lankford. When you say regularly, are you talking 4 
percent or are you talking 40 percent? I know this is going to 
be your ballpark guess. We get that. So we are not going to 
hold you to an absolute statistical number. Your experience.
    Ms. Nottingham. My experience, and the experience of many 
examiners, would perceive it to be higher than 4 percent. I 
would think maybe something 20 percent is a ballpark.
    Mr. Lankford. That should have never been on in the first 
place.
    Ms. Speier. Mr. O'Carroll, what do you say?
    Mr. O'Carroll. As I said, on that one there, when we did 
the study on it, we found 4 percent for sure, and then we found 
8 percent that was questionable because of the information. So 
anywhere from 4 to 12 is us.
    Mr. Lankford. Okay.
    I am sorry to interrupt. Keep going on that, then.
    Ms. Nottingham. It becomes difficult because a lot of 
subjective conclusions are made in the disability process, and 
we can't substitute judgment, so if we can't establish an 
actual true error was made, we end up continuing, and we look 
at, then, if there is medical improvement.
    So someone who is allowed for very minimal impairments, 
their functioning wasn't really limited but they were granted 
disability benefits because of maybe the statements they made. 
The statements should have been supported by the evidence and 
consistent with everything else, but even though that wasn't 
given appropriate weight and they maybe just based the decision 
solely on the statement of the claimant, or maybe even one of 
their doctors, that would be substitution of judgment is how I 
understand the policy, so we would then use the MIRS to find 
out if there is medical improvement, it would not be an error.
    Mr. Lankford. But we are still back to the same spot. How 
are you defining medical improvement? You are not substituting 
judgment, but there is some judgment in this.
    Ms. Nottingham. Yes, the medical improvement is going to be 
subjective. We look at the signs, symptoms, and laboratory 
findings. Some conditions have a lot more objective findings, 
particularly physical.
    Mr. Lankford. Okay, so help us with an example. Give us an 
example of something working through.
    Ms. Nottingham. A back impairment is something that is very 
common, and we usually look at things. They have x-rays, so 
that is a very objective test, or other imaging, and then we 
look at things like their muscle strength, their range of 
motion, and any neurological injuries. So we would look at 
that, and if they still continue to have decreased range of 
motion and some normal strength or decreased strength, if those 
are consistent with what we saw before, then we would say that 
that is not medical improvement.
    How much medical improvement is where a lot of the 
subjectivity and differences may come in. I would think, 
though, that most--I have seen people who try to use very 
little improvement, something like a range of motion that was 
limited to 60 degrees and then they have 90 degrees range of 
motion, something minor like that, they would try to use that 
as an argument, and then we get overturned. Those would not 
fight through appeal.
    Ms. Speier. So, Mr. Chairman, I have a question here. You 
are attorneys or you are judges, correct?
    Ms. Nottingham. No.
    Ms. Speier. What are you? I mean what are the examiners.
    Ms. Nottingham. The DDS examiners are State employees and 
the qualifications range from State to State. Most require a 
bachelor's degree of some sort, and we have extensive training 
in medical policy.
    Ms. Speier. Okay, but no medical training per se, I mean, 
you are not professionally physicians or health care 
professionals.
    Ms. Nottingham. Correct. Most people would not have a 
medical background.
    Ms. Speier. So you came up through the ranks with a 
bachelor's degree and then, through training, became examiners, 
is that correct?
    Ms. Nottingham. Correct. We usually have quite extensive 
training, at least of 10 to 12 weeks of pure training, and then 
we ease people into a caseload with extensive review. In my 
State we have a one-year probation for an examiner.
    Ms. Speier. But here is my concern. In a workers comp 
system, in an interesting sort of way, this is like a workers 
comp system. In a workers comp system, it is a system that is 
very different from this system, but there is a physician that 
evaluates the claim and then the continuation of the benefits 
depends on that physician review and by a second physician 
review that may be from the employer.
    Ms. Nottingham. We do have doctors that review things, 
review the decisions, the medical assessment in most States.
    Ms. Speier. What States don't?
    Ms. Nottingham. There are single decision-maker States and 
there are some decisions that do require like any denial for 
psychological impairment would require a doctor. They are the 
prototype States and the 10 additional.
    Ms. Speier. They are the which States?
    Ms. Nottingham. I don't know. There was a prototype that 
started about 16 years ago, and we are still running on a 
prototype for those 10 States, and there were an additional 10 
States that receive single decision-maker authority.
    Ms. Speier. Oh, prototype. A permanent pilot.
    Mr. Lankford. Yes, that is a pretty long pilot project.
    Ms. Nottingham. Yes, exactly. I can name a few States, but 
I don't have that information.
    Ms. Speier. Can you just name them?
    Ms. Nottingham. Michigan, Missouri, North Carolina.
    Mr. Lankford. Anyone else can jump in on this if you know 
what some of the States are as well.
    Ms. LaCanfora. I don't know the States off the top of my 
head, but I do want to say I think we are getting into a very 
confused area on this issue. If the question is do the 
examiners have access to medical consultants, we have hundreds 
of medical consultants on contract, and they review cases. 
There are certain cases where we do not have a medical review, 
but we are pretty specific about where that is. For example, we 
have cases called compassionate allowances; they are very 
specific impairments where the objective medical evidence will 
prove a finding of a severe disability. In those cases we don't 
require medical consultation.
    It is a little bit of a complicated area I think that we 
are getting into, but disability examiners generally have 
access to medical professionals.
    Mr. Cartwright. Mr. Chairman, may I jump in for a moment?
    Mr. Lankford. Sure. Jump in.
    Mr. Cartwright. Now, we have heard testimony today about 
the backlog of CDRs being $1.3 million, is that right? So we 
are talking about 1.3 million people who are receiving SSD or, 
in some cases, SSI who have gone passed their scheduled date 
for review, which makes them part of a backlog, is that it? I 
see heads nodding.
    So one thing that I am wondering about is whether this is a 
backlog that is disproportionate to the CDR process in SSD. 
Specifically what I am wondering is the people who have 
originally applied for SSD, somebody has had a horrible illness 
which has left him or her, rendered them unable to work, at 
least that is what they think and that is what they claim, so 
they put in for Social Security Disability. And I have heard 
talk that there are backlogs for those applicants as well. 
Anyone disagree with that? Seeing no nodding heads there.
    Does anybody have an idea of what the number of the people 
is who are in that backlog, the people who are waiting for 
overdue Social Security Disability initial determinations in 
this Country?
    Ms. LaCanfora. I don't have that number off the top of my 
head, but let me try to answer your question this way. I think 
you hit upon a very important point. We have seen extreme 
service degradation in the past few years that ranges far 
beyond the realm of program integrity or medical CDRs. We are 
closing our field offices an hour early every day and on 
Wednesdays we close at noon simply because we do not have the 
resources to handle all the work coming in the door. We have 
lost 11,000 employees in the past few years. Our wait times 
have gone up across the board.
    Mr. Cartwright. So that is exactly what I was getting at, 
Ms. LaCanfora, and thank you for your candor there, because 
when you talk about severe degradation, it doesn't just apply 
to the CDR process; it applies across the board at SSA, doesn't 
it?
    Ms. LaCanfora. Absolutely.
    Mr. Cartwright. Thank you.
    I yield back.
    Ms. LaCanfora. May I also just give you the data that you 
wanted regarding the benefits of individuals on whom we perform 
CDRs? The average benefit payment for an SSI child is $545 a 
month; the average benefit payment for an adult getting SSDI is 
$1,146 a month. Thus, the reason I said that the payoff is much 
greater for adults on disability.
    Mr. Lankford. Okay, I am going to go to Ms. Lujan Grisham 
in just a moment here, but when we talk about the benefits, the 
administrative costs, and the backlog, and all that is 
happening is accelerating, is some of the issue just the number 
of people that are trying to enter the system? We are dealing 
with fairly static numbers. When you look at the last five 
years, the numbers have been fairly static for what is actually 
coming in in administrative costs for SSA.
    Ms. LaCanfora. Our workloads have consistently increased, 
while our staffing levels have consistently decreased.
    Mr. Lankford. You have a tremendous number of new people 
that are coming in, your funding levels are not going up, so 
part of our issue is the number of applicants that are coming 
into the system. So part of our question is why have we seen 
this giant jump in the number of applicants get in the system?
    Ms. LaCanfora. Well, I think as we discussed before, this 
is not news. The Social Security actuary, the board of 
trustees, the Congress has been well aware, and this has been 
predicted for many, many years. The reason for the growth in 
the disability programs, and we have research done by 
economists on our Web site which corroborates the findings of 
our actuary, demographic changes have resulted in an increase 
in the number of people on disability, specifically the aging 
of the baby-boomers, individuals entering into their 
disability-prone years, and women entering the workforce and 
gaining insured status under the program. Those demographic 
changes are the reason for the increase in the growth in our 
programs.
    Mr. Lankford. But that is not going to show an increase in 
why we have more children in the program, aging and all those 
things, that dynamic. We have this dramatic increase as well in 
SSI.
    Ms. LaCanfora. There is a very good CBO report that is out 
that talks about the increase in the growth in the childhood 
program, and it talks about a variety of factors that are also 
demographic. First, there is more widespread acknowledgment and 
diagnosis of medical conditions among children. We don't create 
the diagnosis at Social Security, we follow the medicine. There 
has also been an increase in the number of children living in 
poverty. And you have to remember that SSI is a needs-based 
program. So as more children live in poverty, more applications 
come in for SSI.
    Mr. Bertoni. If I can just jump in here. There is a big gap 
between the growth in physical impairments versus mental 
impairments. If you look at physical impairments in the SSI 
program, the line goes like this. If you look at mental 
impairments, the line goes like. So we don't know what explains 
that, but we do know that on the mental impairment side, when 
those cases are decided, at least in the case of speech and 
language delay, 80 percent of those cases are decided on the 
functional criteria, which is very subjective. So it is not a 
listing, it is not a grid; it is a functional criteria.
    Ms. Speier. So let's drill down on that, because a whole 
group from Social Security came in and met with me on ADHD. 
Speech and language is one of those conditions that does 
improve as the child advances, and you are saying that you are 
seeing a dramatic increase in that particular area.
    Mr. Bertoni. Absolutely. It is one of the top three 
impairments where there are increases. Speech and language 
delays has increased significantly, and it is considered by 
many to be a transient impairment, where you can grow out of it 
with maturity. And the allowance rates are very high, so I 
think it is evident that these children have that condition. 
But the cessation rates are very high down the road when they 
finally do these, MIRS notwithstanding; 38 percent cessation 
rate. So it tells me that these folks, these children are 
likely growing out of this condition, but SSA is not reviewing 
the cases.
    Ms. Speier. Okay. So, to that point, you would say, Ms. 
LaCanfora, that they don't reap the same benefits, so you don't 
focus on those cases. But it would seem, based on the GAO's 
study, that that is the one area where there is dramatic 
improvement; whereas, in many medical conditions of adults, 
there isn't improvement. Certainly in these mental, for the 
most part, disabilities there is dramatic; I know ADHD is one 
of them. So why wouldn't we, then, focus more attention on 
those cases, as the GAO is suggesting?
    Ms. LaCanfora. So the math here is very simple. We could. 
We could do more childhood CDRs. But if we did more childhood 
CDRs, we would do fewer of something else. And then my 
colleague, Mr. Bertoni, would be here with a different report 
citing the much greater loss to the taxpayers in revenue by not 
doing that other group of CDRs.
    Ms. Speier. No, he is going to disagree with you, and I 
think I will as well. Go ahead, Mr. Bertoni.
    Mr. Bertoni. I think we acknowledge that there are resource 
issues and there are tradeoffs to be made. Managers manage; 
managers to the pain. We have put on the record at least three 
impairments that have cessation rates in excess of 30 percent; 
ADHD at 25 percent, some personality disorders 39, and then, of 
course, the speech and language delay. For SSA to come here at 
some later date to say we understand that, we may have a 
problem, we are going to take some piece of the DI money, given 
the return on investment, and perhaps do a limited 10-year look 
at these cases to perhaps cease the ones that need to be 
ceased, we would not have a problem with that; that is managing 
to your resources.
    Mr. Lankford. Ms. Lujan Grisham, just to let you know, we 
are in a second round on this, so anywhere you want to jump in, 
you are welcome to be able to jump in with any set of 
questions. So take off.
    Ms. Lujan Grisham. Thank you all for being here. This is a 
subject that, in both a positive and not so positive way, are 
very near and dear to my heart. First, my sister, who has been 
gone many, many years, unfortunately, had a significant 
disability, both physical and developmental back when special 
education was brand new. So just in terms of getting any 
resources for a family tough. And I know all too well what it 
is like even today, decades later, what it is like to get 
disability services, whether it is a Medicaid through a waiver, 
whether it is SSI, whether it is SSDA. Whatever that resource 
component is, it is very difficult still to get it, attain it, 
hold it, and then make it last for the things that you need.
    And I also worked in the field of aging and long-term care 
and DD, adults with disabilities, world for 30 years. I also 
come from a State who, unfortunately, as has been highlighted 
now in every major news media, has the worst public health 
outcomes of any State in the Country, largely related certainly 
to socioeconomic issues.
    But just look at our fetal alcohol syndrome issues and look 
at our higher than national averages, which are way too high, 
for autism. So when you are looking at the number of kids that 
are spiking, we are also seeing a whole new host of significant 
increases, and I think a lot of it is better diagnostics, but I 
think probably we will find, and that is beyond my pay grade, 
some researcher is going to find very clearly what is going on, 
I hope, so that we can do something about it.
    The balance here, and I appreciate this committee's hearing 
today and the comments of my colleagues, when we are wasting 
billions of dollars by doing overpayments and not doing an 
effective administrative service, because I worry about the 220 
average days for somebody to get a disability determination. I 
am concerned about the growing waiting list on the other side. 
And I do respect that you have to manage to your resources, but 
I worry that in the context of this hearing we are going right 
back to where we go; it is all of one and none of the other.
    I think that there can be much more accountability in all 
of these offices. And maybe I am on a diatribe with no 
question, I am so sorry, Mr. Chairman--that is what happens on 
the second round, I guess--that I expect this Administration, 
probably more than most, to do it. But managing to your 
resources isn't going to change that we need to, I am going to 
call it a level of care in some of the claims determinations 
review.
    But the last time I heard, when you have Down Syndrome, 
that doesn't change, that diagnosis; you keep it. So the notion 
that you get better; you can improve some functional 
limitations, but I always am offended when there is a sense 
that people can get dramatically better. And that is not to 
say, by any stretch of the imagination, that I don't expect 
accountability where there can be, because it is finite. We 
have a growing number of people and we want to do the best by 
the number of people we have.
    So if I can maybe boil this down to a question, what can we 
do to balance those two issues more than just we need more 
resources in Social Security? I would be one of those there, I 
would be one of those who is there. But I also want you to be 
accountable with those resources and expect that you do 
everything in your power. How do you start, today, catching up 
in a way that recognizes that I don't want this to be on the 
backs of beneficiaries and I don't think--I heard Ms. Lockhart 
earlier. I may disagree with your characterization about how 
people with disabilities come to you and what those situations 
are.
    How do we right-size those so that we are aggressive on the 
management side, we don't create more discrimination and a more 
difficult process for people to attain the benefits that they 
are entitled to, which are intended to provide dignity, 
respect, independence, a savings on the long-term care side 
somewhere else, and an opportunity for people to reenter the 
workforce and to do the things that we want them to have every 
opportunity to do?
    Give me as many quick ideas as you can about right-sizing. 
Nobody can.
    Ms. LaCanfora. I will start out. You mentioned the funding 
issue, and I know you are well aware of that, but with respect 
to the discussion of prioritizing CDRs, we wouldn't have to 
prioritize CDRs if we had adequate funding. We wouldn't have to 
prioritize them at all because we would be doing all of them.
    Now, with respect to what else we can do, we fully 
acknowledge that we have to evolve the policies in the 
disability programs to keep pace with medicine, technology, the 
world of work. We also have to focus on consistency and 
objectivity in the decision-making process. And we discussed at 
the last hearing and in our intervening meeting all of the host 
of things that we are doing at Social Security in that area, 
and we are working with experts across the Nation; the 
Institute of Medicine, the National Institutes of Health, ACIS, 
the Bureau of Labor Statistics. We have a whole variety of 
initiatives underway to make sure that, in fact, our policies 
are evolving and reflecting today's economy and today's world 
of medicine.
    Ms. Lujan Grisham. If the chairman will let me, Mr. 
Bertoni, do you have any? Because I worry about that imbalance, 
which tends to occur every time, all or none.
    Mr. Bertoni. Sure. And I think you mentioned Downs 
Syndrome. That was not an impairment we focused on. We look at 
the broad spectrum of impairments, and we just flagged three 
that looked to be impairments that could yield a return on 
investment in terms of recovery. So we have given them that 
information, acknowledge that there are resource tradeoffs, but 
again, within that pot of money, I think they can work more 
efficiently. Should that money come down the road, we would 
hope that they would continue to prioritize to the areas that 
would continue to give them a return on investment. That is 
unclear whether they would going forward.
    Mr. Lankford. I want to recognize the ranking member of the 
full committee, Mr. Cummings. I saw you came in and I want to 
be able to recognize you for time. And this is a second round, 
so it is open microphone, so you have all the time that you 
need on it.
    Mr. Cummings. Thank you very much. I want to thank the 
committee, Mr. Chairman, and the ranking member, for 
highlighting the need to conduct timely CDRs to help make sure 
disability programs are serving the truly disabled. When I 
served in the Maryland legislature for some 14 years, I was the 
chairman of the committee that oversaw Social Security for the 
State of Maryland, so this is of great interest to me.
    Now, Ms. LaCanfora, would you agree that CDRs are a highly 
cost-effective program and an effective way that ensures that 
disability benefits are going to only those individuals who 
continue, continue to be eligible?
    Ms. LaCanfora. Absolutely.
    Mr. Cummings. And so when a CDR finds that an individual is 
no longer eligible for benefits, does that mean that the 
original eligibility determination was in error?
    Ms. LaCanfora. No. In fact, more often than not, it is due 
to the fact that the person has medically improved.
    Mr. Cummings. And that is what we would hope for, is it 
not?
    Ms. LaCanfora. Correct.
    Mr. Cummings. I mean, that is a great result. In other 
words, instead of somebody being disabled for years and getting 
benefits, when they have improved, then that helps the person, 
I guess that gets them back to work or whatever, so that helps 
all the way around.
    Ms. LaCanfora. That is right.
    Mr. Cummings. Does a CDR decision to cease benefits because 
an individual is no longer disabled mean that there was fraud? 
Does it?
    Ms. LaCanfora. No, absolutely not.
    Mr. Cummings. And how often is fraud found, though?
    Ms. LaCanfora. Well, this is a question that I think we 
have debated quite a lot in prior hearings. The only real data 
that we have on fraud in our disability program is a study that 
was done by our inspector general in 2006 that cited less than 
one percent of fraud in the program.
    Mr. Cummings. So when a CDR is done and fraud is suspected, 
what happens then?
    Ms. LaCanfora. We refer that case to the inspector general. 
And as I said earlier, we refer 22,000 cases each year to the 
inspector general, and those instances of suspicion arise when 
our examiners look at the facts of the case, the assertions of 
the individual claimant against all of the records that they 
have, and they detect some sort of anomaly or gap in the 
evidence. So 22,000 times a year we refer those cases to the 
inspector general for further investigation.
    Mr. Cummings. And you said that is about 1 percent?
    Ms. LaCanfora. The 1 percent is a little bit different. 
What I am saying is you asked how much fraud is in the program.
    Mr. Cummings. Yes.
    Ms. LaCanfora. And the best indicator we have is a study 
that was done in 2006 by the inspector general citing less than 
1 percent fraud.
    Mr. Cummings. Well, let's go back. I am trying to get to 
the CDRs. What percentage of the CDR cases--you may not have 
this information, and let me know--of the CDR cases is fraud 
suspected and then you pass them on? You follow what I am 
saying? In other words, the CDR is conducted, it appears that 
there is a problem that is connected with fraud. I am asking 
you do you have any idea what percentage of the CDRs that are 
conducted result in suspected fraud. Does that make sense?
    Ms. LaCanfora. It does make sense, and Mr. O'Carroll can 
chime in.
    Mr. Cummings. Somebody can answer. If you can't answer, 
somebody else can.
    Ms. Speier. Actually, Mr. Ranking Member, I think one of 
the points of the CDR, of the CDRs that aren't done because of 
the backlog, they have established that it is $2 billion--was 
that the figure you used, Mr. O'Carroll?--of money that would 
come back to the system as a result.
    Ms. LaCanfora. But those cases are not an indication of 
fraud.
    Mr. Cummings. Okay.
    Ms. Speier. Not fraud, but they no longer have the medical 
disability.
    Mr. Cummings. All right.
    Mr. O'Carroll. There are 22,000 that are referred to us by 
SSA. A small portion, Mr. Cummings, is going to be from the 
CDRs and fraud related to that, and that is sort of the subset 
that goes to our CDI units. We figure of the 22,000 referrals 
that SSA sends to us, about one-third of them are going to the 
CDI units. So that is where there is suspicion in a DDS 
referred to our CDI units. So about one-third of our referrals 
are in relation to suspicions or concerns in disability.
    Mr. Cummings. You know, I am sure you all are familiar with 
that 60 Minutes show that came on not long ago. It seemed like 
there were--they talked about these attorney mills. And I am an 
attorney, so I just want you to know, but do you see a lot of 
that? Yes, sir.
    Mr. O'Carroll. As you said, with that series on it, there 
were a number of news articles on it, The Wall Street Journal 
covered it. It was in a number of things. It is one of our 
biggest concerns, what we call facilitator fraud, and that is 
where you have sort of the mills that are going, where there 
are going to be people do introductions to people saying that 
they will get them on disability; they will be using 
unscrupulous medical providers; there will be facilitators for 
it. It has been in the news quite a bit.
    And, yes, we are concentrating on that very heavily. We are 
doing it in, I guess, three regions now; we have units that are 
just out there taking a look at facilitator fraud. They are 
very difficult investigations to do because usually you are 
using undercover agents to be inserted in to be able to show 
what was happening. We film it, we videotape it, we do all 
that, but it usually takes a couple years, where you establish 
an identity for a person to go in as an undercover on it.
    So, yes, we are exploring that extremely a lot.
    Ms. Speier. But, Mr. O'Carroll, in a prior meeting that we 
had, didn't you indicate that there were thousands of these 
cases in Puerto Rico and so many hundreds of them in New York 
and so many more in West Virginia?
    Mr. O'Carroll. Yes.
    Ms. Speier. Could you just give that number?
    Mr. O'Carroll. The two examples that I used that were 
really specific was Puerto Rico. It is hundreds at this time, 
but there is also suspicion of over 1,000. And in New York City 
there was a large amount on that one, too, where facilitators 
were going to people as they retired from Government and said 
to them, we will get you on benefits. So we have a couple of 
those and we have others going in the other regions that I 
talked about.
    Mr. Cummings. Now, Ms. LaCanfora, it has been suggested 
that the medical improvements standards, going back to the 
CDRs, does not allow the removal of beneficiaries who were 
wrongly awarded benefits in the first place. Is it true that 
under the existing review standards, if a clear and 
indisputable error in the initial disability determination was 
found during a CDR, the examiner can cease benefits?
    Ms. LaCanfora. That is correct.
    Mr. Cummings. So Social Security actuaries projected the 
disability insurance trust fund is only years away from being 
unable to fully finance disability insurance benefits. I would 
like to just as a few questions about that. If the agency 
performed every CDR required in a timely manner, would the 
savings in spending make a small, medium, or large dent in the 
shortfall in the trust fund?
    Ms. LaCanfora. It would be small.
    Mr. Cummings. How small?
    Ms. LaCanfora. Not being an actuary, I am a little 
concerned about commenting on it, but I think it would not 
significantly extend the life of the DI trust fund.
    Ms. Speier. [Remarks made off microphone.]
    Mr. Cummings. Okay, I am just asking a question.
    Ms. LaCanfora. But it would not extend the life of the 
trust fund.
    Mr. Cummings. I am just asking questions. Thank you.
    So go ahead, what were you saying?
    Ms. LaCanfora. Just that if we did all of the CDRs, 
certainly that is desirable, that is what we all want to do. 
With adequate funding we will do it. But in terms of extending 
the life of the disability trust fund, it would not have a 
significant impact.
    Mr. Cummings. Well, going to Ms. Speier's point, we are 
talking about billions of dollars? I see everybody shaking your 
heads.
    Ms. LaCanfora. Yes. Yes.
    Mr. Cummings. Okay. But you are saying that it wouldn't, 
you see that as small.
    Ms. LaCanfora. I don't see it--okay, let me put it into 
perspective. I think was said before, but for every $9 that we 
save the taxpayers, we have to invest, on average, $1. So it is 
clearly an excellent investment to do continuing disability 
reviews; they are essential, they should be fully funded 
without question.
    Mr. Cummings. I agree.
    Ms. LaCanfora. But your question was to what extent would 
doing all of them extend the 2016 date of reserve depletion 
which is currently projected, and my answer is that doing the 
rest of the CDRs isn't going to have a dramatic impact on that 
date.
    Mr. Cummings. So what is a meaningful way, do you think, to 
address the shortfall?
    Ms. LaCanfora. The shortfall is not new; there have been 
shortfalls in our trust funds at least a half dozen times since 
the inception of the programs, and the Congress has a couple of 
options. They can do payroll tax redistribution and there are a 
couple of legislative mechanisms through which to do that.
    Mr. Cummings. And Congress has acted before?
    Ms. LaCanfora. Yes.
    Mr. Cummings. All right, thank you very much.
    Mr. Lankford. Was that for disability insurance 
specification you are talking about the redistribution?
    Ms. LaCanfora. It has been done for both trust funds.
    Mr. Lankford. Short of that, what else can we do? Because 
one of the things that Ranking Member Speier and I, when we 
sent the letter, we were trying to detail 11 different items 
that can be done that are not just about efficiency and 
dollars; they are about people in this process, going back to 
what Ms. Lockhart was talking about before. These are lives and 
people that we hope to be able to transition back into 
productive lives for the sake of their children and the sake of 
the community as a whole and what they bring to society. So 
there are multiple issues here. What are other things, besides 
just redistributing payroll taxes, to be able to stabilize this 
and be able to bring down some of the cost areas?
    Ms. LaCanfora. So I think that there is not a connection 
between any of the items in your letter or any of the things we 
are working on at Social Security and the reserve depletion 
that is projected in 2016. In other words, all of those things 
that we are working on are wonderful ideas and we need to keep 
our eye on the prize and evolve the policy and the program to 
be more efficient and effective. You all have some good ideas 
as well, but those things are not going to extend the life of 
the DI trust fund. You would need to fundamentally, through 
legislation, completely change the nature of the program.
    But I want to go back to something I said earlier, which is 
the policy and the process and the management of the agency is 
not the cause of the reserve depletion. The cause of the 
reserve depletion is demographics; baby-boomers aging, women 
entering the workforce.
    Mr. Lankford. I understand. I only partially accept that 
just from some of the other things. We talked last time about 
the Federal Reserve in San Francisco and the report, I am sure 
you are very familiar with that. They also tracked those same 
issues, about women, age, all those things, but they came out 
with a 44 percent of unexplainable increase beyond just 
demographics.
    So it wasn't just, hey, this is a pure demographic issue; 
they identified, of the additional people in the system, 44 
percent of them no one can identify. This shouldn't be there. 
That is a fairly high number of individuals to enter into the 
system unexplainable. We have talked about the high number of 
people that are actually applying that create this backlog not 
only of CDRs, but there is a backlog of actually getting into 
the system because so many people are hitting the system. They 
go through the two different DDS reports and they just 
automatically go to the ALJs. So there is a press in the 
backlog of the ALJs that SSA has worked on to try to fast-track 
and get people in the system and have the ALJs deal with this.
    So we have issues on every side of this. We have 44 percent 
of the people unexplainable while they are pressing into the 
system; we have a fast-track system of actually getting people 
through the ALJ system; we have CDRs that are occurring that we 
are getting 18 percent turnaround rate of what we are 
expecting, and we are dealing with the definitions of it. There 
are issues on each side of this that have to be addressed. Some 
of these are legislative, we get that. That is one of the 
questions that we are asking, what is it legislatively do you 
need.
    But we do feel like there is a need administratively that 
does make a difference in billions of dollars. If it takes us 
from 2016 to 2017, that is a gain. What are we doing to be able 
to get ahead of this? It is just unacceptable to get to 2016 
and for Congress to wake up and go, gosh, we have a problem. 
When do we all see it?
    Ms. Speier. Well, and let me also say that regardless of 
whether it is a lot of money or not a lot of money, the system 
has to have integrity; and people who are receiving benefits 
should be eligible to receive benefits, and those that are 
ineligible or grow out of eligibility should not receive 
benefits. And we should have a system that works for that end.
    I am curious about, if we could go back to Ms. Nottingham's 
statement and her recommendations. I would just like to 
understand some of the ones you referenced. You said electronic 
claim exceptions should be eliminated to prevent any future 
claims from being processed in a paper format. Makes a lot of 
sense. Are claims still being processed in a paper format?
    Ms. Nottingham. There are still some exceptions. It is very 
few, but it happens still to this day.
    Ms. Speier. Well, by very few, then why is that a 
recommendation if it is de minimis. Is it de minimis?
    Ms. Nottingham. Well, the claims that are currently 
processed that are paper may be de minimis. The problem is that 
just more paper folders in general. When they come up for CDRs, 
some of them are still paper, so the fewer that we have coming 
in as paper, when they become CDRs, the few we all have that 
are lost. We see at CDR maybe a small percentage, but one or 
two percent of claims that are lost is still a large amount.
    Ms. Speier. So you also said the lost folder policy should 
not apply to cases of fraud or similar fault. What is the lost 
folder policy?
    Ms. Nottingham. In the CDR, if the prior decision folder is 
lost, we have to try to reconstruct the file, and if we are 
unable to do that, then we just continue benefits. Prior to 
reconstruction, we actually try to see if they meet the 
criteria currently, but generally we don't have anything to 
compare because it becomes really hard to reconstruct the prior 
file.
    Ms. Speier. So that is our fault for losing the file.
    Ms. Nottingham. Correct.
    Ms. Speier. So what percentage of cases are lost folders?
    Ms. Nottingham. My belief, what I see is that it might be 
more than SSA has fully accounted for or been able to track, I 
should say, and I think it is probably like 1 or 2 percent, 
still.
    Ms. Speier. Okay, so those are small, although, even though 
they are small, they could be a significant number. I 
understand that.
    Revisions to the fraud or similar fault policies are 
needed. Can you kind of expand on that and what kinds of 
changes should be made there?
    Ms. Nottingham. There is very minimal policy at this point 
in time addressing that. Claims are very complex and it is hard 
to prove fraud or similar fault, particularly on CDRs. With 
CDRs, we have to prove that there was fraud or similar fault at 
the prior decision as well, so I don't actually handle those 
types of claims, though.
    Ms. Speier. Okay, I understand that. Mr. Bertoni was 
nodding his head. Maybe you can give us some----
    Mr. Bertoni. I just think when you start talking about the 
issue of fraud, fraud is a very high bar. To get to fraud, you 
had to suspect something, you had to develop a case, and then 
you had to actually get a conviction for fraud, typically. Then 
there is your fraud figure. But is there waste? Is there abuse 
in the program? Absolutely. A person who gets on the rolls five 
years ago, recovers, but doesn't have a CDR for the next three 
years, you finally call that person in, they are deemed not to 
be medically eligible anymore, they have three years of 
overpayments. Was that fraud? Probably not; you probably 
couldn't go there and prove that. But was it potential waste 
and abuse in the program? Absolutely. So you have to look at 
this in a broader context, and it is very costly.
    Ms. Speier. So ADHD, can I have your opinion on how we are 
handling ADHD cases?
    Mr. Bertoni. I think similar to the speech and language 
delay. We have, again, an impairment that could possibly, 
according to many experts, improve. We know that there is a 
high approval rate, a high cessation rate, and it doesn't 
appear to be on the radar screen of the agency. I think there 
is, again, opportunity to look at these impairments and do some 
targeted reviews, again, within the current resource structure. 
And believe me, with additional resources head on into this 
area, but right now I would guess that the numbers of backlog 
claims in that $1.3 million are disproportionate to the SSI 
population. So I think there is opportunity here to look at 
that population.
    What is the benefit? The taxpayers certainly benefit. The 
child benefits because they get early intervention, early 
services, they get mainstreamed back into a regular school 
environment and back into perhaps a more productive future.
    Ms. Speier. So here is my one concern here with ADHD. Most 
of the recipients are poor families, probably single parents. 
From my discussions with the experts at Social Security, many 
of these people aren't eligible for SSDI, the parents, so the 
SSI is the one benefit that can come to a family that has no 
resources. So I understand that.
    But what happens, evidently, is that at age 18 there is a 
review done. If it is determined that you still have ADHD, then 
that benefit continues into adulthood, which does not make 
sense. I mean, I have a lot of experience with ADHD on a 
personal level, so we need to do something about that point.
    Mr. Bertoni. Almost half of those re-determinations end up 
going into the adult disability population. So the cessation 
rate, although it is high, upper fifties, you would surmise 
that those who are deemed eligible, are still disabled at that 
time, are going to go into that next phase of disability.
    Ms. Nottingham. What I see for ADHD claims that come back 
with age 18 for review, we then use the adult standards, so we 
are not using the medical improvement standard at that point, 
at the age 18 re-determination. A lot of those we are not able 
to find disabled at that point in time.
    Ms. Speier. I am sorry, what?
    Ms. Nottingham. We are usually not able to find someone who 
was allowed for ADHD as a child; we usually don't find them 
disabled as an adult, because we are using a new criteria.
    Ms. Speier. I think the numbers are actually pretty high, 
if I remember correctly, the percentage that continue to be. 
The percentage of children who have ADHD who then continue to 
have SSI after 18 is not a small percentage.
    Ms. LaCanfora. Ms. Nottingham is correct, and so is Mr. 
Bertoni. We actually cease 50 percent of all of the 
beneficiaries. Specific to ADHD, I don't know off the top of my 
head, but childhood beneficiaries at age 18 get the de novo 
review, to use Ms. Nottingham's term. We are not using the 
medical improvement review standard at that point. By law, the 
age 18 re-determinations look at the claim fresh and we apply 
the adult disability standards and we process an initial claim 
at that point, not looking at whether they have improved. That 
is not a requirement.
    Ms. Speier. But if they still have difficulty focusing, 
they still have ADHD, and so their benefits can continue.
    Ms. LaCanfora. The medical standards are, obviously, a lot 
more complicated than that, and what we look at is, despite 
treatment intervention, medication, and so forth, the 
individual still has significant impairments in multiple 
domains of function. So it is a little bit more complicated, 
but generally those are the more severe cases.
    I would also add that there are 74 million children in the 
United States. Less than 2 percent of them get SSI. They are 
the poorest children in the Nation, and 32 percent of the 
children getting SSI, despite the receipt of SSI, are still 
living in poverty. Without SSI, it would be more like 60 
percent living in poverty.
    Mr. Lankford. Mr. Horsford, just to give you a head's up, 
you have been here before, this is a second round, so you can 
jump in at any point.
    But I do want to be able to ask Ms. Nottingham you had on 
your statement, to finish up with Ms. Speier was talking about 
your statement, there is to be a consideration of the 
possibility of requiring treatment for conditions that may 
improve. The challenge of this is if there is a disability that 
is treatable, that is manageable, and we go to ADHD or other 
things, whether it may be hearing loss or they have hearing 
aids, whatever it may be, a disability that is treatable and 
manageable, how is that then evaluated for long-term 
disability? Is there the possibility, going back to Ms. 
Lockhart's earlier statement here, how do we get folks back 
into the community if they have a disability, it is being 
managed, they are capable of getting back in the workforce? Do 
we?
    Ms. Nottingham. I think this is an area where there is 
possibly room for improvement. We have some conditions where 
the policies are very--maybe the listings address it. Hearing 
is one thing. When we measure their hearing, it is with best 
correction. Or vision as well. There are some conditions like 
seizures are ones that we are very specific that if they are 
not following prescribed treatment, then we would not allow 
them, because most times seizures are treatable.
    There is an exception for following prescribed treatment, 
it is good cause; and usually that is--one of them is access to 
medical care. So you might have a condition, depression, 
anxiety, ADHD, some of these conditions that could very well be 
improved with treatment, but they don't have access to it, so 
the hope is when they get benefits that they could get 
treatment and get better; however, at CDR many claims we see do 
not actually have any treatment.
    The failure to follow prescribed treatment is something 
that, from my experience, is not really used much at CDRs, and 
I am wondering if that is a possibility where we consider that 
more.
    Mr. Lankford. Okay, slow down. Say that last statement one 
more time.
    Ms. Nottingham. The failure to follow prescribed treatment 
policy is not something that is really considered at CDR. I 
don't know if that is the direct policy on that, whether we 
should be or not, but in practice it is not really followed and 
I am thinking that is a possibility of where we can be looking 
into that more.
    Mr. Lankford. Okay, so I want to lean into this. If a 
person could improve, be in the community, be employable if 
they maintain medication or treatment, or whatever it may be, 
and they choose not to, you are saying that is not considered? 
Hey, this person still should be listed as disabled because 
they are not taking the treatment that has been prescribed for 
them?
    Ms. Nottingham. It depends on the condition. There are some 
that you don't know, with treatment, how they would do. Some 
are much more likely, like I mentioned seizure disorders, if 
people get treatment on that, they get better and, if not, then 
they should be found disabled. So we would find someone to not 
be found to be disabled because they are failing to follow 
prescribed treatment. However, some conditions it is harder to 
tell how they would respond to treatment, like depression or 
anxiety. But there is little guidance on that at this point in 
time on CDRs and when that would apply, outside of a few 
conditions.
    Ms. LaCanfora. If I might just add one point, and that is 
we do take into consideration a person's compliance with 
treatment and we do have tools to cease benefits or disallow 
benefits if a person does not comply with treatment, but 
understand that for medical impairments the failure to follow a 
prescribed treatment is often part of the mental impairment; it 
is not just that the person is trying to be obstinate, it is 
that they have a serious mental condition, whether it be 
schizophrenia or something else, that creates an intense, let's 
say, fear of the medication or fear of the side effects that 
the medication creates. So it is a difficult determination and 
we would be happy to work with NADE and anybody else to clarify 
it or provide training on it, if that would be helpful.
    Mr. Lankford. And I am not necessarily talking about the 
mental illnesses and such. This is a physical thing. If they 
have a physical disability and they choose not to take 
medication just because they don't feel a requirement to and 
say, it doesn't matter to me one way or the other. That is a 
more serious thing not only for the taxpayer, but also for that 
individual and their families, obviously, and somehow we have 
to have a way to be able to incentivize, saying re-engage in 
culture.
    Again, I come back to what Ms. Lockhart was saying. It is a 
very big issue to isolate people and to be able to separate 
them out, and we basically discourage them from future work, 
because if they are able to work, we want them to be able to 
re-engage in culture and be able to get back to work. But if 
benefits and all those things suddenly go away, there is no 
sliding scale, there is no possibility to be able to drift off 
this even when there was a pilot, even; how do we help people 
that are capable of doing that actually being able to re-
engage. So that is something I think we have to take a look at, 
at how we actually can do that. Is that something you need a 
legislative fix on or is that something you have administrative 
authority? Can we pilot something or how do we help to be able 
to transition out?
    Ms. Lockhart, are you trying to say something on that as 
well?
    Ms. Lockhart. Yes. On the compliance, I just want to add to 
that real quickly. We are currently working with our Department 
of Health, for example, with patients with sickle cell anemia. 
The biggest problem with barrier of care we have is compliance. 
It is simply getting the patients to get to the doctor and 
follow the protocol they are given. It is not always a 
psychological issue as much as it a socioeconomic or cultural 
issue. So we work with them on education to help them follow 
those protocols.
    ADHD, our chief rights on the international level, the 
standards for that, I am not sure he would always agree it is a 
disability, so I would welcome you to contact him at any time 
to follow up on that.
    Currently, Oklahoma has 19,475 children in the aid category 
that are receiving some sort of disability aid. My concern, as 
we are talking about all of this, is not are they getting 
disability or not, but what happens to them. Where are they 
going and what is their future? And within these programs the 
bigger picture. That would be my question.
    Ms. LaCanfora. If I might jump in on the bigger picture, 
which goes back to your question about creating self-
sufficiency and having people re-engage in the community and be 
productive members of society, we believe at Social Security, 
as Ranking Member Speier said, that we need to pay the right 
check to the right person at the right time. That is the law 
and we work hard to do that well. But we also believe that part 
of our mission is evolving policy and practice to support 
people to become self-sufficient and to re-engage.
    And I think at the last hearing I may have mentioned we 
have a research budget and we use that money to test new 
policies and demonstrations, and right now we have a couple 
right along the lines of what you are suggestion. PROMISE is 
the Promoting Readiness of Minors in Social Security Program. 
It is an interagency effort to grant money to States around the 
Country. There are 11 States participating. And the idea is to 
create community-based incentives very similar to what Ms. 
Lockhart is doing, and to figure out what community supports 
will work to help children, in particular, re-engage and become 
productive potential working members of society as they age.
    Ms. Speier. Let me just add that for a number of years I 
worked with the developmentally disabled community in my 
county, where what we were doing was placing adult 
developmentally disabled in positions, in local grocery stores, 
at drug stores, in law firms, doing meaningful work, getting a 
paycheck, turning tax receivers into taxpayers was one of the 
lines that was used by this nonprofit, with great success. And 
they were developmentally disabled. So I would hope that, as we 
look at ways to just enhance the program and create greater 
self-sufficiency, that we would look at some of the models that 
exist around the Country. I mean, it is not like we are 
reinventing the wheel here.
    But certainly this PROMISE program, if you have youngsters 
who have speech delays or ADHD, I think it would be really 
important, when they are still minors, to get them working, 
getting them placed in jobs in the communities so that if in 
fact 50 percent of them are ceasing that benefit at age 18, 
that there is somewhere for them to go in terms of being valued 
members of society in terms of employment.
    Ms. LaCanfora. Absolutely. And the PROMISE program does 
include employment support, placement, benefit counseling, and 
all of those integrated supports that Ms. Lockhart was 
referring to. That is the point of the program. And it is not 
the first time that we have engaged on that front. We have 
completed the Youth Transition Demonstration, which targeted 
youth between the age of 14 and 25, and did generally the same 
thing; we provided community-based supports in many different 
locations and it proved effective.
    Ms. Speier. Well, I guess my point is I think it should be 
something that we do automatically with most of these 
youngsters, not just as pilot programs. Because if they are 
successful, let's fold it into the existing----
    Ms. LaCanfora. Absolutely. Our demonstrations are intended 
to inform the dialogue and provide the Congress with some food 
for thought as you consider legislative changes to the program.
    Mr. Lankford. It is not going to be a 16-year prototype, 
though, is it?
    Ms. LaCanfora. No.
    Mr. Lankford. We would like to see some progress on.
    Ms. LaCanfora. We have actually completed the Youth 
Transition Demonstration. The findings are publicly available 
and there are some really interesting things that we found. 
Community-based programs do work. PROMISE is going to, I 
believe, further corroborate that evidence.
    Mr. Lankford. Great. Let me ask about the vocational grid. 
We have talked about this before. I was six, I think, when it 
was finalized. How are we doing on the vocational grid?
    Ms. LaCanfora. We are doing well. I think there are two 
pieces to this. The first is the update of the occupational 
information system. That is the dictionary of jobs that you 
mentioned has not been updated in a long time. We have 
partnered with the Bureau of Labor Statistics. We are cooking 
along.
    Mr. Lankford. Our date for that to be completed?
    Ms. LaCanfora. Our date is 2016, when we believe we will 
have something useful.
    Mr. Lankford. Still on track.
    Ms. LaCanfora. We are on track, absolutely. The grids is a 
slightly different, yet very much related issue. You know, and 
we discussed it at the last hearing, we attempted rulemaking on 
the grids in the past and we were shut down, essentially, and 
the reason for that is that we did not have an evidence base 
behind the proposal that we made to increase the age limits in 
the grid; and when we got questions about the disproportionate 
effects to minorities and other questions, we didn't have the 
science to back it up. We learned from that experience; we are 
not going to make that mistake again.
    So we are, as I described to you before, in the process of 
building our evidence base to support logical changes to the 
grid, and we are well under way. We are working with the 
Disability Research Consortium and the Library of Congress. We 
are engaging them in a literature review to look at how other 
disability systems, both internationally and in the private 
sector, use age, education, and work in their systems so that 
we can learn from that and shape our own policy.
    Mr. Lankford. The date for that?
    Ms. LaCanfora. The initial phase of literature review from 
the Disability Research Consortium, we expect their report in a 
couple of months.
    Mr. Lankford. Okay. Is that something that will be 
available to us as well to be able to review?
    Ms. LaCanfora. Yes.
    Mr. Lankford. How publicly available is that?
    Ms. LaCanfora. We can share. We can share the findings with 
the committee.
    Mr. Lankford. So we are talking July-ish, somewhere through 
there?
    Ms. LaCanfora. Yes. Now, understand that is the first phase 
of our exploration.
    Mr. Lankford. I understand. That is getting the science out 
there to be able to review it. Then the next part of it, after 
that is done, then it is a matter of starting to make the 
recommendations.
    Ms. LaCanfora. Exactly.
    Mr. Lankford. You hope to get all this together by 2016, 
but the vocational grid and the other recommendations, get them 
to complete proposal?
    Ms. LaCanfora. That would be ideal, yes. It really depends 
on what we find in the exploration. Remember that the law 
requires us to consider age, education, and work as part of the 
determination. How we do that needs to evolve over time, as 
people work longer and so forth. But it is a very complicated 
analysis. So we are in the fact-finding stage.
    Mr. Lankford. Okay, let me ask another question we have 
talked about before, and that is the high rate of reversal 
judges for the ALJs, whether it be Judge Daltry or any number 
of others there. You have CDR funds that have been allotted. 
You have said you are setting aside some of those for the high 
priority cases. Are those some of the high priority cases that 
you are actually targeting, some of these high reversal ALJs?
    Ms. LaCanfora. Yes.
    Mr. Lankford. Okay. How is that coming so far?
    Ms. LaCanfora. So we have been looking at this from a legal 
standpoint, because you know we try hard to respect judicial 
independence of our ALJs, so there are some legal parameters 
that we need to work within, and we have been working hard to 
kind of figure out a path forward. But we believe that we are 
going to get to where this committee wants us to be and where 
we need to be by looking at the cases that have the potential 
of being out of policy compliance.
    In other words, we know what cases are problematic from a 
policy standpoint, and we are going to target those cases; and 
in doing so we will get to a lot of the decisions that were 
problematic and made by those judges that were outliers or that 
were high allowance rate judges. And we will take those cases 
and put them to the front of the CDR pipeline. So we will do 
CDRs.
    Mr. Lankford. So give me a date on that. When does that 
begin?
    Ms. LaCanfora. We are going to start that now.
    Mr. Lankford. Okay, that is ongoing now. One other quick 
question on the medical improvement definition GAO. You have 
some thoughts on this as well, Mr. Bertoni, I understand, of 
how we handle this.
    Mr. Bertoni. Well, in our report essentially there was much 
confusion about how to apply some of the provisions in terms of 
the exceptions; how much improvement in medical capacity was 
sufficient to determine or make a judgment of cessation. It 
just wasn't clear. There was a lot of confusion. We surveyed 
every DDS director and a number of examiners, had a 95 percent 
response rate, I believe, and there was a lot of confusion as 
to how to apply those two critical provisions. And we asked the 
agency to go in and put some more granularity around those 
instructions. It hasn't occurred, and we still think it needs 
to.
    Mr. Lankford. How does that happen?
    Mr. Bertoni. That is in SSA's ball court, ball whatever, 
field.
    Mr. Lankford. Ms. LaCanfora, it is on your desk. How does 
that happen?
    Ms. LaCanfora. So it has happened. We have done training on 
the medical improvement review standard and the exceptions. 
However, as I mentioned before, we have lost 11,000 people. The 
lack of funding has resulted in high turnover in the DDSs, so 
training is not a one-time thing; we need to do continual 
training. We have been reviewing cases where the medical 
improvement review standard was utilized and we are looking at 
where we need to provide new improved training and clarity, and 
we will do that. And we are happy to work with NADE to do that.
    Mr. Lankford. And the goal here, again, is to get people 
back out to work. We are all on this dais we are all unanimous. 
There needs to be a safety net for the most vulnerable. But if 
there is an expected return to work, how do we help transition 
people back out to work and be evaluated? When they are in a 
vulnerable moment that our society comes alongside of them, but 
also incentivizes that there is an end-date for people that are 
expected to have returned, so how do we help you in that 
process.
    So the medical improvement, and this definition becomes 
very helpful to us to know that it is not a matter you are 100 
percent back, you are not going to be 100 percent back. 
Everyone lives with aches and pains. My ranking member lives 
with aches and pains all the time from past injuries. She is 
doing extremely well. So there are other people I have talked 
about before in my own family, in a wheelchair, all sorts of 
different medical issues that do extremely well vocationally. 
How do we help incentivize that and to be able to encourage 
people to re-engage with culture, again going back to what Ms. 
Lockhart asked.
    So I am not saying we have to determine that today. I am 
saying from this panel we want to see a way that medical 
improvement is clear and that they see improvement not back to 
100 percent, but see improvement where they can re-engage again 
for the sake of their families and our economy.
    Mr. Bertoni. Mr. Chairman, earlier you talked about the 
initial decision and not being able to overturn a case on the 
initial decision. It is really the last decision. In many 
cases, in our work, it was the ALJ decision that the DDSs were 
revising in CDR, and the information just wasn't there to 
determine medical improvements.
    So I really think the agency needs to look at reconciling 
the tools that they have at the initial level, and I think they 
are doing some things there to standardize and to get enough 
information in the record, where you can revisit and determine 
medical improvement. I think there are real issues at the ALJ 
level, where that tool just doesn't exist yet. I know they are 
thinking about it, but I think something needs to happen there.
    Ms. Speier. I am not following you. What tool are you 
talking about at the ALJ level?
    Mr. Bertoni. I don't believe there is at this point. At 
least at the DDS level we have eCAT, which provides a platform 
for the examiners to more thoroughly document their rationale 
for the decision. And if you had to revisit that in a CDR, 
perhaps you would have more information to document medical 
improvement.
    At the hearings level, at least in our work, most of the 
concern was that when the DDS revisited that case in a CDR that 
was decided at the hearings level, the information was not 
there; there wasn't enough information to document medical 
improvement; and the agency, I think, needs to look to 
additional tools that the ALJs can use to document more 
thoroughly that rationale. When you are under pressure to 
process claims, 700 a month, it is real easy to fly through 
these claims with limited rationale; and in the event of a CDR 
there is not enough there for the DDS representative to make a 
decision.
    Ms. Speier. So are you saying that the ALJ, because they 
don't have enough information, tends to continue the benefit, 
but doesn't document it enough? Is that what you are saying?
    Mr. Bertoni. I would say in our case, in our review, the 
concern was that when the DDS examiner received the CDR for 
review, and the last person who touched it was an ALJ, that 
decision, that justification did not have sufficient 
information for them to determine medical improvement. So there 
could be an opportunity to provide additional tools at the ALJ 
level so that decision is more thoroughly documented, the 
rationale is there for the DDS examiner, should there be a CDR, 
to make a determination of medical improvement.
    Ms. Speier. And the ALJ typically has attorneys write their 
decisions, correct?
    Mr. Bertoni. I will defer to the agency on that. I know 
that happens; I don't know to what extent.
    Ms. LaCanfora. That is true. There are four support staff 
to every ALJ. I do want to agree with Mr. Bertoni, though, in 
terms of the importance of documentation. He mentioned eCAT, 
which is the electronic case analysis tool. It is basically a 
tool that the DDSs use to thoroughly document the rationale for 
their decisions. We love that took because it inspires policy 
compliance consistency across the board. We are implementing a 
version of that with the ALJs, we call it the electronic bench 
book, but it is essentially the same thing. Think of it as sort 
of a tool that pads you through the decision and makes you 
document your rationale.
    Mr. Lankford. When?
    Ms. LaCanfora. I have to get back to you on that one. I 
have to ask Mr. Sklar what his plan is.
    Mr. Lankford. But we are thinking in the next year, the 
next five years? What are you thinking? Give me a ballpark.
    Ms. LaCanfora. Probably somewhere in between for a full 
rollout.
    Mr. Horsford. Mr. Chairman? Mr. Chairman, I want to break 
in here because I want to ask about the continuing disability 
reviews, which was the primary purpose for the hearing today, 
and talk about this annual report on continuing disability 
reviews report that was done by the SSA that found that the 
Government saved approximately $5.4 billion in fiscal year 2011 
alone as a result of completed continuing disability reviews. I 
think, from what I understand, part of this problem is a huge 
backlog and a lack of staff resources at the front end of the 
process where the initial determinations are made, is that 
correct?
    Ms. LaCanfora. Yes.
    Mr. Horsford. So what are the current barriers, then, to 
conducting more medical CDRs?
    Ms. LaCanfora. We need adequate, sustained, and predictable 
funding; and that is the number one way to get current on 
medical CDRs. The only way.
    Mr. Horsford. So the chairman and the ranking member sent 
an 11-page letter yesterday regarding recommendations for 
improvements to the disability program. What were some of the 
examples of how SSA is already addressing some of those 
concerns?
    Ms. LaCanfora. Well, the committee suggested, for example, 
that we ensure that claimant representatives give us all of the 
evidence at their disposal, and we have actually already done 
that. We have a notice of proposed rulemaking out for comment 
right now; it went out on February 20th. The comment period is 
open, so we are already there.
    Mr. Horsford. And what is the estimated number of positions 
that you need based on the current backlog that is in place?
    Ms. LaCanfora. I will give you a dollar amount. In fiscal 
year 2014, we were given the Budget Control Act level of 
funding, $1.197 billion, to do program integrity work. In 
fiscal year 2015 we need from the Congress $1.396 billion for 
program integrity. Subsequent to fiscal year 2015, the 
President's budget has a proposal for mandatory sustained 
funding for program integrity, and we hope that the Congress 
will support it. That is what we need to get the job done and 
to eliminate this backlog of medical CDRs.
    Mr. Horsford. So despite the fact that every dollar that is 
spent on CDRs saved the Federal Government $9, that lack of 
funding, in large part, is what is contributing to this 1.3 
million backlogs of CDRs.
    Ms. LaCanfora. That is the reason.
    Mr. Horsford. So, Mr. Chairman, I would just ask that we 
enter this report into the record. I agree that there are a 
number of different policy and operational recommendations that 
need to be implemented, but I also think that the main thing we 
need to do as Congress is to properly fund and resource where 
there is the greatest return on investment, and that is through 
the CDRs. That is the front-end part of the process.
    I know we had an extensive hearing about the ALJs and 
whatever discretion that they have, and that is an important 
discussion, but I just feel like the meat of the problem is at 
the front-end, and it is really about a lack of resources to a 
program that we know, when you fund it, it works and it 
provides the types of medical reviews that are necessary.
    So I yield back.
    Ms. Speier. Ms. LaCanfora, the inspector general had put up 
that one photo of the rock band star who obviously was provided 
benefits inappropriately. Have you clawed back that money?
    Ms. LaCanfora. I don't know that specific case. I will say 
that we identified that case and referred it to the inspector 
general.
    Ms. Speier. All right. Would you just inform us as to 
whether or not you have attempted to claw back that money?
    Ms. LaCanfora. Sure.
    Ms. Speier. All right.
    And then to you, inspector general and to you, Mr. Bertoni, 
you have spent a lot of time in this issue area, and I would 
like to just know from each of you recommendations you would 
make to us for improvements to the system beyond what you have 
provided. And I guess to you, Mr. Bertoni, if there is another 
issue area that you think we should be requesting you to look 
at at the GAO, we would be happy to make that request of you to 
kind of make the system work more effectively.
    Mr. Bertoni. Well, I think we have done a lot of work on 
the front-end of the process, looking at the initial claims 
process, SSA's processes for moving claims through the system. 
I think there are opportunities to gain some efficiencies 
there. I understand the resource issues, I certainly do, but 
again I think there are opportunities for efficiencies there to 
be able to process claims more quickly and smoothly.
    I think there is opportunity in the area of quality 
assurance to make sure that if we are in an environment where 
we have a backlog situation, we are telling people to process a 
lot of claims, that we also keep our eye on the quality 
assurance piece so that these are not only quickly processed, 
but accurately processed. And ultimately I think follow-on 
work, I would be interested in doing a top-to-bottom review of 
the medical continuing disability review process, the CDR 
process, some of the assumptions, some of the formulas, things 
that are being used to drive these reviews. I think that would 
be great work.
    Ms. Speier. Mr. O'Carroll?
    Mr. O'Carroll. Just a couple things, and I guess this is a 
good time to say it. I think one of the common tones or themes 
throughout this hearing has been what we talk about all the 
time. There is a balance between stewardship and service, and 
one of the things I guess that has come out, and I was looking 
at my numbers as we were sitting here, is that there is about--
we are talking about the 1.3 backlog on CDRs, million backlog 
on it, and there is about that same, if not more, backlog for 
initial claims going into SSA. So the agency has to make that 
balance out between stewardship and the service part of it.
    Our job is to keep reminding them about the fraud, waste, 
and abuse side of it. And I think one of the other themes from 
this thing has been if we prevent the fraud, one prevention is 
best. Let's get the money before it goes out the door and 
prevent it. That is the reason why the CDI units have been so 
effective. And along that same line, with the CDI units, we 
bank now about $10 billion in savings by using the CDI units, 
and going back to what Mr. Cummings was talking about in terms 
of the trust fund on it, that might equate to $10 billion, it 
would be about an extension of a month into the trust fund, 
which is a big deal. So my feeling is that these anti-fraud 
initiatives are major money savers for the trust fund and it is 
something that are very successful and we can show it.
    So, anyway, one other thought on the funding part that we 
were talking about, too, was that we suggested a number of 
times, we put it every year when we go to OMB for our budget 
presentation, we put it in each time with our appropriators, is 
an integrity fund for SSA. And with that integrity fund is with 
the $3 billion-plus that are recovered every year in terms of 
overpayments, if SSA could have access to some of that money. 
What we have suggested is 25 percent of that money, and use 
that for the anti-fraud initiatives like CDRs and other things 
that would fund it; it wouldn't need any additional funding for 
it.
    One of the other things we would like is if the IG could 
get a percentage of that, we can use that for expansion of the 
CDI program and be better able to address the 22,000 disability 
referrals we get from SSA every year. In terms of our resources 
that we have, we are doing about 10,000 cases from the 
resources that we are getting, and we could do a lot more if we 
had more resources, and I think an integrity fund, instead of 
coming and asking for a bigger appropriation, would be very 
helpful.
    Mr. Lankford. What is the source of the integrity funding?
    Mr. O'Carroll. Integrity fund would be the recovered 
dollars that are coming from the recovery of overpayments. So 
SSA is banking $3.26, I think, in overpayments every year that 
are recovered, so instead of that going back into the trust 
fund or into the general fund, which some of the money goes 
back to, redirect that back into anti-fraud initiatives.
    Mr. Lankford. Okay. I have one last question, unless you 
have additional things, and that is this issue that you 
referred to the bench data system that is trying to line up, 
the eCAT and then there was the other one.
    Ms. LaCanfora. The electronic bench book.
    Mr. Lankford. The electronic bench book. Until that is up 
to speed, we are still going to have an issue with ALJs that 
have final basically document that we can't track all the 
reasons for and all the policy documents for. So when we come 
back to do CDRs, it is not written in such a way that we can 
really evaluate medical improvement.
    Ms. LaCanfora. Let me say that we have no indication that 
that is a widespread problem. Certainly we want the ALJs to do 
extensive documentation, and the electronic bench book will 
help that, but under current policy and process they are doing 
that today; and there are always going to be cases where we 
don't do as good a job as others, but I don't have an 
indication that that is a systemic problem.
    Mr. Lankford. Okay. Anyone else experience that? Ms. 
Nottingham?
    Ms. Nottingham. I would disagree with that. The most common 
complaint I hear from other examiners about ALJs is that the 
allowances are not well documented. I can tell you that the 
denial decisions that they do usually are well documented, but 
the allowances, it is very hard for us to make a finding of 
medical improvement when we don't really know what they were 
allowed for. It is sometimes difficult to really see what their 
rationalization was when there is--you know, their 
rationalization on the decision on a denial might be 9 or 10 
pages long; whereas, an allowance is generally like 1 or 2 
pages.
    Mr. Lankford. Tough to be able to tell on that, then, 1 or 
2 pages. So when we are dealing with that, how do we process 
this in the meantime? We have something coming in the future 
with the bench book. How do we deal with medical improvement 
until we get that in place?
    Ms. LaCanfora. Let us get back to you on the bench book, 
because I don't want to speak prematurely, but I believe we are 
already well into the rollout of the electronic bench book.
    Mr. Lankford. Okay.
    Okay, final questions or thoughts? Anyone else have final 
questions or thoughts as well?
    Long day. Thanks for allowing us to be able to pummel you 
with questions. We want to help in this process and I 
appreciate what everybody is doing to be able to serve some of 
the most vulnerable in our society. So thank you.
    With that, we are adjourned.
    [Whereupon, at 4:10 p.m., the subcommittee was adjourned.]



                                APPENDIX

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               Material Submitted for the Hearing Record

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