SSA Disability: Other Programs May Provide Lessons for Improving
Return-to-Work Efforts (Letter Report, 01/12/2001, GAO/GAO-01-153).

Return-to-work practices used in the private sector and in foreign
countries reflect the understanding that some people with disabilities
can and do return to work. Although the Social Security Administration
(SSA) has begun to focus more on return to work, it has yet to adopt a
complete strategy for implementing this new approach. The Ticket to Work
and Work Incentives Improvement Act of 1999 are expected to enhance work
incentives for people with disabilities, but fundamental policy
weaknesses in the Disability Insurance (DI) and Supplemental Security
Income (SSI) programs persist. SSA needs to develop a comprehensive
return-to-work strategy that emphasizes its return-to-work incentives.
In developing this strategy, SSA can supplement what it learns from the
experiences of the Ticket to Work demonstrations with the return-to-work
approaches of other disability systems to identify elements of a new
system that could help each individual realize his or her productive
potential. Adopting a comprehensive return-to-work strategy will require
fundamental changes to the underlying philosophy of the DI and SSI
programs.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  GAO-01-153
     TITLE:  SSA Disability: Other Programs May Provide Lessons for
	     Improving Return-to-Work Efforts
      DATE:  01/12/2001
   SUBJECT:  Social security benefits
	     Vocational rehabilitation
	     Disability benefits
	     Private sector practices
	     Beneficiaries
	     Program graduation
	     Eligibility determinations
IDENTIFIER:  Social Security Disability Insurance Program
	     Supplemental Security Income Program
	     Germany
	     Sweden
	     Netherlands
	     SSI

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GAO-01-153

A

Report to Congressional Requesters

January 2001 SSA DISABILITY Other Programs May Provide Lessons for Improving
Return- to- Work Efforts

GAO- 01- 153

Letter 3 Appendixes Appendix I: Comments From the Social Security
Administration 44

Appendix II: GAO Contact and Staff Acknowledgments 48 Related GAO Products
49 Tabl es Table 1: Comparison of Eligibility Assessment Process Features of

U. S. Private Insurers and Other Countries With Those of SSA 15 Table 2:
Medical Assessment: Tasks, Tools, and Methods 20 Table 3: Vocational
Assessment and Assistance: Tasks, Tools, and

Methods 20 Table 4: Responsibilities and Qualifications of Staff Employed by

Private Disability Insurers to Assess and Enhance a Claimant's Work
Potential 32 Table 5: Staff Assignment for Claims Management by Triage
Category 34

Figure Figure 1: Private Disability Insurers' Eligibility Assessment Process
16

Abbreviations

DDS disability determination service DI Disability Insurance SGA substantial
gainful activity SSA Social Security Administration SSI Supplemental
Security Income

Lett er

January 12, 2001 The Honorable E. Clay Shaw, Jr. Chairman The Honorable
Robert T. Matsui Ranking Minority Member Subcommittee on Social Security
Committee on Ways and Means House of Representatives

The Honorable Benjamin L. Cardin Ranking Minority Member Subcommittee on
Human Resources Committee on Ways and Means House of Representatives

The Honorable Nancy L. Johnson House of Representatives

Each month, the Social Security Administration (SSA) pays nearly $6 billion
in cash benefits to people with disabilities who are beneficiaries of the
Disability Insurance (DI) and Supplemental Security Income (SSI) programs. 1
The size of the working age beneficiary population has grown significantly
over the past 10 years, increasing by 65 percent to its current size of 7. 5
million. This growth has contributed to the DI trust fund's projected
insolvency in 2023 and a significant increase in expenditures for SSI
benefits, which are financed by general revenues. 2 Although technological
and medical advances and societal changes have increased the potential for
some people with disabilities to participate in the labor force, fewer than
one- half of 1 percent of DI beneficiaries, and about 1 percent of SSI
beneficiaries, leave the rolls each year because they are working. As we
have reported in the past, the U. S. private sector and social insurance
systems of other countries are adjusting to this increased work

1 This figure is for 1999. 2 DI is funded by payroll taxes paid by workers
and their employers into the Social Security DI trust fund.

potential more quickly than SSA. 3 Although at one time the common business
practice was to encourage someone with a disability to leave the workforce,
in recent years the private sector in this country and social insurance
systems overseas have been developing and implementing strategies for
helping people with disabilities to return to work as quickly as possible.

We have testified on the practices of the private sector and other countries
for helping people with disabilities return to work and, at your request,
are now providing a report on these issues. 4 We focused our work on three
key areas: (1) the eligibility assessment process, (2) work incentives, and
(3) staffing practices. In this report, we describe these three elements for
three U. S. private sector disability insurers and for three other
countries' social insurance systems and compare the practices of both with
those of the DI and SSI programs. The DI program covers a broader population
than the private insurers, but employees covered under private disability
insurance generally have work experience that insures them for coverage
under DI. Although SSI beneficiaries, unlike DI beneficiaries, are not
required to have worked in covered employment to be eligible for benefits,
we extended our comparison to the SSI program because relatively large
numbers of SSI beneficiaries have also worked at some point, either prior to
benefit receipt or while on the disability rolls. 5 Nonetheless, particular
return- to- work practices may not be the same for the two programs because
of the differences, beyond work history, in the beneficiary populations that
each program serves. For example, the DI beneficiary population is generally

3 See SSA Disability: Return- to- Work Strategies From Other Systems May
Improve Federal Programs( GAO/ HEHS- 96- 133, July 11, 1996). 4 See SSA
Disability: Other Programs May Provide Lessons for Improving Return- to-
Work Efforts( GAO/ T- HEHS- 00- 151, July 13, 2000). 5 See Mary C. Daly,
“Characteristics of SSI and DI Recipients in the Years Prior to
Receiving Benefits: Evidence From the PSID,” in Kalman Rupp and David
C. Stapleton, eds., Growth in Disability Benefits: Explanations and Policy
Implications( Kalamazoo, Mich.: W. E. Upjohn

Institute for Employment Research, 1998), pp. 190- 94. Daly found that about
30 percent of a sample of SSI recipients reported having been employed
during the 5 years prior to benefit receipt. Daly defined employment as
having worked 52 hours or more, or as having wage earnings, in the previous
year. See also L. Scott Muller, Charles G. Scott, and Barry V. Bye,
“Labor- Force Participation and Earnings of SSI Disability Recipients:
A Pooled CrossSectional Times Series Approach to the Behavior of
Individuals,” Social Security Bulletin, Vol. 59, No. 1 (spring 1996).
The authors found that, among individuals entering the SSI rolls after 1976
and spending at least 1 full year in benefit status, nearly one- fourth had
earnings in at least 1 year while on the rolls. Average annual earnings for
all SSI recipients who worked, indexed to 1989 levels, were $2,075.

older and has a higher proportion of males and beneficiaries with a
musculoskeletal diagnosis, and a lower proportion of beneficiaries with a
mental impairment, than the SSI disabled beneficiary population of working
age adults.

To do this work, we conducted in- depth interviews and reviewed policy
documents and program data at three private sector disability insurers:
UNUMProvident, Hartford Life, and CIGNA. 6 We also interviewed program
officials and other experts on the disability systems of Germany, Sweden,
and The Netherlands and reviewed policy documents and studies of these
programs. Our review of these disability systems updates and expands on our
previous work in this area. 7 Although we were able to compare the return-
to- work practices of the different disability systems, we were unable to
obtain from the private insurers or other countries complete, comparable
data on the costs and benefits of their return- to- work practices. We
performed our work in accordance with generally accepted government auditing
standards between February and December 2000.

Results in Brief The disability eligibility assessment process of the U. S.
private insurers and the countries we reviewed focuses on returning people
with disabilities to

work. The assessment process both evaluates a person's potential to work and
assists those with work potential to return to the labor force. This process
of identifying and providing services intended to enhance a person's
productive capacity occurs early after disability onset and continues
periodically throughout the duration of the claim. This ongoing process is
closely linked to a definition of disability that shifts over time from less
to more restrictive- that is, from an inability to perform one's own
occupation to an inability to perform any occupation. Both the definitional
shift and the ongoing assessment process recognize the possibility for
improvement in an individual's capacity to work through

6 Taken together, these three insurers have experience not only in long-
term stand- alone disability insurance, but also in integrating short- and
long- term disability insurance with workers' compensation and, in one
instance, with health care. These insurers are also among the largest long-
term disability insurers in the country, together covering about 52 percent
of the long- term U. S. private disability insurance market in 1997. We
focused our analysis on the population of applicants and beneficiaries whose
disabilities are of such severity that these individuals would likely
qualify for SSA's disability benefits. In addition, we focused our review on
private insurers' group disability insurance policies that contain return-
to- work incentives.

7 See GAO/ HEHS- 96- 133, July 11, 1996.

early provision of supports and services, such as workplace adaptations or
training. In contrast, SSA does not incorporate efforts to return
individuals to work into its eligibility assessment process. SSA's return-
to- work efforts occur only after the agency's often lengthy process of
determining whether an individual meets its statutory definition of
disability. Moreover, the “either/ or” nature of this definition
encourages applicants to focus on their inabilities by characterizing
individuals as either able or unable to work.

Work incentives are an important feature of the strategy that the private
insurers and other countries we reviewed use to encourage and facilitate a
person's return to work. These incentives include requirements for obtaining
appropriate medical treatment and participating in a return- towork program,
if such a program would benefit the individual. To support these
requirements, these disability systems help the individual obtain the
appropriate medical care and provide financial incentives to promote
participation in rehabilitation, such as reimbursement for family care
costs. In contrast, although SSA's claimants must follow medical treatment
that a provider has prescribed for them, they are not required to seek
treatment to be eligible for initial award or continuing receipt of SSA
disability benefits. Indeed, many disabled DI and SSI applicants and
beneficiaries may not have access to the appropriate medical care.
Additionally, rehabilitation in DI and SSI is optional and depends upon the
beneficiary's motivation to pursue such services. Thus, a beneficiary who
could benefit from rehabilitation might not choose to seek it.

Appropriate staffing is a third key component of the return- to- work
strategy implemented by the private insurers and the countries we studied.
These disability systems have access to staff with a wide range of expertise
not only in making eligibility decisions, but also in providing return- to-
work assistance. The three private disability insurers told us that they
select the appropriate type and intensity of staff resources to return
individuals with work capacity to employment cost- effectively. For example,
while the three private insurers generally assign minimal staff resources to
periodically monitor the status of individuals who are unlikely to return to
work, they usually apply their most resource- intensive, multidisciplinary
teams to assist those who are assessed as being likely to work. In
comparison, staff who make eligibility decisions for the DI and SSI programs
focus on assessing eligibility of applicants to receive cash benefits, not
on helping them return to work. However, under the new Ticket to Work and
Work Incentives Improvement Act (Ticket to Work Act), SSA's disabled
beneficiaries who choose to pursue rehabilitation are to be given a voucher
(or “ticket”) to gain access to specialists who can assist them
in returning to work. 8

While the Ticket to Work Act and other initiatives are beginning to focus
more on returning DI and SSI beneficiaries to work, we believe that SSA is
not placing enough priority on enhancing the productive potential of its
disabled beneficiaries and needs to develop a comprehensive return- towork
strategy. In commenting on a draft of this report, SSA agreed that the
return- to- work practices that other disability programs follow provide
useful information and that emphasis should be placed on helping
beneficiaries with disabilities return to work. But SSA disagreed on the
need to develop a comprehensive return- to- work strategy for its disability
programs, stating that it is already devoting substantial resources to
return to work. The agency also stated that changing the DI and SSI policies
discussed in the report would require new legislation, and that differences
between SSA's programs and those of the other systems we reviewed might
limit the application of other systems' practices to the DI and SSI
programs. With regard to these concerns, we believe that SSA's return- to-
work initiatives do not constitute the comprehensive strategy necessary to
address fundamental program weaknesses and reorient the agency's policies
and practices to focus on work while not jeopardizing benefits for people
who cannot work. Moreover, while some aspects of the current disability
programs are based in law, others are set forth in regulation; thus,

8 P. L. 106- 170, Dec. 17, 1999.

important aspects of the programs could be modified by the agency without
legislation. Finally, the existence of differences between SSA's disability
programs and those of the other systems we examined should not be construed
to imply that our federal programs have little to learn from the approaches
of these other systems. Indeed, although limited data exist on the cost-
effectiveness of the practices of other disability systems, the initial
return- to- work rates of the three private insurers show promise. SSA
should build on the experiences of other disability systems and the results
of the Ticket to Work demonstrations to identify the elements of a model
disability system and then determine the legislative and regulatory changes
needed to test and evaluate the effectiveness of these elements. Because
adopting a comprehensive strategy will require fundamental changes to the
underlying philosophy and direction of the DI and SSI programs, which are
embedded in both law and regulation, policymakers will need to carefully
weigh the implications of such changes.

Background DI and SSI are the two largest federal programs providing cash
assistance to people with disabilities. Established in 1956, DI is an
insurance program

that provides monthly cash benefits to workers who are unable to work
because of severe long- term disability. Workers who have worked long enough
and recently enough are insured for coverage under the DI program. After
becoming disabled, individuals have a waiting period of 5 months before
receiving cash benefits. In addition to cash assistance, DI beneficiaries
receive Medicare coverage after they have received cash benefits for 24
months. Beneficiaries' DI benefits convert to Social Security retirement
benefits when beneficiaries reach age 65. In 1999, 4. 9 million disabled
workers received DI cash benefits totaling about $46.5 billion, with average
monthly cash benefits amounting to $755 per person. 9

9 Included in the 4. 9 million DI disabled workers are about 735, 500
beneficiaries who were also eligible for SSI disability benefits because of
the low level of their income and resources. In 1999, DI also paid about $4.
9 billion in cash benefits to about 1. 7 million spouses and children of
disabled workers.

SSI, created in 1972, is a means- tested income assistance program that
provides a financial safety net for disabled, blind, or aged individuals who
have low income and limited resources. Unlike the DI program, SSI has no
prior work requirement and no waiting period for cash or medical benefits.
Eligible SSI applicants generally begin receiving cash benefits immediately
upon entitlement and, in most cases, receipt of cash benefits makes them
eligible for Medicaid benefits. In 1999, about 2.6 million working age
people with disabilities received SSI benefits. 10 In the same year, federal
SSI cash benefits paid to SSI beneficiaries with disabilities equaled $22. 9
billion, and average monthly federal SSI cash benefits amounted to about
$364 per person. 11

The DI and SSI programs use the same statutory definition of disability. To
meet the definition of disability under these programs, an individual must
have a medically determinable physical or mental impairment that (1) has
lasted or is expected to last at least 1 year or to result in death and (2)
prevents the individual from engaging in substantial gainful activity (SGA).
Individuals are considered to be engaged in SGA if they have countable
earnings above a certain dollar level. 12 Moreover, the definition specifies
that for a person to be determined to be disabled, the impairment must be of
such severity that the person not only is unable to do his or her previous
work but, considering his or her age, education, and work experience, is
unable to do any other kind of substantial work that exists in the national
economy. SSA contracts with state disability determination service (DDS)
agencies to determine whether applicants are disabled.

10 The 2. 6 million beneficiaries received federally administered SSI
payments based on disability. This number does not include disabled workers
who were dually eligible for DI and SSI benefits.

11 The $22. 9 billion in federal SSI cash benefits was paid to SSI disabled
beneficiaries of all ages, including working age adults aged 18 to 64, as
well as disabled beneficiaries under age 18 and over age 65. These benefits
were also paid to disabled workers dually eligible for DI and SSI benefits.
The $22. 9 billion does not include SSI supplemental payments made by the
states.

12 Regulations currently define SGA for both the DI and the SSI programs as
employment that produces countable earnings of more than $700 a month for
nonblind disabled individuals. The SGA level for DI blind individuals, set
by statute and indexed to the annual wage index, is currently defined as
monthly countable earnings that average more than $1, 170. SSA deducts from
gross earnings the cost of items a person needs in order to work and the
value of support a person needs on the job because of the impairment before
deciding if a person is working at the SGA level.

The DI and SSI programs offer various incentives that are intended to
encourage beneficiaries to work- and, potentially, to leave the rolls. 13
For example, the DI work incentives provide for a trial work period in which
a beneficiary may earn any amount for 9 months within a 60- month period and
still receive full cash benefits. After the trial work period, cash benefits
continue for 3 months and then are terminated completely if countable
earnings are greater than SGA. The SSI work incentives, among other
features, allow beneficiaries to earn more than the SGA level and retain
part of a cash benefit. As a beneficiary's earnings increase, the SSI
benefit payment gradually decreases until earnings become too high to allow
a cash benefit. 14

Despite these work incentives, however, few DI and SSI beneficiaries return
to work. Therefore, we have recommended in previous reports that SSA place
greater priority on helping disabled beneficiaries return to work. For
example, in 1996, we identified weaknesses in SSA's return- to- work efforts
and recommended that SSA intervene earlier to foster a greater emphasis on
assisting disabled applicants and beneficiaries in returning to the
workforce. 15 We reported that the disability determination process
encourages work incapacity because applicants have a strong incentive to
emphasize their limitations in order to qualify for benefits. In addition,
we observed that the often lengthy and cumbersome application process may
itself reinforce applicants' perceptions of their inability to work.

SSA has recently begun to increase its emphasis on helping its DI and SSI
beneficiaries return to work. For example, SSA recently established the
Office of Employment Support Programs to promote the employment of disabled
beneficiaries. In addition, the Ticket to Work Act is expected to enhance
work opportunities for people with disabilities. For example, this new act
expanded the availability of health care services and created a
“Ticket to Work” voucher program that will allow beneficiaries a
greater choice of vocational rehabilitation and employment service
providers. SSA

13 See Social Security Disability: Improving Return- to- Work Outcomes
Important, but Trade- Offs and Challenges Exist( GAO/ T- HEHS- 97- 186, July
23, 1997) for a more complete explanation of DI and SSI work incentives. 14
To calculate the monthly SSI benefit amount, SSA excludes $20 of a
beneficiary's monthly general income, $65 of his or her monthly earned
income, as well as $1 for every $2 of the remaining monthly earnings.

15 See GAO/ HEHS- 96- 133, July 11, 1996, and SSA Disability: Program
Redesign Necessary to Encourage Return to Work( GAO/ HEHS- 96- 62, Apr. 24,
1996).

has also funded partnership agreements with 12 states. These agreements are
intended to help the states develop services to increase the employment of
beneficiaries with disabilities.

Private Disability Insurance Employers may choose to sponsor private
disability insurance plans for employees either by self- insuring or by
purchasing a plan through a private disability insurer. These disability
plans can provide short- or long- term disability insurance coverage, or
both, to replace income lost by employees because of injuries and illnesses.
The private insurers generally reduce the disability benefit payments of
individuals who receive both private disability and DI benefits by the
amount of the DI benefit payment. The Department of Labor's Bureau of Labor
Statistics estimates that, of the approximately 100 million employees who
work in the private sector, only a portion- about 36 percent- are covered by
employer- sponsored shortterm disability insurance, and a smaller portion-
about 26 percent- have long- term coverage. 16

16 See Private Disability Insurance: Employer- Sponsored Plans( GAO/ HEHS-
00- 18R, Nov. 5, 1999). Bureau of Labor Statistics estimates are for the
1996- 97 period. These estimates include part- and full- time employees.
(Employees were classified as either full- or part- time workers in
accordance with their employers' practices.) These estimates do not include
data on agricultural employees or disability provisions of defined benefit
pension plans. (In a defined benefit plan, the employee's benefit at
retirement can be specifically determined using such factors as salary and
number of years of service.) Data on short- term coverage include state
temporary disability insurance plans in New York, New Jersey, and Hawaii
funded, at least in part, by employee contributions. Data exclude such plans
in California and Rhode Island, where benefits are wholly financed by
employees. The estimates cannot be summed to calculate the total number of
employees with private disability insurance because some employees may have
either short- term coverage or long- term coverage- or both.

The characteristics of the portion of the U. S. working population that is
covered by employer- sponsored private disability insurance differ from
those of SSA's covered population. For example, unlike SSA, private insurers
vary the employer's premium cost on the basis of various risk factors, such
as the type of work and the general health of the workers. Thus, employers
in higher risk industries may choose not to purchase private disability
insurance for their workers because of the cost of coverage. Moreover, in
contrast to SSA, private insurers allow employers who purchase their
disability policies to vary coverage by type of impairment or by class of
employee. For example, because the disability insurance industry generally
charges much higher premiums for full mental health coverage, employers in
general limit coverage for mental impairments to a maximum of 24 months. 17
Employers may also choose to provide long- term disability coverage for only
their white collar employees, rather than for all their employees. 18

The private disability insurance industry, moreover, provides benefits to
many individuals who are not as severely disabled as the beneficiaries of
the DI and SSI programs. However, almost two- thirds of those receiving
private long- term disability benefits from the three private insurers we
reviewed also received DI benefits. This group of beneficiaries, in the
cases of the two insurers that provided us with comparable data, was
composed of a slightly higher proportion of female and older beneficiaries
than the overall DI population, and a lower proportion of female and younger
beneficiaries than the SSI disabled population. The three insurers reviewed
had a lower proportion of beneficiaries with mental impairments than the DI
and SSI disabled populations.

17 For the three insurers we reviewed, the 24- month limitation on mental
impairments does not include time spent in a hospital or mental institution.
Also, the three insurers vary in their descriptions of the types of mental
illness that are covered under this special limitation. One insurer excludes
such conditions as psychotic disorders and schizophrenia from this
limitation. In contrast, the SSA disability programs do not have time-
limited benefits for beneficiaries with mental impairments. In 1999, 26.8
percent of DI disabled workers and 33.8 percent of SSI disabled individuals
between the ages of 18 and 64 had mental disorders other than mental
retardation.

18 White collar jobs fall into two categories: managerial and professional
occupations and technical, sales, and administrative support occupations.

Similar to the private sector organizations we assessed in our previous work
in this area, the three private disability insurers we reviewed for this
report have recognized the potential for reducing disability costs through
an increased focus on returning people with disabilities to productive
activity. 19 To accomplish this comprehensive shift in orientation, these
insurers have begun developing and implementing strategies for helping
people with disabilities return to work as soon as possible, when
appropriate. Although the insurers expect a positive effect on return-
towork outcomes from these strategies, it is too early to fully measure the
effect of these changes. In many cases, return- to- work processes have only
recently been implemented. Moreover, although the three private insurers are
now including return- to- work provisions in the standard disability
contracts that they are writing, a large number of employees are still
insured under prior contracts that lack these provisions. While only
partially indicative of the results of these strategies, the three insurers'
initial return- to- work rates are promising, showing greater success than
SSA's DI program in returning the disabled to work. The three insurers
reported that, in 1999, between 2 and 3 percent of their long- term
disability beneficiaries who also received DI benefits either returned to
work or were terminated from the private sector disability benefit rolls
because they were assessed as having the capacity to work. However, the
groups covered by SSA and the private insurers are not fully comparable.
Although both groups of individuals receive DI benefits, as described
previously, the private insurers cover a selected portion of the U. S.
working population and, therefore, of DI beneficiaries.

Other Countries' Disability Like SSA's disability programs, disability
systems in Germany, Sweden, and

Systems The Netherlands cover a broad population with a wide range of work

experiences, skills, and disabilities. However, these disability systems
operate in a somewhat different social and political context than DI and
SSI. For example, the availability of universal health insurance in these
countries ensures that the receipt of health insurance is not an issue in a
worker's decision about whether to apply for benefits, participate in
rehabilitation, or attempt returning to work, as it can be in the United
States. In addition, disability systems in these countries offer short- term
as well as long- term benefits, which provides an important basis for
comprehensive disability case management.

19 See GAO/ HEHS- 96- 133, July 11, 1996.

The social insurance disability programs in these countries have invested in
return- to- work efforts and have implemented practices similar to those in
the U. S. private sector. While the German social insurance system has had a
long- standing focus on the goal of “rehabilitation before
pension,” the reorientation of Sweden and The Netherlands toward a
return- to- work focus has occurred mostly within the past decade. Some
limited studies and data indicate positive results from the return- to- work
approach in these disability insurance systems. 20

Return- to- Work Efforts In the disability systems of the private disability
insurers and the countries

Are Integral to we reviewed, identifying and providing services intended to
enhance the

claimants' capacity to work are central to the process of deciding
eligibility Eligibility Process in

for benefits. 21 To enable claimants to return to work as quickly as
possible, Selected Private and

these disability systems begin assessing each claimant's potential to rejoin
Foreign Systems

the labor force shortly after disability onset. Further, these systems
continue to periodically monitor work potential and provide return- to- work
assistance to claimants as needed throughout the duration of the claim. This
ongoing process is closely linked to a definition of disability that shifts
over time from less to more restrictive- that is, from an inability to
perform one's own occupation to an inability to perform any occupation. Both
the definitional shift and the ongoing assessment process recognize the
possibility for improvement in an individual's capacity to work. In contrast
to the efforts of the private insurers and other countries we reviewed, the
efforts that SSA makes to return claimants to work occur only after an often
lengthy review of eligibility. (See table 1.)

20 For example, a 1990- 92 study of certain return- to- work practices used
by Sweden's social insurance offices concluded that social insurance costs
had been reduced by returning people to the workplace sooner. Practices
assessed included the social insurance offices' early screening and contact
with disabled individuals.

21 Throughout this report, we use the term“ claimant” to refer
to both a person who submits a claim for disability insurance and a person
who receives disability benefits for the lifetime of a claim.

Table 1: Comparison of Eligibility Assessment Process Features of U. S.
Private Insurers and Other Countries With Those of SSA

Process Private insurers and other feature countries SSA

Disability Definition of disability shifts over a

“Either/ or” definition characterizes definition specified time
period from less to

individuals as either unable to more restrictive, allowing a

work or having the capacity to transitional period of eligibility

work. under a less restrictive definition for providing financial and other
work assistance, such as retraining. This transitional period recognizes the
possibility of improvement in an individual's capacity to work.

Early Intervention occurs soon after

There is a long delay in providing intervention disability onset to identify
returnto- services because only individuals

work needs. who have beenawarded benefits- following an often lengthy
eligibility assessment process- are eligible for return- towork services.

Ongoing Work capacity is periodically

There is no integration of return assessment of

monitored and reassessed, to- work considerations into the

work potential focusing on returning those who

eligibility assessment process. can work to the labor force.

Private Insurers Incorporate The three private insurers we observed
incorporate return- to- work

Return- to- Work Efforts considerations early in the assessment process to
assist claimants in their

From the Beginning of the recovery and in returning to work as soon as
possible. With the initial

Assessment Process reporting of a disability claim, these insurers
immediately set up the

expectation that claimants with the potential to do so will return to work.
The insurers' process for assessing and enhancing a claimant's ability to
work is illustrated in figure 1.

Figure 1: Private Disability Insurers' Eligibility Assessment Process

After receiving a claim, the private insurers' assessment process begins
with determining whether the claimant meets the initial definition of
disability. In general, for the three private sector insurers we studied,
claimants are considered disabled when, because of injury or sickness, they
are limited in performing the essential duties of their own occupation and
they earn less than 60 to 80 percent of their predisability earnings,
depending upon the particular insurer. 22 As part of determining whether the
claimant meets this definition, the insurers compare the claimant's
capabilities and limitations with the demands of his or her own occupation
and identify and pursue possible opportunities for accommodation- including
alternative jobs or job modifications- that would allow a quick and safe
return to work. A claimant may receive benefits under this definition of
disability for up to 2 years. 23

As part of the process of assessing eligibility according to the “own
occupation” definition, insurers directly contact the claimant, the
treating physician, and the employer to collect medical and vocational
information and initiate return- to- work efforts, as needed. Insurers'
contacts with the claimant's treating physician are aimed at ensuring that
the claimant has an appropriate treatment plan focused, in many cases, on
timely recovery and return to work. Similarly, insurers use early contact
with employers to encourage them to provide workplace accommodations for
claimants with the capacity to work.

22 The private insurers generally define one's “own occupation”
as the occupation a person is routinely performing at onset of disability.
They generally assess how the claimant's own occupation is performed in the
national economy, rather than how the work is performed for a specific
employer or at a specific location. Moreover, two of the insurers have
expanded their “own occupation” definition of disability to
include a reasonable alternative position. These two insurers require that a
claimant who is judged able to do so accept a reasonable alternative
position- a job in the same general location as that offered by the
claimant's current employer- or risk losing cash benefits. The claimant must
be qualified to perform the work of this alternative position- which must
pay the claimant more than 60 to 80 percent of predisability earnings,
depending upon the insurer- given his or her education, training, or
experience.

23 Our review of group disability insurance policies focused on those with
an “own occupation” definition of disability that changes to an
“any occupation” definition after 2 years.

If the insurers find the claimant initially unable to return to his or her
own occupation, they provide cash benefits and continue to assess the
claimant to determine if he or she has any work potential. For those with
work potential, the insurers focus on return to work before the end of the
2- year period, when, for all the private insurers we studied, the
definition of disability becomes more restrictive: after 2 years, the
definition shifts from an inability to perform one's own occupation to an
inability to perform any occupation for which the claimant is qualified by
education, training, or experience. Claimants initially found eligible for
benefits may be found ineligible under the more restrictive definition. 24

The private insurers' shift from a less to a more restrictive disability
definition after 2 years reflects the changing nature of disability and
allows a transitional period for insurers to provide financial and other
assistance, as needed, to help claimants with work potential return to the
workforce. During this 2- year period, the insurer attempts to determine the
best strategy for managing the claim. Such strategies can include, for
example, helping plan medical care or providing vocational services to help
claimants acquire new skills, adapt to assistive devices to increase
functioning, or find new positions. For those requiring vocational
intervention to return to work, the insurers develop an individualized
return- to- work plan, as needed. Basing the continuing receipt of benefits
upon a more restrictive definition after 2 years provides the insurer with
leverage to encourage the claimant to participate in a rehabilitation and
return- to- work program. Indeed, the insurers told us they find that
claimants tend to increase their efforts to return to work as they near the
end of the 2- year period.

If the insurer initially determines that the claimant has no work potential,
it regularly monitors the claimant's condition for changes that could
increase the potential to work and reassesses after 2 years the claimant's
eligibility under the more restrictive definition of disability. The insurer
continues to look for opportunities to assist claimants who qualify under
this definition of disability in returning to work. Such opportunities may
occur, for

24 The three private insurers generally use the same “own
occupation” definition for shortand long- term disability benefits.
However, in the case of long- term benefits, the definition shifts to the
“any occupation” definition after 2 years. When applying the
“any occupation” definition, these private insurers generally
try to identify several occupations that exist locally that could provide a
sufficient salary for the claimant. However, the insurers are obligated only
to identify occupations with a sufficient salary in the national economy and
not to find specific job openings or place the claimant in a new position.

example, when changes in medical technology- such as new treatments for
cancer or AIDS- may enable claimants to work, or when claimants are
motivated to work. To illustrate, one insurer told us of a 57- year- old,
college- educated manager who sustained severe injuries, including the
amputation of a leg, as the result of a car accident. The private insurer
initially found the claimant unable to perform any occupation and awarded
him private disability benefits. (SSA, under its own eligibility
determination process, also awarded the claimant DI benefits.) However,
because the claimant wanted to work, the private insurer, employer, and
claimant collaborated in developing and implementing a return- to- work
plan. After 1 month of computer training, the claimant returned to a new
position with the prior employer at his predisability salary.

The private insurers that we reviewed told us that, throughout the duration
of the claim, they tailor the assessment of work potential and development
of a return- to- work plan to the specific situation of each individual
claimant. To do this, disability insurers use a wide variety of tools and
methods when needed. Some of these tools, as shown in tables 2 and 3, are
used to help ensure that medical and vocational information is complete and
as objective as possible. For example, insurers consult medical staff and
other resources to evaluate whether the treating physician's diagnosis and
the expected duration of the disability are in line with the claimant's
reported symptoms and test results. Insurers may also use an independent
medical examination or a test of basic skills, interests, and aptitudes to
clarify the medical or vocational limitations and capabilities of a
claimant. In addition, insurers identify transferable skills to compare the
claimant's capabilities and limitations with the demands of the claimant's
own occupation. This method is also used to help identify other suitable
occupations and the specific skills needed for these new occupations when
the claimant's limitations prevent him or her from returning to a prior
occupation. Included in these tools and methods are services to help the
claimant return to work, such as job placement, job modification, and
retraining.

Table 2: Medical Assessment: Tasks, Tools, and Methods Task Tools and
methods

Assess the diagnosis, treatment, and duration of the Consultation of medical
staff and other resources, including current impairment and begin developing
a treatment plan focused on

medical guidelines describing symptoms, expected results from returning the
claimant to work promptly and safely.

diagnostic tests, expected duration of disability, and treatment Assess the
claimant's cognitive skills. Standardized mental tests Validate the treating
physician's assessment of the

Review of the claimant's file, generally by a nurse or a physician who is
impairment's effect on the claimant's ability to work and the

not the claimant's treating physician most appropriate treatment and
accommodation.

Verify the diagnosis, level of functioning, and appropriateness Independent
medical examination of the claimant by a contracted of treatment. physician

Evaluate the claimant's ability to function, determine needed Home visits by
a field nurse or investigator or accompanied doctor visits assistance, and
help the claimant develop an appropriate treatment plan with the physician.

Assess the claim's validity. Home visits and interviews with neighbors or
others who have knowledge of the claimant's activities

Table 3: Vocational Assessment and Assistance: Tasks, Tools, and Methods
Task Tools and methods

Identify transferable skills, validate restrictions on and Test basic
skills, such as reading or math.

capabilities for performing an occupation, and identify other Determine
interests and aptitudes.

suitable occupations and retraining programs. Evaluate functional capacities
associated with an occupation,

such as lifting, walking, and following directions. Compare functional
capacities, work history, education, and skills

with the demands of an occupation. Enhance work capabilities and help
develop job- seeking skills. Provide resume preparation, help develop job-
seeking skills, and

help with job placement. Assist in obtaining physical, occupational, or
speech therapy and

access to employee assistance, support groups, or state agency vocational
rehabilitation or other community services. Identify and fund on- the- job
training or other educational courses.

Assess ability to perform own or any occupation, assess Observe and analyze
the essential duties of the claimant's own potential for accommodation, and
determine whether sufficient

occupation, another occupation for the same employer, or an salary is
offered locally or nationally for a suitable occupation.

occupation of a prospective employer. Determine the general availability and
salary range of specified

occupations. Identify for a specified occupation the potential employers and

related job descriptions, salary range, and openings. Reaccustom claimant to
a full work schedule and enable

Provide work opportunities for the claimant to gradually resume claimant to
overcome impairment and return to work. his or her job duties.

Procure devices to assist with work or otherwise help to modify the job.

Other Countries Also The three countries we studied also begin assessing
return- to- work needs

Provide Return- to- Work soon after the onset of a disabling condition and
integrate return- to- work

Assistance Early After assistance that is tailored to meet individual needs
throughout the

Disability Onset and assessment process. These countries also provide short-
term benefits on

the basis of a person's inability to perform his or her current job because
of Throughout the Assessment

illness or injury. These short- term disability benefits- which may be
Process

granted for a year or more- are similar to the private insurers' provision
of benefits during the 2- year “own occupation” period of
disability in that they provide a transitional period for assessing an
individual's work potential and providing treatment and rehabilitation.

For example, German laws and policies require that all applicants for
disability benefits be evaluated for rehabilitation and return to work.
Consistent with the principle that intervention should occur at the earliest
possible stage of disability to minimize the degree and effect of the
impairment, program officials told us that intervention in Germany often
begins when the health insurance agency urges a disabled worker receiving
short- term benefits to apply for medical rehabilitation. In addition, they
said that vocational counselors often discuss rehabilitation and return-
towork plans with disabled workers while they are still in the hospital. The
social insurance office then evaluates the person's capacity to work and, if
necessary, refers the applicant to vocational rehabilitation or other types
of return- to- work services and assistance. These return- to- work measures
may include assistance in retaining or obtaining a job or in selecting an
occupation. They may also involve providing basic training or retraining to
prepare for an occupation and developing workplace accommodations. As long
as the person continues to receive short- term disability benefits, the
social insurance office monitors the case and periodically reassesses the
person's work capacity and need for return- to- work assistance, according
to program officials. The office awards long- term disability benefits,
officials said, only after it determines that a person's earning capacity
cannot be restored through return- to- work interventions.

Under Swedish laws and policies, both the private and public sectors are
responsible for the early identification of candidates for rehabilitation
and return to work. After an employee has been on sick leave for 4 weeks,
employers are responsible for determining whether the employee needs some
type of rehabilitation and are required to report this information to the
social insurance office. Social insurance offices closely monitor the use of
short- term benefits and intervene when employers disregard their early

intervention responsibilities, program officials told us. 25 The social
insurance office then begins the process of determining whether the person
will need vocational rehabilitation to return to work. The office arranges
for an assessment of the disabled employee's rehabilitation needs and works
with the employer and employee to develop a rehabilitation plan.
Rehabilitation in Sweden is not meant to be a lengthy process, but rather a
short, intensive period of medical services and vocational training to help
the individual return to work as soon as possible. As in Germany, the social
insurance offices in Sweden periodically monitor and reassess the
rehabilitation needs of individuals receiving short- term disability
benefits and, after the first year of benefits, consider granting long- term
benefits if the person's rehabilitation potential has not improved, program
officials explained.

In The Netherlands, the employer has had increasing responsibility for
efforts to return the employee to his or her current job or a comparable job
within the company since the mid- 1990s. This shift of responsibility from
the public to the private sector is intended to encourage greater
responsibility on the part of employers in the prevention and prompt
amelioration of employee health impairments. Under this policy, within about
3 months of the onset of the disability, the employer must submit to the
social insurance agency a preliminary plan to return the disabled worker to
the workforce. A final plan must be submitted within about 9 months. If the
employer determines that the disabled worker cannot return to the workplace,
or if the disabled worker has not returned to work after 1 year of receiving
short- term benefits, the social insurance agency assesses the person's
condition to determine eligibility for long- term disability benefits. The
assessment involves evaluations of the applicant's physical and mental
capabilities, which are then matched against different occupations to
determine whether the person is capable of performing any work.

25 Social insurance offices in Sweden have no mechanisms or sanctions to
force employers to comply with their rehabilitation responsibilities. We
reported in 1996 that, according to social insurance office surveys,
employers do not arrange for rehabilitation examinations in about40 to50
percentofthe cases.

SSA Does Not Incorporate Unlike the private sector and foreign countries,
SSA does not integrate

Return- to- Work Efforts Into efforts to return individuals to work into its
eligibility assessment

process. 26 To be considered eligible for long- term cash benefits,
applicants Its Eligibility Assessment

are characterized as either having the capacity to work or being unable to
Process

work, according to the Social Security Act's definition of disability. But
this dichotomous choice does not recognize that many people with
disabilities fall on a continuum between being able to work full- time and
being unable to work at all. These individuals may have a variety of needs
for shorterterm supports and services other than permanent cash payments to
help them make the transition to the workforce, such as assistive devices
and medical treatment. Yet, to obtain any services through DI and SSI,
individuals who might have been able to remain at or make the transition to
work with shorter- term services have no choice but to emphasize their
limitations and de- emphasize any work capacity in order to establish their
inability to work. In other words, eligibility for noncash services that are
needed in order to work is, paradoxically, linked to proving one's inability
to work. The act's definition of disability- under which a person is unable
to do any substantial work in the national economy- is comparable to the
private sector's most restrictive definition.

26 There are also distinct differences between the methods used by SSA and
the private insurers to determine a level of earnings beyond which an
individual no longer qualifies for benefits. SSA regulations, on one hand,
apply to both the DI and the SSI programs a standard level of countable
monthly income for all people other than the blind (currently $700),
regardless of predisability earnings. In contrast, the private insurers we
studied establish an individualized level that is a proportion of each
person's predisability earnings.

In recent years, SSA has piloted numerous initiatives to redesign and
thereby improve its disability determination process. But while an
evaluation recently recommended that the agency “create an awareness
and attitudinal change to accept employment support as a core SSA
mission,” the agency has not yet integrated return- to- work
considerations into its efforts to redesign its disability determination
process. 27 Moreover, the recently enacted Ticket to Work Act was intended
to increase beneficiary access to vocational services but does not change
the point in the process at which beneficiaries may receive assistance.
Under the Ticket to Work Act, only those individuals who have met the Social
Security Act's definition of disability and are approved for benefits will
receive a ticket entitling them to receive return- to- work services.
Because SSA's eligibility determination process can take up to 18 months or
longer for individuals who are initially denied benefits and who are then
deemed eligible on appeal, there can be a long delay in receiving services.
Since many applicants have been unemployed before applying for benefits and
remain unemployed during the eligibility determination process, their
skills, work habits, and motivation to work are likely to deteriorate during
this wait. 28 However, the Ticket to Work Act authorizes SSA to carry out a
demonstration project to test the advantages and disadvantages of earlier
referral of DI applicants and beneficiaries for rehabilitation. 29 SSA may
also gain additional insights into early intervention approaches for both DI
and SSI through its funding of demonstration projects in 12 states. 30

27 SSA, Employment Support Concept Development Plan( Baltimore, Md.: SSA,
Apr. 12, 1999). 28 See GAO/ HEHS- 96- 62, Apr. 24, 1996.

29 SSA has not yet designed such a project, and it is unclear how early SSA
will be intervening after onset of disability in this demonstration. 30 For
example, one state is testing the provision of short- term vocational
services to DI and SSI applicants with recent work histories, with an
emphasis on early intervention and quick employment.

Other Systems Provide To facilitate return to work, the insurers and the
countries we studied

Incentives for employ incentives both for claimants to participate in
vocational activities

and receive appropriate medical treatment, and for employers to Claimants
and

accommodate claimants. Insurers and the countries we studied require
Employers That

claimants who could benefit from vocational rehabilitation to participate in
Encourage and

an individualized return- to- work program. They also provide financial
incentives to promote claimants' efforts to become rehabilitated and return

Facilitate Return to to work. To better ensure that medical needs are met,
the insurers and the

Work countries we studied require that claimants receive appropriate medical

treatment and assist them in obtaining this treatment. In addition, they
provide financial incentives to employers to encourage them to provide work
opportunities for claimants. Although these practices are common to the
private sector insurers and the countries we examined, limited data exist to
determine whether they yield positive outcomes. In contrast to the practices
of other systems, the Ticket to Work Act makes participating in
rehabilitation and return- to- work services voluntary for beneficiaries. In
addition, under law and SSA regulations, although SSA's claimants must
follow medical treatment that has been prescribed for them, they are not
required to seek treatment as a prerequisite for award or continuing receipt
of benefits. Moreover, access to medical treatment may be limited for many
DI and SI applicants and beneficiaries, whose medical costs may not be
covered.

Private Insurers Offer The three private insurers we reviewed require
claimants who could

Incentives to Claimants and benefit from vocational rehabilitation to
participate in a customized

Employers to Promote rehabilitation program or risk loss of benefits. As
part of this program, a

Return to Work return- to- work plan for each claimant can include, for
example, adaptive

equipment, modifications to the work site, or other accommodations. These
private insurers mandate the participation of claimants whom they believe
could benefit from rehabilitation, because they believe that voluntary
compliance has not encouraged sufficient claimant participation in these
plans. 31

These insurers also make special financial incentives available, as
appropriate, to claimants who participate in rehabilitation programs. For

31 Although claimants may be involved in the development of the
individualized rehabilitation plans, the insurers make the final decision
about the types of rehabilitation services claimants will receive.

example, one insurer told us that claimants receive an additional benefit
equal to 10 percent of their disability payment for participating in
rehabilitation. The insurer caps these additional benefits at $1, 000 a
month. In addition, the insurers may defray costs associated with
rehabilitation, such as child care expenses. To this end, one insurer
reported that it may pay $250 a month per child, up to $1, 000 per month.

In addition, the insurers told us that they encourage rehabilitation and
return to work by allowing claimants who work to supplement their disability
benefit payments with earned income. 32 During the first 12 or 24 months of
receiving benefits, depending upon the particular insurer, claimants who are
able to work can do so to supplement their benefit payment and thereby
receive total income of up to 100 percent of predisability earnings. 33
After this period, if the claimant is still working, the insurers decrease
the benefit amount so that the total income a claimant is allowed to retain
is less than 100 percent of predisability income.

However, when a private insurer determines that a claimant is able, but
unwilling, to work, the insurer may reduce or terminate the claimant's
benefits. To encourage claimants to work to the extent they can, even if
only part- time, two of the insurers told us they may reduce a claimant's
benefit by the amount the claimant would have earned if he or she had worked
to maximum capacity. 34 The other insurer may reduce a claimant's monthly
benefit by the amount that the claimant could have earned if he or she had
not refused a reasonable job offer- that is, a job that was consistent with
the claimant's background, education, and training. Claimants' benefits may
also be terminated if claimants refuse to accept a

32 The private disability insurers we reviewed told us that their benefits
generally replace 60 percent of predisability earnings, depending upon the
insurer. 33 To illustrate, assume that Ms. Jones is a claimant with
predisability earnings of $1,000 per month and an insurance policy that
replaces 60 percent of her predisability earnings. She is currently not
working. Under this scenario, her income would be limited to $600 per month
in disability benefits. However, if she returned to work, even part- time,
she would have the opportunity to increase her total income to 100 percent
of her predisability earnings or, in this instance, $1,000. If she returned
to work and earned $500 per month, the insurer would reduce her benefit
payment from $600 to $500 per month, so that her combined earnings and
benefit payment would provide a total monthly income equal to her
predisability income of $1, 000.

34 One insurer uses the claimant's physician or three independent experts
qualified to evaluate the claimant's condition to determine a claimant's
maximum capacity to work.

reasonable accommodation that would enable them to work. For example, if a
claimant with impaired vision refuses the offer of a large- screen computer
terminal that would enable the claimant to work, the insurer can terminate
his or her benefits.

Since medical improvement or recovery can also enhance claimants' ability to
work, the private insurers we studied not only require, but also help,
claimants to obtain appropriate medical treatment. To maximize medical
improvement, these private insurers require that the claimant's physician be
qualified to treat the particular impairment. Additionally, two insurers
require that treatment be provided in conformance with medical standards for
treatment type and frequency. Moreover, the insurers' medical staff work
with the treating physician as needed to ensure that the claimant has an
appropriate treatment plan. The insurers told us they may also provide
funding for those who cannot otherwise afford treatment.

The three private sector insurers we studied may also provide financial
incentives to employers to encourage them to provide work opportunities for
claimants. By offering lower insurance premiums to employers and paying for
accommodations, these private insurers encourage employers to become
partners in returning disabled workers to productive employment. For
example, to encourage employers to adopt a disability policy with return-
to- work incentives, the three insurers offer employers a discounted
insurance premium: if their disability caseload declines to the level
expected for those companies that assist claimants in returning to work, the
employers may continue to pay the discounted premium amount. These insurers
also fund accommodations, as needed, for disabled workers at the employer's
work site. 35

35 Educating employers about the size and extent of disability costs is an
important element in motivating employers to promote efforts to return
claimants to work. For example, one of the private insurers we reviewed
educates employers about the direct and indirect costs of not controlling
lost time associated with disability, which this insurer estimated to amount
to 4 to 6 percent of an employer's payroll.

Other Countries Also In Germany and Sweden, individuals may also be denied
benefits for not

Provide Incentives to participating in rehabilitation when it is recommended
by the social

Claimants and Employers to insurance offices. Both these countries, as well
as The Netherlands, also

Encourage Return to Work provide financial incentives to encourage
participation in rehabilitation.

For example, they provide supplementary benefits to cover
rehabilitationrelated expenses, such as transportation and housing costs and
the cost of educational courses, books, and study aids. 36 Germany and
Sweden also offer transitional work opportunities that enable people with
disabilities to return to work part- time while earning disability benefits.
These individuals can gradually increase their daily work hours, and thus
their earnings, until they reach their maximum work capacity, with a
corresponding decrease in benefits. 37 Similarly, The Netherlands provides a
supplemental wage to beneficiaries who work, allowing them to earn a wage
equal to their predisability earnings. The countries we studied also provide
rehabilitation services and medical treatment to disabled individuals, and
social insurance offices in Germany and Sweden may terminate the disability
benefits of individuals who refuse to follow medical recommendations.

In addition, Germany, Sweden, and The Netherlands provide financial
assistance to employers for the purchase of workplace accommodations needed
by disabled employees. For example, such assistance may pay for technical
aids, special staff or personal assistants to help a disabled worker
performvarious work functions, or adaptations of the work environment to
meet the special needs of a disabled worker. These countries also offer
financial incentives for employing disabled individuals by subsidizing the
wages that employers pay them. Wage subsidies are provided for a timelimited
period of 3 to 4 years, with the amount of the subsidy declining each year.
38 Furthermore, in The Netherlands, employers have an additional incentive
to assist employees in returning to work because the employers'
contributions to the disability insurance fund are partially determined by
the number of their employees who became disabled in the prior year.

36 For example, Sweden provides grants to subsidize the purchase or
modification of a vehicle if it is considered necessary for vocational
training or for traveling to work. 37 In Sweden, individuals with reduced
work capacity may work full- time and still take part in the transitional
work program. 38 In Sweden, wage subsidies may be maintained at the same
level and extended beyond the 4- year period if authorities determine it is
appropriate.

SSA's Return- to- Work In contrast to the practices of the private sector
and the countries we

Incentives Are More Limited studied, SSA's disability programs do not
require rehabilitation for

Than Those Used in Other beneficiaries, regardless of their capacity to
work. Instead, the recently

Systems enacted Ticket to Work Act establishes a voluntary system that
depends

upon the beneficiary's motivation to pursue rehabilitation services. Thus, a
beneficiary who could benefit from rehabilitation might not choose to seek
such services. Further, in contrast to the private sector, the Social
Security Act does not require that an individual work to his or her maximum
capacity, which may act as a disincentive to work. In particular, DI
beneficiaries with low earnings may find it more financially advantageous to
periodically stop working, or work part- time and continue to receive
disability payments, than to earn more than SSA's limit of $700 a month in
countable income and lose all cash benefits after completing a trial work
period. In recognition of the potential work disincentive from this all-
ornothing benefit structure, the Ticket to Work Act requires SSA to conduct
demonstration projects under which DI benefits are reduced by $1 for each $2
of a beneficiary's earnings above a level determined by SSA. Such a phased
reduction in benefits is currently used in the SSI program, in which
benefits are reduced by $1 for each $2 in earnings above the beneficiary's
first $65 in monthly earnings and $20 in monthly general income.

The DI and SSI programs also differ from the private sector and the
countries we studied in their requirements for medical treatment. The Social
Security Act, along with SSA regulations, requires that benefits be denied
when an individual fails, without good cause, to follow treatment prescribed
by his or her physician. 39 However, if an applicant is not being treated by
a physician, SSA is still required to assess his or her eligibility for
benefits. If an applicant qualifies, SSA is required to award benefits, even
if the applicant would not qualify for benefits if following treatment
prescribed by a physician. And unless medical treatment is prescribed, it is
not a prerequisite for continued receipt of benefits once they have been
awarded.

39 42 U. S. C. secs. 423( f) and 1382c( a), and 20 C. F. R. secs. 404.1530,
404. 1594( e)( 4), 416.930, and 416. 994( b)( 4)( iv). For benefits to be
denied, treatment must be prescribed by the individual's treating physician
(the licensed physician who attends to an individual's medical needs). When
an individual has no attending physician, the treating physician is the
hospital or clinic where the individual goes for medical care.

Indeed, SSA found in 1999 that some beneficiaries with affective disorders
were receiving no medical treatment. Affective disorders are the primary
diagnosis of about one in every nine DI beneficiaries, according to SSA.
This diagnosis is characterized by a disturbance in mood- for example,
depression, mania, or both- and includes such diagnoses as major depressive
disorder and bipolar disorder. In addition, SSA found that many
beneficiaries with affective disorders who were receiving treatment were not
being treated by mental health professionals. Research cited by SSA suggests
that as many as 60 percent of affective disorder cases can be controlled
with appropriate treatment. 40 SSA believes that providing access to the
right medical treatment for DI beneficiaries with affective disorders could
help them return to work and has recently begun a demonstration project to
test this assumption. 41 Nevertheless, access to medical treatment may be
limited for many DI and SSI applicants and beneficiaries, for whom medical
costs may not be covered. 42

In addition, SSA does not have the legal authority to use financial
incentives to encourage employers to assist those with disabilities to
return to work, thus limiting the agency's ability to influence employers.
However, SSA is currently funding demonstration projects in 12 states to
develop ways to increase employment of beneficiaries and other people with
disabilities and is looking to employers for help. For example, the goals of
one state project are to solicit employer views on barriers to hiring
beneficiaries and to identify strategies for, and educate employers about,
increasing employment opportunities for beneficiaries. In addition, the
federal government provides tax incentives, and states may provide other

40 The extent to which these data apply specifically to DI and SSI disabled
beneficiaries is unknown. 41 Outside of the ongoing demonstration project,
SSA does not routinely intervene in the delivery of medical services for its
beneficiaries. 42 For example, DI and SSI applicants may not be covered by
health insurance before or during the application for benefits process. In
addition, new DI beneficiaries have a 24month waiting period before Medicare
eligibility begins. Moreover, Medicare and Medicaid often severely restrict
funding for assistive technologies that improve function or help prevent
secondary disabilities, and Medicare generally does not cover the costs of
prescription drugs. Lack of coverage for medications can limit the ability
of some people with disabilities to return to work in cases in which drugs
are essential to improving functioning.

assistance, to employers to encourage them to return people with
disabilities to work. 43

Other Systems Use The private disability insurers and social insurance
systems in the other

Staff With a Wide countries we studied have developed techniques for using
the right staff to

assess eligibility for benefits and return those who can to work. Officials
of Range of Expertise to

the three private insurers and the social insurance systems told us that
they Assess and Enhance

have access to individuals with a range of skills and expertise, including
Claimants' Work

medical experts and vocational rehabilitation experts. Private disability
insurers told us that they apply this expertise as appropriate to
costeffectively

Potential assess and enhance claimants' capacity to work. In contrast,

SSA's DDS teams of medical and psychological consultants and disability
examiners are hired and trained to assess eligibility of applicants to
receive cash benefits rather than to enhance claimants' capacity to work. As
a result, the staff of SSA and the DDSs do not have the expertise to carry
out the role of returning disabled workers to productive employment.

Private Insurers Seek toUse The three private disability insurers that we
studied have access to

Appropriate Staff to Assess multidisciplinary staff with a wide variety of
skills and experience who can

Eligibility and Provide assess claimants' eligibility for benefits and
provide needed return- to- work

Return- to- Work Services services to enhance the work capacity of claimants
with severe

impairments. The private insurers' core staff generally includes claims
managers, medical experts, vocational rehabilitation experts, and team
supervisors. 44 The insurers explained that they set hiring standards to
ensure that these multidisciplinary staff are highly qualified. Such
qualifications are particularly important because assessments of benefit
eligibility and work capacity can involve a significant amount of
professional judgment when, for example, a disability cannot be objectively
verified on the basis of medical tests or procedures or clinical

43 For example, small businesses may take an annual tax credit for a variety
of costs incurred in providing employee accommodations such as readers, sign
language interpreters, and equipment modifications. Also, all businesses may
take an annual deduction for the expense of removing physical, structural,
and transportation barriers to disabled workers. Further, state vocational
rehabilitation agencies may provide various services to employers, such as
rehabilitation engineering services for architectural barrier removal and
work- site modifications.

44 The insurers also employ disability income specialists to assist
claimants in applying for DI benefits.

examinations alone. 45 Table 4 describes the responsibilities of this core
staff of experts employed by private disability insurers, as well as its
general qualifications and training.

Table 4: Responsibilities and Qualifications of Staff Employed by Private
Disability Insurers to Assess and Enhance a Claimant's Work Pot ent i al

Type of staff Responsibilities Qualifications and training

Claims managers Determine disability benefit eligibility. One insurer gives
preference to those with a

Develop, implement, and monitor an individualized college degree and
requires insurance claims

claim management strategy. experience and specialized training and
education.

Serve as primary contact for the claimant and the Another requires a college
degree, a passing grade

claimant's employer. on an insurer- sponsored test, and specialized

Focus on facilitating the claimant's timely, safe training and coaching.

return to work. Coordinate the use of expert resources.

Medical and related experts a Collect and evaluate medical and functional
Medical staff include registered nurses with case

information about the claimant to assist in the management or disability-
related experience and

eligibility assessment and help to ensure that experts in behavioral and
mental issues, such as

claimants receive the appropriate medical care to psychologists, experienced
psychiatric nurses, and

enable them to return to work. licensed social workers. Two insurers also
employ

At one insurer, physicians also help train company board- certified
physicians in various specialties. b

staff. Vocational rehabilitation

Help assess the claimant's ability to work. Rehabilitation experts are
master's- degree- level

experts Help overcome work limitations by identifying vocational
rehabilitation counselors. In addition,

needed assistance, such as assistive devices and one insurer requires board
certification and 5 years

additional training, and ensuring that it is provided. of experience.

Supervisors Provide oversight, mentoring, and training. One insurer gives
preference to those with a college degree and requires 3 years' disability
experience, some management experience, and specialized training. Another
insurer requires a college degree, more than 12 years' disability claims
experience, and completion of courses leading to a professional designation.
a At one company, the medical experts are employees of a company subsidiary
but are often colocated with the insurer's employees. b One company, for
example, employs 85 part- and full- time physicians, including
psychiatrists, doctors

of internal medicine, orthopedists, family practice physicians,
cardiologists, doctors of occupational medicine, and neurologists.

The three disability insurers we reviewed use various strategies for
organizing their staff to focus on return to work, with teams organized to

45 According to one insurer, disabilities with subjective diagnoses include
certain types of mental illness, fibromyalgia, chronic pain (often back
pain), and chronic fatigue syndrome.

manage claims associated either with a specific impairment type or with a
specific employer (that is, the group disability insurance policyholder).
One insurer organizes its staff by the claimant's impairment type- for
example, cardiac/ respiratory, orthopedic, or general medical- to develop
in- depth staff expertise in the medical treatments and accommodations
targeted at overcoming the work limitations associated with a particular
impairment. The other two insurers organize their staff by the claimant's
employer because they believe that this enables them to better assess a
claimant's job- specific work limitations and pursue workplace
accommodations, including alternative job arrangements, to eliminate these
limitations. 46 Regardless of the overall type of staff organization, each
of the three insurers facilitates the interaction of its core staff- claims
managers, medical experts, and vocational rehabilitation experts- by pulling
these experts together into small, multidisciplinary teams responsible for
managing claims. Additionally, one insurer engenders team interaction by
physically colocating core team members in a single working area.

To provide a wide array of needed experts, the three disability insurers
expand their core staff through agreements or contracts with subsidiaries or
other companies. These experts- deployed both at the insurer's work site and
in the field- provide specialized services to support the eligibility
assessment process and to help return claimants to work. For instance, these
insurers contract with medical experts beyond their core employee staff-
such as physicians, psychologists, psychiatrists, nurses, and physical
therapists- to help test and evaluate the claimant's medical condition and
level of functioning. In addition, the insurers contract with vocational
rehabilitation counselors and service providers for various vocational
services, such as training, employment services, and vocational testing. 47

The private insurers we examined told us that they strive to apply the
appropriate type and intensity of staff resources to cost- effectively
return to work claimants with work capacity. The insurers described various
techniques that they use to route claims to the appropriate claims

46 All three insurers, however, have behavioral care specialists
specifically for managing psychiatric claims. 47 Two insurers also contract
with investigators and surveillance personnel to investigate potential
inconsistencies between claimants' statements and actual activities. One
company employs field- based investigators who verify claimant information
and assess the conformance of the claim to observed claimant activities.
These investigators usually have prior investigative experience and receive
ongoing training on current medical issues and other professional education.

management staff, which include separating (or “triaging”)
different types of claims and directing them to staff with the appropriate
expertise. According to one insurer, the critical factor in increasing
return- to- work rates and, at the same time, reducing overall disability
costs is proper triaging of claims. In general, the private insurers
separate claims by those who are likely to return to work and those who are
not expected to return to work. The insurers told us that they assign the
type and intensity of staff necessary to manage claims of people who are
likely to return to work on the basis of the particular needs and complexity
of the specific case (see table 5).

Table 5: Staff Assignment for Claims Management by Triage Category Types of
return- to- work services Triage category Staff assigned provided

Likely to return to work

Condition requires medical assistance and Medical specialist Recommend
improvements in treatment more than 1 year to stabilize medically. plan to
treating physician.

Refer claimant for more specialized or appropriate medical services. Ensure
frequency of treatment meets

standards for condition. Condition requires less than a year to

Claims manager Monitor medical condition. stabilize. Maintain contact with
employer and

physician to ensure returnto work. Obtain input from medical and vocational

specialists as needed. Condition is stabilized, and claimant needs

Multidisciplinary team including Evaluate claimant's functional abilities
for

rehabilitation or job accommodation to Vocational expert

work. return to work.

Medical expert Customize return- to- work plan.

Claims specialist Arrange for needed return- to- work

Other specialists as needed services.

Monitor progress against expected returnto- work date.

Unlikely to return to work

Claimant is determined unable to return to Claims manager Review medical
condition and level of work. functioning regularly.

As shown in table 5, claimants expected to need medical assistance, such as
those requiring more than a year for medical stabilization, are likely to
receive an intensive medical claims management strategy. A medical strategy
involves, for example, ensuring that the claimant receives appropriate
medical treatment. Claimants who need less than a year to stabilize
medically are managed much less intensively. For these claims, a

claims manager primarily monitors the claimant's medical condition to assess
whether the claimant has stabilized sufficiently medically to begin
vocational rehabilitation, if appropriate. Alternatively, a claimant with a
more stable, albeit serious, medical condition who is expected to need
vocational rehabilitation, job accommodations, or both to return to work
might warrant an intensive vocational strategy. The private disability
insurers generally apply their most resource- intensive, and therefore most
expensive, multidisciplinary team approach to these claimants. Working
closely with the employer and the attending physician, the team actively
pursues return- to- work opportunities for claimants with work potential.

Finally, claimants who are likely not to return to work (or “stable
and mature” claims) are generally managed using a minimum level of
resources, with a single claims manager responsible for regularly reviewing
a claimant's medical condition and level of functioning. 48 The managers of
these claims carry much larger caseloads than managers of claims that
receive an intensive vocational strategy. For example, one insurer's average
claims manager's caseload for these stable and mature claims is about 2,200
claims, compared with an average caseload of 80 claims in the same company
for claims managed more actively.

Mirroring this wide difference in caseload size, administrative costs for
managing claims increase as the intensity of resources dedicated to claims
management increases. 49 Thus, one private insurer told us that its annual
average administrative costs for managing stable and mature claims equaled
about $100 per claim. In contrast, the same insurer reported annual average
costs for claims managed more actively to be about $2,400 per claim, with
claims managed through the multidisciplinary team approach

48 The insurers review these claims on a regular basis, ranging from every 6
months to every 3 years, depending upon the insurer and the characteristics
of the claim. 49 Administrative costs include salaries and overhead
expenses, such as legal fees, telephone and computing services, and rent.
These costs do not include, however, some costs of returning a claimant to
work, such as costs of return- to- work services provided by vendors. For
example, one insurer told us that its average cost per claim for using
vendor services to return an employee to work was about $470. Included in
this calculation are individuals with disabilities that are less severe than
those of individuals who qualify for SSA disability benefits. The insurer
told us that the average cost of returning an employee to work could be
higher for individuals with disabilities severe enough to qualify for SSA
disability benefits.

focusing on return to work costing even more to manage. 50 Similarly,
another insurer told us that it spent 10 times more to manage claims that
required an active intervention strategy than it did to manage stable and
mature claims.

Regardless of the category into which a claim is placed, the claims manager
is responsible for identifying the appropriate experts and involving them in
the management of the claim as an essential element of developing and
implementing a customized claims management strategy. The claims manager may
informally use the assistance of experts or hold an interdisciplinary team
meeting, including clinical and rehabilitation experts, to obtain advice on
developing the claims management strategy and help in determining which
specialized experts need to be deployed to manage the claim. Further, if the
claims manager refers the claim to a specialist, that specialist may
determine that additional expertise is required as well. But the insurers
told us that they escalate a claim to staff with progressively more training
and specialization, and thus higher cost, only if needed to resolve
increasingly complex claims management issues.

Moreover, to ensure that staff are utilized cost- effectively, the private
insurers said that they compute the return accruing from investing in
return- to- work resources for a particular claimant. For example, for
claimants who were successfully returned to work, one insurer reported
realizing a return of $90 in benefit savings for each dollar invested in
vendor services for rehabilitation. 51 Another insurer estimated that it
invests on average between about $60 and $1, 900 to successfully return a

50 In addition, the same company reported that the annual administrative
cost for intake and triage of claims to the correct staff for claims
management was about $18 per claim. 51 These data, however, are incomplete
because they do not include the costs associated with claimants who received
assistance but were unable to return to work. In addition, the data reflect
costs for some claimants whose disabilities are less severe than those of
SSA's disabled beneficiaries. The insurer told us that the cost for
returning claimants with more severe disabilities to work might be higher.

claimant to work. 52 In addition, the insurers compare the amount invested
in staff resources with the estimated gross savings they expect to accrue
over the life of the claim from returning an average claimant to work, which
range from $25,000 to $40,000. 53

Other Countries Also Use Other countries' social insurance offices also call
upon various specialists,

Specialized Staff to Return such as physicians, vocational experts, and
psychologists, in the process of

Claimants to Work evaluating and enhancing a person's ability to work. If
the needed expertise

is unavailable in- house, the social insurance agency may purchase the
necessary services from other organizations. The expertise applied is
decided on a case- by- case basis depending on the case's complexity. For
example, the social insurance offices in Sweden are responsible for working
with the regional and local employment and rehabilitation offices to
determine the appropriate types of rehabilitation services for a claimant.
Medical assessments of work capacity in Germany and The Netherlands may also
be supplemented by advice from vocational or other experts.

Social insurance offices in Germany and Sweden select the appropriate
staffing and services to dedicate to particular cases on the basis of the
likelihood of a successful outcome. The staff assignments made and the
return- to- work actions taken by the social insurance offices depend on an
assessment of each applicant's potential for returning to work. In complex
cases of potential long- term disability, more extensive evaluations
involving psychologists and vocational specialists may be conducted to
assess the work capacity of an applicant. Officials explained that, in
Germany, medical rehabilitation is provided before an applicant's condition
is assessed to determine whether vocational rehabilitation is necessary.
Officials also said that only if successful rehabilitation seems unlikely,
or if

52 The insurer bases the costs on the average hourly salary for a vocational
rehabilitation expert and the average amount of time this expert spends in
returning a claimant to work in the following situations: (1) return to work
with the same employer, with job modifications-$ 58. 90; (2) return to work
with the same employer and an alternative job- $106. 02; and return to work
with a different employer, with or without retraining-$ 1,884. 80. These
costsare only forthoseclaimantswhowere successfullyreturnedtowork. If
claimants who did not return to work were included in the cost estimate, the
cost would increase. Moreover, the cost might also increase if the claimants
considered were only those with severe disabilities.

53 Two insurers calculated average savings from returning a claimant to work
as, respectively, nearly $34, 000 and about $40,000. The third insurer
calculated the average savings in lifetime benefits for returning to work a
55- year- old private disability beneficiary who also receives DI to be
about $25, 000.

rehabilitation has been provided without success, will the social insurance
offices in Germany and Sweden typically grant the person long- term
disability benefits. Moreover, officials told us that once an individual is
granted long- term benefits because he or she is considered too severely
disabled to benefit from services, the social insurance offices rarely
reassess the person's return- to- work potential and generally do not offer
any return- to- work services or benefits.

The Netherlands also dedicates resources to evaluating return- to- work
potential and providing rehabilitation services on the basis of the
particular return- to- work potential and needs of individuals. But unlike
Germany and Sweden, The Netherlands offers vocational rehabilitation to
disability beneficiaries who choose to pursue a work goal even after they
are granted long- term benefits.

SSA Staff Resources Are In contrast to the private insurers and the foreign
social insurance offices,

Not Focused on Returning SSA requires staff who make determinations only to
assess the eligibility of

Claimants to Work applicants to receive cash benefits and not to assess what
is needed for an

individual to return to work or to help an individual with work capacity to
return to work. Neither does SSA provide staff to monitor applicants' or
beneficiaries' medical treatment. To make initial benefit eligibility
determinations, SSA relies on teams comprising a disability examiner and a
medical or psychological consultant. Since SSA's teams do not carry out the
variety of roles related to return to work that teams in the private and
foreign disability systems do, SSA does not require that these positions be
staffed with individuals with vocational skills and expertise. However,
under the Ticket to Work Act, beneficiaries who voluntarily choose to
attempt a return to work may tap into vocational expertise outside SSA that
could provide the additional services, expertise, and supports to help them
in their effort, but only after benefit award.

Moreover, while SSA funds the state DDS agencies that perform eligibility
determinations under contract with SSA, SSA's regulations delegate authority
to each DDS to set hiring policies and determine how to organize staff
charged with carrying out the eligibility assessment function. Consequently,
in contrast to the standardized hiring practices used by the private
insurers, considerable variation can exist among the states in the requisite
qualifications for hiring key staff. For example, among the DDSs, the
required educational background for disability examiners ranges from a high
school diploma, to some college, to a college degree. In addition, SSA
separates beneficiaries into groups according to their likelihood of medical

improvement for the purpose of assessing continuing eligibility for
benefits, in accordance with law and regulation. 54 In contrast to practices
of the private insurers and foreign social insurance offices, SSA does not
separately evaluate whether a beneficiary has the potential to return to
work.

Conclusions Return- to- work practices used in the U. S. private sector and
in other countries reflect the understanding that some people with
disabilities can

and do return to work. In 1996, we recommended that SSA place greater
priority on helping disabled beneficiaries return to work. We also
recommended that the agency develop a comprehensive strategy for this
effort. While SSA has begun to focus more on return to work, it has yet to
adopt a comprehensive strategy for implementing this new approach. For
example, it has yet to integrate its return- to- work efforts with its
initiatives to improve the disability decision- making process. Moreover,
although the Ticket to Work Act is expected to enhance work incentives for
people with disabilities, fundamental policy weaknesses in the DI and SSI
programs remain unchanged. As we have reported in the past, these weaknesses
include an eligibility determination process that concentrates on
applicants' incapacities, an “all- or- nothing” DI benefits
structure, and return- to- work services offered only after a lengthy
determination process.

We continue to believe that opportunities exist for enabling more of SSA's
disabled beneficiaries to reduce or eliminate their dependence on cash
benefits, and that SSA could do this without jeopardizing the availability
of benefits for people who cannot work. We also continue to believe SSA
still is not placing enough priority on identifying and enhancing the work
potential of its beneficiaries with disabilities and needs to develop a
comprehensive return- to- work strategy. In developing such a strategy, SSA
can supplement what it learns from the experiences of the Ticket to Work
demonstrations with the return- to- work approaches of other disability
systems to identify elements of a new system that could help each individual
realize his or her productive potential. Having identified these elements,
SSA would then be in a position to determine the legislative and regulatory
changes needed to test and evaluate their effectiveness.

54 The law contains several exceptions that allow benefits to be terminated
even when a person's medical condition has not improved. For example,
benefits may be disallowed when new or improved diagnostic techniques reveal
that the impairment is less disabling than originally determined.

We acknowledge that limited data exist on the cost- effectiveness of the
return- to- work approaches used in the other systems we examined. In
addition, SSA may face greater difficulty in returning some of its
beneficiaries to work than private sector insurers do, since its programs
cover a broader population than the private insurers. Moreover, significant
differences exist between SSA's disability programs and those of private
sector disability insurers and social insurance programs in other countries.
Many of these differences can be attributed to the particular laws and
regulations governing the programs. Despite the data limitations and the
differences between disability systems, initial return- to- work rates of U.
S. private insurers are promising, and the experiences of the other
countries show that return- to- work strategies can apply to a broad
population with a wide range of skills and disabilities. Nevertheless,
adopting a comprehensive return- to- work strategy will require fundamental
changes to the underlying philosophy and direction of the DI and SSI
programs, including the determination of disability. Policymakers will need
to carefully weigh the implications of such changes.

Agency Comments and In commenting on a draft of this report, SSA agreed that
the return- to- work

Our Response practices that other disability programs follow provide useful
information

and that emphasis should be placed on helping beneficiaries with
disabilities return to work. However, the agency had three concerns with the
report. First, it disagreed with our assertion that it needs to develop a
comprehensive return- to- work strategy for its disability programs, stating
that it is already devoting substantial resources to return to work. For
example, SSA cited a number of activities that it has under way or is
planning to implement, including working with the Congress to develop and
implement the Ticket to Work Act. Second, the agency stated that the DI and
SSI policies discussed in the report are specified by the Social Security
Act and that changing them would require new legislation. Finally, SSA said
that differences between its programs and those of U. S. private insurers
and other countries' social insurance agencies might limit the extent to
which specific practices of these disability systems are transferable to the
DI and SSI programs. SSA also made a few technical comments, which we
incorporated where appropriate. (SSA's comments appear in app. I.)

We acknowledge throughout this report SSA's return- to- work activities and
the potential for improvements under the Ticket to Work Act, such as
expanding the availability of vocational rehabilitation. Although these are
steps in the right direction, fundamental policy weaknesses- particularly

at the front end of the eligibility assessment process- remain unchanged by
the act and SSA's activities. These weaknesses include, as we explain in the
report, an eligibility assessment process that encourages applicants to
focus on their incapacities and return- to- work assistance that occurs only
after an often lengthy eligibility process, if at all. Indeed, although SSA
stated that the Social Security programs are programs of last resort, for
some applicants and beneficiaries these programs are the sole option for
return- to- work assistance and medical care. Although these individuals may
have a variety of needs for supports and services other than permanent cash
payments to help them make the transition to the workforce, eligibility for
noncash services is, paradoxically, linked to emphasizing one's limitations
and de- emphasizing any work capacity. Because of the continuing existence
of such structural program weaknesses, we believe, as we have concluded in
this and earlier reports, that SSA's return- to- work activities do not
constitute the comprehensive strategy necessary to reorient the agency's
policies and practices to focus on work, while not jeopardizing benefits for
people who cannot work. Absent a comprehensive strategy, SSA lacks a road
map for enhancing the productive capacity of its applicants and
beneficiaries and thus risks spending substantial resources in a piecemeal
fashion with little likelihood of significantly improving outcomes.

With regard to the concern about the need for legislative change, we have
always recognized that new legislation may be in order to reorient the DI
and SSI programs toward return to work and have called for SSA to identify
the legislative changes needed to implement such a reorientation. While some
aspects of the current program are based in law, however, others are set
forth in agency regulations. For example, the sequential process used by SSA
to determine whether applicants meet the Social Security Act's definition of
disability is set forth in regulation- not in law. Important aspects of the
program could, therefore, be modified by the agency without legislation.

Regarding SSA's third concern, we have long acknowledged, in this and other
reports, that the DI and SSI programs differ in a number of ways from those
of private insurers and social insurance programs in other countries. For
example, SSA's programs cover a broader population than the private insurers
do. Although a significant portion of the long- term disability
beneficiaries of the private insurers we examined also received DI benefits,
we sought to compensate for the differences between SSA's beneficiaries and
those of the private sector by examining the return- to- work approaches of
other countries' disability systems as well. These systems,

like SSA's disability system, cover a broad population with a wide range of
work experiences, skills, and disabilities. We have also acknowledged that
other significant differences exist between SSA's disability programs and
those of the other systems we examined, such as the availability of
universal health insurance in some countries. But the existence of these and
other differences among the systems should not be construed to imply that
our federal programs have little to learn from the approaches of other
systems. Indeed, SSA itself has long had an interest in disability programs
in other countries and their rehabilitation and return- to- work efforts.

SSA, in its March 11, 1999, strategic plan for the disability programs, said
that many beneficiaries with disabilities want to work and become
independent and many can work despite their impairments if they receive the
supports they need. 55 To tap this potential, we believe that a
comprehensive return- to- work strategy addressing the fundamental policy
weaknesses in the DI and SSI programs is needed. But, in developing such a
strategy, we do not advocate either wholesale or immediate adoption of these
systems' approaches. Rather, we suggest a carefully managed approach, in
which SSA builds on the experiences of other disability systems (while
considering the differences among the systems) and the results of the Ticket
to Work demonstrations to identify elements of a new system that will help
each person realize his or her productive potential. In thinking through
such a system, SSA should first identify the elements of a model system and
then determine the legislative and regulatory changes needed to test and
evaluate effectiveness of these elements. Through such testing and
evaluation, SSA, as the primary manager of multibillion- dollar programs and
as the entity with fiduciary responsibility for the trust funds, could take
the lead in developing the evidence it needs to suggest legislative and
regulatory changes necessary to develop a disability system for the 21st
century.

We are sending copies of this report to the Honorable Kenneth S. Apfel,
Commissioner of Social Security; appropriate congressional committees; and
other interested parties. We will also make copies available to others on
request.

55 SSA, Social Security and Supplemental Security Income Disability
Programs: Managing for Today; Planning for Tomorrow( Baltimore, Md.: SSA,
Mar. 11, 1999).

If you or your staff have any questions concerning this report, please call
me at (202) 512- 7215 or Carol Dawn Petersen at (202) 512- 7066. Another GAO
contact and staff acknowledgments are listed in appendix II.

Barbara D. Bovbjerg Director, Education, Workforce,

and Income Security Issues

Appendi xes Comments From the Social Security

Appendi xI Administration

Now on p. 14. Nowon pp.8 and 40.

Now on p. 34.

Appendi xII

GAO Contact and Staff Acknowledgments GAO Contact Barbara H. Bordelon, (202)
512- 4427 Staff

Kelsey M. Bright, Julie M. DeVault, William E. Hutchinson, and Mark
Acknowledgments

Trapani made key contributions to this report.

Related GAO Products SSA Disability: Other Programs May Provide Lessons for
Improving Returnto- Work Efforts( GAO/ T- HEHS- 00- 151, July 13, 2000).

Social Security Disability Insurance: Raising the Substantial Gainful
Activity Level for the Blind( GAO/ T- HEHS- 00- 82, Mar. 23, 2000).

Private Disability Insurance: Employer- Sponsored Plans( GAO/ HEHS- 00- 18R,
Nov. 5, 1999).

Social Security Disability: Multiple Factors Affect Return to Work( GAO/
THEHS- 99- 82, Mar. 11, 1999).

Social Security Disability Insurance: Factors Affecting Beneficiaries'
Return to Work( GAO/ T- HEHS- 98- 230, July 29, 1998).

Social Security Disability Insurance: Multiple Factors Affect Beneficiaries'
Abilityto Return to Work( GAO/ HEHS- 98- 39, Jan. 12, 1998).

Social Security Disability: Improving Return- to- Work Outcomes Important,
but Trade- Offs and Challenges Exist( GAO/ T- HEHS- 97- 186, July 23, 1997).

Social Security: Disability Programs Lag in Promoting Return to Work (GAO/
HEHS- 97- 46, Mar. 17, 1997).

SSA Disability: Return- to- Work Strategies From Other Systems May Improve
Federal Programs( GAO/ HEHS- 96- 133, July 11, 1996).

Social Security: Disability Programs Lag in Promoting Return to Work (GAO/
T- HEHS- 96- 147, June 5, 1996).

SSA Disability: Program Redesign Necessary to Encourage Return to Work (GAO/
HEHS- 96- 62, Apr. 24, 1996).

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Appendix I

Appendix I Comments From the Social Security Administration

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Appendix I Comments From the Social Security Administration

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Appendix I Comments From the Social Security Administration

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Appendix II

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United States General Accounting Office Washington, D. C. 20548- 0001

Official Business Penalty for Private Use $300

Address Correction Requested Bulk Rate

Postage & Fees Paid GAO Permit No. GI00
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