    Social Security Disability Insurance: SSA Actions Could Enhance
    Assistance to Claimants with Inflammatory Bowel Disease and Other
    Impairments (31-MAY-05, GAO-05-495).

    Advocates for patients with inflammatory bowel disease (IBD)
    believe that the Social Security Administration's (SSA) process
    for determining eligibility for Disability Insurance (DI) may
    treat some claimants unfairly. As a result, claimants with IBD
    believe they are likely to be denied benefits at the initial
    decision and reconsideration levels, making it necessary for them
    to appeal to SSA's hearings level to have their claims allowed.
    This congressionally mandated study focuses on (1) how SSA
    evaluates claims involving IBD to establish disability under
    Title II of the Social Security Act and (2) what unique
    challenges claimants with IBD encounter when applying for DI
    benefits, and what actions, if any, SSA has taken to address
    these challenges.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-05-495
        ACCNO:   A25379
      TITLE:     Social Security Disability Insurance: SSA Actions Could
    Enhance Assistance to Claimants with Inflammatory Bowel Disease
    and Other Impairments
         DATE:   05/31/2005
      SUBJECT:   Aid for the disabled
    	     Claims
    	     Claims adjudicators
    	     Claims processing
    	     Claims settlement
    	     Comparative analysis
    	     Decision making
    	     Disability benefits
    	     Disability insurance
    	     Diseases
    	     Eligibility determinations
    	     Evaluation criteria
    	     Persons with disabilities
    	     Program management
    	     Social Security Disability Insurance
    	     Program

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    GAO-05-495

    United States Government Accountability Office

    GAO

                           Report to Congressional Committees

    May 2005

    SOCIAL SECURITY DISABILITY INSURANCE

    SSA Actions Could Enhance Assistance to Claimants with Inflammatory Bowel
                             Disease and Other Impairments

    GAO-05-495

    [IMG]

    May 2005

    SOCIAL SECURITY DISABILITY INSURANCE

    SSA Actions Could Enhance Assistance to Claimants with Inflammatory Bowel
    Disease and Other Impairments

      What GAO Found

    SSA evaluates DI claims involving IBD just as it does all claims, using a
    fivestep sequential evaluation process to determine whether: (1) the
    individual is working and earning an amount exceeding established
    thresholds, (2) the impairment or combination of impairments significantly
    limits a person's physical or mental ability to perform basic work
    activities, (3) the individual's impairment meets or equals a
    pre-established list of the medical criteria for impairments considered
    severe enough to prevent an individual from earning wages above the
    established threshold, (4) the claimant can return to previous work based
    on what the individual can still do in a work setting despite physical or
    mental limitations, or his or her "residual functional capacity," and (5)
    the claimant can do any work in the economy. As claims move through the
    five-step process, their assessment requires additional evidence and
    increasingly complex judgments on the part of adjudicators. For example,
    at step three, claimants with IBD who are diagnosed with Crohn's disease
    would meet the medical criteria if their weight fell below the minimum on
    SSA's weight table. In contrast, to determine the residual functional
    capacity of claimants with IBD at steps four and five, SSA adjudicators
    must assess claimants' mental and physical capacity and make judgments
    regarding allegations of pain and fatigue. Adjudicators at the initial,
    reconsideration, and hearings levels use the same five-step process,
    although differences exist between the levels that may affect decisions.
    For example, claimants may be represented by an attorney or nonattorney at
    the hearings level.

    While claimants with IBD are somewhat less likely to be allowed DI
    benefits than claimants with other impairments, their experiences applying
    for disability benefits are not unique, and SSA has efforts under way that
    may address some claimant concerns. When we analyzed DI decisions in 2003
    by decision-making levels, we found that claimants with IBD, like many
    others, experienced lower allowance rates at the initial and
    reconsideration levels compared to the hearings level, although the
    difference between the levels was more pronounced for claimants with IBD.
    Lower allowance rates at the initial levels and higher allowance rates at
    the hearings level may reflect challenges that claimants with IBD share
    with many other claimants in applying for disability benefits. For
    example, both claimants with IBD and other claimants are unlikely to be
    allowed at step five of the process at the initial levels but not at the
    hearings level. SSA is pursuing efforts that may address some claimant
    concerns. For example, the agency is currently updating the medical
    criteria used for many impairments, including IBD, and is proposing
    changes to its decision-making process that may improve consistency
    between decision-making levels. SSA is also trying to improve claimants'
    understanding of the disability claims evaluation process, but lacks
    assurance that the majority of claimants who file in person or over the
    phone understand and provide information critical to SSA's assessment of
    their claims as part of steps four and five of the process.

    United States Government Accountability Office

    Contents

      Letter

    Results in Brief
    Background
    SSA Evaluates IBD Claims Using the Same Evaluation Process as

    for All Claims

    Claimants with IBD and Other Impairments Face Similar Challenges Applying
    for DI, and SSA Efforts May Address Some Claimant Concerns

    Conclusions
    Recommendations
    Agency Comments and Our Evaluation

                                           1

                                          2 5

                                           7

    12 23 24 25

              Appendix I                Scope and Methods                      27
                                           Data Sources                        27
                                              Scope                            27
                                         Data Reliability                      27
                                       Methods of Analysis                     28
              Appendix II                Agency Comments                       32
                                           GAO Comments                        37

      Tables

    Table 1: Comparison of Overall Allowance Rates for IBD versus Other
    Impairments 13 Table 2: Allowance Rates for Claimants with IBD versus
    Other Claimants by Decision-Making Level 14 Table 3: Allowance Rates for
    Disability Decisions at Step Three by Decision-Making Level 15 Table 4:
    Comparison of Allowance Rates at Step Three for IBD versus Other
    Impairments by Decision-Making Level 16 Table 5: Allowance Rates for
    Disability Decisions at Step Five by Decision-Making Level 17 Table 6:
    Types of Comparisons Used in Report for IBD versus Other Impairments 30

      Figure

    Figure 1: Five-Step Sequential Evaluation Process Used at Initial,
    Reconsideration and Hearings Levels to Determine Disability

    Abbreviations

    ADL activities of daily living
    ALJ administrative law judge
    CCS Case Control System
    DDS Disability Determination Services
    DI Disability Insurance
    IBD inflammatory bowel disease
    NAS National Academy of Sciences
    RFC residual functional capacity
    SGA substantial gainful activity
    SSA Social Security Administration
    SSAB Social Security Advisory Board
    SSI Supplemental Security Income

    This is a work of the U.S. government and is not subject to copyright
    protection in the United States. It may be reproduced and distributed in
    its entirety without further permission from GAO. However, because this
    work may contain copyrighted images or other material, permission from the
    copyright holder may be necessary if you wish to reproduce this material
    separately.

    United States Government Accountability Office Washington, DC 20548

    May 31, 2005

    The Honorable Charles E. Grassley
    Chairman
    The Honorable Max Baucus
    Ranking Minority Member
    Committee on Finance
    United States Senate

    The Honorable Joe Barton
    Chairman
    The Honorable John D. Dingell
    Ranking Minority Member
    Committee on Energy and Commerce
    House of Representatives

    The Honorable William M. Thomas
    Chairman
    The Honorable Charles B. Rangel
    Ranking Minority Member
    Committee on Ways and Means
    House of Representatives

    In recent years, concerns have been raised that the process the Social
    Security Administration (SSA) uses to determine which claimants are
    eligible for Disability Insurance (DI) benefits may place some individuals
    at a disadvantage for receiving the benefits to which they are entitled.
    For
    example, advocates have recently stressed that the process of qualifying
    for DI benefits may treat some claimants with inflammatory bowel disease
    (IBD) unfairly. They believe that SSA field staff are not familiar with
    the
    nature of their illness and that the medical criteria used to establish
    disability for IBD patients do not take into account the specifics of
    their
    illness, such as its episodic and unpredictable nature. As a result,
    claimants with IBD believe that they are likely to be denied benefits at
    the
    initial decision and reconsideration levels, making it necessary for them
    to
    appeal to SSA's hearings level to have their claims allowed. This appeal
    delays the receipt of benefits and may require claimants to pay attorney
    fees. These concerns have arisen in spite of efforts by SSA, which manages
    the DI program and paid out $78.2 billion to 7.9 million beneficiaries in
    2004, to ensure that all claimants are assessed in a consistent manner.

    Partially in response to these concerns, the Congress passed the Research
    Review Act of 2004 (Pub. L. No. 108-427), which mandated that GAO study
    problems encountered by patients with IBD when applying for DI benefits
    under Title II of the Social Security Act and identify possible
    recommendations to improve the application process for these patients.1

    This report will discuss (1) how SSA evaluates claims involving IBD to
    establish disability under Title II of the Social Security Act and (2)
    what unique challenges claimants with IBD encounter when applying for DI
    benefits, and what actions, if any, SSA has taken to address these
    challenges. To determine whether claimants with IBD were in fact treated
    differently than claimants with other impairments, we analyzed SSA data on
    all DI decisions made at three decision-making levels (initial,
    reconsideration, and hearings) in 2003 and compared allowance rates for
    claimants with IBD against those for claimants with other impairments.2 We
    also reviewed a small, nonrepresentative sample of cases to better
    understand how both the claimants and SSA documented claims involving IBD.
    To identify problems IBD patients have encountered, we interviewed
    representatives of IBD patient advocacy groups such as the Crohn's and
    Colitis Foundation of America and the Digestive Disease National
    Coalition. We discussed these issues with officials at SSA and selected
    stakeholders with perspective on this issue, such as the National
    Association of Disability Examiners, the National Council of Disability
    Determination Directors, and the National Organization of Social Security
    Claimants' Representatives. To better understand the nature of the
    impairment and the experiences of those in the IBD community who apply for
    DI, we reviewed literature on IBD and SSA's application process and
    criteria as they pertain to claimants with IBD. We performed reliability
    tests on selected data for calendar year 2003 and found the data
    sufficiently reliable for use in this report. We conducted our work
    between January 2005 and May 2005 according to generally accepted
    government accounting standards.

    SSA evaluates claims involving IBD just as it does all claims, using a
    fivestep sequential evaluation process to determine if the claimant's
    impairment or combination of impairments qualifies as a disability under

    1The Research Review Act of 2004 also mandated that GAO report on the
    Medicare and Medicaid coverage standards for certain therapies used by
    patients with IBD.

    2See appendix I for a detailed description of the methods we used to
    analyze 2003 data.

      Results in Brief

    Title II of the Social Security Act. For all claims, adjudicators
    establish first that the individual is not working and earning an amount
    exceeding established thresholds (engaged in "substantial gainful
    activity"), and second, whether the impairment(s) significantly limits the
    individual's physical or mental ability to perform basic work activities.
    Then, at step three of the process, the individual's impairment(s) is
    compared to preestablished medical criteria in SSA's Listing of
    Impairments. Listed impairments are considered severe enough to prevent an
    individual from engaging in any gainful activity. For all claims, if the
    severity and duration of the individual's impairment(s)-as documented by
    medical examinations, laboratory results, and other required evidence-meet
    or are equivalent to (equal) the criteria for an impairment on that list,
    the adjudicator would find the individual to be "disabled" under SSA's
    rules and would allow the claim. For example, a claimant with IBD who is
    diagnosed with Crohn's disease and whose weight is below the minimum on
    SSA's weight table would be "disabled" under SSA's rules. Claims that do
    not meet or equal the medical criteria move to step four, where
    adjudicators determine if the claimants can do previous work based on
    their "residual functional capacity"; i.e., what they can still do in a
    work setting despite physical or mental limitations, or their "residual
    functional capacity." In assessing the residual functional capacity of a
    claimant with IBD, for example, SSA might assess the claimant's ability to
    stand, sit, and lift, as well as his or her mental capacity, pain, and
    fatigue. If the claimant cannot return to previous work, SSA adjudicators
    move to step five to determine if the claimant can do any work in the
    national economy, based on his or her residual functional capacity and the
    "vocational factors" of age, education, and work experience-in addition to
    residual functional capacity. As claims move through the five-step
    process, the assessments generally require additional evidence and involve
    increasingly complex judgments on the part of adjudicators. For example,
    adjudicators might need additional information on daily activities and
    symptoms, such as fatigue, for claimants with IBD whose impairment(s) does
    not meet or equal the medical criteria of one of SSA's listed impairments.
    The adjudicators will weigh this information along with medical evidence
    to assess how claimants' impairments might limit their ability to function
    in a work setting. Adjudicators at the initial, reconsideration, and
    hearings levels use the same five-step process, although other differences
    exist between the decision-making levels that may affect how adjudicators
    decide on claims. For example, claimants may introduce new evidence and
    allegations at each stage of the appeals process and are more likely to be
    represented by an attorney or nonattorney during an appeal.

    While claimants with IBD are somewhat less likely to be allowed than
    claimants with other impairments, their experiences applying for
    disability benefits are not unique relative to others, and SSA has several
    efforts under way that may address some claimant concerns. When we
    analyzed disability decisions made in 2003 for all decision-making levels
    combined, we found that claimants with IBD had a somewhat lower overall
    allowance rate than that of all other claimants (33 percent versus 39
    percent). When we made this same comparison for each decisionmaking level
    separately, we found that, much like for other claimants, the allowance
    rate for claimants with IBD was lower at the initial and reconsideration
    levels compared to the hearings level, although the difference in
    allowance rates between levels was greater for claimants with IBD. Lower
    allowance rates at the initial and reconsideration levels and higher
    allowance rates at the hearings level may reflect challenges that
    claimants with IBD share with many other claimants in applying for
    disability benefits. For example, both claimants with IBD and many
    claimants with other impairments are less likely to be allowed at step
    five of the process at the initial and reconsideration levels, but more
    likely to be allowed on this basis at the hearings level. SSA is pursuing
    efforts that may address some of the concerns of individuals with IBD and
    other claimants. For example, the agency is currently updating its Listing
    of Impairments, including the listings for IBD, and is taking into account
    the views of the public in so doing. The agency is also proposing changes
    to its decision-making process that may improve consistency between the
    initial and reconsideration levels and the hearings level. SSA has also
    taken steps to improve all claimants' understanding of the disability
    claims evaluation process. However, the agency's recently developed
    "Disability Starter Kit" and other information available to the majority
    of claimants who apply for benefits in person or over the phone do not
    explain the types and importance of information needed to assess claims at
    steps four and five of the process.

    GAO is making several recommendations in this report to the Commissioner
    of Social Security that will help ensure that claimants with IBD and other
    claimants are made aware early in the process of the types and importance
    of information claimants must provide with their application. In
    commenting on the draft of this report, SSA agreed with our
    recommendations but also expressed some concerns. For example, SSA stated
    that our report discussed two issues the agency considered irrelevant to
    our study of DI claimants with IBD-listings for impairments other than
    IBD, and the decline in DI allowances based on medical criteria. We
    modified the text to address some of the agency's concerns, but we believe
    that a discussion of both of these issues is relevant because

    Background

    it provides perspective on whether claimants with IBD are treated
    differently than claimants with other impairments.

    DI is the largest federal program providing cash assistance to people with
    disabilities. Established in 1956, DI provides monthly payments to workers
    with disabilities (and their dependents or survivors) under the normal
    retirement age who have enough work experience to qualify for disability
    benefits.3 The Social Security Act defines disability as the inability to
    engage in any substantial gainful activity by reason of any medically
    determinable physical or mental impairment(s) (hereafter simply referred
    to as "impairment") which is expected to result in death or which has
    lasted or can be expected to last for a continuous period of not less than
    12 months.4

    IBD encompasses two chronic autoimmune diseases of the intestinal tract:
    ulcerative colitis and Crohn's disease. The two diseases are often grouped
    together as IBD because of their similar symptoms, but each disease has
    very different surgical options, and may be treated with a spectrum of
    diverse medications. Common symptoms of IBD include, but are not limited
    to: abdominal pain, weight loss, fever, rectal bleeding, skin and eye
    irritations, fatigue, and diarrhea. IBD is characterized by intervals of
    active disease, or "flares," and periods of remission. Although it is
    estimated that as many as one million Americans suffer from a form of IBD,
    most people with IBD are able to work, and few apply for DI benefits. In
    2003, less than 1 percent of DI decisions (nearly 7,000) involved IBD
    patients.

    To obtain DI benefits, a claimant must provide information through an
    application and adult disability report5 filed on line, in an interview by
    telephone, or in person at a Social Security office. For claims taken by
    phone or in person, SSA field staff are responsible for assisting the
    claimant in filling out the application form and the adult disability
    report

    3SSA also manages Title XVI of the Social Security Act, which created the
    Supplemental Security Income (SSI) program in 1972. SSI is a means-tested,
    income assistance program that provides monthly payments to adults or
    children who are blind or who have other disabilities and whose income and
    assets fall below a certain level.

    4The SSI program uses the same definition of disability as the DI program.

    5For all disability claims, claimants must fill out the disability
    application form and the adult disability report.

    with complete information and for noting any relevant information about
    the claimant observed during the interview.

    If the claimant meets the nonmedical eligibility criteria, the field staff
    forwards the claim to the appropriate Disability Determination Services
    (DDS) office. DDS staff-generally a team comprising a disability examiner
    and a medical consultant and, sometimes, a vocational specialist-review
    the claimant's medical and other evidence, obtaining additional evidence
    as needed to assess whether the claimant's impairment satisfies program
    requirements, and make the initial disability decision. If the claimant is
    not satisfied with this decision, the claimant may request a
    reconsideration of the decision within the same DDS.6 Another DDS team
    will review the documentation in the case file, as well as any new
    evidence the claimant may submit, and determine whether the claimant meets
    SSA's definition of disability.

    If the claimant is not satisfied with the reconsideration determination,
    he or she may request a hearing before an administrative law judge (ALJ).
    The ALJ conducts a new review of the claimant's file, including any
    additional evidence the claimant submitted after the DDS decision. At a
    hearing, the ALJ may hear testimony from the claimant, medical experts on
    the claimant's medical condition, and vocational experts regarding whether
    the claimant could perform work he or she has done in the past or could
    perform other work currently available in the national economy. The
    majority of claimants are represented at these hearings by an attorney or
    other representative.7

    SSA has faced long-standing problems in administering this complex,
    multilevel decision-making process. These problems center around a process
    that can be confusing and unwieldy, with many applicants appealing and
    waiting a long time for a final disability decision. In addition, many
    within and outside of SSA have long believed that differences between the
    adjudication levels might cause inconsistencies in

    6In September 2003, SSA's Commissioner proposed eliminating
    reconsideration and the Appeals Council as part of a large set of
    revisions to the disability decision-making process.

    7Under the current process, if the claimant is not satisfied with the
    ALJ's decision, he or she may request a review of the decision by SSA's
    Appeals Council, which is the final administrative appeal within SSA. If
    the Appeals Council denies the request for review or the claimant is not
    otherwise satisfied with the Appeals Council's decision, the claimant may
    appeal to a federal district court. The claimant can continue legal
    appeals to the U.S. Circuit Court of Appeals, and ultimately to the
    Supreme Court of the United States.

    decision making, in turn resulting in too many claims being initially
    denied and then allowed upon appeal and delaying the time it may take for
    some deserving claimants to receive a final agency decision. Concerned
    with the length of time it takes disability claimants to receive a final
    agency decision, SSA has cited "improving service in its disability
    programs" as one of its highest priorities and established "making the
    right decision in its disability process as early as possible" as one of
    its strategic objectives.

    SSA evaluates claims involving IBD just as it does all claims, using a
    sequential evaluation process to determine if the claimant's impairment
    qualifies as a disability under SSA's definition.8 This process-which is
    used at all adjudication levels-consists of five distinct steps, wherein
    the claimant's employment status, medical condition, and functional
    limitations are considered. Figure 1 below gives an overview of how a
    claim moves through the five-step evaluation process.

      SSA Evaluates IBD Claims Using the Same Evaluation Process as for All Claims

    8The sequential claims evaluation process applies equally to DI and SSI
    claims.

    Figure 1: Five-Step Sequential Evaluation Process Used at Initial,
    Reconsideration and Hearings Levels to Determine Disability

    Source: GAO.

    The first two steps of SSA's evaluation process allow SSA to screen out
    cases where the claimant clearly does not meet SSA's definition of

    disability. In step one, field staff determine whether the individual is
    engaged in substantial gainful activity.9 If so, the individual does not
    meet the definition of disability and the claim is denied. If not, the
    claim moves to step two, and is forwarded to the DDS office, where the
    adjudicator obtains medical and other evidence and considers the severity
    of the impairment. If the impairment does not significantly limit the
    person's physical or mental ability to perform basic work activities, the
    impairment is considered not severe and the claim is denied. For example,
    a diagnosis of IBD alone is not sufficient; the condition must be severe,
    i.e., it must limit the person's ability to perform basic work activities,
    for the claim to be considered further. If the impairment is severe, the
    claim moves to step three.

    At step three, the impairment is evaluated to see if it meets or equals in
    severity the medical criteria in SSA's Listing of Impairments (the
    listings). The listings describe impairments considered severe enough to
    prevent an individual from engaging in any gainful activity. If the
    severity and duration of the claimant's impairment, as documented by
    medical examinations, laboratory results, and other evidence meet the
    criteria of a listing or is equivalent in severity to a listing, the claim
    is allowed. For a claimant with IBD, there are different ways of meeting
    or equaling the medical criteria. For example, a claimant diagnosed with
    Crohn's disease whose weight is below the minimum weight on SSA's
    established weight tables would be allowed.

    For all claimants, if the impairment does not meet or equal the criteria
    of a listing, the adjudicator must assess the claimant's "residual
    functional capacity" (RFC) to determine what an applicant can still do,
    despite physical and mental limitations, in a regular full-time work
    setting. The claim then moves to step four, where the adjudicator
    determines whether the claimant has the RFC to do any past relevant work.
    Assessing physical RFC requires adjudicators to judge individuals' ability
    to physically exert themselves in a variety of activities (such as
    sitting, standing, walking, lifting, carrying, pushing, and pulling) and
    to perform manipulative or postural functions (such as reaching, handling,
    stooping, and crouching). Assessing mental RFC requires adjudicators to
    judge, for example, the individual's ability to understand, remember, and
    carry out instructions and to respond appropriately to people and changes
    in work situations.

    9The 2005 substantial gainful activity (SGA) level for claimants who are
    not blind is $830; SGA for blind claimants is $1,380.

    Some IBD claims include allegations of pain and fatigue, which may greatly
    affect the claimant's RFC. Because these factors cannot be measured, the
    adjudicator may need to assess the "credibility" of the claimant's
    allegations by comparing such conditions or symptoms to other evidence in
    the file. If the adjudicator determines that in spite of the impairment,
    the claimant's RFC permits him or her to return to previous work, the
    claim is denied.

    On the other hand, if the adjudicator determines that the claimant's RFC
    does not permit him or her to return to past relevant work, the claim
    moves to step five, where the adjudicator determines whether the claimant
    could do any other work in the national economy, based on the claimant's
    RFC and the vocational factors of age, education, and work experience. To
    do this, the adjudicator uses a complex system of rules set out in SSA's
    regulations, including a grid of medical and vocational factors that
    provides guidance for decision making. There are three grid tables, which
    are based only on exertional limitations (sedentary, light, and medium),
    and each table provides a variety of combinations of age, education, and
    work experience. If, despite the claimant's impairment and other factors,
    the grid indicates that there are jobs the claimant could do, the claimant
    would be denied; likewise, if the grid indicates that the claimant cannot
    do other work, the claimant would be allowed. However, for the majority of
    disability decisions, the grid is used only as guidance, because many
    claimants have limitations that the grid does not capture. For example,
    severe diarrhea necessitating frequent or extended trips to the bathroom
    may greatly reduce the productivity of claimants with IBD without
    necessarily causing any exertional limitations.

    At any point after step one of the sequential evaluation, if the medical
    evidence initially provided by the claimant or obtained by the DDS is
    insufficient, the adjudicator may re-contact the claimant's own doctors or
    request a "consultative examination" paid for by SSA. If necessary-for
    example, for conditions or symptoms that are difficult to document or
    measure-the adjudicator may ask the claimant to provide more information
    by, for example, filling out a pain or fatigue questionnaire, or an
    activities of daily living (ADL) form. To corroborate a claimant's
    allegations of functional limitations, the adjudicator may ask third
    parties, such as friends or relatives, about the claimant's ability to
    perform various tasks in their daily lives. For a claimant with IBD, for
    example, the adjudicator may need such additional information to
    corroborate allegations of severe pain, fatigue, or diarrhea.

    Each step of the sequential evaluation process may require adjudicators to
    obtain and consider more and different types of evidence and to make
    increasingly complex judgments. For example, at the first step, only the
    amount of earnings is needed. In contrast, at steps four and five,
    adjudicators must evaluate medical evidence along with nonmedical
    evidence, including the claimant's activities of daily living and past
    work experience. In addition, the adjudicator may need to make difficult
    assessments of subjective factors, such as the claimant's physical or
    mental capacity with respect to a variety of settings and situations, the
    weight to place on treating source opinions, and the claimant's
    credibility with respect to allegations of pain, fatigue, and other
    symptoms.

    While the five-step evaluation process is the same at all levels, there
    are

    differences between the decision-making levels that can affect how

    adjudicators make decisions on cases. For example, a report by the Social

    Security Advisory Board (SSAB) in 200110 identified some fundamental

    differences in the decision-making process between the DDS and hearings

    levels that could potentially affect the overall consistency of disability

    decision making between the two levels, including the following:

    o  	Most DDS decisions are made without a face-to-face contact with the
    claimant, while the claimant typically appears at an ALJ hearing.

    o  	Attorneys and other representatives are typically involved at the
    hearings level, but not at the DDS levels.

    o  	The law allows claimants to introduce new evidence and allegations-of
    either new impairments or worsening of prior impairments over time-at each
    stage of the appeals process.

    o  	Different quality assurance procedures are applied to the DDS- and
    hearings-level decisions.

    10Social Security Advisory Board, Charting the Future of Social Security's
    Disability Programs: The Need for Fundamental Change (Washington, D.C.:
    January 2001).

      Claimants with IBD and Other Impairments Face Similar Challenges Applying for
      DI, and SSA Efforts May Address Some Claimant Concerns

    While claimants with IBD have somewhat lower allowance rates than other
    claimants, the experiences of these individuals are not unique relative to
    claimants with other impairments. When we compared disability decisions
    for claimants with IBD with those for other claimants, we found that much
    like other claimants, claimants with IBD had lower allowance rates at the
    DDS (initial and reconsideration) levels, but higher allowance rates at
    the hearings level, although the differences between levels are more
    pronounced for claimants with IBD. Allowance rates that are lower at the
    DDS level and higher at the hearings level may reflect challenges that
    claimants with IBD share with other claimants. For example, IBD and other
    claimants face challenges meeting or equaling SSA's medical criteria at
    step three of the process at all adjudication levels. In addition, IBD and
    other claimants are less likely to be allowed at step five of the process
    at the DDS levels compared to the hearings level. Also like many other
    claimants, claimants with IBD may not be sufficiently aware of the types
    and importance of information they need to provide to support an allowance
    at step five of the process at the DDS levels. SSA is pursuing efforts
    that may address some of the difficulties encountered by IBD and other
    claimants.

        While the Experience of Claimants with IBD Is Not Unique, Their Overall
        Allowance Rate Is Somewhat Lower Compared to Other Claimants

    Our analysis showed that, although the experience of claimants with IBD is
    not unique, they tend to be allowed at lower rates compared to many other
    claimants. For example, when we analyzed overall allowance rates,11 we
    found that claimants with IBD were allowed 33 percent of the time, whereas
    all other claimants were allowed 39 percent of the time. Because
    impairments with low allowance rates and a very large number of claims
    associated with them, such as hypertension or epilepsy, could skew these
    results, we also calculated individual overall allowance rates for IBD and
    216 other impairments to determine whether they were significantly higher
    than, lower than, or similar to the overall allowance rate for claimants
    with IBD.12 As shown in table 1, while we found that the majority of
    impairments had statistically higher overall allowance rates, many other
    impairments had similar or lower overall allowance rates.

    11To calculate overall allowance rates, we divided the number of
    allowances at all levels (initial, reconsideration, and hearings) by the
    number of decisions at all levels.

    12The number of impairments we included in this analysis (218, including
    the two IBD impairments, ulcerative colitis, and Crohn's disease) was
    determined by identifying all primary impairments listed in the 2003
    decisions, minus those involving fewer than 100 decisions in 2003.

    Table 1: Comparison of Overall Allowance Rates for IBD versus Other Impairments

                     Other impairments compared     Number of               Total
                                         to IBD    impairments          decisions
                           Significantly higher               122       1,034,956
                          Statistically similar                29          61,941
                            Significantly lower                65         885,633

    Source: GAO analysis.

    Notes: Analysis based on SSA DI disability decisions in 2003 at DDS and
    hearings levels.

    Impairments are classified as having higher, similar or lower allowance
    rates than IBD, based on results from statistical models that estimate the
    direction, size, and significance of the difference between each
    impairment and IBD. Higher and lower impairments are those whose
    difference from IBD is significant at the .05 level.

    When we analyzed allowance rates by adjudication level (DDS versus
    hearings levels), we found that, like many claimants with other
    impairments, claimants with IBD experienced lower allowance rates at the
    DDS and higher allowance rates at the hearings level.13 At the same time,
    we found that the differences between claimants with IBD and all other
    claimants were more pronounced when we analyzed the DDS and hearings
    levels separately than when we combined them. Specifically, at the DDS
    (initial and reconsideration) levels, the allowance rate for claimants
    with IBD was 12 percentage points lower than the average allowance rate
    for all other claimants (see table 2). In contrast, at the hearings level,
    the allowance rate for claimants with IBD was 10 percentage points higher
    than the average rate for all other claimants included in this analysis.
    However, when we computed the overall allowance rate, the two levels
    offset each other, resulting in a difference of only 6 percentage points.

    13Although the allowance rate at the DDS is lower than the rate at the
    hearings level, this does not mean that fewer people were allowed at the
    DDS than at the hearings level. In fact, of the 2,257 claimants with IBD
    who were allowed at either level in 2003, 55 percent (or 1,241) were
    allowed at the DDS level. Similarly, of those claimants with other
    impairments who were allowed at either level, 76 percent (584,613) were
    allowed at the DDS level.

    Table 2: Allowance Rates for Claimants with IBD versus Other Claimants by
    Decision-Making Level

                                     Allowance rate

    Percentage point difference between Decision-making Claimants Other
    allowance rates for claimants with level with IBD claimants IBD and other
    claimants

                          DDS (initial &
                        reconsideration)      22%               34%          -12*
                                Hearings      86%               76%           10*
                              All levels      33%               39%           -6*

    Source: GAO analysis.

    Notes: Analysis based on SSA DI disability decisions in 2003 at DDS and
    hearings levels.

    Asterisks indicate differences between claimants with IBD and claimants
    with other impairments that are significant at the .05 level. The error
    associated with the estimated allowance rates for claimants with IBD is
    +/- 2 percent or less; the error associated with the estimated allowance
    rates for all other claimants is +/- 1 percent or less.

    There may be legitimate reasons for some of the differences in allowance
    rates between adjudication levels and between claimants with IBD and
    claimants with other impairments at the different levels, but pinpointing
    these reasons through data analysis is difficult. Relatively high
    allowance rates at the hearings level could be due to new evidence
    reflecting new impairments or worsening of alleged impairments or the fact
    that the evidence covers a longer period of time, a potentially important
    factor for individuals with episodic impairments like IBD. With respect to
    variance in allowance rates between impairment groups, given the different
    types and characteristics of impairments, it is reasonable that all
    impairments should not necessarily have the same allowance rate,
    regardless of adjudication level. Further, rather than analyzing claims
    filed in a given year and following their outcomes through the various
    decision-making levels, we analyzed data representing decisions at all
    levels for 1 year. As a result, decisions at each level generally involved
    different claimants with varying characteristics (such as age, impairment
    severity, and work history) that influence decisions and might account for
    some of the differences. To analyze whether differences in IBD allowance
    rates by level are legitimate would require a much more complex analysis,
    following a year of applicants through the entire process and controlling
    for many factors that may influence the decision-making process. Even with
    such an analysis, it would be difficult to draw firm conclusions because
    some key data-such as detailed information on changes in the claimant's
    medical condition at the different decision-making levels-are not readily
    available for analysis.

        Claimants with IBD and Other DI Claimants Encounter Similar Challenges in
        the Evaluation Process

    Challenges Encountered at Step Three

    Lower allowance rates at the DDS and higher allowance rates at the
    hearings level may reflect challenges that IBD and many other claimants
    encounter in SSA's disability evaluation process. For example, many
    claimants do not meet or equal SSA's medical criteria at step three of the
    process, regardless of adjudication level. In addition, claims that do not
    meet or equal the medical criteria at step three and are evaluated at
    steps four and five are less likely to be allowed at step five at the DDS
    than at the hearings level. Finally, claimants may not be made
    sufficiently aware of the importance of documenting how the impairment
    limits their ability to work, information that is critical to steps four
    and five of the evaluation process. This lack of documentation may place
    them at a disadvantage, particularly at the DDS level.

    Both DI claimants with IBD and many other claimants face challenges
    meeting or equaling SSA's medical criteria at step three of the sequential
    evaluation process when their impairments are evaluated according to SSA's
    medical criteria. Our analysis showed that the allowance rate at step
    three was low (20 percent or less) for claimants with IBD, as well as for
    claimants with other impairments, regardless of adjudication level (see
    table 3).

    Table 3: Allowance Rates for Disability Decisions at Step Three by
    Decision-Making Level

                              Allowance rate at step three

                             Decision-making level      IBD     Other impairments
                   DDS (initial & reconsideration)     16%*                   20%
                                          Hearings      17%                   17%
                                        All levels     16%*                   20%

    Source: GAO analysis.

    Notes: Analysis based on SSA DI disability decisions in 2003 at DDS and
    hearings levels.

    Allowance rates at step three were derived by dividing allowances at step
    three by all claims considered at step three. Asterisks indicate
    differences between claimants with IBD and claimants with other
    impairments that are significant at the .05 level. The error associated
    with the estimated allowance rates for claimants with IBD is +/- 2 percent
    or less; the error associated with the estimated allowance rates for all
    other claimants is +/-1 percent or less.

    To further analyze whether claimants with IBD experienced similar
    challenges meeting or equaling SSA's medical criteria at step three
    relative to other claimants, we calculated how many other types of
    impairments had statistically higher, similar, or lower allowance rates
    overall and by adjudication level. As shown in table 4, over 45 percent of
    other

    impairments had similar or lower allowance rates at step three, regardless
    of adjudication level.

    Table 4: Comparison of Allowance Rates at Step Three for IBD versus Other
    Impairments by Decision-Making Level

                                   Allowance rates of
                 Decision-making    other impairments      Number of        Total
                           level     compared to IBD      impairments   decisions
                  DDS (initial &
                reconsideration)  Significantly higher             115    710,132
                                  Statistically similar             31    109,838
                                   Significantly lower              70    918,970
                        Hearings  Significantly higher              48     64,061
                                  Statistically similar            124     36,204
                                   Significantly lower              44    143,325
                      All levels  Significantly higher             117    803,653
                                  Statistically similar             23     88,237
                                   Significantly lower              76  1,090,640

    Source: GAO analysis.

    Notes: Analysis based on SSA DI disability decisions in 2003 at DDS and
    hearings levels.

    Allowance rates at step three were derived by dividing allowances at step
    three by all cases considered at step three.

    Impairments are classified as having higher, similar or lower allowance
    rates than IBD, based on results from statistical models which estimate
    the direction, size and significance of the difference between each
    impairment and IBD. Higher and lower impairments are those whose
    difference from IBD is significant at the .05 level.

    Meeting or equaling SSA's medical criteria may be a problem for many DI
    claimants, although the reasons may vary by impairment. Originally, the
    medical criteria were developed as a way to quickly screen the large
    majority of cases that could be allowed on reasonably objective medical
    tests. However, over the years, SSA has experienced a general decline in
    the percentage of DI claims awarded on the basis of meeting or equaling
    the medical criteria at the DDS level, from 82 percent to 58 percent
    between 1983 and 2000. There are many factors that may have contributed to
    the decline in allowance rates at step three, including advances in
    medicine that can affect the applicability or usefulness of listings, the
    general aging of the baby boomer generation, the mix of impairments over
    the years, the addition of functional criteria to some listings that make
    it more difficult for claimants to meet or equal the listings, changes in
    or clarifications of SSA policies, and economic swings that may affect the
    number or percentage of claimants with very severe disabilities.

    In addition, claimants with IBD and other claimants may encounter problems
    meeting or equaling the medical criteria in part because SSA's criteria
    may not be up to date and complete. According to doctors in the IBD
    community, the IBD medical criteria in step three do not consider some
    symptoms of IBD that may prevent a claimant from working, such as severe
    diarrhea. For example, a claimant diagnosed with IBD may experience a
    level and frequency of diarrhea that precludes working, but that symptom
    is not part of the medical criteria for IBD. In general, we previously
    reported that SSA's progress in updating its IBD and other medical
    listings has been slow and may not be keeping pace with medical
    advancements.14 However, we did not determine and do not know whether
    updates to non-IBD listings would improve the likelihood of DI claimants
    meeting or equaling SSA's medical criteria at step three of the process.

    Claimants with IBD and others who are evaluated at steps four and five of
    the sequential evaluation process may also encounter challenges being
    allowed at the DDS versus the hearings level. As shown in table 5, our
    analysis found that step five allowance rates were higher at the hearings
    level than at the DDS levels for both claimants with IBD and claimants
    with other impairments, but the difference is even greater for claimants
    with IBD.

    Challenges Encountered at Steps Four and Five

    Table 5: Allowance Rates for Disability Decisions at Step Five by
    Decision-Making Level

    Allowance rate at step five Decision-making level Claimants with IBD Other
    claimants

                        DDS (initial & reconsideration) 13%* 25%

                                   Hearings 85%* 74%

                                  All levels 27%* 32%

    Source: GAO analysis.

    Notes: Analysis based on SSA DI disability decisions in 2003 at DDS and
    hearings levels.

    Because only denial decisions are possible at step four, allowance rates
    at step five were derived by dividing allowances at step five by all
    claims considered at steps four and five. Asterisks indicate differences
    between claimants with IBD and claimants with other impairments that are
    significant at the .05 level. The error associated with the estimated
    allowance rates for claimants with IBD is +/- 2 percent or less; the error
    associated with the estimated allowance rates for all other claimants is
    +/-1 percent or less.

    14GAO, SSA and VA Disability Programs: Re-Examination of Disability
    Criteria Needed to Help Ensure Program Integrity, GAO-02-597 (Washington,
    D.C.: Aug. 9, 2002).

    The relatively high allowance rates at step five of the hearings level may
    be due to a number of factors, including the presence of an attorney or
    nonattorney representative at the hearings level or the fact that the
    evidence covers a longer period of time, a potentially important factor
    for individuals with episodic impairments like IBD. As noted earlier, each
    step of the process requires increasingly complex judgments by
    adjudicators, and being represented by an attorney or nonattorney who is
    familiar with SSA's complex rules and decision-making process may help
    claimants better present their cases. A GAO report in 200315 found that
    claimants who were represented by an attorney (or a person who is not an
    attorney, such as a legal aide, relative, or friend) were more likely to
    be allowed than claimants who had no representative. The report also noted
    three possible reasons for the increased likelihood of being awarded
    benefits for those represented by an attorney: attorneys provide
    assistance with the development of evidence over and above SSA's efforts
    to develop evidence; attorneys prepare claimants, to improve their
    effectiveness and credibility as witnesses; and attorneys may screen cases
    to select claimants with strong cases. In 2004, for 68.4 percent of all
    hearings-level decisions, the claimant was represented by either an
    attorney or a nonattorney. In contrast, claimants generally do not acquire
    attorneys or other representation to assist them with filing their claims
    at the DDS levels, although they are allowed to do so.

    In the past, SSA and GAO have reported that potential inconsistencies
    between the interpretation and application of standards at the DDS levels
    versus the hearings level might explain higher allowance rates at step
    five at the hearings level.16 For example, GAO reported on SSA studies
    that found that ALJs were more likely than DDS adjudicators to find that
    claimants are credible with respect to allegations of pain, fatigue, and
    other symptoms not identifiable in laboratory tests or confirmable by
    medical observations.17 In addition, past SSA studies have found that the
    different roles that medical staff play at the two levels can affect

    15GAO, SSA Disability Decision Making: Additional Steps Needed to Ensure
    Accuracy and Fairness of Decisions at the Hearings Level, GAO-04-14
    (Washington, D.C.: Nov. 12, 2003).

    16Secretary of Health and Human Services, Implementation of Section 304
    (g) Public Law 96-265, Social Security Disability Amendments of 1980, the
    Bellmon Report

    (Washington, D.C.: January1982).

    17GAO, Social Security Disability: SSA Must Hold Itself Accountable for
    Continued Improvement in Decision-making, GAO/HEHS-97-102 (Washington,
    D.C.: Aug. 12, 1997).

    allowance rates at step five. Specifically, SSA studies have found that
    DDS medical staff (who generally perform assessments of claimants' RFC
    themselves) tend to find that claimants had higher capacities to function
    in the workplace than ALJs (who may consult with medical experts, but have
    sole authority to make the RFC finding), even when these different
    adjudicators were given the same cases to review.

    To help address these inconsistencies, SSA began process unification
    efforts in 1994 to ensure that both levels more consistently interpreted
    and applied SSA's policy guidance. These efforts included creating
    additional policy guidance by publishing rulings and regulations to
    clarify such policy areas as credibility, pain, and the weight given to
    the opinion of the treating physician. However, GAO reported in 200418
    that SSA has not adequately assessed the impact of its process unification
    efforts and has yet to perform assessments that provide a clear
    understanding of the extent or causes of possible inconsistencies in
    decisions between adjudicative levels.

    Challenges associated with claimants understanding the application process
    and providing critical information to support their claim, particularly at
    steps four and five, are common among claimants, regardless of their
    impairment. Having complete information to support a step five allowance
    is particularly significant because, according to the Social Security
    Advisory Board,19 the percentage of claims allowed at step five has more
    than doubled, from 18 percent of all awards in 1983 to nearly 42 percent
    in 2000. However, representatives of stakeholder groups we spoke with
    believe that many claimants, including those with IBD, may be unaware of
    the importance of including detailed information on how their impairment
    limits their ability to work. In fact, some doctors and officials in the
    IBD advocacy community whom we interviewed believed that if a claimant's
    impairment did not meet or equal the medical listings, the claim would be
    denied. They were unaware of steps four and five in the sequential claim
    evaluation process, where nonmedical factors are considered.

    Difficulties Understanding the Application Process

    18GAO, Social Security Administration: More Effort Needed to Assess
    Consistency of Disability Decisions, GAO-04-656 (Washington, D.C.: July 2,
    2004).

    19Social Security Advisory Board, Disability Decision Making: Selected
    Aspects of Disability Decision Making (Washington, D.C.: January 2001).

    Unless sufficiently prompted by SSA, claimants might not provide enough
    information when they file their claim about how their impairment limits
    their ability to work, which could reduce the likelihood of an allowance
    at step five at the DDS level. In our review of 20 disability claim
    folders for claims decided in 2003, we found that the prior version of the
    adult disability report did not clearly state the importance of providing
    detailed and complete information about how the impairment limited the
    ability to work. In responding to the question on the paper disability
    report then used, some claimants provided only minimal information,
    sometimes just a few words. For example, one claimant responded to the
    question about how his impairment limited the ability to work by saying
    "pain, limited movement." In another case that was denied at the initial
    DDS level, the claimant provided minimal information concerning how the
    impairment limited work activities.

    In contrast, the new interactive adult disability report on the agency's
    Web site contains instructions, explanations, and examples that assist
    claimants in filling out the report. For example, in asking about how the
    impairment limits the claimant's ability to work, the report notes: "This
    is one of the most important pages in the report." It goes on to explain
    that, "You can help your case by giving us a detailed description of all
    of your conditions, and any symptoms that limit your ability to work.
    Please do not assume that your condition is self-explanatory." The report
    also provides examples of how to document the conditions and symptoms that
    may limit the ability to work, including the type of information and level
    of detail needed, such as "I have trouble concentrating and have become
    more and more forgetful. My friend at work reminds me about important work
    assignments. Once I forgot to take the daily receipts to the bank.
    Sometimes I can't remember how to add or subtract." However, to view the
    on-line instructions, explanations and examples given in the interactive
    adult disability report, a claimant must provide a name and legitimate
    Social Security number, fill out the report, and reach the section asking
    how the impairment limits the ability to work. Further, these more
    detailed instructions and examples are directly available only to those
    claimants who apply on line, which accounts for only about two percent of
    claimants, according to an SSA official. Since the majority of applicants
    apply in person or over the phone, most claimants never see this
    information.

    For the majority of claimants who apply in person or over the phone, SSA
    field staff have the option of reviewing and reading to claimants examples
    that illustrate the types and importance of information requested.
    However, the Social Security Advisory Board and others believe that field

    staff lack the time to sufficiently explain program rules and procedures
    so that applicants can understand what items of information they need to
    document their case. SSA does not track, and we did not determine, the
    extent to which SSA field staff read this information to claimants
    applying in person or over the phone.

    Brochures and other information are available on line and routinely
    provided by SSA to claimants when they arrange an appointment to file a
    disability claim. SSA provides this information in order to help ensure
    that claimants can gather the information needed and have it available
    when they meet with the claims representative to complete the application.
    However, this information does not explain the type of information and
    level of detail needed if the impairment does not meet or equal the
    medical criteria at step three and the claim must be decided at steps four
    and five. As a result, claimants may not be sufficiently informed to give
    SSA enough information at the time of application to support the
    allegation that their impairment makes them unable to work.

    Another opportunity exists for the DDS to collect information from
    claimants that is relevant to steps 4 and 5 in the evaluation of the
    initial claim. Specifically, DDS procedures call for the adjudicator to
    request additional information from the claimant, if (1) it is warranted
    based on the disability alleged by the claimant and (2) the information is
    not already in the adult disability report completed by the claimant or by
    field staff for the claimant. Requested information might include
    responses to a pain or fatigue questionnaire or an activities of daily
    living form. Again, SSA does not track, and we did not determine, the
    extent to which this is done.

        SSA's Efforts May Address Some Challenges Faced by Claimants with IBD and
        Others

    SSA is pursuing efforts that may address some but not all the difficulties
    encountered by claimants with IBD and other claimants. The agency is
    currently updating the medical criteria used at step three for all
    impairments, including IBD and is taking into account the views of the
    public in so doing. However, SSA officials told us that agency rules
    prohibit the discussion of specific changes prior to their publication.
    The process of updating criteria is lengthy, and the updates to the
    medical criteria for IBD may not be completed until late in 2005.

    SSA also has broader efforts under way that may affect future changes to
    medical criteria. For example, SSA has begun holding public meetings to
    discuss changes in medical criteria for certain impairments, such as
    mental conditions and immune disorders, including HIV/AIDS. According to
    SSA officials, this approach allows SSA to obtain valuable input from

    outside the agency, prior to the drafting of proposed changes to medical
    criteria. In addition, SSA has contracted with the Institute of Medicine,
    part of the National Academy of Sciences (NAS), to conduct a broad review
    of its medical criteria. This review will study such things as developing
    the process for determining when the criteria need to be updated,
    establishing feedback mechanisms to continuously assess and evaluate the
    criteria, and examining the advisability of integrating functional
    assessment into the criteria.

    In addition to changes that affect IBD and other medical criteria, SSA has
    several proposed changes currently under consideration that may improve
    the consistency of decisions between the DDS and hearings levels.
    Specifically, in 2004, GAO reported20 that most SSA stakeholders believe
    the following proposals-announced by the Commissioner in 2003-may increase
    the extent to which DDS and hearings-level adjudicators arrive at similar
    decisions on similar cases

    o  	requiring DDS adjudicators to more fully develop and document their
    decisions;

    o  	changing the quality control process for hearings-level decisions in a
    way that makes it more consistent with that of the DDS level;

    o  	providing both the DDS and the hearings levels with equal access to
    more centralized medical expertise; and

    o  	requiring ALJs to address agency reports that recommend either denying
    the claim or outlining the evidence needed to fully support the claim.

    SSA is also trying to improve all claimants' understanding of the
    disability claims evaluation process, through the interactive adult
    disability report and other information available on SSA's Web site. SSA's
    Web site contains information on various aspects of the DI program,
    including the evaluation process, and SSA periodically reviews and updates
    information provided on its Web site. However, except for the interactive
    adult disability report, SSA's Web site does not provide claimants with
    detailed instructions, explanations, and examples to assist them with
    completing the adult disability report.

    20GAO-04-656.

    Conclusions

    Moreover, SSA recently developed a Disability Starter Kit, available on
    the Web site and also given to all disability claimants who apply in
    person or by phone, which provides answers to frequently asked questions
    and materials to help them prepare for the disability interview. However,
    the Disability Starter Kit does not include the instructions,
    explanations, and examples available on the interactive adult disability
    report, for describing how an impairment limits the ability to work and
    the importance of providing this information.

    Claimants with IBD believe that SSA tends to initially deny their claims,
    only to allow them at the hearings level, and our analysis of 2003 DI
    decisions confirms that most IBD claims are denied at the initial level,
    and a high rate of claims are allowed upon appeal. However, we also found
    that the experience of claimants with IBD is much like that of claimants
    with many other impairments. This situation may be due in part to a
    general shift away from allowing cases at the DDS level based on meeting
    or equaling the medical criteria in the listings. This in turn results in
    more and more cases being assessed at step five of the process-a step that
    involves complex judgments concerning the RFC of the claimant and
    assessments of factors like pain and the credibility of the claimant. Past
    studies have found that relative to counterparts at the hearings level,
    DDS adjudicators have been less inclined to find that claimants are
    credible or cannot perform past or other work in the national economy, and
    therefore less likely to allow claimants on these bases at step five of
    the sequential process. Inconsistencies in how adjudicators at different
    levels make decisions may help explain the relatively low allowance rates
    at the DDS levels and high allowance rates at the hearings level for IBD
    and other claimants whose impairments do not fit neatly into SSA's medical
    criteria and generally require adjudicators to perform more complex and
    subjective assessments. SSA has some efforts under way that may address
    some of these issues, but it is too early to gauge success. For example,
    SSA is updating its medical criteria for IBD and other impairments, but
    SSA is unable to discuss any changes prior to publication. SSA also
    contracted with the NAS to conduct a broad review of its medical criteria.
    However, this effort is in its initial stages, and the NAS report is not
    expected until March of 2006. SSA has also proposed several changes to its
    decision-making process that may address inconsistencies in how
    adjudicators at different levels view cases. However, as we previously
    recommended, SSA needs to collect better information to help it determine
    whether problems with inconsistency have been resolved.

    Recommendations

    We also found that SSA's application and claims evaluation process may not
    be well understood by many claimants, and thus some claimants may not
    provide SSA with all the information necessary for their initial
    decisions. SSA's on-line adult disability report provides useful
    instructions, explanations, and examples to the small percentage of
    claimants who actually fill out the report on line. However, that
    information cannot easily be viewed on SSA's Web site and is not available
    in the other materials provided to applicants. Further, for the majority
    of claimants who file in person or on the phone, SSA lacks assurance that
    SSA field staff explain to claimants the types and importance of
    information needed to support a claim assessed at steps four and five of
    the process. As a result, claimants may not be providing sufficient
    information on how their impairments prevent them from working, and SSA
    may be missing the opportunity to gather key information for meeting one
    of its key strategic objectives, that is, to make the right decision in
    the disability process as early as possible.

    To help ensure that claimants with IBD and other claimants are informed of
    and ultimately provide SSA with information critical to a complete
    assessment of their impairment at the earliest possible point in the
    decision-making process, SSA should implement the following three
    recommendations:

    o  	Update its Web site to include more accessible information that
    clarifies the type and importance of information that claimants must
    submit for steps four and five of the sequential evaluation process. SSA
    should also consider making the information currently in its interactive
    adult disability report-including instructions, explanations and
    examples-more readily available to all claimants on its Web site.

    o  	Update the Disability Starter Kit-which is provided to all claimants
    who apply by phone or in person-to include an explanation of the types and
    importance of information that claimants must submit for steps four and
    five of the sequential evaluation process. SSA should consider adding
    instructions, explanations, and examples that are currently available in
    the on-line form, to the extent that it is cost-effective to do so.

    o  	Explore options for ensuring that field office and DDS staff
    appropriately explain and collect the types of information needed to
    assess how claimants' impairments impact their ability to work.

      Agency Comments
      and Our Evaluation

    We provided a draft of this report to SSA for comment. SSA agreed with our
    recommendations. Specifically, SSA agreed with our first recommendation
    and will take the steps necessary to ensure that, at a minimum, the
    information currently available in the interactive adult disability report
    is available to all claimants on the Web site. In its response to our
    second recommendation, SSA said that it would consider the inclusion of
    information and/or instructions along with other suggestions to the
    Disability Starter Kit that would address the importance of obtaining
    information from the disability applicant about steps four and five of the
    sequential evaluation process, taking into account factors such as expense
    and space. SSA agreed with our third recommendation and will continue to
    emphasize and train DDS and Social Security employees on the importance of
    appropriately explaining all aspects of the disability process to
    claimants and ensuring that the appropriate information is provided to and
    received from the claimants.

    Although SSA agreed with our recommendations, the agency expressed concern
    with two statements in our report. SSA stated that our report discussed
    issues the agency considers irrelevant to our study of DI claimants with
    IBD-the addition of functional criteria to the listings for impairments
    other than IBD and the decline in DI allowances based on medical criteria.
    To respond to agency concerns, we de-emphasized our discussion of
    functional criteria in the listings by simply identifying it as one of
    many reasons for the decline in allowance rates at step three. We also
    clarified in our "Conclusions" section that we were discussing a decline
    in allowances at step three, rather than a decline in allowances based on
    medical criteria. However, we believe that the addition of functional
    criteria to the listings is relevant to our study, as is the decline in
    allowance rates at step three, because they provide perspective on whether
    claimants with IBD are treated differently than claimants with other
    impairments. SSA also expressed concern with how we characterized part of
    our analysis in the "Conclusions" section, and we modified the text in the
    "Conclusions" to be more specific about what our analysis found.

    SSA provided additional general comments, which we have included (along
    with our responses to them) in appendix II and addressed in the body of
    our report where appropriate. SSA also provided technical comments that we
    have incorporated in the report as appropriate.

    We are sending copies of this report to the appropriate congressional
    committees, the Social Security Administration, and other interested
    parties. We will also make copies available to others on request. In
    addition, the report will be available at no charge on GAO's Web site at
    http://www.gao.gov.

    If you or your staff have any questions concerning this report, please
    contact me or Michele Grgich, Assistant Director, at (202) 512-7215. You
    may also reach us by e-mail at robertsonr@gao.gov or grgichm@gao.gov.
    Other major contributors to this assignment were Jill D. Yost,
    Ann T. Walker, Corinna Nicolaou, Daniel Schwimer, Doug Sloane, and
    Shana Wallace.

    Robert E. Robertson Director, Education, Workforce, and Income Security
    Issues

                             Appendix I: Scope and Methods

    To determine whether claimants with IBD were treated differently than
    claimants with other impairments, we analyzed SSA data from 2003 on all
    Disability Insurance (DI) decisions made at three decision-making levels
    (initial, reconsideration, and hearings), and compared allowance rates for
    claimants with IBD to those for claimants with other impairments. This
    appendix describes (1) the sources of the data we used, (2) the scope of
    our analysis, (3) steps we took to ensure data reliability, and (4) our
    methods for analyzing the data.

      Data Sources

    o

    o

      Scope

    Data Reliability

    We collected information from two sources on all DI decisions made in 2003
    at the three decision-making levels

    SSA's 831 file (also referred to as the National Disability Determinations
    Services System), which contains an electronic record of all initial and
    reconsideration decisions made at the DDS and

    SSA's Case Control System (CCS), which contains an electronic record of
    all decisions made at the hearings level.

    The Research Review Act mandated GAO to study problems encountered by
    patients with IBD when applying for DI benefits under Title II of the
    Social Security Act. Therefore, we limited our data analyses to decisions
    that involved Title II (Disability Insurance or DI) claims.1 We restricted
    our analyses to DI decisions that resulted in an allowance or a denial at
    one of the five steps2 in the sequential process and excluded cases denied
    for such reasons as lack of cooperation or failure to follow prescribed
    treatment, because such denials are not associated with one of the five
    steps.

    We determined that the 831 and CCS files were sufficiently reliable based
    on reliability assessments of specific variables and records pertinent to
    our analyses that we had performed for a previous report.3 For that
    report,

    1Some of these DI decisions involved a concurrent claim, that is, the
    claimant filed for DI and SSI concurrently and a decision of disability is
    the same for both programs.

    2Although most step one denials were made at an SSA field office and were
    not included in our analysis, a small number of claims (1,563, or less
    than 0.1 percent) were denied at step one at the DDS and hearings levels.

    3GAO, SSA's Disability Programs: Improvements Could Increase the
    Usefulness of Electronic Data for Program Oversight, GAO-05-100R
    (Washington, D.C.: Dec. 10, 2004).

                             Appendix I: Scope and Methods

    we reviewed reports by GAO, the SSA Office of Inspector General, and SSA
    contractors on data quality. We also interviewed staff responsible for
    managing and using the data to assess the controls and processes in the
    disability system and performed electronic testing of some variables. In
    addition, for this report, we performed the following:

    o  	We reviewed records in the 831 and CCS files representing DI decisions
    made in 2003 to identify missing data for the three variables used in this
    study: impairment, decision, and step of the sequential evaluation process
    (i.e., regulation basis code). We did not find any instances of missing
    data for these three variables.

    o  	We reviewed impairment codes used for 2003 decisions and found records
    that did not indicate a specific diagnosis (e.g., 6490, "impairment
    unknown; insufficient medical evidence"). Because there were a large
    number of records with such impairment codes, we retained them in our
    analyses which compared claimants with IBD with all other claimants. After
    we determined the differences in allowance rates based on the total number
    of decisions regardless of impairment, we conducted a second analysis of
    allowance rates that considered the allowance rate for each impairment
    code. In the second analysis, we used impairment codes for which there
    were 100 or more decisions in 2003, including those impairment codes that
    did not indicate a specific diagnosis.

    o  	We compared decision outcomes with the regulation basis code
    indicating at which step the decision was made, and found cases with
    obvious conflicts between the decision and the step. Specifically we found
    records that were denied at step three (one case) or allowed at step four
    (1,021 cases). The five-step evaluation process does not permit denials at
    step three or allowances at step four, so we excluded these records from
    our analysis. Given the large number of claims (approximately 2 million),
    the error produced by the exclusion of these cases is very small.

    Methods of Analysis 	In order to determine whether claimants with IBD were
    in fact treated differently than claimants with other impairments, we
    compared decision outcomes in two ways: (1) claimants with IBD versus all
    other claimants, and (2) IBD impairments versus 216 other individual
    impairments.

    Claimants with IBD versus To determine the extent to which claimants with
    IBD were allowed at a

    All Other Claimants	different rate than other claimants, regardless of
    impairment type, we compared the allowance rate of claimants with IBD to
    that of all other claimants. The allowance rate for IBD was calculated by
    combining

    Appendix I: Scope and Methods

    decisions for the two IBD impairments-Crohn's disease and ulcerative
    colitis. We then compared the percentage of claims allowed for those
    impairments with the percentage allowed for all other claimants combined.
    We estimated the sampling error associated with these percentages, given
    the size of the samples on which they were based, and tested the
    significance of the difference between them using a simple chisquare
    statistic. The error associated with the estimated allowance rate for
    claimants with IBD is +/- 2 percent or less. The error associated with
    allowance rates for all other claimants is +/- 1 percent or less. We
    tested the significance of the differences between claimants with IBD and
    other claimants using the .05 level of significance.

    As indicated in table 6 below, a total of nine comparisons were made using
    these calculations. As noted in the table, the denominator for step three
    comparisons included only cases considered at step three (i.e., cases that
    were not denied at steps one and two), whereas the denominator for step
    five included cases considered at steps four and five. The reason for the
    difference is that assessments performed at steps four and five are highly
    inter-related; for example, the RFC assessment performed at step four
    would be used to support a denial at either step four or five, or an
    allowance at step five. As such, it seemed appropriate to consider
    allowances at step five relative to all decisions made at steps four and
    five.

                             Appendix I: Scope and Methods

     Table 6: Types of Comparisons Used in Report for IBD versus Other Impairments

    Allowance rate for all steps of the sequential evaluation process

    decisions

    Allowance rate at step three

    DDS allowances at step three divided by all cases considered at the DDS
    level at step three

    Allowance rate at step five

    DDS allowances at step five divided by all cases considered at the DDS
    level at steps four and five DDS (initial and DDS allowances
    reconsideration) level divided by all DDS

    Hearings level 	Hearings allowances divided by all hearings decisions
    Hearings allowances at step three divided by all cases considered at the
    hearings level at step three Hearings allowances at step five divided by
    all cases considered at the hearings level at steps four and five

                Overall (all decision2003 allowances 2003 allowances at

    2003 allowances at step five divided by all 2003 decisions considered at
    steps four and five

                                     making levels)

    divided by all 2003 decisions

    step three divided by all 2003 decisions considered at step three

                                      Source: GAO.

        IBD Impairment versus 216 Other Individual Impairments

    We performed separate analyses to determine whether claimants with IBD had
    an allowance rate that was different from the allowance rates for
    claimants with other impairments, or whether the allowance rate for
    claimants with IBD was higher than for some other impairments, but lower
    for others. We performed this extra step because we did not know whether
    certain impairments might have a large number of records associated with
    them, and therefore might have greatly influenced the allowance rates for
    claimants with impairments other than IBD. This additional analysis
    reveals where claimants with IBD fall in the range of allowance rates by
    impairment, regardless of the number of claims associated with each
    impairment.

    The allowance rate for claimants with IBD was calculated as we did in the
    first analysis described above. We used this allowance rate as the
    reference category and employed categorical logistic regression models,
    with 216 dummy variables for the other categories of impairments, to test
    the direction and significance of the difference in allowance rates
    between each of the other impairments and IBD. These models used Wald
    statistics and .05 level of significance to test differences, and were
    able to classify

    Appendix I: Scope and Methods

    other impairments as having significantly higher, statistically similar,
    or significantly lower allowance rates than IBD.

    A total of four comparisons were made by impairment: overall allowance
    rate (all sequential evaluation steps and decision-making levels
    combined), and step three at the DDS, hearings, and combined levels. We
    reported the overall comparison as an extra test of the results of our
    first analysis. We reported comparisons of impairments at step three
    because this step involves an assessment by SSA adjudicators of medical
    criteria by impairment. Although we also compared impairments at step
    five, we did not report the comparison because we found the results to be
    consistent with our analysis of claimants with IBD versus other claimants.

                              Appendix II: Agency Comments

                              Appendix II: Agency Comments

    See comment 1.

    See comments 1 and 2.

                                 See comments 1 and 2.

                              Appendix II: Agency Comments

    See comments 1 and 2.

    See comment 3.

    See comment 4.

    See comment 5.

               Appendix II: Agency Comments Appendix II: Agency Comments

    Appendix II: Agency Comments

      GAO Comments

    1. 	In response to SSA's comments, we de-emphasized our discussion of
    functional criteria in the listings by simply identifying it as one of
    many reasons for the decline in allowance rates at step three. Although we
    agree that functional elements have not been added to the medical criteria
    for the IBD listings, we believe that the addition of functional criteria
    to some listings is relevant to our study because they provide perspective
    on whether claimants with IBD are treated differently than claimants with
    other impairments. We also clarified our text in the "Conclusions" section
    to discuss the decline in allowances based on meeting or equaling the
    medical criteria in the listings (i.e., step three allowances), instead of
    allowances based on medical criteria. In any case, we commend SSA for
    contracting with the Institute of Medicine of the National Academy of
    Sciences to study issues related to the listings.

    2. 	We agree that a shift away from medical criteria toward more
    functional criteria is only one of many possible explanations for the
    downward trend of allowances at step three for DI claimants, and may not
    specifically apply to claimants with IBD. As discussed in comment 1, we
    modified our text in the body of the report and in the "Conclusions"
    section to place less emphasis on this particular explanation.

    3. 	We revised the text in the "Conclusions" section to state more
    specifically what our analysis of 2003 decisions found.

    4. 	We agree that, of those allowed, a larger number of allowances are
    made at the initial level for claimants with IBD as well as for other
    claimants, and we added a footnote to the body of the report confirming
    this. However, SSA's point that most allowances occur at the initial level
    does not detract from the importance of our discussion of relative rates.
    The low rate of allowances at the DDS level means that a large majority of
    claimants were initially denied, many of whom likely did not appeal their
    initial decision. Our analysis does not allow us to say whether the high
    allowance rate at the hearings level is a function of the merit of the
    appealed cases or, if more of those denied claims had been appealed to the
    hearings level (where more than half of claims are allowed), a larger
    number of claims might have been allowed at the hearings level, and
    therefore claims allowed by the DDS would be a smaller percentage of the
    total number of allowed claims. Thus, reporting only the total number of
    claims allowed at the different decision-making levels may not accurately
    represent the situation.

    5. 	See comment 3. We did not revise the "Conclusions" section further
    because we believe the report sufficiently identifies a number of

                   Page 37 GAO-05-495 SSA Disability Decision Making

    Appendix II: Agency Comments

    legitimate reasons that may explain some of the differences in allowance
    rates between adjudication levels.

               (130442) Page 38 GAO-05-495 SSA Disability Decision Making

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