Social Security Disability: Better Planning, Management, and	 
Evaluation Could Help Address Backlogs (07-DEC-07, GAO-08-40).	 
                                                                 
For years, the Social Security Administration (SSA) has 	 
experienced processing delays and significant backlogs of	 
disability claims. At the end of fiscal year 2006, some 1.5	 
million disability claims were awaiting a decision. About 576,000
of these claims were backlogged--exceeding the number of claims  
that should optimally be pending at year-end. In response to the 
congressional request, GAO (1) examined trends in disability	 
claims backlogs and the time required for SSA to decide a claim, 
(2) identified key factors contributing to the backlogs and	 
processing times, and (3) described the steps SSA is taking to	 
reduce them. To address these issues, GAO analyzed SSA		 
administrative data, conducted an extensive literature review,	 
interviewed SSA officials as well as key program personnel, and  
conducted site visits in three SSA regions.			 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-40						        
    ACCNO:   A78688						        
  TITLE:     Social Security Disability: Better Planning, Management, 
and Evaluation Could Help Address Backlogs			 
     DATE:   12/07/2007 
  SUBJECT:   Claims adjudicators				 
	     Claims processing					 
	     Claims settlement					 
	     Compensation claims				 
	     Data collection					 
	     Data integrity					 
	     Federal social security programs			 
	     Program evaluation 				 
	     Program management 				 
	     Social security benefits				 
	     Strategic planning 				 
	     Program coordination				 
	     Program costs					 
	     Program implementation				 
	     Social Security Disability Insurance		 
	     Program						 
                                                                 
	     SSA Supplemental Security Income			 
	     Program						 
                                                                 

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GAO-08-40

   

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. 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. 

Report to Congressional Requesters: 

United States Government Accountability Office: 

GAO: 

December 2007: 

Social Security Disability: 

Better Planning, Management, and Evaluation Could Help Address 
Backlogs: 

SSA Disability Claims: 

GAO-08-40: 

GAO Highlights: 

Highlights of GAO-08-40, a report to congressional requesters. 

Why GAO Did This Study: 

For years, the Social Security Administration (SSA) has experienced 
processing delays and significant backlogs of disability claims. At the 
end of fiscal year 2006, some 1.5 million disability claims were 
awaiting a decision. About 576,000 of these claims were 
backloggedï¿½exceeding the number of claims that should optimally be 
pending at year-end. In response to the congressional request, GAO (1) 
examined trends in disability claims backlogs and the time required for 
SSA to decide a claim, (2) identified key factors contributing to the 
backlogs and processing times, and (3) described the steps SSA is 
taking to reduce them. 

To address these issues, GAO analyzed SSA administrative data, 
conducted an extensive literature review, interviewed SSA officials as 
well as key program personnel, and conducted site visits in three SSA 
regions. 

What GAO Found: 

From fiscal year 1997 through 2006, backlogged disability claims in the 
Social Security Administrationï¿½s processing system doubled, reaching 
about 576,000 cases. Backlogs of varying degrees have occurred at most 
stages of the claims process. The only significant decline occurred at 
the last stageï¿½-the Appeals Councilï¿½where fewer cases are processed. At 
the initial claims level, handled by state Disability Determination 
Services (DDS), a backlog developed in fiscal year 1998 and grew to 
about 155,000 claims in fiscal year 2006. At the hearings level, 
backlogged claims exceeded 415,000 that year and accounted for 72 
percent of the total backlog. Insufficient data prevented GAO from 
identifying trends in backlogs at the reconsideration stage. Processing 
times, meanwhile, increased with claimants generally waiting 
significantly longerï¿½for example, an additional 95 days at the hearings 
levelï¿½for a decision. 

Figure: Total Backlogged Claims, by Level of Adjudication, Fiscal Years 
1997 to 2006. 

This figure is a shaded bar chart showing total backlogged claims, by 
level of adjudication, between fiscal year 1997 and 2006. One color 
shows initial claims, another shows hearings, and a third shows appeals 
council. The X axis represents fiscal year. The Y axis represents 
backlogged claims. 

[See PDF for image] 

Source: GAO analysis of SSA data. 

[End of figure] 

Substantial growth in the numbers of disability claims, staff losses 
and turnover, and management weaknesses have contributed to the backlog 
problem. Initial applications for benefits grew more than 20 percent 
over the period while SSA experienced losses in key personnel: claims 
examiners in the state determination offices and administrative law 
judges and support staff in the hearings offices. In addition, 
management weaknesses evidenced in a number of initiatives to address 
the backlogs have failed to remedy and sometimes contributed to the 
problem. 

In 2006, SSA introduced the Disability Service Improvement initiative 
(DSI), but suspended national rollout of it in order to concentrate on 
the hearings backlog and full implementation of SSAï¿½s electronic case-
processing system. DSI is still underway in the Boston region; though 
hampered by rushed implementation, poor communication, and a lack of 
financial planning, DSI has shown mixed results, and SSA has proposed 
discontinuing certain components because of cost. Thorough evaluations 
that could help inform decisions about DSIï¿½s future have not yet been 
conducted. 

What GAO Recommends: 

GAO recommends that SSA monitor the reconsideration stage for backlogs 
and better plan, execute, and evaluate initiatives to address backlogs. 

SSA agreed in part or with the intent of GAOï¿½s recommendations, but did 
not fully agree with some of GAOï¿½s conclusions. SSA believed GAO did 
not sufficiently emphasize the agencyï¿½s funding needs. GAO added data 
on SSA funding levels, but continues to believe that the 
recommendations are valid. 

To view the full product, including the scope and methodology, click on 
GAO-08-40.
For more information, contact Daniel Bertoni at (202) 512-7215 or 
[email protected]. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

Backlogs and Processing Times for SSA's Disability Claims Have 
Increased in the Past Decade, with a Particularly Large Backlog at the 
Hearings Level: 

Growth in Applications, Staffing Losses, and Management Weaknesses Have 
Contributed to Backlogs: 

SSA Has Introduced a New Set of Comprehensive Reforms, but Suspended 
Their Rollout to Concentrate on the Hearings Backlog and on Electronic 
Processing: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Continuing Disability Reviews, Fiscal Years 2004 to July 
2007: 

Appendix III: Key Aspects of DSI as of August 2006: 

Appendix IV: Comments from the Social Security Administration: 

Appendix V: GAO Contact and Staff Acknowledgments: 

Related GAO Products: 

Tables: 

Table 1: SSA Annual Full Time Equivalent Employees for Fiscal Years 
1997 to 2006: 

Table 2: Social Security Administration's Limitation on Administrative 
Expenses Account for Fiscal Years 1997 to 2006: 

Table 3: Office of Federal Reviewing Official (FedRO) Claims End of 
Month Status, October 2006 to March 2007: 

Table 4: Fiscal Year 2006 Regional Data on Average Processing Times and 
Receipts: 

Figures: 

Figure 1: SSA's Disability Determination Process: 

Figure 2: SSA's Five-Step Sequential Evaluation Process for Determining 
Disability: 

Figure 3: Total Backlogged Claims, by Level of Adjudication, Fiscal 
Years 1997 to 2006: 

Figure 4: Average Claims Processing Time for DDS Initial Claims, DDS 
Reconsiderations, Hearings, and Appeals Council Decisions, in Days, 
Fiscal Years 1997 to 2006: 

Figure 5: Total SSA Disability Claims Receipts, Dispositions, and 
Backlogs, Fiscal Years 1997 to 2006: 

Figure 6: DDS Initial Claims Receipts, Dispositions, Pending, and 
Backlog, Fiscal Years 1997 to 2006: 

Figure 7: DDS Reconsideration Claims Receipts, Dispositions, and 
Pending, Fiscal Years 1997 to 2006: 

Figure 8: Initial DDS Disability Insurance Claims Processing Time, by 
Age (in Days), Fiscal Year 2006: 

Figure 9: Hearings Office Claims Receipts, Dispositions, Pending, and 
Backlog, Fiscal Years 1997 to 2006: 

Figure 10: Hearings Office Claims Processing Time, by Age (in Days), 
Fiscal Year 2006: 

Figure 11: Hearings Office Claims Processing Time, Age (in Days) as a 
Percentage within a Region, Fiscal Year 2006: 

Figure 12: Appeals Council Claims Receipts, Dispositions, Pending, and 
Backlog, Fiscal Years 1997 to 2006: 

Figure 13: Appeals Council Claims Processing Time, by Age (in Days), 
Fiscal Year 2006: 

Figure 14: Initial Claims Receipts, Reconsideration Receipts, and DDS 
Work Years, Fiscal Years 1997 to 2006: 

Figure 15: Hearings Office Claims Backlog and the Ratio of Hearings 
Office Support Staff to ALJ, Fiscal Years 1997 to 2006: 

Figure 16: Percentage of Hearings Office Claims Pending More Than 270 
Days at the End of Year and the Ratio of Hearings Office Support Staff 
per ALJ, Fiscal Years 1997 to 2005: 

Abbreviations: 

ALJ: administrative law judge: 

CDR: continuing disability review: 

DDS: Disability Determination Services: 

DI: Disability Insurance: 

DSI: Disability Service Improvement: 

eCAT: electronic Case Analysis Tool: 

FedRO: federal reviewing official: 

FIT: Findings Integrated Template: 

HOTS: Hearings Office Tracking System: 

IT: Information Technology: 

NADE: National Association of Disability Examiners: 

ODAR: Office of Disability Adjudication and Review: 

OIG: Office of Inspector General: 

OMVE: Office of Medical and Vocational Expertise: 

QDD: Quick Disability Determination: 

SSA: Social Security Administration: 

SGA: substantial gainful activity: 

SSI: Supplemental Security Income: 

United States Government Accountability Office: 

Washington, DC 20548: 

December 7, 2007: 

The Honorable Charles B. Rangel: 
Chairman: 

The Honorable Jim McCrery: 
Ranking Member: 
Committee on Ways and Means: 
House of Representatives: 

The Honorable Michael R. McNulty: 
Chairman: 

The Honorable Sam Johnson: 
Ranking Member: 
Subcommittee on Social Security Committee on Ways and Means House of 
Representatives: 

The Honorable Sander M. Levin House of Representatives: 

Each year, millions of Americans who believe that they can no longer 
work because of severe physical or mental impairments, apply for cash 
benefits through the Social Security Administration's (SSA) two 
disability programs--Disability Insurance (DI) and Supplemental 
Security Income (SSI). For more than 20 years, SSA has faced challenges 
with processing applications for benefits in a timely manner and 
overcoming significant backlogs. SSA's data show that there are 
disability applicants who wait years for their claims to be resolved at 
the final administrative appeals level, which can be a hardship. By the 
end of fiscal year 2006, SSA had made about 3.7 million disability 
claims decisions, and some 1.5 million disability claims were awaiting 
a determination. Meanwhile, new applications for benefits are expected 
to increase as the baby boomer generation enters its disability-prone 
years. Over the years, SSA has implemented many initiatives aimed at 
reducing the backlog in disability claims as well as the time it takes 
applicants to obtain a decision on their claims. In light of SSA's 
claims processing challenges, you asked us to: (1) examine the trends 
for the last several years in the disability claims backlog and the 
time required for SSA to decide a claim, (2) identify key factors that 
have contributed to the disability claims backlogs and processing 
times, and (3) describe the steps SSA is currently taking to reduce the 
backlog and claims processing times. 

To identify trends in SSI disability and DI claims, we obtained and 
analyzed data provided by SSA for fiscal years 1997 to 2006 for the 
four levels of adjudication of SSA's disability claims process--initial 
claims, reconsiderations, hearings, and final appeals to the Appeals 
Council. We received information from SSA on the number of claims 
received, the number of claims pending a decision, and other data. We 
also obtained data on average processing times. Using these data, we 
determined annual backlogs for three of the four levels of the claims 
process.[Footnote 1] We measured SSA backlogs in terms of the number of 
cases at year-end that exceeded the number of pending claims that the 
agency had deemed acceptable.[Footnote 2] We also met with 
knowledgeable SSA officials to document the reliability of SSA's data. 
We found that limitations exist with respect to hearings data for some 
years, and we have noted the limitations where these data are used. 
However, we found the data provided by SSA to be sufficiently reliable 
for our purposes. 

To identify factors that have contributed to SSA's disability claims 
backlogs and initiatives that SSA is currently undertaking to address 
them, we conducted an extensive literature review, including prior GAO 
reports, and position papers and testimonies from national advocacy 
groups. In addition, we reviewed agency documents, interviewed key SSA 
officials, and conducted site visits to 3 of the 10 SSA 
regions.[Footnote 3] During these site visits, we met with management 
and staff at the regional Office Center for Disability, the Office of 
Disability Adjudication and Review, hearings offices, and state 
Disability Determination Services (DDS). For the regions in which we 
did not conduct site visits, we conducted telephone interviews with key 
officials. We conducted our work between November 2006 and October 2007 
in accordance with generally accepted government auditing standards. 
For more information on our scope and methodology, see appendix I. 

Results in Brief: 

Over the last decade, SSA experienced a substantial increase in its 
backlog of disability claims, with a particularly severe accumulation 
of claims at the hearing level. From fiscal years 1997 through 2006, 
the total number of backlogged claims--numbers exceeding the level that 
should optimally be pending or in the pipeline at year-end---doubled. 
By the end of fiscal year 2006, the total backlog from various levels 
of the disability determination process reached about 576,000 claims. 
Over the period, backlogs of varying degrees have occurred at each 
stage of the claims process where backlogs are calculated. Only at the 
Appeals Council, the stage where generally fewer cases are processed, 
has the backlog been significantly reduced. At the initial claims level 
with the state Disability Determination Services, a backlog developed 
in fiscal year 1998 and grew rapidly for a few years before 
stabilizing. At the hearing level, although the backlog declined to 
about 12,000 claims in fiscal year 1999, it rose dramatically to over 
415,000 claims by the close of fiscal year 2006 and constituted about 
72 percent of all SSA backlogged claims that year. With regard to 
processing times over the last decade, claimants generally waited 
longer to receive a final decision. Processing times increased at the 
Disability Determination Services and more significantly for cases at 
the hearings level. In fiscal year 2006, 30 percent of claims processed 
at the hearings stage alone, took 600 days or more. 

While backlogs in processing disability claims have plagued SSA for 
many years, several factors have contributed to their increase in the 
last decade including substantial growth in initial applications, staff 
losses, and management weaknesses. Initial applications for DI and SSI 
disability benefits have grown more than 20 percent over the past 10 
years, enough to challenge an already complex adjudication process, 
while staffing at this level increased only 4 percent. This increase in 
applications has been spurred by, among other factors, the aging of the 
baby boomer generation, downturns in the economy, increased referrals 
from other benefit programs, and changes in disability eligibility 
requirements in prior years. Over the same period, SSA experienced 
losses of key personnel that included disability examiners and medical 
or psychological consultants in the DDS offices, and administrative law 
judges and support staff in the hearings offices. Finally, management 
weaknesses as evidenced by a number of initiatives that were not 
successfully implemented have limited SSA's ability to remedy the 
backlog. Several initiatives introduced by SSA in the last 10 years to 
improve processing times and eliminate backlogged claims have, because 
of their complexity and poor execution, actually added to the problem. 
For example, the "Hearings Process Improvement" initiative implemented 
in fiscal year 2000 significantly increased the days it took to 
adjudicate a hearings claim and exacerbated the backlog after the 
agency had substantially reduced it. 

In 2006, SSA introduced a new set of comprehensive reforms, but 
recently suspended national rollout to concentrate on the backlog of 
pending hearing requests and on full implementation of its electronic 
case processing system. The reforms, known as the Disability Service 
Improvement (DSI) initiative, were implemented in the Boston region, 
but with mixed results--hampered by rushed implementation, poor 
communication, and inadequate financial planning. An automated 
screening function designed to identify and expedite disability claims 
with a high probability of approval has shortened processing time for 
those cases. However, other facets of the initiative have been 
problematic, such as a new office to handle first level appeals and 
establishing a specialized office to supply medical expertise. As of 
June 2007, both offices were only half staffed. In addition, more than 
1,800 claims were awaiting a medical review, by either a physician 
specialist or a nurse case manager for more than 75 days. We also found 
that rollout of the initiative in the Boston region was rushed over a 
period of 4 months, with little advance information for those managers 
responsible for implementing it. Moreover, the initiative has, as of 
June 2007, incurred $24 million in additional administrative costs, 
although the agency had envisioned that the initiative would not 
increase SSA's existing budget. SSA recently introduced regulations 
that will, if finalized, suspend certain portions of the DSI initiative 
in Boston pending further evaluation. However, it is not clear what 
evaluations will be conducted and if accuracy of disability 
determinations will be one of the factors considered when making 
decisions about which elements of DSI to continue. The Commissioner of 
SSA also recently announced that the agency will concentrate on 
clearing out the backlog of pending claims at the hearings level where 
it is most severe and bringing SSA's electronic case processing system 
into full operation, a step that is expected to facilitate the 
processing of disability claims. 

We are making recommendations to the Commissioner of the Social 
Security Administration to fully monitor backlogs and better execute 
and evaluate initiatives to address them. In its comments on a draft of 
this report, SSA agreed either in part, or with the intent of our 
recommendations, but did not fully agree with a number of our 
conclusions. SSA agreed that the agency should track claims at the 
reconsideration stage, but believed it should use an alternative 
measure as an indicator of performance rather than the measure we 
recommended. SSA partially agreed that the agency should conduct a 
thorough evaluation of DSI before finalizing the agency's decisions on 
implementation and noted that it will continue to collect data and 
monitor outcomes to evaluate DSI. SSA agreed that the agency should 
take necessary steps to improve the likelihood of the success of future 
initiatives and believed the agency is taking steps toward this end. 
Finally, SSA expressed concern that the draft report did not 
sufficiently emphasize SSA's need for additional funding and noted that 
the success of future efforts to reduce the disability claims backlog 
will depend on adequate and timely agency funding. We have added 
additional information on SSA's funding levels for fiscal years 1997 
through 2006 and have revised the report as appropriate in response to 
SSA's comments. However, we continue to believe that our 
recommendations are valid. 

Background: 

The Social Security Administration (SSA) administers two federal 
programs under the Social Security Act that provide benefits to people 
with disabilities who are unable to work: Social Security Disability 
Insurance (DI) replaces income for those with a Social Security work 
record and provides benefits related to their prior earnings levels. 
The Supplemental Security Income (SSI) program provides cash benefits 
to the elderly and individuals with disabilities who have limited or no 
work history.[Footnote 4] In addition, to be eligible for SSI, disabled 
individuals must not have income and assets above a certain 
level.[Footnote 5] 

The process to obtain SSA disability benefits is complex. Several state 
and federal offices are involved in determining whether a claimant is 
eligible for benefits. Although SSA is responsible for the program, the 
law calls for initial determinations of disability to be made by state 
agencies--Disability Determination Services (DDS).[Footnote 6] The work 
performed at federal and state offices is federally financed and 
carried out under SSA disability program regulations, policies, and 
guidelines. The application process, which is the same for DI and SSI 
claimants, involves an initial decision and an opportunity for 
reconsideration at the state level, and up to two levels of 
administrative appeal within SSA as shown in figure 1. 

Figure 1: SSA's Disability Determination Process: 

This figure is a flowchart depicting SSA's five-step sequential 
evaluation process for determining disability. 

[See PDF for image] 

[A] In 1999, SSA eliminated the reconsideration step in 10 states 
(Alabama, Alaska, Colorado, Louisiana, Michigan, Missouri, New 
Hampshire, New York, Pennsylvania and in the Los Angeles area of 
California) as part of the Prototype initiative. In these states, 
claimants who wish to appeal their initial DDS determination must 
appeal for review before an administrative law judge. As of August 
2006, New Hampshire discontinued participation in the Prototype 
initiative due to participation in a new initiative in the Boston 
region. 

[End of figure] 

Under the current structure the process begins at a SSA field office, 
where an SSA representative determines whether a claimant meets the 
programs' non-medical eligibility criteria, such as ensuring that an 
SSI applicant does not have excess assets, or determining if a DI 
applicant has a sufficient number of work credits. If the applicant 
meets the non-medical eligibility criteria, field office personnel will 
help claimants complete their applications and obtain claimants' 
detailed medical, education, and work histories. The completeness of 
the information gathered at this time can affect accuracy and speed of 
the decision. 

SSA field office staff then forward the application and the supporting 
medical evidence to the state Disability Determination Services (DDS) 
where a disability examiner, working with medical staff, must make 
every reasonable effort to help the claimant get medical reports from 
physicians, hospitals, clinics, or other institutions where the 
claimant has received past medical treatments. The examiner may also 
ask the claimant to take a special examination called a "consultative 
examination," where physicians or other medical professionals hired by 
SSA gather more information on the claimant's condition. After 
developing the case and assembling all medical and vocational 
information for the claim, the DDS examiner in consultation with 
appropriate medical professionals determines whether the claimant meets 
the requirements of the law for being disabled. In doing so, the DDS 
examiner conducts up to a five-step, sequential evaluation that 
includes a review of the claimant's current work activity, severity of 
impairment, and vocational factors. See figure 2. 

Figure 2: SSA's Five-Step Sequential Evaluation Process for Determining 
Disability: 

This figure is a flowchart showing SSA's five-step sequential 
evaluation process for determining disability. 

[See PDF for image] 

Source: GAO analysis of SSA data; images (Art Explosion). 

[A] In 2007 the substantial gainful activity (SGA) threshold was $1,500 
per month for blind recipients and $900 per month for individuals with 
other disabilities. 

[End of figure] 

Claimants who are dissatisfied with the initial DDS determination may 
appeal and request a "reconsideration" of the claim within 60 days of 
the notice of decision. The reconsideration review is conducted by DDS 
personnel who were not involved in the original decision. If the 
reconsideration team concurs with the initial denial of benefits, the 
claimant then has 60 days from the time of this decision to appeal and 
request a hearing before an administrative law judge (ALJ). 
Administrative law judges, who are based in 140 hearing offices located 
throughout the nation, can consider new evidence and request additional 
information including medical evidence or medical and vocational expert 
testimony. A claimant who is dissatisfied with the hearings decision 
may request, within 60 days of the administrative law judge's decision, 
that the Appeals Council review the claim. 

The Appeals Council is SSA's final administrative appeals level and is 
comprised of administrative appeals judges. The Appeals Council may 
uphold, modify, or reverse the administrative law judge's action, or it 
may return the claim back to the administrative law judge for another 
hearing and issuance of a new decision. The decision of the Appeals 
Council is the Commissioner's final decision. To appeal this decision, 
the claimant must file an action in Federal Court. 

SSA measures its claims processing performance at each level of the 
process in terms of the number of claims pending each year and the time 
it takes to issue a decision. Since 1999, the agency has used a 
relative measure to determine the backlog by considering how many cases 
should optimally be pending at year-end. This relative measure is 
referred to as "target pending" and is set for each level of the 
disability process with the exception of the reconsideration level. 
SSA's target pending is 400,000 for claims at the initial stage and 
300,000 and 40,000 for the hearings and Appeals Council stages, 
respectively.[Footnote 7] The number of pending claims at year-end that 
exceed these numbers represents the backlog. 

Backlogs and Processing Times for SSA's Disability Claims Have 
Increased in the Past Decade, with a Particularly Large Backlog at the 
Hearings Level: 

Over the last decade, SSA experienced a substantial increase in its 
backlogs of disability claims with accompanying increases in processing 
times for initial claims and even greater increases for claims at the 
hearing level.[Footnote 8] From fiscal years 1997 through 2006, the 
total number of backlogged claims--the number of pending claims that 
exceed the optimal level that should be pending or in the pipeline-- 
doubled, reaching some 576,000 claims. The number of backlogged claims 
grew at both the initial determination and hearings level, though most-
-about 415,000--were backlogged at the hearings level. Meanwhile, for 
reconsideration claims, the second stage of review following an initial 
determination, the number of claims pending a decision increased about 
40 percent over fiscal year 1997 levels. Only at the Appeals Council, 
where fewer claims are processed, did SSA experience significant 
reductions in both backlogged claims and average processing times. 

Since 1997, the Total Backlog in SSA Disability Claims Has Doubled, and 
Processing Times Have Increased at Most Levels: 

Over the last decade, the total number of backlogged disability claims 
in SSA more than doubled, with the greatest accumulation of claims 
occurring among those that were awaiting a hearing. By the close of 
fiscal year 2006, a total of about 576,000 claims[Footnote 9] were 
considered backlogged by SSA's measure,[Footnote 10] which is the 
number of pending claims that exceed the number that should be 
optimally pending in any one year. The 2006 backlog represented an 
overall growth rate of over 120 percent from fiscal year 1997. 

Over the decade, backlogs of varying degree have occurred at all stages 
of the claims process where backlogs are calculated. However, since 
fiscal year 2001, these claims were concentrated most heavily at the 
hearings stage of the review process, and also at the initial 
processing level with the DDS offices. The hearings level accounted for 
the largest share of backlogged claims for 7 of the 10 years of study. 
In fiscal years 2000 and 2001, the DDS, which handles new claims, 
accounted for the largest share of the backlog. The Appeals Council, 
the last stage of appeal within SSA, had the largest backlog in fiscal 
year 1999, but dramatically reduced these numbers by 2006. See figure 
3. 

Figure 3: Total Backlogged Claims, by Level of Adjudication, Fiscal 
Years 1997 to 2006: 

This figure is a shaded bar graph showing total backlogged claims, by 
level of adjudication, fiscal years 1997 to 2006. The X axis represents 
fiscal year while the Y axis represents backlogged claims. The colors 
represent appeals council, hearings, and initial claims. 

[See PDF for image] 

Source: GAO analysis of SSA data. 

[End of figure] 

Not surprisingly, the average processing times for claims at the 
hearings and appeals levels tended to increase or decrease in concert 
with changes in the backlogs. Processing times for claims have 
increased significantly over time at the hearings level and somewhat so 
for initial determinations and reconsiderations at the DDS.[Footnote 
11] For example, processing times increased about 20 days for claims at 
both the DDS initial and reconsideration levels and about 95 days at 
the hearings level over this period.[Footnote 12] See figure 4. On the 
other hand, average processing time dramatically decreased at the 
Appeals Council. In fiscal year 2006, it took almost 140 days less to 
reach a decision at this level than in fiscal year 1997.[Footnote 13] 

Figure 4: Average Claims Processing Time for DDS Initial Claims, DDS 
Reconsiderations, Hearings, and Appeals Council Decisions, in Days, 
Fiscal Years 1997 to 2006: 

This figure is a combination line graph showing average claims 
processing time for DDS initial claims, DDS reconsiderations, hearings, 
and appeals council decisions, in days, for fiscal years 1997 to 2006. 
The X axis represents the fiscal year, and the Y axis represents the 
days. One line represents initial claims, another represents 
reconsiderations, another represents hearings, and another represents 
appeals council. 

[See PDF for image] 

Source: GAO analysis of SSA data. 

[End of figure] 

The growth in the disability claims backlog also generally coincides 
with increases in the total number of disability claims received by the 
agency.[Footnote 14] Over the 10-year period, the agency experienced a 
21 percent increase in the number of initial claims and a somewhat 
smaller increase in the number of requests for a hearing. Despite some 
increases in the number of dispositions issued annually, the backlog of 
claims waiting to be adjudicated has continued to grow. See figure 5. 

Figure 5: Total SSA Disability Claims Receipts, Dispositions, and 
Backlogs, Fiscal Years 1997 to 2006: 

This figure is a combination line graph showing total SSA disability 
claims receipts, dispositions, and backlogs, between fiscal years 1997 
and 2006. The X axis represents fiscal year, and the Y axis represents 
number of claims. One line represents total receipts, another 
represents total dispositions, and another represents total backlogs. 

[See PDF for image] 

Source: GAO analysis of SSA data. 

[End of figure] 

Backlog at the DDS Level Grew Substantially: 

Having begun the 10-year period without a backlog, the DDS offices 
experienced a rapid growth in backlogs from 1998 through 2004. 
Subsequently they made some small gains and ended fiscal 2006 with 
about 155,000 backlogged claims. Also, over the 10-year period, the DDS 
offices saw an increase almost every year in new initial claims, which 
constituted an overall increase of 21 percent by fiscal year 2006. DDSs 
have not been able to keep pace with these rising receipts despite 
increases in dispositions and some additional staffing.[Footnote 15] 
Thus, annual receipts outpaced annual dispositions in 6 of the 10 years 
we examined. See figure 6. SSA anticipates that the number of new 
claims requiring DDS processing will continue to grow. 

The increase in the numbers of initial claims has also affected the DDS 
offices' ability to process other workloads such as continuing 
disability reviews or CDRs. We found, for example, that the DDS offices 
conducted about one-half the number of CDRs, which are evaluations 
conducted by SSA to assess beneficiaries' continued eligibility for 
benefits, in fiscal year 2006 than they did in fiscal year 2004. (See 
app. II): 

Figure 6: DDS Initial Claims Receipts, Dispositions, Pending, and 
Backlog, Fiscal Years 1997 to 2006: 

This figure is combination bar chart showing DDS initial claims 
receipts, dispositions, pending, and backlog, between fiscal years 1997 
and 2006. The X axis represents the number of DDS initial claims (in 
thousands), and the Y axis represents the fiscal year. One bar 
represents receipts, one represents dispositions, one represents 
pending, and one represents backlog. 

[See PDF for image] 

Source: GAO analysis of SSA data. 

[End of figure] 

We were unable to determine from SSA data whether DDS offices also have 
a backlog in claims awaiting reconsideration reviews since the agency 
does not establish criteria that would allow measurement of backlogs at 
this stage of the process. However, it does track pending claims and by 
2006 these numbers had grown by 40 percent over 1997 levels--even 
though the number of claims received over this period dropped 25 
percent. This amounted to some 137,000 reconsideration claims pending 
at the end of fiscal year 2006. Contributing to this increase in 
pending claims was a reduction in the number of reconsideration 
dispositions issued--almost a third fewer than in fiscal year 1997. See 
figure 7. In fact, fewer dispositions were completed in fiscal year 
2006 than in 1990. The decline in reconsideration dispositions are 
attributed, at least in part to the initial claims workload. For 
example, a DDS official in one region we visited told us that several 
DDSs had either slowed or temporarily stopped conducting 
reconsideration reviews in order to concentrate on reviewing initial 
claims. In addition, other factors such as participation in the 
Prototype initiative, which eliminated the reconsideration stage in 10 
states, may have also contributed to the reduction in reconsideration 
dispositions. 

Figure 7: DDS Reconsideration Claims Receipts, Dispositions, and 
Pending, Fiscal Years 1997 to 2006: 

This figure is a combination bar chart showing DDS reconsideration 
claims receipts, dispositions, and pending, fiscal years 1997 to 2006. 
The X axis represents number of DDS reconsideration claims (in 
thousands. The Y axis represents fiscal year. One bar represents 
receipts, one represents dispositions, and another represents pending. 

[See PDF for image] 

Source: GAO analysis of SSA data. 

Note: This graphic does not include backlogs. We were unable to 
calculate backlogs at the reconsideration stage because SSA has not 
established an optimal level of pending claims that would allow its 
computation. 

[End of figure] 

Regarding average processing time, it took longer on average to 
adjudicate initial and reconsideration disability claims in fiscal year 
2006 than in 1997. The average processing time at the initial level was 
89 days in fiscal year 2006, compared to 70 days in fiscal year 1997. 
Moreover, 17 percent of initial DI claims (about 230,000 claims) took 
between 121 and 180 days to adjudicate; 6 percent (about 78,000 claims) 
required over 180 days. See figure 8. At the reconsideration stage, the 
average processing time for all claims increased from 51 to 72 days. 

Figure 8: Initial DDS Disability Insurance Claims Processing Time, by 
Age (in Days), Fiscal Year 2006: 

This figure is a pie chart showing initial DDS disability insurance 
claims processing time, by age (in days), during fiscal year 2006. 

Over 180 days: 6%; 
121-180 days: 17%; 
91-120 days: 19%; 
61-90 days: 25%; 
31-60 days: 24%; 
0-30 days: 9%. 

[See PDF for image] 

Source: GAO analysis of SSA data. 

[End of figure] 

The Largest Backlog in Disability Claims Has Been among Those Awaiting 
Hearings: 

Although backlogged claims were almost eliminated at the hearings level 
from fiscal 1997 through 1999, they grew unabated and reached over 
415,000 cases by fiscal year 2006--accounting for 72 percent of SSA's 
total disability backlog. This was more than twice the number of claims 
backlogged in fiscal year 1997. Meanwhile, the number of requests for 
hearings fluctuated considerably from year to year, and in one year, 
exceeded 1997 levels by as much as about 21 percent. On the other hand, 
the number of dispositions issued over the period declined slightly. 
See figure 9. 

Figure 9: Hearings Office Claims Receipts, Dispositions, Pending, and 
Backlog, Fiscal Years 1997 to 2006: 

This figure is a combination bar graph showing hearings office claims 
receipts, dispositions, pending and backlog, fiscal years 1997 through 
2006. The X axis represents number of claims, and the Y axis represents 
fiscal year. One bar represents receipts, one represents dispositions, 
one represents pending, and one represents backlog. 

[See PDF for image] 

Source: GAO analysis of SSA data. 

[End of figure] 

Although SSA was able to reduce average processing times at the 
hearings level in some years, by the end of fiscal year 2006, the time 
required to reach a decision had increased dramatically.[Footnote 16] 
In fiscal year 2000, SSA's average processing time was 274 days. 
However, by fiscal year 2006, this average had increased to 481 days, 
with many cases taking much longer. For example, 30 percent (about 
170,000) of the decisions issued in fiscal year 2006 took 600 days or 
more; about 2 percent (12,000) took over 1,000 days. See figure 10. 
Recently, SSA concentrated on reducing the number of cases pending over 
1,000 days. From September 2006 to the close of fiscal year 2007, SSA 
reduced the number of these cases from 63,770 to 108. 

Figure 10: Hearings Office Claims Processing Time, by Age (in Days), 
Fiscal Year 2006: 

This figure is a pie chart showing hearing office claims processing 
time, by age, (in days), during fiscal year 2006. 

Over 1,000 days: 2%; 
600-999 days: 28%; 
365-599 days: 39%; 
270-364 days: 11%; 
180-269 days: 8%; 
Under 180 days: 12%. 

[See PDF for image] 

Source: GAO analysis of SSA data. 

[End of figure] 

Lengthy processing times were particularly evident in two regions-- 
namely regions 5 (Chicago) and 10 (Seattle).[Footnote 17] See figure 
11. For these regions, about half of the decisions rendered in fiscal 
year 2006, took on average between 600 and 999 days.[Footnote 18] 

Figure 11: Hearings Office Claims Processing Time, Age (in Days) as a 
Percentage within a Region, Fiscal Year 2006: 

This figure is a combination bar chart showing hearings office claims 
processing time, age (in days) as a percentage within a region, fiscal 
year 2006. The X axis represents the region, and the Y axis represents 
the percentage of hearings dispositions. Each shaded bar chart 
represents a different time frame. One represents under 180 days. One 
represents 180-269 days. One represents 270-364 days. One represents 
365-599 days. One represents 600-999 days, and one represents over 
1,000 days. 

[See PDF for image] 

Source: GAO analysis of SSA data. 

Note: National totals include processing times for SSA's Central 
Screening Division. 

[End of figure] 

At the Appeals Council, Where Significantly Fewer Claims Are 
Adjudicated, Backlogged Disability Claims and Processing Times Were 
Dramatically Reduced: 

Between 1997 and 2006 the disability claims backlog and average 
processing time at the Appeals Council, which handles relatively fewer 
claims (less than 3 percent of all processed claims in 2006), decreased 
dramatically. By fiscal 2006, the backlog dropped from more than 74,000 
claims in 1997 to fewer than 6,000 claims--less than a tenth of the 
fiscal year 1997 backlog. Also over the period, the number of Appeals 
Council claims received declined by about 17 percent, and the number of 
dispositions issued generally increased over the number issued in 
fiscal year 1997.[Footnote 19] See figure 12. 

Figure 12: Appeals Council Claims Receipts, Dispositions, Pending, and 
Backlog, Fiscal Years 1997 to 2006: 

This figure represents the appeals council claims receipts, 
dispositions, pending, and backlog, between fiscal years 1997 to 2006. 
The X axis represents the number of claims (in thousands), and the Y 
axis represents the fiscal year. One bar represents receipts. One 
represents dispositions. One represents pending, and one represents 
backlog. 

[See PDF for image] 

Source: GAO analysis of SSA data. 

[End of figure] 

Accompanying the reduction in the Appeals Council's backlogged claims 
over the period was a dramatic 40 percent reduction in the average time 
that it took to reach a decision on a claim. In fiscal year 2006, the 
average time for the Appeals Council to process a claim was 201 days, 
down from 340 days in fiscal year 1997 and the 495 days it took in 
fiscal year 2000. While on average, it required fewer than 180 days for 
the Appeals Council to process most of the decisions in fiscal year 
2006, 16 percent of these decisions took 365 days or more. See figure 
13. 

Figure 13: Appeals Council Claims Processing Time, by Age (in Days), 
Fiscal Year 2006: 

This figure is a pie chart showing appeals council claims processing 
time, by age (in days) during fiscal year 2006. 

Over 1,000 days: 1%%; 
600-999 days: 5%; 
365-599 days: 10%; 
270-364 days: 7%; 
180-269 days: 13%; 
Under 180 days: 64%. 

[See PDF for image] 

Source: GAO analysis of SSA data. 

[End of figure] 

Growth in Applications, Staffing Losses, and Management Weaknesses Have 
Contributed to Backlogs: 

While backlogs in processing disability claims have plagued SSA for 
many years, several factors may have contributed to their increase in 
the last decade: a substantial growth in initial applications, staff 
losses, and management weaknesses. Staffing losses and turnover have 
reduced the number of experienced personnel available to process rising 
numbers of claims. Management problems have been manifested in a number 
of initiatives that were not well planned and implemented. That is, 
several initiatives introduced by SSA in the last 10 years to improve 
processing times and eliminate backlogged claims have, because of their 
complexity and poor execution, had mixed results. 

In the Past Decade, Disability Applications Increased Over 20 Percent 
while Staffing Increased 4 Percent at DDSs: 

As we noted earlier in this report, the number of initial applications 
for DI and SSI benefits increased by 21 percent overall from fiscal 
years 1997 to 2006; meanwhile, DDS staffing levels increased about 4 
percent. See figure 14. The increase in new applications can be 
attributable to a number of influences: periodic downturns in the 
economy, the aging of the baby boomer population, increased referrals 
from other programs, previous changes in program eligibility 
requirements and regulations, and increased program outreach. With 
respect to the economy, SSA officials, DDS senior managers, and prior 
work by GAO all attest to the fact that economic downturns from a 
failing industry or natural disaster can precipitate new disability 
applications. 

Figure 14: Initial Claims Receipts, Reconsideration Receipts, and DDS 
Work Years, Fiscal Years 1997 to 2006: 

This figure is a combination bar and line graph showing initial claims 
receipts, reconsideration receipts, and DDS work years, between fiscal 
years 1997 to 2006. The X axis represents the fiscal year, the left Y 
axis represents the claims receipts (in thousands), and the right Y 
axis represents DDS work years (in thousands). One bar represents 
initial claims receipts, another represents reconsideration receipts, 
and the line represents DDS work years. 

[See PDF for image] 

Source: GAO analysis of SSA data. 

[End of figure] 

Many SSA regional officials we spoke with said that increased program 
referrals from state and federal programs have also increased the 
volume of applications. Also, SSA officials and DDS senior managers 
cited a change in prior disability claims regulations that has 
effectively expanded eligibility for certain cases. Additionally, 
enhanced outreach efforts over the years have likely increased the 
filing of applications for benefits, according to senior managers we 
spoke with in two SSA regions. Officials in one region recounted one 
initiative that targeted outreach to the homeless, which increased 
applications and also added to processing times. They also attributed 
some processing delays to the time required to track homeless 
candidates and help them document their disabilities. 

SSA Has Experienced Substantial Turnover and Losses in Personnel 
throughout the Disability Claims Process: 

Over the past decade, the growth in the disability claims backlogs has 
coincided with a period of staff turnover and losses throughout the 
disability claims process. At the Disability Determination Services 
(DDS), where the initial and reconsideration decisions are made, in 
particular, there has been a high rate of turnover and attrition. 

Disability Examiners and Medical Staff for the Disability Determination 
Services. Attrition rates for DDS disability examiners, who are state 
employees, are almost double that of SSA federal staff. An interim June 
2007 report by SSA officials and DDS senior managers cited an attrition 
rate of 12.7 percent among disability examiners, which was 
significantly higher than the attrition rate of 6.8 percent among SSA 
federal staff for fiscal year 2006.[Footnote 20] In the course of our 
work and in prior reports, DDS officials have attested to the impact of 
staff losses on work flow. 

Many DDS senior managers we recently spoke with said that turnover of 
experienced disability examiners has affected productivity. In one 
state office, for example, senior managers told us they have had 
difficulty retaining experienced disability examiners and said that 
many leave after their first year of training. These senior managers 
also noted an overall attrition rate of 22.3 percent for DDS disability 
examiners who completed their first year of training from September 
1998 to January 2006. Further, about 130 of the approximately 600 
disability examiners hired during that period left or were terminated 
within the first year. DDS officials said the loss of experienced staff 
affects their ability to process disability claims workloads because it 
generally takes newly hired examiners about 2 years to become 
proficient in their role. 

These accounts of difficulty in retaining key staff are consistent with 
a 2004 GAO study, where we reported that over half of the DDS directors 
stated that claims examiner turnover had increased DDS claims 
processing times and backlogs and that the remaining examiners had to 
assume higher caseloads.[Footnote 21] Almost all of those directors 
reported that the number of examiners in their DDSs had not been 
sufficient for their workloads in at least one fiscal year between 2000 
and 2002. We also reported that many DDS directors believed that their 
examiners needed additional training. 

Finally, DDS managers and staff we spoke with said that not having 
sufficient medical and vocational experts available to review 
examiners' work also extended the time it generally takes to process 
and review an application. For example, at one location, disability 
examiners told us that it took 2 months to review some claims that 
involved mental health issues. 

Administrative Law Judges and Support Staff for Hearings. For much of 
the period under study, SSA experienced reductions in administrative 
law judges (ALJs) and support staff--decision writers, staff that 
prepare case files for review, attorneys, and claims technicians--who 
process disability claims.[Footnote 22] 

The number of ALJs available to conduct hearings fluctuated annually, 
ranging from a high of 1,087 in fiscal 1998 to a low of 919 in fiscal 
year 2001 and rebounding somewhat in 2006, to 1,018.[Footnote 23] Many 
senior SSA management staff and ALJs with whom we spoke cited the 
number of administrative law judges available to conduct hearings as a 
major contributor to backlogged claims.[Footnote 24] In May 2006, the 
Commissioner of SSA said that the agency would require no fewer than 
1,250 administrative law judges along with sufficient numbers of 
support staff to properly manage the claims currently pending at the 
hearings level. Even at these staffing levels, the Commissioner said 
the agency does not expect to immediately reduce the backlog. 

Both the number of support staff and the ratio of support staff to ALJ 
fluctuated considerably in the hearings offices between fiscal years 
1997 and 2006. Support staff levels peaked at over 5,500 in 1999 and in 
2006, bottomed out at about 4,700. While SSA senior managers and ALJs 
have recommended a staffing ratio of 5.25 support staff to 
administrative law judge for effective processing of claims, the actual 
ratio has more often been lower, ranging from a ratio 4.59 in 1997 to 
4.12 in 2006.[Footnote 25] Only in fiscal year 2001 did the ratio of 
support staff to administrative law judge meet the staffing levels 
recommended by SSA's senior management. 

The backlog decreased when the ratio of support staff to ALJs increased 
in some years, but not in others; perhaps because of other intervening 
factors such as the implementation of new initiatives and the 
elimination of others such as the Hearings Process Improvement 
initiative and the Senior Attorney program, respectively.[Footnote 26] 
See figure 15. By the close of fiscal year 2006, SSA saw the highest 
level of backlogged claims and the lowest ratio of support staff to 
ALJs over this period. As shown in figure 16, the number of pending 
cases that were older than 270 days decreased significantly when the 
support staff to ALJ ratio was higher in fiscal years 1999 through 
2001. 

Figure 15: Hearings Office Claims Backlog and the Ratio of Hearings 
Office Support Staff to ALJ, Fiscal Years 1997 to 2006: 

This figure is a combination bar and line graph showing hearings office 
claims backlog and the ratio of hearings office support staff to ALJ, 
fiscal years 1997 to 2006. The X axis represents the fiscal year, the 
left Y axis represents the number of backlogged hearings claims, and 
the right Y axis represents support staff ratio. The bars represent 
backlogs, and the line represents support staff to ALJ ratio. 

[See PDF for image] 

Source: GAO analysis of SSA data. 

[End of figure] 

Figure 16: Percentage of Hearings Office Claims Pending More Than 270 
Days at the End of Year and the Ratio of Hearings Office Support Staff 
per ALJ, Fiscal Years 1997 to 2005: 

This figure is a combination bar and line graph showing percentage of 
hearings office claims pending more than 270 days at the end of the 
year and the ration of hearings office support staff per ALJ, fiscal 
years 1997 to 2005. The X axis represents the year, the left Y axis 
represents the support staff ratio, and the right Y axis represents the 
percentage of claims older than 270 days. The bars represent the 
support staff ratio, and the line represents the percentage of claims. 

[See PDF for image] 

Source: GAO analysis of SSA data. 

[End of figure] 

SSA experienced staffing challenges agencywide. For example, the agency 
experienced a reduction of more than 1,700 annual full time equivalent 
employees from fiscal years 1997 to 2006. See table 1. 

Table 1: SSA Annual Full Time Equivalent Employees for Fiscal Years 
1997 to 2006: 

Fiscal Year: 1997; 
Full time equivalent: 64,904. 

Fiscal Year: 1998; 
Full time equivalent: 63,621. 

Fiscal Year: 1999; 
Full time equivalent: 62,544. 

Fiscal Year: 2000; 
Full time equivalent: 61,931. 

Fiscal Year: 2001; 
Full time equivalent: 62,189. 

Fiscal Year: 2002; 
Full time equivalent: 62,563. 

Fiscal Year: 2003; 
Full time equivalent: 62,521. 

Fiscal Year: 2004; 
Full time equivalent: 63,300. 

Fiscal Year: 2005; 
Full time equivalent: 63,949. 

Fiscal Year: 2006; 
Full time equivalent: 63,131. 

Source: Data provide by SSA. 

Note: Does not include the Office of the Inspector General. 

[End of table] 

In addition to staffing levels, senior SSA officials said the overall 
performance of administrative law judges in adjudicating disability 
cases at the hearings level has a substantial impact on the time it 
takes to render a disability decision. For example, they said average 
productivity would increase if the performance of the bottom 17 percent 
of their duty ALJs--ALJs whose responsibility is to primarily review 
cases--improved.[Footnote 27] According to SSA, the average number of 
hearings processed per duty ALJ is currently around 515 per year, while 
17 percent of duty ALJs process fewer than 350 cases per year. 

Further, SSA officials told us that in the past several years, the 
agency has received appropriated amounts below the President's budget 
request. (See table 2) As a result, the agency has not had sufficient 
resources and has encountered challenges balancing its many workloads. 
In commenting on a draft of this report, SSA indicated that despite 
budget shortfalls, since 2001, through innovation, automation, and 
dedicated staff, the agency has improved productivity on average, by 
2.5 percent each year. However, according to SSA, the success of future 
efforts to reduce the disability claims backlog will depend on adequate 
and timely agency funding. 

Table 2: Social Security Administration's Limitation on Administrative 
Expenses Account for Fiscal Years 1997 to 2006: 

Dollars in millions. 

Fiscal year: 1997; 
Commissioner's Request: 6,239; 
President's Budget Request: 6,092; 
Final Appropriation: 6,407. 

Fiscal year: 1998; 
Commissioner's Request: 6,654; 
President's Budget Request: 6,522; 
Final Appropriation: 6,409. 

Fiscal year: 1999; 
Commissioner's Request: 6,640; 
President's Budget Request: 6,541; 
Final Appropriation: 6,426. 

Fiscal year: 2000; 
Commissioner's Request: 6,908; 
President's Budget Request: 6,706; 
Final Appropriation: 6,572. 

Fiscal year: 2001; 
Commissioner's Request: 7,356; 
President's Budget Request: 7,134; 
Final Appropriation: 7,124. 

Fiscal year: 2002; 
Commissioner's Request: 7,982; 
President's Budget Request: 7,574; 
Final Appropriation: 7,562. 

Fiscal year: 2003; 
Commissioner's Request: 7,974; 
President's Budget Request: 7,937; 
Final Appropriation: 7,885. 

Fiscal year: 2004; 
Commissioner's Request: 8,895; 
President's Budget Request: 8,530; 
Final Appropriation: 8,313. 

Fiscal year: 2005; 
Commissioner's Request: 9,310; 
President's Budget Request: 8,878; 
Final Appropriation: 8,733. 

Fiscal year: 2006; 
Commissioner's Request: 10,106; 
President's Budget Request: 9,403; 
Final Appropriation: 9,109. 

Source: CRS Report for Congress, Social Security Administration: 
Administrative Budget Issues; Updated October 26, 2007. 

[End of table] 

Management Weaknesses Also Contributed to Disability Case Backlogs: 

Management of the disability claims system and particularly of 
strategies initiated to remedy the backlogs may have also contributed 
to their growth in some circumstances. In the last decade, a number of 
initiatives undertaken by SSA to improve the disability process and 
remedy backlogs have faltered for a variety of reasons, including poor 
execution. Implementation of these initiatives, therefore, has often 
slowed case processing. Prior GAO work found that many of the 
initiatives the agency has undertaken since the late 1990s were poorly 
planned and implemented and yielded more losses than gains. In some 
cases, the plans were too large and too complex and fell far short of 
expectations. In addition, in 2001, the Social Security Advisory Board 
raised concerns about SSA's many proposed process changes and about the 
amount of time and resources the agency had invested in changes that 
resulted in minimal gains. 

Some initiatives had the effect of slowing processing times by reducing 
staff capacity, increasing the number of appeals, or complicating the 
decision process. Some improved the process, but were too costly and 
subsequently abandoned. This was the case for several facets of a major 
1997 initiative, known as the "Disability Process Redesign," which 
sought to streamline and expedite disability decisions for both initial 
claims and appeals.[Footnote 28] Various initiatives within this effort 
became problematic. In addition, implementation of an electronic system 
enhanced some aspects of the disability claims process, but also caused 
some delays. 

Process Unification. This initiative, which was designed to standardize 
decisions made both at the initial claims and the hearings level by 
streamlining existing regulations required disability examiners to more 
fully develop and document their decisions. Although this would require 
more time early in the process, this initiative was expected to reduce 
backlogs by decreasing the number of appeals. This initiative was only 
partially implemented and portions of it, such as the development of a 
unified policy guide for adjudicators, were later abandoned by SSA 
because of high costs and an overly-ambitious scope. 

The Prototype. This initiative was designed to ensure that all 
legitimate claims were awarded as early in the initial claims process 
as possible by eliminating the second independent review or 
reconsideration step in the disability adjudication process. Although 
designed to streamline initial processing of claims by screening for 
claims with clear eligibility, this process resulted in an increase in 
the number of appeals for a hearing by an administrative law judge. 
After introducing the process in ten states, SSA, in 2002, discontinued 
its expansion based on its high administrative costs and the increased 
number of appeals.[Footnote 29] SSA also concluded that this initiative 
would cause claimants to wait significantly longer for a final decision 
on a hearings claim. 

The Disability Claims Manager. SSA implemented this initiative in 1999 
to make the claims process more user-friendly and efficient by 
assigning a disability claims manager as the primary point of contact 
until initial decisions are made. The disability claims manager altered 
the process by which numerous employees handled discrete parts of the 
initial claim. Both SSA and DDS employees served as disability claims 
managers during the test, performing both claims representative and 
disability examiner functions. While the test showed greater customer 
satisfaction and faster processing, SSA, in June 2002, ended the 
initiative because of significant start-up and maintenance costs, 
including employee training and insufficient infrastructure to support 
the new claims process. 

The Adjudication Officer. This initiative was designed to expedite 
decision-making at the hearings level by assigning single points of 
contact to (l) provide claimants with information about the hearing and 
their rights to representation, (2) develop the record for a hearing, 
(3) issue fully favorable on-the-record decisions when supported by 
evidence, and (4) narrow issues and fully develop cases that are 
forwarded to the administrative law judge for a decision. Since this 
initiative did not meet most of its milestones for testing or 
implementation because of an overly ambitious plan that required the 
agency to move forward on many fronts simultaneously, SSA discontinued 
implementation in 1999. 

With the Disability Process Redesign Plan of 1997 largely discontinued, 
in 2000, SSA undertook new efforts to improve processing, but most of 
these changes have been troubled by protracted implementation and 
slowed claims processing. 

Electronic Disability Process. In 2000, SSA revived a prior plan to 
transform its paper-based processing system to a national, fully 
integrated electronic processing system. The initiative has several 
goals, including (1) reducing delays caused by losing paper folders 
during transfers to other offices, (2) providing more complete 
disability information on claimants, and (3) reducing keying errors as 
well as storage and mailing costs. However, SSA's decision in 2002 to 
accelerate its rollout of the electronic claims process before 
conducting end-to-end testing of the systems resulted in systemic 
instability and shutdowns at the DDS and hearings offices.[Footnote 30] 
For example, DDS managers in one SSA region we visited said as a result 
they were faced with computer shutdowns as long as a half hour each 
day, making it difficult to process cases. However, SSA regional 
officials told us that these problems are now improving. 

Also, the electronic folder system, a component of the electronic 
disability process, was implemented at the hearings offices without "e- 
pulling," a feature that was part of SSA's original vision of a mature 
electronic disability process that would automatically eliminate 
duplicate documents and organize the remaining documents. While a pilot 
of the functionality for e-pulling is scheduled for implementation in 
April 2008, technicians must still perform this activity manually. 
Staff in one region we visited said that because of system problems and 
the time required to eliminate duplicate electronic documents, and 
master the new system, it has been taking up to three times as long to 
prepare a case. Moreover, administrative law judges we spoke with in 
two SSA regions said that as a result they had experienced some delays 
because the support staff could not prepare enough claims files for 
hearings. 

Currently, new claims are generally processed in the electronic folder 
system at all stages of the process with the exception of the Appeals 
Council, where an electronic folder system is expected to be installed 
January 2008. In addition, since June 24, 2007 hearing offices have 
been able to "reactivate" the most recent closed electronic file, thus 
allowing cases remanded by the Appeals Council to remain electronic. 
Prior to June 24, 2007, any disability claim that was sent back to a 
previous level of the process for adjudication, such as claims that 
were remanded from the Appeals Council back to a hearings office, had 
to be converted and processed in paper, which caused some claims 
processing delays. 

Hearings Process Improvement. This initiative, implemented in 2000 to 
reduce the number of appeals by improving their review at the hearings 
level, reorganized staff into small groups in the hearing offices to 
screen and analyze claims before they were scheduled for a hearing with 
an ALJ. Among other things, this resulted in the promotion--without 
replacement--of some staffers who had formerly been key to assembling 
claims documents for hearings. Also, the automated systems that were 
necessary to support the full implementation of this initiative were 
never put in place. Many of the senior SSA officials we spoke with 
expressed the opinion that this initiative was responsible for dramatic 
increases in delays and processing times at the hearings level. Also, 
during a May 2002 congressional hearing, the Commissioner of SSA 
acknowledged that this initiative had created additional bottlenecks at 
the hearings level. 

Appeals Council Process Improvement. This initiative was implemented in 
2000 to improve customer service by reducing processing times and 
pending disability workloads at the Appeals Council level among other 
strategies, through increased adjudicatory capacity. It was credited 
with reducing both disability case processing times and the backlog of 
pending claims at the Appeals Council level. However, the initiative 
was hampered by automation problems and policy changes. For example, an 
inefficient and error-prone case tracking system caused process delays. 
Additionally, policy changes required that subsequent applications for 
benefits filed by claimants be kept separate from original ones. This 
resulted in two cases pending at different levels of the process, which 
complicated adjudication, requiring more time for resolution. 

In 2002, SSA introduced several short-term initiatives to reduce 
processing times and delays at the hearings level. These short-term 
initiatives included several approaches such as, bench decisions 
whereby an ALJ could issue a favorable decision based on the evidence 
when holding a hearing; use of information technology such as video 
hearings; early screening analysis to identify claims with a high 
likelihood of being granted; and use of outside contractor assistance 
for file assembly. Although many of these strategies are still 
employed, SSA discontinued the use of contractors for file assembly--in 
part because of problems with lost folders. 

SSA Has Introduced a New Set of Comprehensive Reforms, but Suspended 
Their Rollout to Concentrate on the Hearings Backlog and on Electronic 
Processing: 

In 2006, SSA introduced the Disability Service Improvement initiative 
(DSI), a comprehensive set of reforms to the disability process, which 
was initially rolled out in the Boston region with the intention of 
extending it nationally.[Footnote 31] However, DSI was hampered by 
rushed implementation, poor communication within the agency, and 
inadequate financial planning. Thus far, results of the initiative have 
been mixed. SSA recently published proposed regulations to suspend 
certain portions of the initiative operating in the Boston region that 
have cost more than anticipated. SSA has said that it will continue to 
evaluate these portions of the initiative to determine whether they 
should be reinstated. However, it is not clear whether accuracy of 
decisions will be a key consideration in addition to cost and 
timeliness when conducting these evaluations. In the meantime, SSA will 
re-focus its efforts on clearing out the hearings backlog, which has 
reached over 400,000 claims, and on increasing the functionality of the 
electronic folder system. 

Rushed Implementation of SSA's "Disability Service Improvement" 
Initiative as well as Poor Communication and Inadequate Financial 
Planning Has Produced Mixed Results: 

In March of 2006, SSA instituted a comprehensive plan to improve all 
phases of the disability claims process with fundamental changes, 
expecting to make it operational in the Boston region by August of 2006 
and in a second region, at the earliest, a year later.[Footnote 32] 
This plan, called the Disability Service Improvement initiative (DSI) 
was designed to produce correct decisions on disability claims as early 
in the application process as possible, with the expectation that DSI 
would reduce both appeals of denied claims and future backlogs. (See 
app. III for key aspects of DSI). 

By regulation, DSI began in the Boston region in August of 2006--just 4 
months after publication of the final rule describing the program. 
According to regional officials, this left insufficient time to get 
these programs up and running. Also, according to agency and regional 
officials we spoke with, problems caused by a tight schedule were 
compounded by limited communication between SSA headquarters and the 
Boston region prior to the DSI rollout. Officials from the Boston 
region said that regional staff were not party to DSI planning, which 
took place in SSA's Baltimore office, and that until the final 
regulation was published in March, the only information the officials 
received about DSI was the information that was released publicly. 
Despite multiple requests for meetings, regional officials said they 
did not meet with SSA headquarters personnel to discuss implementation 
until May 2006, less than 3 months before the program's scheduled 
rollout and they had few details on how the DSI process was intended to 
work logistically. Further, DSI implementation was complicated by the 
fact that staff were still becoming familiar with the electronic 
processing system, which had been recently implemented. 

Additionally, SSA did not provide training to offices outside the 
Boston region on how to handle claims that are filed originally in the 
Boston region under the DSI system.[Footnote 33] While examiners in non-
DSI regions were instructed to use an electronic search system for 
guidance on DSI cases, they generally found the system to be 
inadequate. According to these officials, the search engine did not 
allow a search by words or phrases and was not effective in providing 
information to examiners on DSI or other topics. 

DSI involved several envisioned changes to improve the disability 
determination process, but several factors, including tight time frames 
and poor communication, converged to undermine the initiative, 
producing mixed results in the Boston region, which has resulted in SSA 
expediting national rollout of some portions of the initiative and 
proposing indefinite suspension of others. 

Quick Disability Determination Process. For initial claims, the DSI 
initiative added an automated screening function designed to identify 
disability claims that have a high likelihood of being approved for 
expedited processing. This process, known as the Quick Disability 
Determination (QDD) program, has been successful in fully adjudicating 
79 percent of targeted claims within 20 days or fewer with an average 
decision time of 10 days.[Footnote 34] Moreover, SSA's Office of 
Quality Performance found high accuracy rates when reviewing decisions 
made under this screening strategy. Nevertheless, Boston regional 
officials told us that the screening mechanism may not consistently 
identify claims that appear to fit SSA's established profile for 
adjudication under this process. For example, an SSA official in one 
state noted a case in which applications for disability benefits were 
submitted for two low birth-weight twins, only one of whom was 
identified as eligible under the QDD screening process, although they 
both had the same condition. According to SSA, this happened because 
the application for the twin that was not selected for QDD did not have 
a weight listed. While SSA headquarters officials have expressed 
enthusiasm about QDD, and the agency has published regulations to roll 
it out nationally, regional officials cautioned that achieving rapid 
resolution of identified claims is highly dependent on hospitals or 
other medical centers expediting the submission of patient records to 
SSA. To date, examiners in the Boston region have been successful in 
convincing doctors and hospitals to expedite evidence for QDD cases, 
but the examiners still cautioned that providers of medical evidence 
may grow less responsive to requests for expedited information as these 
requests increase. 

Office of the Federal Reviewing Official. While reconsideration 
adjudications for a denied claim have traditionally been handled by 
disability examiners at the DDS offices, the DSI initiative transferred 
such reviews to a new federal office of attorneys. These officials, 
known as Federal Reviewing Officials (FedRO), provide more extensive 
documentation of the decision to the claimant for this first level of 
appeal. Decisions by examiners from this specialized federal office 
have, as of March 2007, had accuracy rates of 97 percent.[Footnote 35] 
According to SSA, this is higher than accuracy rates for DDS 
reconsideration adjudications.[Footnote 36] Data provided by SSA on 
FedRO decisions to date also showed that these decisions had resulted 
in fewer appeals compared to standard reconsideration reviews in 
Boston.[Footnote 37] While the FedRO has only recently begun issuing 
decisions, SSA officials have noted that they have so far been well 
documented and legally consistent. 

While case documentation and accuracy appear to have improved under 
FedRO, which is staffed at half of planned capacity, pending claims 
levels and processing times have begun to increase substantially as 
more cases are decided under this process. Between November of 2006 and 
March of 2007, the number of claims pending at the FedRO increased from 
209 to over 4,000. Moreover, the average time it took to adjudicate a 
claim increased from 41 to 80 days and continued to rise to 113 days at 
the close of June 2007. Meanwhile, receipts coming into the FedRO 
office are increasingly outpacing dispositions at a rate that could 
create a new backlog. (See table 3.) 

Table 3: Office of Federal Reviewing Official (FedRO) Claims End of 
Month Status, October 2006 to March 2007: 

Pending; 
October: 55; 
November: 209; 
December: 811; 
January: 1,584; 
February: 2,775; 
March: 4,876. 

Receipts; 
October: 50; 
November: 158; 
December: 616; 
January: 827; 
February: 1,269; 
March: 2,328. 

Dispositions; 
October: 0; 
November: 4; 
December: 14; 
January: 54; 
February: 78; 
March: 226. 

Average age of pending; 
October: 12; 
November: 24; 
December: 32; 
January: 38; 
February: 46; 
March: 55. 

Source: SSA data. 

[End of table] 

In August of 2007, SSA published a proposed rule to suspend the FedRO 
review in the Boston region, citing high administrative costs and lack 
of data to perform adequate evaluation on the effectiveness of FedRO 
review as reasons for suspension. If the proposed regulation is 
finalized, claims appealed after an initial decision will be reviewed 
at the DDS under the existing reconsideration procedures. The proposed 
rule states that SSA intends to continue to process claims already 
received at the FedRO and will continue to evaluate the FedRO through 
the processing of these claims. SSA says it will make a final 
determination as to whether to reinstate the processing of claims at 
the FedRO based on this evaluation. 

Office of Medical and Vocational Expertise (OMVE). The DSI initiative 
established a specialized office to supply medical expertise. The 
Medical and Vocational Expert System commonly called the Office of 
Medical and Vocational Expertise (OMVE), is staffed with nurse case 
managers who support the FedROs. Nurse case managers at the OMVE obtain 
and collect needed medical evidence, schedule consultative exams for 
claimants with SSA-contracted physician specialists, and conduct a 
general review of each claim. The OMVE was not formed until June 2006 
and as of June 2007, this office was staffed at about half the capacity 
required to support the Boston region. This has contributed to over 
6,500 claims pending review at the OMVE with about 1,800 claims pending 
over 75 days as of June of 2007. In addition, the office has failed to 
establish sufficient numbers of contracts with specialty physicians, a 
problem that was attributed to the lack of availability and the cost of 
retaining such specialists. As a result, staff acknowledged that as of 
June 2007, claims were pending 3 weeks for psychiatric review and 5 
weeks for orthopedic review. Additionally, some agency officials told 
us they often found the nurse case-manager review unnecessarily 
duplicative of the work done by the FedRO and noted that the dual 
review was also expensive since both the FedRO and OMVE involve high 
level positions with substantial salaries. In August of 2007, SSA 
proposed using the OMVE in a more limited role to develop and manage a 
national registry of medical, psychological, and vocational experts. 

Deadline for Submission of Evidence at the Hearings Level. At the 
hearings level, the DSI initiative generally requires claimants to 
submit evidence no later than five business days before a 
hearing.[Footnote 38] In limited circumstances, the ALJ will accept 
evidence submitted at the hearing or during the five business days 
before the hearing, or after the hearing and before the hearing 
decision is issued.[Footnote 39] Submission of additional evidence at 
or immediately prior to a hearing can necessitate rescheduling the 
hearing in order for ALJs to consider new evidence. Such delays could 
postpone hearings for several months and require staff resources to 
prepare for the hearing. The official record closes once the ALJ issues 
a decision; regardless of whether it becomes the final 
decision.[Footnote 40] Officials we spoke with in the Boston region 
viewed these deadlines as positive improvements and the Commissioner of 
SSA has recently endorsed these changes. However, since very few DSI 
cases have made it to a hearing as of this date, it is difficult to say 
how these regulations will work in practice. 

New Templates for Documenting Decisions. Under DSI, initial disability 
examiners are also required to provide more extensive documentation 
describing why a claim is awarded or denied. In support of this 
requirement, SSA planned to institute the electronic Case Analysis 
Tool, (eCAT), a computer based system that guides examiners through the 
decision making process and helps them fully document their cases. 
However, SSA's Office of Systems did not have adequate time to fully 
develop and test the tool and, as of August 2006, eCAT was not as 
functional as SSA had expected. Despite, the fact eCAT was not fully 
operational, beginning in August, SSA required DDS examiners to either 
use it or another decision template, which was based on Microsoft Word, 
to document their cases. Both templates caused considerable delays in 
processing caseloads. Regional staff told us the templates were time 
consuming: the eCAT template had technical problems which caused the 
system to crash and lose information and because the Microsoft Word- 
based template was designed to address every possible disability claim, 
it required examiners to sort through an unrealistically long list of 
choices to document each element of every claim. In March 2007, the 
Commissioner of SSA discontinued the template requirement. He later 
noted in a May testimony before Congress that electronic templates 
developed for the DDSs under DSI had been discontinued because they 
were "not ready for real world use".[Footnote 41] 

Apart from the above operational problems, the Disability Service 
Improvement (DSI) initiative has also cost more than the agency 
anticipated. SSA officials told us that they had originally estimated 
that DSI would draw resources from existing programs within SSA. The 
expectation was that resources for staffing and new technology would 
come from the budgets for disability hearings and the electronic folder 
respectively and that implementation of DSI would not increase SSA's 
overall budget. However, according to SSA budget officials, partial 
rollout of the DSI initiative in the Boston region alone, had by June 
of 2007, incurred $24 million in staffing expenses above normal 
administrative costs for disability programs. Meanwhile, budget 
officials told us they had not yet estimated the cost of national 
implementation of DSI. However, they had recently estimated that fully 
staffing the Boston region--one of the smallest of SSA's ten regions-- 
will require as much as $46 million. This estimate did not include the 
cost of funding new technology associated with DSI, such as eCAT. 
Recently, SSA acknowledged the costs of DSI, particularly those 
associated with the FedRO and OMVE, were higher than expected. 

SSA Has Suspended National Rollout of the DSI Initiative Pending 
Further Evaluation: 

SSA suspended further implementation of the DSI initiative beyond the 
Boston region and in August 2007, issued a proposed rule that would 
suspend the FedRO and OMVE portions of DSI. In discussing suspension of 
the national rollout, several agency officials reported to us that the 
agency would conduct an evaluation of DSI in Boston before any further 
decisions were made. According to SSA's proposed regulation, the agency 
will decide whether to reinstate the FedRO and OMVE based on an 
analysis of their performance in the processing of claims already 
received as well as alternative approaches. SSA stated that the 
evaluation will include an assessment of program and administrative 
costs and timeliness. However, one criterion not mentioned for 
evaluation in the regulation is accuracy--which, according to officials 
involved in the creation of DSI, was one of the primary goals of FedRO 
and OMVE review. 

To date, the agency has undertaken only limited assessments of other 
components of DSI even though the strategic plan for the initiative 
originally included a schedule for a detailed evaluation plan. This 
evaluation plan was never carried out, and several components of DSI 
have not yet been assessed. Those evaluations that have been conducted, 
which we reviewed, were limited in scope and covered only short time 
periods. For example, we found that SSA's evaluations of QDD cases 
examined the accuracy of decisions, but not the criteria used for their 
selection or the speed at which individuals whose claims were approved 
under the program received their benefits. In addition, SSA's 
preliminary evaluation to assess FedRO's effectiveness was inherently 
limited by the number of cases involved, as the FedRO had processed 
fewer than 350 cases during the initial period of the evaluation. 

SSA Is Concentrating on Reducing the Hearings Backlog and Improving the 
Electronic Processing System: 

SSA recently outlined a new plan that concentrates on clearing out 
backlogged cases that includes investing at a minimum, an additional 
$25 million to improve the electronic processing system. Officials we 
spoke with at SSA emphasized that the new plan is not meant to replace 
the DSI initiative but to complement it until a final decision is made 
regarding the future of DSI. They noted that a large factor in the 
decision to suspend national rollout of DSI was the cost of the 
program, especially since its implementation was diverting resources 
from addressing the hearings backlog, which they said was at critical 
levels. 

The hearings backlog reduction plan, described in an 18-page document, 
focuses on reducing the existing hearings backlog through a series of 
steps that employ some prior innovations and also new initiatives. The 
plan focuses on updating SSA's medical eligibility criteria, expediting 
cases for which eligibility is more clear-cut, improving the electronic 
processing system, and focusing heavily on clearing out the backlog at 
the hearings level through a number of targeted actions.[Footnote 42] 
We highlight several of the proposed activities below: 

Update of SSA's Medical Condition Listings. As part of the effort to 
expedite cases, the Commissioner said SSA's existing medical listings 
would be updated so that disability categories are better defined. 

Quick Disability Determination (QDD). Citing that the QDD process was 
both efficient and compassionate, the Commissioner said the DSI quick 
decision process for claimants with clear-cut cases would be continued 
and implemented nationally. 

Improvements in Hearings Office Capacity and Performance. The 
Commissioner announced that the agency will increase the numbers of 
ALJs as well as support staff and will focus on clearing out cases that 
are more than 1,000 days old. The Commissioner has also proposed 
reviving the Senior Attorney Advisor program that was in place from 
1995 to 2000 and gave Senior Attorney Adjudicators the ability to 
approve cases for claimants with clear disabilities that did not 
require a hearing. To increase the number of ALJs, the Commissioner 
plans to hire new judges, appoint ALJs from other agencies, and also re-
hire some retirees. The backlog reduction plan also calls for remanding 
more cases back to the DDS, when appropriate, for fully favorable 
determinations. Finally, the plan calls for tightening performance 
measures for ALJs to ensure that cases are processed in a timely 
manner. 

Use of a Findings Template for Hearings Decisions. The plan mandates 
the use of a template to be used by decision writers and ALJs, when 
documenting hearings decisions. The purpose of the Findings Integrated 
Template (FIT) is to ensure that all pertinent legal requirements are 
addressed in the ALJ's decision, with the hope that this will reduce 
the number of cases that are remanded from the Appeals Council back to 
the hearings level. However, the template was not designed to analyze 
or marshal evidence and according to decision writers in one region we 
visited, FIT does not help them associate evidence with relevant 
regulations, which often is a primary source of decision writing 
errors. While officials noted that decisions written using this 
template had a lower rate of remands, overall, FIT has received mixed 
reviews from officials and staff at SSA we talked with who have used it 
for processing cases. They also noted that portions of the template 
were not always relevant to all decisions, which made it difficult to 
use. The decision writers said that an open format rather than a 
template provided more room for associating evidence for a specific 
case with a pertinent regulation. 

Temporary Service Area Realignments. The plan proposes to temporarily 
realign service areas by assigning additional service areas to hearing 
offices without backlogs and with low receipts. This is expected to 
correct caseload imbalances caused by dramatic fluctuations in receipts 
among the 141 hearing offices across SSA's geographic regions. Requests 
for hearings are to be routed by the servicing field office to the new 
hearing office rather than the original office. According to agency 
officials, this will significantly reduce mailing and computer inputs 
required under SSA's previous process, freeing valuable staff time for 
essential case preparation activities. However, agency officials told 
us that claims that are adjudicated in a region other than where they 
are filed require substantial investment for judicial travel or video 
equipment in the case of remote hearings. In addition to video 
equipment, remote hearings require the use of two rooms for the 
hearing, although SSA already faces constraints on physical space for 
hearings. Further, SSA would need to create additional permanent sites 
where the agency could leave video equipment rather than relying on 
rental of temporary sites, such as conference centers and hotel rooms, 
which the agency currently uses to conduct hearings in remote areas. 
The Commissioner is also proposing to continue with interregional case 
transfers, which are short-term reassignments of cases to other regions 
on an as needed basis if temporary service area realignments are not 
possible. 

Improve and Complete Implementation of the Electronic Processing 
System. The Commissioner has announced that SSA will dedicate $25 
million in resources from its technology reserve fund to update 
elements of the electronic folder that were not fully functional when 
the system was rolled out. The agency also plans the initial rollout of 
the electronic folder to the Appeals Council in January 2008. It also 
calls for enhancing the electronic folder by automating file assembly 
at the hearings level, allowing for electronic signatures on approved 
cases, facilitating shared access to the folder for SSA staff, and 
expanding internet support and functionality for claimants or their 
representatives. An official responsible for the information technology 
(IT) budget at SSA recounted that in the previous year the agency had 
budgeted all technology resources to the DSI initiative rather than the 
electronic folder. Referring to the electronic folder, now, as the 
"backbone" of the disability processing system, the official said the 
updates will be needed to make it fully functional and that SSA is now 
refocusing its priority on the electronic folder system. While 
electronic improvements are designed to shorten processing times, the 
National Association of Disability Examiners and staff we spoke with 
who have used the electronic system--disability examiners, decision 
writers and judges--described a mixed picture. They noted that 
transmitting and tracking cases is faster, but file reviews may 
actually take longer given that they necessitate scrolling through 
hundreds of pages of medical evidence on a computer screen.[Footnote 
43] 

Conclusions: 

SSA has long been confronted with the difficult challenge of weighing 
the nature and severity of individual disabilities for people who apply 
for benefits from two very complex programs. Adding to this challenge 
has been the substantial increase in disability applications over the 
past decade, just as the agency was experiencing increased losses in 
examiners, support staff, and administrative law judges. An overall 
loss of experienced staff combined with increasing workloads and 
resource constraints can reduce the success of any initiative aimed at 
reducing backlogs. Unfortunately, SSA also has a history of 
implementing initiatives to improve claims processing that have been 
poorly executed and therefore compounded its problems. 

While there is recognition of the severity of the disability claims 
backlog at the hearings level, it is unclear whether a similar 
situation exists at the first level of appeal--reconsiderations that 
occur at DDS offices. Without this recognition, SSA may fail to focus, 
when necessary, on any backlogs that occur at this stage and also 
understate the total backlog, which in fiscal year 2006, exceeded a 
half million claims. 

SSA's decision to "pause" the national rollout of the Disability 
Service Improvement initiative of 2006 may be appropriate given the 
fact that the hearings backlog has reached critical levels and that 
further rollout would prevent the agency from focusing on relieving the 
backlog and fully implementing a modern system of electronic 
processing. However, some features of the suspended Disability Service 
Improvement initiative could improve the disability process. SSA has 
noted that FedRO and OMVE are costly and may have to be discontinued. 
While the agency has stated it will consider cost and timeliness in its 
evaluations of these components, it is unclear whether the agency will 
assess accuracy, one of the primary goals of DSI, or attempt to 
identify aspects of the FedRO and OMVE that worked well and could be 
incorporated into the disability claims process should they not be 
reinstated. Any failure to weigh their potential through careful 
evaluation could risk additional waste in resources. Finally, the 
latest measures announced by the Commissioner to focus specifically on 
the hearings backlog also appear promising. Experience has shown, 
however, that without careful planning, execution, and evaluation even 
the best strategies can become expensive undertakings that impose 
unnecessary hardship on both claimants and agency staff. 

Recommendations for Executive Action: 

To ensure that current and future modifications to the disability 
determination process achieve the desired and optimal outcome, we 
recommend that the Commissioner of the Social Security Administration 
take the following three steps: 

* establish a "target pending" for cases in the reconsideration stage 
as the agency does for the other stages, to allow identification and 
monitoring of backlogs, 

* conduct a thorough evaluation of the Disability Service Improvement 
(DSI) initiative before deciding which elements should be implemented 
nationwide and which should be discontinued, and: 

* take needed steps to increase the likelihood that new initiatives 
will succeed through comprehensive planning to anticipate the 
challenges of implementation, by including the appropriate staff in the 
design and implementation stages, by establishing feedback mechanisms 
to track progress and problems, and by performing periodic evaluations. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to the Commissioner of the Social 
Security Administration (SSA) for review and comment. In comments on a 
draft of this report, SSA agreed either in part, or with the intent of 
our recommendations, but did not fully agree with a number of our 
conclusions. Also, SSA proposed that GAO recommend that the agency 
explore ways to improve ALJ performance. Moreover, SSA expressed 
concern that the draft report did not sufficiently emphasize SSA's need 
for additional funding. In addition, SSA had specific comments 
regarding our characterization of DDS target pending levels, the 
financial impact of DSI, and the agency's efforts to address the 
backlog at the hearings level. 

Regarding our recommendation that SSA establish a "target pending" for 
the reconsideration stage of the disability process, SSA agreed that 
tracking claims pending at this stage should be part of the agency's 
routine and comprehensive monitoring of all DDS workloads. However, SSA 
did not believe that it should establish an agency target or goal for 
reconsideration claims. Rather, SSA believed the number of 
reconsideration cases over a certain age could be used as an 
alternative indicator of performance, a measure that is consistent with 
the agency's current direction of focusing on aged claims. 

While aged claims might be a useful alternative indicator of 
performance, we continue to believe that SSA should establish a target 
pending or goal for the reconsideration stage as it does for the other 
three stages--initial, hearings, and Appeals Council--of the disability 
process. Establishing and monitoring a target pending at the 
reconsideration stage would help SSA to determine when the number of 
reconsideration claims pending exceeds the optimal level that should be 
in the pipeline, indicating a backlog exists. Knowing when pending 
claims have exceeded optimal levels at any stage in the disability 
claims process will help SSA better determine where the agency needs to 
focus its attention. 

SSA partially agreed with our recommendation that the agency should 
conduct a thorough review of DSI before deciding which elements should 
be implemented nationwide and which should be discontinued. SSA noted 
that it will continue to collect data and monitor outcomes to evaluate 
DSI and is implementing parts of DSI, such as QDD, that have been shown 
to enhance the agency's ability to make timely and accurate decisions. 
SSA stated that it will continue to evaluate the effect of FedRO and 
OMVE on its administrative functions. SSA added that the agency does 
not have sufficient resources to reduce the hearings backlog and fully 
staff FedRO and OMVE and that therefore, SSA's evaluation of these two 
components will have limited reliability. 

The intent of our recommendation is to help ensure that SSA 
incorporates a strong evaluation component in the DSI initiative. To 
date, SSA has conducted only limited assessments of DSI, even though 
the agency had previously developed a detailed evaluation plan and 
indicated this plan would be used to thoroughly evaluate the 
initiative. However, the assessments that have been completed were 
limited in scope and covered short time periods. In conducting a 
thorough evaluation of DSI, SSA would have more reliable data on which 
to base its decision on which aspects should be continued, 
discontinued, or modified. Any failure to weigh the potential of DSI to 
improve the disability claims process through careful evaluation could 
risk additional waste in resources. 

SSA agreed with the intent of our recommendation to take necessary 
steps to improve the likelihood of the success of future initiatives 
and stated it has already taken steps toward this end. 

We are pleased that SSA agrees with the intent of our recommendation 
and is "moving forward with clear accountable leadership, a solid plan, 
a very inclusive executive steering committee, regular management 
information data as feedback, ongoing monitoring, and coordinated 
monthly evaluation mechanisms." We hope that the agency's success in 
implementing this recommendation is evidenced in its future 
initiatives. 

SSA proposed that we recommend that the Commissioner of SSA explore 
ways that the agency can manage the performance of unproductive ALJs. 

Our report acknowledges that variations in ALJ productivity has been a 
long-standing challenge to addressing the backlog problem. In prior 
reports, we have also recommended ways to address ALJ performance 
issues. For example, in December 1989, GAO recommended that the 
Commissioner of SSA direct the Office of Hearings and Appeals (OHA) 
(now ODAR) to conduct a study to determine the appropriate number of 
cases that ALJs should be expected to decide.[Footnote 44] In July 
1996, we noted that SSA's disability Redesign Plan did not specifically 
address how SSA would consistently define and communicate its 
management authority over ALJs.[Footnote 45] Thus, we believe that SSA 
can pursue ways to manage the performance of unproductive ALJs on its 
own initiative without another GAO recommendation. 

Regarding budget implications, SSA believed that the report should 
elaborate on the full impact of reduced funding on the disability 
claims process and highlight this point throughout the report. The 
agency stated that since 2001, the Congress has appropriated on average 
$150 million less each year than the President's budget requested and 
that the agency employed 19,000 fewer people in fiscal year 2005, than 
it did 30 years ago. In addition, SSA points out that a minimum 
increase of over $300 million each year is required to support its 
large infrastructure. Further, the agency pointed out that despite 
budget shortfalls, since 2001, with innovations, automation, and 
dedicated staff, the agency has improved productivity by on average 2.5 
percent annually. However, according to SSA, to compensate for 
insufficient funding would require an additional 10 percent increase in 
productivity annually, a feat that the agency believes is not possible. 

We have added additional information to our report on SSA's budget 
requests and the amounts appropriated over the last several years. 
However, we do not know how the differences in funding requested and 
appropriations received affected backlogs and processing times since we 
did not conduct this analysis. To conduct such an analysis would 
require a separate study that would assess such factors as staffing, 
workloads, and, as SSA points out, the effects of innovations and 
automation on case processing, steps that can improve productivity. 

Regarding DDS target pending and staffing, SSA expressed concern that 
the report draft's discussion of the DDS backlog and target pending 
does not clearly explain that the target pending cited is the optimal 
pipeline and does not reflect the DDS's annual targets as outlined in 
SSA's Annual Performance Plan, which are based on available funding and 
staffing. Further, the agency pointed out that program integrity 
requirements also limit DDSs' flexibility in determining workload 
priorities. 

We have added additional information to the report to clarify our use 
of the term, "target pending". Since we did not conduct an analysis of 
SSA's budget or how the agency used its funding, we do not believe we 
can comment on how these factors specifically impact DDSs' capacity to 
process pending claims. 

Regarding DSI, SSA provided actuarial cost estimates for the DSI 
regulation regarding the effect DSI would have on total allowances and 
benefit costs. SSA said that the draft report did not acknowledge that 
the statutory requirement that 50 percent of all DDS allowances under 
DI programs must be reviewed prior to taking any action to effectuate 
the determination, represents a major workload and added approximately 
2 weeks to average processing times. 

Our discussion of DSI costs in this report is confined to 
administrative costs incurred beyond what SSA had anticipated. While we 
do not dispute SSA's assertion regarding the effect of pre-effectuation 
reviews, this factor did not surface as a major contributor to claims 
backlogs and processing delays during the course of our work. 

Regarding the agency's efforts to address the hearings backlog, SSA 
believed that given the emphasis the report places on the exploration 
of past initiatives, the report should provide a more thorough 
exploration of the agency's current initiatives for handling the 
hearings backlog, and provided additional information on the status of 
its current initiatives. SSA also pointed out that the success of the 
agency's initiatives depends on timely and adequate agency funding. 

We believe that we have given appropriate attention to both SSA's past 
and current initiatives to address the backlog and that it would be 
more appropriate to more thoroughly explore the current initiatives 
once they are fully implemented. 

SSA's comments appear in appendix IV. SSA also provided technical 
comments, which we have incorporated as appropriate. 

As agreed with your offices, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies of this report 
to relevant congressional committees, the Commissioner of the Social 
Security Administration, and other interested parties. We will make 
copies of this report available to others upon request. In addition, 
the report will be available at no charge on the GAO Web site at 
[hyperlink, http://www.gao.gov]. 

If you or your staff have questions concerning this report, please 
contact me at (202) 512-7215. Contact points for our Offices of 
Congressional Relations and Public Affairs may be found on the last 
page of this report. See appendix V for a listing of key contributors 
to this report. 

Signed by: 

Daniel Bertoni: 

Director, Education, Workforce, and Income Security Issues: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

We were asked to examine the backlog in disability claims at the Social 
Security Administration (SSA). Specifically, we (1) examined the trends 
in the disability claims backlog and the time SSA required to decide a 
claim, (2) identified key factors that have contributed to the 
disability claims backlogs and processing times, and (3) described the 
steps SSA is currently taking to reduce the backlog and claims 
processing times. To address these objectives, we analyzed 
administrative data related to SSA's claims processing between fiscal 
years 1997 and 2006. We conducted interviews with SSA central office 
officials, including officials from the Offices of Disability and 
Income Security Programs, Disability Adjudication and Review, 
Disability Determinations, Budget, Systems, and Appellate Operations 
and the Chief Actuary; with a variety of regional SSA and state 
Disability Determination Services officials, during site visits and 
over the telephone; and with officials from the National Association of 
Disability Examiners (NADE). We also reviewed relevant documents from 
SSA and other organizations. We conducted our work from November 2006 
through October 2007 in accordance with generally accepted government 
auditing standards. 

Analysis of Administrative Data: 

To identify trends in SSA disability claims, we analyzed SSA 
administrative data for Disability Insurance (DI) and Supplemental 
Security Income (SSI) disability claims for the four levels of the 
disability determination process. We analyzed data for the time period 
of fiscal years 1997 to 2006.[Footnote 46] The data we analyzed 
included: 

New receipts: The number of new claims receipts during the fiscal year 
at each level of adjudication. These data include Disability 
Determination Services (DDS) initial claims (excluding receipts that 
resulted in non-medical denials and eliminated the need for a DDS 
determination), DDS reconsideration claims, appeals for a hearing 
before an administrative law judge (ALJ), and appeals for review by the 
Appeals Council.[Footnote 47] 

Dispositions: The number of cases in which some adjudicative action was 
taken regarding the claim for disability benefits--including an 
allowance, a denial, or a dismissal--during the fiscal year, at each 
level of adjudication. 

Pending claims: The number of claims pending a review by SSA at the end 
of the fiscal year, at each level of adjudication. 

Average processing time: The average time it took for SSA to adjudicate 
a claim and reach a decision for all cases that were decided during the 
fiscal year, at each level of adjudication.[Footnote 48] 

Target pending: SSA's estimate of the number of cases that should 
optimally be pending at year-end. SSA provided estimates of the 
targeted number of pending cases for fiscal years 1999 to 2006 for each 
level of adjudication except for the DDS reconsideration 
level.[Footnote 49] For DDS initial claims, SSA estimated the targeted 
number of pending claims was 400,000. For the hearings level, the 
targeted number of pending cases was 300,000; and for the Appeals 
Council level, the targeted number of pending cases was 40,000. SSA 
used these same estimates for each fiscal year from 1999 to 2006. 

To calculate the number of backlogged claims at the end of each fiscal 
year for each level of adjudication, we compared the targeted number of 
pending cases at that level of adjudication to the actual number of 
pending cases. If the actual number of pending cases exceeds the 
targeted number of pending cases, then the difference is the backlog. 
The total backlogged cases we present in this report equals the sum of 
backlogged cases at the DDS initial, the hearings, and the Appeals 
Council level, as no estimate of target pending cases was available for 
the reconsideration level. Also, to calculate backlogs for fiscal years 
1997 and 1998, we used the same estimates of targeted pending cases 
that were provided for fiscal years 1999 to 2006. We judged this 
approach to be reasonable because these estimates did not change 
between 1999 and 2006. 

The data we analyzed came from several sources within SSA. Data on 
receipts, dispositions, and pending claims at the initial and 
reconsideration levels came from SSA's Disability Operations Data Store 
and the system that preceded it and data on case processing times at 
the initial and reconsideration levels came from SSA's SUMS Title II 
and SUMS SSI Processing Time applications and the systems that preceded 
them. All of these databases contain data submitted by the state DDS 
agencies. Data on receipts, dispositions, pending claims, and 
processing times at the hearings level came from the Hearing Office 
Tracking System (HOTS) and from the Case Processing and Management 
System (which replaced HOTS in fiscal year 2005). Data on receipts, 
dispositions, pending claims, and processing times at the Appeals 
Council level came from the Appeals Council Automated Processing 
System. To assess the reliability of the SSA data we interviewed SSA 
officials and reviewed documents regarding the reliability of these 
data. We determined that the data were sufficiently reliable for the 
purposes of our review, although we did find some potential limitations 
with HOTS data on case processing times at the hearings level, that we 
acknowledge in the report when discussing that data. 

Site Visits and Phone Interviews with Field Staff: 

We conducted site visits to 3 of 10 SSA regions--Massachusetts (region 
1), Texas (region 6), and California (region 9)--to obtain information 
on claims processing trends, factors that have contributed to the 
backlogs, and strategies SSA uses to address backlogs. During these 
site visits, we interviewed a variety of staff from several offices: 
the regional office Center for Disability, the regional Office of 
Disability Adjudication and Review (ODAR) office, a hearing office, and 
a state DDS office. For example, at the hearings offices, we met with 
the Hearing Office Director, administrative law judges, support staff, 
and decision writers. At the DDS offices, we met with the DDS director, 
managers, disability examiners, line staff, and medical consultants 
responsible for initial disability adjudications. 

We used several criteria to select the regions for our site visits. We 
selected region 1 because it was the only region that had implemented 
the Disability Service Improvement (DSI) initiative. We selected the 
other two regions because one has had below average processing times 
for initial claims in recent years, while the other has had above 
average processing times, even though the two have had similar numbers 
of initial claims receipts. For example, in fiscal year 2006, the 
national average processing time for initial DI claims was 88.9 days. 
The processing time for initial DI claims in region 6 was 76.6 days, 
and the processing time for initial DI claims in region 9 was 104.5 
days. Also in fiscal year 2006, region 6 received about 342,000 initial 
claims and region 9 received about 297,000 initial claims. (See table 4 
for national and regional data on initial claims processing times and 
initial claims receipts.) Within each region, we selected a hearing 
office and a DDS office that were reasonably close to the regional 
offices, so we could visit all four offices within our time frames. 

Table 4: Fiscal Year 2006 Regional Data on Average Processing Times and 
Receipts: 

Nation; 
Initial DI claims average processing time (days): 88.9; 
Initial DI and SSI claims receipts: 2,507,958. 

Region 1 (Boston); 
Initial DI claims average processing time (days): 91.9; 
Initial DI and SSI claims receipts: 108,072. 

Region 2 (New York); 
Initial DI claims average processing time (days): 98.4; 
Initial DI and SSI claims receipts: 213,780. 

Region 3 (Philadelphia); 
Initial DI claims average processing time (days): 87.9; 
Initial DI and SSI claims receipts: 250,602. 

Region 4 (Atlanta); 
Initial DI claims average processing time (days): 91.5; 
Initial DI and SSI claims receipts: 588,960. 

Region 5 (Chicago); 
Initial DI claims average processing time (days): 84.9; 
Initial DI and SSI claims receipts: 449,104. 

Region 6 (Dallas); 
Initial DI claims average processing time (days): 76.6; 
Initial DI and SSI claims receipts: 341,670. 

Region 7 (Kansas City); 
Initial DI claims average processing time (days): 73.6; 
Initial DI and SSI claims receipts: 114,269. 

Region 8 (Denver); 
Initial DI claims average processing time (days): 106.0; 
Initial DI and SSI claims receipts: 54,710. 

Region 9 (San Francisco); 
Initial DI claims average processing time (days): 104.5; 
Initial DI and SSI claims receipts: 297,144. 

Region 10 (Seattle); 
Initial DI claims average processing time (days): 78.3; 
Initial DI and SSI claims receipts: 89,647. 

Source: SSA data. 

[End of table] 

In the regions where we did not conduct site visits, we conducted 
semistructured telephone interviews with officials at the regional 
office Center for Disability and the regional ODAR office. We asked all 
of the regional managers and executives we interviewed the same 
questions. 

Document Review: 

We reviewed prior reports and testimonies from GAO, SSA, and SSA's 
Inspector General on the backlog in disability claims. We also reviewed 
position papers and testimonies from a number of national disability- 
related organizations, including NADE, the Association of 
Administrative Law Judges, the National Organization of Social Security 
Claimants' Representatives, the National Council of Social Security 
Management Associations, Inc., and the Social Security Advisory Board. 
We reviewed these documents to gather information on the trends in 
claims backlogs, the factors that contribute to the backlog, and the 
effectiveness of prior strategies used by SSA to reduce the backlogs. 

[End of section] 

Appendix II: Continuing Disability Reviews, Fiscal Years 2004 to July 
2007: 

Table: 

[See PDF for image]

Source: Data provided by SSA. 

[A] A final decision on whether the claimant will continue to receive 
Disability Insurance (DI) and Supplemental Security Income (SSI) 
disability benefits. 

[End of table] 

[End of section] 

Appendix III: Key Aspects of DSI as of August 2006: 

New feature: Quick Disability Determinations; 
Associated elements: 
* Expedited processing for certain clear-cut cases; 
* Use of a predictive model to screen for cases that have a greater 
likelihood of allowance and to act on those claims within 20 days; 
* Nationally standardized training for DDS examiners on this process; 
* Medical or psychological experts must verify that the medical 
evidence is sufficient to determine that the impairment meets the 
standards. 

New feature: Medical and Vocational Expert System; 
Associated elements: 
* A national network of medical, psychological, and vocational experts 
who will be available to assist adjudicators throughout the agency; 
* The national network will be overseen by a new Medical and Vocational 
Expert Unit; 
* All experts affiliated with the network must meet qualifications, 
which are still under development. 

New feature: Federal Reviewing Officials; 
Associated elements: 
* A cadre of federal reviewing officials--all attorneys--can affirm, 
reverse, or modify appealed DDS decisions; 
* Federal reviewing officials cannot remand cases to the DDSs for 
further review, but they can ask that the DDSs provide clarification or 
additional information for the basis of their determinations; 
* Reviewing officials may obtain new evidence and claimants can submit 
additional evidence at this stage. If necessary, the reviewing official 
may issue subpoenas for documents; 
* If a reviewing official disagrees with the DDS decision or if new 
evidence is submitted, he or she must consult with an expert in the 
expert system. 

New feature: Decision Review Board; 
Associated elements: 
* The Decision Review Board will replace the Appeals Council. It will 
be composed of individuals selected by SSA's Commissioner, and each 
member will serve a designated term; 
* The board will review both allowances and denials, and the board has 
the ability to affirm, modify, reverse, or remand ALJ decisions; 
* The board has 90 days from the date the claimant receives notice of 
board review to make its final decision. If it fails to act within that 
period, the ALJ decision remains SSA's final decision; 
* A claimant may submit a written statement to the board within 10 days 
of receiving notice that the board will review his or her case, 
explaining why he or she agrees or disagrees with the ALJ's decision. 
This statement may be no longer than 2,000 words. 

Source: GAO analysis. 

Note: While DSI does not change the structure or scope of ALJ reviews, 
the new process has several elements that affect hearings at the ALJ 
level. Namely, SSA will notify claimants at least 75 days prior to the 
hearing of the date and time for which the hearing has been scheduled. 
Additionally, claimants have to submit evidence at least 5 business 
days before the hearing date itself. 

[End of table] 

[End of section] 

Appendix IV: Comments from the Social Security Administration: 

Social Security; 
The Commissioner: 
Baltimore, MD: 

October 31, 2007:  

Dan Bertoni: 
Director, Education, Workforce, and Income Security Issues: 
U.S. Government Accountability Office: 
441 G Street, NW: 
Washington, D.C. 20548: 

Dear Mr. Bertoni: 

Thank you for the opportunity to review and comment on the Government 
Accountability Office (GAO) draft report, "Social Security Disability: 
Claims Processing Initiatives Require Better Planning, Management, and 
Evaluation" (GAO-08-40). The attached comments provide specific 
responses to the recommendations and identify technical corrections 
that should be made to enhance the accuracy of the report. 

If you have any questions, please contact Ms. Candace Skurnik, 
Director, Audit Management and Liaison Staff, at (410) 965-4636. 

Sincerely, 

Signed by: 

Enclosure: 

Comments On The Government Accountability Office (GAO) Draft Report, 
"Social Security Disability ï¿½ Claims Processing Initiatives Reouire 
Better Planning, Management, And Evaluation" (GAO-08-40):  

Thank you for the opportunity to review and comment on the draft 
report. We appreciate the report's acknowledgement that the growth in 
the hearings workloads coupled with declines in funding, staffing, and 
resources were contributors to the disability claims processing delays. 
We have put a great deal of effort in establishing specific initiatives 
designed to eliminate the backlogs, and are committed to achieving 
them. One of the primary lessons learned from all of our ambitious 
plans over the past ten years is that adequate resources are critical 
to the success of any new initiative. No major new initiative, no 
matter how well its implementation is managed, can achieve expected 
results without the accompanying resources. 

Regarding the report's contents, we have a number of concerns as they 
relate to the discussion on: 1) budget implications, 2) the State 
Disability Determination Services, 3) the Disability Service 
Improvement initiative, and 4) Hearing Office capacity and performance. 
They are included in the "General Comments" section of this response. 

For the recommendations, we appreciate your efforts to identify areas 
needing attention as we work to manage this workload, however we do not 
fully agree with a number of the conclusions or proposed remedies. Our 
response to the specific recommendations provides additional 
information as to the reasons for the findings and describes 
alternative actions/measures that we have already taken or plan to take 
to effectively manage the disability claims process. 

General Comments: 
 
Budget Implications: 

In recognizing the difficulty caused by funding shortfalls, the report 
states "As a result, the agency has not had sufficient resources and 
has encountered challenges balancing its many workloads." We believe 
the report should elaborate on the full impact of the reduced funding, 
and this resource issue should be acknowledged and highlighted 
throughout the report. We believe the report should acknowledge ï¿½up 
frontï¿½ the impact the Federal budget process and SSA's level of funding 
and resources have had on the disability backlogs. The lack of 
resources has played a significant role in the reasons for the pending 
workloads. 

Specifically, since 2001, Congress has appropriated on average about 
$150 million less each year than the President requested. As a result, 
fewer employees are available to process SSA's growing workloads. In 
fiscal year (FY) 2005, SSA had 66,000 employeesï¿½down from more than 
85,000 employees about 30 years agoï¿½and in a few months we will drop 
below 60,000. Yet, our workloads have become more complex and the 
volume of work continues to grow every year with the aging of the baby 
boom generation. In addition, Congress has mandated new workloads 
outside of our core responsibilities, such as activities related to the 
Medicare Prescription Drug Program and verification of employee work 
eligibility for immigration purposes.

The following chart illustrates that if SSA had received the full 
President's budget for FY 2002 through FY 2007, it would have had 
available more than the cost of processing SSA's hearings backlog. 

Figure: SSA Has Not Received the Resources Needed to Address the 
Growing Hearings Backlog: 

[See PDF for image] 

[End of figure] 

We have an effective, comprehensive plan to reduce the hearings backlog 
by 2013, but it will require that Congress provide adequate funding in 
FY 2008 and the future. Under any funding scenario currently being 
contemplated by Congress, FY 2008 will be a very difficult budget year 
for SSA and this follows FY 2007, a year in which we narrowly avoided 
employee furloughs. In FY 2008, despite the increases provided in both 
the House and the Senate bills, we expect to have less discretionary 
money to spend than in FY 2007. We will remain under a hiring freeze 
throughout FY 2008 unless we receive additional funding to drive down 
the hearings backlog. Funding below the House mark will likely delay 
the implementation of the hearings backlog reduction plan. 

We have a large infrastructure, including over 1,400 field and hearing 
offices in cities and towns across America and increases to mandatory 
costs, such as rent and employee pay and benefits, require a minimum 
administrative budget increase every year of over $300 million. With 
these mandatory cost increases and the requirement in the current House 
and Senate appropriations bills to spend $477 million on program 
integrity work in FY 2008 ($264 million in the base and $213 million 
additional funding in the program integrity cap), the amount of money 
available to the Agency to deliver service to the public and invest in 
workload processing is very limited. We believe the report should note 
that we must spend $477 million on continuing disability reviews (CDRs) 
and supplemental security income (SSI) redetermination in FY 2008 in 
order to receive the full program integrity funding. If, for example, 
we only spend $457 million 51.000 (or $20 million less) on program 
integrity work, our budget will be reduced by $20 million. 
Additionally, program integrity funding cannot be used to do other 
important work, such as reducing the disability hearings backlogs. 

We see no indication of improvement in our budget outlook for the 
immediate future. We are currently operating under a continuing 
resolution which keeps us at the FY 2007 funding level. If we have to 
operate at the FY 2007 level of funding for all of FY 2008, we will 
again be looking at potential furloughs and other unattractive options. 

We believe the report should highlight the fact that despite the budget 
shortfall, since 2001, our efforts to innovate and automate, coupled 
with the dedication of our staff, have improved productivity on average 
by 2.5 percent per year for a cumulative improvement of 13.1 percent 
through FY 2006. Given sufficient funding, we can commit to Agency-wide 
productivity improvements and achieve them. We believe that, given the 
array of services that we provide and the major workload processing 
initiatives implemented each year, incremental productivity 
improvements are sustainable with full funding. 

Despite our efforts, the productivity improvement has not been able to 
compensate for insufficient funding increases approved by Congress. As 
a result, we face significant resource challenges. If we tried to 
address the challenge of processing all our incoming work with 
productivity improvements alone, we would need to achieve approximately 
10 percent productivity improvement in addition to the 2 percent 
already planned in FY 2008, which is not possible. Additional resources 
are needed to overcome this productivity gap. 

The following charts show the disability hearings backlog if we 
maintained the status quo and information about the Federal Reviewing 
Official (FedRO). 

Figure: If We Maintain The Status Quo, The Disability Hearings Backlog: 

[See PDF for image] 

* This projection assumes FY 2008 President's Budget resource levels 
and hearings productivity in all years. 

* Resources needed for the Federal Reviewing Official organization 
would reduce the number of workyears available to process pending 
hearings. 

* The projection also assumes that hearings receipt rates would decline 
under DS] consistent with estimates prepared by SSA's Office of the 
Chief Actuary. 

* The hearings receipt levels are based on the 2007 workload 
projections. 

[End of figure] 

Figure: SSA Has Proposed To Place The FedRO On Hold While The Hearings 
Backlogs Are Addressed: 

[See PDF for image] 

* SSA anticipates receiving new requests for FedRO review through 
January 2008. With current resource constraints, SSA projects that the 
final FedRO reviews should be processed by the end of December 2009. 

* Once this work is completed, SSA will be able to redirect FedRO 
resources to help reduce the hearings backlog.

* Public comment for the FedRO rule has just ended. If the rule is 
finalized as proposed, this is the anticipated impact.

[End of figure] 

Disability Determination Services (DDS): 

We are very concerned that all conclusions relating to the DDS backlog 
are predicated on the assumption that 400,000 is the target pending 
level for initial claims. The 400,000 number was generated as part of a 
Service Delivery Budget in an effort to estimate an optimum pipeline 
based on available funding, staffing/workload levels, and business 
processes at a particular point in time (1997). It was never intended 
to be a targeted pending. 

The report should also emphasize that we have never communicated an 
expectation or held the DDSs accountable for reaching a targeted 
pending of 400,000. Our Annual Performance Plan, which is based on 
budgeted funding and staffing shows 2006 and 2007 pending targets of 
577,000 initial disability claims for the DDSs. If 400,000 is the 
baseline number that will be used to determine backlogs, the report 
needs to make a better distinction between that and the "targeted 
pending." 

In recent years, DDSs have been funded to maintain a pending level of 
577,000 and have met that target. In addition, almost all of these 
pending claims have been assigned to an examiner and have had some 
development done on them. Initial claims are not backlogged in the 
sense that no work has been done on them. The DDSs do an outstanding 
job of serving the public. In FY 2006, 77 percent of the initial claims 
processed were completed within 120 days and 94 percent were processed 
within 180 days. The DDSs also have done an outstanding job over the 
years of balancing workloads and processing disability claims timely 
despite the Federal budget process. 

On page 14, the report states that--over a 10-year period--the DDSs saw 
an increase almost every year in initial claims, which constituted an 
overall increase of 21 percent by FY 2006. It further states that the 
DDSs have not been able to keep pace with these rising receipts despite 
increases in dispositions and some additional staffing. Note the 
footnote at the bottom of the pageï¿½"the DDSs received an overall 
increase of about 4 percent in staff workyears over the 10-year 
period." We have two points to make regarding these statements. First, 
the fact that DDS staffing only increased by 4 percent should be 
highlighted on this page, not merely footnoted.[Footnote 51] The DDSs 
have not been sufficiently funded over this 10-year period to process 
the increase in receipts or to hire staff over their funding levels. 
Second, our appropriations over most of this 10-year period had 
discrete funding allocated to processing Continuing Disability Reviews 
(CDR). Because of this mandated work we had limited flexibility in 
determining workload priorities. 

Disability Service Improvement (DSI): 

To provide additional background information regarding the DSI 
initiative, we are providing three memoranda regarding actuarial cost 
estimates for the DSI regulations. The first two memoranda, dated July 
21 and July 13, 2005 (enclosures 1 and 2) provide the initial estimates 
for DSI on the basis of a 5-year implementation. The memorandum dated 
January 10, 2007 (enclosure 3) provides updated estimates assuming that 
DSI would be implemented over a 10-year period, with one new region 
being implemented each year. The slower implementation is the basis for 
estimates included in the current Trustees Report and the current 
budget estimates. 

The estimates in both 2005 and 2007 show that the expectation was that 
DSI would accelerate allowances for disability somewhat without having 
a significant impact on the total number of allowances from those who 
apply for benefits each month. The acceleration of allowances resulted 
in estimated cash-flow increases in program cost during the first 10 
years for the initially assumed 5-year implementation, and somewhat 
longer for the later prescribed 10-year implementation. In each case, 
the annual net effect on program cash-flow cost was estimated to reach 
essentially zero after 10 to 15 years from initial implementation. 

There is another significant disability claims workload that the report 
does not address. There is a statutory requirement that 50 percent of 
all DDS allowances under the SSDI programs must be reviewed prior to 
taking any action to effectuate the determination (section 221(c) (2) 
of the Social Security Act). This review is a major Agency workload. In 
FY 2006, we conducted pre-effectuation reviews on almost 350,000 DDS 
allowances. These reviews added approximately 2 weeks to average 
processing times. 

Improvements in Hearings Office Capacity and Performance: 

We have already taken a number of important steps to better manage our 
workloads and place resources where they can best meet the desired 
outcomes. We have formulated a plan to eliminate the backlog of cases 
at the hearing level and prevent reoccurrence. On May 23, 2007, we 
detailed this plan in testimony to the Senate Finance Committee. 

Although we recognize that the report only "highlights" the provisions 
of the backlog plan, we believe that given the emphasis the report 
places on the exploration of past initiatives a more thorough 
exploration of the current management plans for handling backlog issues 
at the hearing level is called for. The success of these initiatives 
depends on a timely and adequate Agency funding. Properly funded, these 
initiatives will reduce the amount of time members of the public wait 
for a hearing decision and will lead to a reduction in the number of 
cases pending in our hearing offices. We offer the following 
information regarding the status of those initiatives, all of which are 
designed to improve hearing procedures, increase adjudicatory capacity, 
and increase efficiency through automation and improved business 
processes. 

We began by attacking the problem of aged cases, starting with a plan 
to provide decisions to claimants who had been waiting the longest. We 
made a commitment to work down the inventory of 63,770 cases which 
would be 1,000 days old or more by the end of FY 2007. Through 
extensive oversight and improved management, only 108 of these cases 
remained on September 28, 2007. During FY 2008, we will be focusing on 
disposing of those cases which will be over 900 days old by the end of 
the fiscal year. This initiative should provide decisions to those 
claimants waiting the longest. 

To free our Administrative Law Judge (ALT) resources for the most 
difficult and complex cases, we established a plan to shift a portion 
of our fully favorable on-the-record workload to Attorney Advisors. The 
interim final rule for the Attorney Advisors was published in the 
Federal Register on August 9, 2007. Amended position descriptions have 
been written, and systems functionality to support this initiative will 
be ready November 1, 2007. These additional adjudication resources 
should be helpful in disposing of additional cases without the need for 
a hearing in FY 08 and FY 09. 

Hiring additional ALJs is an essential element in a successful plan for 
reducing the backlog. We have worked with the Office of Personnel 
Management to expedite the selection of 150 ALJs in FY 2008. Pending 
receipt of the Office of Personnel Management register expected in 
November 2007, and budget permitting, we plan to hire 150 ALJs in the 
Spring of 2008. In FY 2007, four ALJs were hired from other Agencies. 
All had prior SSA experience which mitigates the learning curve. Twelve 
intermittent (part time) Senior ALJs and four rehired annuitant (full 
time) ALJs were hired at the end of FY 2007. Seven current ALJs will 
likely be placed in the National Hearing Center (NHC). 

We have already begun to focus on the productivity of both decision 
writers and ALJs. The Chief ALJ has communicated expectations for ALJs 
to produce 500-700 decisions a year. In FY 2007, 498 ALJs produced 500 
or more decisions during the year. In 2006 that number was 488 and in 
2005 that number was 387. We are developing productivity information 
indicators that will assist in measuring improvement. Currently the 
Office of Adjudication and Review (ODAR) is utilizing the Decision 
Writer Statistical Index Report to compute and assess decision writer 
productivity. Increased monitoring of performance and productivity 
should result in additional efficiency and the adjudication of a higher 
number of cases. 

In FY 2007, we took a proactive stance in dealing with AU misconduct. 
Two reprimands and two suspension actions occurred in FY 2007. 
Currently, three termination actions and one suspension action are 
ready to be filed with the Merit System Protection Board (MSPB). Two 
additional reprimands are in the process of being drafted. At the MSPB 
level, one termination and four suspension actions are pending. 

During FY 2007, ODAR implemented a major change in its business process 
which involved transition from processing hearings using paper folders 
to processing hearings using electronic folders. Transition to the 
electronic folder not only involved training for hearing office 
employees, representatives, vocational and medical experts and hearing 
reporters, but also a learning curve associated with mastering a new 
process. It involved working in a dual environment with paper and 
electronic folders and a labor intensive certification process which 
impacted all positions in the hearing office. During FY 2008, ODAR will 
continue to focus on eliminating the backlog of paper files as well as 
continuing to streamline processes within the electronic folder 
environment. 

Over $9,000,000 was spent in FY 2007 on installations and upgrades of 
servers, video teleconferencing equipment and telecommunications 
equipment in the hearing offices and for the set up of the NHC in Falls 
Church, Virginia. These updates support electronic folder processing by 
increasing the capacity of the infrastructure underlying the electronic 
folder and other electronic services and will continue throughout FY 
2008. 

We established the NHC in October 2007 in Falls Church, Virginia, part 
of the Agency's strategy to address the backlog by increasing 
adjudicatory capacity and efficiency with a focus on an electronic 
hearings process. With electronic folder receipts becoming the largest 
part of our pending, we now have the flexibility to transfer workload 
to the NHC easily, where a centralized cadre of ALJs using video 
hearing technology will hear electronic cases from the most backlogged 
offices in the country. Support staff reported for duty on October 15, 
2007 and a solicitation for ALJs was released October 5th to all 
Federal ALJs. 

Video technology is an important part of our method for conducting 
hearings. Additional video hearing units will decrease AU travel, 
allowing for increased ALJ productivity. Currently there are 394 
hearing rooms with video hearing equipment. Video hearings expanded 
from 41,457 held in FY 2006 to 45,449 held in FY 2007. An award to 
purchase an additional 158 video units was released on September 21, 
2007 and shipping of new units will begin in the November/December 
timeframe. The addition of these units will increase the ability to 
more effectively balance workloads on a national level by using ALJ 
resources from one geographic area to assist with hearings in another 
geographic area without incurring travel time. 

As part of the plan to increase adjudicatory capacity and reduce the 
paper case backlog, we developed the Informal Remand initiative. SSA's 
Office of Quality Performance (OQP) developed profiles to identify 
cases for which a favorable decision appears likely. Those cases are 
remanded back to the DDS for review. In FY 2007 about 20,000 cases were 
remanded to the State DDSs, resulting in 8,714 fully favorable 
decisions for claimants without a hearing. In FY 2008, we will be front 
loading cases from New York, Georgia, North Carolina, Indiana, Florida, 
Michigan, Kansas and Ohio to the DDSs since these six States have the 
highest number of unworked profiled paper cases. Plans are to send 
51,000 cases to the DDSs in FY 2008. 

Another method of increasing adjudicatory capacity has come through the 
Appeals Council (AC). Some cases that come before the AC contain 
relatively minor technical deficiencies which could compromise the 
support of the decision in court, but which do not ultimately affect 
the correctness of the ultimate conclusion on entitlement to benefits. 
If the case does not require a hearing or additional development, the 
AC will consider granting the request for review to issue a new 
decision with the technical issue corrected. Doing so, where 
appropriate, should reduce overall processing time for the claimant and 
reduce the number of cases remanded to the hearing level. 

We have initiated a number of automation initiatives that will increase 
efficiency, although many will not be ready for full implementation 
until later in FY 2008. One of the most important provides for the 
completion of the electronic process through the AC. The new Appeals 
Review Processing System (ARPS) will allow the AC to process electronic 
folder cases, with first release scheduled for January 2008. 

Many of the automation improvements will enhance efficiency in the 
processes that prepare cases for hearing by the ALJ. These are critical 
given that the support staff ratios are lower than they should be. We 
have had to provide for interim measures to prepare paper cases for 
hearing, such as using volunteers from Field Offices and Teleservice 
Centers across the nation to work on folders during overtime hours and 
adopting a streamlined folder assembly process for pending paper cases 
that gets the cases to the judges more quickly. When these cases are 
finally adjudicated, they will be replaced by the electronic files 
which will require less time and effort to prepare. 

Some of the automation initiatives pending that will improve the 
hearing process are: 

* ePulling ï¿½ This functionality involves development of customized 
software which has the potential to identify, classify, and sort page 
level data, re-organize the images after classification, and identify 
duplicates. A contract was awarded to eCompex in September 2007 to 
develop this software. This automation initiative will enable hearing 
offices to prepare cases for hearing in about half the time it takes 
now. Implementation is scheduled to begin in the first quarter of FY 
2009. 

* eScheduling ï¿½ The eScheduling initiative envisions an automated 
calendaring function that will incorporate scheduling of experts, 
hearing sites and hearing rooms, equipment, and ALJ availability. ODAR 
is working with the Office of Systems to develop this software which 
should decrease the time it currently takes to schedule a hearing. This 
initiative is still in the planning and analysis phase. 

* Electronic Records Express (ERE) - This initiative will expand access 
to the ERE website to allow outside end-users (representative and 
expert witness community) the ability to view the electronic folder 
online and to receive notices electronically. The target date to begin 
a pilot to test functionality to allow select outside user 
representatives to view the electronic folder via the website is June 
2008. We are currently working on additional functionality to allow 
hearing offices to send notices to representatives via the website. 
Currently hearing offices currently spend much time burning CDs for 
expert witnesses, claimants and representatives at various stages of 
our process. The time spent doing this will be available for other 
tasks. 

* Electronic signature - The electronic signature will give ALJs the 
ability to sign decisions electronically and provide the HOCALJ the 
ability to sign on behalf of another ALJ in the hearing office. This 
functionality will rollout out in January 2008 and will allow ALJ 
decisions to be sent into the electronic folder and to be centrally 
printed and mailed with no hearing office support staff involvement. 

* Centralized Printing and Mailing ï¿½ This initiative will provide for 
centralized, high speed, high volume printing and mailing of notices. A 
pilot in four hearing offices will begin in January 2008. 

* Shared Access to the Electronic Folder ï¿½ this provides the ability to 
temporarily transfer cases for workload assistance while affording full 
electronic functionality to both the receiving and owning offices. 
Enhancements for January 2008 will include the ability to provide 
shared jurisdiction allowing temporary transfer of cases for pulling 
and decision writing, thus providing the ability to move work to where 
there are resources to perform these tasks. 

* Findings Integrated Templates (FIT) for decision writing ï¿½ The 
Findings Integrated Templates (FIT) system was designed as a roadmap of 
our regulations to ensure that all pertinent legal requirements are 
addressed in the ALJ's decision. FIT was intentionally never designed 
to analyze or marshal evidence. Use of the FIT template by ALJs 
(already familiar with the case) to draft fully favorable decisions 
allows for use of decision writer resources for other more complex 
decisions. For the month of September 2007, 95 percent of all written 
decisions were written in FIT and use of FIT continues to rise. Use of 
the FIT decision writing tool should provide decisions which are 
legally sufficient and result in fewer remanded cases from the AC. 

Part of our objective to manage workloads more effectively is a plan to 
balance workloads among the regions across the nation. We are assisting 
the most heavily impacted hearing offices and preventing cases from 
aging by transferring cases electronically to sites where we have 
greater capacity. We are also working to standardize our hearing 
business process, by visiting offices to identify best practices and 
problem areas. OQP and ODAR are working together to develop an improved 
inline quality review procedure. Results of these quality assurance 
reviews will provide information for training purposes and should 
result in the production of a better quality product for our claimants. 

Our responses to the specific recommendations are provided below. 

Recommendation 1: 

The Commissioner of Social Security should establish a "target pending" 
for reconsideration stage as the agency does for the other stages, to 
allow identification and monitoring of backlogs. 

Comment: 

We agree that tracking reconsideration pendings should be a part of the 
Agency's routine and comprehensive monitoring of all DDS workloads. 
However, we do not believe this should be an Agency target/goal. As an 
alternative to a reconsideration pending goal, we could use a number or 
percentage of reconsideration cases over a certain number of days old 
as an indicator of performance. This would be consistent with the 
Agency's current direction of focusing on aged claims. 

Recommendation 2: 

The Commissioner of Social Security should conduct a thorough 
evaluation of the Disability Service Improvement (DSI) initiative 
before deciding which elements should be implemented nationwide and 
which should be discontinued. 

Comment: 

We partially agree. Although we do not concur with your specific 
recommendation as written, we agree that we should continually evaluate 
data to help guide us when implementing any nationwide initiative. We 
will continue to collect data and monitor outcomes to evaluate DSI in 
line with our commitment to outstanding service and continuous 
improvement. We are implementing the parts of DSI that data have shown 
to enhance our ability to make timely and accurate disability 
determinations. For example, based on our careful evaluation, we issued 
a final rule on September 5, 2007, extending the Quick Disability 
Determination (QDD) process nationwide. Arizona, New Jersey and North 
Dakota have started using QDD as part of a staged national roll out 
that will be completed early next year. We are conducting special 
reviews on QDD accuracy in each State as it rolls-out, and management 
information (MI) data on case selection, timeliness, and allowance 
rates will be tracked. 

Regarding the FedRO/Office of Medical and Vocational Expertise (OMVE) 
specifically, we continue to evaluate their effect on our program 
administrative functions. Our experience over the last year in the 
Boston region demonstrates that the administrative costs associated 
with FedRO and its use of OMVE to develop medical and vocational 
evidence is greater over the foreseeable future than we originally 
anticipated. 

Although we plan to suspend sending new claims to FedRO, we expect to 
have over 17,000 claims pending when the regulation goes into effect. 
This volume of pending claims will allow us to continue to collect and 
evaluate data while targeting scarce resources to the hearings process 
where hundreds of thousands of cases are now backlogged. We do not have 
sufficient resources to continue to work down the hearings backlog and 
to fully staff FedRO and OMVE. Therefore, our evaluation of these 
components will have limited reliability. 

Recommendation 3: 

The Commissioner of Social Security should take needed steps to 
increase the likelihood that new initiatives will succeed through 
comprehensive planning to anticipate the challenges of implementation, 
by including the appropriate staff in the design and implementation 
stages, establishing feedback mechanisms to track progress and 
problems, and by performing periodic evaluations. 

Comment: 

We agree with the intent of this recommendation and have already taken 
steps towards comprehensive planning in the design and implementation 
stages. Having learned from the past, we are moving forward with clear 
accountable leadership, a solid plan, a very inclusive executive 
steering committee, regular MI data as feedback, ongoing monitoring, 
and coordinated monthly evaluation mechanisms. 

For example, the NHC is a critical element of the Commissioner's plan 
to eliminate the hearings backlogs. The NHC, established in October 
2007 in Falls Church, Virginia, is designed to help address the backlog 
by increasing adjudicatory capacity and efficiency with a focus on an 
electronic hearings process. A centralized cadre of ALJs will use video 
hearing technology to hear electronic cases from the most backlogged 
offices in the country. As stated before, instead of going to full 
implementation, the Commissioner is following the recommendation of 
staff and using a staged roll-out for the NHC. 

We are suggesting that the following recommendation be added to the 
report: 

Recommendation 4: 

The Commissioner of Social Security should explore ways that the Agency 
can manage the performance of ALJs who are unproductive. 

Comment: 

GAO noted on page 46 of the report that part of the Commissioner's plan 
for improving hearing office capacity and performance includes 
tightening performance measures for ALJs to ensure cases are processed 
in a timely manner. We appreciate your comments in this regard. 
Although most SSA ALJs are dedicated, hard-working employees, data show 
that a significant number of ALJs fail to work at an acceptable level. 
While not all cases are of the same level of complexity, ALJs hear and 
decide the same mix of cases throughout the country. Yet, there is a 
cohort of ALJs whose productivity year after year is below an 
acceptable range achieved by their peers. For example, for FY 2007 
twenty-six percent of ALJs had dispositions below 400 cases per year 
while seventy-four percent of judges decided more than 400 cases. As 
the number of new applications rises, and with budget and staffing 
resources stretched to the limit, SSA must have the tools needed to 
manage the performance of ALJs just as it does with any other group of 
employees. It is unacceptable for ALJs to be free from management of 
their performance when they do not hear and decide cases within an 
acceptable range of performance. 

Limitations on the Agency's ability to manage ALJ productivity are not 
confined to issues of timeliness and quantity of dispositions. ALJs 
hold hearings pursuant to a delegation from the Commissioner, yet some 
ALJs refuse to follow properly promulgated Agency policy in deciding 
cases, often leading to legally insufficient decisions requiring remand 
by the Appeals Council or a district court. This results in further 
delays for the claimant and a further increase in backlogs. Some ALJs 
refuse to hold video hearings. Some do not schedule cases in sufficient 
numbers, and some cancel scheduled hearings for insubstantial, personal 
reasons. Yet these same ALJs assert that the qualified decisional 
independence which is the right of claimants at the de novo hearing 
somehow entitles the ALJ to exercise discretion in adhering to Agency 
policy and procedures in these unrelated areas. 

We also encounter difficulties in hiring and assigning ALJs, who are 
appointed from a register of eligibles developed by OPM pursuant to the 
Administrative Procedures Act and its own regulations. SSA employs the 
largest number of ALJs in government, and yet its need for individuals 
with experience in non-adversarial, high volume, highly automated, 
videoconference and in-person adjudications is often frustrated by OPM 
criteria better suited for employment of ALJs in regulatory agencies 
whose proceedings are small in number, involve highly complex issues of 
law and fact, and are adversarial in nature. Once hired, ALJs often do 
not want to remain in the location for which they were originally 
selected despite promises to do so. Yet current collective bargaining 
language requires ALJs the opportunity to transfer before a new ALJ can 
be assigned. 

We need the flexibility to hire ALJs with Agency-specific experience, 
to hire them quickly, to assign and transfer them to address workloads, 
and to hire them on a term basis to address peaks in workloads. 

Given the increased receipts at the hearing level, it is clear that a 
cornerstone of any plan to reduce the backlog is to increase 
adjudicatory capacity. Although hiring of additional ALJs must be part 
of this plan, the Agency believes that it would be fiscally 
irresponsible to allow some of its current ALJs to continue to perform 
at unacceptable levels. Indeed, the Agency believes that its obligation 
to serve the public in a timely manner requires that we approach the 
issues of ALJ productivity, including the performance issues discussed 
above, in the same way that we would approach similar problems with any 
other employee. SSA will continue its efforts to manage AU productivity 
with the limited tools available to do so, while at the same time 
developing plans to strengthen performance measures. Some improvements 
will likely involve legislative and regulatory changes. To this end, we 
request that you move quickly on the request by Congress to examine 
this matter in greater detail. 

[End of section] 

Appendix V: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Daniel Bertoni, Director, (202) 512-7215. 

Staff Acknowledgments: 

Shelia Drake, Assistant Director; Lucia DeMaio; Salvatore F. Sorbello; 
and Linda Stokes made significant contributions to this report. In 
addition, Daniel A. Schwimer provided legal assistance; Evan Gilman, 
Lorin Obler, and Walter Vance assisted in the assessment of the 
reliability of data; and Susan C. Bernstein and Rachael C. Valliere 
assisted in report development. 

[End of section] 

Related GAO Products: 

Disability Programs: SSA Has Taken Steps to Address Conflicting Court 
Decisions, but Needs to Manage Data Better on the Increasing Number of 
Court Remands. GAO-07-331. Washington, D.C.: April 5, 2007. 

Social Security Administration: Agency Is Positioning Itself to 
Implement Its New Disability Determination Process, but Key Facets Are 
Still in Development. GAO-06-779T. Washington, D.C.: June 15, 2006. 

Electronic Disability Claims Processing: SSA Is Proceeding with Its 
Accelerated Systems Initiative but Needs to Address Operational Issues. 
GAO-05-97. Washington, D.C.: September 23, 2005. 

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

Social Security Disability: Commissioner Proposes Strategy to Improve 
the Claims Process, but Faces Implementation Challenges. GAO-04-552T. 
Washington, D.C.: March 29, 2004. 

Electronic Disability Claims Processing: SSA Needs to Address Risks 
Associated with Its Accelerated Systems Development Strategy. GAO-04- 
466. Washington, D.C.: March 26, 2004. 

Social Security Administration: Strategic Workforce Planning Needed to 
Address Human Capital Challenges Facing the Disability Determination 
Services. GAO-04-121. Washington, D.C.: January 27, 2004. 

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

Electronic Disability Claims Processing: Social Security 
Administration's Accelerated Strategy Faces Significant Risks. GAO-03- 
984T. Washington D.C.: July 24, 2003. 

Social Security Disability: Efforts to Improve Claims Process Have 
Fallen Short and Further Action is Needed. GAO-02-826T. Washington, 
D.C.: June 11, 2002: 

Social Security Disability: Disappointing Results from SSA's Efforts to 
Improve the Disability Claims Process Warrant Immediate Attention. GAO- 
02-322. Washington, D.C.: February 27, 2002. 

SSA Disability Redesign: Actions Needed to Enhance Future Progress. 
GAO/HEHS-99-25. Washington, D.C.: March 12, 1999. 

SSA Disability Redesign: Focus Needed on Initiatives Most Critical to 
Reducing Cost and Time. GAO/HEHS-97-20. Washington, D.C.: December 20, 
1996. 

SSA Disability Reengineering: Project Magnitude and Complexity Impede 
Implementation. GAO/T-HEHS-96-211. Washington, D.C.: September 12, 
1996. 

Social Security Disability: Backlog Reduction Efforts Under Way; 
Significant Challenges Remain. GAO/HEHS-96-8. Washington, D.C.: July 
11, 1996. 

[End of section] 

Footnotes: 

[1] We did not calculate backlogs for the reconsideration stage since 
SSA could not provide data that would allow us to do so. 

[2] For three of the four stages of the disability claims process, SSA 
establishes targets for the number of claims that the agency considers 
should optimally be pending a decision or in the pipeline at year-end. 
The number of claims exceeding the target is considered a backlog. 

[3] The regions we visited were Boston, San Francisco, and Dallas. 
Several criteria were used to select the regions for our site visits. 
We chose regions with comparable workloads in order to compare the 
effects of different initiatives across similar regions. For this 
comparison we considered recent data on DDS level processing times and 
claims receipts. On each site visit, we contacted a DDS, SSA's regional 
office for initial claims, its regional Office of Disability 
Adjudication and Review (ODAR), as well as a hearings office. 

[4] Throughout this report, when we refer to SSA disability claims we 
are referring to claims filed under the SSI and DI disability programs. 

[5] Eligibility for SSI is restricted to individuals who have countable 
resources, determined monthly, that do not exceed $2,000 ($3,000 for a 
couple). 

[6] The District of Columbia and Puerto Rico also have state DDS 
offices. Guam and the Virgin Islands have federal DDS offices that 
perform this function. 

[7] According to SSA, the 400,000 target pending was an estimate of an 
optimal pipeline of claims. However, this target pending level was 
never communicated to the DDSs nor were they held accountable for 
reaching this optimum pending level. Also according to SSA, in recent 
years DDSs have been funded to maintain a pending level of 577,000 and 
have met this target. 

[8] Initial claims processing times presented in our report are the 
average processing times for Disability Insurance (DI) claims only, not 
Supplemental Security Income (SSI) claims. SSA provided average 
processing times separately for the two programs. We are reporting the 
DI processing times because the number of DI cases is larger than the 
number of SSI cases, but the differences in processing times between 
the programs are minimal. See appendix I for more detail. 

[9] Backlogged claims include claims that are backlogged at the initial 
application level, the hearings level and at the Appeals Council level. 
We could not compute the number of claims backlogged at the 
reconsideration stage because SSA has not established an optimal level 
of pending claims that would allow computation of the backlog. As a 
results, references to the number of "target pending" and backlogged 
claims throughout the report do not include reconsiderations. 

[10] Agencywide numbers presented here represent the sum of all three 
levels of adjudication at SSA for which we computed backlogs: (1) 
Disability Determination Services' initial claim adjudications, (2) 
hearings' offices adjudications before an administrative law judge, and 
(3) Appeals Council reviews. 

[11] SSA's overall optimal level of pending claims was about 740,000 
claims per year in fiscal year 2006. See appendix I for further details 
on how SSA estimates the optimal number of pending cases and how we 
estimate the backlog. 

[12] Processing times analyzed in this report for the DDS did not 
account for any time before a claim reached a DDS office (such as time 
spent at an SSA field office). 

[13] From fiscal year 1997 to fiscal year 2006, processing times at the 
initial claims level increased from 70 days to 89 days and processing 
times at the reconsideration level increased from 51 to 72 days. During 
the same time period, processing times at the hearings level increased 
from 386 to 481 days. 

[14] In fiscal year 1997, the average processing time at the Appeals 
Council was 340 days; in fiscal year 2006, it decreased to 201 days. 

[15] Total includes new claims, requests for Reconsideration, Hearing, 
and Appeals Council review. 

[16] The DDSs received an overall increase of about 4 percent in staff 
work-years over the 10-year period. 

[17] SSA's Office of Inspector General (OIG) found some problems with 
the reliability of processing time data stored in the Hearing Office 
Tracking System (HOTS), which is the source of processing time data we 
report at the hearings level for fiscal years 1997 to 2004. 
Specifically, the OIG found problems including incomplete data 
(requests for hearings were not consistently entered in HOTS); 
inaccurate data (especially in hearings request dates and hearings held 
dates, which means data on claims processing are inaccurate); and a 
lack of consistent management controls (e.g., no or infrequent reviews 
of the data, lack of training for staff, unauthorized staff had access 
to the system). For example, when the OIG compared a sample of hearing 
request dates from HOTS to the dates in the original paper files, they 
found that about 13 percent of the dates in HOTS were inaccurate. 
However, in part because SSA has published HOTS data in reports 
including its Annual Statistical Supplement, we judged the data to be 
sufficiently reliable for our reporting objectives. 

[18] The Chicago region includes Minnesota, Wisconsin, Illinois, 
Indiana, Michigan, and Ohio. The Seattle region includes Washington, 
Oregon, Idaho, and Alaska. 

[19] SSA told us that insufficient numbers of ALJs and support staff, 
increased receipts, and low productivity of some ALJs were problematic 
in these regions and affected processing times. 

[20] The number of Appeals Council claims received in fiscal 1997 was 
120,540; in fiscal year 2006, it received 100,247 claims. 

[21] This report was prepared by the DDS Recruitment and Retention 
Workgroup, which was established in December 2006 to identify the DDSs' 
staffing needs in the electronic environment for use in recruiting 
nationally and maintaining a qualified DDS workforce. 

[22] GAO, Social Security Administration: Strategic Workforce Planning 
Needed to Address Human Capital Challenges Facing the Disability 
Determination Services. GAO-04-121. (Washington, D.C.: Jan. 27, 2004). 

[23] Hearings office support staff generally assist the ALJs with 
adjudicating claims, developing the claims and getting the actual 
claims ready for a hearing, and writing the decision once an ALJ 
adjudicates the claim. 

[24] The actual number of ALJs on board was slightly higher than the 
number available to conduct hearings. For example, 1,153 were on board 
in 1998 and 974 were on board in 2001. 

[25] SSA's ability to hire sufficient administrative law judges has 
been hindered in the past by a number of factors; including the length 
of time it took the Office of Personnel Management to establish a 
register of qualified ALJs that the agency could hire to fill vacant 
positions, budgetary constraints, and stays due to class action 
litigation. 

[26] The recommended staffing ratio could change as SSA implements 
planned automation initiatives that are expected to improve the hearing 
process and increase efficiency. 

[27] This program allowed senior attorneys to adjudicate claims that 
were awaiting a hearing if the evidence indicated the claim should be 
approved. 

[28] In prior reports, GAO has noted that the productivity of 
administrative law judges impacts processing times at the hearings 
level. See GAO, Social Security Disability: Backlog Reduction Efforts 
Under Way; Significant Challenges Remain, GAO/HEHS-96-87 (Washington, 
D.C.: July 11, 1996) and GAO, Social Security: Many Administrative Law 
Judges Oppose Productivity Initiative, GAO-HRD-90-15 (Washington, D.C.: 
Dec. 7, 1989). 

[29] Much of this major redesign project was undertaken to address 
GAO's recommendations to redress problems experienced when the system 
was revised in 1994, when the agency first attempted to reduce case 
backlogs. 

[30] The states where the prototype process was introduced include: 
Alabama, Alaska, California (Los Angeles area), Colorado, Louisiana, 
Michigan, Missouri, New Hampshire, New York, and Pennsylvania. 

[31] In prior reviews of the electronic folder, we recommended that SSA 
conduct end-to-end testing to evaluate the functionality and 
performance of all electronic disability system components collectively 
and that the agency not begin rollout without ensuring that all 
critical problems identified in the pilot tests had been resolved. SSA 
disagreed with both of these recommendations citing time constraints 
which it believed made the recommendations unrealistic. 

[32] The Boston region includes the states of Connecticut, 
Massachusetts, Maine, New Hampshire, Rhode Island, and Vermont. 

[33] This reform, the Disability Service Improvement (DSI) initiative, 
was instituted by regulation in 2006. However, plans to create DSI had 
been underway since at least 2003, when the Commissioner of the Social 
Security Administration announced in a testimony before the House 
Committee on Ways and Means that SSA would undertake fundamental reform 
of the disability determination and appeals process. 

[34] A claim is a DSI claim if a person is a permanent resident in the 
Boston region at the time that he or she files a claim. This means that 
examiners in non-DSI regions can encounter DSI claims in two ways: (1) 
claimants may file in another region even if they are permanent 
residents of one of the states in the Boston region or (2) claimants 
file for disability while they are a permanent resident of Boston and 
then move to another region and direct questions about claims to the 
SSA field office in that region. 

[35] These statistics are for all cases that had been initially 
selected for QDD processing in the Boston region as of October 31, 
2006; a total of 667 cases. 

[36] Accuracy rates are based on SSA's Office of Quality Performance 
review of FedRO decisions. 

[37] According to internal evaluations which were provided to us by 
SSA, as of March 31, 2007 SSA's Office of Quality Performance had 
reviewed decisions on 259 FedRO decisions in the Boston region and 
found a decisional accuracy rate of 97 percent. According to SSA, for 
fiscal year 2007, the national accuracy rate for disability 
reconsiderations performed by the state disability determination 
offices was 91.9 percent overall, 97.5 percent for allowances, and 91 
percent for denials. 

[38] Appeals rates for the FedRO were calculated based on fewer than 
3,000 cases, which were decided by the FedRO between implementation and 
June of 2007, whereas the appeals rate for reconsideration was based on 
all reconsiderations for fiscal year 2005 in the Boston region, which 
consisted of over 26,000 cases. Limited data on FedRO appeals makes it 
difficult to determine what the average FedRO appeal rate will be. 

[39] 20 C.F.R. ï¿½ 405.331(a) 

[40] 20 C.F.R. ï¿½ 405.331(b) and (c). 

[41] 20 C.F.R. ï¿½ 405.360. New evidence will be considered by the ALJ 
after the issuance of the decision in limited circumstances set forth 
in 20 C.F.R. ï¿½ 405.373. 

[42] According to SSA, the agency has been working on streamlining and 
refining eCAT for the past 12 months and began piloting it in two DDSs 
in September 2007. 

[43] In announcing the new plan, the Commissioner stated that the most 
aggressive timeline for eliminating the backlog is 2012 but that this 
timeline depends largely on SSA's budget over the next several years. 

[44] Disability examiners said hospitals tend to send all information 
on a claimant to the DDS when the data is in electronic format, 
regardless of whether it is relevant or has been requested. 

[45] GAO, Social Security Administration: Many Administrative Law 
Judges Oppose Productivity Initiatives, GAO/HRD-90-15 (Washington, 
D.C.: Dec. 7, 1989). 

[46] GAO, Social Security Disability: Backlog Reduction Efforts 
Underway; Significant Challenges Remain, GAO/HEHS-96-87 (Washington, 
D.C.: July 11, 1996). 

[47] DDS initial and reconsideration claims data were available for the 
nation, each region, and each state. Hearings data were available for 
the nation and the regions but not for the states, because the areas of 
jurisdiction for the hearing offices do not align with state borders. 
Appeals Council data were only available for the nation, as the Appeals 
Council process is managed in one central office. 

[48] We also analyzed data on continuing disability reviews--including 
new receipts as well as dispositions and pending cases--for fiscal 
years 2004 to July 2007. 

[49] The average processing times we analyzed do not include the time 
it takes for SSA field offices to process claims, although SSA does 
track these data as well. Also, at the DDS level, the average 
processing times presented in this report are average processing times 
for DI cases only, not for DI and SSI cases combined. SSA provided 
average processing times separately for the two programs. We are 
reporting the DI processing times because the number of DI cases is 
larger than the number of SSI cases, but the differences in processing 
times between the programs are minimal. 

[50] SSA did not develop estimates of the targeted number of pending 
claims for fiscal years prior to 1999. Also, SSA has not developed 
estimates of the targeted number of pending claims at the DDS 
reconsideration level. 

[51] We note that you make the same point on page 28 of the draft, and 
there you do include the 4-percent workyear increase in the text. 
Therefore, this change would also make page 14 consistent with later 
text in the document. 

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