Appealed Disability Claims: Despite SSA's Efforts, It Will Not Reach
Backlog Reduction Goal (Letter Report, 11/21/96, GAO/HEHS-97-28).
Americans who are denied benefits under the disability insurance and the
supplemental security income programs may appeal to the Social Security
Administration's (SSA) Office of Hearings and Appeals. In the last
decade, however, the number of disability cases appealed to the Office
has swelled by about 140 percent. As a result of the processing delays,
claimants often wait more than a year for a final decision on their
appeal. Although the Office has reduced its inventory of appealed cases
during the past eight months, GAO found that SSA will not reach its goal
of reducing its backlog to 375,000 by December 1996. SSA attributes its
difficulties to start-up delays, overly optimistic projections of the
number of appealed cases that would be processed, and an additional
37,500 appealed cases above the number that SSA expected during fiscal
year 1995. Some SSA officials had expressed concern that the agency's
aggressive goals to reduce the backlog of appealed cases could result in
inappropriate benefit awards for some claimants and increase the
allowance rate. SSA's statistics, however, show just the opposite. Since
SSA's plan was initiated, the allowance rate has fallen from 75 percent
in fiscal year 1994 to 69 percent through the third quarter of fiscal
year 1996.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: HEHS-97-28
TITLE: Appealed Disability Claims: Despite SSA's Efforts, It Will
Not Reach Backlog Reduction Goal
DATE: 11/21/96
SUBJECT: Federal social security programs
Eligibility determinations
Disability benefits
Compensation claims
Administrative hearings
Claims settlement
Claims processing
Claims adjudicators
Administrative remedies
Productivity
IDENTIFIER: Social Security Disability Insurance Program
Supplemental Security Income Program
SSA Short Term Disability Plan
SSA New Disability Claim Process Plan
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Cover
================================================================ COVER
Report to the Chairman, Subcommittee on Social Security, Committee on
Ways and Means, House of Representatives
November 1996
APPEALED DISABILITY CLAIMS -
DESPITE SSA'S EFFORTS, IT WILL NOT
REACH BACKLOG REDUCTION GOAL
GAO/HEHS-97-28
Appealed Disability Claims Backlog
(106904)
Abbreviations
=============================================================== ABBREV
ALJ - administrative law judge
DDS - disability determination service
DI - Disability Insurance
OHA - Office of Hearings and Appeals
SSA - Social Security Administration
SSI - Supplemental Security Income
STDP - Short-Term Disability Plan
Letter
=============================================================== LETTER
B-274842
November 21, 1996
The Honorable Jim Bunning
Chairman, Subcommittee on Social Security
Committee on Ways and Means
House of Representatives
Dear Mr. Chairman:
Americans who are denied benefits under the two largest federal
programs providing disability benefits may appeal to the Social
Security Administration's (SSA) Office of Hearings and Appeals (OHA).
This office hears appeals of denied benefit claims under both of
these federal programs: Disability Insurance (DI) and Supplemental
Security Income (SSI). In the last decade, the number of disability
cases appealed to OHA has increased by about 140 percent. Although
SSA has tried to manage this increased caseload, between 1985 and
1995 its inventory of appealed cases increased from about 107,000 to
almost 548,000. The processing delays resulting from this increase
have created hardships for disability claimants, who often wait more
than a year for a final decision on their appeal. SSA initiated its
Short-Term Disability Plan (STDP) in November 1994 to reduce the
number of appealed cases awaiting a decision at OHA to a manageable
level by December 1996.
Given your interest in improving the disability claims process and
reducing the number of appealed cases whose decisions are
significantly delayed, you asked us to report on OHA's (1) progress
in meeting STDP's backlog reduction and case processing goals and (2)
current allowance rate for appealed cases compared with pre-STDP
levels.\1 You also asked us to report on the accuracy of decisions
made under STDP, which, as discussed with your office, we cannot do
at this time because SSA is just now evaluating STDP's decision
accuracy. After SSA completes its evaluation, we will review the
results.
We developed information for this report by analyzing data on OHA
workload, backlog, processing time, and allowance rate levels;
examining SSA documents on STDP activities; and interviewing OHA
headquarters officials responsible for developing and implementing
STDP as well as officials of other SSA offices. Because of the focus
of our review, we did not see the need to verify the accuracy of the
data provided by SSA. Our audit work was conducted from May 1996
through September 1996 in accordance with generally accepted
government auditing standards.\2
--------------------
\1 OHA reports its allowance rate as the percentage of appealed cases
approved for payment.
\2 Our report, Social Security Disability: Backlog Reduction Efforts
Under Way; Significant Challenges Remain (GAO/HEHS-96-87, July 11,
1996), discusses SSA's progress through February 1996.
RESULTS IN BRIEF
------------------------------------------------------------ Letter :1
Although OHA has made progress in the past 8 months in reducing its
inventory of appealed cases, SSA will not reach its goal of reducing
this backlog to 375,000 by December 1996. SSA attributes its
difficulties to start-up delays, overly optimistic projections of the
number of appealed cases that would be processed, and an additional
37,500 appealed cases above what the agency expected during fiscal
year 1995. SSA's analysis shows that 22 months into STDP, activities
under the plan's key initiatives--expanded regional screening and
prehearing conferencing activities--allowed OHA to dispose of about
66,500 more cases than it would have had STDP not been implemented.
Despite OHA's increased productivity, as of August 1996 its backlog
of appealed cases was 515,009--about 3 percent higher than at STDP's
inception in November 1994.
Some SSA and OHA officials had expressed concern to us that STDP's
aggressive goals could result in inappropriate benefit awards for
some claimants and that STDP's initiatives could increase OHA's
allowance rate. SSA's statistics show just the opposite. Since the
plan was initiated, the allowance rate--which includes expanded
screening unit and prehearing conferencing decisions--has decreased
from about 75 percent in fiscal year 1994 to about 69 percent through
the third quarter of fiscal year 1996. SSA has not, however,
completed any analysis of the accuracy of STDP decisions or clearly
established to what extent, if any, STDP has affected OHA's allowance
rate. Should SSA's analysis confirm the accuracy of STDP decisions,
it would demonstrate STDP's continuing value to SSA in helping to
reduce OHA backlogs.
BACKGROUND
------------------------------------------------------------ Letter :2
The DI program provides monthly cash benefits to insured, severely
disabled workers; the SSI program provides monthly cash payments to
aged, blind, or disabled people whose income and resources fall below
a certain threshold. Claimants under either program file an
application for disability benefits with one of SSA's more than 1,300
field offices. Applications, along with supporting medical evidence,
are then forwarded to state disability determination service (DDS)
offices, which make the initial medical determination of eligibility
in accordance with SSA's policies and procedures. Claimants DDS
examiners find ineligible have the right to appeal the decision to
OHA, where cases are heard by administrative law judges (ALJ).
A steadily increasing number of appeals has caused workload pressures
and processing delays for OHA. Between 1985 and 1995, appeals
increased more than 140 percent, and the number of appealed cases
awaiting an OHA decision grew from about 107,000 to almost 548,000.
During this period, average processing time for cases appealed to
OHA--measured from the date a claimant files a request for a hearing
to when a decision is issued--
increased 110 percent, from 167 days to 350 days. In addition,
"aged" appealed cases (those taking 270 days or more for a decision)
increased from 5 percent of pending appealed cases to 39 percent
during the same period.
SSA has a long-term strategy--its Plan for a New Disability Claim
Process--designed to address systemic problems contributing to
inefficiencies in its disability programs and significantly reduce
the time claimants must wait to receive a decision on their claim.
STDP is SSA's ongoing effort to achieve some reduction in OHA's
backlog of appealed cases.
SSA began STDP in November 1994 to address the backlog crisis from an
agencywide perspective and establish specific goals and time frames
for reducing backlogs. STDP includes 19 temporary initiatives to
expedite the disability determination process and reduce OHA's
backlog from 488,000 appealed cases in October 1994 to 375,000 by
December 1996.\3 SSA set its backlog target to equal one and one-half
times the number of appealed cases that, in OHA's opinion,
constitutes an appropriate workload for its ALJs and staff--about
250,000 appealed cases. According to OHA, the 375,000 target does
not relate to any processing time or waiting time goal--
it simply is a target that SSA believed was achievable at STDP's
inception.
--------------------
\3 In this report, OHA's backlog includes cases that OHA's staff and
ALJs are working on as well as those on which no action has been
taken.
STDP'S EXPANDED REGIONAL
SCREENING AND PREHEARING
CONFERENCING INITIATIVES
---------------------------------------------------------- Letter :2.1
To reach its aggressive backlog reduction goal, STDP relies heavily
on a temporary reallocation of agency resources and process changes
to reduce the number of appealed cases requiring an ALJ hearing.
Although STDP has 19 temporary initiatives, OHA expects that its
major effect will come primarily from expanding two pre-STDP
initiatives to expedite the processing of appealed cases. These two
initiatives--regional screening unit and prehearing conferencing
activities--were designed to target for review specific kinds of
appealed cases that are likely to result in ALJs' approving the claim
for payment (referred to as "allowance"). These reviews can result
in possible allowance without the more costly and time-consuming
process of an ALJ hearing.
Before STDP's implementation, SSA had established screening units in
each region to help alleviate OHA's backlog. Screening unit
examiners, who were not OHA staff, reviewed certain appealed cases to
determine if the evidence in the case file was sufficient to permit
an allowance, eliminating the need for a hearing. SSA selected most
cases for review by screening unit staff by using computer-generated
case profiles to identify potentially incorrect claim denials by DDS
staff. SSA officials believe that such profiling of appealed cases
minimizes the risk of incorrect allowances.
Under STDP, SSA expanded screening unit activities by assigning OHA
attorneys to help examiners in all of SSA's regional screening units
to identify more appealed cases that could be allowed earlier in the
process. According to SSA, the opportunity for screening unit
examiners to discuss issues with OHA attorneys gave the examiners
more insight into the adjudication process and enabled the examiners
and attorneys, where appropriate, to recommend allowance in more
cases.
SSA's pre-STDP efforts to reduce the backlog of appealed cases also
included implementing a prehearing conferencing process. The purpose
of prehearing conferencing was to shorten processing time for
appealed cases by assigning experienced OHA attorneys to review and
identify appealed cases that potentially could be allowed without a
formal ALJ hearing. While screening unit activities focused on
reviewing evidence already in the case file, prehearing conferencing
enabled attorneys to review evidence in the case file, confer with
claimant representatives, conduct limited case development, and draft
decisions to be reviewed and approved by ALJs.
Under STDP's expanded prehearing conferencing initiative, OHA's
senior attorneys have been given quasi-judicial powers or the
authority to issue allowance decisions without an ALJ's involvement
or approval. Under the initiative, OHA attorneys are to extensively
develop the case record, which includes obtaining medical and
vocational evidence, conducting conferences with claimant
representatives as well as medical and vocational experts, and
issuing allowance decisions. If they cannot allow the claim on the
basis of their review of the evidence, the case is scheduled for an
ALJ hearing. As in the screening unit initiative, SSA relied on
computer-generated case profiles to select cases to be processed
under this effort. Cases were selected on the basis of their
likelihood to be allowed on the record by an ALJ.\4
STDP is scheduled to be phased out in December 1996. Although OHA
has proposed that SSA extend expanded screening unit activities
through December 1997, as of September 1996 SSA had made no final
decision on this. Expanded prehearing conferencing, however, will
remain active until June 30, 1997, when regulatory authority for
senior attorneys to allow appealed cases expires. In fiscal year
1997, SSA expects to implement certain features from its ongoing
efforts to redesign the disability claims process. One of the
features being tested is a new decision-making position to help
expedite appealed claims through the process. Like activities under
STDP's expanded screening unit and prehearing conferencing
initiatives, this position will enable someone other than an ALJ to
review and allow some appealed cases, eliminating the need for an ALJ
hearing.
--------------------
\4 On-the-record allowances, those appealed cases that can be allowed
without further development, do not require an ALJ hearing.
STDP'S BACKLOG GOAL WILL NOT BE
REACHED
------------------------------------------------------------ Letter :3
SSA acknowledges that it will not reach STDP's goal of reducing the
backlog of appealed cases to 375,000 by December 1996. In fact,
OHA's backlog of about 515,000 appealed cases as of August
1996--about 22 months into STDP--was 3 percent higher than the
backlog of about 500,000 that existed at the plan's inception.
Although SSA will not reach STDP's backlog reduction goal, the agency
believes that the plan has helped to reduce the growth in the backlog
of appealed cases awaiting a decision. Since peaking at about
552,000 in December 1995, OHA's backlog decreased steadily by an
average of about 4,600 appealed cases per month through August 1996
or by about 37,000 total appealed cases. As shown in figure 1, OHA's
backlog decreased during each of the last two fiscal quarters of
1996. As of August 31, 1996, the backlog was 515,009 appealed cases.
Figure 1: OHA's Backlog Has
Begun to Decrease
(See figure in printed
edition.)
OHA's current projections indicate that its backlog of appealed cases
will be approximately 498,000 at the end of calendar year 1996 or
about 123,000 above STDP's target. OHA is relying on increased
productivity from its ALJs and attorneys to increase its ability to
dispose of cases and facilitate reaching this revised target.
BACKLOG REDUCTION EFFORTS
HINDERED BY A SHORTFALL IN
STDP ALLOWANCES AND AN
INCREASE IN APPEALED CASES
---------------------------------------------------------- Letter :3.1
According to OHA, its inability to reach STDP's backlog reduction
goal is due to start-up delays, overly optimistic projections on the
number of appealed cases that could be processed, and an unexpected
increase in the number of appealed cases. Figure 2 illustrates the
disparity between the number of appealed cases OHA expected to allow
under STDP through December 1996 and the actual number that have been
allowed through August 1996--22 months since the plan was initiated.
Figure 2: STDP's Key
Initiatives Have Not Reached
Goals
(See figure in printed
edition.)
Start-up delays associated with prehearing conferencing--the
initiative expected to have the greatest impact on reducing OHA's
backlog of appealed cases--have hindered SSA's ability to reach
STDP's goals. To implement this initiative, SSA had to seek a
regulatory change to give about 600 OHA senior and supervisory staff
attorneys the authority to decide certain appealed cases that were
formerly limited to ALJ jurisdiction. However, the process of
obtaining regulatory change and defining the specific duties and
responsibilities these attorneys would have under STDP was lengthy,
and implementation did not begin until July 1995--or about 6 months
after the projected start-up date.
Overly optimistic allowance projections for STDP's expanded
prehearing conferencing and screening unit initiatives also
contributed to OHA's inability to reach the plan's backlog reduction
goal. SSA initially projected that expanded prehearing conferencing
would result in 224,000 allowances by senior attorneys through the
2-year period ending December 1996. However, as of August 31,
1996--or about 22 months into STDP--these attorneys had allowed only
55,363 appealed cases or about 25 percent of the projected total.\5
The aggressive projections for this initiative were based on the
results of the prehearing conferencing pilot, which OHA conducted
before STDP's implementation, and the assumption that the use of
profiling to select cases would result in a higher rate of cases that
could be allowed without a hearing.
On the basis of the prehearing conferencing pilot, which was
conducted at 19 hearing offices that agreed to participate, OHA
estimated that senior attorneys would be able to allow approximately
75 percent of the appealed cases selected for their review. However,
data show that between August 1995 and August 1996 senior attorneys
allowed only about 24 percent of the appealed cases reviewed under
STDP. According to SSA, the lower allowance rate is primarily due to
senior attorneys' not conducting prehearing conferences with
claimants as frequently as anticipated as well as not sufficiently
developing evidence necessary to complete a claimant's case record.
To increase the number of allowances under this initiative, OHA has
directed its hearing offices to ensure that all senior attorneys
receive training to better familiarize themselves with OHA's case
development process. In addition, through directives and a series of
conference calls with all its hearing offices, OHA has provided its
senior attorneys with specific guidance that includes the kind of
evidence that would adequately support an allowance decision.
Like STDP's prehearing conferencing initiative, expanded regional
screening has not reached STDP's allowance goals. Before STDP,
screening units were expected to allow about 20,000 appealed cases
annually. With STDP's introduction of OHA attorneys to the process,
SSA expected to allow 38,000 appealed cases annually or 76,000 over
the 2 years the initiative was to be in place. In the 22 months
since STDP was initiated, however, screening units had allowed a
total of 26,022 appealed cases or about 34 percent of the projected
total as of August 31, 1996.
SSA expected that under STDP, regional screening units would allow
76,000 appealed cases or about 15 percent of those selected for
review. To reach the initiative's target of 76,000 allowances,
screening units would have had to review a total of about 507,000
cases. Since STDP's inception in November 1994, however, screening
units had reviewed only about 258,000 cases as of August 31, 1996.
According to SSA, the shortfall in the number of appealed cases
processed by screening units is mainly due to SSA's reassignment of
some screening unit staff to other duties.
Finally, an unexpected increase in the number of appeals also
hindered OHA's efforts to reduce its backlog to STDP's goal. During
fiscal year 1995, OHA received approximately 37,500 more appealed
cases than it had initially projected for the year. According to
OHA's staff management officer, this unanticipated workload was due
primarily to an increased number of cases processed by DDS staff.
--------------------
\5 Between May and July 1995, 4,385 appealed cases were allowed under
STDP's prehearing conferencing initiative. Although we have included
those cases in the total number of appealed cases allowed under this
initiative, SSA does not have data on the number of cases that senior
attorneys reviewed during this period. Consequently, we cannot
include these cases when determining the allowance rate for this
initiative.
ALTHOUGH GOALS HAVE NOT BEEN
REACHED, STDP HAS ENHANCED
OHA'S ABILITY TO PROCESS ITS
WORKLOAD
---------------------------------------------------------- Letter :3.2
STDP has enhanced OHA's ability to dispose of appealed cases, helped
decrease the agency's decision-writing backlog, and reduced
processing time for some appealed cases. OHA estimates that as of
August 31, 1996, STDP had resulted in a net increase of about 66,500
dispositions. This estimate is based on time savings associated with
appealed cases allowed under STDP's expanded screening unit and
prehearing conferencing initiatives.\6 To determine the net increase
in dispositions attributable to STDP, OHA estimated the amount of ALJ
time that could be saved through activities implemented under the
plan's two key initiatives and converted these time savings into the
number of additional cases that could be disposed of by ALJs in that
amount of time.
OHA's estimate that the number of dispositions through August 1996
increased by about 66,500 as a result of STDP is consistent with our
estimate. On the basis of our analysis of ALJ productivity before
STDP, had SSA not implemented the plan, OHA would have disposed of
about 68,000 fewer cases between the beginning of fiscal year 1995
and August 1996.\7
STDP has also helped to reduce the number of appealed cases awaiting
a written decision. To increase OHA's decision-writing capacity,
staff from various SSA offices were temporarily detailed to OHA under
STDP. Efforts made under STDP helped reduce the decision-writing
backlog from 40,567 decisions--its level at STDP's inception--to
20,293 as of August 31, 1996, or by about 50 percent.\8
Finally, STDP has significantly reduced processing times for appealed
cases allowed under its expanded screening unit and prehearing
conferencing initiatives. On average, processing times for screening
unit examiners' decisions have averaged 39 days; processing times for
senior attorneys' prehearing conferencing decisions have averaged 121
days. These processing times are substantially shorter than the
average monthly processing time of 264 days for similar cases decided
by ALJs from May 1995 through May 1996.
--------------------
\6 OHA estimates that, on average, each case disposed of under STDP's
expanded screening unit and prehearing conferencing initiatives
results in saving 1.5 hours of ALJ time; each prehearing conferencing
case referred to an ALJ for a hearing results in a time savings of 1
hour. OHA estimates that, on average, ALJs spend about 3.8 hours per
disposition.
\7 Our analysis assumes that the ALJ disposition rate would have
remained constant at 44 dispositions per month--the average for the
fiscal year preceding STDP's implementation.
\8 According to OHA, the appropriate caseload for its decision
writers is about 15,000 cases.
OHA'S ALLOWANCE RATE HAS
DECREASED UNDER STDP
------------------------------------------------------------ Letter :4
Some SSA and OHA officials had expressed concern to us that STDP's
aggressive processing goals could result in inappropriate benefit
awards for some disability claimants and that STDP's initiatives
could cause OHA's allowance rate to increase. However, the percent
of appealed cases allowed by OHA since STDP's inception has notably
decreased. The allowance rate has decreased from about 75 percent in
fiscal year 1994--
the fiscal year preceding STDP's implementation--to about 69 percent
through the third quarter of fiscal year 1996.\9 This allowance rate
reflects cases decided by ALJs as well as those decided by screening
unit staff and senior attorneys under STDP. As figure 3 shows,
except for the third quarter of fiscal year 1996, the allowance rate
has decreased during every quarter since the beginning of 1995. SSA
has not completed any analyses of factors contributing to this
decrease, however.
Figure 3: OHA's Allowance Rate
Has Decreased Under STDP
(See figure in printed
edition.)
--------------------
\9 The allowance rate of 69 percent reflects only cases in which a
decision was rendered. Its calculation does not consider cases that
were dismissed. If dismissed cases were included in the calculation,
the allowance rate would be about 60 percent. An ALJ may dismiss an
appealed case for several reasons, including a claimant's failure to
appear at a hearing without "good cause," an ALJ's determination that
a claimant has no right to a hearing, or the death of the claimant.
CONCLUSIONS
------------------------------------------------------------ Letter :5
STDP is SSA's effort to achieve some reduction in what has been OHA's
growing backlog of appealed cases. Recent processing trends show
that STDP has helped the agency reduce the backlog, which has
decreased steadily in the past 8 months. In addition, concerns that
STDP could result in inappropriate allowances and that OHA's
allowance rate could increase have not been substantiated.
RECOMMENDATION TO THE
COMMISSIONER OF THE SOCIAL
SECURITY ADMINISTRATION
------------------------------------------------------------ Letter :6
SSA is evaluating the accuracy of the decisions made under STDP to
help determine the advisability of continuing with the plan. Because
STDP has shown that it can help reduce the backlog of appealed cases,
we recommend that--if SSA determines that accurate decisions are
being made--the Commissioner of the Social Security Administration
extend STDP until the agency institutes a permanent process that
ensures the timely and expeditious disposition of appeals.
AGENCY COMMENTS AND OUR
EVALUATION
------------------------------------------------------------ Letter :7
In commenting on a draft of this report, SSA agreed with our
conclusions and recommendation on the conditions for extending STDP.
The agency stated that it recently found the accuracy of screening
unit allowances to be acceptable and has decided to extend the
initiative beyond the original December 1996 expiration date. The
agency also stated that it is reviewing the accuracy of prehearing
conferencing allowances and will soon decide whether to extend that
initiative. We also received technical comments from SSA, which we
incorporated where appropriate. SSA's comments are reprinted in
appendix I.
---------------------------------------------------------- Letter :7.1
We are providing copies of this report to the Director of the Office
of Management and Budget and the Commissioner of the Social Security
Administration. We will also make copies available to others upon
request.
Major contributors to this report are listed in appendix II. If you
have any questions concerning this report or need additional
information, please call me on (202) 512-7215.
Sincerely yours,
Jane L. Ross
Director, Income Security Issues
(See figure in printed edition.)Appendix I
COMMENTS FROM THE SOCIAL SECURITY
ADMINISTRATION
============================================================== Letter
MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix II
Michael T. Blair, Jr., Assistant Director, (404) 679-1944
Carlos J. Evora, Evaluator-in-Charge, (404) 679-1845
*** End of document. ***