Supplemental Security Income: SSA Needs a Uniform Standard for Assessing
Childhood Disability (Letter Report, 05/06/1998, GAO/HEHS-98-123).

In 1997, almost 900,000 children received about $5 billion in
Supplemental Security Income (SSI) benefits for disabilities. Welfare
reform has made eligibility for childhood SSI benefits more restrictive;
generally, regulations now require that a child's impairment must result
in marked limitations in two areas of functioning or an extreme
limitation in one area. Since these changes, GAO has monitored the
Social Security Administration's (SSA) adjudication of cases for 288,000
children whose eligibility was subject to review against the new
standard, as well as 370,000 new applicants.  SSA has made considerable
progress in implementing the welfare reform changes, taking important
steps to safeguard fairness by identifying children whose benefits may
have been terminated inappropriately and establishing remedial action to
rereview their cases. But SSA also needs to update its medical listings
to ensure that all children are assessed against a uniform severity
standard.

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

 REPORTNUM:  HEHS-98-123
     TITLE:  Supplemental Security Income: SSA Needs a Uniform Standard
	     for Assessing Childhood Disability
      DATE:  05/06/1998
   SUBJECT:  Social security benefits
	     Eligibility determinations
	     Children with disabilities
	     Disability benefits
	     Eligibility criteria
	     Children
	     Mental illnesses
	     Income maintenance programs
IDENTIFIER:  Supplemental Security Income Program

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GAO/HEHS-98-123

Cover
================================================================ COVER

Report to the Chairman, Subcommittee on Human Resources, Committee on
Ways and Means, House of Representatives

May 1998

SUPPLEMENTAL SECURITY INCOME - SSA
NEEDS A UNIFORM STANDARD FOR
ASSESSING CHILDHOOD DISABILITY

GAO/HEHS-98-123

SSI Childhood Eligibility Standard

(207034)

Abbreviations
=============================================================== ABBREV

  CBO - Congressional Budget Office
  IFA - individualized functional assessment
  SSA - Social Security Administration
  SSI - Supplemental Security Income

Letter
=============================================================== LETTER

B-279558

May 6, 1998

The Honorable E.  Clay Shaw
Chairman, Subcommittee on Human Resources
Committee on Ways and Means
House of Representatives

Dear Mr.  Chairman:

In 1997, almost 900,000 children younger than 18 received about $5
billion in Supplemental Security Income (SSI) benefits.  The Personal
Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L.
104-193), commonly referred to as welfare reform, made eligibility
for childhood SSI benefits more restrictive.\1 In February 1997, the
Social Security Administration (SSA) published regulations to
implement the new definition of disability for the SSI children's
program set forth in the welfare reform law.  Under the more
restrictive standard, a child's impairment generally must result in
marked limitations in two areas of functioning or an extreme
limitation in one area.  Previously, a child could be found eligible
if his or her impairment resulted in one marked and one moderate
limitation or three moderate limitations.

In September 1997, we reported that SSA's regulations establishing a
new severity standard are consistent with the law and are well
supported.\2 Since then, we have been monitoring SSA's adjudication
of cases under the new regulations for 288,000 children whose
eligibility was subject to review against the new standard as well as
for about 370,000 new applicants.  You asked us to expand on our
early findings regarding SSA's implementation of the new eligibility
standard, which we reported to you and the Chairman of the Social
Security Subcommittee in a joint hearing on March 12, 1998.\3

--------------------
\1 Sec.  232 of P.L.  104-193 mandates that we report to the Congress
by January 1, 1999, on (1) the effect of the legislative changes on
the SSI program and (2) the extra expenses incurred by families of
children receiving SSI who are not covered by other public programs.
This report is based on our work to date under the first mandated
study.

\2 Supplemental Security Income:  Review of SSA Regulations Governing
Children's Eligibility for the Program (GAO/HEHS-97-220R, Sept.  16,
1997).

\3 SSA's Management Challenges:  Strong Leadership Needed to Turn
Plans Into Timely, Meaningful Action (GAO/T-HEHS-98-113, Mar.  12,
1998).

   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

SSA has made considerable progress in implementing the welfare reform
changes in eligibility for SSI children.  It has taken important
steps to safeguard fairness by identifying children whose benefits
may have been terminated inappropriately and establishing remedial
action to rereview their cases.  However, because SSA's medical
listings reflect multiple levels of severity, SSA also needs to
expedite updating and modifying its medical listings to ensure that
all children are assessed against a uniform severity standard.  The
need to revise the listings is a long-standing problem that we
reported 3 years ago.  Moreover, SSA needs to take concerted action
to follow through on its plan for monitoring and continually
improving the quality of decisions regarding children.  Consistent
with our legislative mandate, we will continue to focus our work on
SSA's efforts to provide reasonable assurance that it can administer
the program consistently and improve the accuracy of childhood
disability decisions.

   BACKGROUND
------------------------------------------------------------ Letter :2

The Congress made the eligibility criteria for children to receive
SSI more restrictive in order to help ensure that only needy children
with severe disabilities are eligible for benefits.  From the end of
1989 through 1996, the number of children younger than 18 receiving
SSI had more than tripled, from 265,000 to 955,000.  This growth
occurred after SSA initiated outreach efforts and issued two sets of
regulations that made the eligibility criteria for children less
restrictive, particularly for children with mental impairments.\4

One regulatory change, issued in December 1990, revised and expanded
SSA's medical listings for childhood mental impairments by adding
such impairments as attention deficit hyperactivity disorder and
incorporating functional criteria into the listings.  Examples of
such functional criteria include standards for assessing a child's
social skills; cognition and communication skills; and the ability to
concentrate, keep pace, and persist at tasks at hand.  The medical
listings are regulations containing examples of medical conditions,
including both physical and mental impairments, that are so severe
that disability can be presumed for anyone who is not performing
substantial gainful activity and who has an impairment that "meets"
the criteria--medical signs and symptoms and laboratory findings--of
the listing.  Since the listings cannot include every possible
impairment or combination of impairments a person can have, SSA's
rules also provide that an impairment or combination of impairments
can "equal" or be "equivalent to" the severity of a listing.  There
are separate listings for adults and children.  The childhood
listings are used first in evaluating childhood claims.  If the
child's impairment does not meet or equal the severity of a childhood
listing, the adult listings are considered.

The second regulatory change, issued in February 1991 in response to
the Sullivan v.  Zebley Supreme Court decision, added two new bases
for finding children eligible for benefits, both of which required an
assessment of a child's ability to function:  functional equivalence,
which was set at "listing level" severity, and an individualized
functional assessment (IFA), which was set at a lower threshold of
severity.

Functional equivalence is based on the principle that it is the
functional limitations resulting from an impairment that make the
child disabled, regardless of the particular medical cause.  It was
added as a basis for eligibility in response to the Supreme Court's
determination in the Zebley case that SSA's medical listing of
impairments--which had been the only basis for eligibility--was
incomplete.  Under functional equivalence, a child could be found
eligible for benefits if the child's impairment limited his or her
functional ability to the same degree as described in a listed
impairment.  Functional equivalence is particularly appropriate for
assessing children with combinations of physical and mental
impairments.

The IFA allowed children whose impairments were less severe than
listing level to be found eligible if their impairments were severe
enough to substantially limit their ability to act and behave in
age-appropriate ways.  A child was generally found eligible under the
IFA if his or her impairment resulted in moderate functional
limitations in three areas of functioning or a marked limitation in
one area and a moderate limitation in another area.\5

In 1995, we reported that the subjectivity of the IFA called into
question SSA's ability to ensure reasonable consistency in
administering the SSI program, particularly for children with
behavioral and learning disorders.  We suggested that the Congress
consider eliminating the IFA and directing SSA to revise its medical
listings.\6

--------------------
\4 Social Security:  Rapid Rise in Children on SSI Disability Rolls
Follows New Regulations (GAO/HEHS-94-225, Sept.  9, 1994).

\5 Under the IFA, areas of functioning were assessed on the basis of
children's ages.  Social, communication, cognition, and motor skills
were assessed for children of all ages.  Responsiveness to stimuli
was assessed in children under age 1; personal and behavioral skills
were assessed for children aged 1 and older; the ability to
concentrate, persist at tasks at hand, and keep pace was assessed for
children aged 3 and older.

\6 Social Security:  New Functional Assessments for Children Raise
Eligibility Questions (GAO/HEHS-95-66, Mar.  10, 1995.)

   WELFARE REFORM RESTRICTS
   CHILDHOOD ELIGIBILITY FOR SSI
   BENEFITS
------------------------------------------------------------ Letter :3

Several welfare reform provisions enacted in August 1996 made the
eligibility criteria for disabled children more restrictive:  (1)
childhood disability was redefined from an impairment comparable to
one that would prevent an adult from working to an impairment that
results in "marked and severe functional limitations," (2) the IFA
was eliminated as a basis for determining eligibility for children,
and (3) maladaptive behavior was removed from consideration when
assessing a child's personal or behavioral functioning.  Thus, such
behavior would be considered only once--in the assessment of that
child's social functioning--when determining whether the child had a
mental impairment severe enough to meet or equal the medical
listings.  The law also required SSA to redetermine the eligibility
of children on the rolls who might not meet the new eligibility
criteria because they received benefits on the basis of the IFA or
maladaptive behavior.

      FEWER CHILDREN ARE AFFECTED
      BY THE LAW THAN WAS EARLIER
      ESTIMATED
---------------------------------------------------------- Letter :3.1

Earlier legislative proposals under consideration in 1995 might have
removed from the rolls as few as 45,000 to as many as 190,000
children, according to Congressional Budget Office (CBO) estimates.
After the welfare reform legislation was enacted in August 1996 but
before SSA issued its regulations, CBO estimated that about 170,000
children on the rolls would no longer be eligible for benefits.
After SSA issued its regulations in February 1997, CBO and SSA
estimates of children who would be removed from the rolls were very
close--131,000 and 135,000, respectively.

SSA identified 288,000 children as potentially affected by the
changes in the eligibility criteria because they had been awarded
benefits on the basis of the IFA or maladaptive behavior.  Through
January 31, 1998, SSA reviewed the eligibility of 271,489 of the
288,000 children.  Of these, 137,090 (50.5 percent) were found
eligible to continue to receive benefits and 134,399 (49.5 percent)
were found ineligible.  Because the number of children deemed
ineligible does not yet reflect the results of all appeals, we do not
yet know the final outcome on all these cases.  Children initially
deemed by a disability determination service to be ineligible have 60
days to request reconsideration of their case.  If they continue to
receive an unfavorable result, they can appeal to an SSA
administrative law judge and, finally, to federal court.  Recipients
can elect to continue receiving benefit payments during the appeal
process.  Factoring in appeals and experience in conducting
redeterminations so far, SSA now estimates that 100,000 children will
be removed from the rolls as a result of the redeterminations.

      SSA'S REVIEW IDENTIFIED
      IMPLEMENTATION PROBLEMS AND
      INITIATED CORRECTIVE ACTIONS
---------------------------------------------------------- Letter :3.2

In December 1997, SSA issued a report on its "top-to-bottom" review
of the implementation of the new regulations to address concerns that
children may have had their benefits terminated unfairly.\7 SSA found
problems with the adjudication of claims for which mental retardation
was the primary impairment as well as potential procedural weaknesses
relating to notification of appeal rights and termination of benefits
for failure to cooperate with SSA requests for information needed to
redetermine eligibility.

To remedy these problems, SSA intends to rereview all children whose
benefits were terminated or denied on the basis of mental
retardation.  SSA conducted training in March 1998 to clarify how
these claims should be adjudicated.  Also, all cases terminated
because families did not cooperate with SSA in processing the claim,
such as by failing to provide requested medical information or to
take the child for a consultative examination, will be rereviewed.
SSA found that in two-thirds of these terminations, all the required
contacts had not been made or had not been documented in the file.
Finally, families of children whose benefits were terminated but did
not appeal are being given an additional 60-day period in which to
appeal their terminations.  Notices of this right as well as the
right to continue to receive benefits while the appeal is pending
were sent out in February 1998.

--------------------
\7 For more information, see SSA, Social Security:  Review of SSA's
Implementation of the New SSI Childhood Disability Legislation
(Baltimore, Md.:  1997).

   REGULATIONS GENERALLY SET
   SEVERITY AT TWO MARKED OR ONE
   EXTREME LIMITATION
------------------------------------------------------------ Letter :4

To implement the new law, SSA issued interim final regulations
establishing a new severity standard in February 1997, which we found
to be consistent with the law.\8 The regulations define an impairment
that results in "marked and severe functional limitations" as one
that meets or medically or functionally equals one of SSA's medical
listings.\9 For a child to be determined eligible for benefits under
this new and stricter standard of severity, the child's impairment
must generally result in marked functional limitations in two areas
of functioning or an extreme limitation in one area.  SSA also
eliminated the IFA and removed the duplicate consideration of
maladaptive behavior from the mental disorders listings.

In developing its regulations, SSA concluded that the Congress meant
to establish a stricter standard of severity than "one marked, one
moderate" limitation, for several reasons.  The Congress eliminated
the "comparable severity" standard of disability and the IFA, which
was created for evaluating impairments less severe than those in the
medical listings.  A "one marked, one moderate" standard of severity
would have retained one of the standards under which children were
found eligible under the IFA, which SSA stated would violate the law.
Finally, SSA interpreted the conference report to mean that the
Congress intended the listings to be the last step in the disability
determination process for children.

--------------------
\8 In light of the congressional mandate to issue regulations needed
to carry out the new statutory provisions as expeditiously as
possible, SSA determined that there was good cause to waive the
notice of proposed rulemaking procedures.  Instead, in accordance
with the Administrative Procedure Act, SSA issued interim final
regulations with a request for public comments.  SSA stated that it
would issue revised rules if necessary.

\9 Previously, the IFA afforded children whose impairments were not
severe enough to meet or equal SSA's listings an additional basis on
which to qualify for benefits.  The IFA, which was set at a lower
severity standard than the listings, was analogous to the test of
residual functional capacity for adults whose impairments are not of
listing level severity.  Now, unlike adults, children can qualify
only under the listings.

      SOME CHILDREN WITH LESS
      SEVERE DISABILITIES STILL
      RECEIVE BENEFITS
---------------------------------------------------------- Letter :4.1

Although SSA articulated the "two marked or one extreme" severity
standard in its regulations, it did not modify its existing listings
to specifically incorporate functional criteria that would reflect
both the new definition of childhood disability and advances in
medicine and science.  For example, because of advances in treatment,
some impairments no longer have as severe an effect on a child's
ability to function as they once did.  As a result, some listings are
set below the "two marked or one extreme" threshold of severity, and
cases are being adjudicated at this less severe level as well as at
the "two marked or one extreme" severity level.

SSA has identified 28 listings that are most likely to enable
children whose impairments result in fewer than two marked functional
limitations or one extreme functional limitation to be awarded
benefits.  Our review shows that such less severe listings can serve
as the basis for awards even though SSA rejected the "one marked, one
moderate" level of severity in interpreting the "marked and severe"
functional limitations required by the welfare reform law.  Children
who meet or medically equal these less severe listings qualify for
benefits under the regulations.  At the same time, SSA told us that
the regulations prohibit the less severe listings from being used to
determine functional equivalence.  In March 1997, SSA stated that it
planned to issue a Social Security ruling to clarify that only
listings at the "two marked or one extreme" level were to be used in
determining functional equivalence, but SSA has not yet issued such a
ruling.  In the absence of such clarification, some adjudicators may
be using less severe listings in making functional equivalence
determinations.  Reviewers in SSA's Office of Program and Integrity
Reviews have told us, however, that they would consider this an
error.

SSA has not identified how many children may have been awarded
benefits on the basis of these less severe listings.  SSA told us
that unreliable coding of the listings used to determine eligibility
makes it difficult to quantify the extent of this problem.  We do
know, however, that some of the listings below the "two marked or one
extreme" threshold are for prevalent impairments, including two of
six listings for the most common impairment--mental retardation--and
three listings for cerebral palsy, one for epilepsy, and one for
asthma.  Other listings below the "two marked or one extreme"
threshold include one listing for juvenile rheumatoid arthritis, one
for juvenile diabetes, and two for diabetes insipidus.  SSA has not
established a schedule for updating and modifying its listings.

   SSA IS TAKING STEPS TO IMPROVE
   THE QUALITY OF DECISIONS ON
   CHILDREN
------------------------------------------------------------ Letter :5

SSA's quality assurance statistics on childhood cases show uneven
accuracy rates across the states.  Although nationally the accuracy
rate for decisions on new childhood cases and redeterminations
exceeds SSA's standard of 90.6 percent, many states fall below the
standard.  Specifically, for decisions made on new childhood cases
from June 1997 through January 1998, 4 states fell below the
90.6-percent accuracy standard for awards, and 10 states fell below
the standard for denials.  For redeterminations, 10 states fell below
the standard for continuances, and 10 states fell below the standard
for cessations.  Most of the errors have been in the documentation;
that is, there was some deficiency in the evidence that formed the
basis for the determination.  In these cases, proper documentation of
the case could substantiate or reverse the decision.

Given the significant changes in adjudicating cases on the basis of
the new regulations, these statistics are not surprising.  Moreover,
childhood cases historically have been among the more difficult cases
to adjudicate.  We would expect SSA to be monitoring the decisions;
identifying areas of difficulty for adjudicators; and providing
additional clarification, guidance, and training to improve the
accuracy of decisions.  In fact, this is exactly what SSA has been
doing, although its training schedule was delayed slightly.

Further, on February 18, 1998, SSA issued a memorandum detailing a
new quality review plan for childhood disability cases to ensure
correct and consistent application of the new regulations.  The plan
includes special initiatives to ensure the quality of cases
readjudicated in response to the top-to-bottom review, as well as
initiatives to improve SSA's ongoing quality assurance reviews on
childhood cases.  For the first time, SSA will be drawing separate
samples of new childhood claims and continuing disability reviews.
This should allow SSA to provide more timely feedback and policy
clarifications on the problems unique to adjudication of childhood
claims.  SSA also will be measuring the performance of its quality
reviewers to ensure that they are accurately and consistently
identifying errors.  Under this effort, SSA plans to increase its
sample of reviewed cases from 1,600 to 6,000 annually.

   CONCLUSIONS
------------------------------------------------------------ Letter :6

SSA has made substantial progress in implementing the new childhood
definition of disability through its rapid redetermination of most of
these cases, its action to ensure that the redetermination process is
fair, and its ongoing review of the implementation of the new
regulations.  However, we remain concerned about how accurately and
consistently the disability determination process is working for
children.  Specifically, because some of SSA's listings of
impairments require less than "two marked or one extreme" limitation
to qualify for benefits, SSA adjudicators are not assessing all
children against a uniform severity standard.  This is because SSA
has neither updated its listings to reflect advances in medicine and
science nor modified them to reflect a single standard of severity,
despite its authority to do so.  Moreover, we noted the need to
revise the listings 3 years ago.  SSA also needs to continue its
efforts to improve decisionmaking for childhood cases to better
ensure that adjudicators apply the new eligibility criteria
accurately and consistently.

   RECOMMENDATION TO THE
   COMMISSIONER OF SOCIAL SECURITY
------------------------------------------------------------ Letter :7

In view of the fact that many of SSA's medical listings for children
are outdated and allow eligibility to be based upon multiple
standards of severity, we recommend that the Commissioner act
immediately to update and modify its medical listings to incorporate
advances in medicine and science and to reflect a uniform standard of
severity.

   AGENCY COMMENTS
------------------------------------------------------------ Letter :8

We provided a draft of this letter to SSA for review and comment.
SSA officials agreed that SSA should periodically update its listings
and stated that it is developing a schedule to accomplish this.  The
agency stated that it must consult with medical experts to ensure
that the listings reflect state-of-the-art medical practice and
estimates that it will take several years to complete the revision.
However, the agency did not address the need for the listings to
reflect a uniform severity standard.

SSA also made some technical comments, which we incorporated where
appropriate.

We are providing copies of this report to the Commissioner of Social
Security and other congressional committees with an interest in this
matter.  We will also make copies available to others upon request.
Please contact me on (202) 512-7215 if you have any questions about
this report.  Other major contributors are Cynthia Bascetta, Ellen
Habenicht, Carol Petersen, and Daniel Schwimer.

Sincerely yours,

Cynthia M.  Fagnoni
Director, Income Security Issues

RELATED GAO PRODUCTS

SSA's Management Challenges:  Strong Leadership Needed to Turn Plans
Into Timely, Meaningful Action (GAO/T-HEHS-98-113, Mar.  12, 1998).

Supplemental Security Income:  Review of SSA Regulations Governing
Children's Eligibility for the Program (GAO/HEHS-97-220R, Sept.  16,
1997).

Children Receiving SSI by State (GAO/HEHS-96-144R, May 15, 1996).

SSA Initiatives to Identify Coaching (GAO/HEHS-96-96R, Mar.  5,
1996).

Supplemental Security Income:  Growth and Changes in Recipient
Population Call for Reexamining Program (GAO/HEHS-95-137, July 7,
1995).

Social Security:  New Functional Assessments for Children Raise
Eligibility Questions (GAO/HEHS-95-66, Mar.  10, 1995).

Social Security:  Federal Disability Programs Face Major Issues
(GAO/T-HEHS-95-97, Mar.  2, 1995).

Supplemental Security Income:  Recent Growth in the Rolls Raises
Fundamental Program Concerns (GAO/T-HEHS-95-67, Jan.  27, 1995).

Social Security:  Rapid Rise in Children on SSI Disability Rolls
Follows New Regulations (GAO/HEHS-94-225, Sept.  9, 1994).

*** End of document. ***