Social Security Disability: SSA Making Progress in Conducting Continuing
Disability Reviews (Letter Report, 09/18/98, GAO/HEHS-98-198).
Pursuant to a congressional request, GAO provided information on
whether: (1) the Social Security Administration's (SSA) plan to process
8.1 million continuing disability reviews (CDR) during fiscal years 1998
through 2002 will result in CDRs being done for all beneficiaries for
whom CDRs are required by law; and (2) disability determination
services' (DDS) CDR processing capacity and the CDR funding authorized
by Congress for fiscal years 1998 through 2002 will be sufficient to
process the CDRs required by law.
GAO noted that: (1) by the end of fiscal year (FY) 2002, if SSA
completes its new CDR plan as envisioned, all CDRs required by law will
be complete or under way, including those that are overdue and those due
to be started by the end of FY 2002; (2) when DDSs award disability
benefits, they set due dates for starting CDRs, and every month these
prescheduled CDR start dates come due for many beneficiaries; (3)
because CDRs can require up to 1 year to complete from the time
beneficiaries are selected for CDRs, many CDRs cannot be completed by
the end of the fiscal year in which they become due; (4) SSA estimates
that about 835,000 of the required CDRs due to be started in FY 2002
will not be completed by yearend; (5) these CDRs will be completed in FY
2003, according to SSA; (6) of the 8.1 million CDRs planned for fiscal
years 1998 to 2002, SSA plans to complete 53 percent through brief
questionnaires mailed to selected beneficiaries and 47 percent through
full medical reviews conducted by DDSs; (7) according to SSA, in
formulating its plan, SSA consulted with DDSs to plan caseloads that
will not exceed the DDSs' case processing capacity; (8) however, DDSs
could potentially encounter additional caseloads not envisioned in SSA's
plan; (9) for several beneficiary groups, SSA is still working to
develop statistical formulas for selecting appropriate mailer
recipients; (10) if DDSs have to conduct more full medical reviews to
replace CDR mailers, the authorized funds could prove inadequate because
full medical reviews cost significantly more than mailers; (11) if SSA's
assumptions about economic growth and unemployment do not prove accurate
or if the test results for SSA's disability process redesign plan are
not positive, the volume of initial disability applications and requests
for reconsideration of denied applications could potentially be larger
than assumed by SSA; (12) if so DDSs could face even larger backlogs of
these non-CDR cases in order to complete CDR full medical reviews in a
timely manner; (13) recognizing the potential uncertainty of the CDR and
non-CDR workloads, SSA plans to monitor them closely; (14) SSA
acknowledged that its CDR plan may require revisions and that unexpected
workload increases, if they occur, could lead SSA to decide to increase
the case processing capacity of state DDSs; and (15) potential barriers
to the timely expansion of DDS capacity exist as well, such as shortages
of qualified applicants and office space, state hiring freezes, and the
time required to train and mentor new staff.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: HEHS-98-198
TITLE: Social Security Disability: SSA Making Progress in
Conducting Continuing Disability Reviews
DATE: 09/18/98
SUBJECT: Disability benefits
Eligibility determinations
Social security benefits
Income maintenance programs
Medical examinations
Federal social security programs
IDENTIFIER: Social Security Disability Insurance Program
Old Age Survivors and Disability Insurance Program
SSA Disability Determination Program
Supplemental Security Income Program
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Cover
================================================================ COVER
Report to the Chairman and Ranking Minority Member, Subcommittee on
Social Security, Committee on Ways and Means, House of
Representatives
September 1998
SOCIAL SECURITY DISABILITY - SSA
MAKING PROGRESS IN CONDUCTING
CONTINUING DISABILITY REVIEWS
GAO/HEHS-98-198
SSA's Continuing Disability Reviews
(207006)
Abbreviations
=============================================================== ABBREV
CDR - continuing disability review
DDS - disability determination service
DI - Disability Insurance
OASI - Old-Age and Survivors Insurance
SSA - Social Security Administration
SSI - Supplemental Security Income
Letter
=============================================================== LETTER
B-277856
September 18, 1998
The Honorable Jim Bunning
Chairman
The Honorable Barbara B. Kennelly
Ranking Minority Member
Subcommittee on Social Security
Committee on Ways and Means
House of Representatives
In 1997, the Social Security Administration (SSA) paid about $66
billion to 9.3 million disabled beneficiaries under the Social
Security Disability Insurance (DI) and Supplemental Security Income
(SSI) programs.\1 To help ensure that only eligible beneficiaries
remain on the rolls, SSA is required by law to conduct continuing
disability reviews (CDR) for all DI beneficiaries and some SSI
disability recipients to determine whether they continue to meet the
disability requirements of the law. SSA's regulations call for CDRs
to begin as soon as 6 months after benefits are awarded for some
beneficiaries, or as long as 7 years after benefits are awarded for
other beneficiaries.\2 However, we have reported on several occasions
that, because SSA did not consistently perform required CDRs when
due, hundreds of millions of dollars in unnecessary costs were
incurred each year, and program integrity was undermined.\3 As of
fiscal year 1996, about 4.3 million CDRs were due or overdue.
In fiscal year 1996, to reduce the unnecessary costs incurred by not
doing CDRs, SSA and the Congress focused on providing funding to
conduct overdue CDRs and new CDRs as they become due. SSA developed
a plan for a 7-year initiative to conduct about 8.2 million CDRs
during fiscal years 1996 through 2002. To fund this 7-year
initiative, the Congress authorized a total of about $4.1 billion.
SSA funds state agencies called disability determination services
(DDS) to process disability applications and conduct CDR medical
reviews in accordance with SSA policies and procedures. On the basis
of the Congress' commitment to fund increased CDR workloads, SSA
negotiated with the DDSs to increase their efforts to hire new staff.
During fiscal years 1996 and 1997, the first 2 years of SSA's CDR
initiative, a total of 1.2 million CDRs were processed.
In March 1998, SSA issued a revised CDR plan that reflected the
experience gained during the first 2 years of the CDR initiative and
incorporated additional CDRs for certain children receiving SSI
disability benefits, as required by a statutory provision enacted
after the original CDR plan was developed. Under the new plan, SSA
set a goal of 8.1 million CDRs for fiscal years 1998 through 2002
(the last 5 years of the CDR initiative). Including the 1.2 million
CDRs already processed during fiscal years 1996 and 1997, SSA plans
to process a total of 9.3 million CDRs for the full 7-year period.
You asked that we determine (1) whether SSA's plan to process 8.1
million CDRs during fiscal years 1998 through 2002 will result in
CDRs being done for all beneficiaries for whom CDRs are required by
law and (2) whether the DDSs' CDR processing capacity and the CDR
funding authorized by the Congress for fiscal years 1998 through 2002
will be sufficient to process the CDRs required by law. To develop
this information, we interviewed officials from SSA and seven state
DDSs about their workloads and priorities; reviewed applicable laws
and regulations and relevant SSA documents; and analyzed the process
SSA uses to determine which beneficiaries should receive a CDR,
including the formulas used to estimate the likelihood that
beneficiaries' impairments have improved medically since benefits
were awarded. We did not assess the reliability of data provided by
SSA. We performed our work from June 1997 through June 1998 in
accordance with generally accepted government auditing standards.
--------------------
\1 In 1997, about 1 million of the 9.3 million beneficiaries
concurrently received both DI and SSI disability benefits because of
their low income and resources. Also, as explained in footnote 4, a
relatively small number of disability beneficiaries receive
disability benefits through the Social Security Old-Age and Survivors
Insurance program.
\2 While the regulations do not state how long a CDR should take to
complete after being started, a CDR can take up to 1 year to complete
from the time a beneficiary is selected to undergo a CDR, according
to SSA.
\3 See the list of related GAO products at the end of this report.
RESULTS IN BRIEF
------------------------------------------------------------ Letter :1
By the end of fiscal year 2002, if SSA completes its new CDR plan as
envisioned, all CDRs required by law will be complete or under way,
including those that are overdue and those due to be started by the
end of fiscal year 2002. When DDSs award disability benefits, they
set due dates for starting CDRs, and every month these prescheduled
CDR start dates come due for many beneficiaries. However, because
CDRs can require up to 1 year to complete from the time beneficiaries
are selected for CDRs, many CDRs cannot be completed by the end of
the fiscal year in which they become due. SSA estimates that about
835,000 of the required CDRs due to be started in fiscal year 2002
will not be completed by year-end. These CDRs will be completed in
fiscal year 2003, according to SSA.
Of the 8.1 million CDRs planned for fiscal years 1998 to 2002, SSA
plans to complete 53 percent through brief questionnaires mailed to
selected beneficiaries and 47 percent through full medical reviews
conducted by DDSs. According to SSA, in formulating its CDR plan,
SSA consulted with DDSs to plan caseloads that will not exceed the
DDSs' case processing capacity. However, DDSs could potentially
encounter additional caseloads not envisioned in SSA's plan. For
example, SSA may have to ask DDSs to do more full medical reviews
than planned because SSA's ability to use CDR mailers to the full
extent planned is not yet certain. For several beneficiary groups,
SSA is still working to develop statistical formulas for selecting
appropriate mailer recipients. If DDSs have to conduct more full
medical reviews to replace CDR mailers, the authorized funds could
prove inadequate because full medical reviews cost significantly more
than mailers. The authorized funding would be sufficient to perform
an estimated 153,000 additional full medical reviews annually in
fiscal years 2000 through 2002; however, the potential annual
increases in full medical review workloads could substantially exceed
that number.
Furthermore, if SSA's assumptions about economic growth and
unemployment do not prove accurate or if the test results for SSA's
disability process redesign plan are not positive, the volume of
initial disability applications and requests for reconsideration of
denied applications could potentially be larger than assumed by SSA.
If so, DDSs could face even larger backlogs of these non-CDR cases in
order to complete CDR full medical reviews in a timely manner.
Recognizing the potential uncertainty of the CDR and non-CDR
workloads, SSA plans to monitor them closely. SSA acknowledged that
its CDR plan may require revisions and that unexpected workload
increases, if they occur, could lead SSA to decide to increase the
case processing capacity of state DDSs. However, potential barriers
to the timely expansion of DDS capacity exist as well, such as
shortages of qualified applicants and office space, state hiring
freezes, and the time required to train and mentor new staff.
BACKGROUND
------------------------------------------------------------ Letter :2
SSA funds a DDS in each state to determine whether disability
applicants meet DI and/or SSI disability criteria. For both DI and
SSI, the law defines disability in adults as the inability to engage
in substantial gainful activity because of a severe physical or
mental impairment that is medically determinable and has lasted or is
expected to last at least 1 year or result in death. For children
under age 18 seeking SSI disability benefits, their impairments must
meet the duration requirement and result in "marked and severe"
functional limitations. The DI program provides monthly cash
benefits and Medicare eligibility to severely disabled workers. The
SSI program provides income assistance and access to Medicaid for
blind, disabled, or aged people whose income and resources fall below
a certain financial threshold. DI cash benefits are paid from the
Federal Disability Insurance Trust Fund.\4 SSI cash benefits are paid
from general tax revenues.
SSA personnel in one of SSA's 1,300 field offices conduct the initial
interview with disability applicants to determine their nonmedical
eligibility on the basis of income, resources, and work history. SSA
personnel also record information on each applicant's disability;
medical treatments; and names, addresses, and telephone numbers of
the individual's doctors and other providers of medical services.
Similarly, when SSA identifies which current disability beneficiaries
must undergo full medical CDRs, field office personnel contact the
beneficiaries to obtain current information on their financial
status, work activity, disability, medical treatments, doctors, and
other medical service providers. SSA field offices also process
other types of cases, such as applications for Social Security
retirement benefits and SSI old-age benefits.
If field offices find that applicants, or beneficiaries undergoing
CDRs, do not meet the nonmedical eligibility requirements, the field
offices deny the applications or, in the case of CDRs, terminate
benefits. However, when such individuals do meet the nonmedical
eligibility requirements, the field offices forward their cases to
state DDSs for medical disability determinations. For initial
applications, DDSs either deny or award benefits to the applicant.
For CDRs, DDSs either terminate or continue the beneficiary's
benefits. To make these determinations, DDSs request medical records
from the individual's treating physicians and other medical treating
sources. If treating sources do not provide sufficient evidence to
make a decision, DDSs may schedule the individual for medical and/or
psychological examinations with consulting physicians. If a DDS
denies an initial disability application or terminates the benefits
of a current beneficiary, the individual may ask the DDS to
reconsider the initial decision and, if denied again, appeal to an
administrative law judge and ultimately to a federal court.
--------------------
\4 Most disabled Social Security beneficiaries are disabled insured
workers who receive benefits through the DI program on the basis of
their own earnings record. However, as of 1997, about 889,000 Social
Security disability beneficiaries were disabled surviving spouses and
disabled adult children who qualified for disability benefits on the
basis of the earnings record of an insured spouse or parent. Many of
these disabled surviving spouses and adult children receive their
disability benefits through the Social Security Old-Age and Survivors
Insurance (OASI) program, not the DI program. OASI disability
benefits for disabled surviving spouses and disabled adult children
are paid from the Old-Age and Survivors Trust Fund. To receive OASI
disability benefits, surviving spouses and adult children must meet
the DI program's disability criteria, and they also are subject to
the requirement for CDRs. For simplicity, our report refers to all
disabled Social Security beneficiaries (in both DI and OASI) as "DI
beneficiaries."
SSA ACCUMULATED A CDR
BACKLOG OVER AN EXTENDED
PERIOD
---------------------------------------------------------- Letter :2.1
In 1980, because of concerns about the effectiveness of the CDR
process and growing disability rolls, the Congress enacted a law
requiring CDRs at least once every 3 years for all DI beneficiaries
whose disabilities are not considered permanent and at intervals
determined appropriate by SSA for DI beneficiaries whose impairments
are considered permanent (see app. I for a detailed history of laws
requiring CDRs and SSA's difficulties conducting these CDRs).
Fourteen years later, in 1994, the Congress established the first
statutory requirement for SSI CDRs, requiring CDRs for a relatively
small proportion of SSI beneficiaries.\5 Welfare reform legislation
enacted in August 1996 focused on CDRs for SSI children.\6 This
legislation required that SSA (1) conduct CDRs at least once every 3
years for SSI children under age 18 if their impairments are not
considered permanent and for infants during their first year of life
if they are receiving SSI benefits due to low birth weight and (2)
review the cases of all SSI children beginning on their 18th
birthdays to determine whether they are eligible for disability
benefits under adult disability criteria. The redeterminations for
18-year-olds are considered part of the CDR workload.
Under regulations issued by SSA in 1986, when DDSs award or continue
DI or SSI disability benefits, the DDSs must set dates (called
"diary" dates) at which CDRs are due to start. To set these CDR
start dates, DDSs assess the beneficiary's potential for medical
improvement on the basis of impairment and age. Beneficiaries whose
impairments are not considered permanent are classified as either
"medical-improvement-expected" or "medical-improvement-possible," and
those whose impairments are considered permanent are classified as
"medical-improvement-not-
expected." When benefits are awarded or continued, those
beneficiaries classified as medical-improvement-expected are
scheduled to have a CDR started within 6 to 18 months; those
classified as medical-improvement-
possible, within 3 years; and those classified as
medical-improvement-not-
expected, within 5 to 7 years.
Although the regulations require DDSs to set CDR due dates, budget
reductions in the late 1980s led to DDS staff reductions that
hampered efforts to conduct CDRs in accordance with these due dates.
DDS staffing levels began to increase in 1991; however, DDS resources
were diverted away from CDRs to process large increases in initial
disability claims. By fiscal year 1996, SSA had about 4.3 million DI
and SSI CDRs due or overdue according to the diary dates set by DDSs.
In 1996, SSA developed its original 7-year plan to conduct 8.2
million CDRs during fiscal years 1996 through 2002, and the Congress
authorized a total of about $4.1 billion to fund the plan. With this
funding commitment, SSA negotiated with DDSs to increase their
efforts to hire and assimilate additional staff who, after 12 to 18
months of training and mentoring, are expected to be ready to process
initial disability determinations, freeing more senior disability
examiners to process CDRs. From fiscal years 1996 to 1997, DDS
workyears expended nationwide increased from 12,936 to 14,118. The
budgeted DDS workyears for fiscal years 1998 and 1999 are 14,778 and
14,384, respectively.\7
In March 1998, SSA issued a new plan for fiscal years 1998 to 2002
that increased the CDR workload goal from 7.1 million to 8.1 million
CDRs for the last 5 years of the CDR initiative. SSA prepared the
new plan because, among other reasons, the original plan did not
include DI CDRs for disabled workers over age 58 or for the disabled
surviving spouses or disabled adult children of insured workers.
Also, SSA had to revise the plan to include SSI CDRs for certain
disabled children and SSI eligibility redeterminations for
18-year-olds as required by the 1996 welfare reform law. The new
plan also took into account DDSs' higher completion rate for CDR full
medical reviews than SSA had estimated could be completed during the
first 2 fiscal years (1996-1997) of the CDR initiative. Not only did
DDSs surpass their 1996 and 1997 CDR goals by over 77,000 (13
percent), they also completed over 224,000 of the SSI childhood
eligibility redeterminations that the 1996 welfare reform law had
added to their fiscal year 1997 workload.
--------------------
\5 SSA issued regulations in 1986 stating its policy of conducting
CDRs for SSI disability beneficiaries with the same frequency as it
conducts CDRs for DI beneficiaries.
\6 See the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996 (P.L. 104-193).
\7 The budgeted DDS workyears decrease from fiscal year 1998 to
fiscal year 1999 because, while the DDS full medical review workload
for 1999 is scheduled to be larger than the 1998 workload, other DDS
workloads are expected to decrease sufficiently to result in a net
workload decrease for the DDSs.
SSA DEVELOPED CDR MAILER
QUESTIONNAIRE TO IMPROVE
COST EFFECTIVENESS OF CDR
PROCESS
---------------------------------------------------------- Letter :2.2
CDR full medical reviews are costly (about $800 each in fiscal year
1996) because they involve a labor-intensive process: (1) SSA
headquarters personnel determine that a CDR is due and notify the SSA
processing center; (2) personnel at the processing center locate the
beneficiary's file and send it to the appropriate SSA field office;
(3) field office personnel contact the beneficiary, conduct a lengthy
interview, and send the file to the appropriate DDS; (4) the DDS
requests medical records from the beneficiary's treating physicians
and other medical treating sources and, if these sources cannot
provide sufficient evidence, schedules medical and/or psychological
examinations with consulting physicians outside the DDS; and (5) a
DDS team, consisting of a disability examiner and a physician or
psychologist, determines whether the beneficiary continues to meet
SSA disability criteria.
To improve the overall cost effectiveness of the CDR process, SSA
developed an alternative (referred to as a "mailer") to process
selected CDRs at a cost of about $50 each (see app. II for a
detailed description of the development of the mailer process and
fig. II.1 for an example of the mailer). SSA uses this alternative
method only for beneficiaries whose impairments are estimated to have
a low likelihood of medical improvement. Because it is unlikely that
their impairments have improved medically, there is a low likelihood
that their benefits would be terminated if they were to undergo an
in-depth DDS full medical review. Therefore, since fiscal year 1993,
SSA has been mailing to such beneficiaries a brief questionnaire,
asking them to report information on their medical conditions,
treatments received, and work activities. In most cases, the
beneficiaries' responses to the mailers provide SSA with a basis to
continue benefits without further review; however, in some cases, SSA
refers the beneficiaries to DDSs for full medical reviews because
their responses, along with other information in SSA's records,
indicate that more comprehensive reviews are warranted. According to
SSA, about 3 percent of the beneficiaries who responded to mailers in
fiscal year 1997 were referred to DDSs for full medical reviews.
Since fiscal year 1993, SSA has significantly increased its use of
mailers and plans further significant increases.\8
--------------------
\8 In a 1994 report that highlighted the need for more CDRs and SSA's
need for more funding for CDRs, we supported the increased use of
mailers. See Social Security: New Continuing Disability Review
Process Could Be Enhanced (GAO/HEHS-94-118, June 27, 1994).
UNDER NEW CDR PLAN, ALL
REQUIRED CDRS WILL BE COMPLETE
OR UNDER WAY BY END OF FISCAL
YEAR 2002
------------------------------------------------------------ Letter :3
By the end of fiscal year 2002, if SSA's new CDR plan is completed as
envisioned, all the CDRs required by law will be complete or under
way, including those that are overdue and those due to begin by the
end of 2002 (see app. III for numbers of required and elective CDRs
that SSA plans to process for various beneficiary groups). When DDSs
award disability benefits, they set dates for starting CDRs, and
every month these prescheduled CDR start dates come due for many
beneficiaries. Once CDRs are initiated, however, the time required
to complete them can be lengthy. SSA estimates that DDS full medical
reviews require about 1 year to complete from the time cases are
identified and selected. SSA's more cursory mailer questionnaires
require about 6 months. Thus, many CDRs cannot be completed by the
end of the year in which they come due. SSA estimates that about
835,000 required CDRs that are due to start in fiscal year 2002 will
not be completed by year-end; according to SSA, these CDRs will be
completed in fiscal year 2003. After fiscal year 2002, SSA intends
to identify and select new CDR cases about 3 months before their
prescheduled start dates so that case files can be pulled and actual
CDR case processing can begin about the time of the prescheduled
start date. Doing so should reduce, but cannot eliminate, the need
to complete some of these CDRs the following year.
As SSA acknowledges, it does not plan to conduct any CDRs for certain
beneficiary groups (see table 1). SSA has "deferred" CDRs for these
groups because doing CDRs for them is not considered sufficiently
cost effective because of such factors as age, nature of impairment,
and basis for entitlement. According to SSA, CDRs for the deferred
groups are known to be much less productive or unproductive under the
existing CDR processes, or are under study to determine how they
should be reviewed in order to be productive. Deferred cases include
those in which the cessation of disability benefits would result in
entitlement to another benefit administered by SSA, often with
minimal or no reduction in benefit amount. Deferred cases also
include those in which the beneficiaries are of advanced age, which
markedly decreases the likelihood of medical improvement. During
fiscal years 1998 through 2002, SSA expects a relatively small number
of beneficiaries will become old enough to move into these deferred
groups before being selected for CDRs. However, after fiscal year
2002, SSA expects that all beneficiaries due for required CDRs will
undergo CDRs before they become old enough to move into any of the
deferred groups.
Table 1
Beneficiary Groups for Which SSA Has
Deferred CDRs
Total
beneficiaries as
of 10/1/97 (in
Deferred beneficiary group thousands)
-------------------------------------- ------------------
DI beneficiaries\a 728
Disabled workers aged 62 to 65 585
Disabled surviving spouses aged 60 to 83
65
Disabled adult children aged 65 and 60
older
Government employees qualified for \b
Medicare
SSI beneficiaries\a 827
Disabled and blind adults aged 65 and 678
older
Disabled adults under age 65 79
grandfathered in from state programs
in 1974
Permanently impaired disabled children 70
Total DI and SSI beneficiaries 1,555
----------------------------------------------------------
\a Concurrent DI/SSI beneficiaries are included in the DI beneficiary
category.
\b SSA does not yet know the exact number of cases.
Source: SSA.
ADEQUACY OF CDR PROCESSING
CAPACITY AND AUTHORIZED FUNDING
HINGE ON KEY SSA ASSUMPTIONS
------------------------------------------------------------ Letter :4
According to SSA, in formulating its CDR plan, SSA consulted with
DDSs to plan caseloads for fiscal years 1998 through 2002 that will
not exceed the DDSs' case processing capacity. However, DDSs could
potentially encounter additional caseloads not envisioned in SSA's
plan. For example, SSA may be unable to use CDR mailers to the full
extent planned. To meet the goal of conducting 8.1 million CDRs by
the end of fiscal year 2002, SSA may then have to ask DDSs to do
additional full medical reviews. Even if DDS capacity is adequate to
process larger-than-expected workloads of full medical reviews, the
currently authorized CDR funding may not be sufficient to fund such
increases. Furthermore, if the volume of initial disability
applications or requests for reconsideration of denied applications
is larger than assumed by SSA, DDSs may have to accumulate larger
backlogs of these cases in order to complete CDR full medical
reviews. Such events, if they occur, could lead SSA to decide to
increase DDS capacity; but timely expansion of DDS capacity faces
potential barriers. Also, if DDS workloads are larger than expected,
the workloads of SSA field offices will necessarily be larger than
expected because they initially receive these cases and then transfer
them to DDSs. Larger-than-expected workloads of any type could
potentially result in larger field office backlogs of non-CDR cases
to permit timely processing of CDRs.
DDSS MAY NEED TO CONDUCT
MORE CDR FULL MEDICAL
REVIEWS IF MAILERS CANNOT BE
USED TO THE FULL EXTENT
PLANNED
---------------------------------------------------------- Letter :4.1
Of the 8.1 million CDRs planned for fiscal years 1998 through 2002,
SSA plans to conduct 4.3 million (53 percent) through the use of
mailers and 3.8 million (47 percent) through DDS full medical reviews
(see table 2). However, for several beneficiary groups, SSA is still
developing statistical formulas for selecting appropriate
beneficiaries to receive mailers. The number of mailers planned for
these beneficiary groups is substantial, ranging from a high of
472,000 in fiscal year 2000 to a low of 323,000 in fiscal year 2002.
Until the mailer selection formulas for these beneficiary groups are
developed, tested, and found to be reliable, SSA faces the risk of
having to reduce the number of planned mailers and ask DDSs to do
more full medical reviews than currently planned in order to meet the
overall goal of 8.1 million CDRs by the end of fiscal year 2002.
Table 2
CDR Workloads in SSA's New Plan, Fiscal
Years 1996-2002
(Numbers in thousands)
CDRs to be processed during FY 1998-2002
----------------------------------------------
Actual
CDRs 5- 7-
1996- year year
DI and SSI CDRs 97 1998 1999 2000 2001 2002 total total
---------------- ------ ------ ------ ------ ------ ------ ------ ------
Mailers\a 518 734 878 949 877 877 4,315 4,833\
b
Full medical 671 511\c 759 855 852 844 3,821 4,492\
reviews b
Total CDRs 1,189 1,245 1,637 1,804 1,729 1,721 8,136 9,325
processed
--------------------------------------------------------------------------------
\a The total number of mailers sent to beneficiaries is greater than
the number shown in table 2 because, after analyzing responses to
mailers, SSA refers about 3 percent of the mailer respondents to DDSs
for full medical reviews. The number of mailers shown in table 2 is
the number that result in continuation of benefits on the basis of
beneficiaries' responses, without any further review by DDSs.
\b As a result of rounding the 1996-97 data, the 7-year total for
"full medical reviews" is shown as 4,492 rather than the 4,493
appearing in SSA's new plan, and the 7-year total for "mailers" is
shown as 4,833 rather than 4,832 as in SSA's new plan.
\c Through April 24, 1998 (about 57 percent of fiscal year 1998),
DDSs had completed about 331,000 full medical reviews (about 65
percent of the fiscal year 1998 target workload for DDS full medical
reviews).
Source: SSA.
Within a given level of resources, the mailer process enables SSA to
increase the number of CDRs and to do them more cost effectively than
if all CDRs were DDS full medical reviews. For example, in fiscal
year 1996, SSA conducted 498,400 CDRs (250,400 full medical reviews
and 248,000 mailers). SSA estimates that, after all appeals, these
CDRs ultimately will result in 26,500 terminations\9 and that each
termination will yield lifetime savings of about $120,000 in the DI
program and $50,000 in the SSI program.\10 SSA estimates the total
savings from these terminations will result in about $11 in savings
for every $1 spent on CDRs in fiscal year 1996.\11 However, this
savings-to-cost ratio would have been significantly lower if the
248,000 CDRs processed as mailers (at a cost of $50 each) had been
processed instead as DDS full medical reviews (at a cost of $800
each). This would have added about $186 million to the total cost of
conducting CDRs in fiscal year 1996 and would have reduced the
savings-to-cost ratio from $11 in savings to about $6 in savings for
every $1 spent on CDRs.
SSA currently uses mailers to conduct CDRs for two primary
beneficiary groups: (1) DI disabled workers under age 62 and (2) SSI
disabled and blind adults under age 65 and not considered permanently
impaired. To identify the beneficiaries who are appropriate
candidates to receive mailers, SSA uses statistical formulas to
estimate the likelihood that beneficiaries' impairments have improved
medically since the time benefits were awarded initially or since the
last CDR. If a beneficiary has a low likelihood of medical
improvement, there is a low likelihood that his or her benefits would
be terminated if he or she underwent a DDS full medical review.
Conversely, if a beneficiary has a high likelihood of medical
improvement, there is a high likelihood that his or her benefits will
be terminated after undergoing a DDS full medical review. According
to SSA, using the more cursory and less costly mailer process is
warranted when a beneficiary has a low likelihood of medical
improvement (and therefore a low likelihood of benefit termination);
using the more costly full medical review is warranted when a
beneficiary has a high likelihood of benefit termination. (See app.
II for a description of how SSA developed the statistical formulas
used to estimate the likelihood of medical improvement.)
In recent years, for example, SSA's statistical formulas have shown
that about 30 percent of DI disabled workers under age 62 not
permanently impaired had a low likelihood of benefit termination.
Therefore, SSA used mailers to process CDRs for this "low profile"
group. Another 30 percent of these beneficiaries were shown to have
a high likelihood of benefit termination; therefore, SSA referred
this "high profile" group to DDSs for full medical reviews. However,
for the remaining 40 percent of the beneficiaries--those in the
"mid-range profile" group--the statistical formulas could not provide
a clear indication as to whether a beneficiary would be an
appropriate candidate for a mailer or a full medical review.
As a result, in developing the original 7-year plan in 1996, SSA
deferred doing any CDRs for the mid-range-profile group until the
statistical formulas could be developed sufficiently to identify the
appropriate candidates for mailers. However, because SSA has not yet
succeeded in developing the formulas, the new CDR plan assumes that
DDSs will do full medical reviews for every beneficiary in the
mid-range-profile group during fiscal years 1998 through 2002.
According to SSA, doing full medical reviews for the entire
mid-range-profile group will be cost effective. However, because
cost effectiveness can be improved if mailers can be used for some
beneficiaries in the mid-range-profile group, SSA is still exploring
ways to reliably identify beneficiaries in the mid-range-profile
group who are appropriate candidates for mailers (see groups A and E
in table 3).
Table 3
Status of Statistical Selection Formulas
for Mailers, by Beneficiary Group
Are statistical formulas currently used to select mailer
Beneficiary group recipients?
---------------------------- -----------------------------------------------------------
DI beneficiaries
-----------------------------------------------------------------------------------------
A. Disabled workers under Yes. Mailers are sent to low-profile beneficiaries in group
age 62 not permanently A. SSA believes mailers will also be appropriate for some
impaired mid-range profile beneficiaries; therefore, to develop the
formulas for these beneficiaries, in October 1997 SSA sent
mailers to 60,000 beneficiaries, all of whom will also
undergo full medical reviews. The target date to begin
sending mailers to mid-range-profile beneficiaries is
fiscal year 2000; however, the new CDR plan does not assume
any mailers will be sent to them.
B. Disabled workers under Yes. Using formulas developed for group A, SSA currently
age 62 permanently impaired sends mailers to low-profile beneficiaries. SSA believes
mailers will also be appropriate for many other
beneficiaries in this group who, for reasons as yet
unknown, have a higher predicted likelihood of medical
improvement. Therefore, SSA currently is exploring how it
will study additional cases for persons who are permanently
impaired in order to devise statistical formulas to select
mailer recipients.
C. Disabled adult children Yes. Using formulas developed for group A, SSA now sends
under age 65 and disabled mailers to low-profile beneficiaries. SSA also believes
surviving spouses under age mailers will be appropriate for some high-and mid-range-
60 profile beneficiaries; therefore, to develop the formulas
for these beneficiaries, in February 1998 SSA sent mailers
to 106,000 beneficiaries, of whom about 7,400 (7 percent)
will undergo DDS full medical reviews. SSA is hopeful it
will be able to send mailers to a considerable number of
additional high-and mid-range-profile beneficiaries by
fiscal year 2000.
SSI beneficiaries
-----------------------------------------------------------------------------------------
D. Children under age 18 not No. To develop statistical selection formulas, SSA sent
permanently impaired 60,000 childhood cases to DDSs for full medical reviews in
the first quarter of fiscal year 1998. SSA will use the
results of these reviews to develop selection formulas.
Under the new CDR plan, SSA assumes it will send mailers to
195,000 low-profile SSI children beginning in fiscal year
2000.
E. Disabled and blind adults Same status as group A above.
under age 65 not permanently
impaired
F. Disabled and blind adults Same status as group B above.
under age 65 permanently
impaired
-----------------------------------------------------------------------------------------
Note: According to SSA's regulations, beneficiaries considered not
permanently impaired are classified by DDSs as
medical-improvement-expected or medical-improvement-possible, and
beneficiaries considered permanently impaired are classified as
medical-improvement-not-
expected.
Source: SSA.
For five other beneficiary groups, however, SSA's ability to use
mailers to the full extent assumed in the new CDR plan depends on
whether SSA can successfully develop statistical formulas for
selecting appropriate mailer recipients. These five groups are (1)
SSI children under age 18 not permanently impaired, (2) permanently
impaired DI disabled workers under age 62, (3) permanently impaired
SSI disabled adults under age 65, (4) disabled surviving spouses
under age 60, and (5) disabled adult children under age 65 (see table
3).
For SSI children, SSA is still in the early stages of developing
statistical selection formulas. Even so, SSA's new CDR plan assumes
it will start using mailers for SSI children in fiscal year 2000.
For the four adult beneficiary groups in question, SSA recently began
efforts to refine existing adult selection formulas. SSA stated that
its ability to use a large (but unquantified) proportion of the
mailers included in the new plan for these adult groups depends on
current efforts to refine the selection formulas. For example,
during fiscal years 2000 through 2002, SSA plans to use mailers to
process a total of about 1.1 million CDRs for SSI children and the
four adult groups in question (195,000 for SSI children and 943,000
for the adults). For these five groups combined, SSA plans to use
mailers to process a total of 472,000, 343,000, and 323,000 CDRs
during fiscal years 2000, 2001, and 2002, respectively (see table 4).
Table 4
Mailer Workload Goals in New CDR Plan,
by Beneficiary Group, Fiscal Years 1998-
2002
Number of mailers\a (thousands)
----------------------------------------------
Beneficiary group 1998 1999 2000 2001 2002 Total
-------------------------------- ------ ------ ------ ------ ------ ------
DI beneficiaries\b 509 585 686 560 541 2,881
Disabled workers under age 62 319 299 336 356 386 1,696
not permanently impaired
Disabled workers under age 62 93 188 183 123 104 691
permanently impaired
Disabled adult children under 97 93 161 77 47 475
age 65
Disabled surviving spouses under 0 5 6 4 4 19
age 60
SSI beneficiaries\b 225 293 263 317 336 1,434
Children under age 18\ not 0 0 49 73 73 195
permanently impaired\c
Disabled and blind adults under 133 173 141 178 168 793
age 65 not permanently impaired
Disabled and blind adults under 92 120 73 66 95 446
age 65 permanently impaired
Total 734 878 949 877 877 4,315
--------------------------------------------------------------------------------
\a The total number of mailers sent to beneficiaries is greater than
the number shown in table 4 because, after analyzing responses to
mailers, SSA refers some mailer respondents to DDSs for full medical
reviews. The number of mailers shown in table 4 is the number that
result in continuation of benefits based on beneficiaries' responses,
without any further review by DDSs.
\b According to SSA's regulations, beneficiaries considered not
permanently impaired are classified by DDSs as
medical-improvement-expected or medical-improvement-possible, and
beneficiaries considered permanently impaired are classified as
medical-improvement-not-
expected.
\c SSA does not plan to use mailers for any CDRs for low birth weight
infants or for children who attain age 18.
Source: SSA.
Consequently, if SSA's efforts to develop statistical selection
formulas for these children and adult groups prove unsuccessful, SSA
will not have an adequate basis for identifying appropriate mailer
recipients; in that case, SSA would have to substantially increase
the number of DDS full medical reviews in order to meet the goal of
completing 8.1 million CDRs by the end of fiscal year 2002. Although
SSA stated that it foresees no difficulties in developing selection
formulas sufficiently to meet the new CDR plan's goals for mailers,
SSA acknowledged that it will need to monitor its progress in
developing the selection formulas in order to make timely changes in
its CDR plan, if necessary.
According to SSA staff, if it becomes necessary to increase DDS CDR
full medical review workloads significantly because mailers cannot be
used to the full extent planned, an increase in the capacity of many
DDSs might be needed. However, increasing capacity could be
difficult to accomplish in some DDSs for varying reasons, such as
shortages of qualified applicants for disability examiner positions,
difficulties acquiring adequate space on a timely basis to house
additional staff and equipment, and state government restrictions on
hiring. Even in the absence of any hindrances, SSA would have to
begin negotiating with DDSs relatively soon to increase staff because
it takes 12 to 18 months of training and mentoring before new hires
can process initial disability claims independently, freeing more
senior disability examiners to process full medical reviews.
Furthermore, increasing DDS capacity for a short-term need might not
be the optimal course of action because it would require great effort
to gear up, only to have to downsize shortly thereafter when the
workload subsides; however, not increasing capacity could potentially
necessitate extending the time frame beyond fiscal year 2002 for
becoming current on required CDRs.
According to SSA staff, other alternatives might be available if DDSs
need to process significantly more CDR full medical reviews to meet
the goal of 8.1 million CDRs during fiscal years 1998 through 2002.
For example, state DDSs could request that SSA use its federal DDS in
Baltimore, Md., to process CDRs or to process initial disability
applications, thus freeing up state DDS staff to process CDRs. In
some cases, state DDSs with available capacity have already been
assisting other DDSs on a limited basis by processing CDRs or initial
applications.
--------------------
\9 DDSs terminated benefits for 41,910 beneficiaries in fiscal year
1996. SSA estimates that 15,410 of these terminations (37 percent)
will ultimately be reversed upon appeal to administrative law judges.
\10 These savings estimates represent the present value of the cash
and medical benefits that the average beneficiary would have received
over a lifetime if his or her benefits had not been terminated. In
the DI program, the $120,000 in total lifetime savings consists of
$75,000 from the federal OASI and DI trust funds and $45,000 from the
Medicare trust funds. In the SSI program, the $50,000 in total
lifetime savings consists of $35,000 from SSI cash benefits and
$15,000 from Medicaid benefits, both of which are paid from general
tax revenues.
\11 Each year, the first beneficiaries in the backlog to undergo DDS
full medical reviews are those who have the highest likelihood of
benefit termination. Therefore, in each successive year, SSA expects
the savings-to-cost ratio to decline as the high-profile cases (those
most likely to be terminated) decline as a proportion of the annual
CDR workload. SSA estimates the savings-to-cost ratio probably will
decline in the future to about $6 to $1, which still is a highly
favorable return.
AUTHORIZED FUNDING SHOULD BE
ADEQUATE TO FUND SUBSTANTIAL
INCREASES IN FULL MEDICAL
REVIEWS
---------------------------------------------------------- Letter :4.2
Under the assumptions in the new CDR plan, the CDR funding authorized
by the Congress should be sufficient to process the 8.1 million CDRs
planned for fiscal years 1998 through 2002. The appropriated funds
available for the current fiscal year (1998) can fully fund SSA's
projected obligations for the year, and the annual amounts authorized
for CDRs during fiscal years 1999 to 2002 exceed SSA's projected CDR
obligations by $165 million in fiscal year 1999 and $115 million
annually during fiscal years 2000 to 2002 (see table 5).
Table 5
Amounts Authorized, Requested,
Appropriated, and Obligated for CDRs and
SSI Redeterminations, Fiscal Years 1996-
2002
(Dollars in millions)
Funding and obligations 1996 1997 1998 1999 2000 2001 2002
------------------------ ------ ------ ------ ------ ------ ------ ------
Authorized funding\a $260 $510 $670 $720 $720 $720 $720
SSA's budget plan\b 260 510\c 490\c 555 605 605 605
Appropriated funds\b 260 563\d 554\d ---- ---- ---- ----
Amount obligated or 207 499\f 554\f 555\g 605 605 605
projected spending by
SSA\e
Appropriated or 53 64 0 165 115 115 115
authorized funds less
obligations/projected
spending
--------------------------------------------------------------------------------
\a The Contract With America Advancement Act of 1996 authorized about
$4.1 billion for CDRs, and the Personal Responsibility and Work
Opportunity Act of 1996 (the welfare reform law) added a total of
$250 million to the authorized amounts for fiscal years 1997 ($150
million) and 1998 ($100 million).
\b The amounts appropriated for fiscal years 1996-98 and the amounts
in SSA's budget plan for 1999 to 2002 include $200 million annually
from SSA's administrative expenses for CDRs. For fiscal years
1996-98, the amounts appropriated annually, in addition to the $200
million, were 2-year funds. The 2-year funds for fiscal year 1996
($60 million) were provided to process CDRs. The 2-year funds for
fiscal year 1997 ($310 million) and fiscal year 1998 ($290 million)
were provided to process either CDRs or the SSI redeterminations
required by the 1996 welfare reform law.
\c SSA's budget plan for fiscal years 1997 and 1998 included $150
million and $100 million, respectively, for the SSI redeterminations
required by the welfare reform law.
\d In addition to the amounts appropriated specifically for fiscal
years 1997 ($510 million) and 1998 ($490 million), the appropriated
funds available for use in fiscal years 1997 ($563 million) and 1998
($554 million) included $53 million and $64 million, respectively, of
unobligated 2-year appropriated funds carried forward from the prior
year.
\e Obligations for fiscal years 1996 and 1997 are actual, and amounts
for fiscal years 1998-2002 are projected.
\f The obligations for fiscal years 1997 and 1998 include $169
million and $174 million, respectively, for SSI redeterminations
required by the welfare reform law. These obligations for SSI
redeterminations were made from budget authority that could be used
to process either CDRs or the SSI redeterminations required by the
1996 welfare reform law.
\g Although SSA projects it will obligate $31 million for SSI
redeterminations in fiscal year 1999, the $555 million in SSA's
fiscal year 1999 budget plan is for CDRs only. Additionally, because
SSA expects to obligate in fiscal year 1998 all of the fiscal year
1998 2-year appropriated funds that can be used to process either
CDRs or SSI redeterminations, no 2-year funds are expected to be
available to carry forward into fiscal year 1999 to fund the $31
million of projected obligations for SSI redeterminations.
Source: SSA.
As discussed, for five beneficiary groups, SSA faces the risk of
being unable to sufficiently develop the statistical formulas for
selecting appropriate CDR mailer recipients. If SSA is unable to
develop these formulas, SSA will be unable to use mailers to the full
extent planned and will have to replace these mailers with larger
numbers of full medical reviews in order to meet the goal of 8.1
million CDRs by the end of fiscal year 2002. SSA stated that, if
this occurs, it may decide to expand DDS capacity to do more full
medical reviews, and this capacity expansion could be funded out of
the authorized funds that exceed projected CDR obligations under the
current plan.
However, because DDS full medical reviews are 16 times more costly
than mailers, the authorized funds could potentially be inadequate to
fund enough additional DDS full medical reviews to meet SSA's goal of
8.1 million CDRs by year-end fiscal year 2002. Every 100,000 full
medical reviews added to DDSs' annual workloads would increase annual
funding requirements by about $75 million.\12 Thus, we estimate that
the current projection of $115 million of unobligated authorized
funding annually during fiscal years 2000 through 2002 would be
sufficient to increase the number of DDS full medical reviews by
about 153,000 annually. As discussed, however, the potential
increases in full medical reviews could be significantly larger. If
so, the authorized funding would be inadequate.
--------------------
\12 Each full medical review added to the workload to replace a
mailer would increase the cost of the CDR program by $750
(eliminating one mailer reduces the cost by $50 and adding one full
medical review to replace the mailer increases the cost by $800).
POTENTIAL INCREASES IN
NON-CDR WORKLOADS COULD
COMPETE FOR DDS CASE
PROCESSING RESOURCES
---------------------------------------------------------- Letter :4.3
CDR cases selected for DDS medical reviews are only part of the
overall workload of DDSs. In addition to CDRs, DDSs process two
other primary disability caseloads--initial disability applications
and requests for reconsideration when initial applications are
denied.\13 SSA's new CDR plan made important assumptions about the
size of these non-CDR disability workloads. If SSA's assumptions do
not hold, unexpected increases in these other disability workloads
could result. To remain on target to process 8.1 million CDRs by the
close of fiscal year 2002, SSA would then have to accept larger
backlogs in the non-CDR workloads, unless it could increase the
capacity of the DDSs to process the additional non-CDR workloads, or
find other options for helping DDSs complete these workloads.
In the early 1990s, SSA experienced significantly higher levels of
initial disability applications than are currently being experienced.
Although DDS staffing levels were increasing during that time, DDS
resources were diverted away from CDRs to process the large number of
initial disability applications (see table 6). In fiscal year 1995,
however, initial disability applications began to decline, primarily
because of the strength of the economy and low unemployment,
according to experts. Largely because of the decline in initial
disability applications, DDSs were able to process more CDRs than
planned during fiscal years 1996 and 1997. The new CDR plan assumes
that the current pattern of economic strength and low unemployment
will continue during fiscal years 1998 to 2002 and that initial
disability applications will remain at the lower levels experienced
in recent years. If these assumptions do not hold, however, initial
disability applications could return to the higher levels experienced
in the early 1990s.
Table 6
DDS Non-CDR Workloads, Fiscal Years
1990-98
(Numbers in thousands)
DDS initial Reconsideration
disability decisions on initial
Fiscal year applications denials\b
-------------- ------------------ ----------------------
1990 1,737 509.5
1991 2,015 524.7
1992 2,393 625.5
1993 2,584 770.7
1994 2,609 814.5
1995 2,489 882.7
1996 2,337 793,1
1997 2,075 730.1
1998 2,044\a Not available
----------------------------------------------------------
\a On the basis of actual DDS receipts of 1,119,295 initial
disability applications during the first 6.57 months of fiscal year
1998, we project the total claims for the fiscal year will be about
2.044 million.
\b Data for reconsideration requests are by calendar year. Data by
fiscal year were not available.
Source: SSA.
Another non-CDR workload uncertainty involves a current step in the
disability process that permits denied disability applicants to ask
DDSs to reconsider their claims. From 1990 to 1997, the number of
reconsideration requests ranged from a low of about 509,500 to a high
of about 882,700 (see table 6). SSA's new CDR plan, however, assumes
there will be no reconsideration request workload during fiscal years
2000 to 2002 because SSA's plan for redesigning the disability
process calls for eliminating the reconsideration step after fiscal
year 1999. The new CDR plan assumes the absence of this previously
significant workload will make additional DDS staff available to work
on CDRs. For example, assuming that the potential reconsideration
workload reduction will be about 700,000 cases annually, SSA
estimates that about 2,600 DDS workyears will be available to do
other work.\14 Whether the reconsideration step actually will be
eliminated, however, is not certain because the testing of SSA's plan
for redesigning the disability process is not yet completed. If the
reconsideration step is not eliminated as planned in fiscal year
1999, overall DDS workloads will be substantially larger than assumed
in the new CDR workplan.
SSA told us that it plans to monitor the volume of initial disability
applications and progress in the testing of the redesign plan on
which the elimination of reconsideration requests depends. If
initial disability applications increase unexpectedly or if
reconsideration requests are not eliminated as planned, SSA stated
that DDS resources paid for from CDR funding will not be diverted
away from CDRs to process initial applications or reconsideration
requests. Under this scenario, according to SSA, DDSs will have to
accumulate larger backlogs of initial applications and
reconsideration requests unless SSA can obtain other funding to
expand DDS capacity or find other options to assist DDSs in
processing cases.
--------------------
\13 DDSs also process special caseloads that arise from time to time,
such as the SSI childhood disability redeterminations required by the
1996 welfare reform law.
\14 Not all of these 2,600 workyears would be available to process
CDRs. While SSA's plan to redesign the disability process calls for
eliminating the reconsideration step, it also calls for adding
predenial interviews to the process, which SSA currently estimates
will add about 70 minutes per case, or an estimated 1,000 workyears.
This would leave a net gain of about 1,600 workyears for doing CDRs
and the resulting appeals.
CONCERNS ABOUT SSA FIELD
OFFICES' CASE PROCESSING
CAPACITY
---------------------------------------------------------- Letter :4.4
SSA field offices perform the initial processing of disability
applications, reconsideration requests, and CDRs to determine if the
individuals meet nonmedical requirements. They then transfer the
cases to DDSs for medical determinations.\15 In discussions with SSA
regional and field office staff, some expressed serious concerns
about the field offices' future capacity to achieve timely processing
of their overall caseloads. Some regional and field office staff
told us that, at present staffing levels, they are already struggling
to maintain timely processing of current caseloads and that the
substantial increases in CDR medical reviews planned for the next
several years will reduce their ability to keep pace even more. Any
additional unexpected increases in CDR medical reviews or non-CDR
workloads, if they occur, would further exacerbate the situation. As
with the DDSs, however, SSA stated that no field office resources
paid for from CDR funding will be diverted away from CDRs to process
unexpected increases in non-CDR caseloads.
Although SSA could, if needed, request additional funding to increase
field offices' processing capacity, SSA's strategic plan for fiscal
years 1997 through 2002 brings into question whether field office
staffing can be expected to grow. SSA stated in its strategic plan
that expected budgetary constraints have resulted in a forecast of no
growth in the number of workyears available to SSA.\16 Consistent
with this forecast, SSA has committed to reducing its overall
staffing levels from approximately 65,000 to 62,000 as part of the
governmentwide staff reduction plan. For fiscal year 1999, SSA has
planned an overall staff decrease of 1,700.
Furthermore, SSA stated in its strategic plan that it could be facing
a critical loss of knowledge and experience over the next 5 years
because nearly 20 percent of its employees will be eligible for
regular retirement between fiscal years 1997 and 2002. More than 57
percent of SSA employees are over age 45 and, therefore, will be
reaching retirement age over the next 10 years. With such a large
number of employees becoming eligible for retirement, SSA stated in
the strategic plan that it could face a challenge if these employees
choose to retire even at the historical rate of retirement for
eligible employees. SSA is conducting a detailed analysis of
retirement patterns in order to predict when staff will retire and
which offices or geographic areas will be most affected. SSA plans
to publish the results of this study during fiscal year 1998.
In response to field offices' concerns about their ability to keep
pace with increasing CDR workloads, SSA is taking several actions to
help field offices process, manage, and track their CDR workloads.
SSA's first action is designed to achieve an even flow of CDR cases
from SSA case file repositories to field offices and subsequently to
DDSs. To do this, beginning in July 1998, SSA planned to release
blocks of CDR cases to the field offices every month, alternating
between DI and SSI, which results in six releases of DI cases and six
releases of SSI cases each year. SSA took this action to deal with
concerns that CDR cases were released too infrequently to ensure an
even and steady workload of CDR cases flowing through field offices
to DDSs. SSA is also working to implement in its field offices an
automated case management system for DI CDRs similar to the system
that is already available to field offices for managing and tracking
the SSI CDR caseload. SSA projects that the DI automated case
management system will be implemented in fiscal year 1999.
--------------------
\15 Field offices also process non-disability caseloads such as
applications for Social Security retirement benefits and SSI old age
benefits. DDSs have no role in processing these nondisability cases.
\16 SSA, "Keeping the Promise" Strategic Plan 1997-2002 (Baltimore,
Md.).
AGENCY COMMENTS
------------------------------------------------------------ Letter :5
In commenting on a draft of this report, the Commissioner of Social
Security stated that the report accurately reflects SSA's commitment
to eliminating the CDR backlog by the end of fiscal year 2002, and he
further stated that SSA is making good progress toward this goal.
The Commissioner also stated that SSA recognizes there may be some
potential workload increases that could affect DDSs. However, SSA
believes that no reduced ability to do CDRs will occur because the
funding approved for CDRs is dedicated to CDRs and any needed
adjustments will be made in other workloads. SSA also made some
technical comments which we incorporated where appropriate.
---------------------------------------------------------- Letter :5.1
We are sending copies of this report to the Commissioner of Social
Security and other interested parties. Copies will also be made
available to others on request. If you or your staff have any
questions concerning this report, please call me at (202) 512-7215.
Other major contributors include Cynthia A. Bascetta, Associate
Director; Ira B. Spears, Senior Evaluator; and Kenneth F. Daniell,
Evaluator.
Cynthia M. Fagnoni
Director, Income Security Issues
HISTORY OF CDRS
=========================================================== Appendix I
During the 2 decades preceding SSA's CDR initiative that began in
fiscal year 1996, the number of CDRs conducted from year to year
varied widely--from as few as 35,900 to as many as 544,200 (see table
I.1). In 1978, we reported on serious program administration
weaknesses that allowed many medically ineligible recipients to go
undetected.\17 In 1980, due to concerns about the effectiveness of
the CDR process and growing disability rolls, the Congress enacted a
law requiring periodic CDRs at least once every 3 years for all DI
beneficiaries whose disabilities are not considered permanent and at
intervals determined appropriate by SSA for beneficiaries whose
impairments are considered permanent.\18
As a result of the 1980 law, SSA began increasing the number of CDRs
in fiscal year 1981, using age, benefit amount, and medical
characteristics as selection criteria. According to SSA, its method
resulted in selecting a disproportionate number of young people with
mental impairments to undergo CDRs, and benefits for many of them
were terminated because they did not meet new mental disability
criteria that had been implemented after SSA had placed these
individuals on the rolls. In response to this situation, the
Congress enacted a law in 1984 establishing the medical improvement
review standard, prohibiting benefit termination unless SSA can show
that a beneficiary's medical condition has improved since the last
medical decision and that this improvement relates to the
individual's ability to work.\19 As a result, SSA declared a
moratorium on conducting CDRs until the new medical improvement
review standard was implemented by regulation in late 1985. Under
this new standard, the proportion of CDRs resulting in cessation of
benefits has declined.
Table I.1
Historical Data on Numbers of CDRs and
Benefit Cessation Rates, Fiscal Years
1975-97
Number of CDRs Benefit cessation
Fiscal year completed\a rate (percent)\b
-------------- -------------------- --------------------
1975 147,200 21
1976 170,000 24
1977 150,300 38
1978 118,800 46
1979 134,500 46
1980 159,600 46
1981 257,100 47
1982 496,800 45
1983 544,200 41
1984 156,600 24
1985 35,900 11
1986 47,700 6
1987 206,000 13
1988 353,800 12
1989 366,800 9
1990 195,100 11
1991 73,500 10
1992 73,100 13
1993 64,800 (34,600 11
mailers)
1994 118,400 (31,000 14
mailers)
1995 217,000 (76,500 17
mailers)
1996 498,400 (248,000 11
mailers)
1997 690,500 (270,000 Not yet available
mailers)
----------------------------------------------------------
\a CDR data for fiscal years 1975 through 1994 include "work" CDRs,
which are unscheduled CDR full medical reviews that SSA field offices
initiate when, for example, they receive reports indicating a
beneficiary is working or has income. SSA estimates that DDSs
annually conduct about 20,000 work CDR full medical reviews.
\b Data represent initial cessation rates before appeals.
Source: SSA.
Fourteen years after enacting the 1980 law requiring CDRs for all DI
beneficiaries, the Congress established the first statutory
requirement for SSI CDRs in 1994.\20 This 1994 law mandated that SSA
review one-third of the SSI beneficiaries who reach age 18 and at
least 100,000 additional SSI beneficiaries annually in fiscal years
1996 through 1998. In August 1996, the Congress enacted a welfare
reform law.\21 This law requires that SSA conduct CDRs at least once
every 3 years for SSI children under age 18 if they are considered
likely to improve and for infants during their first year of life if
they receive SSI benefits due to low birth weight.\22 The welfare
reform law also requires that SSA redetermine the eligibility of all
SSI children beginning on their 18th birthdays using adult disability
criteria.\23 Such redeterminations for 18-year-olds are considered
part of the CDR workload.\24
Under SSA regulations, when DDSs award or continue DI or SSI
disability benefits, the DDSs must set dates (called "diary" dates)
for starting CDRs. To set these CDR start dates, DDSs assess the
beneficiary's potential for medical improvement on the basis of
impairment and age. Beneficiaries whose impairments are not
considered permanent are classified as either
"medical-improvement-expected" or "medical-improvement-possible," and
those whose impairments are considered permanent are classified as
"medical-improvement-not-expected." When benefits are awarded or
continued, those beneficiaries classified as medical-improvement-
expected are scheduled to have a CDR started within 6 to 18 months;
those classified as medical-improvement-possible, within 3 years; and
those classified as medical-improvement-not-expected, within 5 to 7
years.\25
Although the regulations require the setting of CDR due dates, budget
reductions in the late 1980s led to DDS staff reductions that
hampered efforts to conduct CDRs in accordance with the required due
dates. Although DDS staffing levels began to increase in 1991, DDS
resources were diverted away from CDRs to process large increases in
initial disability claims (see table I.2). As a result, backlogs of
CDRs accumulated, and by fiscal year 1996, SSA had about 4.3 million
DI and SSI CDRs that were due or overdue.
Table I.2
DDS Workyears and Initial Disability
Applications, Fiscal Years 1982-93
Initial disability
application receipts (in
Fiscal year DDS workyears thousands)
-------------- -------------- --------------------------
1982 12,513 1,435
1983 12,887 1,481
1984 12,924 1,526
1985 13,074 1,585
1986 13,302 1,746
1987 12,502 1,644
1988 11,963 1,594
1989 11,634 1,589
1990 11,177 1,737
1991 11,738 2,015
1992 13,225 2,393
1993 13,298 2,584
----------------------------------------------------------
Source: SSA.
In 1996, SSA developed the original 7-year plan to conduct 8.2
million CDRs during fiscal years 1996 to 2002, and the Congress
authorized a total of about $4.1 billion to fund SSA's plan. In
1996, the Congress enacted laws that authorized $670 million for
processing CDRs in fiscal year 1998 and $720 million annually for
processing CDRs in fiscal years 1999 to 2002. The Contract With
America Advancement Act of 1996 (P.L. 104-121) authorized about $4.1
billion to be paid from the Old-Age and Survivors Insurance Trust
Fund and the Disability Insurance Trust Fund to process DI and SSI
CDRs during fiscal years 1996 to 2002. The Personal Responsibility
and Work Opportunity Act of 1996 (P.L. 104-193) added a total of
$250 million to the authorized amounts for fiscal years 1997 and
1998.
--------------------
\17 See untitled letter GAO/HRD-78-97, Apr. 18, 1978.
\18 See the Social Security Disability Amendments of 1980 (P.L.
96-265), Sec. 311.
\19 See the Social Security Disability Benefit Reform Act of 1984
(P.L. 98-460).
\20 See the Social Security Independence and Program Improvements Act
of 1994 (P.L. 103-296).
\21 See the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996 (P.L. 104-193).
\22 The Balanced Budget Act of 1997 (P.L. 105-33) permits SSA to
schedule a CDR for a low birth weight child after the child's first
birthday if it is determined that the child's impairment is not
expected to improve within the first 12 months after birth.
\23 The welfare reform law repealed the provision in the Social
Security Independence and Program Improvements Act of 1994 (P.L.
103-296) that required SSI CDRs for one-third of 18-year-olds.
\24 In addition to the required SSI CDRs for children, the 1996
welfare reform law required that SSA redetermine the eligibility of
children (about 288,000) who had qualified for disability on the
basis of either an individualized functional assessment (which the
law eliminated) or maladaptive behavior criteria, which the law
revised to eliminate double counting of impairments. These
eligibility redeterminations did not count toward the CDR goals. The
welfare reform law set a deadline of August 1997 for completing the
childhood redeterminations, but the Balanced Budget Act of 1997
extended the deadline to February 1998, or as soon as practicable
thereafter.
\25 These scheduled reviews are called "periodic" CDRs, in contrast
with unscheduled "work" CDRs that arise, for example, because of
earnings being posted in SSA's earnings record system or reports from
beneficiaries or third parties that beneficiaries are working.
Unless otherwise specifically noted, all usage of the term "CDR" in
this report refers to scheduled "periodic" CDRs.
SSA'S CDR MAILER PROCESS
========================================================== Appendix II
SSA began development of the CDR mailer process in 1991. To do this,
SSA used the outcomes of previous full medical reviews to create
formulas for statistically estimating the likelihood that a DDS full
medical review would find that a beneficiary's medical condition had
improved. Assuming that a beneficiary continues to meet the
nonmedical criteria for DI and/or SSI, SSA cannot terminate benefits
unless the beneficiary's impairment improves medically; therefore,
the higher the likelihood of medical improvement, the higher the
likelihood of benefit termination. SSA based the statistical
formulas on results from full medical review CDRs processed during
fiscal years 1988 and 1989 for DI disabled workers in the
medical-improvement-
expected and medical-improvement-possible categories because these
cases offered more potential for savings than those in the medical-
improvement-not-expected category.
The statistical formulas developed by SSA take into account many
characteristics contained in SSA's computerized records, such as age,
impairment type, length of time on disability rolls, previous CDR
activity, and reported earnings. Such factors may predict the
likelihood of medical improvement and, therefore, of benefit
termination if a full medical review is conducted. For example, SSA
found that the longer an individual is on the disability rolls, the
less likely is benefit termination; and if an individual previously
underwent a CDR, the chance that a new CDR will result in benefit
termination is reduced substantially. Reported earnings, on the
other hand, greatly increase the likelihood of termination.
In 1992, SSA conducted a study to validate the statistical formulas
it had developed. SSA asked its field offices to obtain responses to
a brief questionnaire (seven questions) while interviewing the first
10,000 beneficiaries contacted under the routine CDR selection
process. The DDSs then conducted full medical reviews of all 10,000
cases. SSA applied the statistical formulas and rated the
beneficiaries' predicted likelihood of medical improvement. SSA then
compared the results of the full medical reviews with the
beneficiaries' responses to the questionnaires and the profile
formula results.
From this effort, SSA validated the factors used in the statistical
selection formulas and concluded that responses to the mailer
questionnaires, combined with profiles, were effective predictors of
medical improvement--and therefore disability benefit
termination--when full medical reviews are done for DI beneficiaries
in the medical-improvement-
expected and medical-improvement-possible categories. Although the
statistical formulas were developed using results from CDRs for DI
disabled workers, SSA did a similar study in fiscal year 1995 that
showed that the formulas also work effectively for SSI disabled
adults in the medical-
improvement-expected and medical-improvement-possible categories.
INTEGRITY REVIEWS FOR THE CDR
MAILER PROCESS
-------------------------------------------------------- Appendix II:1
Each year, SSA selects samples of beneficiaries to whom mailers were
sent and sends these cases to DDSs for full medical reviews. The
results of the full medical reviews provide a basis for assessing the
reliability of using results from the statistical selection formulas
to identify appropriate mailer recipients.
When SSA first implemented the mailer process in fiscal year 1993, it
sent mailers to all of the 92,000 DI worker beneficiaries selected
for CDRs that year. According to the results of SSA's statistical
selection formulas, the profile distribution of the 92,000 cases was
54,000 high-profile cases, 10,000 mid-range-profile cases, and 28,000
low-profile cases. To assess the integrity of the profile results,
SSA selected 10 percent of the high-profile cases, 100 percent of the
mid-range-profile cases, and 1 percent of the low-profile cases for
full medical reviews. SSA found the low-profile cases had an
ultimate cessation rate of only 1.2 percent--sufficiently low,
according to SSA, to confirm that doing full medical reviews for all
persons in the low-profile category is not justified. From the low
cessation rate for the low-profile category, SSA concluded it should
send mailers to all low-profile beneficiaries and then refer to DDSs
for full medical reviews only those beneficiaries whose responses
indicate further review is warranted.
Conversely, SSA found that the high-profile cases had an ultimate
cessation rate of 11.2 percent. This cessation rate, according to
SSA, was sufficiently high to confirm that all high-profile
beneficiaries should be referred to DDSs for full medical reviews
without first sending them a mailer. For the mid-range-profile
cases, SSA found an ultimate cessation rate of 3.1 percent. SSA
decided that, while some mid-range beneficiaries probably are
appropriate mailer recipients, the statistical formulas could not yet
be used with confidence to determine which beneficiaries are the
appropriate recipients. SSA decided additional analysis would be
necessary to identify the portion of the mid-range group that could
be considered appropriate mailer recipients.
In fiscal year 1994, SSA conducted a study of high-profile DI
workers, all of whom had been sent mailers. The study found that the
ultimate cessation rate for high-profile cases was 12.4 percent,
confirming SSA's conclusion from the prior year's study that the
cessation rate for high-profile beneficiaries is sufficiently high to
justify conducting full medical reviews without first sending mailers
to them. Accordingly, beginning in fiscal year 1995, high-profile
cases were excluded from the mailer process and routed directly to
DDSs for full medical reviews; the mailer procedure was limited to
low-profile DI worker cases, from which SSA selected a 1 percent
integrity sample (850 cases). The DDS full medical reviews for the
integrity sample resulted in an ultimate cessation rate of 2 percent,
which, according to SSA, confirmed the validity of using mailers to
process CDRs for low-profile cases.
In fiscal year 1996, SSA began using machine scannable mailers. SSA
selected a 0.05 percent integrity sample (about 400 cases) of
low-profile DI workers. With the advent of the scannable mailer, SSA
for the first time was able to capture the answers to the mailers
electronically. In addition to the integrity sample, SSA took this
opportunity to initiate other studies based on the mailer answers
(for example, if the beneficiary failed to answer a question or had
not been receiving treatment). SSA has not yet completed the
analysis of the results because of the level of staff resources that
has been devoted to maintaining the increased flow of CDR cases to
DDSs since the 7-year CDR initiative began.
In fiscal year 1997, SSA selected a 0.05 percent integrity sample of
low-profile DI workers (300 cases) and SSI adults (400 cases). The
results from this review should be available in early fiscal year
1999. In fiscal year 1998, SSA selected larger integrity samples of
approximately 1,500 low-profile DI workers and 800 low-profile SSA
adults to compensate for any shortfall in the fiscal year 1997
sample. SSA selected these cases in February 1998 and does not
expect any results to be available until at least January 1999. (See
fig. II.1 for an example of the CDR mailer.)
Figure II.1: SSA's CDR Mailer
Questionnaire Form
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
CDRS DUE OR OVERDUE AND CDRS TO BE
PROCESSED UNDER SSA'S REVISED PLAN
DURING FISCAL YEARS 1998-2002
========================================================= Appendix III
For certain "deferred" beneficiary groups, SSA does not plan to do
any CDRs (see table 1). For all nondeferred beneficiary groups,
however, SSA plans to complete all required CDRs that are due or
overdue during fiscal years 1998 to 2002 except those for (1)
beneficiaries whose CDRs are due to start too close to the end of
fiscal year 2002 to be completed by year-end, (2) beneficiaries who
become old enough to move into the deferred age groups before being
selected for CDRs, (3) beneficiaries who die before CDRs are
completed, and (4) SSI beneficiaries whose benefits are terminated,
due to income and resources, before CDRs are completed. For the
nondeferred groups, SSA estimates the total number of due or overdue
CDRs during fiscal years 1998 through 2002 will be about 10.3
million, of which 7.5 million are required by law, primarily for DI
worker beneficiaries and SSI children (see table III.1.)
Table III.1
CDRs to Be Completed Under SSA's Revised
Plan, Fiscal Years 1998-2002
(Numbers in thousands)
Total CDRs Total CDRs
due or to be
Beneficiary group overdue\a completed
------------------------------ ------------ ------------
DI CDRs required by law\b 6,114 4,990
Disabled workers under age 62 5,383 4,380
Disabled adult children under 688 589
age 65
Disabled surviving spouses 43 21
under age 60
SSI CDRs required by law 1,391 1,116
Disabled children under age 18 982 731
not permanently impaired
Low birth weight infants\c 131 120
Children who attain age 18 278 265
Elective SSI CDRs 2,760 2,030
Disabled and blind adults 2,760 2,030
under age 65
Total 10,265 8,136
----------------------------------------------------------
\a The total CDRs due or overdue during fiscal years 1998 through
2002 include (1) beneficiaries whose CDRs are due to start too close
to the end of fiscal year 2002 to be completed by year-end, (2)
beneficiaries who become old enough to move into the deferred age
groups before being selected for CDRs, (3) beneficiaries who die
before CDRs are completed, and (4) SSI beneficiaries whose benefits
are terminated, due to income and resources, before CDRs are
completed.
\b Beneficiaries concurrently receiving SSI and DI benefits are
included in the DI beneficiary categories.
\c Low birth weight infants include children over age 3 who initially
were put on the disability rolls before age 2.
Source: SSA.
(See figure in printed edition.)Appendix IV
COMMENTS FROM THE SOCIAL SECURITY
ADMINISTRATION
========================================================= Appendix III
RELATED GAO PRODUCTS
Social Security Disability: SSA Is Making Progress Toward
Eliminating Continuing Disability Review Backlogs (GAO/T-HEHS-97-222,
Sept. 25, 1997).
Social Security Disability: SSA Must Hold Itself Accountable for
Continued Improvement in Decision-Making (GAO/HEHS-97-102, Aug. 12,
1997).
Social Security: Disability Programs Lag in Promoting Return to Work
(GAO/HEHS-97-46, Mar. 17, 1997).
SSA Disability Redesign: Focus Needed on Initiatives Most Crucial to
Reducing Costs and Time (GAO/HEHS-97-20, Dec. 20, 1996).
Supplemental Security Income: SSA Is Taking Steps to Review
Recipients' Disability Status (GAO/HEHS-97-17, Oct. 30, 1996).
Social Security Disability: Alternatives Would Boost
Cost-Effectiveness of Continuing Disability Reviews (GAO/HEHS-97-2,
Oct. 16, 1996).
Social Security Disability: Improvements Needed in Continuing
Disability Review Process (GAO/HEHS-97-1, Oct. 16, 1996).
Social Security: New Continuing Disability Review Process Could Be
Enhanced (GAO/HEHS-94-118, June 27, 1994).
Social Security: Continuing Disability Review Process Improved, but
More Targeted Reviews Needed (GAO/T-HEHS-94-121, Mar. 10, 1994).
Social Security: Increasing Number of Disability Claims and
Deteriorating Service (GAO/HRD-94-11, Nov. 10, 1993).
Social Security Disability: SSA Needs to Improve Continuing
Disability Review Program (GAO/HRD-93-109, July 8, 1993).
Social Security: Effects of Budget Constraints on Disability Program
(GAO/HRD-88-2, Oct. 28, 1987).
Social Security Disability: Implementation of the Medical
Improvement Review Standard (GAO/HRD-87-3BR, Dec. 16, 1986).
*** End of document. ***