SSA Disability: Other Programs May Provide Lessons for Improving
Return-to-Work Efforts (Testimony, 07/13/2000, GAO/T-HEHS-00-151).

Pursuant to a congressional request, GAO discussed how disability
systems in the private sector and other countries encourage and
facilitate return to work in three key areas: (1) the eligibility
assessment process; (2) work incentives; and (3) staffing practices.

GAO noted that: (1) the disability systems of the private insurers and
the countries GAO reviewed integrate return-to-work considerations early
after disability onset and throughout the eligibility assessment
process; (2) this involves both determining--as well as enhancing--the
ability of each claimant to return to work; (3) these systems provide
incentives for claimants to take part in vocational rehabilitation
programs and to obtain appropriate medical treatment and for employers
to provide work opportunities for claimants; (4) managers of these other
systems also explained to GAO that they have developed techniques--such
as separating claims--to use staff with the appropriate expertise to
provide return-to-work assistance to claimants in a cost-effective
manner; (5) although these practices are common to the private sector
insurers and the countries whose systems GAO examined, limited data
exist on the cost-effectiveness of these approaches; (6) Social Security
Administration may face greater difficulty in returning some of its
beneficiaries to work than the private sector insurers, since Disability
Insurance (DI) covers a broader population than the private insurers;
(7) nevertheless, opportunities exist to help disabled workers remain at
or return to the work place; (8) in recognition of these opportunities,
SSA has recently begun placing greater priority on returning
beneficiaries to work; (9) moreover, the new Ticket to Work and Work
Incentives Improvement Act of 1999, by expanding access to vocational
rehabilitation services, is expected to enhance work incentives for
people with disabilities; (10) however, fundamental policy weaknesses in
the DI program remain unchanged; and (11) as GAO has reported in the
past, these weaknesses include an eligibility determination process that
concentrates on applicants' incapacities, an all-or-nothing benefits
structure, and return-to-work services offered only after a lengthy
determination process.

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

 REPORTNUM:  T-HEHS-00-151
     TITLE:  SSA Disability: Other Programs May Provide Lessons for
	     Improving Return-to-Work Efforts
      DATE:  07/13/2000
   SUBJECT:  Disability benefits
	     Program graduation
	     Federal social security programs
	     Employees with disabilities
	     Cost control
	     Disability insurance
	     Private sector practices
	     Foreign governments
	     Vocational rehabilitation
	     Eligibility determinations
IDENTIFIER:  Supplemental Security Income Program
	     Social Security Disability Insurance Program
	     Germany
	     Sweden
	     Netherlands
	     SSI

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GAO/T-HEHS-00-151

   * For Release on Delivery
     Expected at 10:00 a.m.

Thursday, July13, 2000

GAO/T-HEHS-00-151

ssa disability

Other Programs May Provide Lessons for Improving Return-to-Work Efforts

        Statement of Barbara D. Bovbjerg, Associate Director

Education, Workforce, and Income Security Issues

Health, Education, and Human Services Division

Testimony

Before the Subcommittee on Social Security, Committee on Ways and Means,
House of Representatives

United States General Accounting Office

GAO

SSA Disability: Other Programs May Provide Lessons for Improving
Return-to-Work Efforts

Mr. Chairman and Members of the Subcommittee:

Thank you for inviting me here today to discuss the practices of the private
sector and other countries in helping people with severe disabilities return
to work. Each month the Social Security Administration's (SSA) Disability
Insurance (DI) program pays over $4 billion in cash benefits to people with
disabilities. The DI beneficiary population has grown significantly over the
past 15 years, increasing by 67 percent, while benefit payments have nearly
tripled. This growth has contributed to the DI trust fund's projected
insolvency in 2023. Yet, during this period of program growth, numerous
technological and medical advances, combined with changes in society and the
nature of work, have increased the potential for some people with
disabilities to return to, or remain in, the labor force. Many beneficiaries
with disabilities indicate that they want to work and be independent, and
many can work if they receive the supports they need, yet fewer than
one-half of 1 percent of DI beneficiaries leave the rolls each year to
return to work.

The U.S. private sector, as well as other countries, has designed disability
systems to help disabled workers return to work. In recent years, a growing
number of private insurance companies have been focusing on developing and
implementing strategies for controlling disability costs by enabling people
with disabilities to return to work. Disability programs financed by social
insurance systems in other countries also focus on return to work and have
implemented practices similar to those in the U.S. private sector.

Today I would like to discuss how disability systems in the private sector
and other countries encourage and facilitate return to work in three key
areas: (1) the eligibility assessment process, (2) work incentives, and (3)
staffing practices. I will describe these three elements for U.S. private
sector disability insurers and for other countries' social insurance systems
and compare the practices of both with those of the DI program. We are
comparing these practices with those of the DI program because the work
experience of the DI population is most comparable to that of employees
covered under private disability insurance. However, many of the comparisons
discussed would be applicable as well to SSA's other disability program,
Supplemental Security Income (SSI).

To develop this information, we conducted in-depth interviews and reviewed
policy documents and program data at three private sector disability
insurers: UNUMProvident, Hartford Life, and CIGNA. We also interviewed
program officials and other experts on the disability systems of Germany,
Sweden, and The Netherlands and reviewed policy documents and studies of
these programs. This work updates and expands on our previous work in this
area.

In summary, the disability systems of the private insurers and the countries
we reviewed integrate return-to-work considerations early after disability
onset and throughout the eligibility assessment process. This involves both
determining-as well as enhancing-the ability of each claimant to return to
work. In addition, these systems provide incentives for claimants to take
part in vocational rehabilitation programs and to obtain appropriate medical
treatment and for employers to provide work opportunities for claimants.
Managers of these other systems also explained to us that they have
developed techniques-such as separating (or "triaging") claims-to use staff
with the appropriate expertise to provide return-to-work assistance to
claimants in a cost-effective manner. Although these practices are common to
the private sector insurers and the countries whose systems we examined,
limited data exist on the cost-effectiveness of these approaches.

SSA may face greater difficulty in returning some of its beneficiaries to
work than the private sector insurers, since DI covers a broader population
than the private insurers. Nevertheless, opportunities exist to help
disabled workers remain at or return to the work place. In recognition of
these opportunities, SSA has recently begun placing greater priority on
returning beneficiaries to work. Moreover, the new Ticket to Work and Work
Incentives Improvement Act of 1999 (Ticket to Work Act), by expanding access
to vocational rehabilitation services, is expected to enhance work
incentives for people with disabilities. However, fundamental policy
weaknesses in the DI program remain unchanged. As we have reported in the
past, these weaknesses include an eligibility determination process that
concentrates on applicants' incapacities, an "all-or-nothing" benefits
structure, and return-to-work services offered only after a lengthy
determination process.

To address these policy weaknesses, we continue to believe-as we recommended
in 1996-that SSA should develop a comprehensive return-to-work strategy. In
developing the strategy, SSA can draw upon the experiences of other systems
to identify elements of a new federal disability system that could help each
individual realize his or her productive potential without jeopardizing the
availability of benefits for people who cannot work. Having identified these
elements, SSA would then be in a position to determine the legislative and
regulatory changes needed to test and evaluate the effectiveness of these
practices in the federal disability system.

Background

To meet the definition of disability under DI, an individual must have a
medically determinable physical or mental impairment that (1) has lasted or
is expected to last at least 1 year or to result in death and (2) prevents
the individual from engaging in substantial gainful activity. Individuals
are considered to be engaged in substantial gainful activity if they have
countable earnings at or above a certain dollar level. Moreover, the
statutory definition specifies that, for a person to be determined to be
disabled, the impairment must be of such severity that the person not only
is unable to do his or her previous work, but, considering his or her age,
education, and work experience, is unable to do any other kind of
substantial work that exists in the national economy. SSA pays state
disability determination service (DDS) agencies to determine whether
applicants are disabled. The program offers people on the DI rolls
incentives that are intended to encourage beneficiaries to return to
work-and, potentially, to leave the rolls. For example, the DI work
incentives provide for a trial work period in which a beneficiary may earn
any amount for 9 months within a 60-month period and still receive full cash
and medical benefits.

Historically, SSA has given little emphasis to assisting beneficiaries in
returning to work, and we have made a number of recommendations for
improvement. For example, in 1996, we identified weaknesses in SSA's
return-to-work efforts and recommended that SSA intervene earlier to foster
a greater emphasis on assisting disabled applicants and beneficiaries in
returning to the workforce. We also reported that the disability
determination process encourages work incapacity because applicants have a
strong incentive to emphasize their limitations in order to qualify for
benefits. In addition, we observed that the often lengthy and cumbersome
application process may itself reinforce applicants' perceptions of their
inability to work.

SSA has recently begun to place higher priority on emphasizing return to
work for DI beneficiaries. For example, SSA recently established the Office
of Employment Support Programs to promote the employment of disabled
beneficiaries. In addition, the Ticket to Work Act is expected to enhance
work opportunities for people with disabilities. For example, this new act
expanded eligibility for Medicare for DI beneficiaries and created a "Ticket
to Work" voucher program that will allow beneficiaries a greater choice of
vocational rehabilitation and employment service providers. SSA has also
funded partnership agreements in 12 states that are intended to help the
states develop services to increase the employment of DI beneficiaries.

Private Disability Insurers Implement Return-to-Work Practices to Control
Costs

Private insurers provide disability insurance to a selected portion of the
U.S. working population. Unlike SSA, private sector insurers are able to
choose the industries to which they market their policies. The
characteristics of the private insurers' beneficiaries can also differ from
those of SSA's beneficiaries because private insurers can allow employers
who purchase their disability policies to vary coverage by type of
impairment or by class of employee. For example, employers generally choose
to limit coverage for mental impairments to a maximum of 24 months.
Employers may also choose to provide long-term disability coverage for only
their white collar employees, rather than for all their employees.

The private disability insurance industry, moreover, provides benefits to
many individuals who are not as severely disabled as the beneficiaries of
the DI program. However, for the insurers reviewed, almost two-thirds of
those receiving private long-term disability benefits also received DI
benefits. This group of beneficiaries, in the cases of the two insurers that
provided us with comparable data, was composed of a slightly higher
proportion of female and older beneficiaries than the overall DI population.
All the insurers had a lower proportion of beneficiaries with mental
impairments than the DI population.

Some private sector organizations have recognized the potential for reducing
disability costs through an increased focus on returning people with
disabilities to productive activity. To accomplish this comprehensive shift
in orientation, the private disability insurers have begun developing and
implementing strategies for helping claimants return to work as soon as
possible, when appropriate. Although the private sector insurance companies
expect a positive effect on return-to-work outcomes from these strategies,
it is too early to fully measure the effect of these changes. In many cases,
return-to-work processes have only recently been implemented. Moreover,
although the private insurers are now including return-to-work provisions in
the standard contracts that they are writing, a large number of employees
are still insured under prior contracts that lack these provisions. While
the insurers could not provide us with comprehensive cost-effectiveness
studies, their initial return-to-work rates are promising. The private
insurers reported that, in 1999, between 2 and 3 percent of their long-term
disability beneficiaries who also received DI benefits returned to work or
were terminated from the private sector disability benefit rolls because
they were assessed as having the capacity to work.

Other Countries Also Invest in Return-to-Work Efforts

The social insurance disability programs in these countries have invested in
return-to-work efforts and have implemented practices similar to those in
the U.S. private sector. While the German social insurance system has had a
long-standing focus on the goal of "rehabilitation before pension," the
reorientation of Sweden and The Netherlands toward a return-to-work focus
has occurred mostly within the past decade. Although rigorous studies
demonstrating the cost-effectiveness of German, Swedish, or Dutch programs
generally do not exist, some limited studies and data indicate positive
results from the return-to-work approach in these disability insurance
systems.

The Eligibility Assessment Process Integrates Return-to-Work Considerations
Throughout

All the private disability insurers and the countries we reviewed have
developed an eligibility process that includes assessing and enhancing the
ability of claimants to work throughout the process. To enable claimants to
return to work as quickly as possible, insurers incorporate return-to-work
considerations early in the assessment process and throughout a customized
evaluation of each claimant's initial and continuing eligibility for
benefits. In contrast, SSA's return-to-work efforts occur after its
eligibility assessment process. (See table 1.)

Table 1: Comparison of Eligibility Assessment Process Features of Private
Insurers and Other Countries With Those of SSA

 Process feature   Private insurers and other   SSA
                   countries
                   Definition of disability
                   shifts over specified time
                   period from less to more     "All-or-nothing" definition
 Disability        restrictive, recognizing the characterizes individuals
 definition        possibility of improvement   as either unable to work or
                   in the capacity to work      having the capacity to
                   through provision of         work.
                   supports and services, such
                   as retraining.
                                                There is a long delay in
                                                providing services because
                   Intervention occurs soon     only individuals who have
 Early             after disability onset to    been awarded
 intervention      identify return-to-work      benefits-following an often
                   needs.                       lengthy assessment
                                                process-are eligible for
                                                return-to-work services.
                                                There is no integration of
 Ongoing           Work capacity is             return-to-work
 assessment        periodically monitored and   considerations into either
                   reassessed, focusing on
                                                the initial or the
 of work potential returning those with work    continuing eligibility
                   potential to work.
                                                assessment process.

Private Insurers Incorporate Return-to-Work Efforts From the Beginning of
the Assessment Process

Figure 1: Private Disability Insurers' Eligibility Assessment Process

After receiving a claim, the private insurers' assessment process begins
with determining whether the claimant meets the initial definition of
disability. In general, for all the private sector insurers we studied,
claimants are considered disabled when, because of injury or sickness, they
are limited from performing the essential duties of their own occupation,
and they earn less than 60 to 80 percent of their predisability earnings,
depending upon the particular insurer. As part of determining whether the
claimant meets this definition, the insurers compare the claimant's
capabilities and limitations with the demands of his or her own occupation
and identify and pursue possible opportunities for accommodation-including
alternative jobs or job modifications-that would allow a quick and safe
return to work. A claimant may receive benefits under this definition of
disability for up to 2 years.

As part of the process of assessing eligibility according to the "own
occupation" definition, insurers directly contact the claimant, the treating
physician, and the employer to collect medical and vocational information
and initiate return-to-work efforts, as needed. Insurers' contacts with the
claimant's treating physician are aimed at ensuring that the claimant has an
appropriate treatment plan focused, in many cases, on timely recovery and
return to work. Similarly, early contact with the claimant's employer is
used to encourage the employer to make accommodations for claimants with the
capacity to work.

If the insurers find the claimant initially unable to return to his or her
own occupation, they provide cash benefits and continue to assess the
claimant to determine if he or she has any work potential. For those with
work potential, the insurers focus on return to work before the end of the
2-year period when, for all the private insurers we studied, the definition
of disability becomes more restrictive: after 2 years, the definition shifts
from an inability to perform one's own occupation to an inability to perform
any occupation for which the claimant is qualified by education, training,
or experience. Claimants may be found ineligible for benefits under the more
restrictive definition.

The private insurers' shift from a less to a more restrictive disability
definition after 2 years reflects the changing nature of disability and
allows a transitional period for insurers to provide financial and other
assistance, as needed, to help claimants with work potential return to the
workforce. During this 2-year period, the insurer attempts to determine the
best strategy for managing the claim. Such strategies can include, for
example, helping plan medical care or providing vocational services to help
claimants acquire new skills, adapt to assistive devices to increase
functioning, or find new positions. For those requiring vocational
intervention to return to work, the insurers develop an individualized
return-to-work plan, as needed. Basing the continuing receipt of benefits
upon a more restrictive definition after 2 years provides the insurer with
leverage to encourage the claimant to participate in a rehabilitation and
return-to-work program. Indeed, the insurers told us that they find that
claimants tend to increase their efforts to return to work as they near the
end of the 2-year period.

If the insurer initially determines that the claimant has no work potential,
it regularly monitors the claimant's condition for changes that could
increase the potential to work and reassesses after 2 years the claimant's
eligibility under the more restrictive definition of disability. In
addition, the insurer looks for opportunities to assist these claimants when
changes in medical technology, such as new treatments for cancer or AIDS,
may enable them to work.

The private insurers that we reviewed told us that they customize their
assessment and enhancement of a claimant's ability to work throughout the
duration of the claim. To do this, disability insurers use a wide variety of
tools and methods when needed. Some of these tools, as shown in tables 2 and
3, are used to help ensure that medical and vocational information is
complete and as objective as possible. For example, insurers consult medical
staff and other resources to evaluate whether the treating physician's
diagnosis and the expected duration of the disability are in line with the
claimant's reported symptoms and test results. Insurers may also use an
independent medical examination or a test of basic skills, interests, and
aptitudes to clarify the medical or vocational limitations and capabilities
of a claimant. In addition, insurers identify transferable skills to compare
the claimant's capabilities and limitations with the demands of the
claimant's own occupation. This method is also used to help identify other
suitable occupations and the specific skills needed for these new
occupations when the claimant's limitations prevent him or her from
returning to a prior occupation. Included in these tools and methods are
services to help the claimant return to work, such as job placement, job
modification, and retraining.

Table 2: Tools and Methods Used to Provide Medical Assessment
 Task                                  Tools and methods

 Assess diagnosis, treatment, and      Consultation of medical staff and
 duration of the impairment and begin  other resources, including current
 developing a treatment plan focused   medical guidelines describing
 on returning the claimant to work     symptoms, expected results from
 promptly and safely.                  diagnostic tests, expected duration
                                       of disability, and treatment
 Assess the claimant's cognitive
 skills.                               Standardized mental tests
 Validate the treating physician's
 assessment of the impairment's effect Review of the claimant's file,
 on the claimant's ability to work and generally by a nurse or a physician
 the most appropriate treatment and    who is not the claimant's treating
 accommodation.                        physician
 Verify diagnosis, level of            Independent medical examination of
 functioning, and appropriateness of   the claimant by a contracted
 treatment.                            physician
 Evaluate the claimant's ability to
 function, determine needed            Home visits by a field nurse or
 assistance, and help the claimant     investigator or accompanied doctor
 develop an appropriate treatment plan visits
 with the physician.
                                       Home visits and interviews with
 Assess the claim's validity.          neighbors or others who have
                                       knowledge of the claimant's
                                       activities

Table 3: Tools and Methods Used to Provide Vocational Assessment and
Assistance
 Task                      Tools and methods
                           -- Test basic skills, such as reading or math.

                           -- Determine interests and aptitudes.

 Identify transferable     -- Evaluate functional capacities associated
 skills, validate          with an
 restrictions on and
 capabilities for          occupation, such as lifting, walking, and
 performing an occupation, following
 and identify other
 suitable occupations and  directions.
 retraining programs.
                           -- Compare functional capacities, work history,
                           education,

                           and skills with the demands of an occupation.
                           -- Provide resume preparation, development of
                           job-

                           seeking skills, and help with job placement.

                           -- Assist in obtaining physical, occupational,
                           or speech

 Enhance work capabilities therapy and access to employee assistance,
 and help develop          support
 job-seeking skills.
                           groups, or state agency vocational
                           rehabilitation or other

                           community services.

                           -- Identify and fund on-the-job training or
                           other educational

                           courses.
                           -- Observe and analyze the essential duties of
                           the

                           claimant's own occupation, another occupation
                           for the

 Assess ability to perform same employer, or an occupation of a prospective
 own or any occupation,
 assess potential for      employer.
 accommodation, and
 determine whether         -- Determine the general availability and salary
 sufficient salary is      range of
 offered locally or
 nationally for a suitable specified occupations.
 occupation.
                           Identify for a specified occupation the
                           potential

                           employers and related job descriptions, salary
                           range, and

                           openings.
                           -- Provide work opportunities for the claimant
                           to gradually
 Reaccustom claimant to a
 full work schedule and    resume his or her job duties.
 enable claimant to
 overcome impairment and   -- Procure devices to assist with work or
 return to work.           otherwise help to

                           modify the job.

Other Countries Also Provide Return-to-Work Assistance Early After
Disability Onset and Throughout the Assessment Process

For example, German laws and policies require that all applicants for
disability benefits be evaluated for rehabilitation and return to work.
Based on the principle that intervention should occur at the earliest
possible stage of disability to minimize the degree and effect of the
impairment, intervention in Germany often begins when the health insurance
agency urges a disabled worker receiving short-term benefits to apply for
medical rehabilitation. In addition, vocational counselors often discuss
rehabilitation and return-to-work plans with disabled workers while they are
still in the hospital. The social insurance office then evaluates the
person's capacity to work and, if necessary, refers the applicant to
vocational rehabilitation or other types of return-to-work services and
assistance. These return-to-work measures may include assistance in
retaining or obtaining a job or in selecting an occupation. They may also
involve providing basic training or retraining to prepare for an occupation
and developing workplace accommodations. As long as the person continues to
receive short-term disability benefits, the social insurance office will
monitor the case and periodically reassess the person's work capacity and
need for return-to-work assistance. The office will award long-term
disability benefits only after it determines that a person's earning
capacity cannot be restored through return-to-work interventions.

Under Swedish laws and policies, both the private and public sectors are
responsible for the early identification of candidates for rehabilitation
and return to work. After an employee has been on sick leave for 4 weeks,
employers are responsible for determining whether the employee needs some
type of rehabilitation and are required to report this information to the
social insurance office. Social insurance offices closely monitor the use of
short-term benefits and intervene when employers disregard their early
intervention responsibilities. The social insurance office then begins the
process of determining whether the person will need vocational
rehabilitation to return to work. The office arranges for an assessment of
the disabled employee's rehabilitation needs and works with the employer and
employee to develop a rehabilitation plan. Rehabilitation in Sweden is not
meant to be a lengthy process, but rather a short, intensive period of
medical and vocational training to help the individual return to work as
soon as possible. As in Germany, the social insurance offices in Sweden
periodically monitor and reassess the rehabilitation needs of individuals
receiving short-term disability benefits and, after the first year of
benefits, consider granting long-term benefits if the person's
rehabilitation potential has not improved.

In The Netherlands, the employer has had increasing responsibility for
efforts to return the employee to his or her current job or a comparable job
within the company since the mid-1990s. This shift of responsibility from
the public to the private sector is intended to encourage greater
responsibility on the part of employers in the prevention and prompt
amelioration of employee health impairments. Under this policy, within about
3 months of the onset of the disability, the employer must submit to the
social insurance agency a preliminary plan to return the disabled worker to
the workforce. A final plan must be submitted within about 9 months. If the
employer determines that the disabled worker cannot return to the workplace,
or if the disabled worker has not returned to work after 1 year of receiving
short-term benefits, the social insurance agency assesses the person's
condition to determine eligibility for long-term disability benefits. The
assessment involves evaluations of the applicant's physical and mental
capabilities, which are then matched against different occupations to
determine whether the person is capable of performing any work.

SSA Does Not Incorporate Return-to-Work Efforts Into Its Eligibility
Assessment Process

In recent years, SSA has piloted numerous initiatives to redesign and
thereby improve its disability determination process. But while an internal
SSA evaluation recently recommended that the agency "create an awareness and
attitudinal change to accept employment support as a core SSA mission," the
agency has not yet integrated return-to-work considerations into its efforts
to redesign its disability determination process. Moreover, the recently
enacted Ticket to Work Act was intended to increase beneficiary access to
vocational services but does not change the point in the process at which
beneficiaries may receive assistance. Only those individuals who have met
the Social Security Act's definition of disability and are approved for DI
benefits will, under the Ticket to Work Act, receive a ticket entitling them
to receive return-to-work services. There can be a long delay in receiving
services: SSA's eligibility determination process ranges up to 18 months or
longer for individuals who are initially denied benefits and who then
appeal. Since many applicants have been unemployed before applying and
remain unemployed during the eligibility determination process, it is likely
that their skills, work habits, and motivation to work deteriorate during
this wait, thus decreasing their readiness to work. However, the Ticket to
Work Act authorizes SSA to carry out a demonstration project to test the
advantages and disadvantages of earlier referral of applicants and
beneficiaries for rehabilitation. SSA may also gain additional insights into
early intervention approaches through its funding of demonstration projects
in 12 states.

Other Systems Provide Incentives for Claimants and Employers to Encourage
and Facilitate Return to Work

To facilitate return to work, all of the insurers and the countries we
studied employ incentives both for claimants to participate in vocational
activities and receive appropriate medical treatment, and for employers to
accommodate claimants. For claimants who could benefit from vocational
rehabilitation, insurers and the countries we studied require participation
in an individualized return-to-work program. They also provide financial
incentives to promote claimants' efforts to become rehabilitated and return
to work. To better ensure that medical needs are met, the insurers and the
countries we studied require that claimants receive appropriate medical
treatment and assist them in receiving this treatment. In addition, they
provide financial incentives to employers to encourage them to provide work
opportunities for claimants. Although these practices are common to the
private sector insurers and the countries we examined, limited data exist to
determine whether these incentives for claimants and employers yield
positive outcomes. In contrast to the practices of other systems, the Ticket
to Work Act makes participating in rehabilitation and return-to-work
services voluntary for DI beneficiaries. In addition, under law and SSA
regulations, receiving appropriate medical treatment is not a prerequisite
for award or continuing receipt of DI benefits. Moreover, DI applicants and
beneficiaries may not have access to appropriate medical care.

Private Insurers Offer Incentives to Claimants and Employers to Promote
Return to Work

These insurers also make special financial incentives available to claimants
who participate in rehabilitation programs, as appropriate. All insurers may
defray costs associated with rehabilitation, such as child care expenses.
For example, one insurer may pay $250 a month per child, up to $1,000 per
month. This insurer also increases claimants' benefit payments by 10
percent, up to a maximum of $1,000 a month, for those who participate in
rehabilitation.

In addition, all of the insurers told us that they encourage rehabilitation
and return to work by allowing claimants who work to supplement their
disability benefit payments with earned income. During the first 12 or 24
months of receiving benefits, depending upon the particular insurer,
claimants who are able to work can do so to supplement their benefit payment
and thereby receive total income of up to 100 percent of predisability
earnings. After this period, if the claimant is still working, the insurers
decrease the benefit amount so that the total income a claimant is allowed
to retain is less than 100 percent of predisability income.

However, when a private insurer determines that a claimant is able, but
unwilling, to work, the insurer can reduce or terminate the claimant's
benefits. Moreover, to encourage claimants to work to the extent they can,
even if only part-time, two of the insurers may reduce a claimant's benefit
by the amount the claimant would have earned if he or she had worked to
maximum capacity. One insurer uses the claimant's physician or three
independent experts qualified to evaluate the claimant's condition to
determine a claimant's maximum capacity to work. One of the insurers may
also reduce a claimant's monthly benefit during the first year by the amount
that the claimant could have earned if he or she had not refused a
reasonable job offer-that is, a job that was consistent with the claimant's
background, education, and training. Claimants' benefits may also be
terminated if claimants refuse to accept a reasonable accommodation that
would allow them to work. For example, if a claimant with impaired vision
refuses the offer of a large-screen terminal that would allow the claimant
to work, the insurer can terminate his or her benefits.

Since medical improvement or recovery can also enhance claimants' ability to
work, the private insurers we studied not only require, but also help,
claimants to obtain appropriate medical treatment. To maximize medical
improvement, private insurers require that the claimant's physician be
qualified to treat the particular impairment. Additionally, two insurers
require that treatment be provided in conformance with medical standards for
type and frequency. Moreover, to help ensure that a claimant is receiving
appropriate treatment, the insurers' medical staff work with the treating
physician as needed to ensure that the claimant has an appropriate treatment
plan. The insurers may also provide funding for those who cannot otherwise
afford treatment.

All private sector insurers we studied may also provide financial incentives
to employers to encourage them to provide work opportunities for claimants.
By paying for accommodations and offering lower insurance premiums to
employers, private insurers encourage employers to become partners in
returning disabled workers to productive employment. For example, to
encourage employers to adopt a disability policy with return-to-work
incentives, all the insurers offer employers a discounted insurance premium
that they can continue to receive if their disability caseload declines to
the level expected for those companies that assist claimants in returning to
work. To this end, these insurers fund accommodations, as needed, for
disabled workers at the employer's work site.

Other Countries Also Provide Incentives to Claimants and Employers to
Encourage Return to Work

In addition, Germany, Sweden, and The Netherlands provide financial
assistance to employers for the purchase of workplace accommodations needed
by disabled employees. For example, such assistance may pay for technical
aids, special staff or personal assistants to help a disabled worker perform
various work functions, or adaptations of the work environment to meet the
special needs of a disabled worker. These countries also offer financial
incentives for the employment of disabled individuals by subsidizing the
wages that employers pay them. Wage subsidies are provided for a
time-limited period of 3 to 4 years, with the amount of the subsidy
declining each year. Furthermore, in The Netherlands, employers have an
additional incentive to assist employees in returning to work because the
employers' contributions to the disability insurance fund are partially
determined by the number of their employees who became disabled in the prior
year.

SSA's Return-to-Work Incentives Are More Limited Than Those Used in Other
Systems

SSA also differs from the private sector and the countries we studied in
requiring medical treatment. The Social Security Act, along with SSA
regulations, requires that benefits be denied when an individual fails,
without good cause, to follow treatment prescribed by his or her physician.
However, if an applicant is not receiving treatment, SSA still assesses the
applicant's eligibility for benefits and-if the applicant qualifies-awards
benefits, even if the applicant would not qualify for benefits if treated.
And unless medical treatment is prescribed, it is not a prerequisite for
continued receipt of benefits once they have been awarded. Indeed, SSA found
in 1999 that some beneficiaries with affective disorders-who constitute one
of the fastest-growing groups on the DI rolls-were receiving no medical
treatment. However, SSA has recently begun a demonstration project to
determine whether providing access to the right medical treatment for
beneficiaries with affective disorders will enable them to return to work.
Nevertheless, access to medical treatment may be limited for many DI
applicants and beneficiaries.

In contrast to the private sector and The Netherlands, SSA does not have the
legal authority to use financial incentives to encourage employers to assist
those with disabilities to return to work, thus limiting the agency's
ability to influence employers. SSA, however, is currently funding
demonstration projects in 12 states to develop ways to increase employment
of DI beneficiaries and other people with disabilities and is looking to
employers for help. For example, a goal of one state project is to solicit
employer views on barriers to hiring DI beneficiaries and identify
strategies for, and educate employers about, increasing employment
opportunities for DI beneficiaries. In addition, the federal government
provides tax incentives, and states may provide other assistance to
employers to encourage them to return people with disabilities to work.

Other Systems Strive to Use Appropriate Staff to Achieve Accurate Disability
Decisions and Successful Return-to-Work Outcomes

Private Insurers Seek to Use Appropriate Staff to Assess Eligibility and
Provide Return-to-Work Services

Table 4: Responsibilities and Qualifications of Staff Employed by Disability
Insurers to Assess and Enhance a Claimant's Work Potential

 Type of staff  Responsibilities                 Qualifications and
                                                 training
                -- Determine disability
                benefit eligibility.

                -- Develop, implement, and
                monitor an individualized
                                                 One insurer gives
                claim management strategy.       preference to those with a
                                                 college degree and
                -- Serve as primary contact      requires insurance claims
                                                 experience and specialized
 Claims managersfor the claimant and the         training and education.
                claimant's employer.             Another requires a college
                                                 degree, a passing grade on
                -- Focus on facilitating the     an insurer-sponsored test,
                claimant's timely, safe          and specialized training
                                                 and coaching.
                return to work.

                -- Coordinate the use of
                expert resources.
                -- Collect and evaluate
                medical and functional

                information about the            Medical staff include
                claimant to assist in the        registered nurses with
                                                 case management or
                eligibility assessment and       disability-related
                help to ensure that              experience and experts in
 Medical and                                     behavioral and mental
 related        claimants receive the            issues, such as
 expertsa       appropriate medical care to      psychologists, experienced
                                                 psychiatric nurses, and
                enable them to return to         licensed social workers.
                work.                            Two insurers also employ
                                                 board-certified physicians
                -- At one insurer, physicians    in various specialties.b
                also help train company

                staff.
                -- Help assess the claimant's
                ability to work.
                                                 Rehabilitation experts are
                -- Help overcome work            masters-level vocational
 Vocational     limitations by identifying       rehabilitation counselors.
 rehabilitation                                  In addition, one insurer
 experts        needed assistance, such as       requires
                assistive devices and            board-certification and 5
                                                 years of experience.
                additional training, and
                ensuring that it is provided.
                                                 One insurer gives
                                                 preference to those with a
                                                 college degree and
                                                 requires 3 years'
                                                 disability experience,
                                                 some management
                                                 experience, and
 Supervisors    -- Provide oversight,            specialized training.
                mentoring, and training.
                                                 Another insurer requires a
                                                 college degree, more than
                                                 12 years' disability
                                                 claims experience, and
                                                 completion of courses
                                                 leading to a professional
                                                 designation.

aIn one company, the medical expert is an employee of a company subsidiary
but is often colocated with the insurers' employees.

bOne company, for example, employs 85 part- and full-time physicians,
including psychiatrists, doctors of internal medicine, orthopedists, family
practice physicians, cardiologists, doctors of occupational medicine, and
neurologists.

The disability insurers we reviewed use various strategies for organizing
their staff to focus on return to work, with teams organized to manage
claims associated either with a specific impairment type or with a specific
employer (that is, the group disability insurance policyholder). One insurer
organizes its staff by the claimant's impairment type-for example,
cardiac/respiratory, orthopedic, or general medical-to develop in-depth
staff expertise in the medical treatments and accommodations targeted at
overcoming the work limitations associated with a particular impairment. The
other two insurers organize their staff by the claimant's employer, because
they believe that this enables them to better assess a claimant's
job-specific work limitations and pursue workplace accommodations, including
alternative job arrangements, to eliminate these limitations. Regardless of
the overall type of staff organization, each of the insurers facilitates the
interaction of its core staff-claims managers, medical experts, and
vocational experts-by pulling these experts together into small,
multidisciplinary teams responsible for managing claims. Additionally, one
insurer engenders team interaction by physically colocating core team
members in a single working area.

The disability insurers expand their core staff through agreements or
contracts with subsidiaries or other companies to provide a wide array of
needed experts. These experts-deployed both at the insurer's work site and
in the field-provide specialized services to support the eligibility
assessment process and to help return claimants to work. For instance, each
insurer we studied contracts with medical experts beyond its core employee
staff-such as physicians, psychologists, psychiatrists, nurses, and physical
therapists-to help test and evaluate the claimant's medical condition and
level of functioning. In addition, the insurers contract with vocational
rehabilitation counselors and service providers for various vocational
services, such as training, employment services, and vocational testing.

All of the private insurers we examined told us that they strive to apply
the appropriate type and intensity of staff resources to cost-effectively
return to work claimants with work capacity. The insurers described various
techniques that they use to route claims to the appropriate claims
management staff, which include separating (or "triaging") claimants with
work potential and directing their claims to staff with the appropriate
expertise. According to one insurer, the critical factor in increasing
return-to-work rates and, at the same time, reducing overall disability
costs is proper triaging of claims. In general, the private insurers
separate claims by those who are likely to return to work and those who are
not expected to return to work. The insurers told us that they assign the
type and intensity of staff necessary to manage claims of people who are
likely to return to work on the basis of the particular needs and complexity
of the specific case. This selective staff assignment is shown in table 5.

Table 5: Triage of Claims and Illustrations of Selective Staff Assignment
for Claims Management

 Triage category           Staff assigned   Types of return-to-work
                                            services provided
 Likely to return to work
                                            -- Recommend improvements in
                                            treatment plan to treating

                                            physician.
 -- Condition requires
 medical                                    -- Refer claimant for more
                                            specialized or appropriate
 assistance and more than  Medical          medical
 1 year to                 specialist
                                            services.
 stabilize medically.
                                            -- Ensure frequency of
                                            treatment meets standards for

                                            condition.
                                            -- Monitor medical condition.

                                            -- Maintain contact with
                                            employer and physician to
 -- Condition requires                      ensure
 less than a year
                           Claims manager
                                            return to work.
 to stabilize.
                                            -- Obtain input from medical
                                            and vocational specialists as

                                            needed.
                           Multidisciplinary
                           team including   -- Evaluate claimant's
 -- Condition is                            functional abilities for work.
 stabilized and claimant   -- Vocational
                           expert           -- Customize return-to-work
 needs rehabilitation or                    plan.
 job                       -- Medical expert
                                            -- Arrange for needed
 accommodation to return   -- Claims        return-to-work services.
 to work.                  specialist
                                            -- Monitor progress against
                           -- Specialists asexpected return-to-work date.
                           needed
 Unlikely to return to
 work
 -- Claimant is determined
 unable to return to                        -- Review medical condition and
                           Claims manager
                                            level of functioning regularly.
 work.

As shown in table 5, claimants expected to need medical assistance, such as
those requiring more than a year for medical stabilization, are likely to
receive an intensive medical claims management strategy. A medical strategy
involves, for example, ensuring that the claimant receives appropriate
medical treatment. Claimants who need less than a year to stabilize
medically are managed much less intensively. For these claims, a claims
manager primarily monitors the claimant's medical condition to assess
whether the claimant has stabilized sufficiently medically to begin
vocational rehabilitation, if appropriate. Alternatively, claimants with a
more stable, albeit serious, medical condition who are expected to need
vocational rehabilitation, job accommodations, or both to return to work
might warrant an intensive vocational strategy. The private disability
insurers generally apply their most resource-intensive, and therefore most
expensive, multidisciplinary team approach to these claimants. Working
closely with the employer and the attending physician, the team actively
pursues return-to-work opportunities for claimants with work potential.

Finally, claimants who are likely not to return to work (or "stable and
mature" claims) are generally managed using a minimum level of resources,
with a single claims manager responsible for regularly reviewing a
claimant's medical condition and level of functioning. The managers of these
claims carry much larger caseloads than managers of claims that receive an
intensive vocational strategy. For example, one insurer's average claims
manager's caseload for these stable and mature claims is about 2,200 claims,
compared with an average caseload of 80 claims in the same company for
claims managed more actively.

Regardless of the category into which a claim is placed, the claims manager
is responsible for identifying the appropriate experts and involving them in
the management of the claim as an essential element of developing and
implementing a customized claims management strategy. The claims manager may
informally use the assistance of experts or hold an interdisciplinary team
meeting, including clinical and rehabilitation experts, to obtain advice on
developing the claims management strategy and help in determining which
specialized experts need to be deployed to manage the claim. Further, if the
claims manager refers the claim to a specialist, that specialist may
determine that additional expertise is required as well. But the insurers
told us that they escalate a claim to staff with progressively more training
and specialization, and thus higher cost, only if needed to resolve
increasingly complex claims management issues. To ensure that staff are
utilized cost-effectively, the private insurers said that they compute the
return-on-investment accruing from investing in return-to-work resources for
a particular claimant.

Other Countries Also Selectively Apply Specialized Staff to Return Claimants
to Work

Social insurance offices in Germany and Sweden select the appropriate
staffing and services to dedicate to particular cases on the basis of the
likelihood of a successful outcome. The staff assignments made and the
return-to-work actions taken by the social insurance offices depend on an
assessment of each applicant's potential for returning to work. In complex
cases of potential long-term disability, more extensive evaluations
involving psychologists and vocational specialists may be conducted to
assess the work capacity of an applicant. In Germany, medical rehabilitation
is provided before an applicant's condition is assessed to determine whether
vocational rehabilitation is necessary. Only if successful rehabilitation
seems unlikely, or if rehabilitation has been provided without success, will
the social insurance offices in Germany and Sweden typically grant the
person long-term disability benefits. But, in contrast with the private
insurers we examined, once an individual is granted long-term benefits and
therefore considered too severely disabled to benefit from services, the
social insurance offices rarely reassess the person's return-to-work
potential and generally do not offer any return-to-work services or
benefits.

The Netherlands also dedicates resources to evaluating return-to-work
potential and providing rehabilitation services on the basis of the
particular return-to-work potential and needs of individuals. But unlike
Germany and Sweden, The Netherlands offers vocational rehabilitation to
disability beneficiaries who choose to pursue a work goal even after they
are granted long-term benefits.

SSA Staff Are Not Focused on Returning Claimants to Work

Moreover, while SSA funds the state DDSs, SSA's regulations delegate
authority to each DDS to set hiring policies and determine how to organize
staff charged with carrying out the eligibility assessment function.
Consequently, in contrast to the standardized hiring practices used by the
private insurers, considerable variation can exist among the states in the
requisite qualifications for hiring key staff. For example, among the DDSs,
the required educational background for disability examiners ranges from a
high school diploma to some college to a college degree.

In addition, SSA separates beneficiaries into groups according to their
likelihood of medical improvement for the purpose of assessing continuing
eligibility for benefits, in accordance with law and regulation. The agency
invests greater staff resources in reviewing beneficiaries who are most
likely to medically improve than in reviewing those with less likelihood of
improvement. In contrast to practices of the private insurers and foreign
social insurance offices, SSA uses its resources to determine continuing
eligibility on the basis of medical improvement and does not separately
evaluate whether a beneficiary has the potential to return to work.

Concluding Observations

We acknowledge that limited data exist on the cost-effectiveness of the
return-to-work approaches used in the other systems we examined. In
addition, SSA may face greater difficulty in returning some of its
beneficiaries to work than private sector insurers do, since DI covers a
broader population than the private insurers. Moreover, significant
differences exist between SSA's disability programs and those of private
sector disability insurers and social insurance programs in other countries.
Some of these differences can be attributed to the particular laws and
regulations governing the programs. Although SSA would face substantial
constraints and challenges in applying the return-to-work practices of other
programs, we believe opportunities exist for providing the return-to-work
assistance that could enable more of SSA's beneficiaries to reduce or
eliminate their dependence on cash benefits.

The Congress recognized the need to focus more on return to work when it
passed the Ticket to Work Act, which authorizes and requires SSA to conduct
return-to-work demonstration programs. Program managers and policymakers
will be able to learn from the experiences of these demonstrations, and they
can also draw upon the approaches of the other systems to further strengthen
and enhance a comprehensive return-to-work focus. Adopting such a focus
will, however, require fundamental changes to the underlying philosophy and
direction of the disability programs, including the determination of
disability. Policymakers will need to carefully weigh the implications of
such changes, but compelling reasons exist to try new approaches. Current
estimates project that the DI trust fund will become insolvent in 2023. This
financial strain, along with advances in technology and medicine that can
help individuals improve their productive potential, provides ample reason
for examining how practices from other systems could be applied to improve
SSA's return-to-work outcomes.

GAO Contact

and Staff Acknowledgments

Related GAO Products

Social Security Disability Insurance: Raising the Substantial Gainful
Activity Level for the Blind (GAO/T-HEHS-00-82, Mar. 23, 2000).

Social Security Disability: Multiple Factors Affect Return to Work
(GAO/T-HEHS-99-82, Mar. 11, 1999).

Social Security Disability Insurance: Factors Affecting Beneficiaries'
Return to Work (GAO/T-HEHS-98-230, July 29, 1998).

Social Security Disability Insurance: Multiple Factors Affect Beneficiaries'
Ability to Return to Work (GAO/HEHS-98-39, Jan. 12, 1998).

Social Security Disability: Improving Return-to-Work Outcomes Important, but
Trade-Offs and Challenges Exist (GAO/T-HEHS-97-186, July 23, 1997).

Social Security: Disability Programs Lag in Promoting Return to Work
(GAO/HEHS-97-46, Mar. 17, 1997).

SSA Disability: Return-to-Work Strategies From Other Systems May Improve
Federal Programs (GAO/HEHS-96-133, July 11, 1996).

Social Security: Disability Programs Lag in Promoting Return to Work
(GAO/T-HEHS-96-147, June 5, 1996).

SSA Disability: Program Redesign Necessary to Encourage Return to Work
(GAO/HEHS-96-62, Apr. 24, 1996).

(207082)

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