SSA Disability Reengineering: Project Magnitude and Complexity Impedes
Implementation (Testimony, 09/12/96, GAO/T-HEHS-96-211).
Pursuant to a congressional request, GAO discussed the Social Security
Administration's (SSA) efforts to redesign its disability claims
process. GAO noted that: (1) SSA needs to continue its redesign efforts
so that it can reduce the high cost and long processing times associated
with the current claims process; (2) since SSA has made limited progress
toward fulfilling its redesign goal, its redesign plan may be overly
ambitious; (3) although SSA have begun implementation of some of its
redesign initiatives, many are behind schedule, some have become very
complex to implement; (4) SSA cannot determine whether these initiatives
will achieve desired results; (5) SSA implementation approach will
likely limit the chances for project success and has led to delays in
implementation; (6) project delays increase the risk of disruption from
turnover in key executive positions; and (7) SSA needs to ensure that
its redesign efforts are strongly supported by stakeholders and other
interested parties.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: T-HEHS-96-211
TITLE: SSA Disability Reengineering: Project Magnitude and
Complexity Impedes Implementation
DATE: 09/12/96
SUBJECT: Claims processing
Disability benefits
Reengineering (management)
Claims settlement
Disabled persons
Cost control
Customer service
Claims processing costs
Eligibility determinations
Federal social security programs
IDENTIFIER: Social Security Disability Insurance Program
Supplemental Security Income Program
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Cover
================================================================ COVER
Before the Subcommittee on Social Security, Committee on Ways and
Means, House of Representatives
For Release on Delivery
Expected at 10:30 a.m.,
Thursday, September 12, 1996
SSA DISABILITY REENGINEERING -
PROJECT MAGNITUDE AND COMPLEXITY
IMPEDE IMPLEMENTATION
Statement of Diana S. Eisenstat, Associate Director, Income Security
Issues
Health, Education, and Human Services Division
GAO/T-HEHS-96-211
GAO/HEHS-96-211T
(106905)
Abbreviations
=============================================================== ABBREV
ALJ - administrative law judge
DDS - disability determination services
DCM - disability claim manager
DI - disability insurance
SSA - Social Security Administration
SSI - Supplemental Security Income
SSA DISABILITY REENGINEERING:
PROJECT MAGNITUDE AND COMPLEXITY
IMPEDE IMPLEMENTATION
============================================================ Chapter 0
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss the Social Security
Administration's (SSA) efforts to redesign its disability claims
process. SSA operates two disability programs--the Disability
Insurance (DI) and Supplemental Security Income (SSI) programs.
While downsizing substantially, SSA has struggled to manage
unprecedented growth in applications for disability benefits and in
the number of appealed disability decisions. Processing delays at
SSA have created hardships for disabled claimants, who often wait
more than a year for a final disability decision. In fiscal year
1995, SSA spent about $3 billion in administrative costs to pay about
$61.3 billion in cash benefits to program recipients.
Concerned about reducing administrative costs, saving time, and
improving the quality of service in the disability claims process,
SSA's leaders turned to business process reengineering in 1993.
Leading private organizations have successfully used such efforts to
identify and quickly implement dramatic operational improvements.
The objective of reengineering is to fundamentally rethink and
radically redesign a business process from start to finish so that it
becomes much more efficient and significantly improves service to an
organization's customers. SSA's broad- based redesign project, to be
completed by 2000, focuses on streamlining the process of determining
eligibility for disability benefits by relying more on automation and
more efficiently using its workforce.
You asked us to monitor SSA's progress in implementing its redesign
project. Today I will discuss issues related to the scope and
complexity of the project and the agency's efforts to maintain
stakeholder support. In our earlier work, we reported that SSA would
face formidable implementation challenges.\1 I will also discuss
today some ways that could help SSA increase the likelihood that its
project will succeed. My comments are based on information obtained
from SSA officials responsible for implementing the redesign project,
reengineering experts, and management and employee representatives
involved in the disability claims process.
In summary, given the high cost and long processing times of SSA's
current process, the agency needs to continue its redesign efforts.
Its redesign plan, which undertakes a large number of initiatives at
one time, is proving to be overly ambitious, however. Some
initiatives are also getting more complex as SSA expands the work
required to complete them. The agency's approach is likely to limit
the chances for the project's success and has led to delays in
implementation: testing milestones have slipped and stakeholder
support for the redesign effort has diminished. In addition, the
increasing length of the overall project and individual initiatives
heighten the risk of disruption from turnover in key executive
positions. We believe that as the agency proceeds with its redesign
project it should focus its efforts on key initiatives, proceeding
first with those that will quickly and significantly reduce claims
processing time and administrative costs.
--------------------
\1 Social Security Administration: Risks Associated With Information
Technology Investment Continue (GAO/AIMD-94-143, Sept. 19, 1994) and
Social Security Administration: Major Changes in SSA's Business
Processes Are Imperative (GAO/T-AIMD-94-106, Apr. 14, 1994).
BACKGROUND
---------------------------------------------------------- Chapter 0:1
SSA's disability programs provide cash benefits to people with
long-term disabilities. The DI program was enacted in 1956 and
provides monthly cash benefits to severely disabled workers. SSI was
enacted in 1972 as an income assistance program for aged, blind, or
disabled people. The Social Security Act defines disability as an
inability to engage in substantial gainful activity due to a severe
physical or mental impairment. Both programs use the same criteria
and procedures for determining whether the severity of an impairment
qualifies an applicant for disability benefits.
Despite efforts to manage its increasing workload with shrinking
resources, SSA has not been able to keep pace with program growth.
Initial claim levels remain high, appealed case backlogs are growing,
and decisions are not being made in a timely manner. In fiscal year
1995, about 2.5 million initial disability claims were forwarded to
state offices for disability determinations, an increase of 43
percent over fiscal year 1990 levels. During the same period, the
number of applicants requesting an administrative law judge (ALJ) to
reconsider a decision denied at the initial claims level escalated
from about 311,000 to about 589,000, an increase of 89 percent.
Because of the increased workload, in many cases claimants now wait
more than a year for a final disability decision.
SSA'S CURRENT ELIGIBILITY
DETERMINATION AND APPEALS
PROCESS
-------------------------------------------------------- Chapter 0:1.1
SSA's procedures under the current eligibility determination process
have not changed significantly since the DI program's inception. The
process is slow, labor intensive, and paper reliant. In addition to
delays in making disability decisions, SSA spends more than half of
its administrative budget on this program--and very little of the
process is automated. DI and SSI disability claims pass through from
one to five levels of review to receive a decision, depending on the
number of appeals a claimant files.
SSA field office personnel assist with completing applications;
obtain medical, financial, and work history information; and
determine whether applicants meet the nonmedical criteria for
eligibility. Field offices forward applicant information along with
supporting medical history to 1 of the 54 state disability
determination services (DDS), where medical evidence is developed and
a final decision made on whether the impairment meets SSA's
definition of disability. SSA funds the DDSs, provides them with
guidance for making disability decisions, and reviews the accuracy
and consistency of their decisions. Claimants who are dissatisfied
with an initial determination may request reconsideration by the DDS.
Although a reconsideration is conducted by different DDS personnel,
the criteria and process for determining disability are the same.
Claimants who disagree with a reconsideration denial have the right
to a hearing before 1 of SSA's 1,035 ALJs in the Office of Hearings
and Appeals. At these hearings, applicants, usually represented by
attorneys, and medical or vocational experts may submit additional
evidence. If the ALJ denies the claim, the claimant may then request
a review by SSA's Appeals Council. The Appeals Council may affirm,
modify, or reverse the ALJ's decision, or it may remand the case to
the ALJ for further consideration or development. Finally, either
the applicant or SSA may appeal the Appeals Council's decision to a
federal district court.
SSA'S VISION FOR THE
REDESIGNED PROCESS
-------------------------------------------------------- Chapter 0:1.2
In November 1994, SSA released an extensive and complex plan to help
turn its vision of a new disability determination process into
reality. SSA's redesign plan for improving the process includes 83
initiatives to be implemented during a 6-year period (fiscal year
1995 through 2000).\2 Thirty-eight of those initiatives were to be
completed or to be part of an operational test by September 30,
1996.\3
SSA's redesign effort is a major departure from the current
labor-intensive, paper-reliant process. Its ultimate goal is to make
the disability claims process efficient and user friendly and to
allow the agency to make the right decision the first time as quickly
in the process as possible. To that end, SSA will rely heavily on
information technology and will need to develop a simpler methodology
for making disability decisions. Other key elements of the plan
involve consolidating the duties, skills, and knowledge of at least
two current positions in state and federal offices into one position,
allowing the claimant to meet with the decision-maker, and creating a
new adjudication officer to expedite decision-making at the appeals
level.
--------------------
\2 See Plan For A New Disability Claim Process, SSA (Washington,
D.C.: Sept. 1994).
\3 During fiscal years 1995 and 1996, SSA adjusted the number of
near-term initiatives from 40 to 38 and the number of total
initiatives for the project from 83 to 80.
ATTENTION TO REENGINEERING
BEST PRACTICES INCREASES
LIKELIHOOD FOR PROJECT
SUCCESS
-------------------------------------------------------- Chapter 0:1.3
Today's leaders in business process reengineering advocate a variety
of approaches and strategies; however, they frequently cite certain
best practices that increase the likelihood for success.
Reengineering experts have found that when redesign efforts fail to
achieve the desired change it is often because project managers paid
insufficient attention to these best practices.\4
Although a redesign project can be large and encompassing, experts
suggest segmenting the project and concentrating on completing a few
manageable initiatives, or tasks, at any one time. These experts
believe that working on a relatively small number of initiatives with
measurable performance outcomes at one time gives managers better
control over the initiatives and allows a faster response if problems
arise or deadlines are not met. They also contend that concentrating
on a few initiatives can produce results in a short time frame that
can help sustain key stakeholder support.
Furthermore, although the time frame for an overall reengineering
project may run from 2 to 5 years, in a government environment,
leadership turnover and frequent changes in the public policy agenda
necessitate designing the project so that progress on individual
initiatives can be made in relatively short time periods. Finally,
reengineering best practices call for identifying all stakeholders
and working to get and keep their support. Stakeholder support is
vital because opposition can jeopardize the redesign effort's
success.
--------------------
\4 GAO has issued several products that address several of these best
practices, and we refer to just of few of them in this work. See
Government Reform: Using Reengineering and Technology to Improve
Government Performance (GAO/T-OCG-95-2, Feb. 2, 1995) and Business
Process Reengineering Guide, Exposure Draft, Version 1.0, 1995.
PROJECT'S COMPLEXITY AND SCOPE
POSE PROBLEMS FOR
IMPLEMENTATION EFFORTS
---------------------------------------------------------- Chapter 0:2
The overall complexity and scope of SSA's implementation plan are
limiting the redesign effort's progress. In prioritizing its
redesign initiatives, SSA chose to work on 38 of them
simultaneously--a decision that requires a significant investment in
time and resources. Thousands of federal, state, and contractor
employees throughout the country are engaged in activities such as
designing, developing, testing, and evaluating processes and
developing and delivering training programs. Although we identified
six discrete tasks that SSA had completed as of July 1996, it has not
fully completed or implemented any of the 38 initiatives and is
behind schedule in meeting its testing milestones.
Moreover, SSA also has encountered significant challenges in
implementing some of the more complex initiatives. For example, SSA
considers technology vital to fully realizing the redesign's benefits
and has undertaken a technology initiative to more fully automate the
processing of disability claims from the first contact with the
claimant to the final decision. SSA is purchasing over 50,000
computers, installing a local area network in more than 1,350 office
locations, and developing software. Today, completing this key
initiative is falling behind schedule because implementation of this
software has been delayed by more than 2 years. The delay is due to
software development problems and the need for additional testing to
assess redesign changes.
Another complex undertaking that will require completion of several
supporting initiatives is implementing the disability claim manager
(DCM) position. SSA currently plans to place about 11,000 employees
in this position. DCMs will be expected to gather and store claim
information, develop both medical and nonmedical evidence, share
facts about a claim with medical consultants and specialists in
nonmedical or technical issues, and prepare well-thought-out
decisions. DCMs will be responsible for making the final decision on
both medical and nonmedical aspects of a disability claim. Before
fully implementing the DCM position, SSA must first provide several
critical support features, including technology enhancements and a
simpler methodology for making disability decisions--features that
SSA does not expect to be available for several years.
Several of SSA's initiatives are beginning to expand in scope and
length. For example, the scope of SSA's initiative to achieve
consistent adjudication results throughout all stages of the
disability process has expanded considerably. Initially, the plan
called for developing a single policy manual for use by all SSA and
state employees involved in the process. As the agency worked on the
initiative, it realized that considerably more effort was required.
As a result, SSA expanded this initiative to include (1) conducting
the same training for 14,000 decision-makers, including claim
representatives, disability examiners, ALJs, doctors, and reviewers;
(2) developing a consistent quality review process that balances
review of allowances and denials and applies the same standards at
all stages of the process; and (3) using medical and vocational
expert input. With these expanded tasks, full implementation has
been extended from September 1996 to January 1998 or later.
Although SSA may take many years to fully implement this complex
undertaking, experts suggest that individual project initiatives
should be completed quickly--generally taking no more than 12 months
to implement--to give managers better control over them and allow for
a faster response to problems that arise. Achieving measurable
results quickly also enables organizations to build stakeholder
support for its initiatives and overall redesign project.
Moreover, the cornerstone of any redesign effort is the commitment
and long-term availability of its top leaders. Redesign initiatives
that take many years to complete face an increased risk--the longer
the project takes, the greater the chance that the leadership will
change. Turnover typically causes project delays and possible
changes in scope and direction. Although SSA recognizes the
importance of management stability and continuity to the redesign
process, it has already experienced turnover of key executive-level
personnel since implementation began.
SSA CHALLENGED TO MAINTAIN
STAKEHOLDER SUPPORT
-------------------------------------------------------- Chapter 0:2.1
To the extent possible, managers of redesign projects should seek and
secure support from all stakeholders. SSA has tried to involve
interested parties in the redesign effort by identifying more than
140 stakeholders, meeting with them to discuss redesign issues, and
including them on project task teams and work groups. Although its
stakeholders generally support the need for redesign, SSA has had
problems getting and keeping support from some of them. In fact,
some redesign proposals are beginning to cause major concerns for
stakeholders. We found, for example, that SSA's decision to create
the DCM position to adjudicate claims raised fears that some
employees would lose their jobs. Furthermore, SSA's decision to
temporarily promote to a higher pay grade federal employees selected
for the position raised a major concern for state employees who would
be paid less for the same work.
CONCLUSIONS
---------------------------------------------------------- Chapter 0:3
SSA should be commended for initiating action to significantly
improve its disability claims process and should continue its
efforts. Since 1993, however, SSA has made limited progress toward
fulfilling its redesign goal. Although SSA has begun many of the
planned initiatives it expected to complete by September 30, 1996,
many are behind schedule and none is far enough along for SSA to know
whether specific proposed process changes will achieve the desired
results. We are concerned that SSA has undertaken too many complex
initiatives--some are now lengthy endeavors that are likely to extend
the overall project completion date. Before proceeding further, SSA
needs to reassess the number of initiatives it is simultaneously
undertaking and the time frames for completing them. Because SSA
undertook this project to reduce processing time and administrative
costs and improve service to the public, it should focus its efforts
on fewer initiatives and emphasize those that will have the greatest
impact on accomplishing the project goals. SSA should reevaluate the
relative priority and contributions to the redesign goals of the
remaining initiatives and implement them as resources permit.
-------------------------------------------------------- Chapter 0:3.1
Mr. Chairman, this concludes my formal remarks. I will be happy to
answer any questions from you and other members of the Subcommittee.
Thank you.
CONTRIBUTORS
---------------------------------------------------------- Chapter 0:4
For more information on this testimony, please call Michael T.
Blair, Jr., Assistant Director, at (404) 679-1944. Other major
contributors are Clarence L. Tull, Sr., Senior Evaluator, and John
M. Ortiz, Evaluator.
*** End of document. ***