Statement by Dr. Shirley Chater,
Commissioner of Social Security,
before the House Committee on Government Reform and Oversight
August 3, 1995
Mr Chairman and Members of the Committee:
I am submitting this statement for the record as a supplement to my testimony of May 23, 1995, to further address your concerns about the Social Security disability insurance (DI) program. You stated in the press release announcing this hearing that you are committed to fairness in the disability program, enabling those who are truly disabled to receive benefits quickly, and stopping payments to those who have recovered (i.e., are no longer disabled). Let me state at the outset that we absolutely share your commitment. In addition, we are committed to seeing that Social Security DI and Supplemental Security Income (SSI) disability beneficiaries have full access to a positive, quality vocational rehabilitation program to assist them to enter productive employment.
The issues associated with the disability programs we administer are very difficult and complex and have been ongoing for many years. There are no easy fixes. Nevertheless we agree that we can do a better job in these areas. Let me assure you that solving any problems associated with the disability programs is a top priority. At SSA, we are dedicated to making essential improvements in the disability programs so that they work better for all Americans.
As I indicated in my testimony earlier this year. we have been focusing our improvements in three specific areas that we believe will help us achieve major improvements in the disa bility programs. First. we are redesigning the disability claims process from start to finish. The current lengthy and complicated decisionmaking process is broken and needs fixing. Second, we are continuing to seek improvement in the way we conduct continuing disability reviews (CDRs) and greater funding to finance CDRs. And third, we are developing approaches to increase the employment opportunities of current and potential disability beneficiaries. Let me begin with the disability redesign.
SSA's Disability Process Redesign
When I spoke before you in May, I explained that our redesign plan included both short-and long-term initiatives. I mentioned that although our short-term initiatives were designed to reduce the number of claims pending in the State Disability Determination Services (DDSs) and the Office of Hearings and Appeals (OHA), we had not fully implemented the most significant actions in OHA. Consequently, pending hearing-level workloads in OHA had increased. On the other hand, DDSs' pending workloads had dropped by about 45,000 claims (6 percent) as a direct result of our short-term initiatives. Since then, DOSs have continued to reduce the number of pend ing claims by about 53,000, for an overall decreas e of 13 percent. This is a very significant improvement. We are well on our way to our FY 1996 goal of 304,000 pend ing claims. down from 552,000 at the end of FY 1994.
Since May, we have focused our efforts on OHA and the most significant actions in our short-term initiative plan are now underway. On June 30, 1995, we published a fmal regulation which granted temporary authority to attorney advisors at OHA to conduct pre-hearing proceedings and, where the evidence warrants, to issue wholly favorable decisions. When this initiative is fully implemented, it will assist us in further substantially reducing the number of requests for hearings that are pending. In addition to ensuring more effective use of automation at OHA, we have increased our pre-hearing screening of cases and temporarily redirected resources from other agency components to draft disability decisions at OHA.
Despite the fact that the number of pending hearings is significantly higher now than at the beginning of the fiscal year, we have begun to reduce the numbers of cases pending at OHA. For the two week period ending August 3, 1995. pendings were decreased by 4,057 cases. While these results are somewhat small, this is a very significant step in the right direction.
With respect to our long-term initiatives, I stated that we were moving quickly to implement those aspects of the new disability process that could be achieved in the near-term. I specifically mentioned that we would be increasing public awareness of the requirements for disability benefits by providing comprehensive public information, training our disability adjudicators on critical areas, and developing an Adjudication Officer position to conduct pre-hearing conferences. We are currently reviewing comments on the notice of proposed rulemaking we published in the Federal Register on June 9, 1995, to authorize testing of the Adjudication Officer position, and we expect to publish a final regulation authorizing this testing in the near future.
Further, on June 29, 1995, I approved a series of disability process improvements that will begin to move SSA closer to its five-year plan to fully implement tl.e redesigned disability process. These improvements will begin this fall and should significantly enhance the overall disability process. They include:
- More uniform policy guidance and training for all disability adjudicators and reviewers;
- Intercomponent claims representative/disability examiner baseline teaming;
- Enhanced consumer-oriented public infonnation;
- Increased third-party monitoring and assistance; and
- The adoption of quality assurance guiding principles tailored to our new processes.
Once complete, we believe that our disability process redesign initiatives will assure swift, efficient decisionmaking and processing on a continuing basis.
Continuine Disability Reviews
Let me now address the status of our efforts to improve the CDR process. During my last appearance before this subcommittee, I explained that the CDR process directly affects the number of beneficiaries who remain on the DI rolls because this process allows us to terminate disability benefits to those who are no longer disabled. I also explained how unprecedented increases in initial disability claims workloads required previous Commissioners to make difficult decisions on the prudent use of limited resources, one of which was to place less emphasis on CDRs.
However, recognizing the need to strike a better balance between addressing the growing workloads in initial disability claims and conducting CDRs, we implemented a more efficient CDR process in 1993. I elaborated on this new CDR process and our expectations of increasing the number of CDRs we process.
We are continuing to evaluate and improve our CDR process, including the development of a machine-readable CDR mailer questionnaire which will enable us to electronically screen CDRs and store the data for analysis. In addition, we are also responding to a General Accounting Office audit to determine:
- The characteristics of beneficiaries in the pending caseloads in order to more accurately profile these beneficiaries and predict medical improvement;
- What SSA and DDS resources would be necessary to eliminate the current CDR workload over the next few years; and
- What effect this might have on our initial and appeals workloads.
We are determined that disability program dollars should be going only to those who are truly entitled .
SSA's Vocational Rehabilitation Program
I would now like to discuss the issue of vocat ional rehabilitation (VR). At the May 23, 1995 hearing, I very briefly explained SSA's return-to-work strategy to assist individuals with disabilities re-enter the work force. We are very concerned that, despite the fact that numerous studies show that people with disabilities want to work. SSA's current VR process is not as effective as it could be. Very few disabled beneficaries have returned to work at the substantial gainful activity level and left the beneficiary rolls as a direct result of our VR program. Because this is a complex issue, let me now provide you with an overview of the history of the VR program, describe our current VR process, and also tell you about some steps we are taking to improve the VR program and increase the number of beneficiaries who leave the rolls and return to work.
History of the VR Program
As you know, the primary public VR program was established in 1920 and is now authorized by the Rehabilitation Act of 1973, as amended. The Rehabilitation Services Administration, which is part of the Department of Education, administers the program as a partnership between the Federal Government and the States-- 80 percent of the funds come from Federal appropriations and 20 percent from State appropriations. When Congress established the Social Security disability program in 1956, it expressed great confidence in the value of VR for people with disabilities by including a provision that provided for the referral of disability applicants to State VR Agencies.
Current VB Process
People who apply for disability benefits are provided information about the availability of services from their State VR agency. When their claim goes to the State DDS for adjudication, a DDS examiner (or a Stale VR agency counselor) screens the cases to identify persons who may benefit from VR and then refers these individuals to State VR agencies. (I should point out that SSA's referral process is but one route to receiving VR services. Many disability applicants and beneficiaries, on their own initiative or at the advice of their doctors, employers, or other interested third-parties, seek out services from State VR agencies.)
Once the referral is made, neither SSA staff nor State DDS examiners are involved in deciding who receives services or what services are provided. These decisions are made in light of regulations and policies set forth by the Department of Education's Rehabilitation Services Administration and the State VR agency's own guidelines. If the individual is eligible for services, which could include diagnostic services, counseling, medical services or training, the VR agency counselor and client jointly work out a plan or program of rehabilitation. According to the Rehabilitation Services Administration, many State VR agencies are unable to meet the current demand for services.
Under current law, SSA pays for VR services only when these services result in a successful outcome, i.e. when the beneficiary performs substantial gainful activity for a continuous period of nine months and SSA determines that the VR services contributed to the return of the individual to such activity. In FY 1994, SSA reimbursed State VR agencies $63.4 million for successfully rehabilitating about 5,600 beneficiaries. Since 1983, when the current VR payment program began, just over 55,000 beneficiaries have been rehabilitated and employed through this program.
Steps Taken to Improve the Current VB process
We are concerned about the effectiveness of the current VR process and have taken several steps to increase the number of beneficiaries who are served by State VR agencies and to increase the participation of private sector rehabilitation providers in the process. For example, SSA has been implementing the recommendations of a Federal-State task force to improve the VR referral process; simplifying Federal guidelines for VR referral; sponsoring greater collaboration among SSA. State DDS and State VR agencies; and tracking persons who request referral for VR services in the course of a CDR. SSA is also streamlining the VR payment process, which will expedite claims, and improving its management information about the persons who receive VR services and the services they receive.
In June 1989, SSA submitted a legislative proposal to authorize us to contract directly with private VR providers to serve our beneficiaries. The private sector has grown significantly in numbers in recent years, and there are many small businesses, community-based facilities and nation al firms with the experience and specialized knowledge to serve people with severe disabilities. In fact, State VR agencies often contract with the private sector for services. In FY 1991, the latest data we have available, 64 percent of beneficiaries who were accepted by State VR agencies received some type of service from the private sector. When SSA's proposal was not enacted, we sought to modify the process through regulations which permit us to use private or other public agencies as alternate sources when a State VR agency declines to serve an individual whom SSA has referred to it.
These new regulations, published March 15, 1994, brought the first substantive changes to the SSA VR program in over a decade. In addition to expanding the pool of potential service providers, thereby expanding opportunities for our beneficiaries to receive rehabilitation services and return to work, the regulations protect consumers by assuring that alternate providers are qualified through licensing or certification to serve them.
Since the publication of these regulations, we have been working hard to put the new process in place. Briefly:
- We have modified the claims system to record when a beneficiary is referred to a State VR agency and are developing a system to track these referrals.
- We are informing public and private sector rehabilitation providers about our VR program.
- We are developing criteria for certifying altern ate providers as qualified to serve our beneficiaries under the VR payment program.
- We are working with our attorneys and Federal procurement professionals to draft model agreements and contracts with alternate providers who agree to serve our beneficiaries.
We expect to have the framework in place to begin enrolling alternate providers in the next few months.
Let me briefly describe two other initiatives to expand VR services and job opportunities for disabled beneficiaries. The first, Project Network, was initiated in 1991 to test 4 service delivery models that offer alternatives to the current VR program.
Project Network is the SSA's first large-scale demonstration of VR assistance to persons with severe disabilities. This project is also the first major attempt by SSA to take direct responsibility for helping people with disabilities enter or reenter the workforce. Project NetWork used a randomized field experiment design to test 4 models of providing employment and rehabilitation services to DI beneficiaries and SSl applicants and recipients. All of the models were completed in March, 1995. Preliminary results will be available in FY 1996 and a final evaluation report is due December 1997.
We have contracted with a major social science research finn to perform a comprehensive evalua tion of Project NetWork. The evaluation will address two key policy questions:
- Is it feasible to increase participation in VR serv ices among DI and/or SSI beneficiaries through a combination of intensive outreach, case management, and enhanced work incentives? and
- Do the interventions tested produce net benefits from the perspective of participants, society, the DI trust fund, general revenues, and the Federal government in general?
The second initiative, Project ABLE-launched in 1993--is a joint Federal-State initiative to link disabled job-ready beneficiaries with public agencies and private sector employers that need their skills and abilities.
Project ABLE began as a pilot program in 1993 for disability beneficiaries residing in Maryland, Virginia and the Distr ct of Columbia. Project ABLE is a joint effort of the Office of Personnel Management (OPM) in conjunction with SSA, the Rehabilitation Services Administration and participating State VR agencies. Through this program, State VR agencies enroll job-ready beneficiaries into a database which is used by Federal agenc ies to find qualified candidates.
I am pleased to report that, based on favorable input from VR counselors and personnel offices, the Project ABLE system has been improved and is being expanded to California, Illinois, Pennsylvania and Texas. In addition, we have enhanced the Project ABLE database to include resume imaging that will allow prospective employers to receive a client resume by fax directly from the Project ABLE database. Another enhancement will automatically give Federal agencies listings of eligible employees from Project ABLE for all posted job vacancies.
While only a very small number of beneficiaries have been hired to date, we believe Project ABLE's success has been limited by restricted hiring and down sizing of government agencies throughout this period. We are beginning to work with the Department of Labor (DOL) to list Project ABLE clients in various databases funded by DOL that are principally used by private sector employers and to work with States that are experimenting with "one-stop shopping" employment centers.
Project ABLE has been recognized as a National Performance Review "Reinvention Lab" and I am pleased that Project ABLE has proven to be a fine example of Federal and State agencies collaborating to give state-of-the-an service to their respective customers.
Employment Strategy for People with Disabilities
In addition to the initiatives I just mentioned, as I indicated at the May hearing, we are examining other approaches to increase the employment of current and potential disabled beneficiaries. I have established a team headed by Dr. Susan Daniels, Associate Commissioner for Disability, to examine approaches to increase the employment of disability beneficiaries. I am very interested in approaches for bringing together the interests of employers, private insurers, and rehabilitation services to achieve more efficient handling of claims and to return to the workplace as many people as are able to work. Over the coming months, we will continue to work with our State partncrs, other public agencies, and private organizations that serve people with disabilities in an effort to improve these services and to create greater employment opportunities for our beneficiaries as we move forward.
In summary, Mr. Chairman, I thank you for the opportunity to submit my statement for the record. Even though it has only been two months since I last testified before you and your subcommittee, we have made measurable progress and we can assure you that our progress will continue. We are working to maintain fairness in the disability program, improve the integrity of our disability rolls, and increase employment opportunities for current and potential disability beneficiaries. The initiatives I have described will help us accomplish these goals.