Statement of Susan M. Daniels, Ph.D.,
Associate Commissioner, Office of Disability, Social Security Administration
before the House Ways and Means Committee
Subcommittee on Social Security

September 25, 1997

Mr. Chairman and Members of the Subcommittee:

Thank you for inviting me here today to testify about the success of SSA's efforts to protect the integrity of the Social Security disability program. As you know, continuing disability reviews (CDRs) are how we ensure that only people who are still disabled continue to receive monthly benefits. Effective stewardship of the Social Security trust funds is one of SSA's highest priorities. Toward that end, we processed roughly half a million CDRs in FY 1996, with estimated lifetime savings (including Medicare and Medicaid) of nearly $2.5 billion.

I also appreciate this opportunity to thank each of you personally for authorizing last year the additional funding for processing CDRs that has allowed us to achieve such significant progress. Achieving this additional funding was the work of both the authorizing and appropriating committees, and had the full support of the Administration. At the same time, SSA was required to submit an annual report to Congress at the end of each fiscal year through FY 2002 on the amount spent on CDRs, the number of reviews conducted, their results, and the estimated savings. We submitted the report for FY 1996 to Congress two weeks ago.


The Social Security Act generally requires SSA to review the continuing eligibility of individuals with non-permanent disabilities entitled to Social Security Disability Insurance (DI) benefits at least once every 3 years. It also requires SSA to review the continuing eligibility of such individuals with permanent disabilities at such times as the Commissioner determines to be appropriate. Together, these reviews are known as periodic CDRs. We also conduct CDRs when there has been an indication that the individual has returned to work, some of which require a full medical review, some of which do not.

Beginning in 1990. SSA faced unprecedented increases in initial disability claim s workloads, resulting, not surprisingly, in a substantial number of overdue CDRs. Even though the number of periodic CDRs processed each year increased from 48,000 in FY 1993 to 217,200 in FY 1995. SSA recognized that it could not conduct the required CDRs without additional resources. In 1996. Congress authorized administrative funding to enable SSA to process additional CDRs through FY 2002 and provide d that the discretionary spending caps could be adjusted for appropriations above a base funding level of $200 million a year. Congress appropriated $260 million for FY 1996 for SSA to process CDRs, including a $60 million discretionary cap adjustment. For FY 1997, Congress appropriated $510 million for CDRs, including a $310 million adjustment to the discretionary cap to process CDRs, including SSI CDRs and redeterminations related to the welfare reform legislation. These funds are apportioned separately by the Office of Management and Budget and tracked separately by SSA's accounting systems.


Beginning in 1993, SSA implemented a series of innovations to increase the number of CDRs processed. The primary innovation in this area was the CDR mailer questionnaire and profiling system. now beginning its sixth year of operation. It is an efficient and cost-effective means for accurately identifying beneficiaries who do not require full medical reviews in the Disability Determination Services (DDSs), as well as identifying those cases that arc productive referrals
for full medical reviews.

During FY 1996, we implemented further enhancements to the mailer/profiling system. Specifically. we automated the process further by using optically scannable mailers and computer-based decision logic, an important step as SSA prepares to begin annually processing more than three-quarters of a million mailers. Additionally, through experience, we continue to improve our ability to profile cases. We expect that these improved processes will increase our efficiency, program savings, and our ability to accurately process even larger volumes of CDRs. CDRs have always generated program savings well above administrative cost. Under our improved process in FY 1996, program savings were far in excess of administrative costs. We expect to receive similar returns over the lifetime of the authorized additional funding by continuing to work toward our goal of processing CDRs in the most cost-effective manner consistent with program requirements.


During FY 1996, S5A processed a total of 566,000 CDRs, of which 162,900 were for Supplemental Security Income (SSI) recipients. Out of the 566,000 total, 498,400 were periodic CDRs and 67,600 were work issue CDRs. The FY 1996 total was nearly double the number of CDRs conducted during the previous fiscal year, and the second largest annual volume of periodic CDRs that SSA has ever processed. During FY 1996, SSA made initial determinations that benefits should be ceased due to medical improvement and the ability to work in 60,300 cases. Of these, 41,910 were cessations resulting from periodic CDRs, 18,622 were DI only cases, 6,253 were concurrent DI/SSI cases, and 17,035 were SSI only. Out of these, we estimate that 26,500 beneficiaries will have their benefits terminated after all appeals: 10,500 DI only, 4,000 concurrent, and 12,000 SSI only. This represents life-time savings of nearly $2.5 billion - over $1.7 billion in the DI and Medicare programs and over $700 million in Federal savings for the SSI and Medicaid programs.


The Social Security Act was amended in 1994 to require S5A to perform CDRs for a minimum of 100,000 SSI recipients during each of fiscal years 1996, 1997, and 1998.

Additionally , last year's welfare reform legislation requires SSA to make redeterminations of disabled childhood SSI recipients who attain age 18, using the adult disability eligibility criteria, and to conduct CDRs once every 3 years for SSI recipients under age 18 with impairments that are likely to improve, and by age 1 for children whose low birth weight is a contributing factor material to the determination of disability. This year's Balanced Budget Act permits us to schedule a CDR for a low birth weight child at a later date if the child's impairment is not expected to improve by age 1.

During FY 1996, we confirmed the effectiveness of the profile/mailer system for SSI cases and conducted 162,900 SSI CDRs. These reviews included 5,700 initial determinations made for low birth weight children, of which 3,200 were cessations.


SSA's budget projected spending of about $288 million in FY 1997 to process 603,000 periodic review CDRs, including about 151,000 SSI cases. Through August 1997, we have processed nearly 636,000 periodic review CDRs. By the end of the fiscal year, we expect to have processed at least 650,000, at a cost of about $315 million, plus another 74,000 work issue CDRs.

For FY 1998, SSA's budget projects that we will spend about $366 million to process over 1.1 million periodic CDRs-almost double the number of CDRs in FY 1997 at far less than double the cost. Our improved mailer/profiling system provides a high level of confidence in both our ability to achieve our estimated workload targets and in the accuracy and reliability of the decision resulting from our case reviews. Also, in FY 1998, we will begin processing CDRs for SSI recipients under age 18 whose impairments are likely to improve. These cases will allow us to develop a database to profile children's cases for CDR mailers.


Our achievements in processing CDRs over the last two years demonstrate Congress' and the Administration's commitment to addressing this crucial workload. Discretionary cap adjustments for additional funds have been authorized to enable SSA to eliminate the backlog of CDRs by FY 2002, while staying current with annual review requirements.

However, further congressional action is necessary each year to make additional CDR funding available. If Congress appropriates additional funds, as requested each year, we expect to become current with our legislatively mandated CDR workloads. In that regard, the House version of the FY 1998 SSA appropriation, expected to be considered by a Conference Committee next week, provided $45 million dollars less than the President requested to process CDRs and SSI administrative work related to the welfare reform legislation. The Senate version of this bill includes the full amount of the President's request. Failure to provide the additional funds would mean that some 15 percent fewer individuals would have their status reviewed in FY 1998. We would strongly urge the Conference to provide the additional $45 million consistent with Senate action.

Mr. Chairman, we are proud of our recent accomplishments and are confident that our CDR strategy will lead to reliable and cost-effective monitoring of the disability rolls. I thank you for your attention and would be happy to answer any questions.