Conclusions and Implications
In this chapter, we draw some tentative conclusions based on the early evaluation data presented in the report. We also highlight some implications of the findings and identify several issues that deserve close attention as the TTW program continues to unfold. In particular, while TTW is now operational, several pressure points could limit its effectiveness. SSA has already taken some steps to address those points, but careful monitoring is essential during the next few months and additional steps are likely to be required. Given that TTW is a program that was implemented from scratch without a pilot or demonstration and is still in its infancy, operational problems are hardly surprising.
A. SSA HAS IMPLEMENTED TICKET TO WORK
Despite substantial obstacles, SSA has, in fact, implemented TTW in the Phase 1 and 2 states and began to roll out the program in the remaining (Phase 3) states as of November 2003. Although the rollout is a year behind schedule, that is not surprising given the Agency’s resource limitations, the enormity of the task facing SSA in implementing a national program that proved to be much more complex than initially understood when the original schedule was developed, a change of administrations, and other external events. The Ticket concept as envisioned by the NASI panel and enacted by Congress appears simple, but it overlies a set of already complex rules and systems associated with the work incentive provisions of SSA’s two disability programs. Moreover, the legislation left those provisions largely unchanged. In addition, SSA had to address the interests of a wide variety of stakeholders through the regulatory process and other administrative actions.
In the process of implementing TTW, SSA has made substantial operational changes that are likely to support beneficiary efforts to return to work. The mailing of Tickets to over 5 million adult beneficiaries in the Phase 1 and 2 states represents the first time that SSA has invited most of these beneficiaries to obtain employment services potentially funded by SSA. This approach stands in contrast to past policy, under which SSA invited and required a small share of new awardees to seek rehabilitation services through SVRAs and did not directly extend an offer of assistance to others. For the first time, beneficiaries can attempt to work without fear of triggering a medical CDR. It appears that TTW has substantially expanded beneficiary ability to seek services from non–SVRA providers who could then be paid for the rehabilitation by SSA without a referral, that beneficiaries have better access to information about SSA’s work incentive programs through the Benefits Planning Assistance Outreach (BPAO) grantees, and that providers have better knowledge of how returning to work will affect client benefits.1 has taken and continues to take other actions that are designed to improve access to information on work issues. It has provided extensive training of field office staff; developing work incentive specialist positions in each SSA area; training a liaison to the area specialist in each field office to support beneficiary access to work information; and collaborating with the U.S. Department of Labor to establish disability program navigators at One-Stop Career centers.
SSA has also made improvements to its basic systems that seem likely to facilitate beneficiaries’ return-to-work efforts. Some of these improvements address long-standing issues, and it is possible that, even without TTW, the changes would have improved beneficiary employment outcomes and reduced dependence on benefits. New software, new data systems, and other enhancements in SSA procedures should help reduce overpayments and retroactive terminations, speed Ticket eligibility verification, provide timely information about use of the Trial Work Period, and speed payments to providers. SSA administrators have recently accorded high priority to process such post-entitlement work and have budgeted more resources to that effort.
The various changes extend beyond the walls of SSA, most obviously to SVRAs. Ticket implementation has clearly focused SVRA attention on disability beneficiaries, made the agencies aware of SSA’s desire to reduce dependence on benefits through increased earnings, and motivated the agencies to pay more attention to the consequences of increased earnings for benefits. A few SVRAs have even taken what can be viewed as positive steps to promote the development of the EN market.
B. TICKET USE AND PROVIDER PARTICIPATION IS LOWER THAN MANY HOPED
Reliance on TTW is lower than hoped for at this stage. The best evidence comes from Phase 1 states, where rollout was completed in November 2002 (see Chapter IV). Nine months later (August 2003), the assignment rate was only 0.74 percent, although it continues to rise. In addition, 91 percent of Tickets were assigned to SVRAs and the share of Tickets assigned under the new payment systems was particularly low (3 percent for outcomes-only and 11 percent for milestone-outcome system) and declining (see Chapter IV). The experience in Phase 2 states, where rollout ended in September 2003, appears to be similar to the experience of Phase 1 states in the comparable period.
Provider participation in TTW has also been much lower than predicted. Although over 700 providers have signed up to be ENs in the Phase 1 and 2 states, only about 250 have accepted Ticket assignments (Chapter III). Payments to ENs with Tickets are thus far noticeably low, and, among the very few ENs that had accepted several Tickets, many were in various stages of contracting or leaving the market (Chapters III and V). No EN we have talked to thus far appears to be making money on its TTW activities, and the SVRAs continue to dominate the market for employment services to eligible beneficiaries.
It is important to note that some groups of eligible beneficiaries are participating at much higher rates than others. For the Phase 1 states, the participation rate in August 2003 was 1 percent for those who received their Tickets in the first rollout mailing (February 2002), 2 percent for those under age 40, 4.4 percent for those classified as having a severe hearing impairment, and over 1 percent in four states, including 1.9 percent in Delaware. Similarly, some groups are more likely than others to use the new payment systems. Variation by state is particularly wide-ranging—from a high of 45 percent of assignments using the new payment options in Arizona to a low of just 5 percent in South Carolina. We also find greater use of ENs funded through new payment systems by older beneficiaries and by those whose impairments are associated with medical conditions that increase in prevalence with age.
C. IT IS STILL TOO EARLY TO JUDGE THE TICKET TO WORK PROGRAM FULLY
It is too early to know whether TTW, as currently designed, can achieve all its goals. The evidence we have been able to collect to date clearly shows that implementation problems have reduced provider interest in the program.
SSA is attempting to address the major pressure points, that is, those issues that have been most detrimental to the program, and it is possible that changes already in place will stimulate provider and beneficiary interest. Most important, SSA has taken steps to simplify the documentation of earnings required to trigger Ticket payments and to improve the timeliness of payments once evidence is submitted. It has also taken steps to reduce backlogs in post-entitlement workloads that have made confirmation of Ticket eligibility and adjudication of EN claims for payment problematic, and it recently launched a significant beneficiary outreach effort as well as an effort to help providers find other sources of funding to support their operations. Whether these steps will prove sufficient to enable TTW to achieve its goals cannot be determined until more data become available. However, it appears that SSA must continue to address these pressure points aggressively if the program is to succeed.
One important issue demanding consideration is the continued dominance of SVRAs in the employment services market for beneficiaries. Even though TTW has clearly expanded choice for beneficiaries, most Tickets have been assigned to SVRAs under the traditional payment system. The dominance of SVRAs appears to be inconsistent with the objective of developing a competitive market for beneficiary services. If SSA wants to increase competition it will have to work with the Rehabilitation Services Administration (RSA) to develop new ways to involve both SVRAs and ENs in the TTW program.
One key issue is the general policy of most SVRAs to not provide services to beneficiaries that have already assigned their Ticket to an EN, except under an agreement in which the EN would compensate the agency. This policy has been adopted on the grounds that the Rehabilitation Act prevents the agencies from providing Title I vocational rehabilitation services to individuals who are receiving comparable services from other organizations. While the legal debate over this interpretation is continuing, implications of changing the policy are fairly clear. Making SVRA services available to EN clients, without compensation from the EN, would substantially increase the value to the beneficiary of assigning a Ticket to an EN if the beneficiary currently resides in a state with an agency that refuses to provide services without reimbursement. It would also mean, however, that SVRAs would provide more services to beneficiaries without the possibility of reimbursement from SSA.
Still another important issue is the extent to which agreements between SVRAs and ENs vary among states. In particular, the agreements differ in the extent to which they encourage EN participation in TTW. To address this issue SSA and RSA could provide guidance to SVRAs and ENs on the terms of SVRA/EN agreements, or even promulgate new regulations on these agreements. As previously discussed, these agreements describe the conditions under which a SVRA will provide services to a beneficiary when the beneficiary is referred by the EN for services, and cover subjects such as referral procedures, payment terms and schedules, and dispute resolution. In all instances we know of, the SVRA has developed a single SVRA/EN agreement, often with minimal input from ENs and other stakeholders, and has required the EN to sign the agreement prior to referring a Ticket holder to the state agency. In most agreements we have reviewed the SVRA shares some of the risk with the EN, but the financial terms tend to be highly favorable to the state agency. As an alternative, SVRAs could help capitalize ENs, and foster the EN market, by sharing more of the risk. SSA and RSA could collaborate to develop risk-sharing models, and encourage their adoption. The federal agencies could also develop regulations that specify risk-sharing provisions for the VR/EN agreements. Such regulations could be viewed as a compromise between the two extreme positions on the issue of whether beneficiaries who assign their Tickets to ENs are still entitled to receive state VR agency services under Title I of the Rehabilitation Act.
A recent letter from the Ticket to Work and Work Incentive Advisory Panel (2003) raised the issue of beneficiary choice and asked SSA and RSA to reassess policies about the ways in which SVRAs can take Tickets. Under Transmittal 17 of the Social Security Provider’s Handbook, distributed in September 2002, an SVRA can receive a Ticket assignment by transmitting a signed Individual Plan for Employment (IPE) and an unsigned copy of SSA Form 1365 (which SVRAs use to register a beneficiary’s Ticket with SSA). The policy has caused considerable concern on the part of both SVRAs and ENs. Even though several SVRAs have developed procedures to ensure that beneficiaries are fully aware of the potential consequences of signing an IPE, the policy may, in practice, allow SVRA to receive assignments from beneficiaries who may not even know they have a Ticket, who may be unaware they have assigned their Ticket, or who may be unaware of the consequences of Ticket assignment. Some SVRAs have expressed concern about this provision, indicating that the policy seems to conflict with the consumer choice provisions of the Rehabilitation Act. At the same time, some ENs have argued that the guidance gives SVRAs an unfair advantage and limits ENs’ ability to recruit and serve beneficiaries. Requiring SVRAs to obtain a signed Form 1365 might increase beneficiary assignments to ENs, although we have no evidence that a substantial increase would occur.
The issue of the relationships between SVRAs and ENs is part of an even larger issue concerning the ability of ENs to co-mingle funds from TTW with funds they receive from other public and private sources. As noted in Chapter III, some providers are refraining from serving Ticket holders because they believe that their funding from other sources (for example, Medicaid) will be jeopardized by Ticket to Work revenue. The essential question is whether it was Congressional intent for the Ticket to Work program to make beneficiaries ineligible for the full range of Title I VR services, Medicaid, or other supports provided by the many programs for which beneficiaries might be eligible, by making them eligible for EN services under Ticket to Work? Or is it the legislative intent for the TTW program to provide additional and longer-term funding for beneficiaries who often require ongoing and intensive supports to maintain employment? The issue of whether TTW should be viewed as substitute or complementary funding has not been adequately addressed by SSA, and is inhibiting the ability of providers to serve Ticket holders. While it appears that SSA has not yet been able to provide clear policy guidance on the issue, it is certainly not an issue that SSA can address alone. This will require working in collaboration with other federal entities providing funding for services to people with disabilities, and may also require clarification by Congress on the fundamental intent of the legislation.
Beyond the pressure point issues discussed above, the TTW performance is likely to be affected by the downturn in the economy. As the evaluation proceeds, we will pay careful attention to the extent to which local economic conditions affect the extent to which TTW influences beneficiaries’ employment, earnings, and benefit receipt. It is essential that SSA understand how well TTW works in different economic environments so that it can make accurate projections of program costs and effects on the beneficiary rolls.
The economic downturn might have affected the program in several ways. The most obvious is that the downturn has reduced the number of job vacancies and increased competition for those positions that remain. Other possible effects are subtler. A poor economy tends to reduce state budgets, with the result that state funds that might otherwise have helped support beneficiary return-to-work efforts are less likely to be available. State Medicaid programs, which have seen states tighten eligibility requirements and reduce coverage (Smith et al. 2003), provide a clear example. Beneficiaries also are likely facing greater competition from others for state employment and other support services. Some SVRAs we interviewed for the study reported cuts in state funding. Some ENs might be facing financial difficulties for reasons related to the economy but unrelated to TTW, making it harder for them to finance their entry into TTW.
We can reasonably conclude that TTW, as initially implemented, has had, at most, extremely small effects on beneficiary exits due to work. We base our conclusion on the fact that overall participation rates in TTW are still noticeably low, that most beneficiaries who use Tickets are served by the traditional payment system, and that only a few payments have been made to TTW providers. Thus, TTW has yet to have a dramatic effect on beneficiaries’ service use patterns, although Ticket’s effects may be felt if the economy rebounds and as SSA continues to improve TTW operations. In addition, greater effects may materialize over time as we begin to see the full effect of efforts to educate beneficiaries about their work options and opportunities.
D. MORE FUNDAMENTAL CHANGES TO TTW MIGHT BE NEEDED
Although TTW, as currently designed, has not yet existed long enough for us to reach judgments about its success, more fundamental changes to the program’s design, or to the work incentive features of the DI and SSI programs, could be required if substantial increases in beneficiary earnings and reduced reliance on income support are ever to be realized. A major issue to consider would be how to increase potential providers’ interest in participating in the program.
The obvious ways to increase ENs’ interest would be to increase the size of the networks’ payments and to restructure payments for earlier receipt. Depending on how ENs and beneficiaries respond, such changes might either increase or reduce total disability program costs (i.e., benefit payments plus Ticket payments). Payment increases beyond some point will increase total program costs for the simple reason that benefit reductions have a finite limit. Although the intent of the Ticket Act is to reduce or at least not increase total program costs, an increase in TTW costs might--from a broad societal point of view--be optimal given potential impacts on costs for other programs (such as Medicaid and Medicare) and the value of increased income to the beneficiary, among other things.2 We do not, however, have any empirical evidence on the extent to which any given change would result in greater provider participation, greater beneficiary interest, or more desirable employment and program outcomes.
Another approach to increasing EN interest would be to take steps to reduce or eliminate SVRA use of the traditional payment system. Currently, the system is available only to SVRAs, most of which appear to have a strong preference for continuing use of this system rather than use of the new payment system. Limiting or eliminating use of the traditional system would encourage the SVRAs to rely on the new payment system. Such a change would make it a little easier for ENs to compete with the SVRAs, although the agencies’ Title 1 funding will continue to give them a strong competitive advantage. SSA could also consider changing the rules for the traditional payment system in ways that would link payments more closely to SSA’s goal of increasing beneficiaries’ self-sufficiency, not just their work activity.
Another change requiring consideration would be to modify Ticket payments so that providers were rewarded for increasing beneficiary productivity and reducing SSI payment for beneficiaries who work and receive partial benefits. Currently, outcome payments are not triggered unless beneficiaries stop receiving payments from both programs, but there are SSI recipients, including some who also receive DI, whose benefits are reduced but not eliminated when their earnings increase. The milestones payments give ENs some reward for helping beneficiaries reduce their benefits. Similarly, the traditional payment system rewards SVRAs that help beneficiaries earn above the substantial gainful activity level for at least nine months even if those beneficiaries remain on the rolls. A partial payment system for use by providers might be appropriate for SVRAs, perhaps even as a replacement for the traditional payment system. Partial payments that exceed benefit savings should perhaps also be considered on the grounds that increased beneficiary earnings have some value to society even if they are not fully offset by benefit savings.
It is clear that the work incentive provisions of both the SSI and DI programs directly conflict with providers’ desires to generate Ticket payments. Many of the incentives allow beneficiaries to stay on the rolls while testing the employment waters (indefinitely for SSI), but TTW providers generally receive payment only when a beneficiary no longer receives benefit payments. ENs that help beneficiaries use the work incentives run the risk of not receiving payment for their efforts. Many providers we have talked to are acutely aware of this problem. It is also clear from evidence we have collected that the differences between the work incentive provisions of the two programs have added substantial complexity to TTW implementation. These differences make it difficult for SSA to integrate processes and data systems across the two programs and are a significant source of confusion to beneficiaries and providers alike. Depending how TTW plays out, SSA may eventually need to give serious consideration to redesigning the work incentive programs or the TTW program to resolve this conflict. This issue could be addressed in SSA’s forthcoming Benefit Offset Demonstration for DI that would introduce a $1 for $2 benefit offset similar to that in the SSI program and could include special provisions for making TTW payments to providers that work with demonstration participants that use this new offset.
In considering any changes to the TTW program, it is important to be realistic about what TTW can achieve, even if payments were increased and work incentive provisions restructured. TTW is a program intended to improve employment outcomes for people who have passed a rigorous test to show that they cannot engage in substantial gainful activity. The severity of their impairments, combined with other personal characteristics, might make work an unrealistic option for some beneficiaries under any circumstances. Other individuals face environmental barriers and disincentives to work that would not be addressed by the work incentive programs, even under the best imaginable program configuration. Barriers and disincentives include possible reduction or loss of both income and in-kind benefits, the existence of a highly fragmented support system, lack of marketable skills, and employers’ concerns about hiring or retaining those deemed unfit for gainful activity, regardless of whether such concerns are legitimate. The NASI panel that proposed the Ticket concept saw it as a way to help a small share of beneficiaries attain self-sufficiency through employment, with net savings to the disability programs—a small step forward. It seems likely that many other disincentives and barriers to employment will need to be addressed before it is possible for large numbers of beneficiaries to achieve self-sufficiency through employment.
In any event, changes should be made quickly in order to preserve the TTW program’s current momentum. Participation rates were still rising through August 2003, the last month for which we have data, but ENs are continuing to drop out of the program. As a result, beneficiaries may face reduced choices and program enrollments may stagnate. The loss of momentum is not the end of TTW, but may make it harder to SSA to provide the choices and opportunities that TTW promises to beneficiaries.
1 This statement is based on the impressions left by several interviews of staff at SSA, the state VR agencies, and ENs. Conducting a rigorous evaluation of changes in beneficiary and provider knowledge and access to information will require the more detailed survey data that will be available in 2005. Return to text.
2On the grounds that marginal participants will increase their earnings from zero to the SGA level and that increased earnings represent a benefit to society in their entirety, Orr (2003) argues that payments should be roughly equal to SGA for DI beneficiaries. A similar line of reasoning leads to an even higher payment for SSI beneficiaries, after allowing for the effect of the Section 1619 benefit offset provisions. Return to text.