Ticket to Work Evaluation (January 2006)
The Ticket to Work and Self-Sufficiency program (TTW) was established to put disability beneficiaries on the road to economic self-sufficiency by improving not only their access to rehabilitation and employment services but also the quality of those services. Historically, very few beneficiaries in either of the Social Security Administration’s (SSA) disability programs—Disability Insurance (DI) and Supplemental Security Income (SSI)—leave the rolls as a result of having found work. Yet it seems possible to improve on this experience because many people with medical conditions that would make them eligible for disability benefits do in fact work, and advances in technology and rehabilitation techniques make it feasible for many people with very severe disabilities to find and hold a job.
TTW changed the prevailing disability policy in two main ways that were expected to help more beneficiaries leave the disability roles as a result of employment. First, it changed the way the SSA pays for employment services. Under the traditional payment system, the agency reimbursed a state vocational rehabilitation agency (SVRA) for the costs it incurred, up to a limit, if a beneficiary served by the SVRA had earnings equal to at least the substantial gainful activity level (currently set at $830 per month for most individuals) for nine months. Under TTW, however, SSA pays SVRAs and other service providers through two new payment systems—“milestone-outcome” and “outcome-only”—that provide full payment only after a beneficiary has exited cash benefit status by reason of higher earnings for 60 months. This policy change gives service providers a stronger incentive to help beneficiaries secure long-term employment.
Second, TTW gave beneficiaries more service providers to choose from by greatly expanding the types of organizations that could be paid by SSA for helping beneficiaries find work. A wide variety of public and private providers, called “employment networks” (ENs), may now compete directly with SVRAs to serve disability beneficiaries interested in returning to work. Given the new payment incentive described above, these providers are motivated to serve beneficiaries who seem most willing and able to work at an earnings level that would take them off of cash benefits, and who could benefit from the services the EN is most adept at providing.
TTW was implemented in three phases. In Phase 1, which began in February 2002, the program was rolled out in 13 states across the country. Phase 2 began in November 2002 and extended the program to an additional 20 states plus the District of Columbia.
In Phase 3, which began in November 2003, TTW was implemented in the remaining 17 states and U.S. territories. At the end of the rollout in September 2004, SSA had mailed Tickets to more than nine million beneficiaries, who are now free to seek services from an EN or an SVRA, or not to seek services at all.
This report, the second from the Ticket to Work Evaluation, provides an interim look at the program during its second two years of operation, 2003–2004, in order to facilitate the program refinement process. The report draws primarily on information collected or compiled during 2004, including SSA administrative records; a national survey of disability beneficiaries; and interviews with SSA staff, the Program Manager, and representatives of ENs and SVRAs. The report examines beneficiary participation in TTW, beneficiary characteristics and outcomes, the implementation activities of SSA and the Program Manager, and the roles that SVRAs and ENs are playing in the program. It also examines two broad policy issues that are central to the design and success of TTW: whether and the extent to which financial incentives are strong enough to encourage ENs to serve disability beneficiaries, and the extent to which the program is reaching beneficiaries who may need more intensive supports or assistance to succeed in the work force. Finally, the report focuses on operations in Phases 1 and 2. It does, however, provide some implementation information about the Phase 3 rollout, which was in progress when data for this report were collected, but most of the report’s statistics pertain only to Phases 1 and 2.
MAJOR FINDINGS AND CONCLUSIONS
Overall, we found that SSA has successfully implemented the TTW program as designed, but some limitations inherent in the design have become apparent and will need to be addressed.
One limitation is the low rate of participation in TTW. Even in the Phase 1 states, where the program has operated the longest, just 1.1 percent of beneficiaries have assigned their Ticket to a provider. This participation rate reflects, in part, the paradox inherent in TTW: Its goal is to promote work among a group of individuals judged to be incapable of substantial employment, which is they very basis for receiving disability benefits from either the DI or SSI program. In reality, the vast majority of beneficiaries will not attempt to secure a job once they are on the rolls. For instance, only about 2.5 percent of any enrollment cohort will ultimately leave the rolls due to work, and less than 0.5 percent of all beneficiaries on the rolls at a point in time eventually leave due to work (Newcomb et al. 2003; Berkowitz 2003). Nevertheless, our findings from the TTW evaluation surveys suggest that many more beneficiaries express interest in returning to work and leaving the benefit rolls. Thus, it seems that TTW has some unfulfilled potential and that it would be worthwhile to investigate ways to increase beneficiary participation.
The second limitation is the relatively low rate at which service providers actively participate in TTW. While more than 1,100 providers had registered as ENs by June 2004, 60 percent of them have not yet accepted any Tickets, and the program manager reports that it has become increasingly difficult to recruit more ENs. Our analysis suggests that this low participation rate is at least partially a result of the structure of TTW payments, which does not appear to create a financial incentive for providers to recruit and serve beneficiaries beyond what they can fund with their other revenue streams. Furthermore, interviews with SVRA staff indicate that their agencies are becoming less aggressive in pursuing Tickets than they were early in the program rollout. Without active participation by ENs and SVRAs, TTW cannot achieve its goals of increasing beneficiaries’ use of employment-assistance services and expanding the range of service choices available to them. Further program refinements may be warranted if greater provider participation is to be encouraged.
Congress envisioned this kind of mixed success in the early stages of the program when it passed the Ticket to Work and Work Incentives Improvement Act (Ticket Act). Specifically, the legislation provided for the commissioner to assess the program as it rolled out, making changes that would help to achieve program goals more effectively (or recommending changes when legislation would be required). As we prepared this report, SSA had used its Ticket Act authority to propose new regulations that seek to strengthen the financial incentives for providers to participate actively in TTW (SSA 2005). SSA has also launched an analysis of ways to increase beneficiary awareness of and participation in TTW. Future evaluation reports will examine how these efforts are helping TTW to reach its full potential.
Beyond these general observations about the TTW design, seven key findings, presented below, emerged from our analysis of TTW operations in this second two years (2003–2004).
Now that TTW has been rolled out, program administrators are focusing on ongoing operations
In September 2004, SSA had mailed Tickets to all eligible beneficiaries who were on the rolls when TTW began in their state. Approximately nine million beneficiaries are now eligible to use their Ticket. In the future, SSA will focus on mailing Tickets to newly eligible beneficiaries, facilitating Ticket assignments to ENs and SVRAs, and paying providers on behalf of beneficiaries who have achieved specified employment outcomes. In addition, SSA continues to refine TTW operations, pursue revisions to Ticket regulations, and enhance its broader effort to encourage and support the return to work by beneficiaries. The Program Manager has implemented all systems needed to operate TTW and has recruited more than 1,200 ENs. At present, the greatest challenges to sustaining the program include recruiting and retaining more ENs, continuing to help them complete the payment paperwork accurately, and otherwise make the payment process more efficient.
Beneficiary participation continues to grow but remains very low
Although the beneficiary participation rate in Phase 1 and 2 states has increased steadily since mid-2002, it was just 1.1 percent and 0.6 percent in these states, respectively, in March 2004. (Given that Phase 3 had not completely rolled out when this report was prepared, participation only in Phases 1 and 2 is covered.) The participation rate is different for different groups of beneficiaries, but people with hearing impairments in Phase 1 states participate at the highest rate, which is just under 6 percent. Somewhat surprisingly, preliminary evidence suggests that participation may be higher than average in the four groups of beneficiaries that Congress identified as most likely to have trouble getting services in the performance-based TTW environment—those who (1) require ongoing support and services, (2) need high-cost accommodations, (3) earn a subminimum wage, and (4) work and receive partial cash benefits. The findings concerning these individuals, however, may reflect imperfections in the process used to identify them through administrative data. In our next report, we will identify them by using beneficiary survey data, which is likely to give us a more accurate picture of participation.
SVRA participation remains strong but appears to have fallen off somewhat in recent months
Although SVRAs have about 90 percent of all the Tickets that have been assigned, they now seem to be seeking out Tickets less aggressively than they did when the program was first rolled out. Phase 1 SVRAs are obtaining fewer assignments than they obtained a year or so earlier, and the assignment rates for Phase 2 SVRAs are well below those of the Phase 1 SVRAs at the comparable point in the TTW rollout. SVRAs were initially concerned about recouping their costs because they believed that many beneficiaries would assign their Ticket to an EN after receiving extensive services from the SVRA. As this concern has diminished, SVRAs may have relaxed their efforts to obtain large numbers of Ticket assignments.
In addition, there has been a drop in the percentage of SVRAs’ disability beneficiaries whose cases are being closed because beneficiaries have secured competitive employment. The reasons for this decline, however, are unclear. The slow economy during the observation period might explain the trend, but there was no comparable decline for SVRA clients who were not SSA beneficiaries. Given that payments to SVRAs under the traditional payment system also fell during the same period, we can tentatively conclude that efforts by SSA and SVRAs to promote better employment outcomes among disability beneficiaries have not achieved their intended effect. We will address this issue more fully in the next evaluation report through the use of more detailed data on beneficiaries’ use of SVRA services.
Provider interest in TTW is waning
While many ENs continue to take Tickets, their enthusiasm for TTW appears to be waning. The number of ENs has grown very slowly. Some have officially withdrawn from the program, others have stopped accepting Ticket assignments, and approximately 60 percent have no assignments at all. The Program Manager reports that recruiting ENs, which was always “a hard sell,” is now “almost impossible.” ENs contacted recently cited the same issues as those cited by ENs contacted two and three years ago. In their eyes, TTW is financially risky, few beneficiaries are interested in going off cash benefits, the payment process is cumbersome, and a poor economy is making it difficult to find good jobs for beneficiaries.
Their view of the financial incentives provided by TTW is supported by our analysis of the ENs’ costs and revenues, which suggests that ENs that relied solely on TTW payments would have lost money after two years of operation. While this does not mean that they would lose money in the long run, it does indicate that ENs must begin to see some possibility for dramatic improvement if they are to continue to participate actively in TTW. Without their participation and willingness to take the risks inherent in a performance-based payment system like the one used in TTW, it will not be possible to test the program completely. If ENs can use other sources of funding to cover most of their costs, the financial picture improves, but treating TTW merely as a supplemental funding source is likely to limit its ability to achieve one of its main goals—to greatly expand the number and variety of providers who will assist beneficiaries.
SSA has addressed some issues connected with the payment process, but these changes have yet to have a substantial impact. As of August 2004, only 11 payments had been processed under the Certification Outcomes Payment Process, which is intended to simplify and expedite the payment process. Meanwhile, SSA continues to face the high costs—in both time and effort—associated with manually processing payments. This is true largely because of the sheer complexity of both program rules and many factors that are external to TTW.
There is little evidence that TTW has prompted a substantial change in the delivery of services to beneficiaries
For the large majority of Ticket holders, the service environment has essentially remained unchanged by the introduction of TTW. SVRAs, which have the vast majority of Ticket assignments and have chosen the traditional payment system for nearly all of them, typically report that they have not changed the mix or intensity of their services. Nevertheless, a few noteworthy changes have occurred. Some SVRAs report that their staff now have a better appreciation for the complexity of SSA’s program rules and work incentives, and for the issues facing beneficiaries when they attempt to work. In addition, some SVRAs are trying to ensure that beneficiaries receive accurate information on how employment will affect their financial and health care benefits, either by referring them to local Benefits Planning Assistance and Outreach programs (BPAOs) or by increasing their own capacity to provide such services.
National Beneficiary Survey results suggest that TTW may have unrealized potential
Survey data indicate that TTW may have not yet reached many of the individuals who might benefit from the program. About 9 percent of disability beneficiaries were working when we interviewed them, and 15 percent report that they expect to leave the rolls for work in the next five years, while only one percent have assigned their Tickets. Although the potential presence of untapped demand may be encouraging, caution is warranted. History suggests that the survey respondents’ expectations are much too optimistic, since less than one percent of beneficiaries have left the rolls for work in the past. Furthermore, it will be difficult for substantially more beneficiaries to assign their Ticket if providers remain reluctant to actively participate in the program. The challenge facing SSA as it tries to improve TTW, therefore, is to find the mix of outreach, services, and incentives that will encourage not only providers to participate but also more of the beneficiaries who see themselves leaving the rolls because of work to assign their Ticket and successfully earn their way to financial self-sufficiency.
Observed trends in beneficiary outcomes are consistent with TTW’s having a small effect on beneficiary behavior
We compared data for Phase 1 TTW participants and nonparticipants in the 12 months before and 15 months after Tickets were mailed to determine whether participant outcomes after the receipt of a Ticket tended to diverge from outcomes observed for nonparticipants. Such a difference in trends would be consistent with, but not necessarily the result of, an effect of TTW. For SSI beneficiaries, the trends in outcome measures for participants before and after Ticket mailings differ from the trends observed for nonparticipants in ways that are consistent with the new program having, to some extent, promoted employment and program exit.. The trends suggest that TTW may have slightly increased the proportion of SSI beneficiaries who receive zero benefits and who combine zero benefits with substantial employment. The differences also suggest that the average benefit amount for SSI beneficiaries who participate in TTW decreases slightly as a result of TTW. For DI beneficiaries, the patterns of outcome measures during the postmailing period for participants and nonparticipants differ only slightly and therefore provide weaker evidence that TTW produced its intended effects.
These findings are tenuous for several reasons. Most important, we know from the survey results that many TTW participants are motivated to find work and, as a group, they would probably be more successful than nonparticipants in the labor market even if Tickets had never been mailed. Because our preliminary analysis of outcome trends is based on simple analytic techniques that do not fully control for such motivational differences, these early findings ultimately may not be substantiated by the evaluation’s more rigorous analyses, still to be conducted and which will more fully control for the influence of such differences.
Changes are needed if TTW is to realize its potential
The latest findings from the evaluation reinforce the perception that while there are some reasons to be cautiously optimistic about the program’s future, substantial changes may soon be needed to both boost its limited momentum and realize its potential as an effective conduit from the disability rolls to work. Making the program financially more attractive to providers is critical, and doing so will mean assessing the payment systems and how providers can help beneficiaries move more quickly to financial self-sufficiency (after this report was drafted SSA proposed substantial changes to the TTW payment system to encourage ENs to participate more actively). It is also clear that beneficiaries must be made more aware of the program, since only about a third of them report knowing about TTW (or something like TTW). In any event, moving quickly on both fronts is key to ensuring that providers and beneficiaries sustain enough interest in the program such that it is given it a fair test during its early years.