The employment service providers that participate in TTW as ENs have reported generally disappointing experiences with the program, although many still continue to participate at some level. As documented in the two previous evaluation reports, ENs in Phase 1 and Phase 2 states indicated that several factors have continued to impede their participation, including a perceived absence of a financial incentive; an unwillingness to substitute TTW funding, which is seen as risky, for more stable funding sources from other programs; a perceived lack of beneficiary demand for services offered; concern that Ticket holders will be unwilling to leave the benefit rolls; and cumbersome payment mechanisms. The most significant operational problem identified by ENs is that they are generating revenue streams that are “too little, too late,” given the need to cover the up-front costs of overhead and direct services.
In this third report, we extend these earlier findings with information from interviews with three groups of ENs: (1) new ENs operating in Phase 3 states, (2) a subset of the Phase 1 ENs we initially interviewed in 2002, and (3) a small group of ENs that have generated relatively high payments per Ticket accepted. The experiences of the new Phase 3 ENs mirror those reported by Phase 1 and 2 ENs, suggesting that the experience of providers in the last phase of the TTW rollout is not any better than the experience of those in the early phases. ENs in all phases interviewed for all three reports generally indicate that it is difficult in TTW to recruit and serve beneficiaries in a way that does not impose net costs on the organization. The recent interviews with the Phase 1 ENs suggest that their TTW experiences have not improved appreciably with time. Finally, our interviews with the high-revenue ENs indicate that even these relatively successful organizations have trouble covering their operating costs.
A. Experience of Phase 3 ENs
The first two evaluation reports focused on the early experience of Phase 1 and Phase 2 ENs. Here we examine the early experience of Phase 3 ENs, particularly to determine whether they were having less trouble or more success than their predecessors. We explored a wide range of issues in telephone interviews with 12 Phase 3 ENs during spring and summer of 2005. While these ENs are not statistically representative of all Phase 3 ENs, they were selected randomly within strata to ensure that they illustrate the range of EN experiences.1 This section describes their experience in becoming an EN, in financing TTW, in finding and serving Ticket holders, and in dealing with administrative procedures. We close the section by describing their current and future level of participation in TTW and their recommendations for program improvement. Overall, their experience echoes the experience of the Phase 1 and Phase 2 ENs we previously interviewed, suggesting that TTW continues to be as difficult for many Phase 3 ENs as it was/is for many Phase 1 and 2 ENs.
1. How and Why Organizations Became Employment Networks
Deciding to Participate. The 12 Phase 3 ENs that took part in the most recent round of interviews signed up for TTW for essentially the same reasons that ENs in previous years signed up. The most powerful draw of the program was that its main goal matched their main goal: to help people with disabilities improve their lives and their financial situation. The second impetus for becoming an EN was an interest in diversifying and increasing their funding streams, although, like Phase 1 and 2 ENs, none saw TTW as a potentially major revenue source.
Early Plans. Consistent with the idea that they never considered TTW a major revenue source, the majority of the Phase 3 EN managers we interviewed developed no financial plans at all for the program. The few respondents who attempted to do so kept the plans informal, creating rough budgets more than definite financial strategies. A manager at one EN, a large provider with many offices across the nation, had a detailed understanding of the financial problems the program might pose but never developed a business plan, ostensibly because the organization expected TTW to be small and easily financed out of other funds. Another respondent at a smaller EN, who went so far as to cite increasing and diversifying funding as the main reason for adopting TTW, never developed a plan for the program beyond attempting to “partner up” with the SVRA—a partnership that never materialized.
Most of the interviewees knew little about TTW before signing up. Only two had any real knowledge of the experience of Phase 1 and 2 ENs, though about half had some notion, however indistinct, about the way the program was running in other states. The two respondents who did seem to have a good feel for the program’s pros and cons got that information from their umbrella organization (in one case) or from previous involvement in the program as an advisor (in the other). All told, for most organizations, any previous program knowledge had little effect on whether they chose to become an EN or how they implemented the program.
2. Financing TTW
For nearly all of the Phase 3 ENs we interviewed, EN administrators stated that TTW revenues have not come close to covering costs. Like ENs in the two earlier phases, each Phase 3 EN deals with the particulars of this problem in its own way, but all have had to shift money from other programs or funding sources to cover the cost of TTW. Respondents’ attitude about this issue seems to have influenced their overall attitude toward the program. Some have accepted the fact that payments do not cover TTW expenditures because the program dovetails with their mission. For example, one manager at a large EN, recognizing that the size and diversity of its funding sources allowed it to accept some losses on the TTW program, noted, “We are extremely fortunate to be able to do all this,” and ascribed the organization’s success in placing Ticket holders to its financial backing. Others regard TTW as, in the words of one interviewee, a “losing cost center,” and have decided either to abandon the program or to scale back considerably. EN representatives identified several problems related to cost. At least three respondents noted that TTW clients, for a variety of reasons, cost more to serve than their other clients, and, in some cases, this was almost entirely because of the administrative burden created in serving a TTW client. Another respondent pointed to a number of EN clients that had not returned to work and therefore never netted any payments. According to this respondent, the EN “can spend thousands of dollars [on a TTW client] and not get repaid for it.” Another, a manager at the only for-profit EN interviewed in this round, noted that TTW clients are starting to displace some of their “more profitable” clients, and this may lead the EN to leave the program.
3. Finding and Serving Ticket Holders
Marketing and Call Volume. Like Phase 1 and 2 ENs, the Phase 3 ENs did very little marketing to potential TTW clients, finding that self-referrals generally kept them occupied. Some did a minimum of marketing at the beginning of the Phase 3 rollout but generally felt that the returns from this effort were negligible. Some had planned to market the program after they had the time to get used to serving TTW clients; however, their early, negative experience convinced them that marketing would be a poor use of resources. The number of calls and referrals received by ENs in this group varied widely—from a high of 50 per week or more in the early stages of the rollout for one EN, who described the experience as “totally overwhelming, pure chaos,” to a low of four calls over the entire life of the program. Broadly speaking, however, the volume of calls reportedly declined for most ENs after the initial rollout, albeit with a few short-lived rebounds after a new Ticket mailing.
Screening Potential Clients and Accepting Tickets. ENs in this round of interviews used screening and acceptance procedures that were similar to those used by ENs in previous rounds—and they encountered many of the same problems. EN officials interviewed in 2004 and in this round indicated that the problem is threefold: (1) beneficiaries did not typically have a clear understanding of the TTW program, requiring ENs to educate them as part of the screening process; (2) ENs had to devote a great deal of time to identifying, from among all the inquiring beneficiaries, those who were good candidates for Ticket assignment; and (3) screening typically yielded relatively few Ticket assignments.
The screening and acceptance procedures used by ENs with many Tickets did not differ from those used by ENs with few Tickets. Most respondents used the first telephone contact with potential TTW clients as a screening step, but these calls usually turned into education sessions. One EN manager described the program as “massively misunderstood” by most callers, and staff at nearly every EN spent most of the initial telephone call informing respondents about the TTW program. Many potential clients reportedly thought that the EN itself had a job for them or that the Ticket entitled them to a job that the EN would get for them. Some EN staff, at this point, referred potential clients to BPAOs, but the majority did not. In the initial calls, nearly every potential client was informed that the goal of the program was to get off benefits entirely, which for some clients led to an immediate loss of interest in the program. Nor was this interest rekindled when ENs informed beneficiaries that they would not be subject to a CDR as long as their Ticket was in use.
Once a potential client passed an initial screening, most EN managers scheduled a one-on-one meeting. Unfortunately, many of those managers found that candidates were unlikely to come to the meeting, which often had to be rescheduled repeatedly. Some potential clients simply “disappeared,” never contacting the EN again (one TTW coordinator, frustrated because so many of her initial scheduled meetings never took place, stopped scheduling altogether in favor of telling candidates to drop in during normal office hours without an appointment). At the meeting, EN staff asked potential clients about their plans for, and interest in, certain types of work, but the clients were also evaluated to determine whether the EN’s services matched the client’s needs.
Almost every EN representative specifically mentioned that the client’s motivation was key—and that despite their best efforts at screening, they still met with and started providing services for, clients who were ultimately not interested in leaving the benefit rolls. A few respondents also noted that DI beneficiaries were generally better candidates for TTW than SSI beneficiaries because many of the former had a work history and a stronger desire to return to work. Finally, after the one-on-one meeting, if a client was still acceptable to the EN and wanted to try to work his or her way off benefits, the EN usually accepted the Ticket.
A pattern noted in earlier reports also surfaced in these interviews: some ENs were not accepting any Tickets but were instead routinely referring Ticket holders to an SVRA. One respondent specifically mentioned that the goal was to have the SVRA accept Tickets and immediately refer clients back to the EN to be served under the cost-reimbursement arrangement that pre-dated TTW. Several other ENs were also vendors to the SVRA, so they also might have benefited from these “back-referrals” even if that was not their primary objective. Sometimes ENs would refer Ticket holders to the SVRA mainly because they felt the SVRA was in a better position to help these individuals.
Services Offered. The menu of services available to clients from ENs ranges widely, as noted in previous reports. Again, most of the ENs served SSA clients before the inception of TTW and, in fact, found Ticket holders to be essentially the same kind of people they had always served. As a result, most ENs (with one exception who ventured gingerly into employment services) did not expand their services for TTW, though some chose to alter their services somewhat to fit the unique needs of some of their TTW clients. Others took a more hands-off approach to service provision. One EN manager justified his organization’s low-intensity methods on the basis of TTW financing. He reasoned that because the program does not provide much up-front funding, it must be intended for clients that do not need many up-front services.
4. Administrative Experience
The administrative experience of the 12 Phase 3 ENs was mixed. Some spoke well of their dealings with the Program Manager and/or about SSA administrative processes. Representatives of three ENs, for example, offered a positive assessment of their interactions with the Program Manager, noting that they had generally been provided with useful, timely information, and that Program Manager staff had been good about asking whether they needed anything or reminding them of the need to submit certain reports. Furthermore, representatives of five ENs described the process of becoming an EN as generally positive, involving no real problems or difficulties. As one interviewee summed up the situation, “MAXIMUS has this handled.”
Unfortunately, however, this view was substantially overshadowed by criticism and complaints. Some of the individuals mentioned above and several other EN representatives described a variety of negative administrative experiences, echoing comments made by Phase 1 and 2 EN representatives interviewed for previous reports. By far the most common, and often the most bitter, complaint about TTW administrative processes concerned the time required to receive milestone and outcome payments after ENs submitted the proper paperwork to the Program Manager. EN officials expressed the most frustration with administrative delays at SSA. Representatives of two ENs estimated average turnaround time at five to six months. Another respondent told us in mid-July that he had yet to receive payment for a claim submitted in February, even though there were no problems with the paperwork. One interviewee found it “unfathomable” that claims could not be processed more quickly in “this age of computerized information.” Others sounded equally surprised and vexed. Our analysis of EN payment data shows that the median payment lag for a first payment was nine months and for subsequent payments, about six months (see Chapter VIII for a fuller discussion of this issue).
Feedback on the process of acquiring proof of beneficiaries’ earnings, which is needed to submit payment claims, was mixed. Four ENs had relatively little trouble getting enough of the appropriate documentation, one of whom was surprised at not having more trouble, given what she had heard about this issue. But none of these four ENs had more than six employed TTW clients, and two of them had just one successful placement. In contrast, three ENs, including the two with the most clients placed (15 to 20 each), found it very difficult to obtain the information they needed in order to submit payment claims. Their complaints were similar to those summarized in past reports: Trying to get the information is time-consuming, both clients and employers are sometimes uncooperative, and ENs missed out on payments to which they felt they were entitled.
Administrative problems were not limited to payment delays. For example, two EN representatives reported having had a tough time with the Ticket assignment process. One complained that the process took far too long, at least two months and that it was a real “source of frustration.” The other thought the Program Manager might have lost the documentation he submitted; he had never received confirmation of Ticket assignments for any of the beneficiaries for whom he submitted paperwork. His frustration was exacerbated by the fact that every time he called the Program Manager, he had to deal with someone different, who apparently did not know the details of any of his cases, requiring him to explain the situation all over again.
That respondent was not the only one to complain about customer service from the Program Manager. Even one respondent who had characterized the Program Manager as generally helpful described an experience in which Program Manager staff told her that she needed to file a certain report and that they would send the relevant form to her, but she had to wait an inordinate amount of time to receive it. Another EN representative complained of receiving contradictory information from different Program Manager staff members about whether he needed to submit employer’s taxpayer ID numbers along with payment claims.
5. Current and Future Involvement in TTW
At the time of our interviews, some 20 months after the respondents began operating as ENs, 4 of the 12 were no longer accepting Tickets, and all 4 indicated they were very unlikely to begin taking Tickets in the future. The program had not worked out well for them financially. Furthermore, individuals at 2 of the 8 ENs still accepting Tickets were of the opinion that their agency should stop taking Tickets, but senior managers had not reached that conclusion—yet.
The eight ENs that were still accepting Tickets at the time of the interview were generally being very cautious about continued participation in the program. None are planning to substantially increase their TTW caseload. They see their future involvement as contingent on one or more factors not necessarily under their control. Most of all, they described a need to find more suitable clients than the ones they had typically dealt with so far—they are seeking more Ticket holders with a serious desire to pursue work, an ability to hold a productive job, and a willingness to cooperate with the agency’s need to have copies of pay stubs. The ENs have been spending a substantial amount of resources on screening and on trying to help Ticket holders, but their efforts have not yielded revenues that are anywhere near their costs. The two ENs that have been most optimistic about continued participation have fairly substantial funding from other sources—one, from a Projects with Industries grant; the other, from multiple diverse sources—that has enabled them to devote a fairly substantial amount of staff time to TTW, folding it in with their other activities.
6. Suggestions for Program Improvement
The Phase 3 ENs we interviewed this year called for many of the same improvements that their Phase 1 and 2 counterparts called for in previous years. They focused on changes that would reduce their costs and/or increase their revenues (or speed up the revenue stream). They have been the most frustrated with the time and effort involved in screening clients. Following are their suggestions related to this problem.
Provide beneficiaries with better information about the program and potential service providers to reduce the efforts ENs must devote to educating and screening Ticket holders who actually have no interest in working their way off cash benefits. Specific comments included: Do not rely solely on material sent by mail; send follow-up information to Ticket holders who do not use their Ticket within several months of receiving it to remind them they have a Ticket and to re-explain its purpose; give beneficiaries more detailed information about ENs, including the area they serve and the services they provide, and make it clear that ENs typically do not have jobs waiting to be filled; and target the program or restrict it to those who have the greatest chance of achieving its goals—primarily DI (not SSI) participants and those without “significant” disabilities.
Provide ENs with better information about beneficiaries to help them decide whom to target or whether and how to help someone who approaches them for services. One EN representative called for some kind of centralized database, another for more current CDs listing Ticket holders from the Program Manager, describing them now as virtually “useless.”
Give beneficiaries a stronger incentive to explore work, countering their fears about losing various benefits and encouraging them to try to earn a living.
Several ENs called for improvements in administrative practices or processes.
Process Ticket assignment paperwork more quickly. The EN representative who raised this issue said if her agency postpones services until receiving confirmation, clients might tire of waiting and go elsewhere; yet if the agency initiates services right away, it might be wasting resources on an individual it should not be serving—for example, one who has assigned a Ticket elsewhere or one who has no Ticket.
Simplify the payment claims process. Some respondents called for, first, eliminating the requirement for ENs to obtain and submit copies of beneficiaries’ pay stubs—a step one person described as burdensome and potentially “duplicative” given that SSA should be receiving earnings records directly from beneficiaries—and, second, simplifying the required documentation so the Program Manager will reject it less often.
Process payment claims more quickly.
Improve customer service at the Program Manager. A couple of EN representatives called for more consistent information, faster responses to informational and other requests, and better record keeping so that they would not have to explain situations repeatedly to different Program Manager staff or submit duplicate documents that the Program Manager claims not to have received .
Finally, some ENs suggested changes to the payment systems.
Change the outcomes or activities that trigger payments. Specific ideas include: pay ENs for up-front expenses such as screening and initial services; pay ENs for placing clients and make an outcome payment every 30 days after placement; do not make ENs wait for beneficiaries to sustain employment for extended periods; and make it easier for ENs to get payments on behalf of clients who have jobs in which income is somewhat unpredictable—such as real estate agents who rely largely on commissions rather than a set monthly paycheck.
Increase payment amounts, especially for the earlier milestone payments.
SSA has promulgated proposed regulations, discussed in Chapter IV, to address many of these concerns.
B. Recent Experience of Phase 1 ENs
The experience of ENs who enrolled during Phase 1, more than three years ago, might be a harbinger of EN success in Phases 2 and 3. Because the Phase 1 ENs might have valuable lessons for the Phase 2 and 3 ENs, we looked back at the 24 ENs first interviewed for this evaluation in 2002.2 To assess changes in their status as TTW has matured, we examined data on Ticket assignments (as of December 2004) and payments (as of July 2005) for all 24 ENs and conducted follow-up interviews with 8 of the 15 ENs that were still active in TTW as of July 2005.
Our interviews suggest that time and experience has not appreciably improved the situation for these Phase 1 ENs. A few have had limited success, but most seem to have become inactive or to have substantially limited their involvement in TTW. Today, 12 of the 24 ENs interviewed in 2002 can be considered nonparticipants because they have either accepted no Tickets or terminated their involvement. Five of them dropped out of the program officially. Collectively, these ENs had accepted 63 Tickets that were either dropped or reassigned when they withdrew from the program. Another seven have never accepted any Tickets. One additional EN had entered “hold” status as of June 2003, which means that it is continuing to work with its current Ticket holders but is not accepting new Tickets. Of the remaining 11 ENs, 4 have accepted fewer than 5 Tickets, 6 have accepted 9 to 63 Tickets, and one has accepted 220 Tickets.
Comparing the number of Tickets assigned at the time of the 2002 interview with the current number of Tickets assigned, we found that seven ENs have increased their participation by a total of 86 Tickets. The majority of the increase, however, can be attributed to one EN, which increased its Ticket assignments from 6 in 2002 to 57 in 2005. Two ENs have roughly the same number of Tickets as in 2002, and two have fewer Tickets. We noted that the total number of Tickets that had ever been assigned was somewhat greater than the number of beneficiaries now being served at five ENs. This indicates that a number of beneficiaries have either been dropped because of nonparticipation or did not assign their Tickets.
Only 8 of the 24 Phase 1 ENs had received any payments by July 2005; one had received about $182,000, 3 had received between $25,000 and $60,000, and the rest had received $11,000 or less. Despite having been active in the program for more than three years, 4 of the 12 ENs with Ticket assignments had not received a payment.
To get a deeper sense of the Phase 1 ENs’ experience over the past three years, and to assess any implementation changes, we interviewed 8 of the 24 ENs initially interviewed in 2002. We excluded the ENs that had terminated or were “on hold” as well as the 3 ENs we had interviewed for a second time in 2003 to avoid overburdening them.3 The remaining 7 did not respond to our request for an interview.
1. Marketing and Call Volume
Although the Phase 1 ENs we spoke with recently had received relatively few inquiries per week, six of the eight had not marketed TTW either before or since the 2002 interview. One respondent cited a lack of funding as the primary reason. Another said, “We never pursued it because we never considered [the program] financially viable.”
Prior to the evaluation team’s first interview with them, two ENs sent letters to their clientele describing TTW. One reported being so overwhelmed with the response that the agency installed an answering machine telling callers that their call would not be returned for several weeks. The second EN initiated an information mailing in response to clients’ lack of knowledge about the purpose of the Ticket or how to use it or the belief that the agency had a job waiting for them. To reduce the time necessary to correct this information via telephone, this EN used funding from a 2004 Medicaid Infrastructure Grant to mail a “Customer’s Guide to Ticket to Work,” to potential clients. The guide explained TTW and informed potential clients about the EN’s BPAO program. The EN used a CD of Ticket-eligible beneficiaries provided by the Program Manager to randomly select 225,000 beneficiaries for the mailing. While the mailing generated a significant number of calls to the BPAO, the EN official was not certain about the effect of this effort on the number of calls received about TTW. Still, he wished that his EN had more resources to target a mailing to beneficiaries who were more likely to pursue full-time employment. He also would have preferred the CD to have provided more information on beneficiaries, such as type of disability, type of benefit received, or past employment to assist with a targeted mailing.
In 2002, most of the eight ENs reported having difficulty keeping up with the call volume. Since then, call volume has diminished to barely a trickle for the ENs we interviewed. Three EN representatives said they currently receive about 10 calls per month and the rest, fewer.
2. Ticket Taking
Most of the eight ENs we re-interviewed have not accepted a substantial number of new Tickets. Only two had accepted Tickets before the first interview (2002); four had accepted Tickets by the second interview (2005). Two ENs with no Tickets at the first interview now have 3 Tickets each; an EN with one Ticket at the first interview has 9, and an EN with 6 Tickets at the first interview now has 57. Three ENs with no Tickets had low expectations for the program at the first interview and still felt the same way at the time of the second interview, asserting that they are unlikely ever to accept a Ticket. Two of these officials said they are likely to drop out of the program, pointing to a lack of funds for up-front services and a lack of appropriate candidates. Another official speaking for an EN with no Ticket assignments had begun to assess 29 beneficiaries and planned to accept Tickets from them at the first interview, but now says, “Most of them disappeared when they found out what the Ticket program really was about. Some thought we had a job waiting for them; others wanted to maintain their cash benefits.” This EN had not accepted any Tickets by the second interview and did not plan to accept any. The remaining four who are still accepting Tickets say that their willingness to accept Tickets has diminished recently, partly because of lack of demand and partly because of more rigorous screening.
Officials at these experienced Phase 1 ENs reported that their approach to Ticket-taking has changed since the first interview. Their screening criteria have become much more rigorous. Some ENs only consider beneficiaries who are willing to work enough to forego cash benefits, who need little or no training, and who have relatively low benefits. Some ENs attempt to target services to beneficiaries who are most likely to leave the SSA benefit rolls. Another EN will accept Tickets only from beneficiaries who are already being served by the EN’s parent agency to ensure that funding for up-front services is available. Another requires that beneficiaries either attend an introductory forum on TTW or complete a questionnaire before meeting with a staff person. This process attempts to ensure that the beneficiary is truly interested and cuts down on staff time spent screening beneficiaries who might not be serious about participating in the program.
3. Funding and Services
In general, the eight Phase 1 ENs have not acquired new or additional funds to pay for their services and other activities associated with TTW. ENs reported gains or losses in funding typical of human service agencies. For example, one had lost a staff position because of a drop in funding from contractors. Another had obtained a contract to provide services to nursing home residents. Another reported that its contract with the SVRA had decreased due to limited funds, but the EN had obtained a large contract through a Medicaid Infrastructure Grant. None of the officials attributed these changes to TTW itself, and all served roughly the same number of clients and SSA beneficiaries that they had served at the first interview.
As reported in the first interview, ENs with Ticket assignments cobbled together funds from other sources to serve TTW beneficiaries because TTW revenues did not cover their costs. One EN with four Tickets said that it used Medicaid funds to serve Ticket holders but felt uncomfortable about doing so because of uncertainty about how Medicaid reimbursement rules dealt with the TTW payments. Another EN accepted Tickets only for clients of its parent agency, for whom state Department of Health funding was already available. This EN did not see a problem with using these funds to support TTW clients because “TTW is not big enough to be on their radar screen.” However, he does not plan to accept more Tickets because of lack of demand and problems with obtaining payments. The EN with 57 Tickets had placed 15 TTW clients in jobs, and 13 are currently making more than the SGA level. But the representative said his agency lost approximately $65,000 on TTW during 2004, and he now plans to cut back on his organization’s involvement in the program.
ENs that have Ticket assignments have not altered the amount or types of services they provide since the first interview, and three of them reported that Ticket clients are similar to other agency clients. One official from the EN that has 57 Tickets said that, compared with other clients, Ticket clients are usually older, better educated, more likely to be on DI, more likely to have a physical than a mental disability, and less likely to use supported employment services. He said TTW beneficiaries he had served did not require supported employment services as did his other clients because of their past work experience and the types of jobs for which they were qualified.
4. Collecting Paystubs and Obtaining Payments
None of the eight ENs had submitted payment claims before our first interview, but they all expressed concern about the process of collecting pay stubs and requesting payments. Unfortunately, they now feel that their fears have become a reality. EN officials reported that they are having significant problems obtaining pay stubs from beneficiaries. One EN official commented that “people want to separate themselves from us as soon as they get a job,” and “they feel that the requirement to submit pay stubs is just like being on Social Security.” To encourage cooperation, one EN has offered to share a portion of outcome payments with beneficiaries; another provides stamped, self-addressed envelopes; and a third sends caseworkers to clients’ homes or work sites to obtain the stubs. An official with the third EN said, “It takes a good amount of time and money to follow up with people; the outcome payments do not even cover that cost.”
The three ENs that had submitted payment claims at the time of our second interview expressed great frustration with the process of obtaining payments. One respondent characterized the process as “cumbersome,” adding, “anything would be better than this process.” Another EN had submitted 14 claims for payment on behalf of two individuals, but three months later, the EN had received just eight payments; the others were returned to the EN for further documentation. The official at the EN with 57 Tickets said he has submitted about 50 claims, and most have required additional documentation; only one-third of them were paid as of January 2005. By the time they received a payment, after waiting three to six months, officials were sometimes confused about what the payment was for and how the amount was calculated. Respondents said that multiple faxes and telephone calls to the Program Manager are required to resolve documentation issues, and the Program Manager then sends the documentation to SSA for wage verification. “If SSA has to verify wages anyway,” said one respondent, “we may as well just skip submission to MAXIMUS. All of the phone calls and faxes are a big waste of time.” None of these ENs had attempted to use the COPP because their TTW clients had not qualified for enough outcome payments.
5. Recommendations for Program Improvement
Recommendations for program improvement from the eight re-interviewed ENs are largely consistent with their recommendations from the first interview, including simplifying the payment system, more accurately informing beneficiaries about TTW, and providing up-front funds for services. One EN official would like to see payments for a reduction in benefits, enabling ENs to work with beneficiaries to obtain part-time jobs. He suggested a more enhanced role for the Program Manager with regional or local staff to help beneficiaries navigate the TTW program. He also recommended that the Program Manager develop a web-based self-assessment and other tools to help ENs screen beneficiaries.
C. Financial Viability and Potentially Promising Practices
While TTW seems to provide little financial incentive for ENs on average, a few providers appear to have had some success with the program. In particular, more than 80 ENs have generated at least $500 per Ticket accepted, and a handful have generated more than $2,000 per Ticket accepted (Exhibit X.1). We therefore interviewed 10 of the ENs that had received at least $500 per Ticket accepted to try to identify the lessons their experience might have for providers in general and for the overall functioning of the TTW market. These interviews revealed that while these providers did have a few common approaches, their overall success with TTW was actually quite limited, and even several of these seemingly successful providers said that they lost money on TTW.
|Dollars per Ticket||Number of ENs|
|Source: EN payment data as of July 26, 2005.|
The 10 high-revenue ENs we interviewed represent a wide variety of service models and perspectives. To ensure that we interviewed ENs with a range of Ticket-taking experience, we divided the sample of 10 into five groups based on the number of Tickets accepted. We selected two ENs with more than 200 Tickets; two with 50 to 100 Tickets; two with 10 to 20 Tickets; two with 5 to 10 Tickets; and two with 5 or fewer Tickets. Among the 10, 8 are nonprofit organizations and 2 are for-profits. Most focus on people with psychiatric and cognitive disabilities, while a couple focus on people with physical and sensory disabilities. Two are small operations with only one or two staff people; others are multi-million-dollar corporations. Most place clients in jobs in the community, though two hired them internally. Some provide supported-employment services; others provide such services as résumé writing, interviewing, and employer contacts.
One interesting pattern we observed is that higher revenues per Ticket are associated with less, rather than more, Ticket taking (Exhibit X.2). For example, all ENs with more than $2,000 in revenue per Ticket had taken eight or fewer Tickets. An EN with just two Tickets had received revenue of over $6,000 per Ticket; the ENs with more than 200 Tickets had received about $700 and $900 per Ticket, respectively.
1. Potentially Promising Practices
Despite their differences, ENs that have experienced some financial success share a number of organizational practices or features, which they feel have contributed to their success. We defined a practice or feature as “shared” if it was mentioned by a majority of the 10 Phase 1 and 2 ENs interviewed in the second round. A few ENs, however, attributed their relative success to a practice not shared by the rest of the ENs. Both sets of practices are reviewed below.
Readers should bear in mind that this exploratory analysis is by no means conclusive. We do not know the extent to which the many less financially successful ENs might also have these features or use these practices and still yield relatively low payments per Ticket assignment. Furthermore, as shown in Exhibit X.2, even the ENs that appeared to have relatively high payments per Ticket assignment are not necessarily breaking even under TTW. We discuss this issue in Section 2.
|State(s) Served||Phase||Number of Tickets Ever Assigned||Total TTW Revenue||Revenue Per Ticket||Have Revenues Covered Costs?|
|Iowa||1||5||15,617||3,904||Ongoing costs only|
|Michigan||2||7||10,721||2,144||Ongoing costs only|
|New York||1||14||22,324||1,717||Ongoing costs only|
|Wisconsin & Illinois||1||64||57,761||1,605||No|
|National||1 & 2||257||150,000||769||No|
|Florida||1||50||38,553||701||Ongoing costs only|
|Sources: Program Manager data, interviews with EN representatives.|
a. Shared Practices/Features
Funds Available for Start-Up and Continuing Operations. All 10 ENs could cover TTW start-up costs with general revenues or funds from other contracts. They also relied on these funds to serve TTW beneficiaries, including those who did not generate payments, while waiting for TTW revenues. One EN used state mental health funds to serve beneficiaries and accepted Tickets only when a beneficiary was ready for employment, thus making it more likely that the beneficiary would generate TTW payments. Another EN had obtained a grant to cover start-up costs and used undesignated funds from other programs to serve beneficiaries. At two ENs, the staff responsible for TTW covered TTW costs by conducting vocational evaluations for insurance companies and the SVRA.
A Thorough Understanding of the TTW Program. The 10 ENs, particularly those that had accepted more than a few Tickets, have a thorough understanding of the program, including its philosophy and requirements. All 10 also have many years of experience helping people with disabilities find work—one EN official had even written a book on the subject. As another official put it, “Know the benefits, know the program, and know the people.”
Rigorous Screening of Potential TTW Clients. All 10 ENs stressed the importance of rigorous screening to ensure that beneficiaries who assigned their Ticket were appropriate for TTW and understood the requirements. One official said that the screening process should “ensure that they have a positive attitude and are committed to working at a level that will result in benefit loss.” Another official, representing an EN with 14 assignments and about $2,200 in total revenue, said, “Bringing the right people into the program and turning the rest away is the most essential thing we do to ensure TTW success.” The representative of another EN, with almost 100 Tickets, said, “ We have gotten much better at screening, and we’re trying to get better at targeting services to people who will get off benefits. We still get calls that are not appropriate for TTW, such as individuals who want to work part time, and we have stopped accepting them.” One official who instituted stringent screening felt torn about doing so. She said, “It seems against our mission, [which is] to help people with disabilities find work, but if we don’t screen people out, we will lose lots of money on this.” This agency refers beneficiaries it cannot serve to an SVRA.
When asked what criteria are most important in accepting a Ticket, one official cited “the beneficiary’s knowledge, skills, ability, and motivation.” Most of the 10 ENs do not exclude beneficiaries according to the type of disability, although one EN official said he excludes people he considers hard to place, such as those with serious psychiatric symptoms. A large, for-profit EN accepts Tickets only from individuals on DI because they are generally older and have an employment record. EN staff looks for beneficiaries who are job ready and refer individuals who need training or expensive job accommodations to the SVRA.
Use of the BPAO. Most of the officials we interviewed from the 10 successful ENs said they routinely refer beneficiaries to the BPAO before deciding to accept a Ticket. They want beneficiaries to thoroughly understand the ramifications of participation in TTW: finding employment that would pay enough to give up cash benefits. These ENs—who also discuss the impact of wages on cash benefits, housing, medical insurance, and other assistance with beneficiaries—operate under the principle that only when beneficiaries fully understand all of their options can they make a true commitment to TTW.
Use of Existing Staff to Serve TTW Beneficiaries. Given the uncertainty of the TTW revenue stream, several of the ENs added TTW responsibilities to the workload of existing staff instead of hiring new staff. This practice tended to restrict the number of Tickets an EN could accept but prevented subsequent layoffs when Ticket revenues were not generated at the expected level.
Strong Job-Placement Record. The 10 ENs are staffed by specialists with solid experience in helping individuals with disabilities find employment. Some even boasted of extensive, close connections to employers. In addition to job placement, one official said he provides job-development services—working with employers to create jobs—rather than just responding to advertised listings. He also provides interview coaching and serves as a liaison between the applicant and the employer. Another EN uses a network of specialists throughout the country to help beneficiaries find work. Still another EN, staffed by a job-placement specialist and a support-staff person, has placed beneficiaries into high-level positions, including a nurse and a judge. She attributes her success to her strong track record in working well with beneficiaries and employers. One EN’s website includes a list of companies, such as local colleges and medical facilities, that will potentially hire Ticket holders. Another EN official attributes success to the strong relationship with a local food plant that has hired a majority of its seven Ticket clients.
b. Other Practices
Accepting Tickets from the Agency’s Existing Client Caseload. Three of the ENs only accept Tickets from past and current clients when they are ready for full-time employment. These clients have a long-standing relationship with agency staff and are considered more likely to be successful. These ENs use other funds, such as Department of Mental Health or Mental Retardation revenues, to serve these clients until they are ready to earn more than the SGA level and give up their benefits. One EN official, who had accepted two Tickets and received $12,500 in TTW revenue, provides various levels of employment services, including enclave or group placement, transitional employment, supported employment, and independent community placement. Clients progress from one level of employment to another, using their Tickets only when they are ready to work enough hours to generate payments to the EN. The interviewed official from this EN said, “TTW is well-suited to individuals who have progressed through the other employment programs and are ready for independent placement.” The long-standing relationship between beneficiaries and agency staff also makes it easier for staff to obtain beneficiaries’ pay stubs.
Hiring TTW Beneficiaries to Work on Existing Agency Contracts. Two of the 10 ENs have used the Javitz Wagner O’Day (JWOD) program to hire TTW beneficiaries for work on federal contracts. Because the EN hires beneficiaries directly, collecting copies of pay stubs is no problem. These two ENs have accepted relatively small numbers of Tickets: five and seven, respectively.
2. Financial Viability
Because even relatively high revenues per Ticket may not make ENs profitable, we asked the 10 EN officials whether their TTW revenue had covered the costs of operating TTW, including marketing, screening, service provision, collecting pay stubs, and submitting payment documentation. Of the 10 EN officials interviewed, only one reported that her agency has made money on TTW. This agency accepted Tickets from two of its existing clients and received $12,500 in payments. Collecting pay stubs from these beneficiaries was not a problem because they still received other services from the agency, for which pay stubs were also required.
Four EN officials said that TTW revenues probably covered their ongoing operational costs but did not cover the outreach and intake costs, such as marketing to potential clients and screening callers. One of these officials said, “If I had to rely on TTW revenues during the first year, I would have starved.” He attributed his relative financial success to a long-standing relationship with the beneficiaries from whom he had taken Tickets and to the JWOD contract under which some were hired. Another EN representative said, “TTW pays for itself but it is not a money-maker.” This agency targets its services to those who truly want to leave the benefit rolls and makes extensive use of the BPAO before accepting a Ticket. The third EN has placed four people and received a few payments on three of them before they left their jobs or lost touch with the EN. These beneficiaries were already agency clients, and few additional resources were expended to help them find employment. The fourth EN for which TTW covers ongoing costs is more or less equivalent to a sole proprietorship. She attributed her success partly to her low operational costs. However, she consistently has trouble obtaining payments and has recently hired a bookkeeper to whom she is paying a commission for helping her to submit payment documentation.
For the remaining five organizations, being an EN has not proved to be financially viable. Reportedly losing money on the program, officials from all five said the most significant problem is getting payments. One EN official reported losing money despite having received a $100,000 start-up grant to develop a tracking system, introduce collaboration strategies, and prepare marketing materials. She estimated spending about $4,200 and receiving about $900 per Ticket, with about half of her costs associated with obtaining pay stubs and submitting payment claims. She said that her agency will not be able to sustain this level of commitment unless something is done to expedite the payment process. Another EN official said, “If I were paid in a prompt and proper manner, yes, my TTW costs would be covered by my revenues, but if I can’t get paid in a timely manner, then they aren’t.” He said he has spent at least $150,000 on TTW and received just $60,000 in revenues. His revenues would cover costs, he said, “only if SSA and MAXIMUS would fix the payment process to require less paperwork and pay in a more timely manner.” An official from a national EN estimated spending about $2 million on TTW and has received about $175,000 in revenues. He attributed the revenue shortfall to two factors: high operational costs associated with screening beneficiaries (this EN has received about 12,000 callers, only a small percentage of whom enter the program) and with submitting earnings documentation and lower-than-expected revenues associated with the reluctance of beneficiaries to submit pay stubs.
Officials from all five of the ENs that have reportedly lost money on TTW said it takes three to four months to get payments once proper paperwork is submitted. When asked about the COPP, these ENs asserted that they have tried to use it but that either the Program Manager requests pay stubs or the wages must be verified by SSA anyway, so it has not resulted in faster payments.
In sum, it appears that even these 10 ENs, selected from ENs nationwide that received the most revenue per Ticket, are having trouble making TTW a financially viable program. Only one of these ENs said that TTW fully covers its program costs, but even so, this EN had accepted two Tickets only, selecting them from its current client caseload. Fully half of the EN officials we interviewed said they were losing money. It also appears that ENs that accepted the most Tickets had the most difficulty making the program financially viable. Only one EN official who had accepted more than 50 Tickets said that the program covered her ongoing costs, and she is the one who works out of her home and has no employees, so she has low overhead costs. Both ENs with more than 200 Tickets have lost money on the program. So the lesson seems to be: Keep the TTW clientele small, and carefully screen beneficiaries to accept only those who present a low financial risk to the agency.
Despite revenue shortfalls, however, officials from some of the ENs were consoled somewhat by their belief that TTW has had a positive impact on beneficiaries and on organizations that chose to become ENs. They believe that the program can be the push that beneficiaries need to enter the employment arena. One official said, “It has encouraged people with disabilities to work and has encouraged agencies like ours to be entrepreneurial and to pursue funding from programs that are outcome-based.”
D. Summary and Conclusions
The findings from our review of the early experience of new Phase 3 ENs, the recent experience of longtime Phase 1 ENs, and the factors potentially associated with relative financial success present a sobering picture of EN involvement in TTW. The following are among the most significant findings reported in this chapter:
The early experience of Phase 3 ENs mirrors the experience of ENs in Phases 1 and 2. As we reported about earlier rounds of interviews with ENs, the Phase 3 providers see TTW as being aligned with their general mission and a potential source of (modest) additional revenues, but they have generally approached the program cautiously, not making it one of their major initiatives. The ENs have found TTW financially problematic, with operational costs far outweighing revenues. Officials lament the effort required to deal with Ticket holders who are not well-suited to the program; a very small proportion of those they screen become Ticket clients. Also hard to swallow are the difficulties associated with getting payments for clients who manage to achieve the desired employment outcomes. Some ENs have already stopped participating in the program. All of this experience closely parallels the experience of their predecessors.
The recent experience of Phase 1 ENs has not substantially improved over time. Most Phase 1 ENs first interviewed in 2003 have not become more involved in the program, and several have stopped participating altogether. Four of the 12 remaining ENs with Ticket assignments have yet to receive a single milestone or outcome payment. As things stand now, it is not realistic to assume that the Phase 1 ENs will be able to become more involved in TTW, as very few Ticket holders are contacting them and those who do are typically not seen as desirable clients (the ENs have learned to do tougher screening of callers). Funding to cover operational costs that may be incurred before a payment revenue stream might begin remains insufficient. ENs that have placed TTW clients continue to have a great deal of trouble getting the pay stubs needed for payment claims and view the process as unnecessarily taxing.
Financial viability and potentially promising practices. The large majority of ENs have received less than $500 per Ticket accepted; indeed, a majority have received no milestone or outcome payments whatsoever. Representatives from a sample of 10 relatively financially successful ENs, with TTW revenues ranging from $700 to about $6,300 per Ticket, described their agencies as having the following: funds available for start-up and ongoing operation costs, a thorough understanding of TTW, a rigorous screening process, and a strong job-placement record. For some, the key to “success” might have been focusing on pipeline cases and hiring the beneficiaries for internal positions. These practices may be worth considering, but we suspect that many less successful ENs nationwide would also claim to have done the same. More important, even relatively high revenues per Ticket are no guarantee of true financial success: only one of the 10 ENs reported making a profit, and half found that revenues did not cover their ongoing operational costs, let alone their early start-up expenditures.
The generally disappointing picture of EN involvement in TTW has not changed appreciably since TTW was initially rolled out over three years ago. Phase 1 ENs are struggling with the same issues in 2005 that they struggled with in 2002-2003. Phase 3 ENs seem to be having the same difficulties as their Phase 1 and 2 counterparts had before them. SSA has promulgated proposed regulations, discussed in Chapter IX, to address many of these concerns. SSA has also retooled the BPAO program as the Work Incentives Planning and Assistance program. This includes a plan to conduct local Work Incentive Outreach Seminars to educate beneficiaries on available work incentives and the Ticket program and connect them with ENs. This initiative may assist beneficiaries to be better informed and may reduce EN recruitment and screening costs. But none of the SSA or the Program Manager initiatives to date seem to have addressed the core TTW issues. Without substantial changes soon, to make the program easier to administer and more profitable, ENs will likely become less and less involved with TTW. And they will be even less of an alternative to SVRAs than they are now.
The final chapter in this section, Chapter XI, describes participation by the SVRAs and the changes that have been made to their operations as a result of TTW. The SVRAs play a significant role in TTW because they have accepted the vast majority of Tickets.
1Following the precedent used in selecting past samples of ENs, we chose a stratified random sample intended to ensure representation of ENs with varying degrees of experience in TTW: using data as of December 2004, we selected four ENs with fewer than 5 Ticket assignments, another four with 5 to 29 Tickets, and four with 30 or more Tickets. This sample of ENs is not statistically representative of all Phase 3 ENs; ENs with relatively high numbers of Tickets are overrepresented. (back)
2 During July-September 2002, Cornell and Lewin staff conducted site visits to 24 ENs operating in the 13 Phase 1 states: Arizona, Colorado, Delaware, Florida, Illinois, Iowa, Massachusetts, New York, Oklahoma, Oregon, South Carolina, Vermont, and Wisconsin. The preliminary process evaluation report (Livermore et al. 2003) describes the selection process and the findings from those interviews. (back)
3Information gained through second interviews of five single-state and three national ENs was presented in the initial evaluation report (Thornton et al. 2004). The ENs selected for those interviews were the ones with the highest numbers of Ticket assignments at the time. (back)