VIII. Employment Network Availability and Ticket Acceptance
A major goal of the TTW program is to increase the supply of service providers that help disability beneficiaries find a job and leave the SSA benefit rolls. Toward this end, TTW hopes to increase overall access to employment services and the degree to which beneficiaries can choose the provider that best addresses their interests and needs. To increase the supply of providers, TTW introduced two new payment systems (milestone-outcome and outcome-only) that reward providers that help beneficiaries earn enough to leave the benefit rolls. SSA intended these new systems to offer a financial incentive for a wide array of providers to start serving beneficiaries and thereby increase beneficiaries’ choice of providers beyond the SVRAs that had essentially been the only providers who were reimbursed by SSA for assisting beneficiaries to move into employment.
Part 2 of this report (Chapters VIII through XI) focuses on the supply of service providers available to TTW participants. The first three of the four chapters in this part cover ENs and the extent to which TTW has increased the supply of non-SVRA providers.1 This chapter documents our findings on the overall supply of ENs throughout the United States and provides an overview of EN availability, acceptance of Ticket assignments, and receipt of Ticket payments. The findings are based on analyses of administrative data from SSA and the Program Manager. Chapter IX examines the financial incentives built into TTW payments, which are critical to the supply of service providers. It also reviews the new payment system proposed by SSA and the way in which that system improves the financial incentives for ENs. Chapter X rounds out the picture of ENs with information from interviews with 32 ENs in different phases of TTW implementation across the country. The final chapter in this section, Chapter XI, describes participation of the SVRAs and the changes they have made in their operations as a result of TTW.
Our findings generally substantiate findings documented in earlier evaluation reports.2 It appears that the TTW program has increased the supply of employment-support providers for SSA beneficiaries in only a limited way. More than 1,300 non-SVRA providers have registered as ENs and are now able to receive payments from SSA, but only about 40 percent of them have accepted a Ticket, and only about 20 percent have accepted five or more Tickets. Most beneficiaries live in large metropolitan areas and most active ENs are found in these areas as well. In large sections of the country with relatively few beneficiaries, however, there are no ENs at all, or no local EN has taken a Ticket. As a result, while about 35 percent of beneficiaries live in areas with at least five ENs that have taken Tickets in their county, those beneficiaries live in a relatively small number of counties. Three-quarters of beneficiaries live in counties with at least one EN that has taken Tickets, but that leaves one-quarter in counties not served by any local ENs that are active in the Ticket program. Interviews conducted for this and other reports (see Chapter X and Thornton et al. 2004, 2006) indicate that the vast majority of these providers served beneficiaries before they became ENs and have not significantly changed their operations or their client base in response to TTW. These providers are now eligible for SSA payments, but many of them would have served interested beneficiaries even without TTW, in many instances under contract to an SVRA.
While the number of ENs has grown slowly in recent months, payments to ENs have increased substantially, particularly in Phase 3 states. The number of ENs receiving payments has increased as well. By July 2005, SSA had made more than $2.5 million in payments to ENs, and 41 percent of ENs who had accepted a Ticket had received at least one payment. Yet, although TTW has been operational for more than three years, only about 18 percent of ENs enrolled in the program and less than half of ENs who have accepted a Ticket have received any payments. Payment amounts remain relatively low and appear concentrated among a few providers.
It appears that the lag between the month in which a beneficiary has enough earnings to generate a payment (“earnings month”) and the month in which the EN receives payment (“payment month”) has dropped to a median of about six months. First payments took longer to process, but the payment lag time is becoming progressively shorter as ENs, the Program Manager, and SSA refine their administrative processes. Nevertheless, the payment lag is substantial and is likely to dilute the financial incentive TTW provides to ENs.
A. Overview of EN Availability and Ticket-Taking Behavior
This section reviews the availability of ENs and considers whether the supply of rehabilitation providers has actually increased as a result of TTW. In our last evaluation report, we noted that the number of ENs continued to grow in 2004, reaching 1,164 at the end of June, but the pace of growth had slowed substantially from what is was in 2003. The slower pace of EN enrollment in 2004 was, according to the Program Manager, the result of “market saturation” and increasing difficulty in selling what Program Manager staff report to be an “unpopular” program. In our earlier report, we also identified some factors that have made it harder to attract additional ENs into the program: the lackluster financial performance of the initial EN cohort, a growing sense among providers that relatively few beneficiaries pursue employment aggressively enough to leave the benefit rolls and therefore enable ENs to get paid, and the perceived complexity of the program itself. These trends appear to have continued in 2005 and are explored more fully in Chapter X.
Despite the reports of growing difficulty in enrolling providers in TTW, EN enrollment continues to climb steadily, albeit modestly, over time (Exhibit VIII.1). In this exhibit, the vertical lines show the months Phase 1, Phase 2, and Phase 3 began distributing Tickets to beneficiaries. In June 2005, the number of ENs had increased to 1,362, representing an increase of 198, or less than six percent during the past year. Although a more modest rate of growth is to be expected after rollout is completed, other patterns combine to demonstrate that the supply of ENs remains relatively low.
|Source: EN Provider File, August 2005.|
A small number of ENs have continued to drop out of the program over time (Exhibit VIII.2). During the past year, 19 additional ENs, or about one for every 10 new ENs, have stopped participating. SSA staff reports that a total of 108 ENs, or about eight percent, have dropped out since the rollout. Although most ENs officially dropped out in February 2005, it appears that they actually withdrew earlier, but their contract terminations were not processed by SSA until February. Officials from the Program Manager reported six more drop-outs in June and July 2005 that had not been processed when we collected data for this report.
Beyond actual EN terminations, there is the disturbing fact that, as reported in our last evaluation report (Thornton et al. 2006), only about 40 percent of ENs have accepted any Ticket assignments (Exhibits VIII.1 and VIII.3); essentially, 60 percent of “enrolled” ENs are not actively participating. Only about 4 percent of ENs had accepted 30 or more Tickets. This pattern of Ticket assignments means that Tickets are concentrated in a small number of ENs. This pattern is only a slight improvement over the situation reported in July 2004, when 40 percent of ENs had accepted any Ticket assignments, less than 2.7 percent had accepted more than 30 Tickets (with 0.7 percent having accepted 100 or more Tickets (Thornton et al. 2006).
|Source: EN Provider File, August 2005.|
As noted in previous evaluation reports (Thornton et al. 2004, 2006), ENs show a strong preference for the milestone-outcome payment system; this preference appears to be unchanged for 2005. Although the total amount of revenue ENs would receive under the milestone-outcome system is lower than under the outcome-only system, interviews with EN officials reveal that they select the former option because they receive payments earlier, and the first few milestone payments are higher than outcome-only payments. (See Chapter IX for a discussion of financial incentives for ENs under the new payment systems and Chapter XIV for a discussion of payments generated by participants).
|Number of Tickets||Number of ENs||% of ENs|| % Selecting
|% Selecting Outcome-Only|
|100 or more||15||1.0||80.0||20.0|
|Source: Ticket Research File, December 2004, and EN Provider File, August 2005.|
To explore EN availability and the choice Ticket-eligible beneficiaries have in ENs from another perspective, we looked at the number of counties in which at least one EN had taken a Ticket from a Ticket-eligible beneficiary who lived in that county. SVRAs serve all counties in a state, so the presence of at least one active EN suggests a minimal level of choice. Clearly, this is a very approximate definition of choice. It can overstate choice because an EN that has taken a Ticket in a county may not accept Tickets from other Ticket-eligible beneficiaries with different impairments or job prospects. It can also understate choice because the few ENs that operate nationwide may be available to accept a beneficiary’s Ticket even if they have not previously accepted Tickets. Nevertheless, it seems likely that the TTW designers envisioned much more for Ticket-eligible beneficiaries than the choice between one EN and the SVRA.
Exhibits VIII.4 and VIII.5 compare counties where Ticket-eligible beneficiaries live with counties where ENs have accepted a Ticket. ENs have accepted Tickets primarily from eligible beneficiaries in counties located along the Pacific Coast, the Southwest, Florida, New England, the Middle Atlantic States, the Chicago area, and a few other densely populated areas of the country. Exhibit VIII.4 shows that a very large number of Tickets were mailed to these counties that have active ENs, with 10,000 to 250,000 Tickets mailed to several counties in these areas. However, this exhibit also shows many counties in the Great Plains, the Midwest, and the South to which 100 to 10,000 Tickets were mailed. Exhibit VIII.5 shows that in many of these counties, no ENs accepted Tickets. If we compare the two maps, Ticket beneficiaries in many counties may not have much real choice of providers under TTW.
Exhibit VIII.6 shows the counties with different levels of active ENs. When viewed from the perspective of counties, it appears that more than two-thirds of the counties have no active EN, and about one-quarter have one or two active ENs. Only 100 counties have five or more ENs that have taken a Ticket. But those counties contain a disproportionate share of the Ticket-eligible beneficiary population. As a result, 35 percent of Ticket-eligible beneficiaries live in counties with five or more active ENs, and more than half of Ticket-eligible beneficiaries have a choice of at least two ENs in addition to their SVRA.
|Source: Ticket Research File, December 2004.|
|Source: Ticket Research File, December 2004|
|Number of ENs Serving a County||Number of Counties from Which an EN Has Accepted a Ticket||Percent of Counties from Which an EN Has Accepted a Ticket||Number of Ticket-eligible Beneficiaries Living in Counties with Each Level of EN Activity||Percent of Ticket-eligible Beneficiaries Living in Counties with Each Level of EN Activity|
|5 or more||100||3.2||3,568,890||35.2|
Source: Ticket Research File, December 2004.
Note: An EN is considered to serve a county if a Ticket mailed to that county has been assigned to the EN.
This concentration of the beneficiary population and EN activity suggests that the number of beneficiaries in an area needs to be relatively high for a provider to find it lucrative to participate in TTW. For example, if there are 1,000 beneficiaries in a county, we would expect, on average, that only 10 would assign their Ticket. That level of beneficiary demand is not likely to encourage providers to participate actively in the TTW market. They may decide to take a Ticket or two as a supplement to their regular operations, but it seems likely that the market for providers in a county is not likely to be very active unless there are 20,000 or more beneficiaries.
B. Payment Receipt Under the New Payment Systems
1. EN Payments Through July 2005
The number of ENs receiving payments and the amount of these payments increased significantly from July 2004 to July 2005, and it appears that this trend is continuing (Exhibits VIII.7 and VIII.8). As of late July 2004, a cumulative total of about $900,000 in milestone and outcome payments had been made to 142 ENs (or about 31 percent of ENs accepting Tickets) for Ticket holders who had returned to work (Exhibit VIII.7).3 By July 2005, SSA had made more than $2.5 million in payments, and 41 percent of ENs who had accepted a Ticket had received at least one payment. This represents a 32 percent increase in the fraction of ENs getting a payment.
Most payments during the 2003-2004 reporting period went to ENs for Ticket holders residing in Phase 1 states, which was to be expected because ENs in those states have generally been taking Tickets longer than those in Phase 2 states (Exhibit VIII.8). In the last 12 months of the observation period, as total payments to ENs have increased, so has the share of those payments made to ENs serving beneficiaries in Phase 3 states. Payments to ENs serving beneficiaries in Phase 1 and Phase 2 states have also increased somewhat, but not nearly as much as in Phase 3 states. Monthly payments have dropped in the past four months, despite a sharp spike in payments in April 2005, but this pattern is consistent with similar declines in the summer months of previous years and may not indicate a long-term trend.
|Source: EN payment data as of July 26, 2005.|
Although TTW has been operational for more than three years, only 39.6 percent of ENs have taken a Ticket, and only 41.5 percent of these ENs received a payment (Exhibit VIII.8). It is possible payments were due to some ENs with Ticket assignments but no payments through July 2005 but that they had not yet received payments because of a lag time. (See Section 2 below for more information on payment lag time.) Payment amounts per EN also remain relatively low. Among providers that have collected a payment, more than half have yet to collect $5,000. Only a few ENs have received substantial payments from TTW; 19 have collected a total of $20,000 or more, an increase from only 7 providers collecting that much in July 2004.
|Total Value of EN Payments||Number of ENs||Number of ENs a||Percent of ENs with Ticket Assignments|
|Phase 1||Phase 2||Phase 3||All Phases|
|$20,000 or more||7||3||1||19||3.2|
Source: Ticket Research File, March 2004, and EN payment data as of July 26, 2005.
aIncludes national ENs and multi-state ENs that serve beneficiaries in different phases.
We conducted a separate analysis of Tickets assigned under the new payment systems by December 2003 to determine the extent to which Tickets eventually generate revenue for ENs, including payments through July 2005; of course, some Tickets will generate additional payments after this period. Again, we found that payment receipt was concentrated among a few ENs, reflecting the concentration of Ticket assignments (Exhibit VIII.9). Only 35 percent of ENs had accepted Tickets during that period. About 39 percent of all Tickets were assigned to the 8 ENs with more than 100 Tickets each (0.7 percent of all ENs). These same ENs had 35 percent of the Tickets that generated payments and received 41 percent of all Ticket revenue. All of these ENs had received payments.
It is likely that EN revenues on these same Tickets will substantially increase in the future, as shown by a comparison of the last two rows in Exhibit VIII.9. Cumulative payments more than doubled in the last 12 months of the period for which we have data (that is, August 2004 through July 2005). Cumulative payments for these Tickets approximately 3.5 years after the start of the rollout were $303 per Ticket versus $140 per Ticket at the end of 2.5 years. Mean payments for those ENs that received payments increased somewhat less than proportionately, reflecting a small increase in the percentage of ENs with at least one payment .
The fact that a few providers are receiving a very large share of payments is almost entirely a result of the fact that they have a larger share of all Tickets, not because their clients are achieving substantially better earnings outcomes than others. Revenue per Ticket for the largest providers is essentially the same as the overall average (Exhibit VIII.9). Although their revenue per Ticket with payments is somewhat above average, this is offset by a below-average percentage of Tickets with payments.
Number of Assignments
Percent of ENs
Percent of ENs Receiving Payments
Percent of Tickets with Payment
Mean for ENs with Payments
Mean for All ENs in Category
Per Ticket with Payment
|to July 2005||18.6||14.5||12.9||9,719||1,408||2,347||303|
|to July 2004||18.6||12.4||10.3||5,285||653||1,365||140|
|Source: Ticket Research File, March 2004, and EN payment data as of July 26, 2005.|
2. Payment Lag Time
Payment lag time is defined as the number of months from the month in which a beneficiary has enough earnings to generate a payment (“earnings month”) to the month in which an EN receives the payment (“payment month”). This interval comprises the time it takes for:
The provider to receive all earnings documentation from the beneficiary
The provider to submit a payment claim to the Program Manager
The Program Manager to submit the information to SSA
SSA to verify documentation (if necessary) and pay the EN
However, we can provide statistics only on total payment lag time because SSA administrative payment records include two dates for each payment: earnings month and payment month. While we do not have data on each component of the payment lag, the statistics for total lag time are revealing in terms of the extent to which ENs must wait for payments. The statistics also tell us something about whether lag time is declining over time, as ENs, the Program Manager, and SSA gain experience.
This analysis is limited to earnings months through June 2003 because many payments generated by earnings after that month were likely to be pending or unreported in the July 2005 extract, which was used for this report.4 By July 2005, 25 months had passed since June 2003, so it is unlikely that pending payments have a substantial influence on the statistics. The analysis includes only claims filed under the two new payment systems by ENs or SVRAs.
For the earnings months in this period, approximately half of all payments were made within six months of each earnings month (that is, the median processing time was six months), and just over three-quarters of all payments were made within 12 months (Exhibit VIII.10). First payments took longer to process; median processing time for those payments was almost nine months, and by the end of 12 months, only 69 percent of first payments had been made.
Source: Ticket Research File, March 2004, and EN payment data as of July 22, 2005.Note: Based on payments through July 2005.
A first payment claim received by SSA is generally referred to the field office, where staff must often conduct a work CDR to document beneficiary earnings so the provider can get paid. This involves verifying wages by obtaining copies of pay stubs or other documentation of earnings from the beneficiary or from the employer—generally a very time-consuming process. Although some of this work does not need to be repeated for subsequent claims, subsequent payment requests do generate additional issues that must be researched by the field offices. However, processing time for later payments is generally shorter. Learning on the part of the provider, the Program Manager, and, perhaps especially, SSA also presumably reduce the processing time for later payments.
Progress was made in reducing the payment lag time over the period analyzed, as shown for first payments in Exhibit VIII.11. Median lag time for first payments dropped from 10 months for earnings months in the period March 2002-June 2002, to less than 8 months for earnings months July 2002-December 2002, and to under 7 months for earnings months January 2003-June 2003. Recently, SSA has taken measures to address the lengthy median processing time by generating monthly alerts to the FOs on Ticket issues that are 60 days old or older
Source: Ticket Research File, March 2004, and EN payment data as of July 22, 2005.
Note: Based on payments through July 2005.
In 2003, SSA introduced the Certification Outcomes Payment Process (COPP) to reduce processing time. (See Chapter X for the EN perspective on COPP and Chapter XII for SSA’s perspective.) We do not have enough data to look at processing time for all Tickets submitted under the COPP system because it was not in place for enough months before the time the July 2005 extract was created. Nevertheless, we can look at the time required to process all claims that were paid under COPP. We include non-COPP payments for claims that meet COPP eligibility requirements in the analysis even though the provider elected not to use COPP; COPP can only be used for outcome payments and only after three other payments have been made on the Ticket.
The first payment for a COPP claim was made in November 2003, and the first earnings month for which a payment was made under COPP was June 2003. Through July 2005, a total of 457 payments were made under COPP, or 8.3 percent of all claims other than first claims paid during that period. The providers’ use of COPP is increasing but still appeared low through the end of the observation period; of the 1,401 claims other than first claims paid in May, June, and July 2005, 14.1 percent were COPP claims.
COPP claims are processed much more quickly than non-COPP claims (Exhibit VIII.12). Based on all COPP payments through July 2005, 63 percent of payments for COPP claims were made within three months after the earnings month, compared with just 20 percent of non-COPP claims (exclusive of first claims). After six months, 88 percent of COPP claims had been paid, compared with just 54 percent of non-COPP claims, and essentially all COPP claims were paid within 12 months, compared with 87 percent of non-COPP claims. The mean processing time for the COPP claims is 3.4 months, compared with 7.2 months for non-COPP claims.
The impact of COPP on processing time might be substantially different from the differences in processing times found for these samples. It might be, for instance, that providers are more likely to use COPP for claims that would be relatively easy to process anyway, in which case the impact would be less than the differences found. Another reason for a smaller impact is that the samples used reflect all claims paid during a period of payment months, as opposed to all claims filed for a period of earnings months. The non-COPP payments with the longest processing time are for earnings months that occurred before COPP was available, possibly reflecting processing issues that have since been resolved.5 Better estimates of the impact of COPP on processing time can be produced in the future once currently pending claims have been processed.
Chapter IX continues the exploration of the supply of service providers by examining the financial incentives built into TTW payments. It also reviews the new payment system proposed by SSA and the way in which that system improves the financial incentives for ENs.
|Note: Includes only non-COPP claims that could have been filed as COPP claims. See text for details.|
1 TTW allows SVRAs to accept Tickets under the new payment systems and therefore to act as an EN. Nevertheless, we focus on ENs other than SVRAs in order to focus on the extent to which TTW has expanded the supply of employment-support providers beyond the SVRAs. (back)
5 When we exclude claims for earnings months before June 2003, the first earnings month for which a payment was made under COPP, from the non-COPP sample, the mean processing time for that sample drops to 6.5 months. Both this mean and the COPP mean would increase if we knew the processing times for the pending claims from these earnings months and added them to the sample. We do not know which mean will increase by more. Longer processing times for the non-COPP claims imply the non-COPP mean would increase more, but the fact that a larger share of the COPP claims are for more recent earnings months implies the opposite. (back)