Statement of Carolyn Colvin,
Deputy Commissioner for Programs and Policy, Social Security Administration
before the House Committee on Ways and Means
Subcommittee on Social Security
April 24, 1997
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss the workloads at our Office of Hearings and Appeals (OHA), and the General Accounting Office's (GAO) findings on inconsistencies in disability decisionmaking at different levels of the adjudicatory process. As described below SSA is working on myriad initiatives designed to improve and streamline the appeals process. These include short-term initiatives designed to improve our processing time. as well as long range initiatives such as the implementation and testing of several elements of our disability process redesign.
DISABILITY CLAIMS PROCESS
Mr. Chairman, a brief overview of the disability process might help put this statement in context. The Social Security Act broadly defines disability as the inability to engage in any substantial gainful activity. The Act requires the Commissioner of Social Security to prescribe rules for obtaining and evaluating evidence and making disability decisions. The law further requires that initial disability determinations be generally made by State Disability Determination Services (DDSs) following Federal rules and guidelines and flnanced by Federal funds.
State DDS Process
In the State DDS, a team composed of a disability examiner and a physician (or sometimes a psychologist) makes the disability determination based on an evidentiary record. The State DDS requests medical evidence from the treating physician(s) and other sources identified by the claimant. If that evidence is incomplete or conflicting, the disability examiner may request a consultative examination from the claimant's treating physician or a physicianunder contract to the DDS to perform these examinations. If necessary, the examiner will also obtain evidence from the claimant's family, friends, or other third parties which will help explain bow the individual's impairment(s) affects his or her ability to work. The team then considers all medical and other evidence to make the disability determination; if the claimant is not disabled, the DDS releases a denial notice to the claimant.
A person who is denied disability benefits may pursue an appeal through three adminisrrative levels, one at the State DDS and two at SSA, and the Federal courts. The Act requires the Commissioner to provide a dissatisfied claimant the opportunity for a hearing before an SSA administrative law judge (ALJ), and allows for filing of a civil suit in Federal court after the Commissioner's final decision. SSA has also provided a reconsideration review at the State DDS prior to the hearing and a final review after the hearing by SSA's Appeals Council.
Reconsideration is the first administrative review for claimants and is a de novo (fresh) review of the claims file (including any new evidence) by a State DDS doctor/examiner team who did not participate in the original decision. The new team considers all of the evidence and issues a reconsideration decision.
The second level of administrative appeal is a de novo hearing before an administrative law judge (ALJ). The ALJ can call on medical and vocational experts to assist in evaluating the evidence. Usually the claimant will obtain legal representation at this point. Frequently new evidence is introduced by the claimant and his or her representative, often at the hearing itself. They are allowed to present testimony to the ALJ in person, to subpoena witnesses, and to obtain answers to interrogatory requests.
The final administrative appeal level is the Appeals Council (a group of 24 administrative appeals judges), which may gram, deny, or dismiss a request for review of the ALJ decision. It will grant review if the ALJ decision contains an error of law, is not supported by substantial evidence, involves a broad policy issue, or there appears to he an abuse of discretion by the ALJ. After an unfavorable Appeals Council decision or an Appeals Council dismissal, if the claimant is still dissatisfied, the next step is filing a civil action in Federal court.
Although there is one and only one standard for determining disability at all levels of the adjudicative process, there are some inconsistencies in disability decision making at different levels of the adjudicatory process. Before I cite the statistics on the different allowance rates at the DDS and OHA levels, it is important to note that more than 70 percent of the beneficiaries awarded disability benefits in 1996 were allowed by the DDS. Fewer than 30 percent were allowed at the ALJ hearing level or higher levels of appeal.
From the late 1970s and throughout the 1980, while the DDS allowance rates remained fairly stable at about 35 percent, the hearing level allowance rate fluctuated between about 48 to 59 percent. From 1990 to 1992 both the DDS and hearing level allowance rates increased primarily because of the effects of the Zebley Supreme Court decision. Although the DDS allowance rate decreased in 1993, to about 39 percent, the bearing level allowance rate remained at 67 percent through 1995. In contrast the DDS allowance rates dropped to the low 30 percent range during those years. However, in FY 1996 the bearing level allowance rate decreased to about 59 percent and has declined even further in the second quarter of FY 1997. Additionally, the DDS allowance rate has risen slightly.
A fundamental goal of SSA's effort to redesign our disability process is to make the correct decision as early in the process as possible. When developing our redesign strategy we recognized that in order to achieve this goal we needed to minimize those factors, within our control, which contribute to the variance in allowance rates between the DDSs and the ADs. To that end, we are implementing several initiatives designed to do just that. Collectively, we are calling iaese initiatives Process Unification. Our goal is to achieve similar results on similar cases at all stages of the process, through consistent application of laws, regulations, and rulings with minimal or no impact on program costs.
At the outset I want to stress that there is one and only one standard for determining disability at all levels of the adjudicative process. As I will explain below, the difference in the State DDSs and hearing level allowance rates is influenced by many different factors, including differences in the process, as described above. I am proud to report that through the Process Unification initiatives SSA is making significant strides toward minimizing these factors.
As an initial step, we have convened a group of Agency experts to identify policy issues that are critical to process unification. In addition. we have established a senior level group to oversee all aspects of process unification implementation.
Consistent Application of Policy at all Levels
A key element in process unifi cation is consistent presentati on of policy both in written instructions and in training. One of the factors we identified is the different approaches that the DDSs and ALJs take in evaluating claims which can lead to different conclusions in a particular case. These are areas which are highly complex, like how pain and related symptoms are evaluated, or what weight to give treating physician opinion, or deciding an individual's residual functional capacity.
Last year we published eight new Social Security rulings clarifying policy in several complex areas of disability evaluation, designed to assist all decision makers in applying the policy in the same way. To ensure consistent application of these rulings, we conducted--for the first time--joint training for SSA's 15,000 disability adjudicators. This training included DDS examiners, quality reviewers, senior attorneys, and ALJs as well as members of the Appeals Council and their staffs. Training commenced in July 1996 and was completed in February 1997. Each training class was comprised of representatives from all levels of our disability decisionmakers. The training allowed the participants to benefit from the experience of adjudicators at every level, to hear the same information from the same instructors, and to discuss and resolve any differences in interpretation.
Preliminary results are very favorable. Decisionmakers surveyed about the training generally praised the quality of the training and the substance of the new rulings. In fact, our internal stakeholders--DDS administrators, physicians, examiners and ALJs--think that process unification, besides being essential, is progressing positively.
Additionally , we have seen a recent shift in the pattern of allowances both by the DDSs and the ALJs. As mentioned above, the hearing level allowance rate declined to 59 percent in FY 1996, and data for the second quarter of FY 1997 indicate an increase in the initial and reconsideration allowance rates at the DDS with an accompanying further decrease in the hearing level allowance rate. Some of this likely reflects an impact from the process unification initiatives. The rulings published last summer and the joint training effort recently completed were expected to affect decision outcomes in these directions.
We plan to have similar joint training sessions on other complex policy areas in the future. Quality assurance efforts are in place to support and evaluate the training objectives.
Another initiative designed to improve consistency is the development of a single presentation of policy (the "one book") that is binding on all decisionmakers. This will ensure that different presentations of policies, although those differences may be slight, do not result in different outcomes.
Additionally, the process unification workgroups are continually looking at ways to improve our guidance in the areas of policy identified by an intercomponem panel, described below, as "problem areas". For example, we are in the process of preparing revised regulations clarifying residual functional capacity (RFC) assessments for less than a full range of sedentary work, a particularly difficult area of assessment.
Expanded Rationales at the DDS
In the early 1990s, in response to workload pressures caused by the skyrocketing number of new applications for disability benefits, we allowed the DDSs to use simplified rationales to document their determinations. Since the DDS decision is considered evidence at the hearing level, the simplified rationale did not provide the ALJs with the information they need ed to determine why the DDS denied a case. Therefore, in some cases, the ALJ was unable to give proper weight to the DDS determination while evaluating the evidence in file.
We are now requiring that the DDSs fully rationalize all of their reconsideration denials so that this valuable expe rtise is fully utilized at the hearing level. We are also preparing revised regulations clarifying the ALJ's responsibility for considering the medical opinions of DDS physicians.
Remands of Cases to the DDS
In reality, most ALJ allowances are based on a substantially different case. Thus, an ALJ decision may "allow" benefits but it does not necessarily "reverse" the DDS determination. A substantial majority of ALJ decisions are based on additional and different evidence from that available to the DDSs.
Also, the ALJ hearing is the first step of the claims process in which the claimants may appear in person before the decisionmaker to explain their impairments and present witnesses who can attest to the effects of their impairments. DDSs do not meet the claimant. In addition, more than 80 percent of the claimants are represented by an attorney or other individual at the hearing. Because the representative assists the claimant in obtaining new evidence to support the case and explaining the effects of the impairments to the ALJ, representation can have a substantial impact on the hearing decision.
There is also some anecdotal evidence that representatives wait until the hearing before submitting some of the evidence of disability.
Additionally, in some cases the person's condition has worsened, or the person alleges an additional impairment. Other cases, denied by the DDS based on expected improvement in the claimant's condition within 12 months of the onset of the condition, are allowed by the ALJ because improvement has not occurred since the DDS determination.
Therefore, as part of our Process Unification effort, the ALJ can remand to the DDS, for a new determination, those cases where new medical evidence is received prior to the hearing being scheduled. In many cases this will permit the DDS to change its denial to an allowance which will result in fewer cases going to hearing and decrease the time a claimant must wait for a favorable decision. Additionally, for cases that the DDS cannot allow, the ALJ will be reviewing the same claims file as the DDS and benefiting from the DDS's assessment of the new evidence.
Precedential Value to Court Cases
Because ALJ decisions are reviewed directly by the district and appellate courts, ALJs are more inclined than DDSs to be sensitive to how the courts review disability law and policy. Under SSA's acquiescence policy, a ruling is issued in all cases where the final circuit court decision conflicts with SSA policy and SSA decides not to appeal the decision to the Supreme Court. Our adjudicators are not authorized to give precedemial weight to the circuit court decision until these rulings are issued. SSA recently published a ruling reemphasizing our acquiescence policy, and one of the initiatives in Process Unification is to streamline the process for issuing these rulings.
Increased Review of ALJ Cases
Another key initiative in Process Unification is implementation of preeffectuation (PER) quality review of OHA allowances by the Appeals Council under its authority to conduct "own motion" reviews. The Office of Program Integrity Review (OPIR) (which is not a pan of OHA) will screen approximately 10,000 favorable hearings decisions each year, in addition to the ongoing quality review of ALJ allowance and denial decisions, and forward these cases to the Appeals Council if a potential error is detected.
While we are preparing a regulation describing this new process, we have begun a post-adjudicative "dry run" of OPIR's identification of cases for Appeals Council review. OPIR is providing feedback to the ALJs on cases wben they detect a possible error and an intercomponent panel is being established to review a body of "tough policy cases" wbicb can be used to identify problem areas berween the DDSs and ALJs and then to develop policy solutions. We have put the staffing and processes in place so that the official reviews can begin immediately after the regulation is published.
Rewards of Success
The benefits of successful process unification will be enormous. Obtaining the correct decision as early as possible in the process will greatly improve administrative efficiency, often avoiding an expensive hearing. If fewer claimants seek appeal, OHA workloads will decrease, and service to claimants will improve. Not the least benefit WI1I be that DDS examiners and ALJs can work together more harmoniously, and each will be more effective in their roles as decisionmakers.
Having said all this, however, it is important to note that the hearing process is different by design from the DDS process. In a program as important to the American public as this one is, it is imperative that the process not only be fair but also be seen as fair to those applying for benefits. Disability evaluation is a complex task requiring sophisticated, professional expertise. Claims appealed to the ALJ generally are the roughest to evaluate, the most complex and the most subjective. It is entirely appropriate for such cases to be heard in a more formal setting allowing presentation of testimony and questioning of witnesses. I want to emphasize that all of the SSA family (including the DDSs) is committed to Process Unification. We all recognize that the goals of process unification are important on their own, and they are essential for the success of our highest priority, a better and more efficient disability process.
At the same time that we want more consistency in our decisionmaking process, we also want accurate decisions. To achieve this goal, SSA's quality review activities comprise an integrated system designed to provide the Agency with a "report card" of management information (MI) about how different components within the disability decisionmaking process are doing in terms of well documented, policy-consistent correct decisions. At the State level, each DDS conducts inline quality reviews on samples of determinations before they are returned to SSA's field offices. Subsequently, SSA reviews, at the regional level, DDS determinations issued at the initial and reconsideration steps. When appropriate, determinations are returned to the DDS to either change the decision or obtain additional documentation. Some of the cases which are sampled at the DDS level and regionally also receive a review by a component at SSA Headquarters. Known as a consistency review, this assessment enables SSA to check on the consistency with which the regional review components are applying Agency policy. All of these reviews of DDS determinations are integrated in that there is a sharing of findings so that any adjustments in the reviews resulting from this data can be coordinated to achieve greater efficiency and an improved product through the planning and scheduling of DDS/SSA rraining initiatives.
At the hearing level, the history of quality review is more recent. Prior to 1993, there was no ongoing qualiry review of hearing decisions per se, and as a result, the Agency lacked a basic source of ongoing MI with respect to that level. To some extent, the Appeals Council was viewed as a quasi-quality review component because of its review of hearing decisions. However, its formal position as the last step in the administrative appeals process is separate and distinct from that of a quality review component.
In 1993, SSA began its first ongoing quality review of ALJ allowance and denial decisions. This sample is stratified 50 percent allowances and 50 percent denials. Valuable MI has been obtained which has resulted in both ALJ training and process unification initiatives. Moreover, this review also includes a review of the initial and reconsideration denial determinations which preceded each ALJ decision. This unique aspect of the review enables the Agency, for the first time, to obtain a multilevel longitudinal assessment of each case. In addition to identifying process unification issues arising between the DDS and the hearing level, this review enables SSA to ascertain whether hearing allowances were allowed at the earliest possible point in the adjudicative process, which is a fundamental goal of policy unification.
Transitioning to a New Quality Review Vision
With respect to the future of quality review within a redesigned process, SSA is developing a clear vision of what the future of quality review should be--a more comprehensive quality review program that better defines its quality standards, more effectively communicates them to employees in a consistent manner and continually provides employees with the means to achieve them.
SSA's existing quality review system bas always demonstrated the flexibility necessary to adapt to the new concerns andmany changes which have occurred in the disability program over the years. The enhancement of the bearing-level reviews is just one example of that flexibility. As SSA continues forward with its redesign activities, its quality review system will continue to be adaptable and meet the growing needs of the new processes which SSA introduces.
The enormous demands confronting SSA in the form of increasing disability workloads required us to evaluate policies and procedures which might be streamlined or altered to process the workloadmore efficiently. Record numbers of disability applications were received in the early 1990s, leading to skyrocketing bearing requests and ever larger OHA pendings. Additionally, we expect more than 125,000 additional hearings from now through FY 1998 relating to the legislation passed last year affecting individuals disabled due to drug addiction and alcoholism and children and non-citizens receiving Supplemental Security Income payments. SSA bas sought both short-term and long-term solutions to manage the unprecedented workload increases.
Short-Term Disability Project
SSA's Short-Term Disability Project was designed to achieve a substantial near-term reduction in both initial and appeals backlogs. From the inception of the Project in October 1994 through the end of FY 1995, the number of initial claims pending in the DDS was reduced by more than 120,000. Project initiatives designed for OHA had to await completion of hiring, redeployment, and training of staff, as well as approval of a new regulation. This initiative allowed us to increase hearings dispositions by almost 100,000 cases (and doubled the number of CDRs processed), while maintaining most of the progress made in basic DDS initial claims pendings.
Some of the more successful elements are being continued, including:
- expanding the prehearing conference procedures to ensure claimants' files are complete;
- granting temporary authority to experienced staff attorneys and paralegal specialists to make allowances in certain prehearing cases; and
- establishing screening units to identify appealed reconsideration decisions which can be allowed based solely on the record without additional development or a hearing.
In addition, SSA increased decision drafting capacity by detailing employees to decision drafting functions. Through September 1996. these employees produced nearly 58,000 decision drafts.
New AU Hires
In another effort to help reduce OHA pendings, over 300 ALJs were hired during the course of fiscal years 1994 and 1995, increasing the total number of ALJs on dury by over 25 percent to about 1050. New ALJ hires in FY 1996 essentially covered attrition, which is also the plan for FY 1997. In order to help with the new "welfare reform" legislation workloads, 60 ALJs are being hired this year in anticipation of FY 1998 attrition and will report in June.
Additionally, SSA is exploring ways to hire ALJs with subject matter-specific experience. These ALJs would be able to become proficient immediately and would help address the short-term need of "welfare reform" legislation.
The Plan for a New Disability Claim Process represents a long-term initiative to provide world-class service within available resource levels by redesigning SSA's disability process. It is expected to significantly reduce the time and resources needed to process disability cases, and is the Agency's highest priority. We are concentrating most of our redesign efforts on several key elements and have begun testing an integrated redesign process that incorporales many of these elements. While redesign's project life is expected to run over many years, SSA is moving to implement those aspects of the new process that can be implemented in the nearer-term.
Two of these projects are of particular pertinence to the appellate process. First is the Adjudication Officer (AO), currently being piloted in 25 sites nationwide. The AO will serve as the focal point for claimants who request a hearing and will have full authority to issue a favorable decision, if the evidence so warrants. Of the over 20,000 AO cases processed since testing began in November 1995, about 30 percent have been allowances, with the remainder being fully developed by the AO and forwarded to the ALJ for hearing. At slightly less than one case per day, productivity is lower than expected but improvements are anticipated. While quality review of allowances has found some problem areas that need work, the quality of the information being forwarded to ALJs is high.
Second is the Full Process Model, which tests several redesign features working together, including the AO, a pre-decision interview similar to the face-to-face interaction of a hearing, and elimination of the reconsideration step prior to the ALJ hearing. Testing began in eight states this month. Testing of an additional feature-elimination of mandatory Appeals Council review prior to the filing of a civil suit in Federal court--will begin after publication of a revised testing regulation.
In closing Mr. Chairman, I would like to thank the subcommittee for the opporrunity to address these important issues. We expect, based on the short-term efforts mentioned earlier and followed by improvements related to implementing the redesigned disability process, to increase bearings dispositions significantly.
While process unification has already accomplished a great deal, much still remains to be done. You may rest assured that SSA is fully commined to obtaining correct, similar results in similar cases at all stages of the disability claims process. Although all indicators suggest that our initial efforts are succeeding, SSA will continue to monitor carefully the results of all our initiatives.