Statement of Susan Suter
Associate Commissioner for Employment Support Programs Social Security Administration Before the House Committee on Ways and Means Subcommittee on Social Security
May 19, 2009
Mr. Chairman and Members of the Subcommittee:
Thank you for the opportunity to discuss our efforts to help beneficiaries with disabilities return to work. We have been committed to encouraging beneficiaries to return to work since the disability program1 began more than 50 years ago. Thanks in large part to this Subcommittee's leadership, Congress expressed its bipartisan support for expanding these efforts by passing the Ticket to Work and Work Incentives Improvement Act of 1999 (Ticket Act) . Among other provisions, this legislation established the Ticket to Work program (Ticket program), created two programs to help beneficiaries understand the work incentive rules, and authorized us to test the effect of certain changes in the disability program on beneficiaries' work activity.
We serve a diverse population of beneficiaries with disabilities through the Social Security Disability Insurance (SSDI) and the Supplemental Security Income (SSI) programs. SSDI and SSI beneficiaries represent a wide range of age groups and have different impairments, levels of education, work experience, and capacities for working. Assisting beneficiaries to return to work has been challenging, and helping these beneficiaries take advantage of employment opportunities remains one of our highest priorities.
Today, I will update the Subcommittee on the Ticket program, discuss the demonstration projects currently underway, and briefly discuss one of our program integrity measures. We believe recent changes to the Ticket program ensure that all beneficiaries have the opportunity to engage in productive work.
The Ticket to Work Program
The Ticket program is an important part of the Social Security Act's comprehensive set of work incentive policies designed to help beneficiaries with disabilities return to work. Other examples of work incentives include the Trial Work Period, which allows SSDI beneficiaries to test their work abilities for 9 months, and Expedited Reinstatement, which enables us to quickly reinstate benefits to beneficiaries who are unable to sustain their return to work. Our Red Book (which can be accessed online at http://www.socialsecurity.gov/redbook/ ) provides basic explanations for all of our work incentives.
Prior to the Ticket program, State Vocational Rehabilitation (VR) agencies were the primary entities that provided return-to-work services at no cost to beneficiaries. We would reimburse the State VR agency's costs if a beneficiary it served engaged in substantial gainful activity (SGA) for 9 consecutive months. (SGA is significant work normally done for pay or profit. For example, if a non-blind beneficiary earns above $980 in a month this year, we consider that beneficiary to be engaged in SGA. We adjust the SGA dollar amount every year.)
The Ticket Act represented an historic milestone. It was the first time Congress explicitly recognized that while many people receiving disability benefits from Social Security want to work and could become able to work, they face a number of significant barriers that prevent them from reaching their employment goals. Congress established the Ticket program to expand the universe of service providers and to provide beneficiaries choices beyond the State VR agencies in obtaining the services and supports they need to find, enter, and maintain employment.
We do not expect the Ticket program to help every beneficiary return to full-time employment. However, even if the Ticket program were to help only a small number of beneficiaries return to work full-time, Congress noted that it could generate enormous savings. In 1999, Congress noted in the Ticket Act's findings that, if the number of beneficiaries who returned to full-time employment increased by only one-half of 1 percent, there would be $3.5 billion in savings to the Social Security Trust Funds and the general fund of the Treasury.2
Ticket Program Overview
Under our current Ticket program rules, an SSDI or SSI beneficiary receives a Ticket to Work (Ticket) if he or she is at least 18 years old and younger than 65. We enter into contracts with Employment Networks (EN), which are qualified State, local, or private organizations that offer employment support services. We also contract with State VR agencies acting as ENs. We have also been working closely with the Department of Labor to expand the involvement of workforce investment boards and One-Stop Career Centers in becoming ENs.
Beneficiaries, ENs, and State VR agencies voluntarily participate in the Ticket program. A beneficiary who receives a Ticket may choose to assign it to any EN or to the State VR agency. An EN may decide whether to accept a Ticket from the beneficiary. Once a beneficiary assigns a Ticket to an EN, the EN may supply various employment support services to assist the beneficiary in obtaining, regaining, or maintaining self-supporting employment. Providers may supply these services directly or by entering into agreements with other organizations or persons to supply the appropriate services. The beneficiary receives the services at no charge.
We pay ENs based on their success in assisting beneficiaries secure and maintain employment. An EN may elect to receive these payments under one of two systems. Under the Outcome Payment System (Outcome System), an EN receives a payment for each month in which a beneficiary it serves does not receive cash benefits due to work or earnings -- up to 60 months for SSI beneficiaries and up to 36 months for SSDI beneficiaries. Under the Outcome-Milestone Payment System (Milestone System), an EN receives a payment when a beneficiary it serves reaches one or more milestones toward self-supporting employment. The EN will also receive reduced outcome payments for each month -- up to 60 months for SSI beneficiaries and up to 36 months for SSDI beneficiaries -- that a beneficiary does not receive cash benefits because of work or earnings. An EN can receive up to 22 milestone payments for SSI beneficiaries and up to 15 milestone payments for SSDI beneficiaries.
Ticket Program Regulations
On December 28, 2001, we published our initial regulations implementing the Ticket program. Under those regulations, an EN outcome payment was worth only 40 percent of an average SSDI or SSI benefit. An EN that opted to receive payments under the Milestone System was limited to four milestone payments. Furthermore, an EN would receive these milestone payments only when a beneficiary it served engaged in SGA.
We rolled out the Ticket program in phases; the implementation began in February 2002 and ended in September 2004. Early experience showed that the Ticket program did not meet expectations. The program did not increase beneficiary choice or increase work outcomes as much as we would have liked. Through our conversations with members of the advocacy community and the evaluations carried out for us by our contractor, Mathematica, we learned that the program had not developed the vibrant market of ENs envisioned by Congress. In fact, by 2005, very few ENs were accepting Tickets.
Experience revealed that our initial Ticket regulations contributed to this problem. The regulations set the EN milestone and outcome payment amounts too low and set the bar for receiving those payments too high. This unattractive combination discouraged service providers from becoming ENs. As a result, beneficiaries in many areas did not have an EN to provide them with services, and the overwhelming majority of beneficiaries with disabilities receiving services received them from traditional State VR agencies.
To address these concerns, we published new Ticket program regulations on May 20, 2008. These rules became effective on July 21, 2008, and made several key changes to the Ticket program. We created a more attractive EN payment structure. The 2008 regulations increased the value of outcome payments (they are now worth 67 percent of an average SSDI or SSI benefit) and increased the value of milestone payments (increasing the total payout under the Milestone System relative to the Outcome System). The new Ticket regulations increased the number of milestone payments an EN can receive from 4 for serving any Ticket beneficiary to 15 for SSDI beneficiaries and 22 for SSI beneficiaries. The regulations also allow an EN to receive the first four milestone payments when a beneficiary it serves earns $700 in a month, which is below the SGA level. We expect this payment structure will entice more service providers to become ENs.
In addition, experience showed that many beneficiaries wanted to ease their way back into the workforce via part-time work. However, since the previous EN payment structure based payments on attainment of SGA, ENs were reluctant to accept Tickets from beneficiaries seeking part-time employment. The current EN payment threshold removes previous disincentives to serve these beneficiaries.
We also increased available services by permitting State VR agencies to work collaboratively with ENs in an arrangement known as Partnership Plus. This “team” approach allows State VR agencies to provide training and job placement services and then refer beneficiaries to ENs, who can offer job retention supports. This initiative increases the likelihood that beneficiaries will keep working and leave the rolls. In addition, the new regulations abbreviated the process for the One-Stop Career Centers to become ENs.
Prior to publishing the new Ticket program regulations, we identified three key indicators to assess the degree to which the new regulations addressed the concerns we had heard. We measure success by: 1) the number of new EN contracts, 2) the number of beneficiaries accessing EN services, and 3) the number of beneficiaries entering the workforce. In the 11 months since the new rules became effective, our early data show a promising trend for these indicators. Compared to the 11 months preceding the new Ticket rule's publication, the number of new EN contracts has increased from 5 to 34 per month. At the end of last month, there were over 1,300 ENs. Furthermore, the number of beneficiaries assigning their Tickets has increased from 332 per month to 867, and the number of job starts has increased by 83 percent. So far, it looks like the new regulations have truly hit the mark.
Ticket Program Outreach Activities
In addition to revising our regulations, we have recruited more ENs. Through our marketing contractor, Cherry Engineering Support Services, Inc. (CESSI), we are contacting ENs that have gone 6 months without taking a Ticket to determine whether we can resolve any problems. CESSI also holds State and regional “Ticket Express” conferences to recruit new ENs and share best practices. With CESSI's support, we have also increased our conference attendance, EN training, and frequency of webinars to recruit ENs.
We have extended outreach activity to beneficiaries. For example, we created the Work Incentive Seminar (WISE) event to encourage beneficiaries to attempt to work. WISE events educate beneficiaries and their families about work incentives. Employers, ENs, State VR agencies, Protection and Advocacy agencies, and other employment support providers attending these events share information with beneficiaries about available services and employment opportunities in their communities. In 2008, we conducted 111 WISE events, and these events have been well attended. Working with the Department of Labor, 40 state workforce investment entities have become ENs, and they provide return-to-work services in 119 One-Stop Career Centers. In addition, approximately 300 new organizations are in the process of becoming ENs.
We strive to give beneficiaries with disabilities the robust return to work services they need and deserve. We are optimistic that the new Ticket rules, coupled with our expanded outreach activities, will foster the level of beneficiary work activity we envisioned when Congress passed the Ticket Act.
WIPA and PABSS
The Ticket Act created two programs to supplement the assistance available at our field offices and help beneficiaries understand the work incentive rules. The two programs provide grants to organizations with ties to the disability community at the local level. All SSDI and SSI beneficiaries may use these services.
Work Incentives Planning and Assistance (WIPA)
WIPA grantees help beneficiaries with disabilities understand our work incentives and their effect on disability benefits. Specifically, WIPA grantees provide benefit planning and assistance, job placement, and career development. By working with a WIPA grantee, our beneficiaries can make informed choices about work. WIPA grantees also conduct the WISE events.
We currently have 104 community-based cooperative agreements that ensure the availability of WIPA in all 50 States, the District of Columbia , and U.S. Territories.
Protection and Advocacy for Beneficiaries of Social Security (PABSS)
The PABSS is a network of Protection and Advocacy projects in all 50 States, the District of Columbia , U.S. territories, and the tribal entities. This network represents the Nation's largest provider of legal-based advocacy services for persons with disabilities. The 57 PABSS advise beneficiaries about obtaining vocational rehabilitation and employment services. They provide advocacy and services beneficiaries may need to secure, maintain, or return to gainful employment.
For example, PABSS projects have helped beneficiaries regain employment. In one case, a beneficiary with epilepsy lost his job as a cashier after suffering an on-the-job seizure. He filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC) and sought representation from PABSS for the EEOC mediation. The PABSS appeared at the mediation and was able to negotiate a settlement that allowed the beneficiary to return to his job.
Expiring Grant Authority
The Ticket Act initially authorized appropriations for these grants for each fiscal year (FY) through FY 2004. The Social Security Protection Act of 2004 extended this authorization through the end of the current fiscal year. Unless we receive reauthorization, funding for the WIPA program will end on March 31, 2010, and funding for the PABSS program will end on November 30, 2009.
Both the WIPA and PABSS programs provide services to beneficiaries seeking to return to work or maintain their current employment. If after a review of these programs a decision is made to pursue reauthorization, we will work with Congress to reauthorize funding.
Disability Demonstration Projects
The Ticket Act authorized us to test how certain statutory changes to the disability program would affect beneficiary work activity. Pursuant to this authority, we initiated four demonstration projects—the Benefit Offset National Demonstration (BOND), the Mental Health Treatment Study (MHTS), the Accelerated Benefits Demonstration (AB), and the Youth Transition Demonstration (YTD). Each project has distinct test objectives. The following sections provide a brief overview of our progress in each project.
Benefit Offset National Demonstration
Because SSDI beneficiaries lose all of their cash benefits for any month in which they engage in SGA after the trial work period, they are often reluctant to attempt to work. The BOND project tests the effects of replacing this “cash cliff” with a benefit offset that reduces SSDI benefits $1 for every $2 a beneficiary earns above the SGA threshold. This benefit offset takes effect after the beneficiary completes the trial work period and subsequent 3-month grace period. We also offer certain BOND participants enhanced work incentives counseling. Based on data from this project, we will estimate the effect of the benefit offset and counseling on beneficiary work activity.
This demonstration consists of two phases. In the first phase, which lasted from August 2005 to December 2008, we conducted a four-State pilot. We used our experience with the pilot to strengthen the design for the BOND. The pilot also helped us design and build a stand-alone agency system that partially automated the benefit offset calculations and notices, which currently have many manual elements and are very labor-intensive. We have also received some preliminary findings for this pilot and expect to complete a final evaluation report this June.
In the second phase, we will conduct a more expansive demonstration in sites across the Nation. We awarded a design contract for this phase of the BOND to Abt Associates in 2004. We approved the design in September 2008, and we will award an implementation and evaluation contract for this project no later than September 2009.
Mental Health Treatment Study
About 27 percent of all SSDI beneficiaries have severe mental illness. Many persons with mental illness respond well to treatment and want to work. The MHTS tests the effectiveness of providing medical care and employment supports to a sample of SSDI beneficiaries with schizophrenia or affective disorders who have expressed a desire to work. Testing began in October 2006 and will continue through July 2010.
For the most recent reporting period, treatment group participants had an employment rate of about 40 percent, compared to an employment rate of only 22 percent for control group participants. This difference may result from the specific types of supports the MHTS provides (psychiatric nurse-care coordinator, case worker, and a supported employment specialist) and the manner in which the MHTS integrates those supports.
Through the MHTS, we have helped many beneficiaries return to work; in any given quarter of a year, about 400 participants work. For example, some MHTS participants with schizophrenia talk back to the voices they hear. One of our study sites has an ongoing relationship with a sports arena. The sports arena hires these participants, and the arena's noise masks any conversations the participants have with these voices. Thus, the MHTS has placed these participants in employment situations where they can succeed. In other situations, we purchase items that enable participants to return to work, such as dentures and glasses.
We will analyze the demonstration's results and plan to submit our final report by January 2011.
Accelerated Benefits Demonstration
Under current rules, most SSDI beneficiaries have a 24-month waiting period after the date of entitlement before they are eligible for Medicare. This project tests the effect of providing immediate healthcare to newly-entitled SSDI beneficiaries. Specifically, the project tests whether providing medical benefits sooner will result in better health and return to work outcomes for beneficiaries. Since the start of this project in October 2007, we have enrolled about 2,000 beneficiaries in one of three study groups: a control group, a group that receives a medical benefits package, and a group that receives the medical benefits package and comprehensive support services. We will complete this project in November 2010.
To date, project data show that a little over 85 percent of the beneficiaries contacted for inclusion in the project were ineligible for the project because they already had some type of health insurance coverage. Participants in the study have embraced the additional supports offered in this project. We have found that many beneficiaries in the third study group are using the employment counseling, behavioral support program, and medical care management offered as part of this demonstration. However, it is too early to tell whether using these services translates into improvements in health and employment and reduced dependence on SSDI benefits.
We plan to submit a final report on this project by January 2011.
Youth Transition Demonstration
The YTD seeks to identify effective and efficient methods for assisting youths to transition from school to work and become self-sufficient. This project identifies services, implements service interventions, and tests modified SSI income and resource exclusions (referred to as waivers) that lead to better education and employment outcomes for youth with disabilities. The YTD serves youths between the ages of 14 and 25 who receive SSI or SSDI (including child's insurance benefits based on disability) or who are at heightened risk of becoming eligible for those benefits. This study will produce the first empirical evaluation of the effects of enhanced youth transition programs and modified SSI work incentives on disabled youth.
We began the YTD in September 2003 with seven projects. At present eight YTD projects are underway in New York (two sites), California , Colorado , Florida , Maryland , Mississippi , and West Virginia . The last YTD project will in end in spring 2012.
As of January 2009, 503 of the 2,028 YTD participants (25 percent) had full- or part-time employment. Most of the YTD participants are students. By comparison, in December 2007, only about 11 percent of all SSI beneficiaries aged 18 through 21 were working. The nature of the YTD participants' work varies widely and some participants hold only short-term or summer work.
Early data from the projects show that the interventions and the YTD waivers help participants gain experience in both work-related activities and paid employment, increase earnings, improve attitudes and expectations about the future, and achieve greater engagement in education (for those projects with a focus on educational activities).
Among the beneficiaries helped by this project is a young artist enrolled in the Mississippi Model Youth Transition Innovation (MYTI) project. She has intellectual disabilities, but with the help of a specialized savings account allowed under the YTD and counseling she has received from MYTI, she is on her way to establishing a successful business.
We plan to complete a comprehensive final report on this project by 2014.
New Disability Demonstration Authority
We believe that the projects we have in place will yield information Congress can use when it considers certain statutory changes. We want to test other disability program modifications and have several new ideas for demonstration projects.
However, our authority to initiate demonstration projects for SSDI beneficiaries expired on December 17, 2005. Therefore, we would need authority to start new projects and would like to work with you toward that goal. To start this process, we will develop and present to Congress and other stakeholders a detailed plan for how we would use this authority if reinstated.
Continuing Disability Reviews (CDRs)
To help protect the long-term health of the disability program, we strive to pay disability benefits only to eligible persons. Toward that end, we periodically conduct continuing disability reviews (CDR) on beneficiaries with disabilities to determine whether they still qualify for disability benefits. These reviews come in two types — medical CDRs and work CDRs.
We conduct medical CDRs on a periodic basis to ensure that only those who have a disabling condition under our rules continue to receive benefits. We use two methods to conduct these CDRs. We send some cases to the disability determination services (DDS) for a full medical review; others may be completed using the mailer process. The mailer process includes a profiling system that uses data from our records to determine the likelihood of medical improvement and the individuals' responses to a mailer questionnaire.
We send most cases profiled as having a high likelihood of medical improvement to the DDSs for a full medical review and no mailer is sent. In addition, if a beneficiary's responses to our mailer questionnaire indicate medical improvement, we send the case for a full medical review. Otherwise, based on the mailer response, we may decide not to initiate a full medical review, and we schedule the case for a future CDR. We also conduct medical reviews when we receive a voluntary or third-party report of medical improvement.
We will not initiate a medical CDR on a beneficiary who is using a Ticket. Furthermore, if a beneficiary has received SSDI benefits for at least 24 months, we will not initiate a medical CDR solely on the basis of his or her work activity.
Historically, we have realized program savings of $10 for every $1 we spend on medical CDRs. In FY 2008, we processed 240,000 full medical CDRs, an increase of about 50,000 over FY 2007. The FY 2009 appropriation provides an upward adjustment to the discretionary caps to fund program integrity activities such as CDRs. At this level, we will be able to process 329,000 full medical CDRs this year, an increase of 89,000 compared to FY 2008. For FY 2010, the President's Budget requests $359 million to conduct medical and work CDRs, which is part of a larger request of $758 million for program integrity activities at the agency.
We initiate a work CDR when a beneficiary voluntarily reports he or she is working, when a third-party reports a beneficiary is working, or when wages are posted to a beneficiary's earnings record. Because the work CDR process intersects with our return-to-work efforts, I would like to briefly explain our process and how we address the overpayments that can result.
To process work CDRs, we use a centralized national database called eWORK. This automated system collects the necessary work information, prepares the necessary forms and notices, and generates receipts for work reports. A separate system, the Continuing Disability Review Enforcement Operation (CDREO), alerts us to possible unreported work activity by a beneficiary. The CDREO alerts approximately 522,000 cases annually for possible work CDRs. We review and process all work reports we receive. From 2006 to 2008, we processed an estimated 174,000 work CDRs annually in our field offices. At present, there are approximately 62,000 work CDRs pending in field offices.
While most work CDR overpayments occur because we do not receive a timely report of work activity, some overpayments occur because we do not process the related work CDRs timely. Delays in processing these cases may occur for several reasons. First, we have concentrated on high-priority workloads, such as processing retirement and disability claims. Consequently, we have delayed acting on work reports and CDREO alerts. The current recession and the aging population have caused an overall increase in our workloads, thereby exacerbating this situation. Finally, our work incentive rules, which affect how we treat a beneficiary's earnings, are complex. Therefore, these work CDRs may take more time to process correctly.
We know that the potential of an overpayment may discourage some beneficiaries from working. We are committed to reducing the likelihood of overpayments, and we are collaborating with all stakeholders to develop proposals to ensure that beneficiaries who report their earnings timely will not be penalized for our delays in processing their work CDRs.
We are firmly committed to assisting beneficiaries with disabilities who want to return to work. The Ticket program started slowly, but our new regulations have given new life to the program. Since the new rules became effective, we have seen increases in new EN contracts, in Ticket assignments, and in beneficiary work activity. We will continue to monitor the program and consider any advice we receive from beneficiaries, service providers, and Congress to make sure the program continues to meet the needs of our beneficiaries.
We have embraced a comprehensive approach to helping beneficiaries return to work. We are on the right path to reducing those barriers within our control so that every beneficiary can realize his or her fullest potential.
Thank you again for your support and interest in this matter.
1 The Social Security Disability program began more than 50 years ago and the Supplemental Security Income program began more than 35 years ago. In this testimony, “disability program” refers to both programs.
2 We are evaluating the Ticket program's potential savings and will have a report later this year.