Testimony of Commissioner Barnhart before the Joint Hearing before the Subcommittee on Social Security and Subcommittee on Human Resources of the Committee on Ways and Means on the Commissioner of Social Security's Proposed Improvements to the Disability Determination Process
September 27, 2005
Chairman McCrery, Chairman Herger and Members of the Subcommittees:
Thank you for inviting me today to discuss my approach to improve the Social Security disability claims process. Throughout my tenure as Commissioner, I have made improving the disability determination process one of my highest priorities.
As I have discussed in previous appearances before you, we have taken a number of steps toward that end--especially the successful implementation of the electronic disability process. And I want to thank the members of the Subcommittees for your support of our efforts. It has been clear to me from the beginning that we need to make some significant changes to streamline the system if we are to provide the kind of service the American people expect and deserve.
But before I go any further, I want to take a moment and address Social Security's role in the national response to the devastation left by Hurricane Katrina. Foremost, I want you to know that we are doing all that we can to make sure that beneficiaries are receiving their benefits.
Approximately one million Social Security and Supplemental Security beneficiaries live in the affected counties or parishes of Louisiana, Mississippi and Alabama. And every month, they receive almost a billion in benefits.
To meet the needs of these beneficiaries, I invoked immediate payment procedures which permit payments to be made to any Social Security beneficiary or Supplemental Security Income recipient who has lost access to their benefit check. This means that beneficiaries from the Gulf Coast can go to any Social Security office throughout the United States and request an immediate payment, and a check will be issued on the spot.
Within a few days of the hurricane, we knew that there was no way for many of our beneficiaries to reach one of our offices. So, for those who relocated to evacuation centers or shelters, Social Security established an on-site presence to issue immediate replacement checks.
We have already issued about 53,000 immediate payments. To put this in perspective, in a typical month a district office provides an average of 8 immediate payments, but in a single day we issued almost 200 at the Astrodome alone. We hope to have new addresses for as many people as possible for the October checks, but will still issue immediate payments for those who need them.
We're also working with federal, State and local officials in affected areas to assist families who - after the hurricane - may now be eligible for Social Security benefits. In this regard, we have put into place emergency procedures that will enable us to quickly process applications for survivors - widows, widowers and their children - or other Social Security benefits.
Clearly with the complete devastation of Hurricane Katrina, many citizens do not have identification. To make sure evacuees have the Social Security information necessary for employment or other federal assistance, SSA staff are assisting individuals through a simplified protocol to get them the documentation they need.
Our dedicated employees are at the core of our efforts. When I had the opportunity to visit the Gulf Coast, I saw in person the professionalism and compassion of the men and women of SSA and the State Disability Determination Services. There has been a tremendous outpouring of support from these employees. These dedicated men and women, many of whom have lost their own homes and face other losses related to Hurricane Katrina, are working long hours, and in some instances sleeping in offices and commuting over long distances to make sure that those on the Gulf Coast are receiving the help they need. I am incredibly proud to lead an agency with the spirit and the compassion that is the character of our nation's Social Security employees.
For example, in Mobile, an employee delivered an immediate payment check to a local shelter and stayed to help serve dinner. Later that night, she returned to donate items for a baby staying at the shelter. I am sure there are countless other stories like this that remain to be told.
Our work continues in shelters and in field offices everywhere in the country where there are evacuees. It continues with file recovery, establishment of temporary offices, and work toward repairing damaged buildings. And it continues through our commitment to making sure that the pending disability claims of people who were affected by Hurricane Katrina are completed as timely as possible.
We have retrieved all of the 6,321 paper files from the New Orleans Disability Determination Services (DDS) office. With a special pass arranged by the Office of the Inspector General, we gained entry into the DDS building in New Orleans, packed 400 boxes of files, which contractors carried down many flights of stairs lit only by flashlights. We will make sure these cases are processed as soon as possible.
In previous appearances before you, I've stressed the importance of our electronic disability process-eDib-which is replacing voluminous paper files with electronic files. Electronic files had been established for about 1900 of the cases pending in the New Orleans DDS office. I'm pleased to report that we electronically reassigned these cases to the Shreveport office of the DDS beginning in the first week of September.
This brings me back to our topic today--how to make major improvements in the disability process so that we can provide better service to all Americans who apply for benefits.
Status of eDib
When I first discussed with you my new approach to the disability process, I said that the foundation for the new approach was successful implementation of eDib.
The new approach to disability claims processing can work efficiently only when all components involved in disability claims adjudication and review move to an electronic business process through the use of an electronic disability folder.
I am pleased to say that eDib is becoming a reality across the nation.
As planned, roll out is being staggered to ensure that SSA is able to provide each DDS with the support necessary for successful implementation. Once roll out begins in a DDS, the number of DDS decision makers working with electronic folders gradually expands as the DDS develops expertise with the process. So far, 53 of the 54 DDSs in 49 out of the 50 States have rolled out the electronic disability folder, which means that some or all of the decision makers in these DDSs are adjudicating cases in an electronic environment.
In January 2004, the Mississippi DDS started implementing eDib. This past January, the Mississippi DDS became the first in the nation to start processing virtually all cases in a totally electronic environment. Since eDIB was fully implemented in the Mississippi DDS, the DDS has reduced its processing times for Title II disability claims by 7.1 days and for Title XVI disability claims by 9.8 days. Hawaii, Illinois, and Nevada have joined Mississippi and are processing all new disability claims in a totally electronic environment. We are reviewing the progress being made in several other States and by the end of the year another 13 DDSs may be totally electronic.
At the Office of Hearings and Appeals (OHA), our Case Processing and Management System has been implemented in all of the hearing offices and is being used to control case flow and provide management information. In addition, 79 hearing offices in 26 States have conducted over 700 hearings using electronic folders. The initial response from OHA's Administrative Law Judges, and claimants and their representatives has been positive.
In addition, we have been replacing all of our hearing offices' aging tape recorders with digital recording equipment. This equipment is less bulky than the old analog equipment and offers enhanced quality, more stable storage capacity, and greater business process functionality. Furthermore, it provides an electronic recording that eventually will be stored in the electronic folder. Currently, digital recording has been installed in 8 regional offices and 106 hearing offices. We expect all hearing offices to be converted to digital recording by April 2006.
By the end of next year, I expect each of the DDSs and OHAs to be processing their workloads with electronic disability folders on a regular basis. As I noted earlier, eDib allows SSA and DDS adjudicators to view an individual's claims file anywhere in the country. This flexibility affords SSA a new opportunity to make changes to improve the administrative efficiency of the program.
The New Approach
Last year, I testified before you on my vision for the new approach to disability determination. I described to you a conceptual framework for the new approach, and I promised that, before we published proposed rules to turn the conceptual framework into a comprehensive plan, we would conduct an open consultation process to hear from those involved at every step of the disability process.
As you know, on July 27, we published a Notice of Proposed Rulemaking (NPRM) which sets out my plan to improve the disability determination process. This NPRM was developed after an extensive outreach program I launched to let interested parties know what I was considering and to listen to their reaction. I personally conducted over 100 meetings with almost 60 groups, both internal and external. My staff participated in many more meetings. We also received hundreds of emails from individuals currently receiving disability benefits, individuals currently applying for benefits, and other interested citizens providing recommendations on how to improve the process.
As a result of these discussions, the NPRM includes significant changes to the framework I originally put forth. For instance:
- We initially believed that Quick Disability Determination claims should be adjudicated in regional units across the country, and not in the State agencies. However, many of the groups we met with and numerous individuals believed that the State agencies could effectively adjudicate these claims. In the NPRM, we have proposed that the State agencies be allowed to adjudicate Quick Disability Determination claims.
- Several organizations and numerous individuals also urged us to allow the State agencies to continue to use State agency medical consultants when making initial disability determinations under the proposed plan. The NPRM provides that State agencies may continue use State medical and psychological consultants in the disability determination process, as long as they meet SSA's qualification standards in those areas where standards have been established.
A number of the groups we spoke with asked that we consider providing for good cause exceptions to closing the record after the issuance of the ALJ decision. Although the NPRM proposes to close the administrative record after the ALJ issues his or her decision, it also provides for limited good cause exceptions to closing the record.
Another area of concern involved our plans to eliminate the Appeals Council step of the administrative review process. For example, some thought that if claimants could not request administrative review with the Appeals Council, the Federal courts would see a large influx of Social Security disability cases following the ALJ hearing level. Accordingly, a number of organizations and groups asked us to retain the Appeals Council until we could be sure that the proposed new process was working as intended.
The NPRM makes it clear that we intend to roll out the new process gradually on a region-by-region basis, and that we also intend to retain the Appeals Council and continue its operations in those regions where the new process has not yet been implemented. This gradual implementation also will provide us with the opportunity to assess the effects of the elimination of the Appeals Council and to make any necessary adjustments.
The Objective of the Changes we have Proposed
My objective in proposing changes in SSA's disability determination process is to fundamentally improve the quality of service that the agency provides both to claimants and to the public at large.
When I first spoke with President Bush about the current disability program, he asked me three questions. Those questions were:
- Why does it take so long to make a disability decision?
- Why can't people who are obviously disabled get a decision immediately?
- Why would anyone want to go back to work after going through such a long process to receive benefits?
I realized that designing an approach to fully address the central and important issues raised by the President required a focus on two over-arching operational goals:
- to make the right decision as early in the process as possible; and
- to foster return to work at all stages of the process.
To accomplish this, the NPRM proposes changes aimed at expediting the disability decision making process; improving the accuracy, consistency, and fairness of decisions; and making the process more understandable and more credible. We are also working on a series of demonstration projects that we believe will help us determine how best to assist disabled individuals in their efforts to participate in the Nation's work force.
Before I describe some of the features of the NPRM, I want to take a moment to talk about what I believe is a unique opportunity to make the kind of changes that will substantially improve the disability process. This is a difficult challenge because people who view the process from different vantage points, have different perspectives, and different views on what we should do to improve it.
I think this is one reason that past efforts have not been successful. But, this time, I believe that we can be successful. I say this because of the spirit of cooperation, openness, and constructive dialogue that I have seen in the conversations we've had with people involved at every stage of the process.
As I said a moment ago, this NPRM is the blueprint for what began as a conceptual framework for our new approach. I do not expect that everyone will embrace every element of the process proposed in the NPRM. I am looking forward to reviewing those comments and fully expect that there will be changes from the NPRM to the final rules. I do hope that when we review the comments, we will continue to see the same cooperative and constructive spirit and that we can focus on the ultimate goal of improving the process from start to finish.
Before I go any further, I would like to acknowledge the hard work and dedication of our SSA and State Disability Determination Services (DDS) employees. The current backlogs and associated delays exist despite their best efforts. I want to emphasize that no Social Security or State employee will be adversely affected by my new approach. I believe the new approach will allow them to provide even better service to the public.
The proposed regulations do preserve some of the significant features of the current system. Initial disability claims will continue to be handled by SSA's field offices; State DDS agencies will continue to adjudicate claims for benefits; and Administrative Law Judges (ALJs) will continue to conduct de novo hearings and issue decisions. However, the proposed regulations also make some important changes. Today I would like to talk about the major changes we have proposed and why we have proposed them.
Quick Disability Determination Unit
The proposed rules would establish a Quick Disability Determination (QDD) process through which State agencies would expedite cases for people who are clearly disabled. Appropriate claims would be identified and referred directly to special units in the State agencies. We expect that these QDD units would then process these claims in 20 days or less, thereby potentially reducing waiting times for those claimants by several months.
Federal Expert Unit
We realized that under our current disability adjudication process, medical and vocational experts are not consistently available to adjudicators at every level or in all parts of the country. Therefore, we proposed to create a Federal Expert Unit to oversee a national network of medical, psychological, and vocational experts that will be available to assist adjudicators at all levels throughout the country. The purpose of this Federal Expert Unit, would be to augment and strengthen the medical and vocational expertise that currently exists in our DDS's. State medical consultants can choose to become part of the Federal Expert Unit if they meet the qualifications. And, as we have said before, we want to ensure that each case is seen by the right medical eyes. For example, an adjudicator evaluating a musculoskeletal impairment would be able to receive an orthopedist's opinion before deciding the claim, thus ensuring a more accurate decision. Presently, 20 percent of the disability workload is comprised of musculoskeletal cases, yet only 2.5 percent of DDS medical consultants are orthopedists.
Eliminate State Agency Reconsideration and Create Federal Reviewing Officials
Several of the groups and individuals with whom we met described the reconsideration review level in the disability process as having little value. Based on the belief that claimants perceive this level as little more than a rubber stamp, the proposed regulations would eliminate the reconsideration level of review. State agency examiners would be required to more fully document and explain the basis for their determinations at the initial level. We would create a Federal reviewing official (RO) who would review initial State agency denials if a claimant appealed. The RO would provide a written decision on the claim, give reasons for accepting or rejecting findings, and consult with an expert affiliated with the national network if he or she disagrees with the initial determination.
During the course of our outreach, as we discussed this appeals step, people told us that the RO does not need to be an attorney about as often as others told us that the RO absolutely should be an attorney. As we indicated in the NPRM, we believe that attorneys are ideally suited to perform certain critical RO functions, such as drafting well-supported, legally-sound decisions. Moreover, we believe that using attorneys will improve the level of confidence in the integrity of this level of review. Therefore, we have proposed filling this position with attorneys. As these subcommittees are well aware, we already employ many excellent attorneys who have significant experience in SSA's disability programs.
Retains the de novo Hearing Before The Administrative Law Judge (ALJ)
ALJs would continue to hold de novo hearings and issue decisions based on all the evidence presented during the hearing. ALJs would not be required to give any legal deference or weight to the decisions previously made by the RO; however, ALJs would be required to provide in their decisions an explanation as to why they agree or disagree with the rationale in the RO's decision. This explanation would be used to provide constructive feedback to reviewing officials to improve future case reviews.
Submitting Evidence Timely and Closing the Record
Throughout our discussions, there was a general concern that we need to receive claimants' evidence in a more timely manner. The NPRM proposes that claimants must submit evidence no later than 20 days before the hearing. Furthermore, the record would close after the ALJ issues a decision. We believe that these changes will increase our ability to process hearing requests in a more timely manner.
Similarly, we heard from a number of people who were concerned that these new changes would harm those claimants who, through no fault of their own, were unable to submit their evidence in a timely manner. The NPRM proposes closing the record but includes good cause exceptions to the submission requirements I have just described.
These proposed changes would protect a claimant's right to fairly present his or her case while reducing unnecessary delays in the hearing process.
Decision Review Board (DRB)
Under the proposed rules, Appeals Council functions gradually shift to a newly established Decision Review Board (DRB). The DRB would review both allowances and denials. A claimant's right to request review of an ALJ decision in a disability claim would be eliminated; however, a claimant could still seek review when an ALJ dismisses his or her request for a hearing.
The DRB would consist of both ALJs and Administrative Appeals Judges serving staggered terms who would review both favorable and unfavorable decisions that are likely to be error-prone. As I mentioned, the disability review functions currently performed by the Appeals Council would gradually shift to the DRB as the new approach is implemented region by region.
One of the concerns related to elimination of the Appeals Council was the possibility of an increase in court workloads. The NPRM proposes to gradually eliminate the Appeals Council only in those regions where we have implemented the changes in the NPRM. We will monitor the cases appealed to the Federal District Court, and the gradual rollout allows us to make adjustments as necessary.
The NPRM addresses the need for in-line and end-of-line quality review at all levels of the disability determination process. Pre-effectuation review at the initial level would continue.
The lynchpin of quality assurance under the new approach is accountability and feedback at each level. The new quality process would focus on both denials and allowances, and concentrate on ensuring that cases are fully documented at each stage. This last point is crucial because we believe that better documentation would allow cases to move through the system more quickly and will produce better decisions.
Currently, we have numerous incentive programs that encourage disability beneficiaries to work, such as the Ticket to Work and Self-Sufficiency program and expedited reinstatement. Despite these incentives, few disability beneficiaries choose to work.
We have designed several demonstration projects to test the impact of different work incentives on disability beneficiary and claimant behavior. These projects include the following:
Accelerated Benefits Demonstration Project. This demonstration project will provide immediate private health benefits and employment supports for a specified period (2 to 3 years) to newly entitled SSDI beneficiaries who are highly likely to improve medically with aggressive medical care. For instance, a new beneficiary with a fractured hip would benefit from immediate health care to facilitate a return to the workforce. We expect to award a contract for this project within a month and to begin enrolling participants next year.
National Benefit Offset Demonstration Project ($1 for $2). This demonstration will test the effects of allowing Disability Insurance beneficiaries to work without total loss of benefits by reducing their monthly benefit one dollar for every two dollars of earnings above a specified level. While the contractor for the national demonstration project is designing the project, we are operating a smaller four-state benefit offset demonstration in Connecticut, Utah, Wisconsin, and Vermont. This four-state project will help inform the national demonstration project. These projects are well underway and the States began enrolling participants in August 2005.
Early Intervention Demonstration Project. This project would provide immediate medical and cash benefits as well as employment supports to SSDI applicants with certain impairments presumed disabling who elect to pursue work rather than proceed through the disability determination process. We will be conducting this demonstration as a part of our National Benefit Offset project.
Mental Health Treatment Study. The purpose of the Mental Health Treatment Study (MHTS) is to study the impact that better access to medical treatment and employment services would have on outcomes such as medical recovery, and ultimately employment for SSDI beneficiaries who have a mental impairment as a primary diagnosis. The project will provide outpatient treatments (pharmaceutical and psychotherapeutic) and/or employment support services. The interventions will be implemented through demonstration projects in multiple sites. SSA awarded a contract to the Urban Institute to develop and administer a 10-member Technical Advisory Panel (TAP), consisting of experts in the fields of psychology, psychiatry, research, private insurance, and employment supports. The final report was issued in April 2005 and provided recommendations for appropriate interventions for this population. We expect to award a contract for this project this year with enrollments starting next year.
Youth Transition Demonstration. In September 2003, to further the President's New Freedom Initiative goal of increasing employment of individuals with disabilities, SSA awarded cooperative agreements to six States (California, Colorado, Iowa, New York, Maryland, and Mississippi) for the purpose of developing programs to assist youth with disabilities to successfully transition from school to work. These projects are beginning their third year of operation, have enrolled 622 participants to date, and have successfully helped many youth to obtain jobs.
Disability Program Navigator. In September 2002, SSA and the Department of Labor's (DOL) Employment and Training Administration collaboratively funded a 2-year pilot of the Disability Program Navigator (DPN). As of August 2005, 267 DPNs operate in 17 States (Arizona, California, Colorado, Delaware, Florida, Illinois, Iowa, Maryland, Massachusetts, Mississippi, New Mexico, New York, Oklahoma, Oregon, South Carolina, Vermont, and Wisconsin). The Department of Labor recently announced its intention to add DPNs to 15 more States and the District of Columbia.
DPNs work in one-stop career centers where beneficiaries with disabilities can receive employment services. The purpose of the Navigators is to provide a connection between beneficiaries and jobs through the local workforce investment boards.
California HIV/Immune Disorder Demonstration Project.
The purpose of the California HIV/Immune Disorder Demonstration Project is to determine whether immediate and ongoing comprehensive medical benefits along with employment service coordination helps to improve the health of participants to enable them to increase their economic self sufficiency through work. SSA plans to work with the California Department of Rehabilitation (DOR) to provide employment services coordination so that participants will have ongoing supports throughout the process to facilitate an employment goal. Also, SSA will provide DOR with a network of California medical expertise that will provide assistance in developing employment plans that are consistent with limitations or needs associated with the individual's impairment. SSA will provide the funding for services provided by DOR and the medical network. This is the first time that such a unique approach will be tested, i.e. federal and State entities working collaboratively with the medical community for purposes of helping individuals with disabilities return to work. SSA will evaluate the impact these changes have on beneficiaries' health, work behavior, and dependency on long-term benefits.
We expect to begin enrolling participants in calendar year 2006.
As I said earlier, we published the proposed regulations on July 27. The 90-day comment period closes on October 25. Again, Mr. Chairman, I want to emphasize my personal commitment as well as that of the agency to review comments in the spirit that has characterized this entire process with the expectation that there will be changes in the final rule.
I am committed to making sure that implementation proceeds carefully so that all claims are handled fairly and responsibly. We expect to begin roll-out next spring in one of our smaller regions.
Just as we did with e-Dib--as we gain experience--we will gradually roll-out the process nationwide, making modifications as needed.
When I accepted the job of Commissioner, I made it clear that I did not accept this position to manage the status quo. Nowhere was the need for change more apparent than in the disability process. Therefore, from the outset I made improving service to our disability claimants a priority.
I want to thank everyone who has shared their views and those who plan to submit comments. Finally, I would be remiss if I did not thank you Chairman McCrery and Chairman Herger and the members of your subcommittees for your support and guidance. Your leadership and interest have played a significant role in our ability to get people from all perspectives to work together. I look forward to continuing to work with you and your staffs as we improve service to individuals with disabilities.