United States Government Accountability Office Testimony Before the Subcommittee on Social Security, Committee on Ways and Means, House of Representatives SSA DISABILTY For Release on Delivery Expected at 10 a.m. ET Wednesday, July 25, 2018 PROGRAMS Better Metrics and Evaluation Needed to Inform Decision-Making Statement of Elizabeth Curda, Director, Education, Workforce, and Income Security GAO-18-677T Letter Letter Chairman Johnson, Ranking Member Larson, and Members of the Subcommittee: I am pleased to be here today to discuss the Social Security Administration’s (SSA) efforts to manage its disability workloads. SSA provides cash benefits to Americans with disabilities who are unable to work through two main programs: Disability Insurance (DI) and Supplemental Security Income (SSI). Collectively, in fiscal year 2017, payments from these programs were about $200 billion to about 16 million individuals. SSA has faced long-standing challenges processing related workloads and has struggled to decide who is eligible for these benefits in a timely way. Partly because of these challenges, we included “Improving and Modernizing Federal Disability Programs” on our High- Risk List of agencies and programs that are most in need of transformation or are vulnerable to fraud, waste, abuse, and mismanagement. 1 In recent years, SSA’s challenges processing disability workloads are particularly evident when individuals appeal initial decisions on their claims and request a hearing before an administrative law judge (ALJ). At the end of fiscal year 2017, SSA reported that more than 1 million claimants who had appealed their decision to an ALJ were awaiting a decision on disability benefits, and they waited, on average, 605 days (or nearly 20 months). SSA’s workloads overall may remain a challenge as 80 million members of the baby boom generation pass through their most disability-prone years and enter retirement. We have issued several reports describing SSA’s challenges with managing its disability workloads, efforts to reduce claims processing times, and lack of systematic evaluation to determine the efficacy of those efforts. We highlighted many of these issues in our testimony to this committee in March of this year. 2 We noted the need for a sustained focus on the part of SSA leadership to approach these challenges 1 GAO, High-Risk Series: Progress on Many High-Risk Areas, While Substantial Efforts Needed on Others, GAO-17-317 (Washington, D.C.: Feb. 15, 2017). We first designated improving and modernizing federal disability programs as high risk in 2003. In making and updating this designation, we considered actions of SSA and Department of Veterans Affairs as well as the Office of Management and Budget’s efforts to create unified strategies and goals for federal programs that support employment for people with disabilities. 2 GAO, Social Security Administration: Continuing Leadership Focus Needed to Modernize How SSA Does Business, GAO-18-432T (Washington, D.C.: March 7, 2018). Page 1 GAO-18-677T SSA Disability Programs strategically and follow through with rigorous plans to improve its disability programs. Today, we build on this body of work with the release of a new report on SSA’s efforts to manage its appeals workload by transferring cases from hearing offices with backlogs to offices with more capacity. 3 In summary, we found that SSA has increasingly transferred cases between offices to help manage its appeals workloads. At the same time, we found that SSA does not have an accurate metric to assess how individual offices contribute to processing times, which could hinder the agency’s ability to identify and address problems. My testimony today will cover these new findings and the long-standing issues that surround them. Specifically, I will touch on three areas: (1) SSA’s challenges managing disability workloads, especially at the appeals level, (2) the extent to which SSA has metrics to assess its efforts to reduce processing times, and (3) limitations in SSA’s case processing systems that hinder its efforts to reduce backlogs. In our report being released today, we made recommendations in these areas, which SSA agreed to implement. In developing this testimony, we primarily relied on the report that we are releasing today. We also included information from several recent GAO reports that are cited throughout this statement and which each include detailed information on the objectives, scope and methodology of our reviews. The work on which this statement is based was conducted in accordance with generally accepted government auditing standards. More details on our objectives, scope and methodology can be found in the issued report. SSA provides financial assistance to eligible individuals with disabilities Background through two major benefit programs: • Disability Insurance (DI)—provides benefits to eligible workers who have qualifying disabilities, and their eligible family members; and • Supplemental Security Income (SSI)—provides benefits for individuals with limited income and resources who are aged, blind, or have qualifying disabilities. To apply for disability benefits through DI or SSI, an individual must file an application at a local SSA office. Local office staff forward most new 3 GAO, Social Security Disability: Better Timeliness Metrics Needed to Assess Transfers of Appeals Work, GAO-18-501 (Washington, D.C.: July 19, 2018). Page 2 GAO-18-677T SSA Disability Programs claims to a state Disability Determination Services (DDS) office for a review of medical eligibility and an initial determination. 4 Individuals who do not agree with the initial determination can ultimately appeal by requesting a hearing before an administrative law judge (ALJ). SSA’s hearing operations are conducted by ALJs and other staff across the country. Hearing operations staff are organized in 164 hearing offices, with each office having a geographic area of responsibility. However, SSA can transfer appeals cases between offices in an effort to alleviate office backlogs. Staff use technology such as electronic case files and video conferencing to process transferred cases and hold hearings across locations. As we have noted in our High-Risk Series, 5 SSA has faced longstanding SSA Faces challenges managing its disability workloads, but has made some Challenges Managing progress in recent years. For example, as highlighted in our 2017 High- Risk update, SSA has taken steps toward reducing its backlog of initial Disability Workloads, disability claims. 6 Specifically, SSA reduced the number of pending Especially at the claims each fiscal year since 2010—from about 842,000 in fiscal year Appeals Level 2010 to about 523,000 in fiscal year 2017. Nonetheless, the 2017 update emphasized the need for SSA to address the growing backlog at the appeals level. The report released today examines processing times and pending caseloads at the appeals level over the past decade and finds that both have grown in recent years. Specifically, average processing time (APT)—the average number of calendar days between a hearing request and case disposition for all dispositions during the period being analyzed—decreased by about 30 percent over fiscal years 2008 through 2012, but climbed by approximately 70 percent from fiscal years 2012 through 2017. APT peaked at 605 days, or about a year and eight months, in fiscal year 2017. 4 Although SSA is responsible for the programs, initial determinations of disability are generally made by state agencies. 5 In 1990, we began a program to report on government operations that we identified as “high risk.” Since then, generally coinciding with the start of each new Congress, we have reported on progress to address high-risk areas and updated the High-Risk List. 6 GAO-17-317. Page 3 GAO-18-677T SSA Disability Programs Pending caseloads followed a similar pattern. 7 Specifically, pending caseloads declined through fiscal year 2010 and then grew through fiscal year 2016 to over 1.1 million cases. However, the number of pending cases declined by six percent in fiscal year 2017, to just over 1 million cases. (See fig. 1.) 7 Pending cases are appeals that have not yet had a disposition, and include cases at different stages of the appeals process. Page 4 GAO-18-677T SSA Disability Programs Figure 1: Average Processing Time (APT) and Number of Pending Disability Appeals Cases, Fiscal Years 2008-2017 Note: Pending case counts are as of the end of the fiscal year. According to SSA officials and the agency’s Office of Inspector General (OIG), factors contributing to rising processing times and numbers of pending cases include increases in the number of hearing requests after Page 5 GAO-18-677T SSA Disability Programs the 2007-2009 recession, recent declines in hearing operations staffing levels and imbalances in the ratio of support staff to judges, and regulatory changes that have affected judges’ workloads. 8 For example, SSA officials highlighted a regulatory change which generally requires all claimants to submit all evidence known to them that relates to their disabling condition, resulting in potentially lengthier files for judges to review. In our recent work, we found that SSA has taken several steps to improve SSA Has Taken Steps its processing of disability claims and appeals, but lacks metrics to to Reduce Processing determine the effect of some of these efforts. In the report we are releasing today, we examine one example. Specifically, one of SSA’s key Times, but Lacks efforts to reduce processing times at the appeals level involves Metrics to Assess its transferring appealed disability cases from offices with backlogs to offices with more capacity, but SSA lacks meaningful timeliness measures to Efforts assess its efforts. From fiscal years 2008 through 2017, the percentage of dispositions—decided or dismissed cases—that had been transferred increased from 14 to 43 percent, or from approximately 79,000 to more than 290,000 cases (see fig. 2). 8 Social Security Administration, Office of the Inspector General, Factors Related to Decreased Administrative Law Judge Productivity (A-12-18-50289), Sept. 11, 2017. Page 6 GAO-18-677T SSA Disability Programs Figure 2: Percentage of Disability Appeals Cases Transferred to Redistribute Work at Least Once, Fiscal Years 2008-2017 Despite the rising use of transfers over the past decade, SSA cannot assess the effectiveness of these efforts due to weaknesses in its timeliness metrics on APT. In particular, SSA lacks office-specific timeliness measures for transferred cases. Instead, SSA’s current APT metric attributes the entire processing time for a case to the office that finishes it, regardless of the time the case was held by another office before being transferred. Without an office-specific measure of timeliness for transferred appeals cases, SSA does not have an accurate metric to assess how individual offices contribute to processing times—information critical to assessing the effectiveness of transferring cases in meeting timeliness goals. Given the growing use of case transfers, in the report we are releasing today, we are recommending that SSA develop a timeliness metric or set of metrics that more accurately reflect offices’ performance in light of case transfers, and SSA agreed. We have also highlighted the need for SSA to evaluate other efforts designed to reduce the backlog or improve program integrity at the appeals level. For example, our 2017 report on consistency in disability decision making at the appeals level found that SSA had adopted five types of quality assurance reviews of hearings decisions, several of which Page 7 GAO-18-677T SSA Disability Programs have similar goals and may look at similar claims, but SSA had not evaluated the efficiency or effectiveness of these reviews. 9 In the same report, we found that SSA lacked publicly reported metrics on the accuracy and consistency of hearings-level decisions. SSA agreed with our recommendations to evaluate its quality assurance reviews and publicly report metrics and stated that it would be addressing them as part of a comprehensive assessment and refinement of its oversight roles and processes. SSA’s Office of Inspector General (OIG) has also called on SSA to evaluate several efforts related to reducing processing times and improving the quality of decisions at the appeals level. For example, it recommended that SSA evaluate an electronic application it developed for documenting and making decisions at the appeals level to determine whether it should be continued. 10 The OIG concluded that by evaluating the effectiveness of its efforts, SSA could better ensure that it is using its resources for maximum benefit toward improving the timeliness and quality of its disability decisions. SSA has recently taken important steps toward improving its evaluation and metrics that could enhance its ability to respond to these recommendations and others. Specifically, in October 2017 SSA created a deputy commissioner-level Office of Analytics, Review and Oversight with five offices—including the Office of Quality Review and Office of Analytics and Improvements—whose functions were previously spread among multiple divisions of SSA. In announcing this reorganization, SSA’s acting commissioner stated that it will foster data analysis of SSA’s programs and enhance oversight of the disability adjudication system. However, the specific effects of this change remain to be seen. In response to our recommendation in today’s report related to timeliness metrics, SSA stated that it will refine existing metrics to more accurately reflect timeliness of cases before and after being transferred. Furthermore, SSA stated that it may develop additional reporting tools to better measure the contributions of individual offices that receive transferred cases. 9 GAO, Social Security Disability: Additional Measures and Evaluation Needed to Enhance Accuracy and Consistency of Hearings Decisions, GAO-18-37 (Washington, D.C.: Dec. 7, 2017). 10 SSA OIG, Electronic Bench Book, A-01-12-11217, (Baltimore, Md.: June 21, 2016). Page 8 GAO-18-677T SSA Disability Programs While SSA has made strides in modernizing its information technology Limitations in SSA’s (IT) systems to address growing workload demands, it continues to face Case Processing challenges with these modernization efforts in dealing with backlogs. 11 Our report being released today found that SSA staff faced challenges Systems Hinder related to case processing software. Specifically, hearing office staff Efforts to Reduce reported and we observed difficulties in efficiently and accurately identifying appeals cases to transfer because of software limitations. For Backlogs example, the current case processing system restricts search queries to a 6-month time period to avoid slowing down the system. As a result, staff cannot retrieve the universe of potential transfer cases at one time to facilitate transferring large batches of cases. Such limitations impeded productivity for the staff selecting cases to transfer and also created the potential for error and misuse. We recommended in today’s report that SSA evaluate the costs versus benefits of changing system limitations that hinder users’ ability to correctly and efficiently identify and transfer batches of cases. SSA agreed and stated that it is developing a new case processing system that will eliminate the limitations we identified. Chairman Johnson, Ranking Member Larson, and Members of the Subcommittee, this concludes my prepared statement. I would be happy to answer any questions that you may have at this time. For further information about this testimony, please contact Elizabeth GAO Contact and Curda at (202) 512-7215 or curdae@gao.gov. Contact points for our Staff Offices of Congressional Relations and Public Affairs may be found on the last page of this statement. GAO staff who made key contributions to Acknowledgments this testimony are Erin Godtland (Assistant Director), Joel Green (Analyst- in-Charge), Susan Aschoff, James Bennett, Alex Galuten, Kristy Kennedy, Jessica Mausner, Almeta Spencer, and Shana Wallace. 11 GAO, Social Security Administration: Effective Planning and Management Practices Are Key to Overcoming IT Modernization Challenges, GAO-16-815T (Washington, D.C.: July 14, 2016). 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