Monday, October 28, 2013

socialNsecurity Appendix I


The Commissioner of Social Security. (COSS)

Each COSS comes to the job with a different vision of how the system should work.

Statement of Michael J. Astrue

Commissioner of Social Security
Testimony before the Senate Finance Committee

May 23, 2007

Mr. Chairman and Members of the Committee:

Thank you for the opportunity to share our plans to reduce the backlog of
disability claims. As you are well aware, a major challenge that faces our agency is the disability determination process for the Disability Insurance and Supplemental Security Income programs.

For more than half of a century, Social Security has helped disabled workers and their families cope with the loss of income due to a severe disability.
Unfortunately, many of today’s applicants face an uphill battle simply to get a hearing before an Administrative Law Judge (ALJ). For some, the long wait for their day in court leads to homelessness and the loss of family and friends.
Sadly, people have died waiting for a hearing.
As you know, our disability programs have grown significantly over the last five years and will continue to do so at an increasing rate as aging baby boomers reach their most disability-prone years. At the same time, Congress has added new and non-traditional workloads to SSA’s responsibilities while appropriating on average about $150 million less each year than the President has requested since 2001. As a result, the agency is struggling to balance its new responsibilities and its traditional work within tight resource constraints.
So it should be no surprise that the problems associated with the disability
determination process are also stressing our network of field offices.
Increasingly crowded waiting rooms, loss of staff and unaddressed workloads are a direct result of the growing backlogs. This situation is unacceptable.

When I appeared before you at my confirmation hearing, I promised to report back to you with my recommendations for reducing these backlogs and prevent them from recurring. Today, I want to make an initial report on our first 100 days.

Our disability backlogs are a problem that I am determined to overcome. Many of you are aware that my interest in becoming Commissioner was driven by both personal and professional interests. I handled my father’s disability application when, at age 52, he suffered a severe cerebral brain hemorrhage caused by a rare form of brain cancer.
We are overdue for a change. The length of time many people wait for their final disability decision is unacceptable. I am committed to a process that is as fair and speedy as possible. Today, I want to share with you a number of important steps we have taken, will take, or are contemplating taking in the near future to better manage our workloads.

There are four areas which I believe hold the most promise to eliminate the
hearings backlogs: compassionate allowances; improving hearing procedures; increasing adjudicatory capacity; and increasing efficiency with automation and business processes.

Despite the fact that our ALJs are achieving a record high productivity rate,
backlogs continue to grow. The current number of cases waiting for a hearing decision is about 738,000, leading to average waiting times of 505 days, the highest ever in SSA history. Pending hearings have doubled since 2001. In addition, the number of applications for disability benefits has been
extraordinarily high throughout the first seven years of this decade, and, as
mentioned earlier, funding has not kept up.

To provide more context, Congressional budget reductions below the President’s request from 2002 through 2007 are equivalent to processing an additional 177,000 initial claims and an additional 454,000 hearings. I want to thank you for the funding included in the FY 2007 annual appropriation. Although attrition continues to reduce staffing levels, those funds allowed us to avert employee furloughs and hire a limited number of staff in critical areas. We thank the Members of this committee for the support you gave us in obtaining these funds, and we very much need you to continue your advocacy effort on our behalf.

The success of the initiatives that I share with you today depends on timely and adequate agency funding. Properly funded, these initiatives will reduce the amount of time members of the public wait for a hearing decision and will lead to a reduction in the number of cases pending in our offices.
Compassionate Allowances
Attached to this testimony is additional information about our proposals to reduce the hearings backlogs and address the shortfalls of the disability determination process. We believe that these initiatives will have a significant impact on reducing backlogs.
One way to reduce the number of cases in the determination process is to use automation tools to screen cases. We have seen the success of the Quick
Disability Determination (QDD) model currently in use in New England. This computer model identifies cases that are most likely to be allowed. To date, the New England states have decided 97% of these cases within the required 21 days and they have an average decision time of 11 days. About 85% of these cases have been allowed during the initial review, and more have been allowed with additional documentation. We plan to build on the success of the QDD because it is both efficient and compassionate for us to do so. To date, the majority of QDD cases are cancer cases because the model does not yet cull a wide enough variety of diseases. Currently, QDD cases constitute only 2.6% of our cases but we are committed to pushing the number of cases that can be decided through the model as high as we can possibly go while maintaining accuracy.
An added difficulty is that our examiners are working with outdated medical listings and poorly defined categories of disabilities. Many cases that should be resolved quickly are not being determined in a timely manner because many of our listings are outdated. To help us with this initiative, Secretary Leavitt has generously offered the assistance of the Department of Health and Human Services on a taskforce to jumpstart our effort to refine and update our rules. Other course corrections at SSA include reorganizing the Office of Disability and Income Support Programs to better align our organizational structure with our mission of dedicated service to Americans with disabilities. We have already received helpful advice from the Office of Inspector General, which at my request, has completed a first draft of an organizational audit.
In addition, we found that two of the new electronic systems developed for
Disability Determination Services (DDS) as part of the Disability Service
Improvement initiative were not ready for real-world use, and were in fact causing considerable delays in processing caseloads. While one of these systems may have potential over the long term, they both have been pulled. We are instead focusing on refining our two primary systems that will make us fully electronic.
To accomplish that goal, we have used an additional $25 million from our
technology reserve fund.

Improve Hearing Procedures

We have already begun to attack the problem of aged cases starting with the
cases that are or will be 1,000 days old as of September 30, 2007. I consider
this initiative to be a moral imperative. An applicant should not have to wait three or four years for his or her day in court. We have established a goal of reducing these cases to a negligible level by the end of this fiscal year, and I am pleased to report that the number has already dropped from more than 63,000 on October 1 of last year to about 14,000 as of last week. We have made this progress by reallocating resources and redefining the metrics by which we measure success.

We are also studying the experiment of 1995-2000 that authorized Senior
Attorney Advisors to issue fully favorable decisions. The Social Security
Advisory Board has recommended this program. We will evaluate the lessons from this experiment for similar approaches we could adopt now to improve the disability determination process.

Increase Adjudicatory Capacity
Hiring additional ALJs is an essential element in a successful plan for reducing the backlog. Further improvements are expected from our plans to increase efficiency of support staff. Before a hearing can be held, there is a large amount of work that must be done to prepare the case to be reviewed. With advances in technology and improved management, there are a number of ways to increase the efficiency of this behind-the-scenes work, and we will pursue them all.
As an interim measure, we will streamline the folder assembly portion of case preparation to limit file assembly to a cover sheet and numbering pages
sequentially. Streamlining the assembly will have an even greater impact as we add the software needed to automate this function.
In addition, we will send volunteers from our field offices to hearing offices with the largest backlogs to help assemble the remaining 220,000 paper files. We plan to dedicate 5,000 hours of overtime per month to this effort, which will probably continue through next year. To a large extent, the cases pending the longest at the hearing level are paper files. When these cases are finally adjudicated, they will be replaced by the electronic files which will require less time and effort to prepare. By streamlining the file assembly process and making additional staff available to prepare cases, ALJs can schedule as many hearings as possible.
We have also decided to mandate the use of the Findings Integrated Template, or FIT. This tool is now being voluntarily used by about 80% of our judges. It is an abbreviated decision format that captures all of the key elements required for a defensible opinion. Those judges who use FIT have a lower rate of remands from the Appeals Council which saves us time and money.

In addition, we will screen our oldest cases using profiles developed by the Office of Quality Performance to identify cases where there may be a high probability that an allowance can be issued on the record without a hearing. During my visits to hearing offices in Atlanta and Boston, many employees expressed their belief that cases that were initially denied because an applicant did not meet the durational definition of a disability could, at this stage in the process, now meet the time requirements associated with our programs. If true, we could make a significant impact on our backlog. This screening initiative will begin next month.

We are also planning on capitalizing on the flexibility now available to us with electronic disability folders and other technologies. Assigning our ALJs to 141 offices nationwide does not give us enough flexibility to address the worst backlogs. Video hearings have successfully addressed backlogs on an ad hoc basis, and we feel that reserving a percentage of ALJs in a central office solely to do electronic hearings for the most backlogged offices is a better and smarter way to use a very expensive resource.

Increase Efficiency through Automation and Improved Business Processes
We know that technology is instrumental in improving performance.
At the hearing level, we need the ability to sign decisions electronically.
Currently, decisions are printed, signed and then scanned into the electronic
folder. By implementing electronic signature capacity, the adjudicator will be able to complete the decision-making process electronically, thus sending the signed decision directly to the folder with a click of a mouse.
In addition, we need shared access to the electronic folder. Currently, cases
cannot be transferred from office to office in an electronic format. We are forced to print and mail cases that are remanded or are shared with another office. For example, if a hearing office seeks assistance from another office for case preparation or drafting decisions, the electronic folder must be converted to a paper folder. If a hearing office remands a case to the DDS, the electronic folder must be converted to paper before it is returned to the hearing office. This is a waste of time, energy and resources. It also undermines the premise behind going electronic. Our Office of Systems is working on fixing this issue.

To help us reduce ALJ travel time and costs, we are installing all hearing rooms with video equipment to enable us to increase the number of hearings; an initiative which will particularly benefit rural areas.
We are also excited about the long-term potential of a new automation tool called ePulling. This program will support preparation of electronic cases for hearing.

Case preparation has three components: file development, file analysis, and file assembly. ePulling will reduce the amount of time it takes to assemble folders and will allow the staff to devote more time to file analysis and development.

ePulling will identify potential duplicate documents, classify documents by type of evidence and date, sequentially numbered pages, and create exhibit lists.

Implementation of ePulling is projected to begin with a pilot next spring.
Our progress in working down our aged cases is an example of successfully
improving our business processes. Other initiatives in this area include, but are not limited to:

         Direct Appeals Council to issue final decisions when possible to reduce remands;
         Be more proactive in investigating alleged ALJ misconduct complaints;
         Improve management training;
         Encourage greater cooperation between Hearing Offices, Field Offices and Area Directors;
         Standardize the electronic folder in hearing offices; and
         Implement a quality assurance program.


Mr. Chairman, when it comes to disability backlogs, there is no single magic bullet. Our goal is to slow the growth of cases pending until we reach a tipping point next year with the addition of a substantial number of ALJs who can begin to help us drive the backlog down. With better systems, better business processes, and better ways of fast-tracking targeted cases, we hope to return to the more manageable levels we experienced at the beginning of this decade.

This task won’t be easy, and it won’t be possible at all without your continued support for adequate funding for this effort.
Thank you again for your past support, and I’d be happy to answer any questions .

COSS Statement on SSI Program before Congress April 29, 2004

Statement of The Honorable Jo Anne B. Barnhart, Commissioner, Social

Security Administration

Testimony Before the Subcommittee on Human Resources
of the House Committee on Ways and Means

April 29, 2004

Mr. Chairman and Members of the Subcommittee:

Thank you for inviting me to appear today before the Subcommittee to
 discuss  the Supplemental Security Income (SSI) program.  Although this is the first time I have had the privilege of coming before this Subcommittee as Commissioner of Social Security, I would like to thank the Subcommittee  for its work over the years to improve the integrity and public confidence  in the SSI program, while protecting the millions of low-income aged, blind, and disabled individuals the program was designed to assist. 

In March 2004, 6.9 million individuals received federally administered
monthly SSI benefits. This group is composed of 1.2 million individuals
who receive benefits based on their being aged 65 or older,  5.7 million
disabled recipients, and 95,000 blind recipients.  The monthly benefit
paid to these eligible individuals averages $425.  In calendar year 2003,
more than $36 billion in benefits were paid under SSI-$32.4 billion in
Federal expenditures and nearly $4 billion in federally administered State
supplementary payments.

SSI is a complex program, which poses tremendous challenges and
opportunities for SSA.  Today, I would like to touch on several areas:

*          the administrative challenges facing the agency, the progress we
have made in meeting those challenges and current initiatives;

*          progress in simplifying the SSI program;

*          my approach to improving the process for determining disability;

*          opportunities for those disabled SSI recipients who want to begin or
return to work.

Before I describe our challenges and accomplishments, I would like to
briefly give you some idea of the people the SSI program serves.


SSI beneficiaries are among the most vulnerable members of our society.
All of them are either blind or disabled, or aged 65 and older.  All have very
limited incomes and little or no assets.  The maximum income an individual
can have and still be eligible for SSI represents less than 75 percent of
the poverty level for a one-person household, and the maximum income a
couple can have and remain eligible for SSI represents less than 85 percent
of the poverty level for a two-person household.  Only 35 percent of SSI
beneficiaries receive other cash benefits such as Social Security

It is clear that without SSI, the vast majority of beneficiaries would
be destitute.

The current maximum Federal SSI benefit rate  is $564 per month for an
individual and $846 for a couple, when both members are aged, blind, or
disabled.  Of the 1.2 million individuals who receive SSI benefits based on
age, more than half are over age 75 and about 70 percent are women.  About half of all SSI elderly beneficiaries live alone.  The average age of
 the nearly 4 million adults receiving SSI benefits based on disability is
 about 45 years old and 60 percent are women.  In addition, there are 760,000 SSI beneficiaries who came onto the SSI rolls as blind or disabled
 individuals who are now aged 65 or older. 

By any measure, SSI recipients are among the poorest of the poor.  For them, SSI is truly the program of last resort and is the safety net that protects them from complete impoverishment. In administering this program we must recognize both the vulnerability of those served by it as well as our obligation to the American taxpayer to ensure that payments made under the program are consistent with the program's requirements.

Administrative Challenges

As its name indicates, the SSI program is designed to supplement an
individual's income up to a minimum floor of income.  The definition of
income in the SSI program includes cash and in-kind income, and is anything that a person receives that can be used to obtain food, clothing, or
shelter.  It includes cash income such as wages, Social Security and other
pensions, and unemployment compensation. In-kind income includes food,
clothing, and shelter.  Generally, the amount of the cash income or the value of the in-kind income is deducted from the maximum Federal benefit rate.  In computing the SSI benefit, the first $65 of earnings is disregarded and then $1 is deducted from the benefit rate for each $2 of earnings. Unearned income--for example, Social Security--causes the benefit rate to be reduced $1 for $1 after the first $20 is disregarded.

Individuals' SSI benefit amounts also may change if they move into a
different living arrangement--whether a person lives alone or with others,or resides in a medical facility or other institution affects benefit levels.  For instance, when individuals move into nursing homes, their benefits generally are reduced to not more than $30 per month. If they move
from their own household into the household of another person, and that
person provides food, clothing, or shelter, their benefits also may be
reduced. If their income or resources in a month exceed the limits specified
in the law, they may be ineligible. The design of the SSI program requires
SSA to take into account the many changes in an individual's financial and personal life and make adjustments in benefit payments to reflect those

SSI eligibility is based on a monthly means test for income and resources.
It is a practical impossibility for SSA to obtain information from all recipients about every change in their income, resources, or living arrangements every month.  Some overpayments and underpayments are
inevitable.  Additionally, even if individuals report timely, requirements
to notify individuals of how a specific change affects their benefit amounts
can create a lag in adjusting the benefit, also causing overpayments and

The very design of SSI as a program that provides for current needs, leads
to some amount of overpayment.  Certain amounts of overpayments are
unpreventable because of due process notification requirements or because an individual's income increases during a month after the SSI benefit has
already been paid for the month.   Overpayments can occur when recipients
report benefit-changing events too late or do not report them at all.

In addition, some amounts of overpayments occur because SSA is unable to act promptly on reports of changes because of insufficient resources and
competing workloads.  Regardless of the various causes of improper payments, SSA is committed to preventing such payments where possible, and where not, acting quickly and efficiently to correct such payments.

In 1997, the GAO designated SSI as a high-risk program. At the time, GAO
said that SSA lacked an effective plan to address the level of debt created
by overpayments. Further, GAO said that SSA had difficulty determining
initial medical and non-medical eligibility for the program, as well as
continuing eligibility of program participants. GAO also noted what it
perceived as SSA's emphasis on adjudicating initial disability and aged claims and providing beneficiary services over program integrity. 

Corrective Action

When I became Commissioner I made it a priority to address GAO's concerns about the administration of the SSI program.  In fact, Deputy
 Commissioner James B. Lockhart and I met personally with Comptroller General David Walker to discuss GAO's concerns.  In developing a corrective action plan, we focused on four areas: commitment to timely processing of continuing disability reviews (CDRs), improved prevention of overpayments, increased overpayment detection, and increased collection of debt.  SSA developed a Corrective Action Plan directed at the issues raised by GAO in its designation of SSI as a high-risk program. 

The Corrective Action Plan identified the root causes of problems in the SSI program, provided solutions and provided for substantial additional
near-term measures, primarily improved program administration and higher
payment accuracy.  Our efforts to develop and implement the Corrective
Action Plan paid off. In January 2003, the General Accounting Office (GAO) took the SSI program off its high risk list.

Still, much remains to be done.  With the enactment of the Improper Payments Information Act (IPIA) of 2002, SSA has increased its focus on reducing payment errors by refining and improving upon the Corrective Action Plan so that it can  be an increasingly effective program, integrity planning, and tracking tool.  The Plan is reviewed and updated monthly and I hold specific senior agency officials accountable for its results. Major ongoing initiatives under the Plan involve electronic death registrations,
electronic bank account verification, and improving debt collection strategies.  In addition, to simplify wage reporting for beneficiaries, SSA
has conducted a pilot project designed to test beneficiary reporting of
income using touch-tone and voice-prompt telephone technology.  The Plan has been the impetus for helping SSA meet the improper payment reduction targets that are being established pursuant to the IPIA.  Through the Plan, SSA is implementing administrative sanctions, online data matching in the
redetermination process, and improved collections of overpayments through
netting, credit bureau referrals, administrative offsets, and mandatory
cross-program recovery.   

When conducting a redetermination, SSA reassesses SSI recipients' incomes, resources, living arrangements, and all non-disability factors of SSI eligibility.  While we will continue to refine our redetermination selection process to make it more effective and efficient, the number of
redeterminations that we can do in a year are directly related to the resources that are allocated to us by Congress. 

Redeterminations and CDRs are the most effective means of preventing
erroneous payments.  Redeterminations return about $7 for every $1 it
costs to administer.  CDRs, during which we determine whether an individual continues to be under a disability, have a savings-to-cost ratio of roughly $10 to $1. We expect that the present value of SSI program savings resulting from the CDRs conducted in FY 2003 will be close to $2 billion.   And that redeterminations conducted in FY 2003 will produce an estimated $2.7 billion of overpayment prevention and recoveries.  While we are considering a number of ways to improve the redetermination process by better targeting the types of cases we select, budget restraints could adversely affect these ongoing important program integrity efforts.  Doing fewer CDRs and redeterminations would mean that fewer erroneous payments would be prevented and detected.    

However, as you know for FY 2004, SSA's appropriation for  administrative
expenses was significantly lower than the President's budget request.  I
found that I had to balance the need for CDRs and redeterminations against
the need to process claims filed by aged and disabled citizens-arguably the most vulnerable of our population.  And we are not going to be able to do as
many CDRs and redeterminations as I had originally planned.

Prisoners and Felons

A very important area of program integrity in which we continue to improve involves non-payment of SSI benefits to prisoners, fugitive felons, and parole and probation violators. These non-payment provisions are in the SSI law because of Chairman Herger's and this Subcommittee's diligence. As  you know, the fugitive felon prohibition was recently extended to the Social Security program as well in the Social Security Protection Act of 2004.

Since its inception, the SSI program has prohibited the payment of benefits
to individuals who reside in public institutions--including prisons, jails,
detention centers, and other types of correctional institutions. Social
Security recipients in correctional institutions also generally are not eligible for benefits. Even though we conducted matches with correctional
institutions, we were not always able to identify all of the individuals who
should have their benefits suspended. Under this Committee's guidance and
leadership, legislation was enacted that provided for incentive payments to
state and local correctional institutions that furnish information resulting
in the suspension of SSI payments.  Under the provision, SSA pays up to
 $400 to state and local correctional institutions for each report that results in the suspension of an individual's benefits.

SSA currently has agreements with jails and prisons under which the Agency is provided lists of inmates to match against our recipient records.   These agreements are with institutions that house 99% of all prisoners in the
country.  Since the incentive payment program began in 1997, SSA has paid
5,196 penal institutions over $113 million in incentive payments.

Suspension of benefits to prisoners saves approximately $500 million annually. In fiscal year 2001, there were over 89,000 prisoner suspensions.

Another very important SSI program integrity provision prohibits fugitive
felons from receiving benefits. A key to its implementation is having access
to records of outstanding felony warrants.  We have entered into matching
agreements with a number of Federal, state and local law enforcement agencies to facilitate electronic matching of warrant information.

For example, SSA and OIG have matching agreements for obtaining fugitive warrants in place with the FBI; the FBI's National Crime Information Center, the U.S. Marshal's Service, State agencies, and metropolitan police departments. Currently, SSA has access to all Federal warrant information, all felony warrant information from 40 States, the District of  Columbia, and three major metropolitan jurisdictions.  

When we obtain warrant information from any of these sources, we first
verify the social security numbers by matching them against our Enumeration and Verification System.  We then match against our SSI beneficiary files to determine if any of the fugitives are receiving SSI benefits.  Results of the second match are forwarded to OIG for action.

OIG works with both the FBI Information Technology Center the (ITC) and
 with the U.S. Marshals Service to verify that the felony probation or parole
violation warrant is active. The ITC and U.S. Marshals Service provide the
address information in SSA's records about each SSI recipient to the appropriate law enforcement personnel so that they can apprehend the individual.   Over the years, these leads to law enforcement have resulted
in the apprehension of 19,000 fugitives.

Since the inception of the fugitive felon program in August 1996, SSA has
suspended nearly 78,000 SSI payments under this provision, and the number is growing every year.  In FY 2003 alone, we processed nearly 24,000 suspensions.  For FY 2001 (the most recent year for which an estimate  is available), we estimate that the 5-year Federal SSI program savings from suspensions processed in that year amount to over $25 million.
Additionally, the suspension of SSI payments to fugitive felons and parole
violators also saves both Federal and State Medicaid expenditures.

The provision in the Social Security Protection Act of 2004 extending the
fugitive felon prohibition to OASDI payments is estimated to reduce OASDI program expenditures by $800 million over 10 years.  We are currently working toward implementing this provision by its January 2005
effective date.

The core of program integrity involves making sure that individuals meet all
SSI eligibility factors before benefits are paid and assuring that only correct amount of benefits are paid on an initial and ongoing basis.  In those cases in which individuals are overpaid SSI benefits, we pursue recovery.  SSA has a number of tools to collect overpayments from deducting amounts from benefits to referring the debts outside of the agency for collection.  I would like to  give you an idea of some of our more recent successes that have been accomplished in the debt collection area.

Debt Collection Efforts

As part of the Corrective Action Plan, we implemented a new system in
 FY 2003 to measure and report the status of various types of debt. This
 allows us to identify debt that had been previously determined to be uncollectible but may now be recoverable because the overpaid individual is again  eligible for SSI or has become eligible for OASDI benefits from which the debt  may be collected.  Previous to the Corrective Action Plan, we were unable to track debt in such situations because often the old debt was not carried over onto the newer benefit record.  The plan has also been the catalyst for several other changes.  These include collecting overpayments using new "netting" software that automatically recovers overpayments when an underpayment is discovered, mandatory cross-program recovery, and new administrative offset and credit bureau referrals.

These debt collection improvements contributed to increased recovery of
 SSI overpayments at reduced cost.  Specifically, SSI overpayment collections in  FY 2002 totaled $859.6 million and in FY 2003, they totaled $941.6 million (up nine percent), with almost $100 million of that total being attributed to the automated netting technique.  SSA also worked with Congress to develop new authority for expanded cross-program recovery of SSI overpayments from OASDI benefits, which included lifting the restriction on the amount of offset that can be applied to retroactive checks.  An estimated savings of over $200 million over 10 years is expected from
the enactment of this provision in the Social Security Protection Act of 2004.

SSA refers delinquent debtors to credit bureaus and delinquent debts to the
Department of the Treasury for offset of Federal payments being made to the individual.  The credit bureau reporting program led to the voluntary
repayment of $20.9 million during FY 2003.  In FY 2003, SSA referred 158,484 debtors to credit bureaus; the total debt owed by these individuals was $525 million.  The Treasury Offset Program has also been very successful.  For example, SSA collected over $35 million in FY 2003 through this program.

Overpayment prevention, overpayment detection, and overpayment collection are vital parts of our overall program integrity efforts.  Many
overpayments are the result of SSI beneficiaries not reporting changes or SSA not acting on reported changes in time to correct the benefit payment.  Some overpayments are caused by due process requirements that are a matter of law.  And, a number of overpayments are caused by complex program policies that can be difficult to administer. In all cases, regardless of the cause of the improper payment, SSA is committed to tracking and reporting these payments, setting aggressive reduction targets, and taking the necessary steps to ensure that reduction targets are achieved.

Program Simplification

I previously mentioned the recent enactment of the Social Security Protection Act of 2004.  I thank this Subcommittee for including SSI provisions in the bill.  While the bill includes many important Social Security program integrity and improvement provisions, I want to point  out
those SSI provisions that simplify the program.

One provision excludes small amounts of income paid as interest or dividends on an SSI beneficiary's countable resources.  Currently, an SSI
 Individual cannot have countable resources of more than $2,000 if he or she is single or $3,000 if married.  Thus, an interest bearing bank account with a balance close to the resource limit would yield only a small amount of interest income perhaps no more than $1 to $2 a month.  Prior to enactment of the provision in the Social Security Protection Act of 2004, SSA field office employees would have to obtain documentation from the individual or the bank about the amount of the interest paid, record it in the SSI file, and make adjustments to the benefit payment, which resulted in a small overpayment. We would then take appropriate action to recover or waive recovery of  the small SSI overpayment caused by a small interest payment.  All of these actions of identifying, recording, and recomputing are no longer  necessary making the program simpler to administer and avoiding overpayments.

Another provision increases from $20 to $60 a quarter the amount of infrequent unearned income an individual can receive in a quarter  without it affecting his or her SSI benefit.  Again, by eliminating the reporting and
recording of these very small amounts of income-cash birthday gifts or small payments for babysitting , for example-administration of the SSI program is simpler, overpayments are avoided and the program is more equitable and easier to understand.

Yet another provision eliminates the unreasonable situation in which income received in the first month of eligibility is counted three times even
 if it were only received once.  The reason for triple counting the first
 month's income is because in all initial eligibility cases the law required
 that there be a transition from current month accounting to retrospective
accounting without considering income received prior to the first month of
eligibility.  Although the law recognized exceptions for certain types of
income such as Temporary Assistance for Needy Families (TANF), refugee
relocation assistance, and Bureau of Indian Affairs payments, it did not
include a general exception for other income that ended.  For example, a
relative provides cash assistance only until the individual begins receiving
SSI benefits. This triple-counting of one-month's income caused beneficiary
confusion and was difficult for SSA employees to administer and explain.

Two provisions in the Social Security Protection Act of 2004 helped military families.  The first extended the current-law exception for SSI eligibility outside the United States to children of military personnel who were born or became disabled overseas while accompanying their parents on duty assignments. This makes the treatment of disabled children of military personnel consistent whether or not they first received SSI while they were in the United States.  The second provision simplifies the program by providing SSA with the authority to count compensation reported on a  monthly leave and earnings statement issued by the military reflecting compensation earned in the prior month as compensation received in the prior month. The provision is a significant administrative simplification in that it eliminates the need to review multiple payment statements from different periods to determine countable compensation for a month.

These provisions are an important first step in simplifying the SSI
 program. I assure you that we will continue, with the help of Congress, to
 improve and simplify SSI.

President's Budget SSI Proposals

While the enactment of the SSI provisions in the Social Security Protection
Act of 2004 was very helpful, there may still be many areas in the SSI
program that might lend themselves to simplification. 

For example, a proposal in the President's FY 2005 budget would provide more help for military families with disabled children while at the same time simplify the administration of the SSI program.  Under current law, only basic pay is counted as wages for SSI purposes.  But, there are 30 types of military compensation that are not basic pay, and therefore are treated  as unearned income. (The distinction between earned and unearned income is important in determining the amounts to be deemed from a parent or  spouse in military service.  Higher disregard amounts apply to earned income yielding less countable income and, often, higher SSI benefits.)  Determining the difference in the types of military pay is time consuming and error prone, and the guidelines for making such determinations covers 14 pages in SSA's operating instructions.

The proposal would treat most cash military compensation as wages and, thus, as earned income.  The provision would treat cash military compensation and civilian wages alike, and thus eliminate the present unfair and disadvantageous treatment of cash military compensation other than basic pay under SSI.  The proposal would increase SSI benefits for most military families with disabled children, which are currently about 3,000 families. It would be a significant program simplification in these cases and would have a relatively small program cost of only $2 million over 10 years.
Enactment of this proposal would complement SSI policy changes relating to military families that I made a year ago.  One of these changes ensures that any additional pay received by military personnel deployed to a combat zone cannot be used to reduce SSI benefits paid to their children or spouse.  The other changes the SSI treatment of privatized military housing enabling some military families living in such housing who lost SSI payments and Medicaid coverage to regain those benefits.

The President's budget includes another proposal that would help families
with disabled children.  Currently, in cases in which relatively large retroactive SSI payments are due disabled children, SSI law requires that
those payments be placed in "dedicated" bank accounts and the monies used
only for specified purposes related to the children's impairments.  The dedicated account provision is viewed negatively by parents and  advocates of disabled children due to the conflict between the rigid nature of the uses
permitted for the money from the accounts and the unpredictable nature  of
the needs of disabled children. The proposal would eliminate the requirement to establish a dedicated account if the representative payee is the parent of the disabled child.  It recognizes that parents act in the best
 interests of their children and know best how to address the needs of their  children.  At the same time, the proposal protects the retroactive benefits of children who have representative payees other than their parents. 

Modifying the dedicated account requirement would improve service to SSI
beneficiaries and their families and make the program simpler to administer.
There are currently about 40,300 dedicated account cases.  About three-fourths of these are cases in which the parent is the child's representative payee.  The President's proposal would eliminate an estimated 30,000 dedicated account cases.  Reducing the number of dedicated accounts that would be required to be established and monitored would not only ease
some of the day-to-day burden on parents of disabled children, it would also
ease some administrative burden on SSA.  We would be able to redirect the
estimated $5 million per year in administrative resources to other error reduction and debt collection activities.

We note that this Subcommittee has included the President's proposal for
pre-effectuation review of State agency SSI blindness and disability determinations in H.R. 4, the TANF reauthorization bill.  Reviewing the cases before benefits are awarded would be a significant program integrity
effort and would save an estimated $1.7  billion SSI and Medicaid program
dollars over the first 10 years. 

One other proposal in the President's FY 2005 budget that I would like to
mention would temporarily extend the current 7-year period for SSI eligibility for refugees and asylees to 8 years effective October 2004.
This proposal recognizes that some refugees and asylees have been unable to become U.S. citizens within the 7 year time period, and would give them an additional year to naturalize.  The extension would expire after September 2007.  The proposal would benefit about 4,000 SSI beneficiaries each of the three years it is in effect."


Up to now, I have discussed program integrity and simplification issues that
deal with program policies and, as such, are relatively limited in scope.  I
would like to turn now to a much larger process simplification that affects
many of the nearly 1.5 million Americans who file for SSI disability benefits each year and all of the SSA and the State Disability Determination
Service (DDS) employees who work on those disability applications.

I know that everyone is concerned about the length of time the disability
determination process takes and, quite frankly, I think that in too many
cases the length of time is unacceptable. I have a strategy for reducing
these delays. 

The linchpin for my strategy is the development and implementation of an
electronic disability claims system, the Accelerated Electronic Disability
System (AEDIB).  AEDIB is a major Agency initiative that is moving all
components involved in disability claims adjudication and review to an
electronic business process through the use of an electronic disability folder.  These components include the field office, regional office, the
program service center, State DDSs , the hearings and appeals office, and the quality assurance staff.  When the process is fully implemented, each
component will be able to work claims by electronically accessing and
retrieving information that is collected, produced and stored as part of the
electronic disability folder. This will reduce delays that result from mailing, locating, and organizing paper folders.

SSA field offices are currently collecting disability information for initial adult and child cases using the Electronic Disability Collect System (EDCS). Also, claimants can now use the Internet to submit disability information.  I am especially proud to announce that we began national roll-out of AeDIB in January 2004 starting in Jackson, Mississippi, and we
have estimated it will be complete by June 2005.  In fact, the roll-out is
going well and we're right on schedule.

Approach for Improving Disability Determination Process

Early in my tenure as Commissioner, I began a comprehensive service delivery assessment to thoroughly examine all of SSA's workloads. We began that assessment with the disability claims process and mapped out each step from the initial claim through a final administrative appeal. Our analysis of the process showed that the length of time required to move through the entire appeals process was 1153 days -- 525 days due to backlogged cases and 628 days to move through the process.

Based on that analysis, I developed a Service Delivery Plan which now forms the basis of our annual budget submission.

To tackle the management and process issues, we developed both a short-term and long-term strategy.

The short-term strategy is focused on identifying areas where immediate action was possible, while the long-term strategy would focus on  improving the overall disability determination process. Over the past two years, we have implemented a number of short-term initiatives. These include:

·         The participation of Administrative Law Judges (ALJs) in early screening for on-the-record decisions;

·         developing a short form for fully favorable decisions;

·         creating a law clerk (attorney intern) position;

·         deploying speech recognition technology to hearing offices;

·         ending the practice of rotating hearing office technicians among different positions;

·         using scanning technology to track and retrieve folders;

·         eliminating the tape transcription backlog, and

·         eliminating delays in presenting cases to the U.S. District Courts.

We are in the process of implementing two other initiatives:

·         allowing ALJs to issue decisions from the bench immediately after a hearing; and

·         expanding video teleconference hearings.

And we are preparing to implement an initiative to digitally record

I am pleased to report that we have made significant progress.  In FY 2003, we exceeded our Agency-wide productivity goal.  SSA offices processed
over 2.5 million disability claims-an increase of more than 350,000 from FY 2001. Administrative Law Judge productivity rates were the highest in history-at 2.35 cases per day.  SSA's Office of Hearings and Appeals  processed 40,000  more hearing decisions than FY 2002 and almost 80,000  more decisions than in FY 2001.  In November 2001, the average time to appeal an unfavorable hearing decision was 467 days.  In November 2003, it took 252 days.

But these short-term efforts, important as they are, do not address the fundamental problems.  If we are to see long-term results, we must look at
the entire process as a whole, and make systemic changes.
When I introduced my approach for improving the process, it was the first
step of what I believe must be -- and have worked to make – a collaborative
process. I am working  within the Administration, with Congress, the State
DDSs and interested organizations and advocacy groups.  To be successful,
perspectives from all parts of the system must be considered.

I believe that if we work together, we will create a disability system that
responds to the challenge inherent in the President's questions about why it
takes so long to make a disability decision and why can't people who are
obviously disabled get a decision quickly. We will look beyond the status
quo to the possibility of what can be. We will achieve our ultimate goal of
providing accurate, timely service for the American people.

Work Incentives and Opportunities

When the President asked me about the disability determination process he
asked why, other than pride, anyone would want to risk going back to work
after going through such a long process to receive benefits.  With the SSI
program, the question could be expanded to include not only those individuals who return to work, but also those disabled individuals who go
to work for the first time.  Regardless of their reasons for working, a surprising number of individuals who have been determined to have disabling medical conditions do try to work.  Nearly 330,000 individuals who receive SSI disability benefits were working in September 2003.  This
 represents nearly 6 percent of all SSI disability recipients.

The SSI program encourages individuals with disabilities to work through a
number of program incentives and opportunities.  I will briefly describe
these provisions, many of which have been an important part of the program
for at least 20 years, and then turn to the newest work opportunity provision in the SSI program.

Generally, after the first $20 is excluded, income reduces the SSI benefit $1 for $1, unless the income is from work in which case it is treated more generously.  The first $65 of earned income is excluded and then the SSI
benefit is reduced only $1 for every $2 earned.  These higher exclusions for
work recognize the additional costs associated with work, and also assure
that SSI beneficiaries who work have higher incomes than those who do not
work.  In addition, other amounts of earnings may be excluded under specific circumstances.  For example, as incentive for working and remaining in school, up to $5,520 a year of a student's income is excluded.  Similar to the DI program, an individual's work expenses attributable to his or her impairment are also excluded in SSI.  Blind individuals have additional impairment-related work expense exclusions.   

A very important work incentive is the plan for achieving self-support or
PASS.  Under an SSA-approved PASS, an individual is permitted to set aside income and resources for a work goal.  The amounts of the set-aside income and resources are not considered in determining an SSI beneficiary's
continued eligibility or benefit amount.  The income or resources set aside
are used to pay for goods and services needed to reach the goal, such as
education, vocational training, starting a business or purchasing work-related equipment.   A PASS may be approved for the length of time that
is determined reasonably needed for the individual to attain his or her goal.  Currently, about 1,785 SSI beneficiaries have established a PASS.

A common fear that individuals have expressed about going to work is the
potential effects that work may have on their medical coverage under Medicaid.  The SSI program addresses this concern by providing continued
Medicaid coverage after an individual's earnings cause his or her income to
exceed the level at which cash benefits could continue to be paid.  Under
this section 1619(b) provision, a working individual's Medicaid coverage
continues even after SSI stops as long as the individual has earnings, remains disabled, and the earnings are below the  individual and state threshold amounts.  Currently, about 73,500 beneficiaries continue to qualify for Medicaid through this provision.  For individuals whose earnings exceed the threshold and live in one of the participating states, individuals can continue to receive Medicaid through the Medicaid Buy-In
programs authorized by the Ticket to Work legislation.

The most recent provision in SSI law that provides an opportunity for beneficiaries to work is the Ticket to Work Program, which was enacted in
December 1999.

First, let me briefly describe how the program works.  Under current agency
regulations, an SSDI or SSI beneficiary with a disability receives a  Ticket
to Work if he or she is between the ages of 18 and 64 and has a medical condition that is not expected to improve in the near future.

Approximately 2.5 million, or 63 percent, of all SSI beneficiaries with disabilities who do not also receive Social Security benefits meet this standard.

Under the Act, SSA enters into agreements with Employment Networks
 (ENs) and with State Vocational Rehabilitation Agencies ("State VR Agencies").  ENs are qualified State, local, or private organizations that offer employment support services. These organizations include One-Stop Career Centers established under the Workforce Investment Act of 1998; single  providers of services; or groups of providers organized to combine their resources into a single entity.
A beneficiary who receives a Ticket to Work can choose to assign it to any
EN that provides services within the community or to the State VR Agency.
Together, these organizations are referred to as "Ticket Providers." An EN
may decide whether or not to accept the assignment of a Ticket.  ENs may only be paid based on their success in assisting beneficiaries to secure and
maintain employment and move beneficiaries off the disability benefit rolls.

Once a Ticket is assigned by a beneficiary to a Ticket Provider, the beneficiary and the Provider jointly develop and implement a plan of employment, vocational, or other support services designed to lead to and
maintain employment. Providers may provide these services directly or by
entering into agreements with other organizations or individuals to provide
the appropriate services at no cost to the beneficiary.

SSA is implementing the Ticket to Work program in three phases. During the first phase of the program, from February through October 2002, about 723,373 SSI beneficiaries in 13 states received Tickets to Work. During the second phase, which ran from November 2002 through September 2003, we mailed Tickets to approximately 718,886 SSI beneficiaries in 20 additional States and the District of Columbia. Then beginning in November 2003, we started releasing Tickets to the more than one million SSI beneficiaries in the remaining 17 States and the U.S. Territories during the third and final implementation phase. By September 2004, nearly 2.5 million eligible SSI beneficiaries will have been mailed a Ticket to Work, and any eligible beneficiary who has yet to receive a Ticket to Work in the mail can obtain one by asking for it. To date, we have certified almost 1,100 ENs to participate in the Ticket program, and about 22,000 SSI beneficiaries have assigned their Tickets to an EN.

The impact of the Ticket to Work program is being evaluated both inside and outside of SSA.  Preliminary findings from these reviews are that SSA has made progress in developing such a system to assist individuals with disabilities to find work and remain in the workforce. But, given our
experience so far and the comments we have received, we are taking a comprehensive look at the Ticket program.  We will be happy to provide the Subcommittee with the results of these reviews, which we expect to be available shortly, and will also be happy to brief you on their findings. 


The President's budget for FY 2005 includes $8.878 billion for the Limitation on Administrative Expenses (LAE), a 6.8 percent increase over  our FY 2004 appropriation.  We believe this increase in funding reflects the
President's desire to meet the needs of Americans who apply for and benefit
from SSA's program, including beneficiaries of SSI. 
I want to assure that we are committed to continuing to improve the administration of the SSI program.  Program integrity efforts for debt prevention, debt detection, and debt collection are being monitored and improved through our Corrective Action Plan. We are looking at all of the
most complex areas of SSI program policy to see if changes-even small incremental changes-can be made to make the program simpler and less error prone.  The disability approach will be a major simplification with regard to the taking and adjudicating of SSI disability applications, and the
approach is already yielding improved processing times and decision making accuracy.  There has never been more focus on helping beneficiaries become self-sufficient so that they no longer have to rely on SSI.  The Ticket to Work program along with increased emphasis on the other SSI work incentives are providing real opportunities for individuals to work.

As for the longer term, we do not anticipate that there will be any early
1990's-like spike in program growth over the next 25 years.  Each year, SSA's Office of the Actuary publishes a report on the SSI program and sends it to the President and Congress.  This year's draft report projects that the projected growth in the SSI program over the 25-year period is largely
due to the overall growth in the U.S. population.  Program expenditures in constant dollars are estimated to increase from $34.5 billion in 2004 to
$43.8 billion in 2028, an increase of 1 percent per year.  When compared to
the Gross Domestic Product (GDP), SSI expenditures are projected to decline over time, from the current level of 0.30 percent of GDP in 2003 to 0.24 percent by 2028.

I assure you that we will continue to look for ways to improve service and ensure fiscal stewardship. I believe that working together, SSA and the Subcommittee can find common ground for legislation to improve and simplify SSA's ability to administer the SSI program in a way that evokes increased congressional and public confidence in both the program and the Agency.

Again, I appreciate the opportunity to appear before this Subcommittee.  I
will be glad to answer any questions that you may have. Thank you.  


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