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.
Conclusion
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;
and,
*
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.
Beneficiaries
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
benefits.
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
changes.
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
underpayments.
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."
AeDIB
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
hearings.
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.
Conclusion
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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