oversight

Social Security Disability: SSA Must Hold Itself Accountable for Continued Improvement in Decision-making

Published by the Government Accountability Office on 1997-08-12.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                  United States General Accounting Office

GAO               Report to the Chairman, Subcommittee
                  on Social Security, Committee on Ways
                  and Means, House of Representatives


August 1997
                  SOCIAL SECURITY
                  DISABILITY
                  SSA Must Hold Itself
                  Accountable for
                  Continued
                  Improvement in
                  Decision-making




GAO/HEHS-97-102
      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      Health, Education, and
      Human Services Division

      B-270669

      August 12, 1997

      The Honorable Jim Bunning
      Chairman, Subcommittee on Social Security
      Committee on Ways and Means
      House of Representatives

      Dear Mr. Chairman:

      This report, prepared at your request, evaluates the Social Security Administration’s
      decision-making process for disability determinations and assesses its efforts to improve the
      process.

      As agreed with your office, we are sending copies of this report to the Commissioner of the
      Social Security Administration and the Director of the Office of Management and Budget. We
      will also make copies available to others on request.

      If you have any questions about this report, please call me at (202) 512-7215. Other major
      contributors to this report are listed in appendix IV.

      Sincerely yours,




      Jane L. Ross
      Director, Income Security Issues
Executive Summary


             Each year, about 2.5 million people apply to the Social Security
Purpose      Administration (SSA) for disability benefits. Disability determination
             services (DDS), which are state agencies that conduct disability
             determinations on behalf of SSA, award benefits to about 35 out of every
             100 of these initial applicants. Of the 65 denied applicants, about 43
             abandon their claims, and about 22 appeal to administrative law judges
             (ALJ). On appeal, 14 of 22 claimants, or almost two-thirds, are subsequently
             awarded benefits. This rate of ALJ benefit awards raises concerns in the
             Congress and elsewhere about the accuracy of disability DDS and ALJ
             decisions, length of time claimants must wait for a decision if they appeal,
             and costliness of deciding cases on appeal rather than upon initial
             application.

             In 1995 testimony before the Social Security Subcommittee of the House
             Committee on Ways and Means, GAO reported on the timeliness and
             consistency of SSA’s disability decisions.1 On the basis of that testimony,
             the Chairman asked GAO to report on (1) factors that contribute to
             differences between DDS and ALJ decisions and (2) SSA’s actions to make
             decisions in initial and appealed cases more consistent. This report details
             GAO’s findings, which were reported in testimony earlier this year.2



             SSAoperates the Disability Insurance (DI) and Supplemental Security
Background   Income (SSI) programs—the two largest federal programs providing cash
             benefits to people with disabilities. The law defines disability for both
             programs as the inability to engage in any substantial gainful activity by
             reason of a severe physical or mental impairment that is medically
             determinable and is expected to last at least 12 months or result in death.
             The programs have grown in the last 10 years, and today over 7 million
             working-age adults are on the rolls. These and other beneficiaries receive
             cash benefits totaling about $61 billion a year.3

             Disability determinations begin at the DDSs, where a disability examiner
             and a medical or psychological consultant, working as a team, analyze an
             applicant’s documentation, gather additional evidence as appropriate, and
             make a disability determination. Denied applicants may ask the DDS to

             1
              Social Security Disability: Management Action and Program Redesign Needed to Address
             Long-Standing Problems (GAO/T-HEHS-95-233, Aug. 3, 1995).
             2
             Social Security Disability: SSA Actions to Reduce Backlogs and Achieve More Consistent Decisions
             Deserve High Priority (GAO/T-HEHS-97-118, Apr. 24, 1997).
             3
              Included in the $61 billion of benefits are payments to all SSI blind and disabled beneficiaries
             regardless of age.



             Page 2                                        GAO/HEHS-97-102 SSA Accountability for Decisions
                   Executive Summary




                   reconsider its finding, and if denied again, may appeal to an ALJ. The ALJ
                   usually conducts a hearing and must consider the findings of the DDS
                   medical consultant but is not legally bound by them. In addition, claimants
                   may testify before an ALJ and present new evidence. Claimants whose
                   appeals are denied may request review by SSA’s Appeals Council and then
                   may file suit in federal court. The average initial DDS decision in DI cases
                   costs about $540, though a hearing can cost an additional $1,200. In
                   addition, appeals can add an average of 378 days to the length of time that
                   a claimant must wait for a final decision.

                   Both DDS and ALJ adjudicators use a sequential evaluation process when
                   determining disability. Under this process, applicants are awarded benefits
                   when their medical condition meets or equals criteria in SSA’s regulations
                   (commonly referred to as the medical listings). For those whose condition
                   does not meet or equal the listings, the adjudicators focus on the
                   functional consequences of applicants’ medically determined impairments.

                   As part of its 1994 plan for redesigning the disability determination
                   process, SSA set a goal of “making the right decision the first time.” As a
                   first step, SSA has begun an initiative, called process unification, to
                   improve the consistency of its decisions. Under redesign, the agency
                   expects more award decisions to be made by the DDSs, reducing the need
                   for appeals. Meanwhile, SSA faces several other competing demands,
                   including significant increases in continuing disability reviews and
                   increasing SSI workloads mandated by recent legislation.4 Over the longer
                   term, SSA plans to improve its methods for assessing applicants’ capacity to
                   function in the workplace.


                   ALJs made nearly 30 percent of all awards in 1996. Moreover, because
Results in Brief   two-thirds of all cases appealed to ALJs have resulted in awards, questions
                   have arisen about the fairness, integrity, and cost of SSA disability
                   programs. Differences in assessing applicants’ functional capacity and
                   procedural factors, as well as weaknesses in quality assurance, contribute
                   to inconsistent decisions.

                   Differences in assessing functional capacity help explain the inconsistent
                   decisions of ALJs and DDSs. ALJs are far more likely than DDSs to find
                   claimants unable to work on the basis of their functional capacity.

                   4
                    The Social Security Independence and Program Improvements Act of 1994 and the Personal
                   Responsibility and Work Opportunity Reconciliation Act of 1996 increased claims workloads for drug
                   addicts and alcoholics, noncitizens, and children on SSI, and both significantly increased SSA’s
                   requirements to conduct continuing disability reviews.



                   Page 3                                     GAO/HEHS-97-102 SSA Accountability for Decisions
Executive Summary




Moreover, this outcome has occurred even when ALJ and DDS adjudicators
review the same evidence for the same case. Most notably, DDS
adjudicators tend to rely on medical evidence such as the results of
laboratory tests; ALJs tend to rely more on symptoms such as pain and
fatigue. In addition, the opinions of claimants’ own physicians may more
likely influence ALJs than DDSs; DDSs may give more weight to other medical
evidence such as laboratory findings.

DDS and ALJ decision-making practices and procedures also contribute to
inconsistent results because they limit the usefulness of DDS evaluations as
bases for ALJ decisions. For instance, DDSs often do not ensure that medical
consultants write adequate explanations of their opinions. SSA regulations
require ALJs to consider these explanations, but this has little practical
value if the explanations are not well documented. In addition, SSA
procedures often lead to substantial differences between the evidentiary
records examined by DDSs and ALJs. Specifically, ALJs may examine new
evidence submitted by a claimant and hear a claimant testify. As a result,
even with a well-explained DDS decision, ALJs could reach a different
decision because the evidence in the case differs from that reviewed by
the DDS.

Finally, SSA has not used its quality review systems to identify and
reconcile differences in approach and procedures used by DDSs and ALJs. In
fact, the quality review systems for the initial level and appeals levels of
the decision-making process merely reflect the differences between the
levels; they do not help produce more consistent decisions.

Although SSA has not managed the decision-making process well in the
past, its current process unification initiatives, when fully implemented,
could significantly help to produce more consistent decisions. Competing
workload pressures at all adjudication levels could, however, jeopardize
SSA’s efforts. As a result, SSA, in consultation with the Congress, will need
to sort through its many priorities and be more accountable for meeting its
deadlines and establishing explicit measures to assess its progress in
reducing inconsistency. This may include, for example, setting a goal,
under the Government Performance and Results Act, to foster consistency
in results, set quantitative measures, and report on its progress in shifting
the proportion of cases awarded from the ALJ to the DDS level.




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                         Executive Summary




Principal Findings

DDSs and ALJs Differ     Differences in assessing claimants’ residual functional capacity (RFC) by
Mainly Over Claimants’   DDSs and ALJs are the main reason for most ALJ awards, according to GAO’s

Functional Abilities     analysis. ALJs are much more likely than DDSs to find that claimants have
                         severe limitations in functioning in the workplace, as indicated by an
                         ongoing SSA study of the appeals process. For instance, in the view of
                         awarding ALJs, 66 percent of cases merited an RFC of “less than the full
                         range of sedentary work”—a classification that often leads to an award. In
                         contrast, DSS reviewers found that less than 6 percent of the cases
                         merited this classification. DDS and ALJ differences in assessments were
                         also apparent in a 1982 SSA study that controlled for differences in
                         evidence. This study indicated that DDS and ALJ adjudicators often reach
                         different results even when presented with the same evidence.
                         Specifically, DDS reviewers would have awarded benefits in 13 percent of
                         the cases, while ALJs would have awarded benefits in 48 percent of the
                         cases.

                         The use of medical experts and the application of judgment in weighing
                         evidence seem to influence the differences in DDS and ALJ decisions. For
                         example, at the DDSs, medical or psychological consultants assess
                         applicants’ RFC. DDSs appear to rely more on objective medical findings
                         when assessing the impact of symptoms, such as pain and fatigue, on
                         functional capacity. In contrast, ALJs have the sole authority to determine
                         RFC and often rely on a claimant’s testimony and treating physicians’
                         opinions. Although ALJs may have independent medical experts testify at
                         hearings, only about 8 percent of cases in which benefits are awarded have
                         used such experts, according to our analysis.

                         SSA issued rulings in July 1996, which were written to clarify ALJs’ use of
                         DDS  medical consultants’ findings, treating source opinion, and assessing
                         RFC. In addition, SSA plans to issue a regulation to provide further guidance
                         on assessing RFC for both DDSs and ALJs, specifically clarifying when a
                         “less-than-sedentary” classification is appropriate. SSA expects this
                         classification to be used rarely.


DDS Evaluations of       Several factors at both the DDS and ALJ levels limit the usefulness of DDS
Limited Use to ALJs      evaluations as bases for ALJ decisions. Often, ALJs cannot rely on DDS
                         evaluations because they lack the supporting evidence and explanations of




                         Page 5                            GAO/HEHS-97-102 SSA Accountability for Decisions
                          Executive Summary




                          the reasons for the denial, laying a weak foundation for an ALJ decision if
                          an applicant appeals the case. Moreover, although SSA requires ALJs to
                          consider the DDS medical consultants’ assessments of RFC, DDS procedures
                          do not ensure that such assessments are clearly explained. Without this,
                          an ALJ could neither effectively consider such assessments nor give them
                          much weight.

                          At the ALJ level, claimants may submit additional evidence and claim new
                          impairments. This also affects the consistency of DDS and ALJ decisions.
                          Claimants submit additional evidence in about 75 percent of appealed
                          cases; and, in about 27 percent of hearing allowances, additional evidence
                          is an important factor in the decision. In about 10 percent of appealed
                          cases, claimants switch their primary impairment from a physical to a
                          mental one.

                          SSA has acknowledged the need to ensure that DDS decisions are better
                          explained and based on a more complete record so that they are more
                          useful if appealed. The agency plans to issue instructions and provide
                          additional training for the DDSs on how and where in the case files to
                          explain their decisions and on explaining the decisions. SSA also plans to
                          issue a regulation clarifying the reliance on DDS medical consultants’
                          opinions at the ALJ level. To deal with the possible effect of new evidence,
                          SSA plans to return about 100,000 selected cases a year to the DDSs for
                          further consideration when new evidence is introduced at the ALJ level.
                          The DDSs might award benefits at this point, eliminating the need for costly
                          and time-consuming ALJ hearings.


Quality Review Systems    SSA  has several quality review systems for disability decisions, each with
Neither Identify nor      its own specific purpose; none, however, is designed to identify and
Reconcile Inconsistency   reconcile factors that contribute to differences between DDS and ALJ
                          decisions. For example, although ALJs must consider as evidence medical
Between DDS and ALJ       consultants’ conclusions about claimants’ functional capacity, DDS quality
Decisions                 reviews do not focus adequate attention on explaining these conclusions
                          in the record. Moreover, SSA reviews of ALJ awards are too limited to
                          ascertain whether ALJs appropriately consider this evidence or whether
                          DDS explanations could be made more useful to ALJs. Feedback about both
                          of these issues—DDSs’ explanations of decisions and ALJs’ consideration of
                          them—would help improve SSA’s reviews of DDS and ALJ decisions and
                          make DDS decisions more useful to ALJs.




                          Page 6                           GAO/HEHS-97-102 SSA Accountability for Decisions
                  Executive Summary




                  SSA has started to focus its quality reviews on achieving greater
                  consistency between DDS and ALJ decisions. In late 1996, the agency started
                  to increase its reviews of ALJ awards, setting a first-year target of 10,000
                  cases. In the longer term, SSA plans to unify its DDS and ALJ quality review
                  processes, providing systematic review of decision-making. The agency
                  hopes this will ensure that the correct decision is made at the earliest
                  point in the process.


                  GAO supports SSA’s process unification initiatives and recommends that SSA,
Recommendations   using available systems and data collected so far, move quickly ahead to
                  implement its quality assurance initiative to provide consistent feedback
                  to DDS and ALJ adjudicators as soon as possible. In addition, SSA should
                  expand its effort to return cases to DDSs for their review when new
                  evidence is introduced on appeal.

                  GAO also recommends that SSA set specific goals for measuring the
                  effectiveness of process unification in reducing inconsistent decisions.


                  In its written comments on a draft of this report, SSA stated that the goal of
Agency Comments   process unification was the linchpin of the agency’s disability redesign
                  efforts and that GAO’s findings and suggestions would help SSA achieve this
                  goal. SSA generally agreed with GAO’s conclusions and recommendations
                  and provided specific comments and observations about areas of the
                  report that it believed should be changed. Where appropriate, GAO has
                  revised the report. A number of SSA’s specific comments and GAO’s
                  evaluation of these comments appear in chapter 6; the full text of SSA’s
                  comments and GAO’s response appear in appendix III.




                  Page 7                            GAO/HEHS-97-102 SSA Accountability for Decisions
Contents



Executive Summary                                                                                    2


Chapter 1                                                                                           12
                       Claimants May Pursue Several Levels of Appeal                                12
Introduction           ALJ Procedures Foster Independent Decision-making                            16
                       Differences in Decision Results Are Long-standing                            17
                       Decision-making Process Yields Much Inconsistency Between                    19
                         DDSs and ALJs
                       Recent SSA Efforts to Reduce Inconsistency                                   20
                       Objectives, Scope, and Methodology                                           22

Chapter 2                                                                                           23
                       DDSs and ALJs Use a Standard Approach, the Sequential                        23
Disability               Evaluation Process
Decision-making: A
Complex Process
Requiring Much
Judgment
Chapter 3                                                                                           33
                       Most ALJ Awards Result From RFC Assessments That Differ                      33
DDSs and ALJs Differ     From Those of DDSs
Most When Assessing    DDSs and ALJs Differ in Their Decision-making Approaches                     35
                       Effect of Differences in Policy Documents Difficult to Assess                36
Residual Functional    SSA Is Taking Actions to Improve Consistency of Decisions                    37
Capacity
Chapter 4                                                                                           39
                       DDS Medical Consultants Often Inadequately Explain RFC                       39
DDS Evaluations of       Assessments
Limited Use to ALJs    ALJ Awards Are Often Based on Information Not Available to                   40
                         DDSs
                       Effect of Other Factors Does Not Appear Major or Is More                     42
                         Difficult to Substantiate
                       SSA’s Planned Improvements in Procedures                                     43




                       Page 8                          GAO/HEHS-97-102 SSA Accountability for Decisions
                      Contents




Chapter 5                                                                                          45
                      Quality Reviews Not Designed to Address Differences                          45
Quality Reviews Do    Current Quality Reviews Mirror Differences in Approach and                   47
Not Focus on            Procedures
                      SSA Has Plans to Improve Quality Reviews                                     49
Inconsistency
Between DDS and ALJ
Decisions
Chapter 6                                                                                          51
                      Conclusions                                                                  51
Conclusions,          Recommendations                                                              52
Recommendations,      SSA’s Comments and Our Evaluation                                            53
Agency Comments,
and Our Evaluation
Appendixes            Appendix I: DDS and ALJ Disability Decisions and Operations                  56
                      Appendix II: SSA Studies Addressing Differences Between DDS                  60
                        and ALJ Decision-making
                      Appendix III: Comments From the Social Security Administration               68
                        and Our Evaluation
                      Appendix IV: GAO Contacts and Staff Acknowledgments                          75

Tables                Table 1.1: Levels of Appeal and Actions Taken by Disability                  13
                        Adjudicators
                      Table 1.2: Award Rates by DDSs and ALJs by Impairment Type                   19
                      Table 1.3: Back Impairment Award Rates by DDS and ALJs by                    20
                        Claimant Age
                      Table 2.1: Five-Step Sequential Evaluation Process for                       24
                        Determining Disability
                      Table 2.2: Definition of Five Exertional Demand Categories                   27
                      Table 2.3: Directed Decisions Under Medical-Vocational Rules for             28
                        Applicants Aged 50 or Older Whose Exertional Ability Is Limited
                        to Sedentary Work
                      Table 2.4: Directed Decisions Under Medical-Vocational Rules for             29
                        Applicants Under Age 50 Whose Exertional Ability Is Limited to
                        Full Range of Sedentary Work
                      Table 2.5: Factors Adjudicators Consider in Weighing Medical                 31
                        Opinions




                      Page 9                          GAO/HEHS-97-102 SSA Accountability for Decisions
          Contents




          Table 3.1: DDS and ALJ Differences in RFC Assessment                         34
            Classifications for Physical Impairment Awards
          Table 4.1: SSA Reviews Differ by Organization Reviewed and                   45
            Purpose
          Table I.1: DDS Decisions—September 1992 Through April 1995                   56
          Table I.2: ALJ Decisions—September 1992 Through April 1995                   57
          Table I.3: DDS and ALJ Operations, FY 1986 Through First                     58
            Quarter, FY 1997
          Table II.1: Design of SSA’s Bellmon Study                                    61
          Table II.2: Three-Tier DHQRP                                                 65

Figures   Figure 1.1: Disability Appeals Process and Outcomes                          15
          Figure 1.2: ALJ Awards as a Proportion of All Awards, FYs                    18
            1986-96




          Abbreviations

          ALJ        administrative law judge
          APA        Administrative Procedure Act
          CDR        continuing disability review
          DDS        disability determination service
          DHQRP      Disability Hearings Quality Review Process
          DI         Disability Insurance
          HALLEX     Hearings, Appeals, and Law Litigation Manual
          IG         Office of the Inspector General
          OHA        Office of Hearings and Appeals
          OPIR       Office of Program and Integrity Reviews
          PER        pre-effectuation review
          POMS       Program Operations Manual System
          RFC        residual functional capacity
          SSA        Social Security Administration
          SSI        Supplemental Security Income
          SSR        Social Security Ruling


          Page 10                         GAO/HEHS-97-102 SSA Accountability for Decisions
Page 11   GAO/HEHS-97-102 SSA Accountability for Decisions
Chapter 1

Introduction


                       The Social Security Disability Insurance (DI) and Supplemental Security
                       Income (SSI) programs are the two largest federal programs providing cash
                       payments to people with long-term disabilities. The DI program, authorized
                       in 1956 under title II of the Social Security Act, provides monthly cash
                       insurance benefits to insured, severely disabled workers. The SSI program,
                       authorized in 1972 under title XVI, provides monthly cash payments to
                       aged, blind, or disabled people whose income and resources fall below a
                       certain threshold. About 2.5 million people apply to the Social Security
                       Administration (SSA) each year for disability benefits.

                       Between 1985 and 1995, the number of DI beneficiaries increased about 53
                       percent to about 5.0 million, and the number of working-age SSI recipients
                       increased 81 percent to 2.4 million. In 1995, SSA distributed about
                       $61 billion to these and other disability beneficiaries and spent $3 billion
                       on program administration, which accounted for more than half of SSA’s
                       total administrative expenses.5

                       Both the DI and SSI programs are administered by SSA and state disability
                       determination services (DDS), which determine benefit eligibility. DDSs
                       award benefits to about 35 percent of applicants.6 Denied applicants may
                       appeal to an administrative law judge (ALJ) in SSA’s Office of Hearings and
                       Appeals (OHA). About a third of all applicants found not disabled by DDSs
                       appeal to an ALJ, and almost two-thirds of claimants who appeal to an ALJ
                       are subsequently found disabled.

                       Cases appealed to ALJs add considerably to SSA’s administrative expense
                       and increase the time claimants must wait for a decision. The average
                       initial DDS decision in DI cases costs about $540, while a hearing can cost
                       an additional $1,200. In addition, appeals can add an average of 378 days to
                       the length of time that an applicant must wait for a final decision.
                       Moreover, because ALJs award a high percentage of appealed cases that
                       have already been denied twice by the DDS, the integrity of the process is
                       called into question.


                       Claimants apply for DI and SSI disability benefits in SSA field offices, which
Claimants May Pursue   forward these applications, along with any supporting medical evidence,
Several Levels of      to the appropriate state DDS. A DDS adjudication team, consisting of a
Appeal                 disability examiner and a medical or psychological consultant, makes the

                       5
                        Included in the $61 billion of benefits are payments to all SSI blind and disabled beneficiaries
                       regardless of age.
                       6
                        DDSs are funded by SSA and make decisions in accordance with SSA’s policies and procedures.



                       Page 12                                       GAO/HEHS-97-102 SSA Accountability for Decisions
                                  Chapter 1
                                  Introduction




                                  initial decision on each claim. If the DDS denies a claim, the claimant may
                                  ask for reconsideration. For the reconsideration review, a new team of DDS
                                  adjudicators makes an independent decision on the basis of its own
                                  evaluation of all the evidence, including any new evidence the claimant
                                  might submit.

                                  If, after reconsideration, a DDS denies benefits, the claimant may pursue
                                  several levels of appeal (see table 1.1) and may introduce new evidence at
                                  almost every level. First, the claimant has the right to request a hearing
                                  before an ALJ. Before the hearing, the ALJ may obtain further medical
                                  evidence, for example, from the claimant’s own physician or by hiring a
                                  consultative physician to examine the claimant. The hearing before the ALJ
                                  is the first time that a claimant has an opportunity for a face-to-face
                                  meeting with an adjudicator. SSA hearings are informal and nonadversarial;
                                  SSA does not challenge a claimant’s case.


Table 1.1: Levels of Appeal and
Actions Taken by Disability       Adjudicative action                          Adjudicative decisionmakers
Adjudicators                      State DDS
                                  Make initial decision                        Medical consultant and disability examiner
                                                                               team
                                  Reconsider decision to deny benefits         Different medical consultant and disability
                                                                               examiner team
                                  SSA
                                  Review appealed DDS denial                   ALJ
                                  Review ALJ denial                            Appeals Council members
                                  Federal courts
                                  Review final agency decision (by ALJ or      Federal courts
                                  Appeals Council) to deny benefits

                                  The claimant and witnesses—who may include medical or vocational
                                  experts—testify at the hearing. The ALJ asks about the issues, receives
                                  relevant documents into evidence, and allows the claimant or the
                                  claimant’s representative to present arguments and examine witnesses. If
                                  necessary, the ALJ may further update the evidence after the hearing. When
                                  this is completed, the ALJ assesses the effects of the claimant’s medical
                                  impairment on capacity to function at work. The ALJ then issues a decision
                                  based on his or her assessment of the evidence in the case and is generally
                                  authorized to do so without seeking input from a medical professional.

                                  If an ALJ denies an appealed claim, the claimant may request that SSA’s
                                  Appeals Council review the case. The Appeals Council may deny or




                                  Page 13                                GAO/HEHS-97-102 SSA Accountability for Decisions
Chapter 1
Introduction




dismiss the request, or it may grant the request and either remand the case
to the ALJ for further action or issue a new decision. The Appeals Council’s
decision, or the decision of the ALJ if the Appeals Council denies or
dismisses the request for review, becomes SSA’s final decision. After a
claimant has exhausted all SSA administrative remedies, the claimant has
further appeal rights within the federal court system, up to and including
the Supreme Court.

Overall, about 49 percent of all applicants receive benefits, most
(71 percent) from initial or reconsideration decisions made at the DDS
level. About 22 percent of all applicants appeal their cases to ALJs; about
two-thirds of all claimants whose claims are denied at the DDS
reconsideration level appeal to an ALJ. Overall, about 29 percent of all
claims in 1996 were awarded on appeal. Figure 1.1 shows an overview of
the disability decision-making appeals process.




Page 14                           GAO/HEHS-97-102 SSA Accountability for Decisions
                                         Chapter 1
                                         Introduction




Figure 1.1: Disability Appeals Process and Outcomes




                                         Source: GAO analysis based on 1996 SSA data.




                                         Page 15                                 GAO/HEHS-97-102 SSA Accountability for Decisions
                     Chapter 1
                     Introduction




                     ALJs at SSA conduct de novo (or “afresh”) hearings; in other words, they
ALJ Procedures       may consider or develop new evidence, and they are not bound by DDS
Foster Independent   decisions. In addition, the Administrative Procedure Act (APA) protects
Decision-making      ALJs’ independence by exempting them from certain management controls.


                     Although ALJs are SSA employees and generally subject to the civil service
                     laws, the APA protects these staffs’ independence by restricting the extent
                     to which management controls them. For example, ALJ pay is determined
                     by the Office of Personnel Management independently of SSA
                     recommendations or ratings, and ALJs are not subject to statutory
                     performance appraisal requirements. Such safeguards help ensure that ALJ
                     judgments are independent and that ALJs would not be paid, promoted, or
                     discharged arbitrarily or for political reasons by an agency.

                     ALJsoperate under rules that differ from those of appellate courts. After a
                     DDS denial is appealed, an ALJ at SSA holds a de novo hearing, entitling the
                     claimant to have all factual issues determined anew by the ALJ. In contrast,
                     appellate courts generally review the findings of lower courts and only
                     consider whether those courts made errors of law or procedure.

                     Under the ALJ de novo process, the claimant receives a full in-person
                     hearing from an adjudicator who is fully authorized to hear every aspect of
                     the case.7 The ALJ hearing is the first time a new claimant is guaranteed the
                     right to testify before an adjudicator.

                     As SSA employees, ALJs make decisions for the Commissioner and are
                     subject to agency rules and regulations that they must apply in holding
                     hearings and making decisions. Review by the Appeals Council ensures
                     that ALJ decisions follow SSA regulations and rulings. If the Council
                     concludes that the ALJ has not followed agency rules and regulations, the
                     Council can reverse the ALJ decision on its own or send the case back to
                     the ALJ for further action.

                     Although the ALJ’s review and analysis of an appealed denial must include
                     the case file materials developed by the DDS, the ALJ makes new factual
                     determinations. For example, even though a DDS concludes that an
                     individual can perform work, the ALJ is free to conclude that the individual
                     cannot.




                     7
                      Not every appealed case involves a hearing; some are decided on the basis of the case record.



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                       Chapter 1
                       Introduction




                       The differences between DDS and ALJ results are a long-standing problem
Differences in         contributing to the growth in OHA backlogs and increased case-processing
Decision Results Are   time, according to our 1996 report on SSA’s efforts to reduce backlogs in
Long-standing          appealed decisions.8 Our review of over 40 internal and external studies of
                       the disability determination and appeals process, several of which were
                       completed more than 20 years ago, led us to this conclusion. In the early
                       1990s, as part of its efforts to develop a number of strategic priority goals,
                       SSA reviewed many of the same studies and identified inconsistent
                       decisions as a critical issue affecting SSA’s ability to improve its service to
                       the public.

                       Inconsistent decisions have been evident in program data for many years.
                       For example, since 1986, DDS award rates have ranged from 31 to
                       43 percent, whereas ALJ award rates have ranged from 60 to 75 percent. As
                       shown in figure 1.2, ALJ awards, as a percentage of total awards, have
                       ranged from 17 percent in 1986 to 29 percent in 1996.9




                       8
                        Social Security Disability: Backlog Reduction Efforts Under Way; Significant Challenges Remain
                       (GAO/HEHS-96-87, July 11, 1996).
                       9
                        More recently, in the first quarter of fiscal year 1997, the proportion dropped to 24 percent.



                       Page 17                                        GAO/HEHS-97-102 SSA Accountability for Decisions
                                        Chapter 1
                                        Introduction




Figure 1.2: ALJ Awards as a
Proportion of All Awards, FYs 1986-96




                                        Source: SSA data.




                                        Concerns about comparatively high ALJ award rates are not new. Although
                                        many hypotheses for inconsistent decisions have been discussed,
                                        explanations for the high rate of ALJ awards have been inadequate or
                                        unavailable. In early 1979, congressional hearings focused on high ALJ
                                        award rates, and, in 1980, the Congress passed legislation aimed at
                                        promoting greater consistency and accuracy of ALJ decision-making. This
                                        legislation required SSA to establish a system of reviewing ALJ decisions to
                                        ensure that they comply with laws, regulations, and SSA rulings. In
                                        January 1982, SSA submitted to the Congress the results of a study on
                                        progress made in reviewing ALJ decisions, including the possible causes for
                                        ALJ reversals.10


                                        Soon after SSA started to perform the quality reviews required by
                                        legislation, the Association of ALJs filed suit in federal court. The lawsuit
                                        challenged SSA’s plans to target these reviews to judges with high award

                                        10
                                         Implementation of Section 304 (g) of Public Law 96-265, Social Security Disability Amendments of
                                        1980 (the Bellmon Report), Secretary of Health and Human Services (Washington D.C.: Jan. 1982).



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                                     rates on the grounds that such reviews threatened ALJs’ decision-making
                                     independence. The court never ruled on this issue because SSA decided to
                                     rescind targeted reviews. ALJ award rates fell temporarily from 62 percent
                                     in 1981 to 55 percent in 1983 when SSA was performing its targeted
                                     reviews, although other factors could explain the decline. When targeted
                                     reviews ended in 1984, however, ALJ award rates started to increase again
                                     and have remained at high levels ever since.


                                     Not only do award rates between DDSs and ALJs differ, but the rates also
Decision-making                      differ by impairment type and other factors. For example, although DDS
Process Yields Much                  award rates vary by impairment, ALJ award rates are high regardless of the
Inconsistency                        type of impairment. As shown in table 1.2, DDS award rates ranged from
                                     11 percent for back impairments to 54 percent for mental retardation. In
Between DDSs and                     contrast, ALJ award rates averaged 77 percent for all impairment types with
ALJs                                 a smaller variation among impairment types.

Table 1.2: Award Rates by DDSs and
ALJs by Impairment Type                                                                    DDS award rates        ALJ award rates
                                                                                                 (percent)              (percent)
                                     Physical                                                               29                74
                                     Musculoskeletal                                                        16                75
                                       Back cases                                                           11                75
                                       Other musculoskeletal                                                23                76
                                     Other physical                                                         36                74
                                     Mental                                                                 42                87
                                       Illness                                                              39                87
                                       Retardation                                                          54                84
                                     All impairments                                                        30                77
                                     Source: GAO analysis based on SSA data from Sept. 1, 1992, through Apr. 30, 1995.



                                     When age is considered in addition to impairment type, decisions can vary
                                     even more widely. Table 1.3 illustrates, for example, how widely DDSs and
                                     ALJs can diverge when age is considered in back impairment cases.




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Table 1.3: Back Impairment Award
Rates by DDS and ALJs by Claimant                                                                   Award rates (percentage)
Age                                 Age of claimant                                                           DDS                         ALJ
                                    All ages                                                                    11                         75
                                    Under 50                                                                      2                        68
                                    50 and older                                                                22                         83
                                    Source: GAO analysis based on SSA data for Sept. 1, 1992, through Apr. 30, 1995.




                                    SSA has long known about its inconsistent decisions and the problems they
Recent SSA Efforts to               pose for the disability programs and the agency. SSA has studied the
Reduce Inconsistency                problem and taken several steps to address factors known to contribute to
                                    inconsistency between DDS and ALJ adjudicators. In May 1992, SSA’s
                                    Commissioner approved a study of the appeals process, later called the
                                    Disability Hearings Quality Review Process (DHQRP).11 This study analyzed
                                    the reasons for high ALJ award rates. SSA has issued two reports based on
                                    this study, which is ongoing.12

                                    Realizing that the inconsistency between DDS and ALJ decisions and the
                                    length and complexity of the decision-making process compromised the
                                    integrity of disability determinations, SSA began redesigning the process in
                                    1993. In late 1994, it released its Plan for a New Disability Claim Process—
                                    commonly referred to as the “redesign plan”—which represents the
                                    agency’s long-term strategy for addressing the systemic problems
                                    contributing to inefficiencies in its disability processes. To direct the
                                    redesign effort, SSA created a management team assisted by top SSA
                                    management, various task teams, and state and federal employees
                                    involved with disability determinations.

                                    To address inconsistent decisions as a part of redesign, the agency
                                    established a process unification task team. This team included a diverse
                                    group of 29 SSA and DDS employees who, in addition to their own expertise,
                                    sought information from other sources and reviewed data from SSA’s DHQRP
                                    study of the appeals process. In November 1995, the task team issued its
                                    final report. SSA established an intercomponent group to develop specific
                                    actions to support consistent disability decisions and a senior executive


                                    11
                                      SSA’s decision to begin this review of ALJ decisions was prompted in part by our 1992 report about
                                    racial disparities in ALJ allowance decisions. See Social Security: Racial Difference in Disability
                                    Decisions Warrants Further Investigation (GAO/HRD-92-56, Apr. 21, 1992).
                                    12
                                       Findings of the Disability Hearings Quality Review Process, SSA, Office of Program and Integrity
                                    Reviews (Washington, D.C.: Sept. 1994 and Mar. 1995).



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                              group to enforce needed changes. In July 1996, the SSA Commissioner
                              approved the group’s recommendations for several initiatives designed to
                              reduce inconsistent decisions by DDSs and ALJs.


SSA Faces Several             In addition to SSA’s recent efforts to address inconsistent DDS and ALJ
Competing Workloads           decisions, the agency faces significantly increasing workloads at all levels
                              of adjudication. In particular, several congressional mandates will
                              compete for time and resources with process unification efforts. For
                              example, the Social Security Independence and Program Improvements
                              Act of 1994 and the Personal Responsibility and Work Opportunity
                              Reconciliation Act of 1996 require hundreds of thousands more continuing
                              disability reviews (CDR) to ensure that beneficiaries are still eligible for
                              benefits. By law, SSA must conduct CDRs for at least 100,000 more SSI
                              beneficiaries annually through fiscal year 1998. In 1996, the Congress
                              increased CDR requirements for children on SSI, requiring CDRs at least
                              every 3 years for children under age 18 who are likely to improve and for
                              all low birth weight babies in the first year of life. In addition, SSA is
                              required to redetermine, using criteria for adults, the eligibility of all
                              18-year-olds on SSI beginning on their 18th birthdays and to readjudicate
                              332,000 childhood disability cases by August 1997. Finally, thousands of
                              noncitizens and drug addicts and alcoholics could appeal their benefit
                              terminations, further increasing SSA’s workload.


SSA Includes Performance      The Government Performance and Results Act (the Results Act) of 1993
Goals for Disability in Its   requires federal agencies to be more accountable for the results of their
Government Performance        efforts and their stewardship of taxpayer dollars. The Results Act shifts
                              the focus of federal agencies from traditional concerns, such as staffing
and Results Act Plan          and activity levels, to results. Specifically, the act directs agencies to
                              consult with the Congress and obtain the views of other stakeholders and
                              to clearly define their missions. It also requires them to establish long-term
                              strategic goals as well as annual goals linked to the strategic goals.
                              Agencies must then measure their performance toward these goals and
                              report to the President and the Congress on their progress.13

                              The Results Act’s initial implementation involves about 70 pilot tests
                              during fiscal years 1994 through 1996 to provide agencies with experience
                              in meeting its requirements before governmentwide implementation in the
                              fall of 1997. As a pilot agency, SSA submitted its fiscal year 1996 annual

                              13
                               For further details, see Executive Guide: Effectively Implementing the Government Performance and
                              Results Act (GAO/GGD-96-118, June 1996).



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                     Introduction




                     performance plan to the Office of Management and Budget in May 1995.
                     Specifically, the plan includes the strategic goals of (1) rebuilding
                     confidence in Social Security, (2) providing world-class service, and
                     (3) creating a supportive environment for SSA employees. It also includes a
                     broad range of measures for disability and appeals-related performance
                     outputs and outcomes.


                     In 1995 testimony before the Subcommittee on Social Security, House
Objectives, Scope,   Committee on Ways and Means, we reported on the timeliness and
and Methodology      consistency of DDS and ALJ disability determinations.14 After our testimony,
                     the Chairman asked us to examine the differences between DDS and ALJ
                     decisions in more detail. Specifically, we agreed to (1) ascertain the
                     factors contributing to inconsistent decisions by DDSs and ALJs and
                     (2) identify SSA’s efforts to address inconsistent decisions. We reported our
                     preliminary findings in testimony earlier this year.15

                     To respond to the first objective, we divided the possible contributing
                     factors into three types: (1) factors related to differences in RFC
                     assessments made by DDSs and ALJs, (2) procedural factors that contribute
                     to differences in decisions, and (3) use of quality reviews to manage the
                     process.

                     In conducting our review, we examined existing studies, SSA’s regulations
                     and program operations memoranda, and court cases related to the
                     disability programs. We also obtained and analyzed program and statistical
                     data; see appendix I for details. In addition, we interviewed DDS and SSA
                     officials, including ALJs and OHA staff. We also attended SSA’s nationwide
                     process unification training.

                     We performed our review at SSA headquarters in Baltimore, Maryland; OHA
                     headquarters in Falls Church, Virginia; and at SSA and DDS offices in
                     Atlanta, Boston, and Denver. We conducted our review between October
                     1995 and June 1997 in accordance with generally accepted government
                     auditing standards except that we did not verify agency data.




                     14
                      Social Security Disability: Management Action and Program Redesign Needed to Address
                     Long-Standing Problems (GAO/T-HEHS-95-233, Aug. 3, 1995).
                     15
                      Social Security Disability: SSA Actions to Reduce Backlogs and Achieve More Consistent Decisions
                     Deserve High Priority (GAO/T-HEHS-97-118, Apr. 24, 1997).



                     Page 22                                    GAO/HEHS-97-102 SSA Accountability for Decisions
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Process Requiring Much Judgment

                      SSA requires that DDS and ALJ adjudicators follow a standard approach—
                      called the sequential evaluation process—for making disability
                      determinations. Although standard, the process requires adjudicators to
                      make several complex judgments. For example, if adjudicators cannot
                      allow the claim on the basis of medical evidence only, they must make
                      judgments on whether claimants can perform prior or other work
                      available in the national economy despite their disabling conditions. Such
                      determinations may involve not only residual functional capacity (RFC)
                      assessments, but consideration of these assessments along with the
                      claimant’s age, education, and skill levels.

                      To reduce the amount of judgment involved, SSA has developed medical-
                      vocational rules. In general, the older, less educated, and less skilled the
                      claimant, the more likely these rules will direct the adjudicator to award
                      benefits. For claimants with functional and vocational profiles that do not
                      fit the rules, however, adjudicator decision-making is less prescribed. In
                      addition, before making any decision, adjudicators must decide how much
                      weight to give to various sources of evidence and evaluate the
                      reasonableness and consistency of any allegations the claimant makes
                      about pain or other symptoms.


                      To determine whether applicants meet the Social Security Act’s definition
DDSs and ALJs Use a   of disability, SSA regulations provide DDS and ALJ adjudicators with a
Standard Approach,    sequential evaluation process (see table 2.1). Although the process
the Sequential        provides a standard approach, determining disability requires a number of
                      complex judgments.
Evaluation Process
                      For people 18 or older, the act defines disability under the DI and SSI
                      programs as the inability to engage in substantial gainful activity by reason
                      of a severe physical or mental impairment that is medically determinable
                      and has lasted or is expected to last at least 1 year or result in death.16
                      Moreover, the impairment must be of such severity that a person not only
                      is unable to do past relevant work, but, considering age, education, and
                      work experience, is also unable to engage in any substantial work
                      available in the national economy.




                      16
                       Regulations currently define substantial gainful activity as employment that produces countable
                      earnings of more than $500 a month for disabled people and $1,000 a month for blind people.



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Table 2.1: Five-Step Sequential
Evaluation Process for Determining                                                             Action or decision taken if answer to
Disability                                       Questions asked in the sequential                         question is
                                     Step        process                                      Yes                      No
                                     1           Is the applicant engaging in                 Stop—applicant is        Go to step 2
                                                 substantial gainful activity?a               not disabled
                                     2           Does the applicant have an                   Go to step 3             Stop—applicant is
                                                 impairment that has more than a                                       not disabled
                                                 minimal effect on the applicant’s
                                                 ability to perform basic work tasks?b
                                     3           Does the applicant’s impairment        Stop—applicant is              Go to step 4
                                                 meet or equal the medical criteria for disabled
                                                 an impairment in SSA’s Listing of
                                                 Impairments?b
                                     4           Comparing the applicant’s RFC with           Stop—applicant is        Go to step 5
                                                 the physical and mental demands of           not disabled
                                                 the applicant’s past work, can the
                                                 applicant perform his or her past
                                                 work?
                                     5           On the basis of the applicant’s RFC          Applicant is not         Applicant is
                                                 and any limitations that may be              disabled                 disabled
                                                 imposed by the applicant’s age,
                                                 education, and skill level, can the
                                                 applicant do work other than his or
                                                 her past work?b
                                     a
                                      Under the sequential evaluation process, SSA’s field offices determine whether the applicant is
                                     engaged in substantial gainful activity.
                                     b
                                      In addition, the criteria require that the impairment last 12 months or be expected to result in
                                     death.



                                     Applicants are denied benefits at step 1 if they are engaged in substantial
                                     gainful activity. At step 2, adjudicators further screen applicants by
                                     assessing whether they have a severe impairment, defined by the
                                     regulations as an impairment that has more than a minimal effect on the
                                     applicant’s ability to perform basic work tasks. For those whose
                                     impairments have more than a minimal effect on ability to work,
                                     adjudicators then begin determining whether the applicant’s impairments
                                     are severe enough to qualify for disability benefits.


Does the Applicant Qualify           In step 3 of the sequential evaluation process, adjudicators compare the
Under SSA’s Listing of               applicant’s medical condition with medical criteria found in SSA’s Listing of
Impairments?                         Impairments—referred to as “the medical listings”—which are published
                                     in SSA’s regulations. The listings delineate over 150 categories of medical
                                     conditions (physical and mental) that, according to SSA, are presumed to



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be severe enough to ordinarily prevent an individual from engaging in any
gainful activity. For example, corrected vision of 20/200 or less,
amputation of both hands, or an intelligence quotient of 59 or less would
ordinarily qualify an individual for benefits.

An applicant may automatically qualify for benefits if the adjudicator
concludes that the laboratory findings, medical signs, and symptoms of
one of the applicant’s impairments meet the specific criteria for medical
severity cited in the listings for that impairment and the applicant is not
engaging in substantial gainful activity. If an applicant’s medical condition
does not meet the listed criteria or if the impairment is not listed, then the
adjudicator must determine whether the applicant’s impairment is the
medical equivalent of one in the listings.

The medical severity criteria for listed mental impairments are generally
more subjective than those for physical impairments. For most mental
impairments in the listings, many of the severity criteria are defined by
functional limitations. Determining whether a mental impairment meets or
equals the listed criteria often requires subjective evaluations about
(1) restrictions of daily activities; (2) difficulties in maintaining social
functioning; (3) deficiencies in concentration, persistence, or pace that
result in failure to complete tasks in a timely manner; and (4) episodes of
deterioration in work settings that cause the individual to withdraw or
have exacerbated signs and symptoms. For example, adjudicators must
decide whether the impairment has any impact at all on activities of daily
living or on social functioning, and, if so, rate the impact as slight,
moderate, marked, or extreme.

By contrast, the listed criteria for physical impairments generally are more
objective, relating to medical diagnosis and prognosis, rather than the
assessment of functional limitations in the mental listings. Determining
whether the medical findings for a physical impairment meet or equal
these criteria is a matter of documentation and is often more a question of
medical fact than opinion. In some instances, however, the criteria for
physical impairments also require that adjudicators assess functional
limitations. For example, for applicants with human immunodeficiency
virus, adjudicators assess their symptoms or signs, such as fatigue, fever,
malaise, weight loss, pain, and night sweats as well as their subsequent
effect on activities of daily living and social functioning. For
musculoskeletal and other impairments, adjudicators assess the
importance of pain in causing functional loss when it is associated with
relevant abnormal signs and laboratory findings. Adjudicators must also



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                             carefully determine that the reported examination findings are consistent
                             with the applicant’s daily activities.


Can the Applicant Perform    When medical evidence does not show that an applicant’s condition meets
Past Relevant Work?          or equals the severity criteria in the listings, adjudicators must determine
                             whether the applicant can perform past work. To do this, adjudicators use
                             judgment when they assess an applicant’s RFC—that is, what an applicant
                             can still do, despite physical and mental limitations, in a regular full-time
                             work setting.

                             To assess RFC, adjudicators must consider all relevant medical and
                             nonmedical evidence, such as statements of lay witnesses about an
                             individual’s symptoms. In considering medical evidence, adjudicators must
                             evaluate medical source opinions and judge the weight to be given to each
                             opinion. Adjudicators also often evaluate issues involving pain or other
                             symptoms and judge whether the applicant’s impairment could reasonably
                             be expected to produce the applicant’s symptoms.

                             Assessing physical RFC requires adjudicators to judge individuals’ ability to
                             physically exert themselves in activities such as sitting, standing, walking,
                             lifting, carrying, pushing, and pulling. Adjudicators also assess the effect of
                             the individual’s physical impairment on manipulative or postural functions
                             such as reaching, handling, stooping, or crouching. Assessing mental RFC
                             requires adjudicators to judge the individual’s functional abilities such as
                             understanding, remembering, carrying out instructions, and responding
                             appropriately to supervision, coworkers, and work pressures.

                             After assessing an applicant’s RFC, the adjudicator compares it with the
                             demands of the applicant’s prior work. The adjudicator either concludes
                             that the applicant can perform his or her prior work and denies the claim
                             or proceeds to the last step (step 5) in the sequential evaluation process.


Can the Applicant Perform    At step 5, adjudicators evaluate whether applicants unable to perform
Other Work in the National   their previous work can do other jobs that exist in significant numbers in
Economy?                     the national economy. If the adjudicator concludes that an applicant can
                             perform other work, the claim is denied. Again, adjudicators must apply
                             judgment to determine whether an applicant can perform other work in
                             the national economy, depending on whether the applicant’s limitations
                             are exertional or nonexertional.




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                                           An applicant has exertional limitations when his or her impairment limits
                                           the ability to perform the physical strength demands of work. For this
                                           evaluation, SSA places a claimant into one of five categories of physical
                                           exertion—sedentary, light, medium, heavy, and very heavy—with
                                           sedentary work requiring the least physical exertion of the five levels (see
                                           table 2.2).17 On the basis of an applicant’s RFC, adjudicators must judge
                                           which of the five exertional categories is the most physically demanding
                                           work the individual can perform. For an applicant whose maximum
                                           physical ability matches one of the five exertional categories of work, SSA
                                           provides medical-vocational rules that direct the adjudicator’s decision on
                                           the basis of the claimant’s age, education, and skill levels of prior work
                                           experience.

Table 2.2: Definition of Five Exertional
(Strength) Demand Categories               Exertional demand                                 Strength requirements
                                           category                 Requirement for lifting                      Other strength demands
                                           Sedentary                Requires lifting no more than 10             Involves sitting; walking and
                                                                    pounds at a time and occasionally            standing may be required
                                                                    lifting or carrying articles like docket     occasionally
                                                                    files, ledgers, and small tools
                                           Light                    Requires lifting no more than 20             Requires a good deal of
                                                                    pounds at a time or carrying objects         walking or standing or
                                                                    weighing up to 10 pounds                     involves sitting most of the
                                                                                                                 time with some pushing and
                                                                                                                 pulling of arm or leg controls
                                           Medium                   Requires lifting no more than 50       Requires unlimited sitting,
                                                                    pounds at a time with frequent lifting walking, and standing ability
                                                                    or carrying of objects weighing up to
                                                                    25 pounds
                                           Heavy                    Requires lifting no more than 100      Requires unlimited sitting,
                                                                    pounds at a time with frequent lifting walking, and standing ability
                                                                    or carrying of objects weighing up to
                                                                    50 pounds
                                           Very heavy               Requires lifting objects weighing            Requires unlimited sitting,
                                                                    more than 100 pounds at a time with          walking, and standing ability
                                                                    frequent lifting or carrying of objects
                                                                    weighing 50 pounds or more

                                           Table 2.3 shows how the medical-vocational rules direct decisions for
                                           people aged 50 or older who are limited to sedentary work.




                                           17
                                            The Department of Labor developed this classification system, which is in its Dictionary of
                                           Occupational Titles.



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Table 2.3: Directed Decisions Under
Medical-Vocational Rules for          Education                        Previous work experience Directed decision
Applicants Aged 50 or Older Whose     Limited (grades 7-11 or less)    Unskilled or none            Disabled
Exertional Ability Is Limited to
                                      Limited (grades 7-11 or less)    Skilled or semiskilled—skills Disabled
Sedentary Work
                                                                       not transferable
                                      Limited (grades 7-11) or less    Skilled or semiskilled—skills Not disabled
                                                                       transferable
                                      High school graduate or          Unskilled or none            Disabled
                                      more—does not provide for
                                      direct entry into skilled work
                                      High school graduate or          Unskilled or none            Not disabled
                                      more—provides for direct
                                      entry into skilled work
                                      High school graduate or          Skilled or semiskilled—skills Disabled
                                      more—does not provide for        not transferable
                                      direct entry into skilled work
                                      High school graduate or          Skilled or semiskilled—skills Not disabled
                                      more—does not provide for        transferable
                                      direct entry into skilled work
                                      High school graduate or          Skilled or semiskilled—skills Not disabled
                                      more—provides for direct         not transferable
                                      entry into skilled work

                                      In general, the older a person is, the more likely SSA’s medical-vocational
                                      rules direct adjudicators to award benefits. For example, under the rules
                                      for those whose maximum physical capacity limits them to performing
                                      sedentary work, applicants aged 50 or older qualify for benefits under four
                                      of the scenarios shown in table 2.3. Those aged 45 through 49, however,
                                      qualify under only one scenario; applicants aged 18 through 44 qualify
                                      under no scenario (see table 2.4).




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Table 2.4: Directed Decisions Under
Medical-Vocational Rules for                                                     Previous work            Directed decision
Applicants Under Age 50 Whose           Education                                experience           Aged 45-49    Aged 18-44
Exertional Ability Is Limited to Full
                                        Illiterate or unable to communicate in   Unskilled or none    Disabled      Not disabled
Range of Sedentary Work
                                        English
                                        Limited (grades 7-11 or less)—at least Unskilled or none      Not disabled Not disabled
                                        literate and able to communicate in
                                        English
                                        Limited (grades 7-11 or less)            Skilled or           Not disabled Not disabled
                                                                                 semiskilled—skills
                                                                                 not transferable
                                        Limited (grades 7-11 or less)            Skilled or           Not disabled Not disabled
                                                                                 semiskilled—skills
                                                                                 transferable
                                        High school graduate or more             Unskilled or none    Does not      Not disabled
                                                                                                      apply
                                        High school graduate or more             Skilled or           Not disabled Not disabled
                                                                                 semiskilled—skills
                                                                                 not transferable
                                        High school graduate or more             Skilled or           Not disabled Not disabled
                                                                                 semiskilled—skills
                                                                                 transferable

                                        Although SSA’s medical-vocational rules reduce the degree of judgment
                                        that adjudicators must use in many cases, SSA has no rules to direct
                                        adjudicators’ decisions for other cases. These include cases in which
                                        (1) the applicant’s maximum strength capability does not match any of the
                                        five exertional levels or (2) the applicant’s primary limitations are
                                        nonexertional (or unrelated to the physical strength demands required for
                                        sitting, standing, walking, lifting, carrying, pushing, and pulling). In such
                                        cases, the medical-vocational rules can provide a guide for evaluating an
                                        applicant’s ability to do other work, but the regulations instruct
                                        adjudicators to base their decisions on the principles in the appropriate
                                        sections of the regulations, giving consideration to the medical-vocational
                                        rules for specific case situations. For example, an applicant may be
                                        restricted to unskilled sedentary jobs because of a severe cardiovascular
                                        impairment. If a permanent injury of the right hand also limits the
                                        applicant to only those sedentary jobs that do not require bilateral manual
                                        dexterity, then the applicant’s work capacity is limited to less than the full
                                        range of sedentary work. The ability to do less than the full range of
                                        sedentary work is not one of the five exertional levels defined in SSA’s
                                        regulations; therefore, no medical-vocational rules would direct the
                                        adjudicator’s decision.




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                          On the basis of Department of Labor data, SSA estimates that
                          approximately 200 unskilled occupations exist, each representing many
                          jobs that can be performed by people whose limitations restrict them to
                          the full range of sedentary work. But, if an applicant is limited to less than
                          the full range of sedentary work, the adjudicator must determine the
                          extent to which the exertional and nonexertional limitations reduce the
                          occupational base of jobs, considering the applicant’s age, education, and
                          work experience, including any transferable skills or education providing
                          for direct entry into skilled work. The mere inability to perform all
                          sedentary unskilled jobs is not sufficient basis for a finding of disability.
                          The applicant still may be able to do a wide range of unskilled sedentary
                          work.


Adjudicators Must Weigh   Before making any decision, an adjudicator must assess the amount of
Evidence and              weight to give to the various sources of evidence and evaluate the
Reasonableness of         reasonableness and consistency of any allegations from applicants about
                          pain or other symptoms.
Symptom Allegations
                          To provide a basis for determining disability, the adjudicator must gather
                          existing medical evidence, which includes (1) opinions of physicians or
                          psychologists who have had an ongoing treatment relationship with the
                          applicant and (2) hospitals, clinics, and other medical sources that have
                          treated or evaluated the applicant but not on an ongoing basis. In addition,
                          adjudicators may develop new medical evidence obtained from consulting
                          sources. Medical evidence includes (1) medical history; (2) clinical
                          findings, such as the results of physical or mental status examinations;
                          (3) laboratory findings, such as blood pressure and X rays; (4) statement of
                          the diagnosis of the disease or injury based on its signs and symptoms; and
                          (5) treatment prescribed and prognosis. Medical evidence also includes
                          statements from treating physicians or other medical sources describing
                          work-related activities, such as sitting, standing, walking, and lifting, that
                          the applicant can still do despite his or her impairments. In the case of
                          mental impairments, statements should describe the applicant’s ability to
                          understand, carry out, and remember instructions and respond
                          appropriately to supervision, coworkers, and work pressures. In making a
                          decision, an adjudicator must assess how much weight to give to each
                          medical source’s statement of opinion. Table 2.5 describes the factors to
                          be considered in weighing opinions.




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                                  Disability Decision-making: A Complex
                                  Process Requiring Much Judgment




Table 2.5: Factors Adjudicators
Consider in Weighing Medical                                      General effect of each factor on the weight given to a
Opinions                          Factor                          medical source opinion
                                  Examining relationship          More weight is given to a source who examined the
                                                                  applicant than to a source who did not.
                                  Treatment relationship          More weight is given to the applicant’s treating physicians
                                                                  because they can provide a detailed, longitudinal picture
                                                                  of the impairments and bring a unique perspective not
                                                                  available from objective medical findings alone or from
                                                                  single examinations or brief hospitalizations. If a treating
                                                                  physician’s medical opinion is well supported and is not
                                                                  inconsistent with other medical evidence in the case file,
                                                                  then adjudicators must give it “controlling” weight.
                                  Length, nature, and extent of   Weight is commensurate with (1) the length of time a
                                  treatment relationship          source has treated the applicant, (2) the number of times
                                                                  the source has seen the applicant, and (3) the source’s
                                                                  knowledge based on the kinds and extent of
                                                                  examinations and testing the source has performed or
                                                                  ordered from specialists and independent laboratories.
                                  Supportability                  Weight is commensurate with the extent to which the
                                                                  medical source (1) supports the opinion with relevant
                                                                  evidence, such as medical signs and laboratory findings,
                                                                  and (2) provides an explanation for the opinion.
                                  Consistency                     The more consistent an opinion is with the record as a
                                                                  whole, the more weight adjudicators must give that
                                                                  opinion.
                                  Specialization                  All other factors being equal, more weight is given to the
                                                                  opinion of a specialist on medical issues in his or her area
                                                                  of specialty than to the opinion of a source who is not a
                                                                  specialist.
                                  Other factors                   Adjudicators must consider any factors that the applicant
                                                                  or others bring to their attention that tend to support or
                                                                  contradict the opinion.

                                  Adjudicators also must evaluate whether an applicant’s impairment could
                                  reasonably be expected to produce the reported symptoms—such as pain,
                                  fatigue, shortness of breath, weakness, and nervousness. This requires the
                                  adjudicator to assess the extent to which an individual’s symptoms are
                                  consistent with (1) the objective medical evidence (medical signs and
                                  laboratory findings); (2) evidence, such as statements from the applicant,
                                  medical sources, family, friends, or employers about the applicant’s
                                  medical history, diagnosis, prescribed treatment, activities of daily living,
                                  and efforts to work; (3) information from social welfare agencies,
                                  nonmedical sources, and other practitioners, such as chiropractors and
                                  audiologists; and (4) any other evidence of the applicant’s impairment’s
                                  effect on his or her ability to work.




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    If the adjudicator concludes that the impairment could reasonably be
    expected to produce the reported symptoms, the adjudicator must then
    evaluate the intensity and persistence of the symptoms to determine how
    the symptoms limit the applicant’s ability to work. In making such an
    evaluation, adjudicators look for objective medical evidence obtained
    through clinical and laboratory diagnostic techniques, such as evidence of
    reduced joint motion, muscle spasm, sensory deficit, or motor disruption.
    However, adjudicators cannot reject an applicant’s statements about the
    intensity and persistence of pain or other symptoms or about the effect of
    these symptoms on the ability to work solely because the available
    objective medical evidence does not substantiate the applicant’s
    statements. Because symptoms reported by the applicant sometimes
    suggest a more severe impairment than can be shown by objective medical
    evidence alone, adjudicators must carefully consider any other
    information provided by the applicant, treating sources, or other people
    about the applicant’s pain or other symptoms. Following are the factors
    that adjudicators must consider in assessing pain and other symptoms:

•   activities of daily living;
•   location, direction, frequency, and intensity of the pain or other symptoms;
•   precipitating and aggravating factors;
•   type, dosage, effectiveness, and side effects of any medication the
    applicant takes or has taken to alleviate pain/symptoms;
•   treatment, other than medication, the applicant is receiving or has
    received for relief of pain or other symptoms;
•   any measures the applicant uses or has used to relieve pain or other
    symptoms, such as lying flat on back, standing for 15 or 20 minutes every
    hour, and sleeping on a board; and
•   other factors concerning the applicant’s functional limitations and
    restrictions due to pain or other symptoms.




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DDSs and ALJs Differ Most When Assessing
Residual Functional Capacity

                       SSA studies show that DDS and ALJ decisions most often differ because
                       adjudicators make different conclusions about applicants’ ability to
                       function in the workplace. At the DDS and ALJ levels, two different types of
                       professional staff perform residual functional capacity (RFC) assessments.
                       At the DDS, medical staff perform the assessments; at the ALJ level, the ALJ
                       performs them. ALJs may seek the advice of medical experts, but they do
                       so infrequently. Study results also suggest that DDSs and ALJs differ in their
                       assessments of the opinions of applicants’ own physicians.

                       SSA  has conducted studies of the differences between DDS and ALJ decisions
                       and has identified key issues. To improve consistency of decisions, the
                       agency has recently published policy clarifications, conducted training for
                       all disability adjudicators, and is now starting to evaluate the impact of
                       this training. SSA also plans to develop a single presentation of policy to be
                       used by both DDSs and ALJs.


                       Differing DDS and ALJ assessments of a claimant’s capacity to function in
Most ALJ Awards        the workplace are the primary reason for most ALJ awards. Under the
Result From RFC        sequential evaluation process, almost all DDS denial decisions appealed to
Assessments That       ALJs include an RFC assessment. On appeal, ALJs also follow the same
                       sequential evaluation process and assess the claimant’s functional ability
Differ From Those of   in most awards they make. Both the ongoing Disability Hearings Quality
DDSs                   Review Process (DHQRP) study and a study conducted by SSA in 1982 note
                       the importance of differences in assessing RFC.18 (See app. II for more
                       details on these studies’ results.)

                       Decisions in cases involving physical impairments clearly reflected
                       differences in assessing RFC. Table 3.1 presents data from SSA’s DHQRP study
                       on physical impairment cases in which ALJs made awards on the basis of
                       RFC assessments. The table compares the ALJ decisions with those of
                       reviewers who used the DDS approach and examined the written evidence
                       available to the ALJ. These data indicate that ALJs are significantly more
                       likely than DDS medical consultants to find that applicants have very
                       limited work capacity.




                       18
                          Findings of the Disability Hearings Quality Review Process, SSA, Office of Program and Integrity
                       Reviews (Washington, D.C.: Sept. 1994) and Implementation of Section 304(g) of Public Law 96-265,
                       Social Security Disability Amendments of 1980 (the Bellmon Report), Secretary of Health and Human
                       Services (Washington, D.C.: Jan. 1982).



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Table 3.1: DDS and ALJ Differences in
RFC Assessment Classifications for                                                         Quality reviewers
Physical Impairment Awards                                                                        using DDS
                                                                                                   approach Original awarding
                                        Level of physical exertion determined by an          (percentage of ALJs (percentage
                                        adjudicator or reviewer                                      awards)       of awards)
                                        Heavy work (or no limiting effect on physical
                                        effort)                                                              0                0
                                        Medium work                                                         22                1
                                        Light work                                                          56                8
                                        Sedentary work                                                      15               25
                                        Less than the full range of sedentary work                           6               66
                                        Source: GAO analysis based on SSA data for ALJ awards made from Sept. 1992 through
                                        Apr. 1995.



                                        In the view of awarding ALJs, 66 percent of the cases merited a “less than
                                        the full range of sedentary work” assessment—a classification that often
                                        leads to an award. In contrast, the medical consultants who performed the
                                        RFC assessment using the DDS approach found that less than 6 percent of
                                        cases merited this classification. The DDS and ALJ adjudicators also differed
                                        in the other classifications.

                                        In addition, high ALJ award rates for claimants with mental impairments
                                        often reflect different assessments of functional limitations. Even ALJ
                                        mental impairment awards based on the listings reflect these differences
                                        because most such listings require adjudicators to assess functional
                                        limitations in addition to determining the claimant’s medical condition.

                                        A study known as the Bellmon Report, which controlled for differences in
                                        evidence, also found that differing RFCs played a role in differing DDS and
                                        ALJ decisions. This study found that DDS and ALJ adjudicators reached
                                        different results even when presented with the same evidence. As part of
                                        the study, two groups of reviewers looked at selected cases. One group
                                        reviewed the cases as ALJs would, and the other reviewed the cases as DDSs
                                        would. Reviewers using the ALJ approach concluded that 48 percent of the
                                        cases should have received awards; reviewers using the DDS approach
                                        concluded that only 13 percent of those same cases should have received
                                        awards.




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                              We identified specific differences in DDSs’ and ALJs’ approach to their
DDSs and ALJs Differ          decisions. First, medical staff have different roles at the two levels. In
in Their                      addition, DDSs and ALJs respond differently to (1) the opinions of claimants’
Decision-making               physicians and (2) claimants’ statements about symptoms such as pain.

Approaches
DDSs and ALJs Use             Medical experts play different roles in the DDS and ALJ decision-making
Medical Expertise             approaches. At the DDS, medical or psychological consultants assess RFC of
Differently                   applicants. In contrast, ALJs may consult with medical experts but have
                              sole authority to make the RFC finding. ALJs sought the advice of medical
                              experts in only 8 percent of cases resulting in awards, according to our
                              analysis.

                              Both the Bellmon and DHQRP studies compared RFC assessments made by
                              SSA medical staff using the DDS approach with those made by awarding
                              ALJs. According to both studies, medical staff tended to find that claimants
                              had higher capacities to function in the workplace than the ALJs found.


DDSs and ALJs Seem to         Under SSA regulations, adjudicators must consider the opinions of treating
Differ in Their Reliance on   physicians who have an ongoing treatment relationship with the claimant.
Treating Physicians’          Such an opinion might include, for example, a statement that a claimant
                              “cannot stand or walk for more than two hours total in a day.” In the
Opinions                      disability determination, adjudicators must give controlling weight to
                              these treating source opinions provided they are (1) well supported by
                              medically acceptable clinical and laboratory diagnostic techniques and
                              (2) consistent with the other substantial evidence in the record. A treating
                              physician’s statement, however, that a claimant is “disabled” or “unable to
                              work” does not bind adjudicators.

                              Treating physicians’ opinions, however, seem to influence DDSs and ALJs
                              differently. The DHQRP study found that the treating physician’s report was
                              one of the five most frequent reasons for ALJ awards. This implies that ALJs
                              tended to give controlling weight to the treating physician’s opinion, while
                              DDS adjudicators were more likely to focus on assessing that opinion in
                              conjunction with other medical evidence in the case file.


Reports of Symptoms and       A second factor contributing to differing DDS and ALJ decisions is the
Claimants’ Credibility Also   impact of symptoms (for example, pain, fatigue, or shortness of breath)
Affect Differences, but       reported by the claimant but not identifiable in laboratory tests or
                              confirmable by medical observation. Like the opinions of the claimant’s
Extent Is Unknown

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                        own physician, assessment of symptoms is important in the disability
                        decision. Adjudicators must assess symptoms by determining (1) whether
                        the medically determinable impairments could reasonably be expected to
                        produce such symptoms and (2) the intensity, persistence, and
                        functionally limiting effects of the symptoms. According to SSA,
                        adjudicators must assess the claimant’s credibility on the basis of the
                        entire case record to make a determination about these symptoms’ effects.
                        DDSs generally make such assessments on the basis of the case file (for
                        example, statements made by applicants on the application or reports
                        from medical sources that record applicants’ comments). ALJs have
                        additional evidence because they have the opportunity to consider the
                        claimant’s testimony in a hearing. Moreover, claimant credibility has a
                        significant impact on ALJ decisions.

                        The DHQRP study identified the credibility of the claimant and claimants’
                        allegations about pain as two of the top five reasons for an ALJ allowance
                        decision. The impact of these reasons on DDS decisions is more difficult to
                        assess. However, during the DHQRP study, reviewers using the DDS
                        approach listened to tapes of claimant testimony in a small sample of 50
                        cases. The study concluded that claimant testimony had no or minimal
                        impact on those adjudicators.


                        SSA adjudicators use two different sets of documents as criteria for
Effect of Differences   disability decisions, which some believe contributes to inconsistent
in Policy Documents     decisions. DDS adjudicators must follow a detailed set of policy guidelines,
Difficult to Assess     called the Program Operations Manual System (POMS). The POMS for
                        disability contains detailed interpretations of laws, regulations, and rulings
                        as well as procedural instructions on deciding cases. ALJs, on the other
                        hand, rely directly on the laws, regulations, and Social Security Rulings
                        (SSR) for guidance in making disability decisions. The latter documents are
                        generally shorter and much less prescriptive than the POMS.

                        This difference in policy documents, along with the difference in decisions
                        between the DDSs and ALJs has led to the belief by some that there are two
                        standards—or at least two different interpretations of policy. A 1994
                        Inspector General survey of DDS and ALJ opinion found that the DDSs’ strict
                        application of POMS—as opposed to the ALJs’ direct application of disability
                        law and regulations—was considered to have a strong effect on allowance
                        rates by over half of those surveyed. Similarly, the Bellmon Report stated
                        that, “SSA has long recognized that the standards and procedures governing
                        decisions by DDSs and ALJs are not entirely consistent.”



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                        The type and extent of these differences have proven difficult to quantify,
                        however. For example, the Bellmon Report identified significant
                        differences in DDS and ALJ decisions based on impairments considered not
                        severe. The study then identified differences in the regulations and POMS
                        on this issue. The study concluded, however, that the two written
                        standards, “while different, (were) not widely divergent.” As such, it
                        remains unclear whether the differences derive from the standards or from
                        their differing application. Nevertheless, although their relative impact has
                        not been quantified, policy differences cannot be discounted as a potential
                        reason for inconsistent decisions.


                        SSA has taken or planned several initiatives to make disability decisions
SSA Is Taking Actions   more consistent. In July 1996, SSA issued nine SSRs to address several of the
to Improve              factors we identified as contributing to inconsistent decisions. For
Consistency of          example, one of the new rulings reminds ALJs that they must obtain expert
                        medical opinion in certain types of cases.19 Another ruling clarifies when
Decisions               adjudicators must give the opinion of a treating physician special
                        consideration. A third ruling states that an RFC of less than the full range of
                        sedentary work is expected to be relatively rare. SSA also plans to issue a
                        regulation to provide additional guidance on assessing RFC for both DDSs
                        and ALJs, specifically clarifying when a less-than-sedentary classification is
                        appropriate.20

                        In addition, partly on the basis of the nine rulings, SSA completed
                        nationwide process unification training between July 10, 1996, and
                        February 26, 1997. SSA officials pointed out that this training was the first
                        time that the agency had brought together DDS and ALJ staff to share their
                        views. The training represented a major effort—15,000 adjudicators and
                        quality reviewers received 2 full days of training, coordinated by
                        facilitators in SSA headquarters using a broadcast system. SSA has also
                        started to evaluate the impact of the new rulings and training by collecting
                        data before and after the new rulings and training.

                        Furthermore, SSA recently compared the policy language in the POMS with
                        disability law, regulations, and SSRs and concluded that no substantive
                        differences in policy existed. SSA did find some differences in wording and


                        19
                         The ruling reinstates a previous SSA policy that an ALJ or Appeals Council member must obtain
                        expert medical opinion before determining that an impairment or group of impairments that do not
                        meet a specific listing are equivalent to the level of severity implied by the listings.
                        20
                          In April 1997, SSA told us that the notice of proposed rulemaking on the less-than-sedentary
                        regulation is ready for release but did not provide a date when it would be issued.



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detail, however, that could lead to a perception of differences. To address
this matter, SSA plans to develop a single policy presentation to be used by
both DDSs and ALJs. To this end, the agency is using exactly the same words
in any new regulation, ruling, and POMS publication. It has already done
this, for example, for the SSRs on which the process unification training
was based. SSA eventually plans to have all adjudication policy in the form
of regulations or SSRs so that they are binding on ALJs as well as DDS
adjudicators.

In the longer term, SSA also plans under redesign to develop new, more
valid, and reliable functional assessment/evaluation instruments relevant
to today’s work environment. Because current differences in RFC
assessments are the main reason for inconsistent decisions, however, SSA
should proceed cautiously and test any new decision-making methods to
determine their effect on consistency as well as on award rates before
widespread implementation.




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DDS Evaluations of Limited Use to ALJs


                       ALJs often cannot fully understand how DDS denial decisions have been
                       made because DDS written evaluations provide neither clear explanations
                       nor justifications for the findings and conclusions reached. Therefore, the
                       evaluations often do not lay a solid foundation for subsequent appeals. For
                       instance, the basis of the DDS’ residual functional capacity (RFC)
                       assessment is often unclear, leaving the ALJ without full understanding of
                       the reasoning that led to the DDS denial. Furthermore, explanations of how
                       the DDS considered evidence that ALJs might later rely on, such as the
                       opinions of the claimants’ own physicians, may often be missing from the
                       case file or are not fully developed. As a result, ALJs often cannot rely on
                       the evaluations as developed by the DDSs.

                       SSA has plans to change the process to improve the documentation of DDS
                       evaluations so they can better serve as a foundation for ALJ decisions.
                       These plans include requiring clear DDS explanations of the reasoning used
                       to support reconsideration denials and improving development of
                       evidence at the DDS. SSA also plans to return a selected number of cases
                       involving new evidence from the ALJ level to DDSs for their reconsideration.
                       Together, these changes in procedures will better serve as a foundation for
                       appeals, improving the consistency of DDS and ALJ decisions.


                       As discussed in chapter 3, inconsistent decisions between DDSs and ALJs
DDS Medical            are due mainly to differences in RFC assessments. Studies show that DDS
Consultants Often      medical consultants often inadequately explain their conclusions,
Inadequately Explain   including those about an applicant’s RFC. Such explanations, if improved,
                       could be more useful in ALJ decision-making. In fact, SSA’s policy is that an
RFC Assessments        ALJ, when making an RFC assessment, must consider the opinion of the DDS
                       medical consultant.

                       To this end, SSA requires DDS medical consultants to record explanations of
                       their reasoning. In particular, the agency asks medical consultants to fully
                       describe how they used the medical evidence to draw their conclusions
                       about an applicant’s RFC. RFC forms and procedures require that medical
                       consultants discuss in writing how the medical evidence in the case file
                       supports or refutes an applicant’s allegations of pain or other symptoms.
                       Finally, the RFC forms also require medical consultants to explain how
                       conflicts among treating physician opinion and other medical evidence in
                       the case file were resolved.

                       Disability Hearings Quality Review Process (DHQRP) data, however,
                       indicate that existing SSA procedures do not ensure that DDS decisions are



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                          well documented. Specifically, procedures require the disability examiner
                          to prepare supplementary explanations when the resolution of key issues
                          is not well documented elsewhere in the case file. The DHQRP study of
                          appealed reconsideration denials found that in about half the cases that
                          hinged on complex issues—such as conflicts with the treating physician’s
                          opinion, assessment of RFC, and weighing of allegations regarding pain or
                          other symptoms—DDS documentation failed to explain how these issues
                          were resolved. The insufficient documentation of the underlying medical
                          analyses limited their usefulness during the appeal process.


                          Although ALJs use the medical evidence assembled by DDSs, they often base
ALJ Awards Are Often      their decisions on additional documentary or testimonial evidence. This
Based on Information      both contributes to inconsistent decisions and makes it difficult to
Not Available to DDSs     reconcile those differences. Procedures at the hearings level, such as
                          longer time frames for evidentiary development and permitting the
                          introduction of new information, result in the availability of new
                          documentary evidence for appeal cases. In addition, testimony during the
                          face-to-face hearing and the opportunity it provides for further assessing
                          the claimant’s credibility provide new information not in DDS case files.


Additional Medical        SSA studies show that in many instances introducing additional
Evidence Results in ALJ   documentary evidence at the hearing level results in an ALJ’s awarding
Awards                    benefits. DHQRP data show that about three-quarters of the appealed cases
                          sampled contained new evidence. The study estimated that 27 percent of
                          the hearing awards hinged on additional evidence, resulting in an
                          assessment of a more severe impairment or a more restrictive RFC. In
                          addition, the Bellmon Report found that when new evidence was removed
                          from the case file, the ALJ award rate decreased from 46 to 31 percent. This
                          study also found that approximately three-quarters of new documentary
                          evidence was medical in nature rather than, for example, statements of
                          friends and associates.

                          One reason that appeals cases have additional evidence is that ALJ
                          procedures allow for more time to be spent on evidence development.
                          Although SSA regulations stipulate that “every reasonable effort” be made
                          to obtain necessary evidence, DDS guidelines state that evidence should
                          generally be gathered within 30 calendar days. ALJ guidelines, however,
                          provide a time frame for evidence gathering that is almost twice as long
                          and can be extended if necessary.




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                           In addition, ALJs responding to an Inspector General (IG) survey believed
                           that DDSs often fail to adequately develop evidence to show the true nature
                           and extent of an applicant’s disability. The ALJs attributed some of this to a
                           lack of adequate resources at the DDSs and pressures to dispose of cases.21
                           Also, surveyed ALJs said that DDS problems with developing evidence,
                           particularly medical evidence, contribute to their reversals of DDS denials.
                           In an earlier survey we conducted of DDS administrators, almost two-thirds
                           responded that workload and staffing pressures had affected the accuracy
                           of denial decisions.22 Seven DDS administrators (14 percent) said the
                           harmful effect on the accuracy of denial decisions was great or very great.

                           Finally, the presence of attorneys or others who represent the claimant’s
                           interests may also result in the presentation of new evidence during an
                           appeal. Because attorneys are generally paid only when decisions favor
                           their clients, they are motivated to find and present additional evidence.
                           Although few claimants hire attorneys or other representatives at the DDS
                           level, DHQRP data showed that representatives attended 81 percent of ALJ
                           hearings.


Claimant Testimony         With few exceptions, ALJ hearings present a claimant’s first opportunity for
Appears to Result in ALJ   face-to-face contact with a disability adjudicator. Studies show that face-
Awards                     to-face encounters with claimants appear to account for a significant
                           number of ALJ reversals. Specifically, in the DHQRP study, reviewing ALJs
                           believed that a favorable assessment of the claimant’s credibility is a
                           factor in 34 percent of sampled hearing allowances. Although DDSs and
                           ALJs also assess credibility from case file information, testimony received
                           at a hearing appears to especially influence ALJs when assessing the
                           credibility of a claimant’s subjective allegations such as the effect of pain
                           on functioning.

                           The IG’s 1994 report showed that nearly 60 percent of ALJs surveyed
                           believed that the claimant’s appearance before an ALJ strongly affects
                           awards; 90 percent believed it has a moderate to strong effect.
                           Furthermore, the Bellmon Report found that the ALJ award rate decreased
                           by about 17 percentage points when evidence from the claimant’s record
                           of testimony was removed from the case file.



                           21
                            The Disability Appeals Process: Administrative Law Judge Perspectives, Department of Health and
                           Human Services Office of the IG (Washington, D.C.: May 1994).
                           22
                            Social Security: Increasing Number of Disability Claims and Deteriorating Service (GAO/HRD-94-11,
                           Nov. 10, 1993).



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New Impairment Claims       Because claimants may offer new documentary and testimonial evidence
Also Result in ALJ Awards   at an ALJ hearing, they can also change their impairment type or add a new,
                            secondary impairment, which also affects consistency of DDS and ALJ
                            decisions. Moreover, in about 10 percent of cases appealed to the ALJ level,
                            claimants switch the basis of their primary impairment from a physical
                            claim to a mental claim. Under current procedures, the DDS lacks the
                            opportunity to routinely consider these switched claims, then incorporate
                            this consideration in their analysis, thus providing the ALJ with a basis for
                            confirming or rejecting the new impairment claim.


                            In addition to inadequately explained RFC assessments and new evidence
Effect of Other             submitted on appeal, we examined other factors that could affect
Factors Does Not            inconsistent decisions. We could not attribute any significant effect,
Appear Major or Is          however, to other factors, such as worsening condition of claimants and
                            the lack of government representation at hearings.
More Difficult to
Substantiate
Claimant’s Worsening        Because claimants must often wait several months—on average almost a
Condition Does Not          year—for an ALJ hearing, it seems reasonable to conclude that some ALJ
Appear to Be a Major        awards could be explained by the claimants’ condition deteriorating
                            during that time. Worsening conditions, however, are not a major
Contributor                 contributor to ALJ awards, according to our examination of program data.
                            About 93 percent of ALJ awards had onset dates—dates on which the ALJ
                            had determined the individual had become disabled—that preceded the
                            DDS decision, suggesting that the ALJ had decided the individual had been
                            disabled when the DDS denied the case. If worsening conditions were a
                            major factor contributing to ALJs awarding benefits, we might expect to
                            see ALJ-determined onset dates coming after the date of the final DDS
                            denial. Because such onset dates are relatively rare, however, little basis
                            seems to exist for concluding that worsening conditions influence many
                            ALJ awards. Moreover, neither the Bellmon Report nor the DHQRP study
                            discussed worsening conditions as a key factor influencing ALJ awards.

                            An ALJ award based on a worsening condition may have also followed a
                            DDS  denial based on the assumption that a claimant’s impairment would
                            improve within 12 months (individuals are not disabled if their impairment
                            is expected to last less than 1 year), SSA officials noted. If expected
                            improvement did not, in fact, occur, then the ALJ award would have
                            correctly been based on the original alleged date of onset. About
                            10 percent of ALJ awards are made to individuals whose claim the DDS had



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                             denied on the basis of the duration requirement, according to our analysis
                             of program data. This 10 percent, however, represents a maximum amount
                             because available program data did not allow us to isolate the impact of
                             other factors—such as new information introduced at the ALJ level—which
                             could have been the main reason for the ALJ award.


Lack of Government           Although the ALJ is expected to consider SSA’s interests during the hearing,
Representation at Hearings   the agency is not formally represented. The presence of a government
Not Fully Evaluated          attorney or other advocate to represent SSA at hearings has been discussed
                             over the years as a way of improving the ALJ hearing process. Although
                             claimants have the right to representation, SSA relies on the ALJ to fully
                             document the case, considering the claimant’s as well as the government’s
                             best interests.

                             In the early 1980s, SSA initiated a pilot project at selected hearing offices to
                             test the effect of SSA representation at hearings. At a 1985 congressional
                             hearing, SSA released preliminary information from the pilot that suggested
                             that ALJ awards made in error could be cut by 50 percent if SSA were
                             represented at appeal hearings.23 Acting under a July 1986 court
                             injunction, however, SSA halted the pilot project. The court concluded that
                             the entire notion of SSA representation, as implemented, violated
                             procedural due process. In May 1987, SSA decided to end the project,
                             stating that the administrative resources committed to it could be better
                             used elsewhere. As a result, the preliminary results were never verified,
                             and a final report was never issued.


                             SSA plans to take several actions so that DDS and ALJ procedures better
SSA’s Planned                ensure decision-making consistency, including requiring more detailed DDS
Improvements in              rationales, returning selected appealed cases to the DDS for consideration
Procedures                   of new evidence introduced at ALJ hearings, and using a “predecision
                             interview” by a disability examiner.

                             To improve explanations of DDS decisions, SSA plans to require more
                             detailed DDS rationales. New guidelines for all reconsideration denials are
                             to require DDS adjudicators to write rationales explaining how they made
                             their decisions, especially how the medical consultants assessed RFC,
                             treating physician opinion, pain, and other factors. On the basis of
                             feedback from the process unification training, SSA plans further

                             23
                              Hearing before the Select Committee on Aging, House of Representatives, 99th Congress, 1st session,
                             Mar. 18, 1985.



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DDS Evaluations of Limited Use to ALJs




instructions and training for the DDSs on the bases for their decisions and
where in the case files this information should go. SSA issued a ruling in
July 1996 clarifying that ALJs consider the findings of fact made by DDS
medical and psychological consultants as expert opinion evidence of
nonexamining sources and plans to issue a regulation to further clarify the
weight given by ALJs to the DDS medical consultants’ opinions.24

To ensure that DDSs have an opportunity to review all relevant evidence
before an ALJ hearing, SSA plans to return selected appealed cases to the
DDS for consideration of new documentary evidence introduced at ALJ
hearings. This would avoid the need for a more costly and time-consuming
ALJ decision in cases where the DDS would award benefits. If the DDS
cannot allow the returned claim, however, the DDS medical consultant
must provide a revised assessment of the case’s medical facts. SSA plans to
implement this project in May 1997, at which time it would begin selecting
about 100,000 of the roughly 500,000 appealed cases per year for such
claims.25 Moreover, SSA’s decision to limit such claims to about 100,000
cases may need to be reassessed in light of the possible benefits that could
accrue from this initiative.

SSA  also plans to test the use of a “predecision interview” by a disability
examiner with the claimant before denying a claim. This interview would
provide an opportunity for the DDS to routinely obtain and consider
testimonial evidence. It would also allow the DDS the chance to better
ensure that claimants understand how decisions about their cases are
made and what evidence might be relevant. This could improve the
claimants’ ability to provide complete and relevant information and make
all relevant disability claims earlier in the disability determination process.




24
 In April 1997, SSA told us, the notice of proposed rulemaking on the DDS medical consultants’
opinions was in final clearance within SSA.
25
  DHQRP data show that 76 percent of appealed cases contain new evidence.



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                                    SSA could use its ongoing quality reviews to better focus on differences in
                                    DDSs’ and ALJs’ assessments of functional capacity and of procedures to
                                    improve its management of the decision-making process and reduce
                                    inconsistent decisions between DDSs and ALJs. Current quality reviews,
                                    however, focus on the DDS and ALJ decision-making processes in isolation
                                    from one another and do not reconcile differences between them. In
                                    addition, to better manage the process and reduce inconsistencies, SSA
                                    also needs a quality review system that focuses on the overall process and
                                    provides feedback to all adjudicators on factors that cause differences in
                                    decisions. SSA has data and mechanisms in place that it could use to begin
                                    integrating its quality reviews and to provide feedback to DDSs and ALJs. In
                                    the longer term, SSA plans to systematically review decision-making at all
                                    levels through a new quality review system.


                                    SSAhas several quality review systems that review disability DDS and ALJ
Quality Reviews Not                 decisions. As shown in table 4.1, each of the reviews has a different
Designed to Address                 purpose. None was developed to identify and remedy the factors that
Differences                         contribute to differences in DDS and ALJ decisions.

Table 4.1: SSA Reviews Differ by
Organization Reviewed and Purpose                                                                          Fiscal year 1996 cases
                                                                                                          reviewed (approximate)
                                    Type of review                     Purpose                          Award            Denial
                                    DDS level
                                    Quality assurance                  Determine whether DDS            27,000           33,000
                                                                       decisions comply with
                                                                       written standards and
                                                                       criteria, including
                                                                       performance standards
                                    Pre-effectuationa review (PER) Protect the solvency of the 235,000                   Not
                                                                   DI trust fund by intercepting                         applicable
                                                                   DDS award errors before
                                                                   payment
                                    ALJ level
                                    Own-motiona                        Review ALJ award                 4,000b           b

                                                                       decisions before payment
                                    Appealed ALJ denials               Ensure supportability of ALJ Not                  57,000
                                                                       denial before possible court applicable
                                                                       appeal by applicant
                                    a
                                     The PERs cover DI and DI/SSI concurrent cases; own-motion reviews cover cases involving DI
                                    only.
                                    b
                                     Excludes reviews of “bureau protests,” which are generally cases with technical problems
                                    related to insured status, but includes a small number of denials, which are being phased out.




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                             At the DDS level, staff who report to SSA’s Office of Program and Integrity
                             Reviews (OPIR) perform a quality assurance review to promote the
                             accuracy and consistency of DDS determinations. The review uses
                             continuous random samples of completed award and denial actions. On
                             the basis of errors found during this review, SSA computes accuracy rates
                             for each DDS, which it compares with performance standards. DDSs that fall
                             below standards for two consecutive quarters are subject to increased SSA
                             oversight and may be removed from making disability decisions. In
                             addition, DDS staff also perform a pre-effectuation review or PER (that is, a
                             review before benefits payments are paid) of awards to protect the
                             solvency of the DI trust fund. Under this review, staff review 50 percent of
                             DI awards (not SSI-only cases) to prevent payment of erroneous awards.


                             At the ALJ level, quality review heavily focuses on the review of claims
                             denied by ALJs and appealed to SSA’s Appeals Council. Claimants whose
                             claims are denied by an ALJ and want to appeal the denial must apply to
                             the Appeals Council before bringing their claim to a federal court. The
                             purpose of this final agency review is to ensure that the case file fully
                             supports the ALJ denial decision before possible court appeal by the
                             claimant. On the basis of this review, the Appeals Council may, among
                             other things, reverse the denial decision or remand the case to the ALJ for
                             further action. In addition, like the PER at the DDS level, the Appeals
                             Council performs a PER of ALJ awards. Unlike the 50-percent sample used
                             for the PER, however, this Appeals Council review samples only a portion
                             of DI-only awards totaling about 3 percent of all ALJ DI awards to people
                             under age 59.


Review of Awards and         As shown in table 4.1, DDS reviews emphasize awards; the ALJ reviews,
Denials Is Imbalanced, but   however, emphasize denials. This may inappropriately give DDSs an
Effect on Decision Bias      incentive to deny claims and ALJs an incentive to award claims in both
                             instances to avoid scrutiny by quality reviewers. Available evidence,
Not Evident                  however, does not support this conclusion.

                             Before SSA instituted the PER of DDS award determinations in fiscal year
                             1981, national accuracy rates were generally higher for initial denials than
                             for awards. After the PER was instituted, this situation reversed. By 1983,
                             award rates were more likely to be accurate than denial rates. This trend
                             may suggest that instituting the review caused a decline in the accuracy of
                             denials, while increasing the accuracy of awards. Other factors could have
                             influenced these accuracy trends, however, including workload pressures
                             and program changes. In addition, the difference between the denial and



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                          award accuracy rates is slight. In fiscal year 1996, the denial accuracy rate
                          was only 2.9 percentage points lower than the award accuracy rate.

                          Moreover, data from the DHQRP study suggest that the evidence supports
                          ALJ awards and denials equally. As part of that study, reviewing ALJs
                          assessed 3,000 ALJ awards and 3,000 denials and found virtually the same
                          support rates for both types of cases: 81 percent of awards and 82 percent
                          of denials were supported by substantial evidence.


                          How DDS and ALJ quality reviews operate reflects the differences in how
Current Quality           decisions are made at the two levels. First, quality reviewers use the same
Reviews Mirror            decision-making approach as those they are reviewing. Therefore, they
Differences in            sustain the differences in approach discussed earlier rather than reconcile
                          them. For example, the Appeals Council, mirroring the approach of the
Approach and              ALJs, infrequently consults with medical experts. Second, DDS reviews do
Procedures                not examine the possible impact at the ALJ level of weaknesses in evidence
                          or the explanation of the decision. As a result, SSA misses the opportunity
                          to use quality reviews to strengthen procedures so that DDS decisions
                          better serve as a basis for ALJ consideration.


Differences in Approach   The staff and approach used in SSA’s quality reviews of DDS decisions
Not Identified and        mirror those used in the DDS process. SSA review teams, composed of
Reconciled                disability examiners and physician consultants, assess the quality of DDS
                          decisions using the same policies and procedures that DDSs use in making
                          their decisions. For example, when review staff examine a DDS decision, a
                          physician consultant on the team has final authority regarding the
                          correctness of the residual functional capacity (RFC) assessment made by
                          the DDS medical consultant.

                          Likewise, SSA’s Office of Hearings and Appeals (OHA) staff perform ALJ
                          reviews in a manner that mirrors the ALJ process. Staff at OHA screen
                          decisions for conformance with the same standards and procedures used
                          by ALJs, then refer cases that merit further review to the Appeals Council,
                          which consists of attorneys. Similar to ALJs, Appeals Council reviewers
                          have sole authority for assessing a claimant’s RFC, and they seek medical
                          input infrequently. The Appeals Council’s medical staff and contract
                          physicians consulted in about 17 percent of the cases reviewed by the
                          Appeals Council, according to our analysis of available SSA data.




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                            In addition, although SSA’s Office of Disability is responsible for
                            promulgating a uniform decision-making policy, management control of
                            reviews is split between OPIR, which reports to the Deputy Commissioner
                            for Finance, Assessment, and Management, and the Appeals Council,
                            which reports through OHA to another Deputy Commissioner. The two
                            review groups have not routinely met to identify and resolve issues related
                            to inconsistent decisions.26


Quality Reviews Do Not      SSA’s quality reviewers examine the evidence gathered by the DDS to
Ensure That DDS Decision    determine if the end result complies with SSA regulations and guidelines.
Builds a Solid Foundation   Although SSA’s reviewers assess the adequacy of the DDS’s explanation of
                            the initial decision, the reviewers consider the DDS to have made an
for ALJ Decision            accurate decision whether it is well explained or not. If a DDS medical
                            consultant fails to adequately explain the basis for the RFC assessment—
                            but nonetheless the decision appears correct and based on adequate
                            evidence—the reviewers do not charge DDS with an error affecting its
                            performance accuracy.

                            This approach focuses on performance accuracy; it does not provide DDSs
                            with routine, systematic feedback on inadequate RFC explanations because
                            SSA does not return cases to DDSs for correction solely because RFC
                            explanations are inadequate. Instead, if reviewers return a case to a DDS
                            because of other types of errors, such as inadequate evidence to support
                            the decision, the returned case would include comments on inadequate
                            RFC explanations by DDS medical consultants, according to SSA officials.
                            Otherwise, the only way that reviewers might provide feedback on
                            inadequate RFC explanations is during periodic visits to DDSs.
                            Consequently, SSA lacks a routine, systematic mechanism for giving DDSs
                            timely information on the adequacy of their RFC explanations.

                            Likewise, Appeals Council reviews have not emphasized ALJs’
                            consideration of DDS medical consultants’ opinions. First, the Appeals
                            Council samples few ALJ awards for review. Such reviews could identify
                            differences between the DDS medical consultant’s opinion and the ALJ view.
                            Second, even if the Appeals Council might want to consider the views of
                            DDS medical consultants, the lack of explanation gives the Council little to
                            review.

                            In addition, SSA’s quality reviews of DDSs’ performance accuracy do not
                            focus on weaknesses in DDS evidence gathering from the standpoint of

                            26
                              Recently, SSA has started such meetings under its process unification effort.



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                   whether the evidence could later contribute to ALJ reversals. Instead,
                   reviewers of DDS decisions focus on whether the evidence in the file
                   supports the DDS’s own decision. They do not consider whether gaps in
                   evidence may become significant in a later appeal. For example, if the file
                   indicates that the claimant has a treating physician, but the treating
                   physician’s report is missing from the file, quality reviewers do not
                   automatically cite this as a performance accuracy error. Instead, they
                   determine whether the totality of evidence in the file supports the DDS’s
                   decision. If the decision is supported adequately—despite the missing
                   evidence—the reviewers do not charge the DDS with a performance
                   accuracy error, though this lack of evidence could become significant at
                   the ALJ level. Although the DDS decision may be technically accurate, it may
                   also be vulnerable to reversal on appeal, a factor that the current quality
                   assurance system does not consider in assessing the overall quality of DDS
                   decisions.

                   In keeping with procedures, DDS reviewers also determine whether the DDS
                   has made a reasonable effort to obtain the evidence. In assessing the
                   reasonableness of the effort, however, the DDS reviewers again do not
                   focus on the potential impact of the missing information if the case were
                   to be appealed. Such a focus would be necessary for both identifying and
                   reconciling differences in decisions.


                   SSA has taken or planned several actions to reduce decisional
SSA Has Plans to   inconsistency, including addressing factors that we identified as important
Improve Quality    contributors to the inconsistency. First, the agency has started to
Reviews            systematically gather information on this subject. In 1992, SSA established
                   the Disability Hearings and Quality Review Process (DHQRP), which
                   collects data on ALJ decisions and on the DDS reconsideration denial
                   decisions that preceded them. DHQRP provides a data-driven foundation to
                   identify inconsistency issues and focus on strategies for resolution.
                   According to quality reviewers, SSA has continued this process and
                   anticipates issuing more reports in the future.

                   In addition, SSA is completing work on a notice of proposed rulemaking,
                   with a target issue date of August 1997 for a final regulation to establish
                   the basis for reviewing ALJ awards, which would require ALJs to take
                   corrective action on remand orders from the Appeals Council before
                   benefits are paid. As envisioned, disability examiners and physician
                   consultants as well as reviewing judges will review ALJ awards. In
                   November 1996, SSA began an initial start-up period for this effort and after



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the regulation is issued plans to target about 10,000 cases for review
during the first year.

Unlike existing quality reviews, the new process aims to identify and
reconcile factors that contribute to differences between DDS and ALJ
decisions. When the reviewers find ALJ awards they believe are
unsupported, they send these cases to the Appeals Council. If the Appeals
Council disagrees with the conclusions of the quality reviewers, the case is
referred to a panel of SSA disability adjudicators from various SSA units.
This review process can reveal significant policy issues because the panel
will receive cases in which the reviewing Appeals Council judge disagrees
with the reviewing examiner and medical consultant. On the basis of
issues identified, SSA could issue new or clarified policies or provide
adjudicators with additional training. In addition, SSA’s process unification
effort calls for returning certain cases to the DDS when new evidence is
provided at the hearing level.

In the longer term, SSA envisions instituting a new quality review system
that will systematically review decision-making at all levels. One focus of
the new system is making the right decision the first time. SSA estimates
this new system will help reduce the percentage of awards made by ALJs,
while increasing the percentage made by DDSs. Under SSA’s model, when
this redesign is fully implemented, the percentage of all awards made by
ALJs would decline from around 29 to 17 percent, and the percentage made
by DDSs would increase from 71 to 83 percent. The agency has not
explicitly established this as a goal, however.




Page 50                             GAO/HEHS-97-102 SSA Accountability for Decisions
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Conclusions, Recommendations, Agency
Comments, and Our Evaluation

              Inconsistent decisions between DDSs and ALJs are a long-standing problem
Conclusions   for SSA management with implications for the fairness, integrity, and costs
              of both the decision-making process and the program overall. The award
              rate of appeals raises questions about the fairness of the process because
              many claimants are awarded benefits only after a lengthy appeal.
              Moreover, persistent inconsistencies between the two levels can
              undermine confidence in the integrity of the decision-making process.
              Furthermore, the later the case is finally decided in the appeals process,
              the more expensive it is to adjudicate.

              SSA can make more progress than it has in the past by unifying the
              decision-making process at both the DDS and ALJ levels. Meanwhile,
              reducing inconsistent decisions will be limited to some extent by factors
              inherent in the program. Disability decisions are inherently complex and
              require adjudicators to exercise judgment on a range of issues. As a result,
              expectations about the level of agreement possible in such a program
              should acknowledge this reality. Moreover, the process involves large
              numbers of decisionmakers with more than 15,000 adjudicators, quality
              reviewers, and others, including over 1,000 ALJs, making these complex
              decisions nationwide.

              SSA has developed process unification initiatives that, if implemented,
              could significantly improve the consistency of decisions. Competing
              workloads at all levels of adjudication, however, could jeopardize progress
              in this important area. SSA should capitalize on the momentum it has
              recently gained and give consistency of decisions the sustained attention it
              requires as an essential part of redesign. For example, the agency has
              ongoing data gathering and review mechanisms in place that could
              produce real progress in this area. SSA has not established explicit
              outcome-oriented goals or measures, however, to assess its progress in
              achieving consistent decisions. We believe the strategic planning process
              required under the Government Performance and Results Act can be a
              useful vehicle to help focus management attention on the results SSA hopes
              to achieve through process unification and to monitor its progress toward
              reaching these results. In this context, SSA needs to establish performance
              goals to measure its progress in shifting the proportion of cases awarded
              from the ALJ to the DDS level. SSA could then monitor its progress and make
              corrections if its actions do not achieve the desired results. Using
              quantifiable performance goals to measure results would place a high
              priority on this issue and bolster public confidence in SSA’s commitment to
              achieve more consistency in DDS and ALJ decision-making.




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                  Under process unification, SSA plans to ensure that the DDS decisions are
                  better explained and thus more useful to ALJs. Workload pressures at the
                  DDSs, however, may make full and thoughtful explanations of their
                  decisions difficult. SSA will need to consider ways to reduce these
                  pressures if the agency’s plans are to be effective. At the ALJ level, SSA’s
                  plans to return cases to the DDSs are important, given the significance of
                  new evidence as a possible reason for awards. SSA’s decision to limit such
                  returns to about 20 percent of cases, however, could reduce the
                  effectiveness of this initiative.

                  In addition, SSA plans to improve its quality reviews but could move more
                  quickly to implement these plans. Historically, SSA has never had a unified
                  system of quality reviews, despite studies documenting inconsistent
                  decisions. Specifically, in 1982, the Bellmon Report identified problems in
                  the consistency of less-than-sedentary residual functional capacity (RFC)
                  assessments, and the Disability Hearings Quality Review Process (DHQRP)
                  reinforced this finding in 1994. However, SSA has not effectively used its
                  quality reviews to focus on this problem or taken action to resolve it.
                  Similarly, DHQRP identified problems with DDS rationales, but no systematic
                  feedback has been provided on this issue. The DHQRP results give SSA an
                  adequate foundation and an ongoing review mechanism to begin unifying
                  quality reviews between the DDSs and ALJs without further delay. SSA could,
                  for example, use the DHQRP findings on less-than-sedentary awards to
                  sharpen and focus current Appeals Council reviews. The agency could also
                  focus on the adequacy of DDS decision explanations in its unified quality
                  review program.

                  We are also concerned that, without adequate planning and evaluation,
                  some redesign initiatives could have unintended consequences. For
                  example, under redesign, SSA intends to develop new, more valid, and
                  reliable functional assessment/evaluation instruments that are relevant to
                  today’s work environment. The agency intends to rely heavily on these
                  instruments in decision-making. But, because differences in RFC
                  assessments are the main reason for ALJ awards, SSA should proceed
                  cautiously. As such, it should test any new decision methods to determine
                  their effects on consistency as well as on award rates before widespread
                  implementation.


                  SSAis beginning to implement initiatives to reduce inconsistent decisions
Recommendations   between DDSs and ALJs, realizing that the lengthy and complicated
                  decision-making process and inconsistent decisions between adjudicative



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                     Conclusions, Recommendations, Agency
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                     levels compromise the integrity of disability determinations. We support
                     these initiatives and recommend that SSA take immediate steps and be
                     accountable for ensuring that they are implemented as quickly as feasible.
                     For example, using available quality assurance systems, SSA should move
                     quickly ahead to improve feedback to adjudicators at all levels. In
                     addition, to better ensure that adjudicators review the same record, the
                     agency should increase the number of cases it plans to return to DDSs
                     when new evidence is submitted on appeal.

                     In addition, we recommend that, given the magnitude and seriousness of
                     the problem, the Commissioner should, under the Results Act, articulate
                     the process unification results that the agency hopes to achieve and
                     establish a performance goal by which it could measure and report its
                     progress in shifting the proportion of cases awarded from the ALJ to the
                     DDS level.



                     SSA officials generally agreed with the conclusions and recommendations
SSA’s Comments and   in this report and stated that the report would be useful to SSA in its efforts
Our Evaluation       to reduce inconsistent decisions between DDSs and ALJs. SSA agreed with
                     our recommendation that the agency take immediate steps and be
                     accountable for ensuring that its process unification initiatives are
                     implemented as quickly as feasible.

                     Regarding our other recommendation, SSA said that the goal of making a
                     greater proportion of awards at the DDS level and fewer on appeal was
                     laudable and would promote good customer service. But SSA disagreed
                     about taking steps to be accountable for attaining this goal. Agency
                     officials believed that the natural outcome of SSA’s process unification
                     initiatives would effect an increase in DDS awards and a decrease in ALJ
                     awards. Because process unification is the linchpin of the disability
                     determination process, however, not just disability redesign, we continue
                     to believe that SSA needs to establish a performance goal for achieving
                     process unification and that the Results Act is the appropriate mechanism
                     to do this.

                     SSA took exception to our remarks suggesting that its proposal for a new
                     decision methodology could exacerbate inconsistent decisions. We do not
                     agree. Under redesign, SSA plans to reduce medical determinations to a
                     relatively small number of claims, while expanding the functional
                     component of the decision-making process. Because it is unlikely that the
                     new decision methodology will eliminate all adjudicator judgment needed



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Conclusions, Recommendations, Agency
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in making functional determinations, we continue to believe that SSA
should proceed cautiously and test any new decision methods to
determine their effects on consistency as well as award rates. In its
comments, SSA stated that it is committed to using research results to
dictate which, if any, changes will be made in the decision methodology.
We support this commitment.

The full text of SSA’s comments and our response appear in appendix III. In
addition, SSA provided technical comments, which we incorporated in the
report as appropriate.




Page 54                                GAO/HEHS-97-102 SSA Accountability for Decisions
Page 55   GAO/HEHS-97-102 SSA Accountability for Decisions
Appendix I

DDS and ALJ Disability Decisions and
Operations


Table I.1: DDS Decisions—September 1992 Through April 1995
                                                      Award                                    Percent of Awards,
                      Number of Percent     Number       rate        Listing     Functional     awards— unknown
Impairment type        decisions of total of awards (percent)        awards         awards     functional   basis           Denied
All impairments       4,592,595    100 1,396,717              30    850,633          541,135           39       4,949     3,195,878
Total physical        3,148,186      69   919,668             29    570,089          347,470           38       3,424     2,228,518
Musculoskeletal       1,083,437      24   168,958             16      26,277         142,146           84         535       914,479
  Back                 660,747       14     69,663            11       5,330          64,080           92         253       591,084
     Under age 50      387,252        8      8,719             2       2,970           5,685           65          64       378,533
     50 and above      272,486        6     60,823            22       2,352          58,282           96         189       211,663
     Unknown age          1,009       0        121            12            8            113           93           0           888
Other
musculoskeletal        422,690        9     99,295            23      20,947          78,066           79         282       323,395
Other physical        2,064,749      45   750,710             36    543,812          205,324           27       1,524     1,314,039
Total mental          1,066,217      23   450,176             42    272,795          175,856           39       1,525       616,041
Illness                860,482       19   338,447             39    186,085          151,504           45         858       522,035
Retardation            205,735        4   111,729             54      86,710          24,352           22         667        94,006
Unknown
impairment             378,192        8     26,873             7       7,749          17,809           66       1,315       351,319
                                          Source: GAO analysis of SSA administrative data.




                                          Page 56                                   GAO/HEHS-97-102 SSA Accountability for Decisions
                                          Appendix I
                                          DDS and ALJ Disability Decisions and
                                          Operations




Table I.2: ALJ Decisions—September 1992 Through April 1995
                                                      Award                                       Percent of Awards,
                      Number of Percent     Number       rate        Listing      Functional       awards— unknown
Impairment type        decisions of total of awards (percent)        awards          awards       functional   basis            Denied
All impairments        759,999     100    586,821             77     142,267         439,663                75       4,890      173,179
Total physical         589,955       78   439,404             74      57,793         377,986                86       3,625      150,551
Musculoskeletal        288,795       38   217,153             75      21,464         194,061                89       1,628       71,642
  Back                 202,752       27   151,758             75      13,949         136,919                90         890       50,994
     Under age 50      111,544       15     76,105            68       8,534          66,989                88         582       35,439
     50 and above       69,864        9     57,679            83       3,838          53,556                93         285       12,184
     Unknown age        21,344        3     17,974            84       1,577          16,374                91             23     3,371
Other
musculoskeletal         86,043       11     65,395            76       7,515          57,142                87         738       20,647
Other physical         301,160       40   222,250             74      36,330         183,924                83       1,996       78,910
Total mental           169,353       22   146,899             87      84,467          61,402                42       1,030       22,454
Illness                137,566       18   120,191             87      63,876          55,482                46         833       17,375
Retardation             31,788        4     26,709            84      20,591            5,920               22         198        5,079
Unknown
impairment                 691        0        518            75            7             276               53         235         173
                                          Source: GAO analysis of Disability Hearings Quality Review Process study data.




                                          Page 57                                    GAO/HEHS-97-102 SSA Accountability for Decisions
                                        Appendix I
                                        DDS and ALJ Disability Decisions and
                                        Operations




Table I.3: DDS and ALJ Operations, FY
1986 Through First Quarter, FY 1997
                                        Fiscal year                                          1986          1987           1988
                                        DDS
                                        Applications received                           2,248,432      2,107,221     1,594,833
                                        Initial decisions                               2,007,130      2,010,996     1,516,873
                                          Awards                                          757,943       698,324        540,135
                                          Denials                                       1,249,187      1,312,672       976,738
                                        Initial award rate (percent)                            38            35            36
                                        Reconsideration receipts                          533,776       594,698        457,402
                                        Reconsideration appeal rate                             43            45            47
                                        Reconsideration decisions                         501,631       589,810        438,251
                                          Awards                                           82,914         83,846        60,600
                                          Denials                                         418,718       505,964        377,651
                                        Reconsideration award rate (percent)                    17            14            14
                                        ALJ
                                        Appeals received                                  225,273       270,241        274,779
                                        Appeal rate (percent)                                   54            53            73
                                        Appeal decisions                                  170,661       216,916        238,815
                                          Awards                                          104,371       130,832        150,744
                                          Denials                                          66,290         86,084        88,071
                                        ALJ award rate (percent)                                61            60            63
                                        Percent of all awards                                   11            14            20




                                        Page 58                                GAO/HEHS-97-102 SSA Accountability for Decisions
                                    Appendix I
                                    DDS and ALJ Disability Decisions and
                                    Operations




                                                                                                                          1997 first
    1989        1990        1991              1992           1993            1994            1995            1996           quarter


1,589,652   1,737,533   2,014,194      2,392,644       2,564,163        2,609,498       2,488,878       2,438,498           516,483
1,489,534   1,589,311   1,802,896      2,258,980       2,513,709        2,551,210       2,551,953       2,298,801           542,368
 547,397     621,223     759,120         981,504         974,868          860,578         787,455         707,204           182,159
 942,137     968,088    1,043,776      1,277,476       1,538,841        1,690,632       1,764,498       1,591,597           360,209
      37          39          42               43               39              34              31              31                 34
 472,551     525,689     546,294         627,892         769,948          823,641         864,415         798,668           194,958
      50          54          52               49               50              49              49              50                 54
 442,218     484,499     502,561         603,681         746,241          793,689         858,999         766,775           185,269
  67,636      80,988      86,998         102,829         106,787          100,173         112,094         100,107               30,151
 374,582     403,511     415,563         500,852         639,454          693,516         746,905         666,668           155,118
      15          17          17               17               14              13              13              13                 16


 281,478     297,326     312,892         372,073         488,173          515,148         557,350         497,933           128,690
      75          74          75               74               76              74              75              75                 83
 251,991     248,237     266,818         302,660         319,789          354,173         444,350         485,737           100,241
 167,786     177,571     197,758         226,959         238,094          265,776         324,611         323,266               65,424
  84,205      70,666      69,060           75,701          81,695          88,397         119,739         162,471               34,818
      67          72          74               75               74              75              73              67                 65
      21          20          19               17               18              22              27              29                 24
                                    Sources: DDS data from State Operations Reports; ALJ data from the Office of Hearings and
                                    Appeals Key Workload Indicators.




                                    Page 59                                   GAO/HEHS-97-102 SSA Accountability for Decisions
Appendix II

SSA Studies Addressing Differences
Between DDS and ALJ Decision-making

                     Two major SSA studies have found that DDS and ALJ adjudicators
                     systematically reach different results, even when considering the same
                     evidence. In a report known as the Bellmon Report, SSA issued the results
                     of the first study in January 1982. The second study, known as the
                     Disability Hearings Quality Review Process (DHQRP), is an ongoing quality
                     review of ALJ decisions for which SSA periodically issues reports on review
                     results. The most recent DHQRP report was issued in June 1995.


                     The Bellmon Report’s major finding was that even when reviewing the
The Bellmon Report   same evidence from the same cases, DDSs and ALJs often reach different
                     conclusions on whether claimants are disabled. SSA issued this 1982 report
                     to comply with a provision known as the Bellmon amendment in the
                     Social Security Disability Amendments of 1980 (P.L. 96-265). This
                     provision required SSA to conduct ongoing reviews of ALJ decisions to
                     ensure that the decisions conform to statute, regulations, and binding
                     policy. The requirement grew out of congressional concerns about (1) the
                     increasing number of DDS denials being appealed to the ALJ hearing level,
                     (2) the high percentage of DDS denials being reversed by ALJs, and (3) the
                     accuracy and consistency of ALJ decisions.

                     Initiated in October 1981, SSA’s study was designed to examine whether
                     two separate sets of reviewers—one using the DDS decision-making
                     approach and the other using the ALJ approach—would reach different
                     conclusions when considering the same evidence for the same case (see
                     table II.1). Under the study, each set of reviewers reached its own
                     conclusions on each case without knowledge of the decision by the
                     original ALJ or the other reviewers and without personal contact with the
                     claimants.




                     Page 60                          GAO/HEHS-97-102 SSA Accountability for Decisions
                                      Appendix II
                                      SSA Studies Addressing Differences
                                      Between DDS and ALJ Decision-making




Table II.1: Design of SSA’s Bellmon
Study                                 Two sets of                                 Decision(s)          Quality reviewers’
                                      reviewers             Review criteria       reviewed             responsibilities
                                      SSA medical             SSA’s Program       Original ALJ         Evaluate medical
                                      consultants/ disability Operations Manual   decision             evidence
                                      examiner teams          System (POMS)
                                                                                                       Assess adequacy of
                                                                                                       evidence

                                                                                                       Determine
                                                                                                       impairment severity

                                                                                                       Assess residual
                                                                                                       functional capacity
                                                                                                       (RFC)

                                                                                                       Conclude whether
                                                                                                       claimants are
                                                                                                       disabled on the
                                                                                                       basis of the same
                                                                                                       evidence
                                      Reviewers from SSA’s The act, regulations, Original ALJ          Conclude whether
                                      Appeals Council      Social Security       decision              claimants are
                                                           Rulings (SSR), and                          disabled on the
                                                           guidance                                    basis of the same
                                                           handbooks                                   evidence

                                      As shown in table II.1, the first set of reviewers were teams of SSA medical
                                      consultants and disability examiners who applied the standards and
                                      procedures found in SSA’s POMS, which governs DDS decision-making.
                                      According to SSA, POMS contains SSA’s official program policy and program
                                      operations guidance, which is binding on DDSs and all SSA components
                                      except ALJs and the Appeals Council. POMS is based on, and consistent
                                      with, the Social Security Act, SSA’s regulations, and SSRs. POMS is also
                                      consistent with circuit court case law. Thus, the conclusions of the SSA
                                      medical consultant/disability examiner teams represented the correct
                                      application of DDS standards.

                                      The second set of reviewers were from SSA’s Appeals Council, which is
                                      SSA’s final administrative review authority on all appealed disability
                                      decisions. These reviewers applied the standards and procedures
                                      governing ALJ decisions. These governing standards and procedures
                                      consisted of the Social Security Act and SSA’s regulations and rulings,
                                      along with guidance provided in various handbooks. Because they applied
                                      these decision-making criteria, the reviewers’ conclusions from the
                                      Appeals Council represented the correct application of the standards and




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                              Appendix II
                              SSA Studies Addressing Differences
                              Between DDS and ALJ Decision-making




                              procedures that apply to ALJs. The review was conducted in three phases
                              addressing three different questions.


Phase I: Do the Standards,    To address this question, the medical consultant/disability examiner teams
Procedures, and Practices     reviewed a representative random sample of 3,600 recent ALJ decisions, of
of DDSs, ALJs, and the        which 64 percent had awarded benefits. The Appeals Council reviewers
                              then reviewed all cases in which the medical consultant/disability
Appeals Council Result in     examiner teams disagreed with the original ALJ decision, plus an additional
Different Decisions for the   300 cases in which no disagreement existed, for a total of 2,183 cases. The
Same Cases?                   Appeals Council—using the ALJ decision-making approach—awarded
                              benefits in 48 percent of the cases; the medical consultant/disability
                              examiner teams—using the DDS approach—awarded benefits in only
                              13 percent of the cases. The report identified three possible causes for the
                              different results.

                              First, standards and procedures differed. The ALJ approach, unlike the DDS
                              approach, often resulted in a finding that the claimant’s RFC was “less than
                              the full range of sedentary work,” which is the most restrictive RFC
                              possible and usually results in benefits being awarded. The Appeals
                              Council reviewers concluded that claimants in 9 percent of the cases had
                              an RFC that restricted them to less than the full range of sedentary work,
                              while the original ALJs had found that 18 percent—twice as much as the
                              Appeals Council—had that RFC. In contrast, the medical consultant/
                              disability examiner teams concluded that none of the claimants had an RFC
                              that restricted them to less than the full range of sedentary work. ALJs and
                              the Appeals Council also awarded benefits more often than did medical
                              consultant/disability examiner teams because of severe pain combined
                              with significant impairments or nonsevere mental disorders combined
                              with significant physical impairments. The report also noted that ALJs
                              apparently gave considerable evidentiary weight to treating physician
                              conclusions that claimants are medically disabled.

                              Second, standards were inconsistently applied. Although reviewers from
                              the Appeals Council applied the same standards and procedures that ALJs
                              used in making decisions, the Appeals Council denied benefits in
                              37 percent of the cases in which the original ALJs had awarded benefits and
                              awarded benefits in 21 percent of the cases in which the original ALJs had
                              denied benefits. These inconsistencies were even more pronounced than
                              these percentage differences indicate because even in those cases in
                              which the Appeals Council agreed with the ALJs on whether benefits
                              should be awarded or denied, they disagreed on the basis for the decision.



                              Page 62                               GAO/HEHS-97-102 SSA Accountability for Decisions
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                             SSA Studies Addressing Differences
                             Between DDS and ALJ Decision-making




                             For example, when the original ALJs based their decisions to award
                             benefits on SSA’s medical listings, the Appeals Council agreed with that
                             basis in only 41 percent of the cases; when the original ALJs based their
                             decisions to award benefits on vocational criteria, the Appeals Council
                             agreed with that basis in only 38 percent of the cases. Agreement on other
                             criteria for awarding benefits was significantly lower.

                             Third, other contributing factors included subjectivity, organizational
                             trends, and management emphases. The report noted historical trends in
                             DDS and ALJ rates of awarding benefits, SSA program and management focus
                             on certain aspects of the process, and the subjective judgment inherent in
                             determining whether an individual can engage in substantial gainful
                             activity. The report stated that one manifestation of the subjectivity in the
                             process may be different decisions produced by different organizational
                             levels.


Phase II: Do Claimants’      This phase involved selecting a special subsample of 1,000 cases from the
In-Person Appearances        3,600 cases used in the first phase. Written transcripts of the hearings were
Before ALJs Have an Effect   prepared that retained the testimony of expert witnesses but excluded any
                             testimony by the claimant or observations about the claimant’s personal
on ALJ Decisions?            appearance. A representative sample of 48 other ALJs then reviewed the
                             files.

                             The reversal rate of the original ALJs had been 63 percent, but the ALJs who
                             reviewed the sample of cases for this study reversed only 46 percent.
                             Because information on claimants’ in-person appearances was the only
                             information that had been removed from the file, the report concluded
                             that claimants’ in-person appearances do affect ALJ decisions. The study
                             also observed differences in the reversal rates for claimants with legal
                             representation (61 percent) and those without representation (48 percent).


Phase III: Does the          This phase used the same sample of 1,000 cases used in phase II. All
Submission of Additional     medical and vocational evidence added to the file after the DDS
Evidence After the DDS       reconsideration decision was removed from the files. Another group of 48
                             ALJs reviewed the files.
Reconsideration Decision
Affect ALJ Decision-         When the additional evidence submitted after the DDS decision was
making?                      removed from the files, the ALJ reviewers’ overall reversal rate of
                             46 percent in phase II declined to 31 percent in phase III. The difference
                             was solely attributed, on the basis of a statistical test, to additional



                             Page 63                               GAO/HEHS-97-102 SSA Accountability for Decisions
        Appendix II
        SSA Studies Addressing Differences
        Between DDS and ALJ Decision-making




        medical evidence that had been submitted in 74 percent of the cases.
        Additional vocational evidence did not affect reversal rates. The medical
        consultant/disability examiner teams also reviewed these cases with and
        without the additional medical evidence. Their reversal rate was
        15 percent when the additional evidence was present and 12 percent when
        it was not.


DHQRP   SSA’s DHQRP study found that differences between DDS and ALJ decisions
        noted in the Bellmon Report continued into the 1990s. SSA instituted DHQRP
        partly as a result of our 1992 report on disparities in the ALJ award rates
        between black and other claimants.27 Although we did not conclude that
        racial bias was the factor responsible for these disparities, we could not
        rule it out, which raised questions in many sectors, including the Congress,
        about the extent to which SSA has fulfilled its mandate to have a fair,
        unbiased ALJ hearing process.

        SSA responded that our report did not draw a meaningful conclusion about
        the impartiality of hearing decisions. SSA stated that it could not
        immediately address all of our specific findings, however, because it did
        not maintain an ongoing quality review database of ALJ hearing decisions.
        As a result, SSA implemented a series of initiatives to address questions we
        raised. Among the initiatives was the creation of DHQRP.

        The SSA Commissioner directed DHQRP to examine not only any racial
        differences but also program issues through an ongoing quality review of
        ALJ hearing decisions. Implemented in March 1993, DHQRP’s objectives are
        to promote fair and accurate hearing decisions and to collect sufficient
        data to permit analysis of other adjudicative issues. From DHQRP results,
        SSA intends to identify areas of the ALJ decision-making process that may
        require some fine tuning through continuing legal education or program-
        specific training for ALJs and other adjudicators. Thus far, SSA has issued
        two reports—in October 1994 and June 1995—covering the results of
        reviews conducted through March 25, 1994.

        DHQRP is a three-tier review process involving (1) medical consultants from
        SSA’sOffice of Disability, Office of Medical Evaluation; (2) disability
        examiners from SSA’s Division of Disability Hearings Quality; and (3) ALJs
        from SSA’s Office of Hearings and Appeals (OHA) who serve as reviewing
        judges (see table II.2).

        27
         See Social Security: Racial Difference in Disability Decisions Warrants Further Investigation
        (GAO/HRD-92-56, Apr. 21, 1992).



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                               Appendix II
                               SSA Studies Addressing Differences
                               Between DDS and ALJ Decision-making




Table II.2: Three-Tier DHQRP
                               Quality reviewers at                        Decision(s)          Quality reviewers’
                               each tier              Review criteria      reviewed             responsibilities
                               SSA medical            SSA’s POMS           DDS                  Evaluate medical
                               consultants                                 reconsideration      evidence
                                                                           denial
                                                                                                Assess adequacy of
                                                                           ALJ decision         evidence

                                                                                                Determine
                                                                                                impairment severity

                                                                                                Assess RFC
                               SSA disability         SSA’s POMS           DDS                  Assess whether
                               examiners                                   reconsideration      reconsideration
                                                                           denial               denial is supported

                                                                           ALJ decision         Assess whether ALJ
                                                                                                decision is
                                                                                                supported
                               Peer reviewer ALJs     The act, regulations, ALJ decision only   Assess whether ALJ
                               from OHA               SSRs, and                                 decision is
                                                      Hearings, Appeals,                        supported by
                                                      and Law Litigation                        substantial
                                                      Manual (HALLEX)                           evidence

                                                                                                Assess whether ALJ
                                                                                                decision meets
                                                                                                review criteria

                               In the DHQRP study, similar to the Bellmon Report, SSA’s medical
                               consultants and disability examiners’ reviews represent the DDS approach
                               to decision-making. Their reviews are based solely on criteria found in
                               SSA’s POMS, which contains the SSA decision-making policies and
                               procedures for DDS decision-making.

                               The medical consultants evaluate the written evidence available to (1) the
                               DDS examining team issuing the reconsideration denial that preceded the
                               sampled hearing decision and (2) the original ALJ who rendered the
                               sampled hearing decision. For each review, the medical consultant
                               evaluates and assesses the adequacy of the file’s medical evidence,
                               determines the level of severity, and if necessary, assesses the claimant’s
                               RFC. The medical consultants do not listen to the audiotape of the
                               testimony offered at the hearing.

                               After completion of the medical review phase, SSA’s disability examiners
                               use the medical consultants’ assessments to review the DDS’s




                               Page 65                               GAO/HEHS-97-102 SSA Accountability for Decisions
Appendix II
SSA Studies Addressing Differences
Between DDS and ALJ Decision-making




reconsideration denial and the ALJ’s hearing decision. Using the medical
review findings and other evidence in the file, the disability examiner
assesses whether the reconsideration denial and the hearing decision are
supported adequately. Like the medical consultants, the disability
examiners do not listen to the audiotape of the testimony offered at the
hearing.

In the last phase of DHQRP, working ALJs serve as peer reviewers who
evaluate only the hearing decision as it was issued by the original ALJ.
These peer reviewer ALJs measure the degree to which the original ALJ’s
hearing decision conforms to the Social Security Act, SSA’s regulations and
rulings, and SSA’s HALLEX. In doing so, the peer reviewer ALJs apply the
substantial evidence criterion from HALLEX, which defines substantial
evidence as “that evidence which, although less than a preponderance, is
sufficient to convince a reasonable mind of the credibility of a position
taken on an issue when no evidence on the opposing side clearly compels
another finding or conclusion.”

The DHQRP results reported by SSA demonstrate how DDS and ALJ decisions
differ or reveal reasons why they differ even when adjudicators base their
decisions on the same documentary case file evidence.

First, although peer reviewer ALJs have concluded that about 81 percent of
the ALJ reversals were supported by substantial evidence, the SSA medical
consultant/disability examiner teams, who used the DDS decision-making
approach, have concluded that only 41 percent of the ALJ reversals were
supported adequately by written evidence in the case file. The medical
consultant/disability examiner teams have concluded that (1) the evidence
in the file actually supported an opposite decision in 48 percent of the ALJ
reversals and (2) another 11 percent had insufficient evidence to make any
decision.

Second, DHQRP has provided evidence that ALJs generally find claimants’
RFCs to be significantly more restricted than do DDS medical consultants
using POMS criteria. When peer reviewer ALJs have reviewed ALJ reversals,
they have concluded that 56 percent of the claimants had RFCs that limited
them to less than the full range of sedentary work, while the medical
consultants, who have reviewed the same written evidence as the peer
reviewer ALJs, have concluded that only 6 percent had such restricted RFCs.

Third, the peer reviewer ALJs have identified the top factors that influenced
the original ALJs to award benefits. The reviewing ALJs have identified these



Page 66                               GAO/HEHS-97-102 SSA Accountability for Decisions
Appendix II
SSA Studies Addressing Differences
Between DDS and ALJ Decision-making




factors as (1) a more restrictive RFC assessment, (2) symptoms other than
pain, (3) claimant credibility, (4) medical source statements, and (5) the
impact of pain.

Fourth, DHQRP has shown that DDS medical consultants, when assessing
RFC, sometimes have overstated the claimant’s capacity to function in the
workplace. In reviewing DDS reconsideration denial case files, the SSA
medical consultant/disability examiner teams have found that in
18 percent of the cases the medical evidence supported awarding benefits.
In many of those cases, SSA’s review teams using POMS criteria have arrived
at different RFC assessments than have the DDSs on the basis of the same
written evidence.

These findings are based on cases reviewed through March 25, 1994. As of
that date, the medical consultants and disability examiners had reviewed
9,600 ALJ decisions (5,500 that awarded benefits and 4,100 that denied
benefits). The peer reviewer ALJs had reviewed a subsample of 6,000 ALJ
decisions (3,000 that awarded benefits and 3,000 that denied benefits).

The sample for DHQRP is selected monthly from OHA’s case control system.
Although hearing allowances are reviewed after SSA starts sending benefit
payments, all cases selected for review are administratively final and are
not changed by the study results. Hearing denials selected for the study
either already have been reviewed by the Appeals Council, or their appeal
period has expired.

The sample design allows analyses and conclusions to be drawn at the
national and regional levels but not at the state or DDS level. In addition,
the DHQRP database does not identify the ALJs who issued the decisions
being reviewed.




Page 67                               GAO/HEHS-97-102 SSA Accountability for Decisions
Appendix III

Comments From the Social Security
Administration and Our Evaluation

Note: GAO comments
supplementing those in the
report text appear at the
end of this appendix.




                             Page 68   GAO/HEHS-97-102 SSA Accountability for Decisions
                     Appendix III
                     Comments From the Social Security
                     Administration and Our Evaluation




Now on pp. 38, 52.
See comment 1.




                     Page 69                             GAO/HEHS-97-102 SSA Accountability for Decisions
Appendix III
Comments From the Social Security
Administration and Our Evaluation




Page 70                             GAO/HEHS-97-102 SSA Accountability for Decisions
                 Appendix III
                 Comments From the Social Security
                 Administration and Our Evaluation




See comment 2.
Now on p. 51.




                 Page 71                             GAO/HEHS-97-102 SSA Accountability for Decisions
Appendix III
Comments From the Social Security
Administration and Our Evaluation




Page 72                             GAO/HEHS-97-102 SSA Accountability for Decisions
               Appendix III
               Comments From the Social Security
               Administration and Our Evaluation




               The following are GAO’s comments on the Social Security Administration’s
               letter dated July 8, 1997.


               1. We revised the report, where appropriate, to use the term “RFC”
GAO Comments   assessment rather than “functional” assessment. In addition, we clarified
               our discussion of SSA’s plans for a new decision methodology to
               distinguish between (1) the development new instruments for clinical
               assessments of function and (2) the expansion of functional
               considerations in the administrative decision-making process envisioned
               under disability redesign. We agree that more objective assessments of
               function would ameliorate some differences in results if these assessments
               provided better evidence for decision-making.

               We continue to believe, however, that the new decision-making process
               may exacerbate inconsistent decisions. Under disability redesign, SSA
               plans to reduce medical determinations to a relatively small number of
               claims, while expanding the functional component of the decision-making
               process. Because it is unlikely that the new decision-making method will
               eliminate all adjudicator judgment needed to make functional
               determinations, we continue to believe that SSA should proceed cautiously
               and test any new decision-making methods to determine their effects on
               consistency as well as on award rates. In its comments, SSA stated that it is
               committed to using research results to dictate which, if any, changes will
               be made to the decision-making methods. We support this commitment.

               2. We revised our recommendation to emphasize the importance of SSA’s
               committing itself under the Results Act to foster consistency in results and
               to monitor and report on its progress in shifting the proportion of cases
               awarded from the ALJ to the DDS level. Such a shift is the measure of SSA’s
               achieving its qualitative goal to “make the right decision the first time.” In
               it comments, SSA stated that it wholeheartedly supports our conclusion
               that it needs to take immediate steps to reduce inconsistent decisions and
               considers process unification the linchpin of disability redesign. But the
               agency has not taken steps to be accountable for the success of this effort.
               Because process unification is the linchpin of the determination process,
               not just disability redesign, we continue to believe that SSA needs to
               establish a performance goal for this initiative and that the Results Act is
               the appropriate mechanism to achieve the desired results.

               SSAbelieves that it would not be legally defensible or advisable to set
               quantitative goals for increasing DDS award percentages and decreasing the



               Page 73                             GAO/HEHS-97-102 SSA Accountability for Decisions
Appendix III
Comments From the Social Security
Administration and Our Evaluation




award percentages for hearings. It stated that setting numerical goals
could be construed as dictating decisions to award or deny claims, while
each claim should stand on its own merits. We believe that if properly
designed and implemented, however, the use of a performance goal would
direct the agency’s overall management of the process and would not
dictate individual decisions.

Furthermore, the agency states that a wide variety of factors influences
claim outcomes, including worsening conditions, new evidence, and the
like. As the report discusses, however, virtually all factors influencing
differences in results—differences in approach, inadequate DDS written
evaluations, and problems in the focus of quality reviews—are under SSA’s
management control. Therefore, we believe it is advisable for SSA
management, consistent with the Results Act, to hold itself accountable
for continued progress toward process unification.




Page 74                             GAO/HEHS-97-102 SSA Accountability for Decisions
Appendix IV

GAO Contacts and Staff Acknowledgments


                  Cynthia A. Bascetta, Assistant Director, (202) 512-7207
GAO Contacts
                  David F. Fiske
Staff             William E. Hutchinson
Acknowledgments   Ira B. Spears
                  Kenneth F. Daniell
                  Carolina M. Morgan
                  Ellen S. Habenicht
                  Carol Dawn Petersen
                  Mary Ellen Fleishman
                  John G. Smale, Jr.




(106507)          Page 75                          GAO/HEHS-97-102 SSA Accountability for Decisions
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