United States General Accounting Office Report to Congressional Committees -GAO March 1990 SOCIAL SECURITY SSA Could Save Millions by Targeting Reviews of State Disability Decisions GAO/HRD-90-28 Human Resources Division B-238212 March 5, 1990 The Honorable Andy Jacobs, Jr. Chairman, Subcommittee on Social Security Committee on Ways and Means House of Representatives The Honorable Daniel Patrick Moynihan Chairman, Subcommittee on Social Security and Family Policy Committee on Finance United States Senate This report, prepared at our own initiative, is an assessment of the Social Security Administration’s (w’s) effectiveness in reviewing disability determinations made by state agencies. Section 221(c) of the Social Security Act requires SSAto review 65 percent of the state agency decisions that award or continue disability benefits. SSAcould substantially improve its performance by using a targeted sample rather than its current random approach. Moreover, reviews of continuances are relatively unproductive, and these administrative resources could be better used reviewing initial awards. This would require a revision of section 221(c) to exclude continuances from the universe of cases that SSA is required to review. The report also illustrates that targeting the reviews would enable SSAto correct more incorrect awards, while reviewing fewer cases. This report is being sent to the Secretary of Health and Human Services and to interested congressional committees and subcommittees. Please contact me at (202) 275-6193 if you or your staffs have any questions concerning this report. Other major contributors to this report are listed in appendix III. Franklin Frazier Director, Income Security Issues (Disability and Welfare) Executive Summary The Social Security Administration (%A) spent about $29.2 million in Purpose fiscal year 1988 reviewing disability decisions made by state disability determination services (DDSS). These reviews are done primarily to (1) measure DDS performance in meeting accuracy standards and (2) correct as many erroneous benefit allowances as possible. This report evaluates SSA'S effectiveness in accomplishing the latter objective. SSA administers two disability programs under the Social Security Act: Background the Disability Insurance program under title II and Supplemental Secur- ity Income for disabled and blind persons under title XVI. For both pro- grams, SSArelies on state agencies (DDSS) to make initial disability determinations on individual claims. The DDSSalso (1) reconsider unfa- vorable decisions if requested by claimants and (2) periodically review the medical condition of persons on the disability rolls (continuing disa- bility reviews) to determine if they are still disabled. SSAfunds the DDSS, provides guidance to them, and reviews a sample of their decisions. This report discusses only SSA’Sreviews of title II decisions made by DDSS.SSAreviewed about 409,000 of the 1.5 million title II decisions DDSS made in fiscal year 1988. About 51,000 of these reviews were classified as quality assurance (QA) reviews, done to determine whether DD~S are meeting standards of accuracy. (See p. 10.) The QA reviews covered both favorable and unfavorable DDS decisions. The remaining 358,000 reviews covered only favorable decisions. They were done to satisfy a 1980 legislative requirement that SSAreview at least 65 percent of favorable DDS decisions. All reviews are done before the claimant is noti- fied of the decision, but SSAcommonly refers to only the legislatively required reviews as preeffectuation reviews (PERS). SSAselects all review cases randomly. While this is appropriate for the Results in Brief &A sample that measures DDS accuracy, the PER sample could produce better results if SSA targeted it to categories of cases most susceptible to incorrect DDS decisions. SSAknows from its QA data that some types of decisions (such as allowances of claims involving back injuries or chronic lung disease) are more difficult for DDSSthan others. If SSA focused its sample on the more difficult (error-prone) types of cases, it could correct more erroneous decisions than it does using a random approach, even with a lower volume of reviews. The current PER reviews of DDS continuances (resulting from continuing disability reviews) change very few DDS decisions. If the resources spent Page 2 GAO/HID-90-28 SSA Reviews of State Disability Decisions Executive Summary on those reviews were made available for targeted reviews of initial DDS allowances, substantially more incorrect benefit awards would be identi- fied and reversed, with future benefit savings. GAO estimated that SSA'S reviews of favorable DDS decisions in fiscal year GAO Analysis 1988 will result in long-term net savings of about $69 million-about $6 million from QA reviews and $63 million from PER reviews. PER reviews of initial DDS allowances will result in savings of about $55 million, or $5.18 in reduced benefit payments for each $1 .OOspent reviewing cases. GAO calculates that targeting fiscal year 1988 PER reviews of initial allowances could have increased SSA’Ssavings to $87 million. Because such targeting would involve reviewing the more difficult types of cases, it would require an increase in reviewer and physician resources of about $2.1 million. (See p. 17.) GAO estimated that SSA'S fiscal year 1988 PER reviews of DDS continu- ances will save $0.6 million, or $1.09 in future benefit payments for each $1.00 spent. If SSA had used the resources spent on these reviews for targeted reviews of initial DDS allowances, additional savings of about $33 million could have been obtained. (See p. 18.) However, SSA would need legislative authorization to exclude continuances from the universe of cases that SSA is required to review. Without such authoriza- tion, SSA could reduce its reviews of continuances and shift some resources to its reviews of initial allowances. GAO did not estimate the fiscal impact of such an adjustment. GAO recommends that the Secretary direct SSA to use a targeted sample Recommendation to for its PER reviews of initial DDS allowances. While this would require the Secretary of some additional review and medical staff, costs would be far exceeded Health and Human by the reductions in future benefit payments resulting from the targeted reviews. Services The Congress should revise section 221(c) of the Social Security Act to Recommendation to exclude continuances from the universe of DDS decisions SSA is required the Congress to review. SSAcould then limit its reviews of continuances to a quality assurance sample and transfer administrative resources to a more cost- effective targeted review of initial DDf3allowances. Page 3 GAO/Mu190-28 SSA Reviews of State Disability Decisions Executive Summary The Department of Health and Human Services (HHS) provided written Agency Comments comments on a draft of this report. HHS agreed that the PER reviews of initial allowances can be targeted to be more effective, and that the PER reviews of continuing disability reviews are only minimally effective. HHS said that, although it agreed that the relative effectiveness of the PER process could be improved, the PER review should not be limited to initial cases only. HHS added that any legislation in this regard should provide maximum flexibility to direct resources where they are most needed. GAO'S recommendation would increase SSA'S flexibility by eliminating the current legislative requirement to include continuances in the universe of cases that SSAis required to review. It would not prohibit SSAfrom reviewing continuances or any other types of cases if SSAthought this was needed to improve the accuracy of decisions. Such reviews would be in addition to the legislatively required reviews of initial and reconsider- ation allowances. Page 4 GAO/IiRD-SO-28 SSA Reviews of State Disability Decisions Page 5 GAO/HlUMO-28 SSA Reviews of State Disability Decisions contents Executive Summary Chapter 1 8 Background Quality Assurance in the Disability Program 8 Objectives, Scope, and Methodology 11 Chapter 2 13 Targeting Samples and SSA’s Reviews Have Some Positive Results, but Leave 13 Many Erroneous Decisions Uncorrected Reallocating Resources Insufficient Medical Staff Resources May Reduce the 14 Could Improve Effectiveness of PER Reviews Effectiveness of SSA’s PER Reviews Would Be More Effective If the Sample 15 Were Targeted PER Reviews Resources Used to Review CDR Continuances Could Be 18 Better Used Reviewing Initial Awards Conclusions 20 Recommendation to the Secretary of Health and Human 21 Services Recommendation to the Congress 21 Agency Comments 21 Appendixes Appendix I: Methodology and Tables 22 Appendix II: Comments From the Department of Health 31 and Human Services Appendix III: Major Contributors to This Report 33 Tables Table 1.1: SSA’s Preeffectuation Reviews (Fiscal Years 10 1981-88) Table 1.2: SSA Reviews in Fiscal Year 1988 11 Table 2.1: Costs and Future Benefit Reductions From 13 SSA’s Fiscal Year 1988 PER Reviews Table 2.2: SSA’s Correction of DDS Decisions in Fiscal 14 Year 1988 Table 2.3: PER Return Rates for Fiscal Year 1988 15 Compared With QA Return Rates Table 2.4: Net Future Benefit Savings From Alternative 17 Sizes of Targeted PER Samples Table 2.5: Net Future PER Savings From Alternative Sizes 20 of Targeted Samples Using Reallocated CDR Resources Page 6 GAO/IiRB96-28 SSA Reviews of State Disability Decisions Contents Table 1.1: Results of GAO’s Study of Claimants Denied 23 Benefits by PER Reviews (Jan.-June 1987) Table 1.2: Potential Results of Targeting PER Sample 25 Table 1.3: Potential Results of Targeting PER Sample 26 Using Reallocated CDR Resources Table 1.4: Calculation of Future Benefit Savings From 27 Targeting PER Sample Table 1.5: Calculation of Future Savings From Targeting 28 PER Sample Using Reallocated CDR Resources Table 1.6: Costs and Net Future Benefit Savings From 29 Targeting PER Sample Table 1.7: Costs and Future Savings From Targeting PER 30 Sample Using Reallocated CDR Resources Figures Figure 2.1: Benefit Savings From Targeting PER Sample 16 of Initial Allowances Figure 2.2: Savings From Targeted Sample Using 19 Reallocated CDR Resources Abbreviations CDR continuing disability review DDS disability determination service D&B Disability Quality Branch GAO General Accounting Office HHS Department of Health and Human Services PER preeffectuation review Q-4 quality assurance SSA Social Security Administration Page 7 GAO/HRDS@28 SSA Reviews of State Disability Decisions Chapter 1 Background The Social Security Administration (SSA)administers two disability pro- grams under the Social Security Act: the Disability Insurance program under title II and Supplemental Security Income for disabled and blind persons under title XVI. As required by law, SSArelies on state disability determination services (DOSS) to make initial determinations on individ- ual claims. DDGS also handle claimant requests for reconsideration of initial denials and periodically review the status of persons on the disa- bility rolls to determine if medical improvement has occurred. These lat- ter determinations are known as continuing disability reviews (CDRS). SSA funds the DDSS, provides guidance to them, and reviews a sample of their decisions. SSA classifies some of its reviews as quality assurance (QA) reviews, which it uses primarily to measure performance in meeting accuracy standards. Other reviews, called preeffectuation reviews (PERS), are done to satisfy a 1980 legislative requirement that !%A review at least 65 percent of DDS title II favorable decisions (allowances and continuances). SSAcounts the QA reviews of favorable DDS decisions as part of the 65-percent requirement. l .%Auses a three-tiered quality assurance process to foster accuracy and Quality Assurance in consistency in the disability program. DDGS are required to have internal the Disability Program quality assurance programs. SSA’S regional Disability Quality Branches review DDS decisions, and ss~ headquarters staff review a sample of the cases examined by the regional branches. States may vary their approaches to quality assurance to suit their par- ticular needs. We visited the Ohio and Indiana DDsS to discuss their inter- nal QA programs. Ohio was randomly reviewing all types of decisions. Indiana was also randomly reviewing all decisions except reconsidera- tions and cases involving mental impairments. Indiana officials said they had stopped reviewing the latter because they were getting few returns of these decisions from SSA.Both DDSS used their internal QA reviews to give accuracy ratings to examiners and examiner units. SSA’Sregional branches review decisions to assign accuracy rates to each DDS. The reviewers are ss~ employees, while SSAcontracts with physi- cians to provide medical consultation to the reviewers. The regional branches return cases to DOSS if they believe the decisions are incorrect or the supporting documentation inadequate. If a DD6 disagrees with !%A’sreasons for returning a case, it may attempt to rebut ~3~‘s position. If the DDS agrees that its decision was deficient, it changes the decision Page 8 GAO/HIUHO-26 SSA Reviews of State Disability Decisions Chapter 1 Background or obtains additional evidence to support its original decision. About one-half of the QA returns result in a change of DDS decisions. SSAuses the QA results to determine whether DDSSare at least go-percent accurate in deciding claims and are properly documenting their deci- sions. (Many documentational errors are corrected without changing the decisions.) If a DDS fails to meet the standards for two consecutive quarters, ss~ may conduct a management review and require corrective actions. SSA’SOffice of Disability Program Quality also monitors consis- tency among the regions by reviewing a sample of the QA cases from the regional branches. Reviews Required by the In the early and mid-1970s, the title II disability program grew rapidly, straining the resources of the disability trust fund. The program’s 1980 Amendments growth was a result of high numbers of disability applications, a high approval (allowance) rate by DDSS,and benefit increases. In addition, the advent of the title XVI disability program in 1974 greatly increased DDS caseloads. In an effort to improve the quality and uniformity of DDS decisions, the Congress (in P.L. 265) amended section 221 of the Social Security Act to require SSA to review at least 65 percent of favorable title II DDS deci- sions (allowing or continuing benefits) before the decisions took effect (hence the name preeffectuation reviews, or PERS). SSA’s Implemen .tation of %A originally conducted PER reviews on a targeted basis but discontin- Preeffectuation Reviews ued targeting once the program was fully implemented. The law pro- vided that PER reviews could be phased in: at least 15 percent in the first year, 35 percent in the second year, and 65 percent thereafter. SSA began in fiscal year 1981 by reviewing certain types of allowances that were more error prone, such as those involving vocational considerations as well as medical conditions. When expanding its sample in fiscal year 1982, SSA added certain types of disabilities, such as back ailments, that were considered difficult to evaluate. SSAalso began doing its QA reviews before the decisions took effect, and thus began counting them toward the PER review requirement. At the 15- and 35-percent review levels, SSA was targeting its samples at the more error-prone types of cases. In September 1981, SSA recom- mended to the Congress that the 65-percent level be deferred until it could be determined whether the targeted 35-percent review could . Page 9 GAO/HlUMK&28 SSA Reviews of State Disability Decisions Chapter 1 Background achieve the results that the Congress was seeking at the 65-percent review level. When the Congress made no legislative changes, SSA aban- doned targeting and went to a random 65-percent sample. SSA officials told us they abandoned targeting because (1) selecting the sample was becoming burdensome for DDSs, (2) it was easier to estimate regional staffing needs with a random sample, and (3) targeting was less effec- tive at the 65-percent review level. Table 1.1 summarizes the results of W'S PER reviews from 198 1 Lhrough 1988. It includes reviews of title II allowances and continuances. The table shows that the percentage of DDS decisions reversed by PER reviews has steadily declined. SSAofficials cited the following reasons for this: (1) targeted sampling was replaced by random sampling, (2) DDS accu- racy for allowances has improved, and (3) PER reviews of continuance decisions have yielded fewer reversals since implementation of the med- ical improvement standard required by 1984 legislation.’ Table 1.1: SSA’s Preeffectuation Reviews (Ftscal Years 1981-88) Returned Percent Decision Percent Fiscal year Review@ to DDS returned reversed reversed 1981D -73,738 6,413 8.7 3,725 5.1 1982b 182,824 12,792 7.0 7.294 40 1983 285,584 12,299 4.3 6,586 2.3 1984" 282,261 8,525 3.0 4,846 1.7 1985" 221,983 6,054 2.7 3,297 15 1986 262,418 6.566 2.5 3.559 14 1987 309,202 6,483 2.1 3,565 12 1988 386,150 7,663 2.0 3,540 09 %eglnnlng in 1982, SSA counted QA reviews of favorable declslons In meeting the 65percent requirement. bSSA targeted PER samples In 1981 and 1982. ‘SSA suspended contlnulng disability reviews for part of 1984 and all of 1985 Reviews in Fiscal Year SSAreviewed 409,172 DD!3 title II decisions in fiscal year 1988, at a cost 1988 of about $29.2 million. These included about 51,000 &A reviews of both favorable and unfavorable decisions and 358,000 PER reviews of allowances and continuances. (See table 1.2.) ‘Under Public Law 98-460 (Social Security Disability Benefits Reform Act of 1984), disability benefits cannot be terminated unless substantial evidence shows that there has been medical improvement in an individual’s condition allowing the individual to engage in substantial gainful activity. Page 10 GAO/HRD-90-28 SSA Reviews of State Disability De&&s Chapter 1 Background Table 1.2: SSA Reviews in Fiscal Year 1988 DDS title II Reviewed by Percent decisions SSA e’aviewed Favorable decisions 628,756 386,150 __~___ 61” htial allowances 331,738 197,143 59 QA sample 10,477 3 PER sample 186,666 56 Reconsideration ~__ allowances 39,724 35,646 90 QA sample 2,291 6 PER sample 33,355 a4 CDR continuances 257,296 153,361 60 QA sample 15,073 6 PER sample 138,288 54 Unfavorable decisions 895,049 23,022 s Initial denials (QA) 606,940 11,128 2 Reconslderatlon denials (QA) 254,620 2.929 1 CDR cessations (QA) - 33,489 8,965 27 Total 1 S23.807 409.172 27 Source: SSA State Agency Operations Reports, QA Reports, and PER Reports. 5SA offlclals believe they achieve the required 65percent revlew because some of their reviews cover people who have flied simultaneous claims as a disabled worker and disabled widow or disabled adult child. This report analyzes how USA can be more effective in reviewing DDS Objectives, Scope, and decisions. SSAhas the following objectives for its reviews: Methodology 1. To measure the accuracy of disability determinations and to deter- mine DDS performance accuracy, as required by SSA regulations. 2. To detect and correct erroneous disability allowances. Our work focused on SSA’Seffectiveness in meeting the second objective. SSAhas said that it could be more effective if it were not required to review as many decisions. It has proposed several times to reduce the review requirement to 50 percent of allowances and 25 percent of con- tinuances SSA would then target its sample to the more error-prone types of decisions. We considered this and other alternatives in assess- ing ssA’s program. During our review, we interviewed SA officials in the Office of Program Integrity Reviews, Office of the Actuary, Office of Disability Operations, Page 11 GAO/HRD-90-28 SSA Reviews of State Disability Decisions Chapter 1 Background During our review, we interviewed SSAofficials in the Office of Program Integrity Reviews, Office of the Actuary, Office of Disability Operations, and Office of Management and Budget. We visited DDSSin Ohio and Indi- ana, interviewing management officials and claim supervisors. We vis- ited SSAregional offices in Chicago and San Francisco, interviewing case reviewers, supervisors, and medical directors about their workloads and the impact a targeted PER review sample would have on their work. We developed a cost-benefit model to estimate the fiscal impact of fiscal year 1988 reviews and various alternatives. Our model shows the poten- tial effects of targeting the PER sample of initial DD!3allowances to error- prone types of cases, in comparison with SSA’Srandom approach. We used SSA’Squality assurance data from fiscal years 1987 and 1988 to construct a model for targeting the reviews by disability code and basis of DDS decision. Although we did not verify SSA’Sdata, we did review its procedures and controls for collecting and reporting the data. Appendix I presents a detailed discussion of our cost-benefit model and our meth- odology for estimating the effects of targeting the PER sample. We did our review from December 1988 through June 1989 in accord- ance with generally accepted government auditing standards. . Page 12 GAO/HIUMO-28 SSA Reviews of State Disability Decisions Targeting Samples and Reallocating Resources Could Improve Effectiveness of SSA’s PER Reviews SSA’S review program saves more in future benefit payments than it costs in administrative funds. However, SSA’S reviews could be more effective in identifying and correcting erroneous DDS decisions if (1) SSA had more regional medical staff to review PER cases, (2) SA targeted its PER reviews to error-prone types of cases rather than using a random sample, and (3) SA reduced its reviews of continuances and used those resources on a targeted review of initial DDS allowances. We estimate that SSA spent about $29.2 million reviewing DDS decisions SSA’s Reviews Have in fiscal year 1988, of which about $7.2 million was for QA purposes and Some Positive Results, $22 million for PER reviews. We used a cost-benefit model (see app. I) to but Leave Many estimate the savings in future benefit payments (disability and Medi- care) resulting from those reviews that changed DDS awards to denials. Erroneous Decisions We estimated that total net savings (after deducting costs) from the Uncorrected reviews of favorable decisions in fiscal year 1988 would be about $69 million, $5.6 million from QA reviews and $63.2 million from PER reviews. Table 2.1 breaks this estimate down into reviews of initial allowances, reconsideration allowances, and continuances. It shows that reviews of allowances are much more cost-effective than reviews of continuances. Table 2.1 also distinguishes the QA review results from the PER results. Table 2.1: Costs and Future Benefit Reductions From SSA’s Fiscal Year 1988 Dollars in millions, except per-dollar amounts PER Reviews Initial Reconsideration CDR allowances allowances continuances QA reviews: Future savings (benefit and Medicare reductions) $4.8 $1.4 $2 8 Review costs 1.2 03 2.1 Net future savings $3.6 $1 2 $0.8 Future savings per dollar spent $4 00 $5.42 $1 36 PER reviews: Future savings (benefit and Medicare reductions) $68.5 $9.6 $7 0 Review costs 13.2 2.4 6.4 Net future savinqs $55.3 $7.3 $0 6 Future savings per dollar soent $5.18 $4.08 $1 0s Note Some totals may not add because of rounding. This table does not include QA revlews of unfavor- able DDS declslons Page 13 GAO/ElRIHO-28 SSA Reviews of State Disability Decisions Chapter 2 Targeting Samples and Reallocating Resources Could Improve Effectiveness of SSA’s PER Reviews As noted in chapter 1, one of SSA’S goals for its review program is to detect and correct erroneous disability allowances made by the DDSS. Using SSA’S QA results, we estimate that DDSSmade 42,342 incorrect deci- sions in fiscal year 1988, of which over 31,000 were incorrect denials. Through its PER and QA reviews, SSA changed an estimated 4,459, or 10.5 percent, of the incorrect decisions. As table 2.2 shows, most of the incor- rect DDS denials were left uncorrected. DDSSdeny nearly twice as many claims as they allow. The error rate on denials is twice as high as on allowances. However, some of these claimants can be expected to receive benefits through appeals. Table 2.2: SSA’s Correction of DDS Decisions in Fiscal Year 1988 Estimated number of Percentage incorrect decisions’ Changed changed Initial allowances 4,976 2,352 --- 47 3 Reconslderatlon %owances 1,112 495 44.5 CDR contmuances 3,345 693 20.7 Initial demals 22,457 409 --_____ 18 Reconsideration denials 8,912 101 -.___-- 1 1 CDR cessations 1,540 409 26.5 Total 42,342 4,459 10.5 aProlected based on SSA’s CIA data SSA'S PER reviews do not detect all the estimated erroneous decisions. SSA Insufficient Medical officials said this is because not enough physicians are under contract to Staff Resources May review all the cases selected for review. Reduce the Compared with the results of &A reviews, PER reviews do not return as Effectiveness of PER many deficient DDS decisions. Since the QAsamples are statistically ran- Reviews dom samples with a margin of error of 0.3 percent, they should reliably estimate the percentages of deficient DDS decisions expected in the large random PER samples. As table 2.3 shows, the QA sample produced a higher return rate of cases with errors for all categories of reviews in fiscal year 1988 than did the additional PER sample. Page 14 GAO/HRD!W28 SSA Reviews of State Disability Decisions Chapter 2 Targeting Samples and Reallocating Resources Could Improve Effectiveness of SSA’s PER Reviews Table 2.3: PER Return Rates for Fiscal Year 1988 Compared With QA Return Percent of cases returned to DDSsa Rates QA PER sample sample Initial allowances 3.1 2.2 Reconsideration allowances 44 29 CDR continuances 2.9 i3 aAs explained In chapter 1, not all demons returned are reversed Most of the SSA personnel we interviewed said that this difference resulted because regional medical staff physicians review nearly all &A cases, but can review only about 33 percent of the PER cases. They said that physicians identify some deficiencies in the DDS development of cases that SSA’S reviewers do not. SSA’S Office of Program Integrity Reviews has asked regional branches to try to achieve 40-percent physi- cian review of PER cases, but the goal is not being met. Administrative budget cuts have affected regional medical staff budgets, and physician review of PER cases fell to about 30 percent in late fiscal year 1989. In an attempt to make the best use of limited resources, ss~ has directed that regional reviewers automatically refer certain error-prone categories of cases, such as back ailments and lung diseases, to the medical staffs. One of SSA’S objectives for PER reviews is to detect and correct erroneous PER Reviews Would disability allowances. The reviews could be more effective in accom- Be More Effective If plishing this objective if SSA targeted its sample to cases more likely to the Sample Were be incorrect rather than selecting cases randomly. Targeted To more fully demonstrate the effects of targeting, we analyzed results using targeted samples ranging from 5 to 100 percent of initial allowances. We used QA data from fiscal years 1987 and 1988 to identify the most error-prone types of decisions. (See app. I.) At the 5-percent level, only the most error-prone types of decisions would be reviewed.’ For each 5-percent increase in sample size, the types of cases added to the sample would be slightly less error prone than in the smaller sample. Thus, the number of reversals grows more slowly as the sample is enlarged. Our analysis shows that if the fiscal year 1988 reviews of initial allowances had been targeted, SSA would have identified and reversed a ‘Fifty-five disabilities would be involved, including chronic lung disease, anxiety, alcoholism, and multiple sclerosis. Page 15 GAO~HRD!3O-28 SSA Reviews of State Disability Decisions Chapter 2 Targeting Samples and Reallocating Resources Could Improve Effectiveness of SSA’s PER Reviews larger percentage of incorrect allowances than it did with its random sample. Using our cost-benefit model (described in app. I), we estimate that with the same number of reviews, net future savings could have increased by $32 million. (See fig. 2.1.) Figure 2.1: Benefit Savings From Targeting PER Sample of Initial 120 Mwotm at Dollan Allowances 110 100 90 so 70 60 50 40 30 20 10 0 ;I Note: Based on revlewlng the same number of cases SSA reviewed in fiscal year 1988 (186,666) Table 2.4 shows our analysis of future savings that would be generated by targeted samples of other sizes. We present these data to show what could be expected from alternatives to the current 65-percent require- ment. Table 2.4 excludes &A reviews because we believe these should be done on a random basis in order to measure DDS accuracy. We assume in this analysis that SSA’Sregional medical staffs, in addition to reviewing &A cases, could review up to 20 percent of all PER initial allowances, which is about the number they have been reviewing. This would require some additional medical staff to cope with the higher number of error-prone cases in the sample. Page 16 GAO/HRIMO-28 SSA Reviews of State Disability Decisions Chapter 2 Targeting Samples and Reallocating Resources Could Improve Effectiveness of SSA’s PER Reviews Table 2.4: Net Future Benefit Savings From Alternative Sizes of Targeted PER Dollars in mhons - .-_____- Samples initial allowances Percent of total Net future reviewed reviewed Cost of reviews savings 53,008 16.5 $6.7 $58 1 66,180 20.6 8.4 71.7 79,763 248 9.3 74.9 97,021 30.2 104 77.9 112,441 35.0 11 3 802 128,504 40.0 123 82 4 145,531 45.3 132 ________--842 159,988 49.8 14.0 856 176,694 55.0 14.8 866 195,969 61.0 15.8 878 207,856 64.7 16.3 883 Ten of the 12 regional reviewers we interviewed said targeting the PER sample would be a good idea, because they now spend part of their time reviewing cases that are obvious allowances with little or no chance of error. However, a targeted sample would be more time consuming because the case mix would be more difficult to review and more cases would be returned requiring written rationale for the disagreement. We believe %A would have to increase review and medical staff to do a targeted review if the volume of cases remained at current levels. Also, productivity expectations, in terms of the number of cases reviewers must complete, would have to be reduced. After reviewing SSA’S data on productivity of regional review and medical staffs and calculating cost- per-case averages, we concluded that SSAwould have to spend an addi- tional $2.1 million to review the same number of initial allowances it reviewed in fiscal year 1988. (See p. 24.) This calculation is included in our analysis in table 2.4. Page 17 GAO/HRlMO-28 SSA Reviews of State Disability Decisions Chapter 2 Targeting Samples and Reallocating Resources Could Improve Effectiveness of SSA’s PER Reviews The PER reviews of DDS continuances, done by W’S Office of Disability Resources Used to Operations and program service centers, change very few DDS decisions. Review CDR By our estimate, PER reviews of continuances produced only $1.09 in Continuances Could future benefit savings for each $1 .OOspent in-fiscal year 1988, com- pared with $5.18 from SSA'S PER reviews of initial DDS allowances. (See Be Better Used table 2.1.) Reviewing Initial ss~ could do somewhat fewer continuance PER reviews if it chooses.-! Awards - However, SSA would need legislative authorization to exclude continu- ances from the universe of cases that it is required to review. If the resources used to review continuances were available to the regional review branches for a targeted review of initial DDS allowances, substan- tially more could be saved in future benefit payments. As explained ear- lier, SSA'S PER reviews of initial allowances would be more effective if review and regional medical staffs were larger. This would be especially true with a targeted sample of initial allowances, which would focus on the more time-consuming cases. If the fiscal year 1988 PER reviews of initial allowances had been targeted and the funds now spent reviewing continuances had been used, PER reviews could have identified cases with a potential for about $120 million in net future benefit savings. This would have been an increase of $64 million over the estimated $56 million saved by SSA’S actual PER reviews of initial allowances ($55.3 million) and continuances ($0.6 million). (See fig. 2.2.) “We did not estimate the fiscal impact of such adjustments. Page 18 GAO/HRD#Mf3 SA Reviews of State Disability Decisions Chapter 2 Targeting Samples and Reallocating Resources Could Improve Effectiveness of SW’s PER Reviews Figure 2.2: Savings From Targeted Sample Using Reallocated CDR Milllons ot Dollars Resources 120 110 100 90 so 70 so !I0 40 30 20 I Cost of review Net savings Note: Based on revtewlng the same number of cases SSA reviewed in fiscal year 1988 (186,666) Table 2.5 shows net future benefit savings (disability and Medicare) for alternative sample sizes in the same way that table 2.4 did, except that table 2.5 assumes that over $7 million (mostly from the continuance reviews) could be made available for a more intensive review of initial allowances. This would make it possible for regional medical staffs to review up to 50 percent of all initial allowances. (See table I.7 for sample sizes from 5 to 100 percent.) . Page 19 GAO/HRIhW28 SSA Reviews of State Disability Decisions Chapter 2 Targeting Samples and Reallmting Resoorces Could Improve Effectiveness of SSA’s PER Reviews Table 2.5: Net Future PER Savings From Alternative Sizes of Targeted Samples Dollars in mdlions Using Reallocated CDR Resources Initial allowances Percent of total Net future reviewed reviewed Cost of reviews savings 53,008 16.5 $6.7 --__~ $58.1 -__ 66,180 20.6 8.4 71 7 79,763 24.8 10.0 82 0 97,021 30.2 12.0 92.0 112,441 35.0 13.8 998 128,504 40.0 15.6 1073 145,531 45.3 17.5 113.4 159,988 49.8 19.1 1183 176,694 55.0 19.9 1193 195,969 61.0 20.9 120.6 207,856 64.7 21.4 122.5 SA'S PER reviews could be more effective if the sample were targeted Conclusions according to error-prone characteristics rather than selected randomly. This would, however, produce a sample of cases that are more difficult and time-consuming to review. If no change is made in the legislative requirement to review 65 percent of favorable DDS decisions, ss~ would have to provide its regional review branches with more resources to adequately review a targeted sample. Our analysis shows that the addi- tional administrative spending would be justified by the substantial increase in future benefit savings generated by the reviews. The current reviews of DDS continuances yield little in future savings. A shift of resources from these reviews to a targeted review of initial allowances should be beneficial because it would permit a more intense review of such allowances with more medical staff reviews. This would enhance the effectiveness of a targeted review of error-prone allowances. Page 20 GAO/HRD!3@28 SSA Reviews of State Disability Decisions Chapter 2 Targeting !%uuples and Reallocating Resources Could Improve Effectiveness of SSA’s PER Reviews Recommendation to its PER reviews of initial DDS allowances. While this would require some the Secretarv of additional review and medical staff, costs would be far exceeded by the reductions in future benefit payments resulting from the targeted Health and l&man reviews. Services Recommendation to exclude CDR continuances from the universe of DDS decisions SSA is the Congress required to review. SSA could then limit its reviews of continuances to a quality assurance sample and transfer administrative resources to a more cost-effective targeted review of initial DDS allowances. On January 22, 1990, the Department of Health and Human Services Agency Comments (HHS) provided us with written comments on a draft of this report. (See app. II.) HHS agreed that the PER review of initial allowances can be targeted to be more effective and that the PER review of CDRSis only minimally effective. HHS also agreed that targeted PER reviews generally require more administrative resources. HHS said that while it agreed that the relative effectiveness of the PER reviews can be improved by reducing the number of CDRS, it did not believe that the PER review should be limited to initial cases only. HHS said any legislation “should provide the maximum flexibility to direct resources where they are most needed. That would enable us to judge what types of cases are most error-prone at any given time and expend resources to remedy the problem, whether it involves allowances, denials or continuing disability review cases. Legislation either specify- ing percentages and types of cases SSA is to review or excluding types of cases from review severely restricts SSA's ability to manage the disability program effectively.” Our recommendation would increase SSA’Sflexibility by excluding con- tinuances from the universe of cases that ss~ is required to review. It would not prohibit SSA from reviewing continuances or any other types of cases if SSA thought this was needed to improve the accuracy of deci- sions However, such reviews would be in addition to the legislatively required reviews of initial and reconsideration allowances. Page 21 GAO/IiRD-!X%28 SSA Reviews of State Disability Decisions Methodology and Tables We developed a cost-benefit model to estimate (1) the effect of SSA'S PER reviews on the disability and Medicare trust funds and (2) the effect of targeted sampling at sample levels from 5 to 100 percent. We also used the model to estimate the effect of shifting resources from reviewing continuances to a targeted review of initial allowances. Our model used the following cost-per-case averages: Cost-Benefit Model l $63 for regional Disability Quality Branch (DQB) QA reviews of initial and reconsideration decisions, l $77 for regional DQB QA reviews of continuing disability decisions, l $53 for regional DQB PER reviews, l $54 for regional medical staff reviews, . $38 for program service center and Office of Disability Operations PER reviews of continuances, and l $63 for central medical staff reviews of continuances. We derived these averages from cost and workload data supplied by the relevant components of .%A.We allocated regional DQB costs to the differ- ent types of reviews based on productivity studies done by SSA'S Office of Disability Program Quality. To estimate future benefit savings due to PER reviews, we used the number of cases reversed by SSA’Sreviews, reduced by an estimated number who would be expected to file successful appeals or file success- ful new claims in future years. To determine the effects of appeals and new claim filings, we studied the 1,192 disabled worker claims that were reversed to denials by PER reviews from January 1 through June 30, 1987. This study, reported in table I. 1, also determined the sex and average age of claimants who did not successfully appeal their denials. We used the age and sex variables in determining the present value of the benefit awards (including Medi- care benefits) that would have been made to these claimants if not for the PER reviews. We derived the average present value from SSA'S table of present values by age and sex, which take into account that some persons will die or recover from their disabilities before reaching age 65, at which time they would be eligible to receive retirement benefits rather than disability benefits. . Page 22 GAO/HRD9@28 SSA Reviews of State Disability Decisions Appendix I Methodology and Tables Table 1.1: Results of GAO’s Study of Claimants Denied Benefits by PER DDS Reviews (Jan -June 1987) reconsideration DDS initial awards awards Reversed by PER reviews 923 269 Benefits granted on appeal 373 (40.4%) 155 (57 6%) Benefits denied 550 (59.6%) 114 (42 4%) Status of denials (Feb. 1989): Receiving disability benefits from a new apphcatlon 38 7 Filed 7/87-6188 27 6 Filed 7/88-IO/88 11 1 Receiving retirement benefits 105 16 Retirement beneficlanes deceased 5 0 Not receiving benefits 402 91 Average age of denied claimants 49 47 We used SSA’SQA data to identify the most error-prone types of cases. Effect of Targeted Our database was the 30,275 initial DDS allowances reviewed by SSA for Sampling QA purposes in fiscal years 1987 and 1988. ss~ provided data showing the number reviewed and the number returned to DOSSfor each disabil- ity (primary diagnosis) code. We were also able to separate the cases that DDSSdecided using both medical and vocational factors from those decided on a medical basis only. The medical/vocational allowances gen- erally have a higher error rate than allowances based on medical condi- tion alone. Using these case characteristics, we ranked each type of case from those with the highest return (error) rates to those with the lowest. We then calculated the percentage of all erroneous cases that would be reviewed if SSA reviewed 5 percent of all DDS allowances, focusing on the types of cases with the highest error rates. We made this calculation for each 5- percent increase in sample size up to a loo-percent review. We then pro- jected these results to the universe of initial DDS allowances in fiscal year 1988. This permitted us to compare targeted sampling at various levels with SSA’S actual PER results in fiscal year 1988. We excluded the QA cases from the universe of allowances, on the assumption that the QA sample would remain the same regardless of how SSA selected the PER sample. Page 23 GAO/HRD-90-28 SSA Reviews of State Disability Decisions Appendix I Methodology and Tables Table I.2 shows the results of the above calculations. In this table, it is assumed that the medical staffs would be able to review 20 percent of initial DDS allowances, about the number they actually reviewed in fiscal year 1988. Because the medical staff review all QA cases, QA results and PER results are equal up to the 20-percent level. For additional PER cases reviewed above a 20-percent sample, SSAwould be dependent on its non- medical reviewers to identify incorrect or inadequately documented decisions. Hence the PER results above a 20-percent sample are lower than would be projected from &A results. Table I.3 shows the effect of increasing the medical and review staffs up to the point that 50 percent of initial allowances could be reviewed with the same attention given to QA cases. These additional resources would be approximately equal to what is now expended on PER reviews of con- tinuances. The number of erroneous decisions identified increases con- siderably in this illustration compared with table 1.2. Tables I.4 and I.5 use our cost-benefit model to show the future benefit savings from the various levels of targeted sampling compared with SA’S fiscal year 1988 reviews of initial DDS allowances. Table I.5 shows the increased benefit savings that would result from using additional resources, as done in table 1.3. Tables I.6 and I.7 include the costs of the reviews and subtract them from the projected savings to obtain net savings. In estimating reviewer costs, we made adjustments to reflect the difficulty in reviewing error- prone cases. Based on SSA productivity data, we adjusted reviewer costs at lo-percent sample intervals. The costs are highest for the first lo- percent sample; they then decrease for each lo-percent increase in the targeted sample. This takes into account that each increase in the sam- ple contains fewer erroneous cases and is thus less time-consuming to review. Table I.7 shows the increased costs that would be incurred and the increased future benefit savings from reviewing initial allowances if resources were shifted from continuance reviews. Page 24 GAO/HRD90-28 SSA Reviews of State Disability Decisions Appendix I Methodology and Tables Table 1.2: Potential Results of Targeting PER Sample Percent of Initial erroneous Percent allowances Percent cases actually Number reviewed reviewed reviewed identified’ identified 16,706 5.2 17.3 17.3 1,745 34,054 10.6 27.8 27.8 2,804 53,008 16.5 38.2 38.2 3,853 66,180 20.6 47.2 47.2 4,761 79,673 24.8 54.2 49.6 5,001 97,021 30.2 61.3 52.0 5.245 112,441 35.0 66.9 53.9 5.437 128,504 40.0 72.4 55.8 5,626 145,531 45.3 77.1 57.4 5,787 159,988 49.8 80.9 58.7 5,917 i76,694 55.0 84.2 59.8 6.030 195,969 61.0 87.8 61.0 6,154 207,856 64.7 89.7 61.7 6,219 225,204---- 70 1 92.3 62.5 6,308 240,303 748 95.6 63.7 6.421 258.294 80.4 97.5 64.3 6,487 274,357 854 98.9 64.8 6,535 290.099 90.3 99.7 65.1 6,562 306,162 95.3 100.0 65.2 6572 321,261 100.0 100.0 65.2 6,572 SSA’s fiscal year 1988 results: 186.666 58.1 58.1 40.3 4.069 aThls table assumes regional medical staffs can revlew only 20 percent of PER cases. Thus, at higher levels (above 20 percent), not all erroneous declslons are being returned to the DDSs Page 25 GAO/HRtNO-28 SSA Reviews of State Msability Decisions Appendix I Methodology and Tables Table 1.3: Potential Results of Targeting PER Sample Using Reallocated CDR Percent of Resources Initial erroneous Percent allowances Percent cases actually Number reviewed reviewed reviewed identified’ identified 16,706 52 17.3 17.3 1,745 34,054 10.6 27.8 27.8 2,804 .__-~ 53.008 165 38.2 38.2 3,853 66,180 20 6 472 47.2 4,761 ___.-- 79,673 248 54.2 54.2 5,467 97,021 -__ 30 2 61.3 61 3 6,184 112,441 35.0 66.9 66.9 6,749 128,504 40.0 72.4 72.4 7,303 145,531 45.3 77.1 77.1 7,778 159,988 49.8 80.9 80.9 8,161 176,694 55.0 84.2 82.0 8,274 195,969 61 0 87.8 83.2 8,398 207,856 64.7 89.7 83.9 8,463 225,204 70.1 92.3 848 8,552 240,303 74.8 95.6 85.9 8,665 258,294 80.4 97.5 865 8,730 274,357 .-____- 85.4 98.9 870 8,778 290.099 ___- 90.3 99.7 87.3 8,806 306,162 - 95.3 100.0 874 8.816 321,261 100.0 100.0 874 8,816 SSA’s fiscal year 1999 results: 186.666 58.1 58.1 40.3 4.069 aThis tableassumes reglonal medlcal staffs can review 50 percent of PER cases Page 26 GAO/HRD9@28 SSA Reviews of State Disability Decisions Appendix I Methodology and Tables Table 1.4: Calculation of Future Benefit Savings From Targeting PER Sample Percent of Erroneous Decisions Denials after Tentative Savings lost to Initial allowances total decisions reversed appeals benefit savings new claims Adjusted reviewed reviewed returned (-54) W) (76,384) (.32) savings 16,706 5.2 1,745 942 565 $43,185,986 $13,819.515 $29366,470 34,054 10.6 2,804 1,514 908 69,394,558 22,206,259 47 188.300 53,008 16.5 3,853 2,081 1,248 95,355,647 30,513x807 64,841.840 66,180 20.6 4,761 2,571 1,543 117,827,209 37,704,707 80,122.502 79,673 24.8 5,001 2,701 1,620 123,766,828 39,605,385 84,161,443 97,021 30.2 5,245 2,832 1,699 129,805,442 41,537,741 88267 701 112,441 35.0 5,437 2,936 1,762 134,557,138 43,058,284 91.498 854 128,504 40.0 5,626 3,038 1,823 139,234,588 44,555,068 94.679520 145,531 45.3 5,787 3.125 1,875 143,219,083 45,830,107 97.388,977 159.988 49.8 5,917 3,195 1,917 146,436,377 46,859,641 99,576,737 176.694 55.0 6,030 3,256 1,954 149,232,948 47,754,544 101 478.405 195,969 61.0 6,154 3,323 1,994 152,301,752 48.736,561 ___---103.565.191 207,856 64.7 6,219 3,358 2,015 153,910,399 49,251,328- 104,659,071 225,204 70.1 6,308 3,406 2,044 156,113,008 49,956,163 106.156846 240,303 74.8 6,421 3,467 2,080 158,909,579 50,851,065 108.058 514 258,294 80.4 6,487 3,503 2,102 160,542,975 51,373.752 log,169223 274,357 85.4 6,535 3,529 2,117 161,730,899 51,753,888 109.977011 290,099 90.3 6,562 3,543 2,126 162.399.106 51.967714 l'Q.431392 306,162 95.3 6,572 3,549 2,129 162,646,590 52,046,909 110.599681 321 261 100.0 6,572 3,549 2,129 162,646,590 52,046,909 110.599.681 SSA’s fiscal year 1988 PER results: 186,666 58.1 4,069 2,197 1,318 100,701,305 32.224.418 68476.807 Note, QA cases are excluded on the assumption that SSA would continue to select them randomi,, Page 27 GAO/HRD-90-28 SSA Reviews of State Disability Drcisions Appendix I Methodology and Tables Table 1.5: Calculation of Future Savings From Targeting PER Sample Using Reallocated CDR Resources Percent of Erroneous Decisions Denials after Tentative Savings lost to Initial allowances total decisions reversed appeals benefit !i$$19~ new claims Adjusted reviewed reviewed returned 1.54) 1.601 .- -1-- -I 1.321 a---, snvinaa -- ---*a- 16,706 5.2 1,745 -94; - 565 $43.185.986 $13,819,515 _ $29,366,470 34,054 10.6 2,804 1,514 908 69.394.558 2; !,206,259 47,188,300 53,008 16.5 3,853 2,081 1,248 95,355,647 30,513,807 64.841.840 66,180 20.6 4,761 2,571 1,543 117,827,209 37,704,707 80,122,502 79,673 24.8 5,467 2,952 1.771 135.299.590 43,295,869 92,003,721 97,021 30.2 6,184 3,339 2,004 153.044.205 48,974,145 i 04,070,059 112,441 35.0 6,749 3,644 2,187 167,027,060 53448.659 113,578,401 128,504 40.0 7,303 3,944 2,366 180,737,682 57,836:058 122.901.624 145,531 45.3 7,778 4,ZC 10 2.520 192.493.180 61,597,817 130,895,362 159,988 498 8,161 4,407 2,644 201.971.823 & 225,204 70.1 8,552 4,618 2,771 211. . - ,-_- 240,303 74.8 8,665 4,679 2,807 214.445.025 68.622.408 290,099 90.3 8,806 4,755 ,-- ,-- 306,162 95.3 8,816 4,761 2,856 218,182,035 69,818,251 148,363,784 321,261 100.0 8,816 4,761 2,856 218,182,035 69,818,251 148363,784 SSA’s fiscal year 1988 PER results: 186,666 58.1 4,069 2,197 1,318 100,701,305 32,224,418 68,476.887 Note: QA cases are excluded on the assumption that SSA would contrnueto select them randomly Page 28 GAO~HRD-90-28 SSA Reviews of State Disability Decisions Appendix I Methodology and Tables Table 1.6: Costs and Net Future Benefit Savings From Targeting PER Sample Percent of allowances Number Future benefit Medical Return per reviewed reviewed savings Review costs staff costs Total costs Net savings dollar spent 5.2 16,706 $29,366,470 $1,252,950 $902,124 $2,155,074 $27,211,396 $13.63 106 34,054 47,188,300 2,554,050 1,838,916 4,392,966 42,795,334 1074 16.5 53,008 64,841,840 3,880,830 2,862,432 6,743,262 58,098,578 9.62 20.6 66,180 80,122,502 4,802,870 3,573,720 8,376,59O 71,745,912 9.57 24.8 79,763 84,161,443 53685,765 3,573,720 9,259,485 74$X,958 9.09 30.2 97,021 88,267,701 6,807,535 3,573,720 10,381,255 77,886,446 8.50 35.0 112,441 91,498,854 7,732,735 38573,720 11,306,455 80,192,399 8.09 40.0 128,504 94,679,520 8,696,515 3,573,720 12,270,235 82,409,285 7.72 -45.3 145,531 97,388,977 9,633,OOO 3,573,720 13,206,720 84,182,257 7 37 49.8 159,988 99,576,737 10,428,135 3,573,720 14,OO1,855 85,574,882 7.11 550 176,694 101,478,405 11,263,435 31573,720 14,837,155 86,641,250 6.84 61.0 195,969 103,565,191 12,227,185 3573,720 15,800,9O5 87,764,286 6.55 64 7 207,856 104,659,071 12,762,lOO 3,573,720 16,335,820 88,323,251 6.41 701 225,204 106,156,846 13,542,760 3,573,720 17,116,480 89,040,366 6.20 748 240,303 108,058,514 14,146,720 37573,720 17,720,440 90,338,074 6.10 804 258.294 109,169,223 14,866,360 3,573,720 18,440,080 90,729,143 5.92 85.4 274,357 109,977,Oll 15,428,565 3,573,720 19,002,285 90,974,726 5.79 903 290,099 110,431,392 15,979,535 3,573,720 19,553,255 9O,878,137 5.65 95.3 306,162 110,599,681 16,461,425 3,573,720 20,035,145 9O,564,536 552 100.0 321,261 110,599,681 16,914,395 3,573,720 20,488,115 9O,lll,566 5.40 SSA’s fiscal year 1968 results: 58.1 186,666 68,476,887 9,893,298 3,326,388 13,219,686 55,257,201 5.18 Notes: 1. This analysis assumes that regbonal medical staffs can revkew cases up to the 20- percent level 2. Reviewer costs are highest for the 10 percent of cases in the most error-prone categories, and decrease with each addItIonal 10 percent . Page 29 GAO/HRD-9W28 SSA Reviews of State Disability Decisions Appendix I Methodology and Tables Table 1.7: Costs and Future Savings From Targeting PER Sample Using Reallocated CDR Resources Percent of allowances Number Future benefit Medical staff Return per reviewed reviewed savings Review costs costs Total costs Net savings dollar spent 5.2 16,706 $29,366,470 $1,252,950 $902,124 $2,155,074 $27,211,396 $1363 10.6 34,054 47,188,300 2,554,050 1,838,916 4,392,966 42,795,334 10.74 16.5 53,008 64,841,840 3,880,830 2,862,432 6,743,262 58,098,578 9 62 20 6 66.180 80,122,502 4,802,870 3,573,720 8,376,590 71,745,912 957 24.8 79763 92,003,721 5,685,765 4,307,202 9,992,967 82,010,754 921 302 97.021 104,070,059 6,807,535 5,239,134 12,046,669 92,023,390 8 64 350 112,441 113.578,401 73732,735 6,071,814 13,804,549 99,773,852 823 400 128,504 122.901,624 8,696,515 6,939,216 15,635,731 107,265,893 786 453 145,531 130,895,362 9,633,OOO 7,858,674 17,491,674 113,403,688 748 49.8 159,988 137.340.840 10,428,135 8639,352 19,067,487 118,273.353 7.20 550 176,694 139,242,508 11,263,435 8,639,352 19.902.787 119.339.721 7 00 61 0 195,969 141,423,174 12,227,185 8,639,352 20,866;537 120,556.637 6.78 647 - 207,856 143,920,948 12,762,100 8,639,352 21,401,452 122,519,496 6 72 70 1 225,204 145,822,617 13,542,760 8,639,352 22,182,112 123,640,505 6.57 74.8 240,303 146,916,497 14,146,720 8,639,352 22,786,072 124,130.425 645 80.4 258,294 1473724,285 14.866,360 8,639,352 23,505,712 124,218,573 6.28 85.4 274,357 148,195,495 15,428,565 8,639,352 24,067,917 124,127,578 616 90.3 290,099 148,363,784 15,979,535 8,639,352 24,618,887 123,744,897 6.03 95 3 306.162 148,363,784 16,461,425 8,639,352 25,100,777 123,263,007 5 91 100.0 321,261 148,363,784 16,914,395 8,639,35i 25.553.747 122.810.037 581 SSA’s fiscal year 1988 results: 58.1 186,666 68,476,887 9,893,298 3,326,388 13,219,686 55,257,201 518 1. This analysis assumes reglonal medical staffs can review cases uptothe 50.percent level 2 Reviewer costs are highest for the 10 percent of cases in the most error-prone categones and decrease with each addItIonal 10 percent. Page 30 GAO/HRD!9@28 SSA Reviews of State Disability Decisions Appendix II Comments From the Department of Health and Human Services DEPARTMENT OF HEALTH & HUMAN SERVICES Olf~ceof lns,xclorGeneral Washmgton, 0 C 20201 JAFi221990 Mr. Lawrence H. Thompson Assistant Comptroller General United States General Accounting Office Washington, D.C. 20548 Dear Mr. Thompson: Enclosed are the Department's comments on your draft report, "Social Security: SSA Could Save Millions by Targeting its Reviews of State Disability Decisions." The comments represent the tentative position of the Department and are subject to reevaluation when the final version of this report is received. The Department appreciates the opportunity to comment on this draft report before its publication. Sincerely yours, Richard P. Kusserow Inspector General Enclosure Page 31 GAO/HRD9028 SSA Reviews of State Disability Decisions AppendixII CommentsFromtheDepartmentofHealth and HumanServices COMMENTS OF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES ON THE aERAL ACCOUNTING OFFICE'S DRAFT REPORT, "SSA COULD SAVE KILLIONS BY TARGETING ITS REVIEWS OF STATE DISABILITY DECISIONS" ltfBP-go-201 General Accountino Office Recommendations -- That the Secretary of the Department of Health and Human Services direct the Social Security Administration (SSA) to use a targeted sample for its preeffectuation reviews (PER) of initial disability determination services (DDS) allowances. While this would require some additional review staff and medical staff, costs would be far exceeded by the reductions in future benefit payments resulting from the targeted reviews. -- The Congress should revise Section 221(c) of the Social Security Act to exclude CDR continuances from the DDS decisions SSA is required to review. SSA could then limit its reviews of continuances to a quality assurance (QA) sample, and transfer administrative resources to a more cost-effective targeted review of initial DDS allowances. penartment Comment We agree that the PER of initial allowances can be targeted to be more effective, and that the continuing disability review (CDR) PER is only minimally effective. We also agree that targeted reviews generally require more administrative resources. While we agree that the relative effectiveness of the PER process can be improved by reducing the number of CDR continuance reviews, we do not believe that the PER review should be limited to initial cases only. Any legislation in this regard should provide the maximum flexibility to direct resources where they are most needed. That would enable us to judge what types of cases are most error prone at any given time and expend resources to remedy the problem, whether it involves allowances, denials or continuing disability review cases. Legislation either specifying percentages and types of cases SSA is to review or excluding types of cases from review severely restricts SSA's ability to manage the disability program effectively. However, if Congress insists on retaining requirements regarding percentages and types of cases to be reviewed, those contained in the Administration's bill (Section 702 of "Social Security Amendments of 1989") are superior to those contained in present law. . Page 32 GAO/HRD-90-28 SSA Reviews of State Disability Decisions. Appendix III Major Contributors to This Report ; Human Resources Cameo A. Zola, Assignment Manager Division, Washington, DC. Daniel L. McCafferty, Regional Assignment Manager Cincinnati Regional Kenneth R. Libbey, Evaluator-in-Charge Office Ellen Soltow, Evaluator (105343) Page 33 GAO/HRD9&28 SSA Reviews of St&e Disability Decisions
Social Security: SSA Could Save Millions by Targeting Reviews of State Disability Decisions
Published by the Government Accountability Office on 1990-03-05.
Below is a raw (and likely hideous) rendition of the original report. (PDF)