oversight

Social Security Disability: SSA Is Making Progress Toward Eliminating Continuing Disability Review Backlogs

Published by the Government Accountability Office on 1997-09-25.

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

                               United States General Accounting Office

GAO                            Testimony
                               Before the Subcommittee on Social Security, Committee
                               on Ways and Means, House of Representatives




For Release on Delivery
Expected at 1:00 p.m.
Thursday, September 25, 1997
                               SOCIAL SECURITY
                               DISABILITY

                               SSA Is Making Progress
                               Toward Eliminating
                               Continuing Disability
                               Review Backlogs
                               Statement of Jane L. Ross, Director
                               Income Security Issues
                               Health, Education, and Human Services Division




GAO/T-HEHS-97-222
Social Security Disability: SSA Is Making
Progress Toward Eliminating Continuing
Disability Review Backlogs
               Mr. Chairman and Members of the Subcommittee:

               Thank you for inviting me to testify on the Social Security Administration’s
               (SSA) plan to eliminate the backlog of continuing disability reviews (CDR) in
               the Disability Insurance (DI) and Supplemental Security Income (SSI)
               programs. These programs together pay about $60 billion annually to
               9 million disabled beneficiaries. CDRs, required by law for all DI and some
               SSI beneficiaries, help ensure that only those eligible continue receiving
               benefits. During the last 20 years, however, SSA has conducted from as few
               as 36,000 to as many as 544,000 reviews in various years. We have reported
               on several occasions that because SSA has not consistently done the
               required CDRs, hundreds of millions of dollars in unnecessary costs have
               been incurred each year, and program integrity has been undermined. (See
               the list of related GAO products at the end of this statement.)

               For almost a decade, budget and staff reductions and large increases in
               initial claims hampered SSA’s efforts to conduct these reviews.
               Consequently, more than 4 million beneficiaries were due or overdue for
               CDRs by 1996. Both SSA and the Congress focused attention on CDRs in that
               year. As a result, SSA developed a plan to conduct 8.2 million CDRs between
               1996 and 2002, and the Congress authorized funding of about $4.1 billion
               over 7 years for this purpose. Soon after SSA developed its plan, the
               Congress established a new requirement for CDRs and for disability
               redeterminations for certain SSI children, for whom eligibility criteria were
               made more restrictive as part of welfare reform. SSA expects to complete
               an update of its plan in November 1997 to incorporate these SSI CDRs as
               well as its progress conducting CDRs.

               My testimony today presents our observations on SSA’s ability to achieve
               its current 7-year plan cost effectively and on schedule. I will discuss SSA’s
               progress so far, its spending rate, and the status of selection formulas
               needed to meet future goals. My testimony is based on our previous
               reports and our ongoing work for you and Representative Kennelly.

               In summary, we have found that SSA’s experience in conducting CDRs
               during fiscal year 1997 is encouraging. For 1997, SSA expects to meet or
               exceed its goal to conduct 603,000 CDRs. And, for 1998, it is planning to
               increase its goal because it was able to meet its 1997 goal, while also
               processing at least 235,000 SSI childhood eligibility redeterminations.
               Reviewing more cases sooner than planned, to the extent possible, is
               clearly desirable because of the high costs—in taxpayer dollars and
               program integrity—of continuing benefits to those who are no longer



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                       eligible. In addition, SSA’s spending to date and estimates of future
                       processing costs suggest that it will be able to complete its current 7-year
                       plan with the funds the Congress has authorized, although its revised plan
                       will not be available until November 1997. Key issues, however, such as
                       deciding which beneficiaries should undergo a full medical review—a
                       lengthy and costly process—are still unresolved but will determine how
                       quickly and at what cost SSA can become current on its CDR workload.


                       SSA’s disability programs provide cash benefits to people with long-term
Priority of CDRs Has   disabilities. The DI program provides monthly cash benefits and Medicare
Varied                 eligibility to severely disabled workers; SSI is an income assistance
                       program for blind, disabled, or aged people whose income and resources
                       fall below a certain threshold. The law defines disability for adults for both
                       programs as the inability to engage in substantial gainful activity because
                       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. For
                       children seeking SSI disability benefits, the impairment must meet the
                       duration requirement and result in marked and severe functional
                       limitations.

                       Both the DI and SSI programs are administered by SSA and state disability
                       determination services (DDS). DDSs receive their funding from SSA and make
                       disability decisions in accordance with SSA’s policies and procedures. They
                       process initial disability applications, assess beneficiaries’ potential for
                       medical improvement, set due dates for CDRs, and conduct full medical
                       reviews.

                       In early 1978, we reported on serious program administration weaknesses
                       that allowed many medically ineligible recipients to go undetected.1
                       Because of its concerns about the effectiveness of the CDR process and the
                       growing number of disability beneficiaries, the Congress enacted a
                       provision in a 1980 law requiring periodic CDRs for all DI beneficiaries.2
                       This provision requires SSA to review—at least once every 3 years—the
                       status of DI beneficiaries whose disabilities are not permanent to
                       determine their continuing eligibility for benefits. The law also requires
                       CDRs for DI beneficiaries with permanent impairments but gives SSA latitude
                       in determining the frequency of these reviews. The 1980 provision does
                       not require SSA to review cases involving SSI recipients. Before the 1980


                       1
                        See GAO numbered correspondence HRD-78-97.
                       2
                        See the Social Security Disability Amendments of 1980 (P.L. 96-265) Sec. 311.



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                                       legislation, SSA scheduled beneficiaries for medical reviews only if medical
                                       improvement was expected.

                                       As a result of the 1980 law, SSA began increasing the number of CDRs in
                                       fiscal year 1981, using age, benefit amount, and medical characteristics as
                                       selection criteria. This resulted in the selection of a disproportionate
                                       number of young people with mental impairments for CDRs, as shown in
                                       table 1. Many of these cases were terminated because they did not meet
                                       new strict mental disability criteria that had been implemented after they
                                       had been put on the rolls.

Table 1: CDR Historical Data, Fiscal
Years 1975-96                                                                Benefit
                                                                          cessation
                                                          Number of          rate (in   Selected significant events in
                                       Fiscal year           CDRsa         percent)c    CDR history
                                       1975                  147,200               21
                                       1976                  170,000               24
                                       1977                  150,300               38
                                       1978                  118,800               46   GAO reported its concern that
                                                                                        thousands of medically ineligible
                                                                                        recipients were going undetected.
                                       1979                  134,500               46
                                       1980                  159,600               46   The Congress established
                                                                                        requirement for periodic reviews of
                                                                                        DI beneficiaries.
                                       1981                  257,100               47   SSA increased CDRs and began
                                                                                        targeting CDRs on the basis of
                                                                                        age, benefit amount, and medical
                                                                                        factors that disproportionately
                                                                                        affected younger people and the
                                                                                        mentally impaired.
                                       1982                  496,800               45
                                       1983                  544,200               41
                                       1984                  156,600               24   The Congress enacted medical
                                                                                        improvement review standard, and
                                                                                        SSA declared moratorium on CDRs.
                                       1985                   35,900               11
                                       1986                   47,700               6    SSA lifted the CDR moratorium
                                                                                        after publishing regulations for the
                                                                                        medical improvement review
                                                                                        standard. SSA also published
                                                                                        criteria for scheduling CDRs.
                                       1987                  206,000               13
                                       1988                  353,800               12
                                       1989                  366,800               9
                                                                                                                 (continued)


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                                             Benefit
                                          cessation
                        Number of            rate (in          Selected significant events in
Fiscal year                CDRsa           percent)c           CDR history
1990                        195,100                11          SSA began diverting CDR
                                                               resources to initial disability claims,
                                                               which were growing rapidly.
1991                         73,500                10
1992                         73,100                13
1993                         64,800b               11          SSA implemented mailer CDR
                                                               process for certain DI beneficiaries
                                                               under age 59.
1994                        118,400b               14          The Congress enacted requirement
                                                               for 100,000 SSI CDRs annually
                                                               during fiscal years 1996-98.
1995                        217,000b               17
                                     b
1996                        498,400                11          The Congress authorized $4.1
                                                               billion for CDRs during fiscal years
                                                               1996-2002 and required additional
                                                               SSI childhood disability reviews
                                                               and redeterminations for which it
                                                               authorized an additional $250
                                                               million.

a
 CDR data for 1975 through 1994 include “work” CDRs for which DDSs conduct full medical
reviews. Work CDRs are unscheduled reviews that SSA’s field offices initiate when, for example,
they receive reports indicating a beneficiary is working or has income. SSA estimates that DDSs
annually conduct about 20,000 full medical reviews as a result of work CDRs.
b
 For 1993-96, the number of mailers, respectively, were about 34,600, 31,000, 76,500, and
248,000.
c
    Data represent initial cessation rate before appeals.

Source: SSA.



In response to this situation, the Congress enacted a law in 1984
establishing the Medical Improvement Review Standard, which prohibits
benefit termination unless SSA can show that the beneficiary’s medical
condition has improved since the last medical decision and that this
improvement relates to the individual’s ability to work.3 As a result, SSA
declared a moratorium on conducting CDRs until the new medical
improvement standard was implemented by regulation in late 1985. Since
enactment of the new standard, the cessation rate for CDRs has declined
greatly.



3
 See the Social Security Disability Benefit Reform Act of 1984 (P.L. 98-460).



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SSA’s regulations require CDRs every 6 to 18 months for DI beneficiaries
expected to improve medically and at least once every 3 years if medical
improvement is considered possible. For DI beneficiaries whose
impairments are judged to be permanent, the regulation requires CDRs
once every 5 to 7 years. Until 1993, all CDRs were labor-intensive full
medical reviews. In full medical reviews, one of SSA’s 1,300 field offices
first contacts the beneficiary to determine whether he or she is engaged in
any gainful activity that would make the beneficiary ineligible for benefits.
If not, the field office forwards the case to a DDS, which determines
whether the beneficiary still meets the medical eligibility requirements. SSA
currently estimates that a full medical review costs about $800.

To conduct CDRs more cost effectively, SSA developed an alternative to full
medical reviews.4 Under this alternative, SSA mails a questionnaire
(referred to as a “mailer”) to beneficiaries who have a low likelihood of
benefit termination for them to report information on their medical
conditions, treatments received, and work activities. About 2 percent of
these beneficiaries eventually undergo a full medical review because their
responses to the mailer and statistical information used to indicate the
likelihood of cessation indicate that a more comprehensive review is
warranted. SSA currently estimates that a mailer CDR costs about $50 to
process.

Due to budget and staff reductions after 1986 and large increases in initial
disability claims beginning in 1990, SSA diverted resources from CDRs and
could not conduct all required DI CDRs; nor could the agency conduct many
SSI CDRs. In 1994, the Congress established the first statutory requirement
for SSI CDRs, mandating that SSA review one-third of the SSI beneficiaries
who reach age 18 and at least 100,000 additional SSI beneficiaries annually
in fiscal years 1996 to 1998.5

We reported in October 1996 that about 2.4 million DI beneficiaries were
due or overdue for CDRs, all required by law, and about 1.9 million SSI
beneficiaries were due or over due for CDRs, of which 118,000 were



4
 To develop the mailer CDR process, SSA used the outcomes of previous DI CDRs to statistically
estimate the likelihood that a CDR would result in benefit termination. The estimate is based on
characteristics such as age, impairment, length of time on the disability rolls, and previous CDR
activity. If the estimated likelihood of benefit termination is high, SSA routes the case to a DDS for a
full medical review. If the estimated likelihood of benefit termination is low, SSA sends a mailer to the
beneficiary, permitting SSA to do more CDRs than if all cases were forwarded to DDSs for full medical
reviews.
5
 See the Social Security Independence and Program Improvements Act of 1994.



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required by law.6 SSA calculated a smaller number of due or overdue
CDRs—1.4 million for DI beneficiaries and 1.6 million for SSI beneficiaries.
SSA excluded from its calculation DI worker beneficiaries aged 59 and
older, disabled adult children and disabled widows and widowers of DI
worker beneficiaries, and SSI beneficiaries aged 59 and older. SSA officials
have acknowledged that CDRs were required for all DI beneficiaries
excluded from its calculation but stated that because of the CDR backlog it
was focusing on the portions of the CDR population that the agency
estimated as the most cost effective to review.

In early 1996, SSA developed an ambitious 7-year plan to conduct
8.2 million CDRs during fiscal years 1996 to 2002, and, in March 1996, the
Congress authorized a total of about $4.1 billion to fund SSA’s plan.7 The
current 7-year plan includes (1) CDRs for DI worker beneficiaries under age
59, (2) SSI CDRs required under the Social Security Independence and
Program Improvements Act of 1994, and (3) about 2 million additional SSI
CDRs.


In November 1997, SSA plans to complete its updated plan to include
additional beneficiary groups mandated in recent legislation. SSA estimates
adding about 600,000 cases to its plan during fiscal years 1998 to 2000 to
comply with requirements to conduct (1) CDRs at least every 3 years for SSI
children under age 18 who are likely to improve; (2) CDRs for infants in
their first year of life who receive SSI benefits due to low birth weight; and
(3) redeterminations for all SSI children beginning on their 18th birthdays,
using adult disability criteria.8 The August 1996 legislation also required
that SSA conduct SSI eligibility redeterminations for all children who
previously qualified for disability on the basis of an individualized
functional assessment (IFA), which the law eliminated, or on maladaptive
behavior criteria, which the law revised to eliminate double counting of
impairments. SSA estimated that about 300,000 children had been approved

6
 See Social Security Disability: Alternatives Would Boost Cost-Effectiveness of Continuing Disability
Reviews (GAO/HEHS-97-2, Oct. 16, 1996) and Social Security Disability: Improvements Needed to
Continuing Disability Review Process (GAO/HEHS-97-1, Oct. 16, 1996). Also see Supplemental Security
Income: SSA Is Taking Steps to Review Recipients’ Disability Status (GAO/HEHS-97-17, Oct. 30, 1996).
7
 The Contract With America Advancement Act of 1996 (P.L. 104-121) authorizes funding for 7 years for
CDRs from the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability
Insurance Trust Fund.
8
 See the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. This act repealed
the provision for CDRs for 18-year-olds in the 1994 legislation. SSA determined that newly required
CDRs on low birth weight babies and children under age 18 whose impairments are likely to improve
and redeterminations for 18-year-olds may count toward the 100,000 CDRs required under the Social
Security Independence and Program Improvement Act of 1994. The Balanced Budget Act of 1997
permits SSA to schedule a CDR for a low birth weight child after the child’s first birthday if it is
determined that the child’s impairment is not expected to improve within 12 months after birth.



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                       on the basis of the IFA or maladaptive behavior criteria. These cases, which
                       are not counted in the CDR workload, must be completed by February 1998.


                       SSA data indicate that it will meet its CDR target for 1997, while also
SSA Met 1997 Target,   processing the newly required SSI childhood redeterminations. This result
Further Progress       is due in part to SSA’s working with the DDSs to increase case processing
Expected               capacity to handle the unprecedented workloads in SSA’s CDR plan. We find
                       this progress encouraging and will continue to review SSA’s progress in our
                       ongoing work.

                       In fiscal year 1997, SSA faced a new SSI childhood redetermination
                       workload that competed for the same resources that conduct CDRs. Even
                       so, the DDSs were on track to meet or exceed the 1997 target of 603,000
                       CDRs (see table 2). Both SSA and DDS officials told us that they attributed
                       part of their success to the decline in initial applications—from about
                       2.4 million in fiscal year 1996 to about 1.9 million through the first 11
                       months of fiscal year 1997. SSA is reassessing its CDR workload target for
                       1998 to determine the extent to which it can increase the CDR target
                       beyond the 1.1 million the plan currently calls for.

                       To prepare for this ambitious CDR workload, SSA has negotiated with the
                       DDSs  to increase CDR workloads and increase the DDSs’ efforts to hire, train,
                       and supervise additional staff. After several months of training, the new
                       staff would be expected to handle initial disability determinations, freeing
                       more senior examiners to handle CDRs. Training and supervising new
                       disability examiners, however, can require a great deal of the senior
                       disability examiners’ time. Our preliminary work indicates that the DDSs
                       substantially succeeded in meeting their 1997 hiring goals, despite
                       problems such as hiring freezes, shortages of qualified applicants, and
                       limited office space, which sometimes caused DDSs to reach their hiring
                       goals later in the year than planned. From 1996 to 1997, the number of
                       full-time disability examiners in the DDSs increased from 5,459 to 5,724, not
                       including 435 trainees. SSA also expects DDSs to be able to meet their 1998
                       hiring goals.




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Table 2: SSA’s CDR and SSI Childhood Redetermination Workload Targets and Cases Completed, Fiscal Years 1996-2002
In thousands
                      1996                     1997        1998               1999            2000             2001             2002
Current workload targets
CDRs processed        500                       603        1,117              1,397           1,595            1,527            1,443
(mailers and full
medical reviews)
SSI childhood         Not applicable            288        Not providedb      Not             Not              Not              Not
initial                                                                       applicable      applicable       applicable       applicable
redeterminationsa
Actual cases completed
CDRsc (mailers        498                       603        Unavailable        Unavailable     Unavailable      Unavailable      Unavailable
and full medical
reviews)
SSI childhood         Not applicable            235d       Unavailable        Not             Not              Not              Not
initial                                                                       applicable      applicable       applicable       applicable
redeterminationsa
                                        a
                                         Years other than 1997 and 1998 are not applicable for childhood redetermination targets or
                                        cases completed because the Aug. 1996 legislation required that all childhood redeterminations
                                        be completed by Aug. 22, 1997, and in 1997 the Congress extended this deadline to Feb. 1998 in
                                        P.L. 105-33. Actual cases completed for 1998 are unavailable until the end of 1998.
                                        b
                                            SSA did not provide the current target workload for childhood redeterminations in 1998.
                                        c
                                         CDRs completed for 1996 represents CDRs for DI and SSI beneficiaries. CDRs completed for
                                        1997 includes periodic CDRs, CDRs for SSI low birth weight babies, and redeterminations for SSI
                                        children after they reach age 18. The 603,000 cases for 1997 is an estimate based on actual
                                        cases completed through the end of Aug. 1997. Cases completed for fiscal years beyond 1997
                                        are unavailable until the end of each fiscal year.
                                        d
                                         As of the end of Aug. 1997, about 235,000 of the original 288,000 SSI childhood
                                        redeterminations had been processed. Of the 235,000 cases processed, SSA determined on the
                                        basis of a review of existing medical evidence that about 28,000 cases could be continued
                                        without referring them to DDSs for medical redeterminations. DDSs conducted medical
                                        redeterminations for the remaining 207,000 cases. SSA did not provide an estimate of the initial
                                        redeterminations it will complete by the end of Sept. 1997.

                                        Source: SSA.




                                        On the basis of SSA’s current cost estimates, the congressionally authorized
Budget Authority                        funding levels for fiscal years 1998 through 2002 will exceed the estimated
Appears Sufficient to                   costs of the CDR workloads in SSA’s current plan. The Congress has
Conduct Required                        authorized a total of about $4.3 billion for DI and SSI CDRs and SSI
                                        redeterminations during fiscal years 1996 through 2002 (see table 3).9
CDRs
                                        9
                                         The Contract With America Advancement Act of 1996 (P.L. 104-121) authorized about $4.1 billion for
                                        DI and SSI CDRs during fiscal years 1996 to 2002. The Personal Responsibility and Work Opportunity
                                        Reconciliation Act of 1996 (P.L. 104-193) added a total of $250 million to the authorized amounts for
                                        fiscal years 1997 and 1998.



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Table 3: Amounts Authorized,
Requested, Appropriated, and     Dollars in millions
Obligated for CDRs and SSI       Funding for DI and
Redeterminations, Fiscal Years   SSI CDRs and SSI
1996-2002                        redeterminations                   1996             1997              1998        1999-2002
                                 Amount authorized                  $260             $510              $670        $720a
                                                                                                            b
                                 SSA’s budget                         260              510              490        Not available
                                 request
                                 Amount appropriated                  260              510b             490c       Not available
                                 Amount obligated by SSA
                                     CDRs                             207              288              366        Not available
                                     SSI                                0              235              164        Not available
                                     redeterminations
                                 Total obligations                  $207             $523d             $530e       Not available
                                 Amount not spent and carried forward
                                     CDRs                              53               40                 0       Not available
                                     SSI                                0                 0                0       Not available
                                     redeterminations
                                 Total                                $53              $40               $0        Not available
                                 a
                                 The annual authorization from 1999-2002 is $720 million.
                                 b
                                  The $510 million appropriated in 1997 and the $490 million requested for 1998 include
                                 $200 million annually from SSA’s administrative expenses to be used for CDRs. The remaining
                                 funds—$310 million in 1997 and $290 million in 1998—are from an additional budget authority
                                 that can be used to process either CDRs or SSI redeterminations.
                                 c
                                  The Senate approved SSA’s $490 million request on Sept. 11, 1997. Final approval by the
                                 Congress is pending.
                                 d
                                  In 1997, SSA obligated more than the amount appropriated because $53 million of unobligated
                                 1996 funds had been carried forward to 1997.
                                 e
                                  SSA estimates it will have $530 million in obligations available in 1998—its $490 million request
                                 plus the unobligated $40 million carried over from 1997.

                                 Source: SSA.



                                 For fiscal year 1996, SSA requested and received $260 million for CDRs, of
                                 which the Congress designated $60 million as 2-year funding for use in
                                 1996 or 1997. SSA spent a total of $207 million in 1996 to conduct 498,000
                                 CDRs—only 2,000 short of its goal of 500,000. In 1996, SSA found that full
                                 medical reviews cost less than previously estimated—about $800 each,
                                 rather than $1,000 each. As a result, SSA carried forward $53 million from
                                 1996 into 1997.




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For fiscal year 1997, SSA requested and received $510 million—$200 million
for CDRs and $310 million of 2-year funding that could be used for either
CDRs or SSI redeterminations. Including the $53 million that SSA carried
forward from 1996, SSA had a total of $563 million available for 1997. Of
this $563 million, SSA estimates it will spend $288 million to meet its goal of
conducting 603,000 CDRs and will spend $235 million to process more than
235,000 SSI redeterminations—or a total of $523 million. This means SSA
will spend $13 million more than the $510 million appropriated; however,
it still will be able to carry forward $40 million into 1998 because of the
$53 million carried forward from 1996 into 1997.

SSA officials told us that in fiscal years 1996 and 1997 the agency could not
have effectively spent the unused funds ($53 million and $40 million,
respectively) to greatly increase the number of full medical reviews
conducted during those years because the DDSs were gearing up to handle
the increased CDR workloads. As mentioned previously, some DDS officials
told us they could not have expanded any faster.

In 1996, the Congress authorized $670 million for CDRs and SSI
redeterminations in fiscal year 1998. This $670 million consisted of
$570 million authorized by Public Law 104-121 for CDRs and an additional
$100 million authorized by Public Law 104-193, which enacted the SSI
redetermination requirements. SSA officials told us that the $570 million
authorization assumed that the DDSs would conduct 533,000 full medical
reviews costing $1,000 each. In formulating its budget request for 1998,
however, SSA reduced the full medical review workload from 533,000 to
428,000 (costing $800 each). SSA reduced the workload because of the size
of other DDS workloads. As a result, SSA submitted a budget request of
$490 million or $180 million less than the total amount authorized for CDRs
and SSI redeterminations.

On the basis of SSA’s current 7-year plan and the current estimated average
cost of processing CDRs, it appears that the $720 million authorized for
each year from 1999 to 2002 will exceed the cost of conducting CDRs (see
table 4). For example, the current plan calls for the largest number of CDRs
to be conducted in 2000. At an average estimated cost of $800 per full
medical review and $50 per mailer, the estimated total cost for CDRs in
2000 is about $668 million, compared with the authorized amount of
$720 million.




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Table 4: Estimated Costs of
Conducting CDRs During Fiscal Years                                               1999   2000          2001        2002
1999-2002 Under SSA’s Current CDR     Workload targets specified in current plan (CDRs in thousands)
Workload Plan
                                      Full medical reviews                         593    780           778         678
                                      Mailer CDRs                                  880    890           820         840
                                      Estimated average cost per CDR in FY 1998
                                        Full medical reviews                      $800   $800          $800        $800
                                        Mailer CDRs                                 50     50            50          50
                                      Estimated total cost (dollars in millions)
                                      Full medical reviews                         474    624           622         542
                                      Mailer CDRs                                   44     44            41          42
                                      Total cost                                  $518   $668          $663        $584
                                      Amount authorized
                                      (dollars in millions)                        720    720           720         720
                                      Authorized amount less
                                      estimated cost
                                      (dollars in millions)                        202     52            57         136
                                      Source: GAO computations based on SSA data.




                                      To make the CDR process more cost effective, SSA has been developing
Timely Completion of                  selection formulas to identify which beneficiaries should receive lower
Selection Formulas                    cost mailers and which should be designated for higher cost full medical
Needed to Meet                        reviews. In October 1996, we reported that SSA had sufficiently developed
                                      the selection formulas to apply them to about one-half of the beneficiaries
Future Goals                          due for CDRs. SSA is still developing selection formulas for many of the
                                      other beneficiaries due for CDRs, however, and the extent of SSA’s success
                                      could affect its ability to complete its 7-year plan cost effectively and on
                                      schedule.

                                      We reported that although SSA had developed selection formulas for
                                      beneficiaries under age 59 who have potential for medical improvement,
                                      the formulas could not identify for most beneficiaries in this group who
                                      should receive a mailer or be referred for a full medical review. Recently,
                                      however, SSA began full medical reviews for the 10 percent of these
                                      beneficiaries with the highest probability of benefit cessation. Successful
                                      completion of selection formulas for the remainder of the beneficiaries is
                                      important because if SSA has to do full medical reviews for all of them, it
                                      could jeopardize meeting the 2002 goal.




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               SSA is also developing selection formulas to apply to more than 600,000 SSI
               childhood cases that will be coming due for a CDR by fiscal year 2000.
               Completing these CDRs on schedule may depend on SSA’s ability to develop
               and implement a reliable mailer process for children.

               SSA has finished developing selection formulas for beneficiaries aged 59
               and older and for beneficiaries not expected to improve medically. Of this
               latter group, SSA sent mailers to 44,000 beneficiaries in early 1997. For
               beneficiaries aged 59 and older, SSA plans to send mailers to 60,000
               beneficiaries in October 1997.

               SSA officials also said that the agency is nearing the completion of selection
               formulas for disabled adult children and disabled widows and widowers of
               DI worker beneficiaries, and mailers for this group could start going out
               sometime in fiscal year 1998.


               SSA plans to conduct over 8 million CDRs by 2002, more than double the
Concluding     number of CDRs conducted during the entire preceding 21-year period. Our
Observations   preliminary findings indicate that SSA is meeting its capacity-building goals
               in the DDSs and should have adequate funding to carry out its current plan.
               In fact, SSA may be able to conduct these CDRs in a shorter time period. The
               more quickly SSA can remove those who are no longer eligible from the
               rolls, the more it can save in program costs. Therefore, in light of the lower
               levels of initial applications, SSA should increase its yearly CDR goals.
               Finally, we note that many beneficiaries who will not medically improve
               could nevertheless have or regain work capacity. In light of this, we
               continue to encourage SSA to consider ways to integrate return-to-work
               efforts into its overall management of the CDR process for all beneficiaries.


               Mr. Chairman, this concludes my prepared statement. At this time, I will be
               happy to answer any questions you or the other Subcommittee members
               may have.




               Page 12                                                     GAO/T-HEHS-97-222
Social Security Disability: SSA Is Making
Progress Toward Eliminating Continuing
Disability Review Backlogs




Page 13                                     GAO/T-HEHS-97-222
Social Security Disability: SSA Is Making
Progress Toward Eliminating Continuing
Disability Review Backlogs




Page 14                                     GAO/T-HEHS-97-222
Page 15   GAO/T-HEHS-97-222
Related GAO Products


              Social Security Disability: SSA Must Hold Itself Accountable for Continued
              Improvement in Decision-Making (GAO/HEHS-97-102, Aug. 12, 1997).

              Social Security: Disability Programs Lag in Promoting Return to Work
              (GAO/HEHS-97-46, Mar. 17, 1997).

              Supplemental Security Income: SSA Is Taking Steps to Review Recipients’
              Disability Status (GAO/HEHS-97-17, Oct. 30, 1996).

              Social Security Disability: Alternatives Would Boost Cost-Effectiveness of
              Continuing Disability Reviews (GAO/HEHS-97-2, Oct. 16, 1996).

              Social Security Disability: Improvements Needed in Continuing Disability
              Review Process (GAO/HEHS-97-1, Oct. 16, 1996).

              Social Security: New Continuing Disability Review Process Could Be
              Enhanced (GAO/HEHS-94-118, June 27, 1994).

              Social Security: Continuing Disability Review Process Improved, But More
              Targeted Reviews Needed (GAO/T-HEHS-94-121, Mar. 10, 1994).

              Social Security Disability: SSA Needs to Improve Continuing Disability
              Review Program (GAO/HRD-93-109, July 8, 1993).

              Social Security: Effects of Budget Constraints on Disability Program
              (GAO/HRD-88-2, Oct. 28, 1987).

              Social Security Disability: Implementation of the Medical Improvement
              Review Standard (GAO/HRD-87-3BR, Dec. 16, 1986).

              More Diligent Followup Needed to Weed Out Ineligible Disability
              Beneficiaries (HRD-81-48, Mar. 3, 1981).




(207015)      Page 16                                                   GAO/T-HEHS-97-222
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