oversight

Social Security: Many Administrative Law Judges Oppose Productivity Initiatives

Published by the Government Accountability Office on 1990-06-13.

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

                   United   States General Accounting    Office

         I         Testimony




For Release          SOCIAL SECURITY:
On Delivery          Many Administrative         Law Judges
Expected at          Oppose Productivity         Initiatives
10:00 a.m. EDT
Wednesday
June 13, 1990




                     Statement of Gregory J.            McDonald
                     Associate Director
                     Income Security    Issues
                     Human Resources Division
                     Before the
                     Subcommittee  on Social  Security
                     Committee on Ways and Means
                     House of Representatives




GAO/T-FIRD-90-39                                                   GAO Form 160 (U/87)
                                      SUMMARY

The Social     Security   Administration       (SSA) employs more than 700
administrative      law judges     (ALJs) in 132 hearing     offices  around            I
the country     to hear appeals       of applications   for social   security           i
or Medicare     benefits   that have been denied.
To ensure judges'         independence,     the Administrative    Procedure     Act
grants    ALJs certain       specific    exemptions  from normal personnel
management practices.            Management is permitted,      however,   to
supervise     and review ALJs' work to ensure its efficiency,
quality,    and adherence         to agency policies    and procedures.      At
SSA, this     supervision       is provided    by the Office   of Hearings    and
Appeals.
Historically,        SSA has used a monthly disposition    goal to
encourage     ALJs to decide more cases.       The goal has been based on
management's       judgment of what ALJs need to accomplish      to keep up
with their     appeals workload.      Monthly goals appear to have been
effective     in increasing     the average disposition  of cases per ALJ,
They have also been at the core of a long-standing           controversy
between SSA and its judges.          A large number of ALJs have
complained      that SSA's emphasis on productivity     has had a negative
effect     on their    work.
In our opinion,     the issue of performance        goals need not be
divisive.     As early as 1978, we recommended that federal               agencies
employing    ALJs establish    performance    standards     delineating     what
is expected    of them in terms of work quality           and quantity.      The
key in this recommendation        is the link between work quality           and
quantity.     We support    SSA's need for performance        goals and
standards    but SSA has not conducted      an adequate study of the
relationship    between its goals and the quality           of decisions.       As
a result,    SSA lacks the ability      to validate     its performance
goals.
In 1985, SSA began a major initiative               to decrease     its wo,rk
force.   Every SSA component had to reevaluate                  its staffing   needs.
The number of ALJs and support            staff    were allowed     to decline
through  attrition      until    fiscal   year 1988 when the ALJ corps was
at a ten-year      low.    As the number of appeals began to climb in
1986, SSA did not increase            its staffs,    especially     its ALJ corps,
to keep pace with the increasing             workload.      This caused a decline
in some performance        indicators.-
SSA began increasing         its ALJ corps in fiscal    year 1989 to about
700 judges,      but performance     has continued   to decline,     The
average age of pending cases and average processing              time reached
their    highest    levels  during   the decade at 147 and 217 days,
respectively,       and the number of pending cases increased         to
159,268.      This situation      has remained largely   unchanged through
the first     6 months in fiscal       year 1990.
Although    SSA has increased    its support    staff,     some hearing
offices    continue   to have staff  shortages.        According    to OHA
estimates,      about 100 of the 132 ALJ field       offices     are short some
support    staff.
Mr.     Chairman         and Members of               the Subcommittee:


We are       pleased        to be here            today      to discuss           the      activities             of the
Social       Security        Administration's                 (SSA's)        administrative                     law
judges       (ALJs).


ALJs are          unique     federal         employees.              They conduct             hearings            and
make decisions              on administrative                 proceedings             of     the    agency            that
employs       them,         SSA employs            more      than     700 ALJs             in 132 hearing
offices       around        the    country         to hear          challenges          from       individuals
whose applications                 for      social        security       or Medicare               benefits             have
been denied.


The role          of SSA's        administrative              law judges           differs          from         that        of
other      A,LJs in the           federal         government.            SSA hearings               are
nonadversarial              and informal,              and the         judge      has responsibility                         for
both      developing         the    evidence           and deciding             the     case.           In contrast,
most      other      executive           branch       ALJs hold         formal,         adversarial
hearings          that     are    similar         to a trial.            Responsibility                   for
developing           the    evidence         in      these    other      hearings            is    left         to the
parties       in the        proceedings,              who are        often      represented               by
attorneys.


TO ensure          their     decisional              independence,             the Administrative
Procedure          Act grants            ALJs certain           specific          exemptions              from        normal
management           controls.            Under       the    act,     federal         agencies
--   cannot      apply      statutory               performance            appraisal         requirements            to
     ALJs;
--   may not        reassign        or transfer             ALJs without                approval         of    the         t
     Office      of     Personnel        Management;
-e may remove ALJs only                       for      "good        cause,"        as determined              and
     established          by the        Merit          System Protection                 Board;         and
--   must     assign      ALJs cases                on a rotating              basis,       to    the    extent            i
                                                                                                                           /
     practicable.


Management            is permitted,            however,             to    supervise         and review          ALJs'
work    to ensure          its   efficiency,               quality,            and adherence             to agency
policies       and procedures.                      At SSA', this             supervision          and
administrative             support       is         provided         by the        Office        of Hearings         and
Appeals       (OHA).


Over    the    years,       conflict           has arisen                between      OHA and SSA's             judges
over    various         management            practices.                 At the     Subcommittee's
request,       we reported             late         last   year          on. the    causes        for    yecent
conflicts         and whether           reductions                 in staff,        especially           in    judges,
had adversely            affected         the adjudicative                     process.1




 1Social     Security:        Many Administrative   Law Judges Oppose
 Productivity       Initiatives     (GAO/HRD-90-15,   Dec. 7, 1989).
                                                               2
ALJ CONTROVERSY CENTERS ON                                                                                                          !
                                                                                                                                    P
MONTHLY DISPOSITION GOALS                                                                                                           p

Historically,                  SSA has used a monthly                         disposition          goal     to

encourage              ALJs to decide               more cases            and,      in part,         in an attempt
to     reduce          processing          delays.               The goal        has been based             on
management's                 judgment           of what ALJs need to accomplish                             to     keep up
with      their         appeal         workload           and has changed              as the workload                  and
number         of      judges         has changed.


Monthly         disposition               goals         appeared         to have        increased          the     average
monthly         disposition               of cases          per        ALJ.      They have also             been at           the
core      of      a long-standing                  controversy            between        SSA and its              judges.
Each time              the     goal     was increased,                  the    number       of ALJ decisions
rose,      even         if     the goal          was not met.                 But many ALJs have                                    E
complained              that       OHA's emphasis                 on productivity                has had a
negative            effect         on their         work --either              damaging          morale     or leading
to lower            quality           decisions.


These      views,            however,           were not          universally          held       by the      judges.
In preparing                 our      report       last      year,       we sent       a questionnaire                  to all
nonmanagerial                  ALJs.           About      half     of    those      responding            complained
about      the         productivity              measures,             and 34 percent             said     that     the
quality           of    their         decisions           had deteriorated               over      the past         3
years.            Yet 27 percent                 said      that        the quality          of    their     decisions
had improved.                   About          29 percent          of the        responding          ALJs said           that


                                                                   3
the      quality       of     their         service         to the public                   had worsened,                  but
about       23 percent              of     the     ALJs said             that      it     had improved.


In our       opinion,          the         issue      of performance                     goals        need not be as
divisive           as it      is.          The desirability                     of good performance
standards           has long              been established.                      As early             as 1978,            we
identified           the      need for             performance              standards             for      all       ALJs
throughout           the      federal             government.               We recommended                    that        federal
agencies           employing             ALJs establish                  performance              standards
delineating            what         is expected             in terms             of work          quality            and
quantity.            However,              the     key element              in this             recommendation                   is the
link      between          work quality               and quantity.                      We support              SSA's         need
for      performance           goals             and standards.                  However,             while       SSA has
established            performance                 goals,     we believe                  that        it   has not
adequately           studied              the     relationship              between             the     quality           and
quantity           of decisions.


As a result,               SSA lacks              a system         for      adequately                measuring            the
impact       of productivity                      changes        or initiatives                   on quality               and thus
lacks       the     ability              to validate         its         performance              goals.             In our
December           1989 report,                  we recommended                 that      the     SSA Commissioner
direct       OHA to         determine              the appropriate                      number        of cases            that      ALJs
should       be expected                  to decide.             In making               this     determination,                    we
believe        OHA should                 give     proper     balance              to the         quality            of
decisions.             The results                 of such a study                      should        be used as a basis



                                                                   4
for     establishing              and validating                 reasonable         monthly              disposition
goals.


OHA told           us about        a year          ago that        it     planned         to develop                 and
implement           a data        base of decisional                     deficiencies               identified
during       its     Bellman         reviews          (OHA's       only      routine            review          of    the
quality        of ALJ decisions)                    and to use            this     information
periodically            to monitor             the quality               of ALJ decisions.                       Such a
data      base would          give         OHA a better            capability             to      evaluate            whether
organizational               changes         or certain            management              initiatives                affect
the     quality        of ALJs'            work.          We understand            this         effort        has been
delayed        because        of budget             constraints.


However,           OHA has begun             to develop            a work measurement                        system.              In
January        1990,        the    former          Associate            Commissioner              of     OHA
established            a task        force         to submit            recommendations                  on a work
measurement            system        for     OHA field            offices         that      would         reflect           the
level      of service             that      the public            should         expect.            The task              force
gave the           Deputy     Commissioner                 for    Programs         its         initial        draft         of a
work measurement                  system       in May 1990,               and the Department                         of
Health      and Human Services                      has informed             us that            the      task        force's
work      should       be    completed             this     month.
STAFF REDUCTIONS ADVERSELY
AFFECTED OHA'S PERFORMANCE


Let      me turn        next      to      the      issue     of staffing.                    In 1985,             SSA began          a

major      initiative             to decrease              its        work     force.           Under         this
initiative,             Every      SSA component,                     including             OHA, had to
reevaluate            its      staffing          needs.           From fiscal                year         1985 through
fiscal        year      1988,      the      numbers          of ALJs and support                           staff            were
allowed        to decline              through        attrition.                By fiscal                 year      1988 the
ALJ corps            was at       a 10-year            low of          657 judges.


Early      staff        reductions              appeared          warranted,                particularly                                 t
c0nsiderin.g            the     large       decline          in appeals               that      accompanied                   the
moratorium            placed        on continuing                 disability                reviews.2                   However,
as the        number of appeals                     began        to climb            back      to    its         pre-
moratorium            level       in 1986,           OHA did           not     increase             its     staffs,
especially            its      ALJ corps,            to keep pace with                       the     increasing                          P
workload.             This      cau'sed a decline                     in some of OHA's performance                                       t
indicators,             but     decreased            resources            appeared             to have             little
effect        on operations                until       fiscal          year         1987.          In that          year       the
number        of pending           cases           increased           by more than                 26 percent                to over
                                                                                                                                         P
148,000,        and the           average           processing               time     for      a case            increased
from      172 to        198 days.               The indicators                 worsened             further             in    1988

2Reacting     to public     and congressional    pressure,                                           the Secretary   of
Health and Human Services          stopped reviewing     all                                         beneficiaries   for
their   continuing     eligibility     under the disability                                             program in
early   1984 and did not resume such reviews until                                                     January 1986.
                                                                  6
and,      although             OHA increased                   its     ALJ corps                in fiscal             year      1989 to
about       700 judges,                  performance                 continued             to decline.                 The average

age of pending                   cases           and average                processing                time      reached         their
highest           levels         during           the      decade           at     147 and 217 days,
respectively,                  and the            number of pending                        cases            increased         to
159,268.               This      situation               has remained                   largely          unchanged            through
the      first         6 months           of      fiscal           year       1990.


OHA increased                   its      support           staff          in fiscal             year         1988,     but      some
hearing           offices             continued            to have            staff        shortages.                 Ninety-four
percent           of     the ALJs who reported                              that        their         offices         lost      support
staff       during            fiscal           year      1988 said               that      this        had a negative
effect           on their             offices'           ability            to process                appeals.           Over 50
                                                                                                                                             ,P
percent           of them said                   that      the       loss        of staff             led     to     longer
processing               times         and poorer              quality             work.              .
                                                                                                     Managers         in the
offices           that        lost       staff          verified            that        the     loss        had a negative
effect           on their             work.


As of May, 1990,                       SSA had increased                         its      ALJ corps             to 715'and,             by
the      end of this                  fiscal          year,      OHA expects                   to have about                 750 ALJs
on duty--          the        highest            staffing            level         since        1984,           OHA had about
3,672        support           staff           on duty         as of May 1990,                       and expects              to have
about        3,985         by the          end of the                fiscal            year.          According          to OHA
staffing           estimates,                  about       100 of the                  132 ALJ field                 off ices      are
short        some support                  staff.             Because            hiring         is decentralized                   to the
regional           offices,              OHA could             not     estimate                the     number         of offices

                                                                        7
that   will   continue   to have staff'shortages       as the   year
progresses.




This   concludes    my statement.      I will   be pleased   to answer   any

questions.