Social Security disability reforms disappointing, GAO says

The Social Security Administration has spent more than $100 million over the past seven years to improve its much-maligned process for awarding disability benefits, but those efforts have missed the mark, according to a new General Accounting Office report. "In spite of significant resources SSA has dedicated to improve the disability claims process, the overall results…have been disappointing," says the GAO report, "Social Security Disability: Disappointing Results from SSA's Efforts to Improve the Disability Claims Process Warrant Immediate Actions" (GAO-02-322). SSA has two programs for providing financial assistance to people with disabilities. The disability insurance program paid $59 billion in benefits in fiscal 2001 to 6 million disabled workers and their families who cannot work, while the Supplemental Security Income program paid about $28 billion in benefits in fiscal 2001 to 6 million aged, blind or disabled individuals whose income fell below a certain threshold. GAO called the current process for getting disability benefits "complex and fractured." Those seeking benefits must first apply at an SSA field office. If the claimant meets minimal eligibility criteria, their claims are forwarded to a federally funded state agency, known as the Disability Determination Service, which decides if an individual will receive benefits. Once approved, SSA pays the claimants monthly benefits.

The disability programs have been criticized for how they handle appeals from those who have their claims rejected. Initially, a "reconsideration" review is done by the state agency. If that appeal is turned down, the case moves to the federal level. A claimant can then request a hearing with an SSA administrative law judge, where additional medical evidence can be presented in a more formal legal setting. If the ALJ rejects the benefit request, the claimant's last option before filing a federal lawsuit is to seek benefits from the SSA Appeals Council. Many people wait more than a year for an appeal to be decided, GAO found. Nearly 75 percent of all claimants rejected by the Disability Determination Service filed an appeal with the agency and, of those, the agency reversed the decision and awarded benefits to about two-thirds. Beginning in 1994, SSA set out to establish a more timely, customer-friendly and equitable disability determination process. GAO examined those reforms, but found many fell short. For example, the agency's Disability Claim Manager Initiative, which created a single point of contact for each claimant at the state level, won high marks for improved customer service and faster processing times, but also sent operating costs soaring by as much as 20 percent, GAO said. The agency eventually scrapped the program. Another reform, known as The Prototype and in place at a number of test sites, gave state examiners more authority in awarding benefits, permitted greater documentation and meetings with the claimants, and eliminated appeals at the state level. Those reforms had mixed results, GAO found. Initial claim reviews took longer, but benefits were awarded earlier in the process. With the elimination of appeals at the state level, SSA was able to process claims more quickly. SSA has not yet decided whether to expand The Prototype. GAO warned that expanding the program would require more money because an additional 100,000 claims will likely be appealed to SSA if reconsideration is eliminated. GAO also said SSA needs to do more to expedite its backlog of appeals before administrative judges and needs to develop a more comprehensive quality assurance program to guarantee that all claims are reviewed on a consistent basis.