Chairman Shaw, Ranking Member Matsui, and members of the Social Security Subcommittee, I want to thank you for your invitation to testify on the subject of SSA's disability programs and for the opportunity to present this statement regarding the longstanding and worsening crisis in the Social Security Administration's disability programs. As President of the National Council of SSA Field Operations Locals, I speak on behalf of approximately 25,000 Social Security Administration (SSA) employees in over 1300 field offices and 36 Teleservice Centers across the country. These employees receive, process and review disability benefit applications, appeals requests, and assist disabled beneficiaries with many post entitlement issues, including recent employment support initiatives. AFGE welcomes the opportunity to encourage the prompt action that is needed to ensure that the Social Security Administration can fulfill its current and future obligation to serve the American people.

I would like to extend our gratitude to Stanford Ross and the Social Security Advisory Board (SSAB) for their continued perseverance in addressing improvements necessary to strengthen SSA's capability to respond to the demands of the disability workloads, present and future. AFGE strongly agrees with the SSAB's finding that additional resources are essential to administer these disability programs. AFGE fully supports the Board’s recommendations to exclude SSA’s administrative budget for Social Security from the statutory cap that imposes a limit on the amount of discretionary government spending.

While SSA disability workloads continue to increase steadily, human resources have been constrained. As this committee is aware, the crisis stems from a severe downsizing within the Agency, almost entirely in those positions that provide direct public service. Senior SSA officials and AFGE have testified at various times to this Committee that without human capital and process improvements, our Agency will find itself with a deficit of nearly 20,000 employees to maintain the previous levels of public service. The improvements and the staff increases needed to deliver the timely, high quality service that our clients have paid for and deserve have not materialized.

AFGE supports the budget proposed by former Commissioner Apfel of $8.2 billion for FY 2002. Chairman Shaw proposed an even larger appropriation for FY 2002 ($8.4 billion) when he sponsored HR 5447. These resources are necessary to provide sufficient staff to enable SSA to efficiently process its disability workloads. Absent such resources SSA will process fewer claims and fewer continuing disability reviews (CDRs). Processing times will be longer and waiting times in offices will exceed tolerable limits. Overpayments will increase due to staffing shortages. These outcomes were all predicted in the former Commissioner’s budget proposal. AFGE believes that the American public deserves a better deal from SSA. Actuaries predict that SSA’s disability workloads will increase by over 40% by the end of the decade. Processing times are already escalating due to the increasing volume of work. In addition, overpayments are rapidly escalating due to SSA’s inability to properly monitor eligibility of those currently on the benefit rolls.

SSA observers such as the SSA Advisory Board are critical of the uneven allowance rate which depend on a claimant’s state of residence. Profit motivated companies have become an increasing problem in SSA. These companies have taken over some claims taking functions that have traditionally been viewed as inherently governmental. Such transfer of work has often resulted in poor service and occasionally in outright fraud and criminal activity. In addition, SSA’s own management information systems have been compromised due to cutthroat competition by SSA managers over ever decreasing resources.

Solving these problems is a daunting task. A multifaceted response is required. Certainly Congress must supply adequate budgetary resources to enable SSA to process the anticipated increases in disability workloads. However, many of SSA’s disability related problems can be solved if SSA rolls out two pilots which have proven remarkably successful in reducing processing times, providing greater customer satisfaction and eliminating some of the large overpayments in the Disability program. These pilots are the Disability Claims Manager (DCM) and the Employment Support Representative (ESR).

Today the Social Security Administration (SSA) will close down the Disability Claims Manager (DCM) pilot which is the final and only successful project of the approximately $100 million Disability Process Redesign. SSA is abandoning this project, closing the sites and dismissing journey level Federal and State DCMs before a complete consideration of the formal evaluation results that is targeted for a mid-July release.

The DCM was designed as a proof of concept test of one stop service to SSA’s disability claimants. The current bifurcated process is slowed by hand-offs between the federal claims representatives and the state disability examiners. Claimants do not understand the system. Currently federal employees interview disability claimants and secure information regarding their medical condition. The medical information is sent to state disability processing centers. Employees in the state centers secure the medical evidence of record for the claimant. Often claimants are referred for consultative examinations by contracted physicians. After all required medical information is secured, a state disability examiner decides whether the claimant is disabled and sends this decision back to the SSA field office. SSA makes decisions on all of the claimant’s non-medical entitlement factors such as benefit amount, entitlement of children and spouse, correct posting of earnings in their work history, etc.

Claimants are thoroughly confused by this process. They are confused by the division of duties between the state and federal workers. They are never able to identify who makes the medical decision on their disability claims. They never are seen by this state decision-maker. The public expresses significant frustration to front line SSA employees regarding this process.

The three-year DCM test measured the capability of one person to adjudicate both the technical and medical factors of entitlement. It was intended to evaluate the overall processing time and decisional quality of the DCM as compared to the current process. The results are a resounding success! The DCMs succeeded in this position, achieved a statistically significant reduction in processing time, and maintained the same high-level quality in comparison to the current process.

The Agency’s FY 2002 Performance Plan sets as a goal disability claims processing time of 108 days. DCM processing time during Phase 2 of the test was 73 days overall. Congress should closely question Agency officials who ignore such performance and prefer to maintain the current – and significantly more lengthy - process.

Congress should also examine the scandalously deteriorating performance levels of the states. The SSA Advisory Board indicated in its January 2001 report that state employee attrition levels have escalated as high as 38% per year in state DDS facilities. The inadequate pay and benefit package provided by some states cause many employees to abandon their jobs. State backlogs have become endemic in many states. The DDS is now staging cases. This means that 150,000 disability claims at any given time are unassigned to disability examiners because their caseloads are at the maximum. Such cases may not be assigned to a disability examiner for up to six weeks. And SSA is satisfied with this current system?

Customer satisfaction is the greatest accomplishment of the DCMs. They meet with the claimants at their first point of contact and explain SSA’s requirements for disability eligibility. The DCMs worked concurrently with physicians, advocacy groups and the claimants on their cases. When compared to both the current process measurement study and a separate study of the Prototype process, the DCMs scored significantly higher in all areas of customer satisfaction. It is noteworthy that among claimants denied benefits, satisfaction with the DCMs was significantly superior to both the current process and the Prototype process. Under the current process, claimants do not meet a decision-maker until the hearing stage of their case. DCM claimants enjoyed the fact that they knew their caseworker and could communicate with them while the claim was being processed.

The DCMs themselves reported an 83% higher job satisfaction rating by taking responsibility for all aspects of the disability case, compared to their previous work in handing off decisions to others. It is imperative to recognize these excellent human resources and to empower employees. This would reduce the attrition rates that are increasing in both the federal and state sectors.

AFGE repeatedly has called for SSA and this Subcommittee to conduct an independent evaluation of the formal (Phase 2) DCM test. The Lewin Group assessed Phase 1 and found that the DCM provides a viable approach for processing initial disability claims. Separate SSA components measured Phase 2 processing time, customer satisfaction, employee satisfaction and quality compared to a control group. These studies proved the DCMs’ effective service. SSA attempted to measure productivity and the administrative cost of the DCM and found it to be within a comparable range to the current process. A longer-range study is required to measure program cost in appeals rates and benefits paid.

Shutting down the DCM sites on June 29^th clearly shows that SSA reached the wrong conclusion about the DCM in the disability process. The test is the first successful breakthrough streamlining the claims process for disability claimants. Unfortunately SSA leadership lacks the political will to demand that Congress enact legislation permitting SSA workers to make disability decisions. Such legislation is necessary to enable a full roll out of this wonderful example of good and efficient government.

The Agency favors the Prototype program, which eliminates the reconsideration process and incorporates the single decision-maker. While the Agency is willing to go ahead with the Prototype, the public is much more satisfied with the DCM process.

The following is a comparison of the results of customer satisfaction studies regarding the DCM and the Prototypes. SSA’s Office of Quality Assurance conducted these studies.

Goals and objectives in the Social Security Advisory Board Report, January 2001, emphasize that claimants must be assisted to understand the disability rules and determination process. The disability system should provide fair and consistent treatment, ensuring high quality decisions by well-qualified and trained adjudicators, who provide expeditious processing of claims and increased claimant understanding. The DCMs provide this service and the claimant’s know it!

The next step should be a nationally representative pilot of the DCM process for handling initial disability claims. It is time to provide claimants one stop service. This occurred in 36 federal and state DCM test sites for the past three years, and should be expanded to represent all states and all SSA regions. SSA’s investment in resources for this successful pilot has resulted in a blueprint for a more efficient disability process. Rejecting it borders on malfeasance. Congress must take action to preserve this example of good government.

There is a critical need for the DCM in bridging the gap between the federal and state processes that currently specialize in initial disability adjudication. The investment in giving both federal and state employees control over the medical development is the incentive to involve the claimant in adequately developing communication and understanding from the outset. This will result in a consistent and equitable application of SSA’s process unification approach.

AFGE asks that the Subcommittee take an oversight role in the next step -piloting the DCM nationwide. Legislative change is required to accomplish this because the current law reserves technical entitlement to the federal sector and medical entitlement to the states. The DCM provides both federal and state components an opportunity to work together to finally remedy the process for claimants who are clamoring for a responsive system that meets their needs!

Another fundamentally crucial piece in SSA’s ability to provide viable, responsive, community based service to disabled beneficiaries is the Employment Support Representative (ESR).

The Ticket to Work and Work Incentives Improvement Act, which was enacted on

December 17, 1999, requires SSA to establish a community based work incentives planning and assistance program for the purpose of disseminating accurate information to disabled beneficiaries on work incentives programs and issues. The Ticket to Work and Work Incentives Improvement Act specified that this should be accomplished by:

1. Allowing disabled beneficiaries to receive assistance and/or information for disabled beneficiaries to work by "Federal, State, and private agencies and nonprofit organizations that serve disabled beneficiaries and with agencies and organizations that focus on vocational rehabilitation and work-related training and counseling"; and

2. Establishing "a corps of trained, accessible and responsive work incentive specialists within the Social Security Administration who will specialize in disability work incentives under Titles II and XVI" The legislation mandates that these SSA employees be experts with respect to inquiries and issues relating to work incentives to beneficiaries, applicants, and to benefits planning and advocacy groups.

To comply with the "Ticket to Work and Work Incentives Improvement Act of 1999, SSA has redefined its mission to include promoting the employment of Social Security beneficiaries with disabilities. By the year 2005, SSA's goal is to increase the number of beneficiaries who can attain steady employment and leave the disability rolls by 100%.

SSA created the Employment Support Representative (ESR) position to improve service delivery to beneficiaries interested in returning to work and related issues. The ESR plans, develops and leads an active outreach and communications program to promote understanding and use of Social Security work incentives provisions among beneficiaries, claimants, support groups, advocates, employers and the general public. This includes organizing workshops and conferences for various advocacy groups, employers, educational institutions, vocational rehabilitation counselors and Administrative Law Judges. The ESR initiates, coordinates, and leads outreach activities aimed at supporting beneficiaries who are interested in, or are returning to work. The ESR serves as a liaison and the primary SSA work incentive expert to advocacy groups, the public, congressional staff members, claims representatives and other field office personnel.

Although implementation of a pilot of 32 ESRs nationwide could be considered timid or meek effort on the part of SSA to comply with the legislation, the interim evaluation report demonstrates positive results. This report unequivocally shows that the ESR fills a gaping hole in providing service to disabled constituents seeking assistance in return to work, as well as providing a vital link for community organizations assisting the disabled.

Customers and organizations were highly appreciative of the service that ESRs provided, finding them to be compassionate, responsive, accessible, and highly knowledgeable. Over 83% of community organizations who responded to surveys agreed or strongly agreed that the ESRs provided helpful information on SSA programs that support work. One community organization commented: "it is [a] well needed and appreciated position. It is a long time coming. It is wonderful to be able to call a representative for questions. Shows great customer service." Other comments from organizations and beneficiaries included "I never knew SSA was so easy to work with...thank you, thank you, thank you!; "to my surprise, (SSA) actually wanted me to succeed.. The ESR gets my vote" and "...anyone on disability who has the desire to try to work should immediately be directed to the ESR."

Outreach efforts by the ESR were effective in educating customers about SSA's employment support programs. Work activity processing represents the highest percentage of employment support activities, ranging from 26-37 percent across the board. In addition to having a dedicated, discrete specialist processing these cases, ESRs have been successful in educating beneficiaries, and monitoring their work activity early on, so large overpayments are avoided. ESRs have been providing beneficiaries with a single point of contact within SSA about their work.

The ESR has also served a valuable role in processing Continuing Disability Review (CDR) cases involving return to work issues. Although most CDRs do not result in cessation, SSA's CDR process has been yielding a favorable ratio of savings to costs. For fiscal year 1998, actuaries estimate the ratio of savings to administrative costs at $12 to $1. In testimony before this subcommittee in March 2000, SSA stated that the second leading cause of Social Security program overpayments is disability cessation. Nearly $294 million dollars in 1999 was caused by cessations due to work activity. While this can occur when a beneficiary fails to timely report earnings, often beneficiaries have informed SSA, many times repeatedly that they have returned to work and the cases are not processed timely. These cases are highly complex, involving extensive, time consuming development and application of many different work incentive provisions.

Hardworking employees in understaffed offices are pressed to interview, answer phones, assist callers in the reception area, clear cases, and deal with a myriad of other workload crises. Anecdotal evidence from employees throughout the country cites large backlogs of CDRs. Many involve retroactive terminations going back several years causing very large overpayments, commonly in the tens of thousands of dollars, to disabled beneficiaries. In the same testimony, SSA stated that the ESR would be monitoring these cases and this would reduce future overpayments.

The volume of work issue CDRs is growing each year, totaling over a million new receipts in FY 2000, according to SSA workload reports. These receipts have increased at an average annual rate of 25% over the past 3 years, and they will increase at a faster rate because of provisions in the Ticket to Work legislation. Additionally, as beneficiaries begin using Tickets, employment networks will in turn expect timely reimbursement, which can only occur when a determination is made on a work CDR case.

Although the testimony states that the ESR also served a valuable role in SSA’s plan to improve service to the disabled who are trying to return to work, there are only 32 workers assigned to this job. Allocations should be focused or budgeted specifically to support at least one ESR in support of your constituents at each field office. If 32 ESRs could present such a favorable reaction in a limited number of locations, AFGE proposes that at least one ESR be assigned to each social security office in each congressional district.

AFGE applauds and supports SSA’s focus and efforts to increase the number of disabled beneficiaries returning to work and to improve service in this crucial area. We support the role and function of the ESR in this plan. This position will ensure that disabled constituents have an accessible and responsive specialist who provides high quality and timely community based service. SSA is currently considering further implementation of the ESR. AFGE is concerned that the Agency may choose an option of implementation significantly short of national rollout to every field office because of staffing concerns.

The national implementation of the ESR to every servicing area should not be delayed any longer. Section 121 of PL 106-170 authorized $23,000,000 to be appropriated to establish a community based work incentives planning and assistance program for the purpose of disseminating accurate information to disabled beneficiaries on work incentives programs for each of the fiscal years 2000 through 2004. However, SSA has decided to allocate all of the $23 million towards grants and cooperative agreements for private agencies and nonprofit organizations. SSA's decision to put all the allocated revenues into one aspect of the Ticket to Work and Work Incentives Improvement Act has depleted the Agency's ability to meet the legislative requirement to establish a corps of trained, accessible and responsive work incentive specialists within SSA. It is clear, unless Congress directs SSA to reallocate the appropriated funds provided in Section 121 of PL 106-170 or appropriates additional funding to meet the requirements of the Ticket to Work and Work Incentives Improvement Act, the most important and effective method of providing consistent and accurate information and assistance on work incentive programs will not be accessible to the majority of disabled beneficiaries. SSA needs the necessary resources to achieve a wide-scale implementation of the ESR.

SSA and AFGE created a Third Party Assistance Team for the purpose of identifying areas of concern involving third parties and developing recommendations for consideration by SSA and AFGE leaders.

Reports indicated that information to determine proper eligibility (such as income, resources, prior wage history, etc.) were being reported incorrectly as well insufficient medical information, (such as the disabled completing their own medical reports) that would require follow-up. Additionally, reports of fraud and inappropriate actions by third party assistants (identified by Social Security employees and verified by SSA's OIG, law enforcement and district attorneys), indicated that some third party assistants and/or organizations created fraudulent medical evidence for applicants resulting in eligibility decisions that would not have otherwise been made, shared confidential records resulting in privacy act violations, withheld/failed to report income resulting in payment errors and overpayments, and charged improper fees for services.

The Third Party Assistance Team found that virtually all third parties have a financial incentive in the disability claims process. Whether they receive fees for services or they are motivated to shift the financial responsibility from state and local government to the federal government, the employee of the organization and/or the organization itself gains financially through the disability claims process. The Third Party Assistance Team determined that only SSA employees were found to be neutral in the disability claims process and the outcome of a disability decision.

Other trends identified by the Third Party Assistance Team have resulted in genuine concern.  In many cases, loss of benefits would have been caused due to untrained, albeit well meaning, assistance from third parties that receive little, or no, formal training. Protective filings were not always documented properly, resulting in payment errors. Most of the time, third party assistants are not able to establish a correct date of onset, resulting in processing delays and/or loss of benefits. Some third parties conducted eligibility screening incorrectly, resulting in a disabled individual failing to file for benefits or suffering a loss of benefits. AFGE believes that eligibility screening should only be done by trained SSA employees.

The Third Party Assistance Team was briefed by the SSA Office of General Counsel regarding the legal prohibition of third parties providing reporting instructions to applicants. It was verified that only SSA employees can give reporting instructions, which includes reporting information that would effect eligibility or payment amounts. Therefore, all applicants from third parties should be contacted by an SSA employee to discuss their reporting responsibilities. This creates a counterproductive process. This leaves the door open to fraud.

The Third Party Assistance Team recommended that an automated data system was needed to identify third parties involved in the disability claims process, in order to monitor and evaluate their effectiveness. Additional recommendations addressed fraud by third parties. This topic created embarrassing adverse publicity for SSA, resulting in a hearing before the House Ways & Means, Subcommittees on Oversight and Human Resources. Rather than effectuate the joint recommendations, SSA has abandoned its work with AFGE on these important public service issues and has failed to address them independently. On the contrary, SSA has resumed the expansion of third party individuals and/or organizations. As a result, AFGE believes that fraud by "non-profit" and "for-profit" third parties may have gone and may continue to go undetected, robbing many millions of dollars from Trust Funds and General Revenues.

AFGE has received recent reports from employees in the Atlanta region regarding a third party company that pays a commission to its employees for every approved disability case that is submitted to SSA. Company employees are encouraged to lie on the applications that are filled out for claimants to enhance the likelihood of approval. Company employees are also encouraged to change information on signed applications if doing so improves the chance of a favorable decision. SSA employees report that these "benefit specialists" coach claimants to respond to interviewer questions with false information.

Employees report that another third party company has submitted signed applications for claimants who were dead at the time the application was signed. The same company is notorious for failing to list income and resources for TXVI SSI claimants. Often such hidden income and resources are subsequently discovered by claims representatives. Knowing failure to list such income and resources is fraudulent activity punishable by fine and/or imprisonment. SSA takes no action to discipline or sanction these third parties.

The third party disability application process remains an unaccountable system that is riddled with inefficiencies as well as fraud, waste and abuse. At a minimum, it is poor public service which will be further exacerbated as SSA proceeds with plans to encourage disability claims to be filed via the Internet, instead of direct contact through local field offices. The harm to claimants, beneficiaries, and taxpayers by this ghost workforce should not be dismissed by SSA or Congress.

In July 1996, the Management Information Integrity Partnership Team issued a 300 page Report to the SSA/AFGE National Partnership Council. The report listed 57 inappropriate practices used to manipulate work processes and work measurement, many of which involved disability claims and appeals. The practices were employed to give the false impression that service levels have been maintained, or even improved, despite a lack of adequate staffing. The report included a comprehensive set of specific recommendations to deal with this misrepresentation and to restore the integrity of the disability claims process. Virtually all were accepted, but few have been implemented.

To make matters worse, SSA institutionalized changes in disability claim work measurement that added powerful new incentives for managers to encourage cheating by their employees. A prime example is taking unnecessary claims from clearly ineligible claimants for the purpose of lowering overall processing times of Title II and TXVI disability claims. In the past, the Ways and Means Subcommittee on SSA has found these practices to be inappropriate and especially egregious.

In December 2000, SSA's Office of Inspector General produced an audit report that did not capture or address the reliability or validity of the Agency's SSI Disability claims performance measures. AFGE addressed its concerns to the SSA's Office of Inspector General on May 7, 2001. To date, AFGE has not received a response. Additionally, AFGE has recently learned of renewed practices to date stamp claims upon processing rather than upon receipt. This practice is clearly unethical and is meant to distort the overall processing time of a claim and conceal any delays in processing due to inadequate staff. AFGE is concerned that most, if not all, of the 57 inappropriate practices used to manipulate work processes and work measurement have become institutionalized.

SSA has offered claimants the ability to file retirement applications on the Internet. SSA plans to offer this same service to disability applicants. Although AFGE reserves judgment about the wisdom of this plan, workers are reporting serious quality problems with the current Internet retirement claims. These problems involve potential benefit losses for both claimants and eligible auxiliary beneficiaries. AFGE urges a moratorium of any expansion of Internet claims until studies are conducted regarding the quality and accuracy of current Internet claims.

AFGE respectfully thanks this Committee for its work and for including SSA's employees in the process of identifying and resolving problems in the Social Security disability programs. AFGE is willing to work in cooperation with SSA's new Commissioner in a continued effort to improve the disability process that better serves the American people. AFGE and the SSA employees it represents understand and deeply care about providing the best public service possible. AFGE will continue to serve as not only the employees' advocate, but also as a watchdog for clients, taxpayers, and their elected representatives.

In summary, AFGE requests that the Committee take the following action:

1. Consider enacting amendments to current legislation that restricts the authority for making disability decisions to state employees. Expand this authority to federal employees. Direct SSA to expand the DCM pilot nationwide.

2. Urge the Appropriations Committee to consider the Apfel budget proposal.

3. Consider off-budget legislation for SSA’s administrative expenses.

4. Consider legislation excluding SSA administrative expenses from the budget caps.

5. Direct SSA to implement nationally the ESR position by requiring such federal Ticket to Work activity in every SSA office.

6. Investigate Third Party Involvement in the disability claims process. Consider imposing legislative sanctions for third parties found guilty of unethical or illegal practices.

7. Investigate SSA’s management information system to insure its integrity.

8. Oversee SSA’s Internet claims initiatives to insure that claimants are not adversely affected due to inadequate safeguards in the process.