1
Introduction

The Social Security Administration (SSA) pays Social Security Disability Insurance (SSDI) benefits to disabled workers, who are insured against disability under Title II of the Social Security Act, and their dependents, as well as to certain disabled adult children of disabled, retired, or deceased workers and widows and widowers of deceased workers.1 It also pays Supplemental Security Income (SSI) benefits to disabled adults and children who have limited income and resources under Title XVI of the Social Security Act. Some receive benefits from both programs.

SSDI and SSI are key components of the nation’s social support system, providing vital social insurance and public assistance to individuals with disabilities. The majority of adult recipients of SSDI and SSI have disabling chronic mental disorders (30 percent), musculoskeletal impairments (19 percent), mental retardation (13 percent), or disorders of the nervous system and sense organs (9 percent) as their primary impairment (SSA, 2006g: Table 67). In December 2005, the average monthly payment under SSDI was $896 ($10,752 a year). The average age of disabled workers receiving SSDI is 52 (SSA, 2006g:Tables 5, 19). On average, SSDI payments replace 44 percent of the earnings of a disabled worker age 45 with medium earnings (SSA, 2006e:10).2 In December 2004, most SSI beneficiaries under

1

Technically, disabled workers, their dependents, and disabled adult children receive benefits from the SSDI trust fund. Widows and widowers and disabled adult children of retired or deceased workers are paid from the Social Security trust fund.

2

In fiscal year (FY) 2006, SSDI replaced 59 percent of the earnings of the average disabled worker with low earnings (defined as $16,110 annually) and 82 percent of the earnings of the average disabled worker with low earnings and a dependent (SSA, 2006e:10).



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Improving the Social Security Disability Decision Process 1 Introduction The Social Security Administration (SSA) pays Social Security Disability Insurance (SSDI) benefits to disabled workers, who are insured against disability under Title II of the Social Security Act, and their dependents, as well as to certain disabled adult children of disabled, retired, or deceased workers and widows and widowers of deceased workers.1 It also pays Supplemental Security Income (SSI) benefits to disabled adults and children who have limited income and resources under Title XVI of the Social Security Act. Some receive benefits from both programs. SSDI and SSI are key components of the nation’s social support system, providing vital social insurance and public assistance to individuals with disabilities. The majority of adult recipients of SSDI and SSI have disabling chronic mental disorders (30 percent), musculoskeletal impairments (19 percent), mental retardation (13 percent), or disorders of the nervous system and sense organs (9 percent) as their primary impairment (SSA, 2006g: Table 67). In December 2005, the average monthly payment under SSDI was $896 ($10,752 a year). The average age of disabled workers receiving SSDI is 52 (SSA, 2006g:Tables 5, 19). On average, SSDI payments replace 44 percent of the earnings of a disabled worker age 45 with medium earnings (SSA, 2006e:10).2 In December 2004, most SSI beneficiaries under 1 Technically, disabled workers, their dependents, and disabled adult children receive benefits from the SSDI trust fund. Widows and widowers and disabled adult children of retired or deceased workers are paid from the Social Security trust fund. 2 In fiscal year (FY) 2006, SSDI replaced 59 percent of the earnings of the average disabled worker with low earnings (defined as $16,110 annually) and 82 percent of the earnings of the average disabled worker with low earnings and a dependent (SSA, 2006e:10).

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Improving the Social Security Disability Decision Process age 18 (66 percent) had mental retardation or other mental disorders. The portion of SSI adults ages 18-64 with mental retardation or other mental disorders was 57 percent (SSA, 2005:Table 26). The average SSI benefit for disabled and blind adults 18-64 in December 2005 was $456 a month ($5,467 a year), and for children under age 18 the average benefit was $523 a month ($6,274 a year) (SSA, 2006f:Table 7). These programs are large and costly, and they are growing. In 2004, SSA awarded SSDI benefits to more than 1.3 million disabled workers and their dependents, disabled adult children, and disabled widows and widowers (SSA, 2006h:Table 31). It awarded SSI benefits to almost 750,000 disabled adults and children (SSA, 2005:Table 47). As of December 2004, SSA was paying disability-based benefits to almost 9.8 million people ages 18-64. Of these, 5.8 million received benefits under the Social Security program only, 2.9 million received benefits under SSI only, and 1.2 million received both (SSA, 2006h:Table 59). In addition, nearly 1 million disabled children were receiving SSI benefits (SSA, 2006h:Table 3). In 2007, as in 2006, SSA expects to process 2.6 million initial disability claims under these two programs (SSA, 2006a:7), using its network of more than 1,300 field offices and teleservice centers. It relies on 54 state Disability Determination Services agencies (DDSs), with more than 1,600 staff, as well as a federal DDS to make initial disability decisions and handle the first level of appeals, called “reconsiderations.” SSA also expected to process almost 580,000 appeals hearings in 2007 (SSA, 2006a:7), using a network of 144 hearing offices and 10 regional hearing offices and relying on about 1,100 administrative law judges (ALJs) to decide appeals. From 1990 to 2003, expenditures for cash benefits under the Social Security disability program rose 93 percent in real terms. For the SSI disability program, the increase was nearly 90 percent. For both programs, 2004 benefit payments exceeded $100 billion. As a percentage of gross domestic product, benefit payments under these programs rose from 1.26 percent in 1990 to 1.98 percent in 2001 (SSA, 2006b:Chart 17). SSA expects the number of SSDI beneficiaries to increase by about 26 percent between 2005 and 2015 (SSA, 2006c:Table V.C5).3 The number of blind or disabled SSI beneficiaries is expected to increase by 16 percent (SSA, 2006d:Tables IV.B6, IV.B1). Although the program is expanding, it can be quite complicated and lengthy for individuals who apply for benefits (the process is described in detail in Chapter 4). It takes DDSs, the state agencies that make the initial determination of disability for SSA and handle the first level of appeal, three 3 This is the intermediate estimate of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance Trust Fund. The low and high estimates are 10 percent and 45 percent, respectively.

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Improving the Social Security Disability Decision Process months on average to process an application and make an initial determination of eligibility (88 days in FY 2006, compared with 106 days in FY 2001).4 In FY 2002, 38.5 percent of the initial decisions were allowances. If a denied applicant asks the DDS for reconsideration, the process averages another three months and, in FY 2002, increased the cumulative allowance rate to about 42 percent. The next level of appeal is a hearing before an ALJ, which averages more than a year to complete (483 days in FY 2006, compared with 447 days in FY 2001). In FY 2002, ALJs allowed about 60 percent of the cases they heard. If the applicant is denied after a hearing and appeals to the Appeals Council, and more than 100,000 applicants did in FY 2002, the process averages another six to eight months (203 days in FY 2006, compared with 447 days in FY 2001). About 14,000 applicants appeal to federal district court, which takes another 600 days to settle. The chance of an allowance from the Appeals Council or federal court is about 3 percent and 6 percent, respectively. The overall allowance rate in FY 2002 was about 57 percent. The majority of those who appeal are eventually awarded benefits, mostly at the ALJ hearing level. As a result, although most applicants who are awarded benefits receive them through a favorable initial decision after an average of three months, a substantial share—about 24 percent— receives benefits one or more years later, after appealing. Historically, SSA has used a Listing of Impairments to expedite decision making. The Listings (as they are called) are a set of approximately 100 medical conditions with criteria of severity set so high that anyone who meets them, or has a condition that equals them in severity, is presumed to be disabled and allowed benefits. SSA does not subject applicants who meet or equal the Listings to the more time-consuming and expensive process of considering vocational factors and the interaction between the person’s limitations and the physical and mental demands of jobs they might seek. In the early years of SSDI, 80 to 90 percent of awards were based on meeting or equaling the Listings. The percentage of awards based on the Listings has steadily declined and accounted for about 50 percent of initial awards to adults in 2004. SSA’S REQUEST TO IOM SSA has undertaken a number of initiatives to decide disability claims more quickly and more accurately, goals that are difficult to maximize simultaneously. SSA asked the Institute of Medicine (IOM) to help in two broad areas, broken down into 10 specific tasks (see Appendix B). 4 All statistics in this paragraph on processing times during FY 2001 and FY 2006 are from SSA (2006e).

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Improving the Social Security Disability Decision Process First, SSA asked IOM to recommend improvements in the medical criteria it uses to screen applicants for disability benefits, which are the basis of the Listing of Impairments, so that the Listings are as sensitive as is practically possible in identifying individuals who would be highly likely to be approved for benefits if they went through the full individualized disability determination process. Specifically, SSA asked IOM to reexamine the conceptual basis of the Listings, consider alternative conceptual models, improve the consistency in their application by program decision makers, and recommend a system for keeping the Listings up to date over time. This request was broken down into seven specific tasks (Tasks 1-7 in Appendix B). Second, SSA asked IOM to recommend ways to improve the use of medical expertise in the disability determination process, including how medical expertise can best be provided to support case adjudication at the state DDSs and in SSA’s Office of Hearings and Appeals, as well as advice on the organization and qualifications of supporting medical experts (Tasks 8-10 in Appendix B). The committee addressed SSA’s request with respect to its use of medical expertise in the disability determination process in an Interim Report issued on December 21, 2005 (reproduced in Appendix C). The body of this report addresses the committee’s deliberations, findings, and recommendations with respect to Tasks 1 through 7. REFERENCES SSA (Social Security Administration). 2005. SSI annual statistical report, 2004. Released September 2005. Available: www.ssa.gov/policy/docs/statcomps/ssi_asr/2004/ssi_asr04. pdf (accessed May 22, 2006). SSA. 2006a. Performance plan for fiscal year 2007 and revised final performance plan for fiscal year 2006. Available: www.ssa.gov/performance/2007/16%20Page%20APP%20-%20Final%20%20(2-16-06).pdf (accessed May 22, 2006). SSA. 2006b. Trends in the Social Security and Supplemental Security Income Disability programs. SSA Publication 13-11831. Released August 2006. Available: www.ssa.gov/policy/docs/chartbooks/disability_trends/trends.pdf (accessed September 28, 2006). SSA. 2006c. 2006 Annual report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance Trust Fund. Updated May 1, 2006. Available: www.ssa.gov/OACT/TR/TR06/tr06.pdf (accessed October 19, 2006). SSA. 2006d. 2006 Annual report of the Supplemental Security Income Program. Released May 24, 2006. Available: www.ssa.gov/OACT/SSIR/SSI06/ssi2006.pdf (accessed October 19, 2006). SSA. 2006e. SSA’s Performance and accountability report for fiscal year 2006. Available: www.ssa.gov/finance/2006/FY06_PAR.pdf (accessed December 4, 2006). SSA. 2006f. SSI monthly statistics, September 2006. Released October 2006. Available: www.ssa.gov/policy/docs/statcomps/ssi_monthly/2006-09/table07.html (accessed December 4, 2006).

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Improving the Social Security Disability Decision Process SSA. 2006g. Annual statistical report on the Social Security Disability Insurance Program, 2005. Released September 2006. Available: www.ssa.gov/policy/docs/statcomps/di_asr/ 2005/index.html (accessed December 4, 2006). SSA. 2006h. Annual statistical report on the Social Security Disability Insurance Program, 2004. Released March 2006. Available: www.ssa.gov/policy/docs/statcomps/di_asr/2004/ index.html (accessed December 4, 2006).