2
Background

Statement of the Problem

The Social Security Disability Insurance (SSDI) program (Title II of the Social Security Act (hereafter, "the act") and the Supplemental Security Income (SSI) program (Title XVI of the act) are the two largest federal programs providing cash benefits and medical assistance to persons with disabilities. SSDI is an insurance program that provides payments to persons with disabilities based on their having been covered previously under the Social Security program. SSI is a means-tested income assistance program for disabled, blind, and aged persons who have limited income and resources regardless of their prior participation in the labor force. The definition of disability and the decision process are the same for both programs. The act defines disability as an "inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or [is] expected to last for a continuous period of not less than 12 months..." (Section 223 (d)(1)).

During the last decade, SSDI and SSI have experienced unprecedented growth. Between 1989 and 1995, the number of working-age people receiving SSDI benefits rose from about 2.9 million to nearly 4.2 million, an increase of 45 percent. Likewise, the increase in the number of working-age people receiving SSI disability benefits grew from about 2.1 million to about 3.4 million, an increase of nearly 62 percent (SSA, 1996 a, b). This growth reflects increases in the number of people applying for and entering the programs and a decrease in the number leaving the programs, due at least in part to the younger age of persons with mental impairments. As a consequence of this growth, SSA has faced large workload increases in both the SSDI and SSI programs without a concomitant increase in administrative resources. This imbalance has resulted in significant delays in processing for disability claims and appeals determinations.

Many factors have contributed to fluctuations in the growth in the number of people receiving disability benefits under SSDI and SSI: economic changes in the United States; structural shifts in the labor market; changes in the size, composition, and characteristics of the working-age population (i.e., the baby boom generation, and increasing proportions of younger workers; women and persons with limited English proficiency in the workforce); changes in public policies and the types of disabling impairments that are recognized and diagnosed for disability benefits; a decrease in the average age of persons with disabilities with a resulting increase in duration of benefits; program outreach; and cost shifting by states associated with cuts in state and locally funded general assistance and other welfare programs as well as with deinstitutionalization of people with



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2 Background Statement of the Problem The Social Security Disability Insurance (SSDI) program (Title II of the Social Security Act (hereafter, "the act") and the Supplemental Security Income (SSI) program (Title XVI of the act) are the two largest federal programs providing cash benefits and medical assistance to persons with disabilities. SSDI is an insurance program that provides payments to persons with disabilities based on their having been covered previously under the Social Security program. SSI is a means-tested income assistance program for disabled, blind, and aged persons who have limited income and resources regardless of their prior participation in the labor force. The definition of disability and the decision process are the same for both programs. The act defines disability as an "inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or [is] expected to last for a continuous period of not less than 12 months..." (Section 223 (d)(1)). During the last decade, SSDI and SSI have experienced unprecedented growth. Between 1989 and 1995, the number of working-age people receiving SSDI benefits rose from about 2.9 million to nearly 4.2 million, an increase of 45 percent. Likewise, the increase in the number of working-age people receiving SSI disability benefits grew from about 2.1 million to about 3.4 million, an increase of nearly 62 percent (SSA, 1996 a, b). This growth reflects increases in the number of people applying for and entering the programs and a decrease in the number leaving the programs, due at least in part to the younger age of persons with mental impairments. As a consequence of this growth, SSA has faced large workload increases in both the SSDI and SSI programs without a concomitant increase in administrative resources. This imbalance has resulted in significant delays in processing for disability claims and appeals determinations. Many factors have contributed to fluctuations in the growth in the number of people receiving disability benefits under SSDI and SSI: economic changes in the United States; structural shifts in the labor market; changes in the size, composition, and characteristics of the working-age population (i.e., the baby boom generation, and increasing proportions of younger workers; women and persons with limited English proficiency in the workforce); changes in public policies and the types of disabling impairments that are recognized and diagnosed for disability benefits; a decrease in the average age of persons with disabilities with a resulting increase in duration of benefits; program outreach; and cost shifting by states associated with cuts in state and locally funded general assistance and other welfare programs as well as with deinstitutionalization of people with

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mental disorders and mental retardation, and other disabilities previously cared for and financed by state hospital systems. Despite all these factors and the resulting workload increases, the procedures for processing disability claims have not changed in any important way since the beginning of the SSDI program in the 1950s. Many people have complained that SSA's current disability decision process is lengthy and complicated, resulting in untimely and inconsistent decisions that are often based on subjective judgments (GAO, 1994; 1995; 1996). SSA'S Redesign Plan for Determining Program Eligibility Recognizing the need to improve its claims process, SSA has developed a long-term strategy for reengineering the disability decision process (SSA, 1994). The redesigned process is meant to be simpler than the one currently in place. SSA's basic objectives for the redesigned disability decision process are that it should be user-friendly, prompt and accurate, and that the work should be satisfying for its employees. As one part of the reengineering effort, SSA has proposed a new decision process for determining whether individuals are "disabled" as defined by the act and SSA's implementing regulations. Briefly, under the present system, the disability decision process consists of four stages: (1) the initial claim, (2) a reconsideration, (3) a hearing before an administrative law judge, and (4) Appeals Council review. SSA's plans call for elimination of two of these stages, namely, reconsideration and Appeals Council review. At present, the decision process for initial claims involves a five-step sequential process (SSA, 1994).2 Claimants whose applications are denied can have their claims reconsidered. If benefits are denied after the reconsideration, the claimant may request a heating before an administrative law judge at the SSA. Further appeals options include a request for the Appeals Council or the federal district courts to review the decision. The concept of disability in recent years has generally shifted from a focus on diseases, conditions, and impairments to one on functional limitations caused by these factors (Adler, 1996). "The goal of the new decision process is to focus decision making on the functional consequences of an individual's medically determinable impairment(s)" (SSA, 1994, p. 21). Although the presence of a medically determinable impairment will remain the central requirement for eligibility as required by law, the redesigned process will focus directly on the applicant's functional ability to work and will rely on standardized instruments for measuring functioning to reach decisions. Because of its complexity and far-reaching impact, SSA has concluded that the re-engineering effort, including the decision process, requires extensive research, testing, validation, and further development of some of its components prior to implementation (SSA, 1996c). Consideration of the specific functional and vocational criteria to be used in the new decision 2   The decision process involves (1) determining whether the claimant is engaging in substantial gainful activity (GSA), (2) determining the severity of the claimant's limitation, (3) determining whether the claimant's impairment meets or equals the medical listings and how long the impairment has lasted or is expected to last, (4) determining the claimant's residual functional capacity (RFC) to perform past relevant work, and (5) determining the claimant's RFC to perform another type work in the nation's economy.

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process has begun, but much remains to be done before satisfactory measures are available. Moreover, the effect of reengineering on the number and characteristics of future beneficiaries also needs further study. The agency, therefore, is now engaged in a multiyear, complex research effort to develop and validate the redesigned decision process. Considerable thought, study, and effort is being invested in developing a research agenda. SSA has requested the National Academy of Sciences to conduct an independent, objective review of, and make recommendations about, the reliability, validity, adequacy, and appropriateness of its current and proposed research activities as they relate to the proposed redesigned disability decision process. Included in the review is the approach, survey design, and content of the complex multiyear DES. The results of that review are the subject of this interim report and of the committee's ongoing work. (See the Appendix for the study mandate.)