Social Security Disability:

SSA Could Increase Savings by Refining Its Selection of Cases for Disability Review

GAO-16-250: Published: Feb 11, 2016. Publicly Released: Mar 14, 2016.

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What GAO Found

The Social Security Administration (SSA) selects cases for continuing disability reviews (CDR) using several inputs, but it does not do so in a manner that maximizes potential savings. SSA first prioritizes CDRs required by law or agency policy such as those for children under 1 year old who are receiving benefits due in part to low birth weight. Then SSA uses statistical models to identify the remaining CDRs to be conducted each year. The models also determine which cases will receive an in-depth review of medical records by the Disability Determination Services—the state agencies that conduct CDRs—versus a lower-cost questionnaire sent directly to the beneficiary. As shown in the figure below, a growing number of cases have been set aside for future review (backlogged) over the last 10 years. Although SSA somewhat considers potential cost savings when selecting cases for in-depth reviews, its approach does not maximize potential savings for the government. For example, estimated average savings from conducting CDRs are higher for some groups of Disability Insurance (DI) beneficiaries than others, but SSA's selection process does not differentiate among these groups. As a result, it may be missing opportunities to efficiently and effectively use federal resources.

CDRs Completed and Backlogged by SSA, Fiscal Years 2003-2013

CDRs Completed and Backlogged by SSA, Fiscal Years 2003-2013

SSA reviews a sample of CDRs for quality, but its analysis and reporting of errors is not comprehensive. Specifically, SSA randomly selects CDR decisions to check for a variety of potential errors. For example, SSA regularly monitors and reports on the frequency of errors that affect whether benefits are continued or ceased. However, contrary to federal internal control standards, SSA does not systematically analyze errors to detect and address root causes. Consequently, SSA lacks information that could help improve the quality of the reviews conducted by the Disability Determination Services. Further, in determining CDR accuracy rates, SSA does not count date errors, including incorrect cessation dates, which can affect disability benefit payments. As a result, decision makers do not have a complete picture of the CDR errors that affect disability payments.

Why GAO Did This Study

To help ensure that only eligible individuals receive disability benefits, SSA conducts periodic CDRs to assess beneficiaries' medical condition. CDRs have historically saved the government money. However, in recent years, SSA has had difficulty conducting timely CDRs resulting in a backlog of over 900,000 CDRs in fiscal year 2014. With this backdrop, GAO was asked to study SSA's ability to conduct and manage timely, high-quality CDRs.

This report evaluates, among other things, how SSA selects which CDRs to conduct and the extent to which SSA reviews the quality of CDR decisions.

GAO analyzed CDR data for fiscal years 2003 through 2013 (the most recent year for which complete data were available); assessed SSA's models used to prioritize CDRs; reviewed relevant federal laws, regulations, and SSA documentation about CDR prioritization and accuracy review procedures; and interviewed SSA and state Disability Determination Services officials.

What GAO Recommends

GAO recommends SSA, among other things, further consider cost savings as part of its prioritization of CDRs, analyze the root causes of CDRs with errors, and track date errors. SSA agreed with most of GAO's recommendations, but disagreed that there is a need to track date errors and to adjust its approach to sampling CDRs for quality review. GAO maintains actions are warranted and feasible as discussed in the report.

For more information, contact Daniel Bertoni at (202) 512-7215 or bertonid@gao.gov.

Recommendations for Executive Action

  1. Status: Open

    Comments: SSA partially agreed with this recommendation. SSA agreed that it could look for ways to improve its return on conducting CDRs, but also stated that its statistical models and prioritization process already do much of what we recommend. For example, SSA stated that age is already Agency Comments and Our Evaluation a strong variable in its statistical models. However, these models predict medical improvement and are not designed to take expected cost savings into account. We continue to believe that to maximize expected cost savings SSA could refine its prioritization process by factoring in actuarial considerations. For example, SSA could consider the effect of a beneficiary's age on expected cost savings, in addition to its existing statistical models that account for the effect of age on the likelihood of medical improvement.

    Recommendation: The Acting Commissioner of Social Security should direct the Deputy Commissioner of Operations to further consider cost savings as part of its prioritization of full medical reviews. Such options could include considering the feasibility of prioritizing different types of beneficiaries on the basis of their estimated average savings and, as appropriate, integrating case-specific indicators of potential cost savings, such as beneficiary age and benefit amount, into its modeling or prioritization process.

    Agency Affected: Social Security Administration

  2. Status: Open

    Comments: SSA agreed with this recommendation and stated that it plans to complete its ongoing re-estimation and to document a process for determining when to re-estimate the models in the future.

    Recommendation: The Acting Commissioner of Social Security should direct the Deputy Commissioner of Budget, Finance, Quality, and Management to complete a re-estimation of the statistical models that are used to prioritize CDRs and determine a plan for re-estimating these models on a regular basis to ensure that they reflect current conditions.

    Agency Affected: Social Security Administration

  3. Status: Open

    Comments: SSA agreed with this recommendation and stated that it reports all errors to the relevant DDS for corrective action. SSA further stated that its identification of root causes is limited by the relatively few reviewed CDRs that have errors. However, in fiscal year 2014 as an example, SSA identified over 600 CDRs with errors. Although these CDRs make up a small percentage of the CDRs reviewed by SSA that year, the agency could analyze the characteristics of CDRs with errors by comparing relevant percentages without modeling. In addition, SSA could combine data from multiple years if it determined that considering more CDRs with errors would be helpful.

    Recommendation: The Acting Commissioner of Social Security should direct the Deputy Commissioner of Budget, Finance, Quality, and Management to monitor the characteristics of CDR errors to identify potential root causes and report results to the Disability Determination Services. For example, SSA could analyze CDRs with and without errors to identify trends by impairment, beneficiary type, or other characteristics.

    Agency Affected: Social Security Administration

  4. Status: Open

    Comments: SSA disagreed with this recommendation and stated that, per SSA regulation, the agency does not consider date errors when calculating accuracy rates because date errors do not affect the decision to cease or continue benefits. SSA also stated its stewardship reviews examine the non-medical quality of benefit payment decisions. However, these reviews are not focused on CDRs, and SSA does not report results from them for CDRs specifically. SSA also explained that it does not track the number and rate of date errors because they are infrequent. However, SSA's regulations do not prevent the agency from tracking date errors, and until it does, SSA cannot definitively determine the frequency of these errors. In addition, we found that considering date errors substantially reduced some states' estimated CDR accuracy rates. Without tracking these errors, SSA cannot assess their effect and consider whether including them in its reported CDR accuracy rates has merit.

    Recommendation: The Acting Commissioner of Social Security should direct the Deputy Commissioner of Budget, Finance, Quality, and Management to regularly track the number and rate of date errors, which can affect benefit payments (e.g., incorrect cessation dates), and consider including those errors in its reported CDR accuracy rates.

    Agency Affected: Social Security Administration

  5. Status: Open

    Comments: SSA disagreed with this recommendation and stated that some states do not generate enough CDR decisions, particularly cessations, to generate statistically valid samples. However, for states with CDR samples that are consistently too small to produce reliable results, SSA could, for example, pool decisions from more months than it currently does to generate statistically valid samples by state. Conversely, for states with CDR samples that are consistently larger than necessary to efficiently achieve reliable results, SSA could, for example, reduce sample sizes. Because CDR accuracy rates vary by state and cessations are consistently less accurate than continuances, we maintain that SSA should adjust its approach to sampling CDRs.

    Recommendation: The Acting Commissioner of Social Security should direct the Deputy Commissioner of Budget, Finance, Quality, and Management to adjust its approach to sampling CDRs to efficiently produce reliable accuracy rate estimates for continuances and cessations separately in each state.

    Agency Affected: Social Security Administration

  6. Status: Open

    Comments: SSA agreed with this recommendation and stated that it will expand on its current sensitivity analyses as time and resources permit.

    Recommendation: The Acting Commissioner of Social Security should direct the Chief Actuary to conduct sensitivity analyses on SSI and DI's contributions to CDR cost savings estimates and report the results reflecting a range of inputs (e.g., from optimistic to pessimistic).

    Agency Affected: Social Security Administration

  7. Status: Open

    Comments: SSA agreed with this recommendation and stated that it will improve and expand its existing documentation as time and resources permit.

    Recommendation: The Acting Commissioner of Social Security should direct the Chief Actuary to better document the methods including data sources, assumptions, and limitations that factor into its estimates of CDR cost savings.

    Agency Affected: Social Security Administration

 

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