Improving and Modernizing Federal Disability Programs
What We Found
Management attention and efforts are needed across the government to ensure that disability programs provide benefits in a timely manner, reflect current ideas about disability, and achieve positive employment outcomes.
Since our 2019 High-Risk Report, ratings for all five criteria remain unchanged.
Ratings also remain the same since 2019 for each of the five segments that form the federal disabilities high-risk area.
Two of the segments are for the Social Security Administration (SSA) and the Department of Veterans Affairs (VA) efforts to manage disability claims workload; two additional segments are for SSA and VA efforts to update disability benefit eligibility criteria; and the fifth segment is for the Office of Management and Budget’s (OMB) efforts to develop unified strategies and goals.
Managing Disability Claims Workloads (SSA)
Since our 2019 High-Risk Report, ratings for all five criteria remain unchanged.
Leadership commitment: met. SSA moved forward the target year for meeting its goal of processing appeals within 270 days from fiscal year 2022 to 2021. SSA also included eliminating its disability appeals backlog as a key initiative in its fiscal year 2021 annual performance plan.
Capacity: partially met. SSA officials reported that about 1,500 staff were hired in fiscal year 2019 to process initial disability claims, in part, to address increased workload needs in some states. At the same time, they reported having about 600 fewer staff for processing appeals compared to the previous year. SSA also adjusted operations in fiscal year 2020 due to disruptions from the Coronavirus Disease 2019 (COVID-19) pandemic, for example, by increasing the use of telework, pausing in-person medical exams, and conducting hearings by phone. However, we reported in November 2020 that officials involved in processing disability claims have experienced challenges maintaining operations under the pandemic, for example, due to lack of technology for teleworking staff and difficulty scheduling and conducting phone hearings.
Action plan: partially met. SSA’s 2018-2019 appeals plan reiterated the agency’s commitment to addressing its appeals backlog and highlighted actions taken so far, including improvements in information technology. In addition, as of December 2020, SSA had made progress implementing our July 2017 recommendations related to its expansion of service delivery methods but has not completed its efforts. For example, SSA still needs to develop a long-term field office facilities plan that accounts for claimants’ increasing use of remote services and complete system enhancements to ensure the effectiveness of online services.
Monitoring: met. SSA continues to monitor and report on timeliness against goals for processing initial disability claims and appeals.
Demonstrated progress: partially met. SSA demonstrated mixed progress managing initial claims and appeals both pre- and post-pandemic. Pre-pandemic, SSA’s inventory of pending initial claims increased by 14 percent between the end of fiscal years 2017 and 2019. Over the same period, the number of pending appeals decreased by 46 percent, and appeals processing time improved from 605 to 506 days.
As a result of pandemic-related disruptions, officials reported that pending initial claims increased further—by around 35 percent—from the end of fiscal year 2019 to July 2020. In contrast, pending appeals continued to decline—by about 23 percent. Officials stated that SSA did not meet its fiscal year 2020 performance goals for either initial claims or appeals. In addition, substantial progress will be needed for SSA to reach its goal of processing appeals within 270 days by the end of fiscal year 2021.
Managing Disability Claims Workloads (VA)
Since our 2019 High-Risk Report, ratings for all five criteria remain unchanged.
Leadership commitment: met. VA leadership has continued to focus on reducing its inventory and backlog of initial disability claims and appeals of claims decisions. For example, in fiscal year 2020 VA created an Executive Advisory Board comprised of senior executive-level staff to guide VA’s effort to address issues related to the high-risk designation.
Capacity: partially met. Since our 2019 High-Risk Report, VA continued building its capacity to process initial claims by hiring nearly 700 staff, expanding its contract exam capacity, and improving information technology to enhance productivity. In 2019, VA implemented legislation to streamline the appeals process, and has hired more than 1,700 staff at the Veterans Benefits Administration (VBA) and the Board of Veterans’ Appeals (Board) to process appeals.
However, VA’s capacity to address initial claims and appeals is being hindered by surges in other workloads, such as Blue Water Navy claims from veterans who served in the offshore waters of the Republic of Vietnam for illnesses linked to Agent Orange exposure, and by COVID-19 preventive measures, such as social distancing and delayed in-person exams and hearings.
Action plan: partially met. In 2019, VA analyzed factors contributing to this high-risk designation and identified six root causes related to the appeals workload. VA addressed its first root cause—constraints due to the legacy appeals process—by implementing a new appeals process and associated plans for new and legacy appeals.
In October 2020, VA provided us with action plans to address the five other root causes it had identified for new and legacy appeals and a separate plan to address COVID-19-related challenges. The root cause analysis and action plans are a key step toward resolving this high-risk area. However, VA’s action plans contained information gaps, such as incomplete solutions to manage surges in initial claims workloads and unclear metrics and milestones.
Monitoring: partially met. VA monitors workloads and the timeliness of initial claims and legacy appeals and has set timeliness goals for some, but not all, of its five appeals options. Board officials said they will establish timeliness goals for the remaining appeal options by March 2021.
VA has made progress in monitoring workloads and performance, but it has not fully addressed our March 2018 priority recommendation to assess the efficacy of the new and legacy appeals processes. Further, VA’s October 2020 action plans lacked clear metrics and milestones, which are needed to help assess and report progress.
Demonstrated progress: partially met. VA has made progress on reducing backlogs for initial claims and appeals. VA reported that it reduced the backlog of initial disability claims from a high of about 611,000 in March 2013 to less than 100,000 in March 2020. Further, VA reduced processing times from an average of 378 days in fiscal year 2013 to 106 days in fiscal year 2019. Through its appeals reform efforts from March 2019 through June 2020, VA increased productivity and reduced inventories. The inventory of legacy appeals decreased at VBA from 268,914 to 89,242 and at the Board from 113,897 to 110,368.
A surge in claims workloads due in part to pandemic-related issues could threaten VA’s progress. For example, the number of backlogged initial claims doubled between March and September 2020. Similarly, in fiscal year 2020, the Board fell short of its production goal by 8,600 hearings. In our continuing work to monitor this area, we determined that VA could take additional steps to develop documented contingency plans for workload surges and demonstrate that it is effectively addressing root causes contributing to the high-risk designation.
Updating Disability Benefit Eligibility Criteria (SSA)
Since our 2019 High-Risk Report, ratings for all five criteria remain unchanged.
Leadership commitment: met. SSA has maintained leadership focus on updating the medical, occupational, and, more recently, vocational criteria that define eligibility for disability benefits.
Capacity: met. SSA added staff to continuously update its medical criteria. SSA also continues to work with the Bureau of Labor Statistics (BLS) to update—and eventually maintain—occupational criteria.
Action plan: partially met. SSA has goals for reviewing its medical criteria on a 3-to-5-year cycle and for refreshing data underlying the occupational criteria on a 5-year cycle. SSA also reported plans to implement new occupational criteria concurrently with new vocational criteria and expects to issue a proposed rule for updating its vocational criteria sometime in fiscal year 2021. However, SSA has not shared with us either documentation or details on how it will develop this proposed rule, or a plan or timeline for concurrently implementing new occupational and vocational criteria.
Monitoring: met. SSA continues to track progress on modernizing its medical and occupational eligibility criteria, for example, through monthly progress reports under its agreement with BLS.
Demonstrated progress: partially met. According to SSA, the agency has produced comprehensive updates of its medical criteria over the past decade for 11 of the 14 body systems (listings of diseases and disorders in each part of the body). Rulemaking efforts are underway for the remaining systems. However, SSA often extended dates for rulemaking beyond its goal of a 3-to-5-year cycle.
SSA generally met its timelines for developing occupational criteria in conjunction with BLS. However, SSA’s plan to issue a related proposed rule on vocational criteria sometime in fiscal year 2021 rather than 2020 will delay implementation of both new vocational and new occupational criteria.
Updating Disability Benefit Eligibility Criteria (VA)
Since our 2019 High-Risk Report, ratings for all five criteria remain unchanged.
Leadership commitment: met. VA leadership has sustained its focus on updating its eligibility criteria to reflect advancements in medicine and changes in the labor market. The criteria is used to assign a degree of disability and a compensation level for veterans with service-connected injuries or conditions.
Capacity: partially met. In April 2020, VA established a program office to manage the continuous update of medical criteria and earnings loss information, and filled more than two-thirds of the 26 planned positions as of December 2020. VA officials report that they have streamlined the process for developing proposed regulations to update the body systems. VA officials also said they finalized a data sharing agreement with the Census Bureau and are finalizing one with SSA to access new data sources to study earnings loss. However, VA’s action plans do not contain enough detail on the resources and time needed to complete these studies and update the criteria.
Action plan: partially met. In October 2020, VA submitted action plans to us for each of the six root causes related to modernizing its criteria, an important step for addressing the underlying factors that contribute to this area of concern. However, the plans lacked key elements, such as clear metrics and milestones.
Monitoring: partially met. VA has developed a project management system to monitor its progress on the current medical criteria update and to revisit these criteria at least once every 10 years, which partially addresses one identified root cause. VA’s October 2020 action plans lacked clear metrics and milestones for monitoring progress demonstrated against its plans, particularly for its earnings loss studies.
Demonstrated progress: partially met. VA has taken actions to strengthen its management functions to keep the updates on course and address root causes associated with past delays. As of December 2020, VA reported that it had updated the medical information for regulations covering eight of the 15 body systems. VA officials said they plan to complete the update for the remaining body systems by 2023. However, VA’s efforts to fully update the criteria are 7 years behind its initial timetable.
VA also continues to study earnings loss. As of December 2020, VA has completed studying eight of more than 700 diagnostic codes in the criteria. However, of these eight codes, information for six is unreliable and nongeneralizable, and VA has not updated the criteria with the usable results.
Programs with Unified Strategies and Goals (OMB)
Since our 2019 High-Risk Report, ratings for all five criteria remain unchanged.
Leadership commitment: partially met. OMB reported that the previous administration has continued to pursue legislative changes and has taken some actions to improve collaboration across federal agencies and support employment of people with disabilities.
However, proposed legislative changes have not been enacted, and OMB does not have (1) a larger vision for coordinating more than 40 programs that provide similar services to support employment of people with disabilities, and (2) overarching, government-wide goals and strategies that could help spur more efficient service delivery across these different programs, and improve employment for people with disabilities in both federal and nonfederal sectors. Taking action in this area is especially important given that employment of people with disabilities fell faster and remains lower than for those without disabilities during the COVID-19 pandemic.
Capacity: partially met. According to OMB, agencies are coordinating on several demonstration projects that may inform the development of consistent goals and measures for federal programs that support employment for people with disabilities. OMB also noted that SSA is developing a set of metrics to assess employment and other outcomes across its demonstration projects, and that these metrics could broadly inform federal efforts to set goals. However, OMB did not specify whether or how it will use results from SSA’s and other agencies’ demonstration projects to establish government-wide goals.
Action plan: not met. OMB has not yet led or coordinated an executive branch effort to establish government-wide goals and associated plans for the employment of people with disabilities outside of the federal sector. OMB reported that new cross-agency priority goals may be considered when developing the next President’s Management Agenda, but OMB did not indicate any plans to consider such goals for the employment of people with disabilities.
Monitoring: partially met. OMB reported that the Department of Labor (DOL) oversees progress toward a 2013 goal for individuals with disabilities to comprise 7 percent of the workforce for federal contractors and subcontractors. Specifically, DOL assesses whether contractors are making good faith efforts to meet this goal and identifies any best practices through regular compliance evaluations. DOL reported in December 2020 that about 17 percent of the contractors the agency reviewed that provided utilization data in fiscal year 2020 met the 7 percent goal.
Demonstrated progress: partially met. In June 2020, we reported that the federal government exceeded a prior goal for hiring people with disabilities in the federal sector. However, we also found that the Office of Personnel Management (OPM) does not routinely track or report the extent to which these new hires stay in their jobs. OMB officials stated that they are not considering any job retention strategies or goals beyond OPM efforts to track data on federal hiring and retention of people with disabilities.
An estimated 13 percent of Americans had a disability in 2018. Many of these Americans need help finding or retaining employment, or rely on cash benefits if they cannot work. However, federal disability programs struggle to meet their needs.
Three of the largest federal disability programs—two managed by SSA and one by VA—dispensed about $290 billion in cash benefits during fiscal year 2019, and about 19 million people with disabilities were receiving benefits through the programs at the end of 2019. Both agencies struggle to manage their workloads and make timely decisions on benefit claims.
In addition, when determining whether individuals qualify for disability benefits, SSA and VA rely on outdated criteria. While both agencies have efforts underway to update medical or occupational information used to make eligibility decisions, they continue to rely on information that can be decades old.
In addition to the aforementioned cash benefit programs, we previously identified more than 40 programs managed by nine different agencies that provide a patchwork of employment support for people with disabilities. We reported in 2012 that these programs lacked a unified vision, strategy, or set of goals to guide their outcomes.
We designated improving and modernizing federal disability programs as high risk in 2003.
Managing Disability Claims Workloads (SSA)
Since 2003, we have made 35 recommendations related to this high-risk segment. As of December 2020, seven remain open.
Consistent with these recommendations and ongoing agency efforts, SSA should continue to develop and implement plans for managing its workloads, particularly in light of disruptions caused by the pandemic. Specifically, SSA should continue to:
- refine and implement plans to address its appeals backlog; and
- conduct facilities planning and implement enhancements related to remote service delivery, which could also help address potential future disruptions to initial claims and appeals processing.
Managing Disability Claims Workloads (VA)
Since 2003, we have made 69 recommendations related to managing VA workloads. As of December 2020, 10 remain open, including two priority recommendations on appeals reform. VA should continue developing and implementing plans to address its workloads at both levels. This includes:
- developing detailed plans to maintain capacity during surges of initial claims;
- comparing the efficacy of the new and legacy appeals processes; and
- developing plans to fully address risks to capacity, including veterans choosing more resource-intensive appeals options.
Updating Disability Benefit Eligibility Criteria (SSA)
Since 2003, we have made seven recommendations related to this high-risk segment, all of which were implemented. SSA should continue ongoing efforts to update its disability criteria. Specifically, SSA should:
- ensure capacity aligns with goals for reviewing and, when necessary, updating body system rules on a 3-to-5-year cycle; and
- share details on steps taken to develop new vocational criteria and plans for concurrently implementing vocational and occupational criteria.
Updating Disability Benefit Eligibility Criteria (VA)
Since 2003, we have made three recommendations related to modernizing disability criteria, all of which were implemented. VA should continue to develop and implement plans for updating medical criteria and earnings loss information. This includes:
- dedicating sufficient resources to this effort;
- developing a viable plan for monitoring progress in updating earnings loss information; and
- refining plans to revisit medical criteria at least once every 10 years.
Programs with Unified Strategies and Goals (OMB)
We identified two actions in February 2012 that needed to be addressed by OMB related to this high-risk segment as part of our work on opportunities to reduce fragmentation, overlap, and duplication in the federal government. In June 2020, we also made one related recommendation to OPM. As of December 2020, one action for OMB and the recommendation to OPM remain open. Specifically:
- OMB should lead or coordinate the development of a set of unifying, government-wide goals for employment of people with disabilities; and
- OPM should routinely track and report retention data for federal employees with disabilities, and make such data available to federal agencies, which could help the administration monitor progress in this area.
