NATIONAL ORGANIZATION OF SOCIAL SECURITY CLAIMANTS' REPRESENTATIVES (NOSSCR)

Transcription

1 Social Security ForumB Volume 29, No May, 2007 Executive Director Nancy G. Shor NATIONAL ORGANIZATION OF SOCIAL SECURITY CLAIMANTS' REPRESENTATIVES (NOSSCR) 560 Sylvan Avenue Englewood Cliffs, NJ Telephone: (201) Fax: (201) nosscr@worldnet.att.net HEARING ON FUNDING SOCIAL SECURITY'S ADMINISTRATIVE COSTS: WILL THE BUDGET MEET THE MISSION? May 23,2007 SENATE COMMITTEE ON FINANCE STATEMENT OF NANCY G. SHOR, EXECUTIVE DIRECTOR National Organization of Social Security Claimants' Representatives (NOSSCR)

2 Social Security Foruma Volume 29, No May, Processing times are reaching, intolerable Levels. The average processing times for cases at the hearing level have increased dramatically since 2000, when the average time was 274 days.' In the current fiscal year, SSA estimates that the average processing time for disability claims at the hearing level will be 524 days and will increase to 541 days in FY 2008; nearly twice as long as in And it is important to keep in mind that this is just an "average." In fact, many claimants will wait even longer than the "average" time. And, while the "average" processing times at the initial and reconsideration levels, there also are many cases with delays at these two levels. The current processing times in some hearing offices are striking, and much longer than the 524 days targeted by SSA in FY Data from January 2007 indicates that the average time from the request for hearing to the date the hearing is held is 16 months, or about 485 days. The average time from the date of the hearing to the decision is two months, an additional 60 days. Thus, the average as of January 2007, only four months into the fiscal year, is already 545 days.3 Of the 142 hearing offices, 57 are above the 16-month average, according to SSA's statistics.? This represents about 40% of all hearing offices. Many other hearing offices are approaching the two year mark just to hold a hearing. It is important to keep in mind that the 16-month processing time is only an "average" and only counts the time until the hearing is held. The actual processing time is even longer. When the "average" time from "hearing held to ALJ's decision is added (60 days), many more hearing offices are approaching the two year and longer mark. As noted in some of the cases described above, even those hearing offices with below average times may, in fact, have considerably longer processing times when the time from the date of the hearing until the decision is issued is added. The impact of the budget and staffing cuts in district offices also affect the processing times at the hearing levels. Our members have reported that cases are sitting longer in district offices after requests for hearings are filed, often adding months - or years -- to the processing time. In a case from Providence, RI, a claimant is currently waiting for an ALJ hearing where the request for hearing was filed by the claimant pro se in The request was timely sent to the hearing office but without the claims folder. The hearing office returned the file to the SSA district office, where the case sat for more than two years. The hearing request and folder were finally sent to the hearing office in January 2007 after an attorney became involved in the case and started to track what happened. The hearing office has finally scheduled the case for an expedited hearing in view of the more than two year delay. II. The number of pendinq cases continues to increase. Like processing times, the number of cases pending at hearing offices continues to grow. As noted by the Social Security Advisory Board (SSAB): "The size of the pending workload in hearing 1 Social Security Advisory Board, Improving the Social Securi~ Administration 's Hearing Process (Sept. 2006)("SSAB Report"), p. 8 2 Social Security Administration: Fiscal Year 2008 JustiJication of Estimatestor Appropriations Committees ("SSA FY 08 Budget Justzfication"), p. 81. ' SSA Office of Disability Adjudication and Review, "NETSTAT" List of Processing Times - January SSA Office of Disability Adjudication and Review, "NETSTAT" List of Processing Times - January 2007.

3 Social Security ForumB Volume 29, No May, 2007 offices - the hole that SSA has to dig itself out of - has followed a pattern similar to that of processing times."' The number of pending cases at the hearing level reached a recent low in FY 1999 at 3 1 1,958 cases. The numbers have increased dramatically since 1999, reaching 7 1 1,284 in FY 2005.' And SSA estimates the numbers to continue a significant increase: 752,000 in FY 2007 and 768,000 in FY And these increases will occur despite an expected increase in the productivity of ALJs in issuing decision^.^ However, even for hearing offices with a lower number of pending cases, the numbers do not tell the whole story. Because of the disparities between hearing offices, many of our members have reported that SSA has been transferring cases from offices with high numbers of pending cases to offices with lower numbers where the hearings are held by video conference, if the claimant agrees. While this is understandable in a national program, it nevertheless means that claimants who live near hearing offices with lower numbers of pending cases will end up waiting longer. Ill. Staffing levels have decreased which means a decrease in service. Our members have noted the loss of ALJs and support staff in hearing offices around the country. Former Commissioner Barnhart had planned to hire an additional 100 ALJs in FY 2006 but due to cuts in the President's budget request, she was able to hire only 43. The real impact of the burden on the current ALJ corps can be seen by comparing statistics from 1999 and 2005, when nearly the same number of ALJs were expected to handle more than twice as many cases: In 1999, there were 1090 ALJs to handle 311,958 cases, while in 2005, there were 1096 ALJs to handle 711,284 cases.' Whether there are an adequate number of ALJs may not even be the primary staffing issue in hearing offices. Productivity is not related solely to the number of ALJs, but also to the number of support staff. In 2005, the median hearing office had 4 to 4.5 staff members per ALJ. This represents a significant decrease, about 20 to 25 percent, from the 5.4 staff per ALJ in 2001 at a time when the number of pending cases was much lower." IV. Impact on service provided in SSA field offices. Under the current budget situation, people with severe disabilities have experienced long delays and decreased services provided in SSA field offices, which do not have adequate resources to meet all of their current responsibilities. Of greatest concern, even with the modest increase SSA is seeking for FY 2008, is that SSA will need to reduce its staff. Despite an expected increase in the number of initial disability claims expected to be filed in FY 2008, the number of SSA and Disability Determination Services ("state agencies") Full-Time Equivalents (FTEs) is expected to decrease from FY 2007." This does not take into account the drop in the number of positions from FY ' SSAB Report, p. 9. " SSAB Report, p. 10. ' SSA FY 08 Budget Justijication, p SSA keeps statistics on the number of pending cases in each hearing office, which NOSSCR has received through Freedom of Information Act (FOIA) requests. The numbers vary dramatically from office to office and do not necessarily correlate to large population centers. "SAB Report, p. 10. " SSAB Report, p. 10. "' SSA FY 08 Budget Justification, p. 81 and 90. In FY 2007, it is projected that 577,000 new disability claims will be filed; in FY 2008, the estimate is 627,000 claims. In FY 2007, the total SSAIDDS workyears is estimated to be 74,823; in FY 2008, the estimate is 74,596 workyears.

4 Social Security Forume Volume 29, No May, 2007 A. Impact on disability claims. Under the current SSA budget situation, it can be expected that delays will grow not only at the hearing level but also at the initial and reconsideration levels. A recent action taken by SSA demonstrates the scope of the problem. In June 2006, SSA was forced to direct all available resources to the processing of initial applications, and away from processing reconsideration level cases, when the initial application backlog became too high. The decision to redirect resources was caused primarily by the cut in the President's request for fiscal year In some states, this meant that reconsideration cases were not processed for a period of time, unless the claimant knew to notify the state agency of "dire circumstances." Two recent cases handled by NOSSCR members where claimants with severe and life-threatening impairments were denied initially and needed to request reconsideration are graphic examples of the impact that this type of action could have on claimants: Ms. S - Hardyville, KY. Ms. S is 57 years old and worked as a certified nursing aide. She was involved in a terrible automobile accident leaving work in the fall of Due to her pulmonary injuries, she will be bedridden and on a ventilator for the rest of her life. After months in the hospital, she is at home and her daughter is taking care of her. After receiving preliminary approval for disability benefits, her initial application was inexplicably denied. She has no health insurance and was forced to leave a rehabilitation hospital due to lack of insurance coverage. She also has no means to pay for home health care. She does not qualifl for any community-based or state-funded programs because her husband's monthly disability check places their family income above the income eligibility levels. Her representative submitted to the state agency medical evidence supporting the severity and permanence of her injuries and her dire financial and medical needs. John - Dickinson, ND. "John" (his name has been changes for privacy reasons) has a chordoma, which is a rare form of a brain tumor. In addition, he suffers from failing kidneys. The radiation therapy that John underwent for his tumor is killing off all of the glands in his body. John has been told by his doctors that his condition will kill him. The only question is when. John applied for Social Security disability benefits in October 2006 and was inexplicably denied on December 29, Because they are experiencing financial hardship paying for John's medications and medical bills, John and his wife had to apply for heating assistance last winter. With the assistance of his attorney, John filed a request for reconsideration. B. Impact on post-entitlement work. These accumulated staffing reductions have already translated into SSA's inability to perform post-entitlement work, let alone reducing the backlogs in the disability appeals process. Not surprisingly, with millions of new applications filed each year, SSA emphasizes the importance of processing applications, determining eligibility, and providing benefits. Once a person begins to receive monthly benefits, there are many reasons why SSA may need to respond to contacts from the person or to initiate a contact, known as "post-entitlement work." Generally, this workload does not receive the priority it should. Frequently, when SSA is short on staff and local offices are overwhelmed by incoming applications and inquiries, they are necessarily less attentive to post-entitlement issues. For people with disabilities, this can discourage efforts to return to work, undermining an important national goal of assisting people with disabilities to secure and maintain employment. One key example of post-entitlement work that has fallen by the wayside in the past is the processing of earnings reports filed by people with disabilities. Typically, the individual calls SSA and reports work and earnings or brings the information into an SSA field office, but SSA fails to

5 Social Security Forumm Volume 29, No May, 2007 input the information into its computer system and does not make the needed adjustments in the person's benefits. Years later, after a computer match with earnings records, SSA notifies the person was overpaid, sometimes tens of thousands of dollars, and sends an overpayment notice to this effect. These are situations where the individual is clearly not at fault. However, all too often, after receiving the overpayment notice, the beneficiary will tell SSA that he or she reported the income as required and SSA will reply that it has no record of the reports. When this occurs, it may result in complete loss of cash benefits (Title I1 benefits) or a reduction in cash assistance (SSI). It also can affect the person's health care coverage. To collect the overpayment, SSA may decide to withhold all or a portion of any current benefits owed, or SSA may demand repayment from the beneficiary if the person is not currently eligible for benefits. Not surprisingly, many individuals with disabilities are wary of attempting to return to work, out of fear that this may give rise to the overpayment scenario and result in a loss of economic stability and potentially of health care coverage upon which they rely. As a result of this long-term administrative problem, anecdotal evidence indicates that there is a widespread belief among people with disabilities that it is too risky to even attempt a return to work, because the beneficiary may end up in a frightening bureaucratic morass of overpayment notices, demands for repayment, and benefit termination. C. Impact on performing continuing disability reviews (CDRs). The processing of CDRs is necessary to protect program integrity and avert improper payments. Failure to conduct the full complement of CDRs would have adverse consequences for the federal budget and the deficit. According to SSA, CDRs result in $10 of program savings for each $1 spent in administrative costs for the reviews." The number of CDRs is directly related to whether SSA receives the funds needed to conduct these reviews. The number of reviews in 2006 was reduced by more than 50%, due to the lower level of appropriations. Even though the great majority of CDRs result in continuation of benefits, the savings from those CDRs that result in terminations are substantial because of the size of the program and the value of the benefits provided. D. New caseloads are added without providing the funds to implement these provisions. Over the past few years, Congress has passed legislation that added to SSA's workload, but does not necessarily provide additional funds to implement these provisions. Recent examples include: 1. Conducting pre-effectuation reviews on increasing numbers of initial SSI disability allowances. SSA must review these cases for accuracy prior to issuing the decision. 2. Changing how SSI retroactive benefits are to be paid. SSA must issue these benefits in installments if the amount is equal to or more than three months of benefits. The first two installments can be no more than three months of benefits each, unless the beneficiary shows a hardship due to certain debts. Many more cases will need to be addressed because under prior law, the provision was triggered only if the past due benefits equaled 12 months or more. With the trigger at three months, it is likely that many more beneficiaries will ask SSA to make a special determination to issue a larger first or second installment. ' ' SSA FY 08 Budget Justification, p. 80.

6 Social Security ForumB Volume 29, No May, New SSA Medicare workloads. SSA has new workloads related to the Medicare Part D prescription drug program, including determining eligibility for low-income subsidies, processing subsidy changing events for current beneficiaries, conducting eligibility redeterminations, and performing premium withholding. And beginning in FY 2007, SSA will make annual incomerelated premium adjustment amount determinations for all current Medicare beneficiaries for the new Medicare Part B premium for higher income beneficiaries. SSA will also make the determinations for new Part B applicants. CONCLUSION Thank you for the opportunity to testifl today. The examples of claimants from NOSSCR members demonstrate in human terms the terrible impact of the delays caused by the disability claims backlogs. SSA must be given enough funding to make disability decisions in a timely manner and to carry out its other mandated workloads. As required by law, the Commissioner of Social Security submits a budget request separate from the President's request. The Commissioner's request for fiscal year 2008 indicates that the agency needs $10.44 billion in hnding its administrative expenses. This amount is almost $1 billion more than the President's request of $9.6 billion. We support the Commissioner's budget request of $10.44 billion. But, at a minimum, we urge that SSA be provided with $10.1 billion, the amount recommended in the Fiscal Year 2008 Budget Resolution conference agreement. This amount provides additional resources to address the disability claims backlog and provides a $2 13 million adjustment to the discretionary spending limit to conduct continuing disability reviews and SSI redeterminations. This funding is critical to provide SSA with adequate resources to perform its workloads, which are vital to people with disabilities.