SSA and VA Disability Programs
Re-Examination of Disability Criteria Needed to Help Ensure Program Integrity Gao ID: GAO-02-597 August 9, 2002The three largest disability programs collectively provided $89.7 billion in cash benefits to 10.2 million adults in 2001. However, the Disability Insurance (DI) program, Supplemental Security Income (SSI) program, and VA disability criteria reflect neither medical and technological advances nor the labor market changes that affect the skills needed to perform work and work settings. If these federal disability programs do not update scientific and labor market information, they risk overestimating the limiting nature of some disabilities while underestimating others. Twelve years ago, both the Social Security Administration and the Department of Veterans Affairs (VA) began reviewing relevant medical advances and updating the criteria they use to evaluate claims. However, the time the agencies are taking to revise the medical criteria could undermine the very purpose of the update. Moreover, because of the limited role of treatment in the statutory and regulatory design of these programs, the updates have not fully captured the benefits afforded by advances in treatment. Also, the disability criteria used by DI, SSI, and VA programs have not incorporated labor market changes. These programs continue to use outdated information about the types and demands of jobs needed to determine the impact that impairments have on individuals' earning capacity. To incorporate scientific advances and labor market changes into the DI, SSI, and VA programs, steps can be taken within the existing program design, but some would require more fundamental change. Agencies need to continue their medical updates and vigorously expand their efforts to more closely examine labor market changes. At a more fundamental level, SSA and VA could consider changes to the disability criteria that would revisit the programs' basic orientation.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
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Report to Agency Officials:
United States General Accounting Office:
GAO:
August 2002:
SSA and VA Disability Programs:
Re-Examination of Disability Criteria Needed to Help Ensure Program
Integrity:
GAO-02-597:
Contents:
Letter:
Results in Brief:
Background:
SSA Provides Benefits to People Found to Be Work Disabled:
Disability Criteria Not Fully Updated to Reflect Scientific Advances:
Disability Criteria Not Updated to Reflect Labor Market Changes:
Incorporating Scientific Advances and Labor Market Changes into
Disability Criteria Has Several Implications:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Response:
Appendix I: Comments from the Social Security Administration:
Appendix II: Comments from the Department of Veterans Affairs:
GAO Comments:
Appendix III: Five-Step Sequential Evaluation Process for Determining
DI
and SSI Eligibility:
Appendix IV: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Staff Acknowledgments:
Tables:
Table 1: Progress of SSA‘s Current Efforts to Update Medical Listings:
Table 2: Types of Changes Made (or Proposed) to SSA‘s Medical Listings
during Current Update:
Table 3: Types of Changes Made (or Proposed) to VA‘s Schedule for
Rating Disabilities during Current Update:
Figures:
Figure 1: DI, SSI, and VA Cash Payments to Adults with Disabilities,
1991-2001:
Figure 2: Percentage Distribution of DI Disabled Workers by Impairment
Categories, 2000:
Figure 3: Percentage Distribution of SSI Adult Disabled Recipients by
Impairment Categories, 2000:
Figure 4: Percentage Distribution of Veterans Receiving Disability
Compensation by Impairment Categories, 2000:
Figure 5: Time Frame of VA‘s Efforts to Update the Schedule for Rating
Disabilities:
Abbreviations:
DI: Disability Insurance:
DOT: Dictionary of Occupational Titles:
O*NET: Occupational Information Network:
SGAsubstantial gainful activity:
SSA: Social Security Administration:
SSI: Supplemental Security Income:
VA: Department of Veterans Affairs:
Letter:
United States General Accounting Office:
Washington, DC 20548:
August 9, 2002:
The Honorable Jo Anne B. Barnhart
Commissioner of Social Security Administration:
The Honorable Anthony J. Principi
Secretary of Veterans Affairs:
The three largest federal disability programs providing cash
assistance, which are administered by the Social Security
Administration (SSA) and the Department of Veterans Affairs (VA), in
2001 collectively provided $89.7 billion in cash benefits to
approximately 10.2 million adults with a physical or mental condition
that reduced their earning capacity. With such an extensive cash outlay
and such a large beneficiary population, it is important to use updated
scientific, workforce, and economic information to evaluate claims for
disability benefits. Over time, progress in the fields of medicine and
technology has provided a better understanding of how disease and
injury affect the ability to work. Likewise, changes in the labor
market have affected the skills needed to perform work and the settings
in which work occurs. Together, scientific advances and labor market
changes redefine the extent that physical or mental conditions affect
the ability of people with disabilities to work. If federal disability
programs do not update scientific and labor market information used in
assessing program eligibility, they risk overestimating the limiting
nature of some disabilities while underestimating others. Moreover, not
keeping abreast of this information puts federal programs at risk of
undermining their efforts to help some persons with disabilities
achieve economic independence or work to their full potential.
Although the three largest federal disability programs differ in their
underlying purpose, they face a similar underlying challenge. SSA
administers both the Disability Insurance (DI) program and the
Supplemental Security Income (SSI) program. DI provides benefits to
workers with severe long-term disabilities who have enough work history
to be insured for coverage under the program. SSI provides benefits to
disabled, blind, or aged individuals with low income and limited
resources, regardless of their work histories.[Footnote 1] VA,
meanwhile, compensates veterans for their physical or mental conditions
that are service connected.[Footnote 2] Despite these differences in
the populations they serve and basic rules of eligibility, these
programs share the similar task of making complex and difficult
decisions about individuals with impairments and their ability to work
in today‘s environment. Beneficiaries served by these programs also
have links to rehabilitation services to help them prepare for, find,
and maintain employment.
In the past, we and others have reported the DI, SSI, and VA programs
as being out-of-step with medical and technological advances and
changes in the workforce and the economy. In this report, we review the
extent to which DI, SSI, and VA‘s disability criteria have been updated
based on
(1) scientific advances, including medical and technological
innovations; and (2) labor market changes, including the growth in
service-and knowledge-based industries over manufacturing-based
industries. We also discuss implications of incorporating these
advances and changes into the programs. To address these issues and to
consider their implications on the design of these federal disability
programs, we reviewed agency documents, SSA‘s advisory board reports,
our prior reports, and other literature. In addition, we interviewed
agency officials and several experts in the field. We conducted our
work between June 2001 and July 2002 in accordance with generally
accepted government auditing standards.
Results in Brief:
The DI, SSI, and VA disability criteria have not been fully updated to
reflect medical and technological advances. About 12 years ago, both
SSA and VA began reviewing relevant medical advances and updating the
criteria they use to evaluate claims. However, both agencies are taking
years to revise the medical criteria and, consequently, the lengthy
time frames could undermine the very purpose of an update. Moreover,
because of the limited role of treatment in the statutory and
regulatory design of these programs, the updates have not fully
captured the benefits afforded by advances in treatment. That is,
agencies generally factor in the effects of treatment only when an
applicant has received or, for SSA, has also been prescribed treatment.
For example, the effects that medication to control severe mental
illness may have on an applicant‘s ability to work are not
automatically factored into agencies‘ disability decision making. As a
result, people applying for benefits are not necessarily evaluated at
their fullest potential for work in their corrected condition.
Likewise, efforts to update programs‘ criteria have not incorporated
innovations in assistive technologies--such as advanced prosthetics and
wheelchairs--because of similar program design issues.
Also, the disability criteria used by DI, SSI, and VA programs to
determine who has a disability have not incorporated labor market
changes. Programs continue to use outdated information about the types
and demands of jobs in the economy in determining the impact that
impairments have on individuals‘ earning capacity. SSA uses an outdated
database--last updated in 1991--for information on the types and
demands of occupations in the national economy. The agency is working
on identifying a replacement database but this undertaking could take
years to complete. VA, meanwhile, has not updated its estimates of the
effect that impairments have on earning capacity to reflect today‘s
labor market. Its last update was made in 1945. Moreover, without a
current understanding of the impact of physical and mental conditions
on earnings given labor market changes, VA and SSA may be
overcompensating some individuals while denying or undercompensating
other individuals because of outdated information on earning capacity.
In order to incorporate scientific advances and labor market changes
into the DI, SSI, and VA programs, some steps can be taken within the
existing program design and some would require more fundamental change.
Within the context of the programs‘ current statutory and regulatory
framework, agencies will need to continue their medical updates and
vigorously expand their efforts to more closely examine labor market
changes. At a more fundamental level, SSA and VA could consider changes
to the disability criteria that would revisit the programs‘ basic
orientation. As part of this effort, agencies would consider the
implications of assessing individuals under corrected conditions for
maximizing their employment in a knowledge-and service-based economy.
Moreover, under this scenario, agencies could place a greater emphasis
on assisting individuals find the appropriate employment assistance and
obtain employment. Reorienting programs in this direction would align
them with broader social changes that focus on building and supporting
the work capacities of people with disabilities. To this end,
approaches taken from private disability insurers and other countries
offer useful insights. This shift, however, would raise a number of
significant policy issues that have not yet been fully explored. For
example, are there certain circumstances when programs would require a
beneficiary to accept interventions to enhance work capacities as a
precondition for benefits? Likewise, would the cost of providing
treatment and assistive technologies in the disability programs be
higher than cash expenditures paid over the long-term?
In light of the outmoded criteria, this report contains recommendations
that agencies use their annual performance plans to help ensure they
place greater priority on updating their disability criteria within the
context of the programs‘ current design. This report also recommends
that SSA and VA study the broader implications of how scientific
advances and labor market changes could affect the programs‘
eligibility criteria and benefits package. Appendix I contains SSA‘s
comments on the draft of our report while VA‘s comments on the draft
are shown in appendix II.
Background:
The DI, SSI, and VA programs are three separate federal disability
programs that differ in their underlying intent, populations they
serve, and the specific approach used by SSA and VA to assess
disability. Yet, each program provides financial assistance to
individuals with a reduced capacity to work due to a physical or mental
impairment. Program beneficiaries also have a connection to vocational
assistance that can help program beneficiaries minimize the economic
loss resulting from their disabilities.
Programs Have Grown in Recent Years:
All three programs have experienced growth in recent years. The amount
of cash benefits paid to program beneficiaries has increased over the
past 10 years (see fig. 1). In 2001, DI provided $54.2 billion in cash
benefits to 5.3 million disabled workers, SSI provided $19.0 billion in
federal cash benefits to 3.7 million disabled and blind individuals age
18-64, and VA provided $16.5 billion in disability compensation
benefits to about 2.3 million veterans.[Footnote 3] Since 1991, the
cash benefits for these programs increased by 69 percent, 55 percent,
and 32 percent, respectively (adjusted for inflation). In addition,
since 1991 the number of DI, SSI, and VA beneficiaries grew by 65
percent, 53 percent, and 6 percent, respectively.
Figure 1: DI, SSI, and VA Cash Payments to Adults with Disabilities,
1991-2001:
[See PDF for image]
Source: GAO analysis of SSA and VA data.
[End of figure]
The size of the programs could grow in the years ahead. In fact, DI and
SSI are expected to grow significantly over the next decade. By 2010,
SSA expects worker applications for DI to increase by as much as 32
percent over 2000 levels. In 2000, VA predicted that while the number
of veterans receiving disability benefits will decrease approximately
18 percent over the next 10 years, the caseload will decline annually
by less than 1 percent during this time period. VA explained that
veterans will likely incur more disabilities than the past because, for
example, veterans of the all-volunteer force are older at time of
discharge with longer periods of service, and also because better
outreach and access makes veterans more aware of benefits to which they
are entitled. Moreover, VA‘s estimate of the number of veterans assumed
the United States would not be engaged in any major global or regional
conflict. The recent war on terrorism, however, could affect VA‘s
future projections on the size of the disabled veterans population.
SSA Provides Benefits to People Found to Be Work Disabled:
SSA provides disability benefits to people found to be work disabled
under the DI or SSI program. Established in 1956, DI is an insurance
program that provides benefits to workers who are unable to work
because of severe long-term disability. In 2000, the most common
impairments among DI‘s disabled workers were mental disorders and
musculoskeletal conditions (see fig. 2). These two conditions also were
the fastest growing conditions since 1986, increasing by 7 and 5
percentage points, respectively.
Figure 2: Percentage Distribution of DI Disabled Workers by Impairment
Categories, 2000:
[See PDF for image]
Source: Annual Statistical Supplement to the Social Security Bulletin,
2001.
[End of figure]
Workers who have worked long enough and recently enough are insured for
coverage under the DI program. DI beneficiaries receive cash assistance
and, after a 24-month waiting period, Medicare coverage. Once found
eligible for benefits, disabled workers continue to receive benefits
until they die, return to work and earn more than allowed by program
rules, are found to have medically improved to the point of having the
ability to work, or reach full retirement age (when disability benefits
convert to retirement benefits). To help ensure that only eligible
beneficiaries remain on the rolls, SSA is required by law to conduct
continuing disability reviews for all DI beneficiaries to determine
whether they continue to meet the disability requirements of the law.
SSI, created in 1972, is an income assistance program that provides
cash benefits for disabled, blind, or aged individuals who have low
income and limited resources. In 2000, the most common impairments
among the group of SSI blind and disabled adults age 18-64 were mental
disorders and mental retardation (see fig. 3). Mental disorders was the
fastest growing condition among this population since 1986, increasing
by
9 percentage points.
Figure 3: Percentage Distribution of SSI Adult Disabled Recipients by
Impairment Categories, 2000:
[See PDF for image]
Source: Annual Statistical Supplement to the Social Security Bulletin,
2001.
[End of figure]
Unlike the DI program, SSI has no prior work requirement. In most
cases, SSI eligibility makes recipients eligible for Medicaid benefits.
SSI benefits terminate for the same reasons as DI benefits, although
SSI benefits also terminate when a recipient no longer meets SSI income
and resource requirements (SSI benefits do not convert to retirement
benefits when the individual reaches full retirement age). The law
requires that continuing disability reviews be conducted for some SSI
recipients for continuing eligibility.
The Social Security Act‘s definition of disability under DI and SSI is
the same: an individual must have a medically determinable physical or
mental impairment that (1) has lasted or is expected to last at least 1
year or to result in death and (2) prevents the individual from
engaging in substantial gainful activity (SGA).[Footnote 4] Moreover,
the definition specifies that for a person to be determined to be
disabled, the impairment must be of such severity that the person not
only is unable to do his or her previous work but, considering his or
her age, education, and work experience, is unable to do any other kind
of substantial work that exists in the national economy. (See app. III
for a more complete description of SSA‘s five-step process to determine
DI and SSI eligibility.):
While not expressly required by law to update the criteria used in the
disability determination process, SSA has stated that it would update
them to reflect current medical criteria and terminology. Over the
years, SSA has periodically ensured that the medical information and
the structure of its Listing of Impairments--which describe impairments
that are presumed by the agency to be severe enough to prevent a person
from doing substantial gainful activity--were both acceptable for
program purposes and consistent with current medical thinking. The last
general update to the Listing of Impairments (also known as the Medical
Listings) occurred in 1985, at which time expiration dates ranging from
3 to 8 years were inserted for individual body systems to ensure the
agency periodically reviews and if necessary, updates the Medical
Listings.
The statutes establishing the DI and SSI programs presume that
disability, for program eligibility, is long-term and based on an
either-or decision. That is, a person is either capable or incapable of
engaging in substantial gainful work. However, the Social Security Act
allows beneficiaries to use a ’ticket“ issued by the Commissioner of
SSA to obtain free employment services, vocational rehabilitation
services, or other services to find employment.[Footnote 5] Also,
Congress has established various work incentives intended to safeguard
cash and health benefits while a beneficiary tries to return to
work.[Footnote 6] Despite these provisions, few DI and SSI
beneficiaries have left the rolls to return to work,[Footnote 7]
although the ticket program may have an impact on future rates. The
either-or process produces a strong incentive for applicants to
establish their inability to work to qualify for benefits, and work-
related supports and services (including health coverage) are offered
only after individuals have completed the eligibility process. Yet our
past work found that DI beneficiaries believe that health
interventions--such as medical procedures, medications, physical
therapy, and psychotherapy--are primary factors in assisting them to
work.[Footnote 8]
VA Provides Benefits to Veterans Found to Have Reduced Earning
Capacity:
VA‘s disability program compensates veterans for the average loss in
earning capacity in civilian occupations that results from injuries or
conditions incurred or aggravated during military service.[Footnote 9]
In 2000, the most common impairment category among all disabled
veterans was illness and injury to bones and joints (see fig. 4). This
impairment category also experienced the fastest growth among the
disabled veteran population since 1986, increasing by 6 percentage
points.
Figure 4: Percentage Distribution of Veterans Receiving Disability
Compensation by Impairment Categories, 2000:
[See PDF for image]
Note: Percentages do not add to 100 percent due to rounding.
Source: VA‘s Compensation and Pension Master File.
[End of figure]
VA‘s program is similar to the DI and SSI programs in that all three
programs provide cash benefits to persons whose physical or mental
impairments have been deemed to reduce their ability to earn a
living.[Footnote 10] However, VA relies upon an average reduction in
earning capacity across a group of individuals with a similar condition
rather than the actual reduction for an individual veteran applying for
benefits. As a result, a veteran with a disability is entitled to
disability cash benefits whether or not employed and regardless of the
amount earned. The cash benefit level is based on the ’percentage
evaluation,“ commonly called the disability rating, that represents the
average loss in earning capacity associated with the severity of
physical and mental conditions. VA uses its Schedule for Rating
Disabilities to determine which disability rating to assign to a
veteran‘s particular condition. Ratings for individual diagnoses in the
schedule range from 0[Footnote 11] percent to 100 percent.[Footnote 12]
For example, VA presumes that the loss of a foot as a result of
military service results in a 40 percent impairment in earning
capacity, on average, among veterans with this injury. All veterans who
lose a foot as a result of military service, therefore, are entitled to
a 40 percent disability rating. Unlike the DI and SSI programs, the law
does not specifically require VA to conduct continuing disability
reviews to determine whether veterans continue to meet the disability
requirements of the law.
The Schedule for Rating Disabilities was first developed in 1919 and
had its last major revision in 1945. Two major studies have been
conducted since the implementation of the 1945 version of the schedule
to determine whether the schedule constitutes an adequate basis for
compensating veterans with service-connected conditions. One was
conducted by a presidential commission in the mid-1950s and a second by
VA in the late 1960s. Both concluded, for various reasons, that at
least some disability ratings in the schedule did not accurately
reflect the average impairment in earning capacity among disabled
veterans and needed to be adjusted.
The law states that VA shall, from time to time, readjust the schedule
based upon experience. Keeping the schedule current is important
because cash benefits are based on the schedule. We previously
reported, however, that VA‘s rating schedule that was being used in the
late 1980s had not been adjusted to incorporate the results of many
recent medical advances, and as a result, some veterans may be
undercompensated and others may be overcompensated for their service-
connected disability.[Footnote 13] Further, we recommended that VA (1)
prepare a plan for a comprehensive review of the rating schedule and,
based on the results, revise medical criteria accordingly and (2)
implement a procedure for systematically reviewing the rating schedule
to keep it updated.
Veterans with a service-connected disability rated at 20 percent or
higher who are found by VA to have an employment handicap can receive
rehabilitation services. Eligible veterans can receive vocational
counseling, training, job search assistance, and supportive
rehabilitation services. In addition, VA offers veterans a medical
benefits package that provides a full range of outpatient and inpatient
services, including primary and specialty care as well as drugs.
Advances in Medicine and Technology, Labor Market Changes, and Social
Changes Have Affected Work-Related Capabilities of People with
Disabilities:
Recent scientific advances in medicine and assistive technology and
changes in the nature of work and the types of jobs in our national
economy have generally enhanced the potential for people with
disabilities to perform work-related activities. Advances in medicine
have afforded the scientific community a deeper understanding of and
ability to treat disease and injury. Medical advancements in treatment
(such as organ transplantations), therapy, and rehabilitation have
reduced the severity of some medical conditions and have allowed
individuals to live with greater independence and function in settings
such as the workplace. Also, assistive technologies--such as advanced
wheelchair design, a new generation of prosthetic devices, and voice
recognition systems--afford greater capabilities for some people with
disabilities than were available in the past.
At the same time, the nature of work has changed in recent decades as
the national economy has moved away from manufacturing-based jobs to
service-and knowledge-based employment. In the 1960s, earning capacity
became more related to a worker‘s skills and training than to his or
her ability to perform physical labor. Following World War II and the
Korean Conflict, advancements in technology, including computers and
automated equipment, reduced the need for physical labor. The goods-
producing sector‘s share of the economy--mining, construction, and
manufacturing--declined from about 44 percent in 1945 to about
18 percent in 2000. The service-producing industry‘s share, on the
other hand--such areas as wholesale and retail trade; transportation
and public utilities; federal, state and local government; and finance,
insurance, and real estate--increased from about 57 percent in 1945 to
about 72 percent in 2000.
Although certain jobs in the service economy continue to be physically
demanding--a cashier in a fast food restaurant might be expected to
stand for most of his or her shift--other service-and knowledge-based
jobs can allow greater participation for persons with physical
limitations. In addition, telecommuting and part-time work provide
other options for persons with disabilities. However, some labor market
trends--such as an increasing pace of change in office environments and
the need for adaptability--can pose particular challenges for some
persons, such as those with severe mental illness and learning
disabilities. Moreover, other trends--such as downsizing and the growth
in contingent workers--can limit job security and benefits, like health
insurance, that most persons with disabilities require for
participation in the labor force. Whether these changes make it easier
or more difficult for a person with a disability to work appears to
depend very much on the individual‘s impairment and other
characteristics, according to experts.
Social change has promoted the goals of greater inclusion of and
participation by people with disabilities in the mainstream of society,
including adults at work. For instance, over the past 2 decades, people
with disabilities have sought to remove environmental barriers that
impede them from fully participating in their communities. Moreover,
the Americans with Disabilities Act supports the full participation of
people with disabilities in society and fosters the expectation that
people with disabilities can work and have the right to work. The
Americans with Disabilities Act prohibits employers from discriminating
against qualified individuals with disabilities and requires employers
to make reasonable workplace accommodations unless it would impose an
undue hardship on the business.
Disability Criteria Not Fully Updated to Reflect Scientific Advances:
The disability criteria used by the DI, SSI, and VA disability programs
to help determine who is qualified to receive benefits have not been
fully updated to reflect scientific advances. Both SSA and VA are
currently in the midst of a process that began around the early 1990s
to update the medical criteria they use to make eligibility decisions,
but the progress is slow. The updates include dropping or adding
conditions that qualify one for benefits, modifying criteria needed to
establish the presence and severity of certain medical conditions, and
wording changes for clarification and guidance in making decisions.
Agencies report that they made some of these changes due to medical
advances in treatment that have reduced the severity and occurrence of
some medical conditions. Nevertheless, the statutory and regulatory
design of these programs limits the role of treatment in determining
who is disabled. Therefore, treatment advances, by definition, have not
been folded into the updates. Moreover, because of the statutory design
of these programs, the role of assistive technologies is not recognized
in making disability decisions. Consequently, the updates have not
fully incorporated innovations in this field, such as advanced
prosthetics and wheelchair designs.
Slow Process to Update Medical Criteria Jeopardizes Progress Already
Made:
SSA‘s current effort to update the disability criteria began in the
early 1990s. To conduct the current update, SSA gathers feedback on
relevant medical issues from state officials who help the agency make
disability decisions. In addition, SSA has in-house expertise to help
the agency keep abreast of the medical field and identify aspects of
the medical criteria that need to be changed. SSA staff develop the
proposed changes and forward them for internal, including legal and
financial, review. Next, SSA publishes the proposed changes in the
Federal Register and solicits comments from the public for 60 days. SSA
considers the public comments, makes necessary adjustments, and
publishes the final changes in the Federal Register.
Between 1991 and 1993, SSA published for public comment the changes it
was proposing to make to 7 of the 14 body systems in its Medical
Listings.[Footnote 14] By 1994, the proposed changes to 5 of these 7
body systems were finalized, although SSA told us that changes to 2
systems were relatively minor. SSA‘s efforts to update the Medical
Listings were curtailed in the mid-1990s due to staff shortages,
competing priorities, and lack of adequate research on disability
issues. Since the mid-1990s, we, SSA‘s Office of the Inspector General,
and the Social Security Advisory Board have expressed concern that SSA
was not updating the Medical Listings regularly but simply extending
the expiration dates that were originally developed by SSA so as to
ensure that it would conduct the updates. In fact, the Office of the
Inspector General[Footnote 15] recommended that SSA develop a
performance measure of its update activities for inclusion in SSA‘s
annual performance plan.[Footnote 16] SSA did not agree with the
recommendation, responding that revisions to the Medical Listings are
subject to some factors not fully in their control (e.g., progression
of scientific advances, input from experts and the public, and shifting
congressional priorities), which can affect timing and prioritization
of effort. In our view, these uncertainties--in addition to the size
and costs of the programs--in fact elevate the need for establishing a
time frame to ground SSA in its efforts and help keep the agency on
track. Moreover, SSA is allowed to revise performance measures in its
annual plans.[Footnote 17]
SSA resumed updating the Medical Listings in 1998. Since then, SSA has
taken some positive steps in updating portions of the medical criteria
it uses to make eligibility decisions, although progress is slow. As of
early 2002, SSA has published the final updated criteria for 1 of the 9
remaining body systems not updated in the early 1990s (musculoskeletal)
and a portion of a second body system (mental disorders). SSA also
plans to update again the 5 body systems that were updated in the early
1990s. In addition, SSA has asked the public to comment on proposed
changes for several other body systems. During the course of our work,
SSA initially indicated to us that the agency planned to publish
proposed changes for all body systems by 2002 and submit changes to the
Office of Management and Budget for final clearance by 2003. Recently,
the new administration at SSA (a new commissioner was confirmed in
November 2001) reviewed the schedule and timing for the revisions. The
results of this review pushed back the completion date for publishing
proposed changes for all remaining body systems to the end of
2003.[Footnote 18] The revised schedule, as of May 2002, is shown in
table 1.
Table 1: Progress of SSA‘s Current Efforts to Update Medical Listings:
Action : Updates finalized; Body system: Mental disorders (partial
system
update); Date of current update: 2000; Date of previous update:
1985.
Action: Updates finalized; Body system: Musculoskeletal; Date of
current
update: 2002; Date of previous update: 1985.
Action: Updates in process; Body system: [Empty]; Date of current
update: Proposed changes published for comment in the Federal Register;
Date of previous update: [Empty].
Action: Updates in process; Body system: Hemic and lymphatic; Date
of current update: Nov. 2001; Date of previous update: 1985.
Action: Updates in process; Body system: Malignant neoplastic diseases;
Date of current update: Nov. 2001; Date of previous update: 1985.
Action: Updates in process; Body system: Digestive; Date of current
update: Nov. 2001; Date of previous update: 1985.
Action: Updates in process; Body system: Skin; Date of current update:
Dec.
2001; Date of previous update: 1979.
Action: Updates in process; Body system: [Empty]; Date of current
update:
Plan to submit proposed changes to OMB; Date of previous update:
[Empty].
Action: Updates in process; Body system: Multiple body systems; Date of
current update: Oct. 2002; Date of previous update: 1993.
Action: Updates in process; Body system: Genitourinary; Date of current
update: Nov. 2002; Date of previous update: 1985.
Action: Updates in process; Body system: Cardiovascular; Date of
current
update: Dec. 2002; Date of previous update: 1994.
Action: Updates in process; Body system: Endocrine; Date of current
update:
Jan. 2003; Date of previous update: 1993.
Action: Updates in process; Body system: Respiratory; Date of current
update: Jan. 2003; Date of previous update: 1993.
Action: Updates in process; Body system: Special senses and speech;
Date of current update: Mar. 2003; Date of previous update: 1985.
Action: Updates in process; Body system: Neurological; Date of current
update: Aug. 2003; Date of previous update: 1985.
Action: Updates in process; Body system: Immune; Date of current
update:
Sept. 2003; Date of previous update: 1993.
Action: Updates in process; Body system: Mental disorders (remaining
portion);
Date of current update: Nov. 2003; Date of previous update: 1985.
Source: GAO Analysis of SSA documents.
[End of table]
SSA‘s slow progress in completing the updates could undermine the
purpose of incorporating medical advances into its medical criteria.
For example, the criteria for musculoskeletal conditions--a common
impairment among persons entering DI--were updated in 1985. Then, in
1991, SSA began developing new criteria and published its proposed
changes in 1993 but did not finalize the changes until 2002; therefore,
changes made to the musculoskeletal criteria in 2002 were essentially
based on SSA‘s review of the field in the early 1990s. SSA officials
told us that in finalizing the criteria, they reviewed the changes
identified in the early 1990s and found that little had taken place
since then to warrant changes to the proposed criteria. However, given
the advancements in medical science since 1991, it may be difficult for
SSA to be certain that all applicable medical advancements are in fact
included in the most recent update. Similarly, we are concerned about
the time frames for completing the full update on the criteria for
another major impairment category--mental disorders. While SSA
finalized in 2000 a portion of the changes for mental disorders first
proposed in 1991, the agency deferred action on the remaining portion
pending further review. SSA recently announced plans to publish these
proposed changes by November 2003.
Keeping to a set schedule and making necessary updates could help SSA
minimize the use of outmoded criteria in a large number of disability
decisions. For example, SSA used the criteria for musculoskeletal
conditions that were developed in 1985 until 2001. This means that in
the year prior to the update--2000--SSA allowed 222,750 adults to enter
the DI or SSI program on the basis of medical criteria that were 15
years old.
VA has made more progress than SSA in updating the medical criteria
used to evaluate its disability claims, but overall the process is
slow. In 1989, VA hired a contractor to bring together practicing
physicians to review and develop updated criteria for several of the
body systems contained in the Schedule for Rating Disabilities. The
practicing physicians, who were organized by teams according to
specific body systems, were tasked with proposing changes that were
consistent with modern medical practice and stated in a manner that
could be easily interpreted by rating personnel. The results of the
teams‘ efforts were reviewed by VA in-house staff. After making
necessary adjustments, the proposed changes were forwarded to various
VA offices for review. Proposed changes were published in the Federal
Register and opened for a 60-day comment period. As of March 2002, VA
had finalized the criteria for 11 of 16 body systems. VA is currently
reviewing the remaining body systems.
VA has generally taken more than 5 years to complete the update for
each body system (see fig. 5). VA has not yet completed updating the
medical criteria for several important body systems. For example,
criteria used for evaluating orthopedic impairments were last updated
in 1986. Yet the number of veterans with a disabling orthopedic
condition has risen significantly in the past decade, outpacing the
number of veterans receiving benefits under any other single disability
group. Therefore, veterans with an orthopedic impairment who applied
for VA disability benefits since 1996 were evaluated with medical
criteria that were at least 10 years old.
Figure 5: Time Frame of VA‘s Efforts to Update the Schedule for Rating
Disabilities:
[See PDF for image]
[A] VA has not published an advance notice or proposed criteria.
Further action is pending following the completion of updates for disc
disease.
Source: GAO analysis of VA data.
[End of figure]
We found two factors contributing to the amount of time to update VA‘s
medical criteria. First, the review given to the proposed changes is
lengthy. VA‘s legal counsel as well as other entities within VA, such
as the Veterans Health Administration, Office of Congressional and
Legislative Affairs, and Office of Inspector General, review all
proposed changes to the Schedule for Rating Disabilities. The Office of
Management and Budget also reviews the changes. This entire review
process can take up to 3 years. Second, the number of staff assigned to
coordinate the updates at VA also contributes to the lengthy time to
complete the updates. For example, one staff person is assigned less
than half time to coordinate the update efforts.
VA does not have a well-defined plan to conduct the next round of
medical updates. Although VA provided us with a statement acknowledging
the need to re-review the medical criteria in the future, it had
neither a strategy nor time frame for completing the task.
Agencies Have Changed Several Aspects of Disability Criteria:
SSA has made various types of changes to the Medical Listings thus far.
As shown in table 2, these changes, including the proposed changes
released to the public for comment, add or delete qualifying
conditions; modify the criteria for certain physical or mental
conditions; and clarify and provide additional guidance in making
disability decisions. In addition, SSA has made a number of editorial
changes.
Table 2: Types of Changes Made (or Proposed) to SSA‘s Medical Listings
during Current Update:
Type of change: Revise qualifying conditions; Examples: Remove peptic
ulcer.[A]; Add inflammatory bowel disease by combining two existing
conditions already listed: chronic ulcerative and regional enteritis.;
Rationales: Advances in medical and surgical management have reduced
severity.; Reflect advances in medical terminology..
Type of change: Revise evaluation and diagnostic criteria; Examples:
Expand the types of allowable imaging techniques.; Reduce from
three to two in the number of difficulties that must be demonstrated to
meet the listings for a personality disorder.[B]; Rationales: The
Medical Listings previously referred to x-ray evidence. With
advancements in imaging techniques, SSA will also accept evidence from,
for example, computerized axial tomography (CAT) scan and magnetic
resonance imaging (MRI) techniques.; Specific rationale not
mentioned..
Type of change: Clarify and provide additional guidance; Examples:
Remove discussion on distinction between primary and secondary
digestive disorders resulting in weight loss and malnutrition.;
Expand guidance about musculoskeletal ’deformity.“; Rationales:
Distinction not necessary to adjudicate disability claim.; Clarify that
the term refers to joint deformity due to any cause..
[A] A condition removed from the Medical Listings means that SSA no
longer presumes the condition to be severe enough to ordinarily prevent
an individual from engaging in substantial gainful activities. However,
an individual with a condition removed from the Medical Listing could
still be found eligible under other considerations in the evaluation
process as described in appendix III.
[B] The criteria for a personality disorder are met when (a) the
individual has certain behaviors defined in the Medical Listings and
(b) those behaviors result in at least two of the following: (1) marked
restriction of activities in daily living; (2) marked difficulties in
maintaining social functioning;
(3) marked difficulties in maintaining concentration, persistence, or
pace; or (4) repeated episodes of decompensation (as specified in the
Medical Listings).
Source: GAO analysis of SSA publications appearing in Federal Register.
[End of table]
In recognition of medical advances, VA has also made several types of
changes to its Schedule for Rating Disabilities during the current
update. As shown in table 3, the types of changes have been quite
similar to changes made by SSA. Revisions generally consist of (1)
adding, deleting, and reorganizing medical conditions in the Schedule
for Rating Disabilities; (2) revising the criteria for certain
qualifying conditions; and (3) wording changes for clarification or
reflection of current medical terminology. VA also has made a number of
editorial changes.
Table 3: Types of Changes Made (or Proposed) to VA‘s Schedule for
Rating Disabilities during Current Update:
Type of change: Revise schedule; Examples: Add pneumoconiosis as a
qualifying disease under interstitial lung diseases.; Create new
category for ’schizophrenia and other psychotic disorders.“;
Rationales: Allows for a more complete representation of this disease
category.; New category is in accordance with terminology used in the
standard medical texts.
Type of change: Revise criteria; Examples: Evaluation of anemia should
include clinical findings and not be based solely on hemoglobin
levels.; Under certain conditions, varicose veins developed after
leaving the service can be considered as service-connected.;
Rationales: Provides a more accurate measure.; Specific rationale
not mentioned.
Type of change: Wording change for clarification or reflection of
current medical terminology; Examples: Replace ’frequent“ with ’twice
per year“ when assessing frequency of surgical therapies for recurring
stone formation in the ureter.; ; Change ’new growth“ to ’neoplasm.“;
Rationales: Standardizes the term for more precise evaluations.;
Improve technical accuracy.
Source: GAO analysis of VA publications appearing in the Federal
Register.
[End of table]
Design Issues Have Limited the Incorporation of Treatment, Corrective
Medical Devices, and Assistive Technologies
into Criteria:
Program design issues have limited the extent that advances in medicine
and technology have been incorporated into the DI, SSI, and VA‘s
disability decision making. SSA has indicated that the updates are
being made in recognition of medical advances in treatment and
technology, and we found examples in SSA‘s publications in the Federal
Register of this occurring. Our methodology for this study, however,
does not allow us to determine the extent of SSA‘s efforts to
incorporate medical advances into the Medical Listings. Nevertheless,
the design of these programs limits the role of treatment in deciding
who is disabled. SSA‘s regulations require that in order to receive
benefits, claimants must follow treatment prescribed by the
individual‘s physician if the treatment can restore his or her ability
to work.[Footnote 19] The implication of this regulation is that if an
individual is not prescribed treatment, SSA does not consider the
possible effects of treatment in the disability decision, even if the
treatment could make the difference between being able and not being
able to work. Moreover, the programs do not require individuals to
receive nonprescribed treatment before or during the time they are
assessed for eligibility. Thus, treatments that can help restore
functioning to persons with certain impairments may not be factored
into the disability decision for some applicants. This limited role of
treatment means, by definition, the updates have not fully captured the
benefits that treatments can provide to persons with certain
impairments. For example, medications to control severe mental illness,
arthritis treatments to slow or stop joint damage, total hip
replacements for severely injured hips, and drugs and physical
therapies to possibly improve the symptoms associated with multiple
sclerosis are not automatically factored into SSA‘s decision making for
determining the extent that impairments affect people‘s ability to
work. Additionally, this limited approach to treatment raises an equity
issue: Applicants whose treatment allows them to work could be denied
benefits while applicants with the same condition who have not been
prescribed treatment could be allowed benefits.
While some of VA‘s changes to the Schedule for Rating Disabilities
reflect advances in medicine, the changes have generally not
incorporated the potential benefits of treatment. While treatment can
improve an individual‘s ability to function in the workplace, the
program is not designed to factor in the potential benefits of
treatment when evaluating a veteran‘s service-connected disability.
That is, veterans applying for disability benefits--much like, for
example, workers applying for DI benefits--are not required to undergo
treatment before or after they are given a disability rating. Moreover,
the VA program does not, unlike DI and SSI, factor in the potential
effect of prescribed treatment on an applicants‘ abilities.
As with treatment, the benefits of innovations in assistive
technologies--such as advanced prosthetics and wheelchair designs--
have not been fully incorporated into DI, SSI, and VA disability
criteria because the statutory design of these programs does not
recognize these advances in disability decision making. That is,
programs are not designed to assess an applicant‘s ability to work
under corrected conditions. Conceivably, using innovations such as a
prosthetic device could reduce the limiting nature of an applicant‘s
impairment and could also reduce, if programs were designed
differently, eligibility for or the amount of cash benefits. And some
technologies may not involve sophisticated electronics. For example, a
factory worker with a back impairment who works on an assembly line
could benefit from an ergonomic stool or chair and matting that would
cushion the floor and reduce fatigue. According to VA, technological
advances, such as voice recognition devices--which can help people who
do not have the use of their hands to interact with a computer--are not
considered during the rating process to determine the extent to which
technology could improve a veteran‘s earning capacity.
Disability Criteria Not Updated to Reflect Labor Market Changes:
The disability criteria used by DI, SSI, and VA programs for
determining who is disabled have not incorporated labor market changes.
In determining the effect that impairments have on individuals‘ earning
capacity, programs continue to use outdated information about the types
and demands of jobs in the economy. Given the nature of today‘s
economy, which offers varied opportunities for work, agencies‘ use of
outdated information raises questions about the validity of disability
decisions.
SSA Relies upon Outdated Labor Market Information to Assess Impact of
Impairments on Capacity to Perform Work:
For an applicant who does not have an impairment that SSA presumes is
severe enough ordinarily to prevent an individual from engaging in
substantial gainful activity, SSA evaluates whether the individual is
able to work despite his or her limitations.[Footnote 20] Individuals
who are unable to perform their previous work and other work in the
national economy are awarded benefits. SSA relies upon the Department
of Labor‘s Dictionary of Occupational Titles (DOT) as its primary
database to make this determination; however, Labor has not updated DOT
since 1991 and does not plan to do so. Since 1993, Labor has been
working on a replacement for the DOT called the Occupational
Information Network (O*NET). It contains information on about 970
occupational categories, while DOT had 13,000 occupational titles.
Labor and SSA officials recognize that O*NET cannot be used in its
current form in the DI and SSI disability determination process. The
O*NET, for example, does not contain SSA-needed information on the
amount of lifting or mental demands associated with particular jobs.
The agencies have discussed ways that O*NET might be modified or
supplemental information collected to meet SSA‘s needs, but no
definitive solution has been identified. SSA officials have indicated
that an entirely new occupational database could be needed to meet
SSA‘s needs, but such an effort could take many years to develop,
validate, and implement. Meanwhile, as new jobs and job requirements
evolve in the national economy, SSA‘s reliance upon an outdated
database further distances the agency from the current market place.
VA Relies upon Outdated Information in Estimating Economic Loss
Resulting from Physical and Mental Impairments:
The percentage ratings used in VA‘s Schedule for Rating Disabilities
are still primarily based on physicians‘ and lawyers‘ estimates made in
1945 about the effects that service-connected impairments have on the
average individual‘s ability to perform jobs requiring manual or
physical labor. Although VA is revising the Schedule for Rating
Disabilities‘ medical criteria, the estimates of how impairments affect
veterans‘ earnings have generally not been reexamined. As a result,
changes in the nature of work that have occurred in the past 57 years-
-which potentially affect the extent to which disabilities limit one‘s
earning capacity--are overlooked by the program‘s criteria. For
example, in an increasingly knowledge-based economy, one could consider
whether earning capacity is still reduced, on average, by 40 percent
for loss of a foot.
VA recognizes that there have been significant changes in the nature of
work, but does not believe that these changes need to be reflected in
the disability ratings. One official noted that a disability rating is
essentially an indication of medical severity: the more severe the
medical condition, then the higher the rating. Moreover, it was stated,
changes in the nature of work are captured in the types of vocational
rehabilitation services offered to veterans (e.g., veterans could
receive computer skills training). Finally, the official noted that
disability compensation should not be adjusted if an individual veteran
is able to work despite a disabling condition.
In the past, we suggested to Congress that it may wish to consider
directing VA to determine whether VA ratings correspond to veterans‘
average loss in earning capacity and adjust disability ratings
accordingly.[Footnote 21] VA responded to us that the schedule, as
constructed, represents a consensus among Congress, VA, and the veteran
community, and that the ratings generally represent an equitable method
to determine disability compensation. In conducting the work for our
present assignment, VA told us that they believe the consensus remains
and the ratings continue to generally represent an equitable approach.
We continue to believe, however, that changes in the nature of work
afford some veterans with a disability the opportunity to become more
fully employed and that the current estimates of the average reduction
in earning capacity should be reviewed. Further, we believe that
updating disability criteria is consistent with the law.
Incorporating Scientific Advances and Labor Market Changes into
Disability Criteria Has Several Implications:
Incorporating scientific advances and labor market changes into DI,
SSI, and VA programs can occur within the existing program design and
at a more fundamental level. Within the context of the programs‘
existing statutory and regulatory design, agencies will need to
continue updating the criteria they use to determine which applicants
have physical and mental conditions that limit their ability to work.
As we noted above, agencies began this type of update in the early
1990s, although their efforts have focused much more on the medical
portion than labor market issues. In addition to continuing their
medical updates, SSA and VA need to vigorously expand their efforts to
more closely examine labor market changes. SSA‘s results could yield
updated information they use to make decisions about whether or not
applicants have the ability to perform their past work or any work that
exists in the national economy. VA‘s results could yield updates to the
average loss in earning capacity resulting from service-connected
injuries and conditions.
More fundamentally, SSA and VA could consider the impact that
scientific advances and labor market changes have on the programs‘
basic orientation. Whereas programs currently are grounded in assessing
and providing benefits based on incapacities, fully incorporating the
scientific and labor market issues we highlight in this report implies
that agencies would assess individuals with physical and mental
conditions under corrected conditions for employment in an economy
increasingly different from that which existed when these programs were
first designed. Factoring medical and technological advances more fully
into the DI, SSI, and VA programs implies that some if not many
applicants would receive up-front assistance--including help in finding
and maintaining employment--to help agencies evaluate individuals under
their fullest potential to work. In fact, the types of beneficiaries
who currently might have benefited from such assistance but have not
received either timely medical or vocational assistance (for example,
DI beneficiaries during the 24-month wait period for Medicare benefits)
could get a package of up-front service under a new approach. Moreover,
reorienting programs in this direction is consistent with increased
expectations of people with disabilities and the integration of people
with disabilities into the workplace, as reflected in the Americans
with Disabilities Act. However, for people with disabilities who do not
have a realistic or practical work option, long-term cash support is
likely the best option.
In reexamining the fundamental concepts underlying the design of the
DI,SSI, and VA programs, approaches used by other disability programs
may
offer some valuable insights. For example, our prior review of three
private disability insurers shows that they have fundamentally
reoriented their disability systems toward building the productive
capacities of people with disabilities, while not jeopardizing the
availability of cash benefits for people who are not able to return to
the labor force.[Footnote 22] These systems have accomplished this
reorientation while using a definition of disability that is similar to
that used by SSA‘s disability programs.[Footnote 23] However, it is too
early to fully measure the effect of these changes. In these private
disability systems, the disability eligibility assessment process
evaluates a person‘s potential to work and assists those with work
potential to return to the labor force. This process of identifying and
providing services intended to enhance a person‘s productive capacity
occurs early after disability onset and continues periodically
throughout the duration of the claim. In contrast, SSA‘s eligibility
assessment process encourages applicants to concentrate on their
incapacities, and return-to-work assistance occurs, if at all, only
after an often lengthy process of determining eligibility for benefits.
SSA‘s process focuses on deciding who is impaired sufficiently to be
eligible for cash payments, rather than on identifying and providing
the services and supports necessary for making a transition to work for
those who can. While cash payments are important to individuals, the
advances and changes discussed in this report suggest the option to
shift the disability programs‘ priorities to focus more on work.
We recognize that re-examining the programs at the broader level raises
a number of significant policy issues, including the following:
* Program design and benefits offered. Agencies would need to consider
the impact on program design, including fundamental issues of basic
eligibility structure and benefits and services provided. Would the
definition of disability change? To what extent would programs require
some beneficiaries to accept assistance to enhance work capacities as a
precondition for benefits versus relying upon work incentives, time-
limited benefits, or other means to encourage individuals to maximize
their capacity to work? Would persons whose work potential is
significantly increased due to medical and technological assistance
receive the same cash benefits that are currently provided? Would
criteria need to be established to identify persons whose severity
presumes a basis for permanent cash benefits? Would program recipients
with earned income above a certain level still be eligible for no-cost
assistance or do they begin to help pay for the support? To change
program design, what can be done through the regulatory process and
what requires legislative action?
* Accessibility. Agencies would need to address the accessibility of
medical and technological advances for program beneficiaries. Are new
mechanisms needed to provide sufficient access to needed services? In
the case of DI and SSI, what is the impact on the ties with the
Medicare and Medicaid programs? For VA, accessibility issues may not be
as critical because of existing links to health and vocational
rehabilitation benefits provided by VA.
* Cost. Agencies would need to address cost implications, including the
issue of who will pay for the medical and assistive technologies (will
beneficiaries be required to defray costs?). For example, would the
cost of providing treatment and assistive technologies in the
disability programs be higher than cash expenditures paid over the
long-term? The cost to provide medical and technological treatment
could be quite high for some program recipients, although much less for
others. Moreover, net costs would need to be considered, as some
expenditures could be offset with cost savings by paying reduced
benefits.
* Integration with other program components. Agencies would need to
address how to integrate a new emphasis on medical and technological
assistance when making disability determinations with the health care
and vocational assistance already currently available to program
beneficiaries. Notably, VA‘s program components of cash assistance,
vocational rehabilitation, and medical care may uniquely position the
agency to develop an integrated model and evaluate the results. During
our work, VA officials pointed out that vocational rehabilitation
services are already available to veterans to help them return to work
and that such services include incorporating the advances and changes
addressed in this report. Yet, the restorative benefits of medical,
technological, or vocational interventions are not considered when VA
makes an initial assessment of the economic losses that result from a
condition or injury. With a limited amount of program funding,
integrating these program components may help VA to equitably
distribute program funds among veterans with disabilities.
Agencies‘ research efforts could help address these broader policy
issues. In fact, SSA is beginning to conduct a number of studies that
recognize that medical advances and social changes require the
disability programs to evolve. SSA‘s 2002 annual performance plan
contains a strategic objective to promote policy change based on
research, evaluation, and analysis. SSA has funded a project to design
a study that would assess the extent to which the Medical Listings are
a valid measure of disability, and began work to design a study for SSA
to identify the most salient job demands in comparison to applicants‘
residual functional capacity. Additionally, SSA is sponsoring the
National Study of Health and Activity, a project intended to enable SSA
to estimate how many adults live in the United States who meet the
definition of disability used by SSA and to better understand the
relationship between disability, work, health care, and community.
Also, SSA has funded a study to examine the impact and cost of
assistive technology on employment of persons with spinal cord injuries
and the associated costs. Finally, SSA had planned to conduct a
demonstration project to determine the impact of medicine and therapy
on beneficiaries with mood disorders such as major depressive disorder
and bipolar disorder in returning them to work. The project was partly
in response to evidence found by SSA that some beneficiaries with mood
disorders had not received promising treatment. SSA has placed the
project on hold while it reconsiders the purpose of the project.
Such research projects could provide important insight into ways that
medical and technological advances can help persons with disabilities
work and live independently. The research could also begin to provide
important information about the cost and outcomes of program changes
that bring up-front help to individuals receiving or applying for
disability benefits. Nevertheless, individually, these studies do not
directly or systematically address many of the implications of
factoring in medical advances and assistive technologies more fully
into the DI and SSI programs.
Conclusions:
Given the large size of the DI, SSI, and VA programs, it is incumbent
that they remain current with medical advances and the changes in the
demands and opportunities in the world of work. Updating disability
criteria within existing program structures is prudent, not only as a
means to best ensure program integrity, but also for agencies to meet
their fiduciary responsibilities for public funds. We recognize the
challenge to updating disability criteria. Yet we have concerns that
while agencies are making some progress, their commitment to this
effort appears to be inconsistent with the stakes involved: medical
updates have been slow and there are few written strategies for
performing timely updates in the years ahead. Moreover, these agencies
have done little to better take into consideration the implications of
labor force changes on the ability of persons with disabilities to earn
a living. To the extent that SSA and VA do not update criteria used to
reach disability decisions, they cannot ensure their disability
decisions are valid.
Updating the disability criteria within the context of current program
design will not fully capture the work-enhancing opportunities afforded
by recent scientific advances and labor market changes. That is,
current program design does not assess individuals under corrected
conditions. To fully capture these advances and changes, policymakers
would need to comprehensively re-examine some fundamental aspects of
the DI, SSI, and VA programs, including the type, timing, and
conditions of providing assistance to persons with physical and mental
conditions. Such an examination is a complex but increasingly important
undertaking. Indeed, Congress‘ approach to these issues could be quite
different given the unique characteristics of each program. But
nevertheless, without a comprehensive analysis about alternatives and
their impacts, it is likely that little progress will be made.
Recommendations for Executive Action:
To further advance the discussion of issues raised in this report, we
recommend that the Commissioner of Social Security take the following
actions:
* Use SSA‘s annual performance plan to delineate strategies for and
progress in periodically updating the Medical Listings and labor market
data used in its disability determination process.
* Study and report to Congress the effect that a comprehensive
consideration of medical treatment and assistive technologies would
have on the DI and SSI programs‘ eligibility criteria and benefit
package. The analysis should estimate the effects on the size, cost,
and management of these and other relevant programs and identify the
legislative action, if any, necessary to initiate and fund such change.
To further advance the discussion of issues raised in this report, we
recommend that the Secretary of Veterans Affairs take the following
actions:
* Use VA‘s annual performance plan to delineate strategies for and
progress in periodically updating the Schedule for Rating Disabilities
and labor market data used in its disability determination process.
* Study and report to Congress the effect that a comprehensive
consideration of medical treatment and assistive technologies would
have on the VA disability programs‘ eligibility criteria and benefit
package. The analysis should estimate the effects on the size, cost,
and management of the program and other relevant VA programs and
identify the legislative action, if any, necessary to initiate and fund
such change.
Agency Comments and Our Response:
We sent a draft of this report to SSA, VA, and the Department of Labor
for comments. SSA and VA submitted comments to us, which are
reproduced, respectively, in appendixes I and II. Our responses to
their comments appear below. In addition, technical comments and
clarifications from these two agencies were incorporated as
appropriate.
SSA‘s Comments and Our Response:
SSA concurred with our recommendation to use its annual performance
plan to delineate strategies for, and progress in, periodically
updating the Medical Listings and labor market data used in its
disability determination process, and it cited the strategic objective
in its 2003 performance plan to promote policy changes that take
account of changing needs based on medical, technological, demographic,
job market, and societal trends. However, the performance goals
associated with this objective do not refer specifically to updating
either the Listings or labor market data. We believe such specific
measurable goals are needed in light of the many years that have passed
since DI and SSI disability criteria have been fully updated.
In addition, SSA provided several other comments on our findings
concerning the agency‘s efforts to update the disability criteria.
First, SSA mentioned it is unable to determine why our report concludes
that the DI and SSI updates do not reflect medical advances, citing
their published commitment to do so and our recognition in the report
of the agency‘s efforts to incorporate some medical updates into the
Listings. We do not dispute SSA‘s contention, which is similar to a
point also made by VA, that the agency considers the effects of
treatment, medication, and assistive technologies in some if not many
updates to the Listings. However, the issues we raise are at a more
fundamental level. Our report specifically states that, under the
statutory and regulatory design of these programs, SSA does not
automatically evaluate individuals applying for benefits under
corrected conditions. Thus, it is our belief that the programs
themselves have not been fully updated to reflect scientific advances,
because interventions that could enhance individuals‘ productive
capacities are not, by design, factored into the disability decision-
making process. Second, SSA commented that the DOT, even though it has
not been revised since 1991, remains the most complete and up-to-date
source of comprehensive occupational information. While characterizing
the database in this manner may be technically accurate, the database
was generally recognized as outdated by SSA and Labor officials we
interviewed, and we note that Labor does not plan to update the
database. Similarly, SSA commented that creating a new database on jobs
in today‘s economy for DI and SSI decision making is only one
alternative (and, as SSA notes, an unlikely and undesirable one). In
our view, absent a significant change in the decision-making process,
SSA has only a few options: it will need to either modify the database
that Labor developed to replace the DOT, modify the DOT, or develop a
new database. Each option could require substantial effort, and
regardless of which approach the agency selects, it will need to update
the job-related information it uses.
Regarding our recommendation that SSA study and report to Congress the
effect that a comprehensive consideration of medical treatment and
assistive technologies would have on DI and SSI‘s eligibility criteria
and benefit package, SSA again states that it already considers in its
Listings the effect that new medical treatment and assistive
technologies would have on these two disability programs. Moreover, it
states, the agency is not reluctant to promulgate regulatory changes or
to suggest any legislative changes it considers appropriate as the need
for change arises. We do not agree that SSA currently meets our
recommendation. Our recommendation underscores the need to move beyond
updating the disability decision-making process within the existing
program design. Instead, SSA needs to make a more systematic study of
options that would maximize an individual‘s work potential by focusing
on early and appropriate supports and interventions that take advantage
of the advances and changes we identify in this report. As we note in
the report, SSA has several research studies that could provide useful
information in consideration of the larger design issues. Yet these
studies do not directly or systematically address many of the
implications of factoring in medical advances and assistive
technologies more fully into the DI and SSI programs. The agency needs
to lay out a master plan to systematically explore these larger policy
and design issues.
VA‘s Comments and Our Response:
VA did not concur with our recommendation to use its annual performance
plan to delineate strategies for and progress of periodically updating
the Schedule for Rating Disabilities and labor market data used in its
disability determination process. VA stated that developing timetables
for future updates to the Schedule for Rating Disabilities is
inappropriate while its initial review is ongoing. We continue to
believe that VA needs to include measurable goals about how and when it
will complete the current round of medically-focused updates as well as
future updates. VA should incorporate this information into its plan
because portions of the Schedule for Rating Disabilities still remain
to be updated and the agency has taken years to update individual body
systems. In addition, VA should now begin to develop strategies for the
next round of updates because portions of the Schedule for Rating
Disabilities updated during the current round were completed about 8
years ago and were based on expert input collected about 12 years ago.
As such, it is important to begin planning for the next cycle of
review. VA‘s annual performance plan can help the agency hold itself
accountable for ensuring that disability ratings are based on current
information.
VA also did not concur with our recommendation to use its annual
performance plan to discuss strategies and progress on updating the
Schedule for Rating Disabilities because the agency does not plan to
initiate an economic validation study or a revision of the Schedule for
Rating Disabilities based on economic factors. The agency stated that
prior attempts to change the Schedule for Rating Disabilities by
conducting an economic validation were met with dissatisfaction among
Congress, the veteran community, and VA. Moreover, VA noted that it
believes the Schedule for Rating Disabilities is medically based;
represents a consensus among Congress, VA and the veteran community;
and has been a valid basis for equitably compensating America‘s
veterans for many years. We do not disagree that validating the
Schedule for Rating Disabilities could lead to significant if not
controversial changes, and the Schedule for Rating Disabilities does
have a medical component and has been used as a basis for disability
compensation for years. However, our analysis of the extent to which
the VA--as well as DI and SSI--disability criteria were updated was
grounded in the current law that authorizes this program. The law
states that veterans are entitled to compensation for the average
reduction in earning capacity for injuries incurred or aggravated while
in service. Because earning capacity is clearly linked to the types and
demands of jobs in the economy, and given that the economy has changed
over time, updating the Schedule for Rating Disabilities based on labor
market changes is sound administrative policy. Moreover, the concept of
disability has changed significantly since the economic data
assumptions in the Schedule for Rating Disabilities were last updated
in 1945, further supporting the need to keep current with workforce
requirements and opportunities.
In addition, VA did not agree with our finding that VA disability
criteria have not been fully updated based on medical advances, noting
that disabilities are commonly evaluated based on disabling effects
while on treatment. We do not dispute VA‘s contention that it
recognizes the effects of treatment, medication, and assistive
technologies that have been received by veterans in some, if not many,
of its disability ratings. Much like our response to a similar comment
made by SSA, our conclusion is based on the overall design of the
program rather than on whether specific ratings have been updated to
reflect treatment options. VA does not automatically evaluate a
veteran‘s average reduction in earning capacity under corrected
conditions when making a decision about benefit eligibility and as
such, a veteran not receiving a medical intervention or assistive
technology that could increase work capacity is not evaluated according
to his or her potential or actual capacity to work. Again, although
VA‘s current approach is consistent with program design, it also
downplays the role that medical and technological advances can play in
helping enhance work capacity. Consequently, we conclude that the
program is not fully aligned with medical and technological advances.
Finally, VA did not concur with our recommendation that it study and
report to Congress the effect that such a comprehensive consideration
of medical treatment and assistive technologies would have on the
program. VA believes moving in this direction would present a radical
change from the current program, and the agency raised questions about
whether Congress and the veteran community would support the idea. We
believe that our society is very different from the times when VA and
SSA disability programs were first designed. In addition to scientific
advances and economic changes, expectations for people with
disabilities are different. We believe more information is needed about
the effects of a fuller consideration of these advances and changes on
the program. VA should systematically study the implications of such
changes and provide the results to Congress to facilitate future
decision making.
Copies of this report are being sent to appropriate congressional
committees and other interested parties. The report is also available
at no charge on the GAO Web site at http://www.gao.gov. If you have
any questions about this report, please contact me at (202) 512-9889.
Other contacts and staff acknowledgments are listed in appendix IV.
Robert E. Robertson, Director
Education, Workforce, and
Income Security Issues:
Signed by Robert E. Robertson:
[End of section]
Appendix I: Comments from the Social Security Administration:
SOCIAL SECURITY Office of the Commissioner:
June 26,2002:
Mr. Robert E. Robertson:
Director, Education, Workforce and Income Security Issues:
U.S. General Accounting Office Washington, D.C. 20548:
Dear Mr. Robertson:
Thank you for the opportunity to review and comment on the draft
report, ’Social Security Administration and Veteran‘s Administration
Disability Programs: Re-Examination of Disability Criteria Needed to
Help Ensure Program Integrity“ (GAO-02-597). Our comments on the report
are enclosed. If you have any questions, please have your staff
contact:
Trudy Williams at (410) 965-0380.
Sincerely,
Jo Anne B. Barnhart Commissioner:
Signed by Jo Anne B. Barnhart:
Enclosure:
SOCIAL SECURITY ADMINISTRATION: BALTIMORE MD 211235-0001:
COMMENTS OF THE SOCIAL SECURITY ADMINISTRATION (SSA) ON THE GENERAL
ACCOUNTING OFFICE (GAO) DRAFT REPORT ’SOCIAL SECURITY ADMINISTRATION
AND VETERAN‘S ADMINISTRATION PROGRAMS: RE-EXAMINATION OF DISABILITY
CRITERIA NEEDED TO HELP ENSURE PROGRAM INTEGRITY“ (GAO-02-597):
Recommendation 1:
SSA should use its annual performance plan to delineate strategies for
and progress in periodically updating the Medical Listings and labor
market data used in its disability determination process.
Comment:
We concur. One of the 23 Supporting Strategic Objectives in SSA‘s FY
2003 Annual Performance Plan is to ’Promote policy changes, based on
research, evaluation and analysis, that shape the disability program in
a manner that increases self-sufficiency and takes account of changing
needs, based on medical, technological, demographic, job market, and
societal trends.“:
Recommendation 2:
SSA should study and report to Congress the effect that a comprehensive
consideration of medical treatment and assistive technologies would
have on the disability (DI) and supplemental security income (SSI)
programs‘ eligibility criteria and benefit package. The analysis should
estimate the effects on the size, cost, and management of these and
other relevant programs and identify the legislative action, if any,
necessary to initiate and fund such change.
Comment:
We believe that SSA already considers the effect that new medical
treatment and assistive technologies would have on the disability
programs we administer. As the need for change arises, we are not
reluctant to promulgate regulatory changes or to suggest any
legislative changes we think appropriate. This can continue to be
accomplished without the requirement of a formal study and report to
Congress.
Other Comments:
In several places, the draft report discusses how SSA‘s disability
program rules consider or fail to consider medical advances, assistive
technology and medical treatment. The report, on page 14, paragraph 1,
sentences 5-7, states, ’Nevertheless, the statutory design of these
programs limits the role of treatment in deciding who is disabled.
Therefore, treatment advances by definition, have not been folded into
the updates. Moreover, because of the statutory design of these
programs, the role of assistive technologies is not recognized in
making disability decisions. Consequently, the updates have not fully
incorporated innovations in this field, such as advancedprosthetics
and wheelchair designs.“ The revisions to the listings do
reflect advancements in medical knowledge and treatment, including
engineering advances and prosthetics. In a recent update to the
listings SSA stated, ’...we are committed to ensuring that the listings
for the musculoskeletal body system continue to reflect appropriate
advances in medical knowledge, treatment and methods of evaluating
musculoskeletal impairments.“ (See 66 Fed.Reg. 58010 (2001).) SSA also
stated in the update that, ’Engineering advances have produced
prosthetic devices which minimize ... so that some individuals wearing
artificial limbs ...are able to work.“ (See 66 Fed.Reg. 58018.):
As noted elsewhere in the draft, the disability program design limits
the extent to which SSA might assess an applicant on the basis of
anticipated benefits from medical treatment that has not been
prescribed by the individual‘s treatment source(s), and that the
individual has not undergone. However, program updates (i.e., revisions
to the Listing of Impairments) do reflect advances in medical
treatment. That is one of the most important reasons we periodically
update these criteria. Further, program rules require that we consider
any benefits that individuals have received from medical treatment when
making our disability determinations.
SSA has not been able to update all sections of the Listing of
Impairments as quickly as we would like. Consequently, some sections of
the Listings do not fully reflect more recent medical advances.
However, treatment advances have been folded into these updates. We
note that, on page 20, the draft report acknowledges that SSA has
informed GAO that its program updates reflect medical advances in
treatment and that GAO has found examples in SSA‘s publications in the
Federal Register of this occurring.In addition, the report states that
GAO‘s study did not allow it to determine the extent of our efforts to
incorporate medical advances. Consequently, we are unable to determine
why the report concludes that our program updates do not reflect
medical advances.
While the report does mention some of the research that is designed to
address the policy issues raised by the report, some equally important
research efforts, in particular the Disability Research Institute‘s
(DRI) work on job demands, are not addressed. The ongoing DRI project
is designed to develop a way for SSA to study the most salient job
demands in comparison to applicants‘ residual functional capacity.
Additionally, the planned demonstration project on early intervention
is directly relevant to the policy implication mentioned on page 25,
sentence 2, which reads, ’Factoring medical and technological advances
more fully into the DI, SSI, and VA programs implies that some if not
many applicants would receive up-front assistance-including help in
finding and maintaining employment-to help agencies evaluate
individuals under their fullest potential to work.“:
Technical Comments:
On page 1, the letter to the Commissioner states that 11.3 million are
served by DI, SSI and VA. However, this figure includes substantial
overlap in these programs and thus overstates the number served.
On page 4, the first sentence in the ’Background“ section says ’The DI,
SSI, and VA programs ... that differ in their underlying intent,
populations they serve, and the specific approach they use to assess
disability.“ This statement is not accurate since DI and SSI do not
differ in their approach to assessing disability.
On pages 4 and 5, payment levels cited are referred to as calendar year
when they are actually fiscal year values.
On page 9, in the first sentence, the word ’substantial“ should be
inserted before ’gainful work.“:
Page 9, sentence 2 of the report states, ’However, the statutes also
allow beneficiaries to use a payment voucher-referred to as a ticket-to
obtain free employment services, vocational rehabilitation services, or
other services to find employment.“ We believe that the use of the term
’voucher“ is inappropriate. We recommend that this sentence be revised
to read, ’However, the statute also provides that the Commissioner may
provide a ’ticket“ to beneficiaries that they may use to obtain
vocational rehabilitation, employment or other support services from an
approved Employment Network (EN) or State Vocational Rehabilitation
agency (VR agency) of their choice.“:
On page 22, regarding SSA‘s use of the Department of Labor‘s (DOL)
Dictionary of Occupational Titles (DOT): although it has not been
revised since 1991, the DOT remains the most complete and up-to-date
source of comprehensive occupational information. As the report goes on
to say, the O*NET cannot be used in its current form in the DI and SSI
disability determination process. Even when fully populated with
updated data, O*NET will not meet SSA‘s occupational data needs.
On page 23, in the first paragraph, sentence four states, ’SSA
officials have indicated that an entirely new occupational database
could be needed to meet SSA‘s needs, but such an effort could take many
years to develop, validate, and implement.“ Although this statement is
technically correct, that is only one possible scenario-and an unlikely
and undesirable one. Neither SSA nor DOL expect that to be necessary,
and we are working together to meet SSA‘s occupational data needs
within the context of DOL‘s occupational data systems.
[End of section]
Appendix II: Comments from the Department of Veterans Affairs:
THE SECRETARY OF VETERANS AFFAIRS WASHINGTON:
June 24, 2002:
Mr. Robert E. Robertson Director, Education, Workforce, and Income
Security Issues:
U. S. General Accounting Office 44,1 G Street, NW:
Washington, DC 20548:
Dear Mr. Robertson:
The Department of Veterans Affairs (VA) has reviewed your draft report,
SSA AND VA DISABILITY PROGRAMS: Re-Examination of Disability Criteria
Needed to Help Ensure Program Integrity (GAO-02-597). VA does not agree
with GAO‘s recommended approach to revising the method for disability
determinations. The medically based Schedule for Rating Disabilities
represents an equitable method for determining compensation and pension
ratings. Indeed, VA is systematically updating the body systems
contained in the Schedule to reflect advances in medicine.
The enclosure discusses in detail VA‘s nonconcurrence with GAO‘s
recommendations.
Sincerely yours,
Anthony J. Principi:
Signed by Anthony J. Principi:
Enclosure:
THE DEPARTMENT OF VETERANS AFFAIRS COMMENTS TO GAO DRAFT REPORT SSA AND
VA DISABILITY PROGRAMS: Re-Examination of Disability Criteria Needed to
Help Ensure Program Integrity (GAO-02-597):
GAO recommends that to further advance the discussion of issues raised
in this report, the Secretary of Veterans Affairs take the following
actions:
* Use VA‘s annual performance plan to delineate strategies for and
progress in periodically updating the Schedule for Rating Disabilities
and labor market data used in its disability determination process.
Do not concur - VA does not plan to initiate an economic validation
study or a revision of the rating schedule based on economic factors.
In 1973, VA conducted an Economic Validation of the Rating Schedule
(ECVARS), but no changes were adopted because of widespread
dissatisfaction in Congress, the veteran community, and VA.
This recommendation is very similar to the major point in a former GAO
report titled VA Disability Compensation: Disability Ratings May Not
Reflect Veterans‘ Economic Losses (GAO/HEHS-97-9, dated January 7,
1997). VA reiterates its position on that report by stating (a) the
Schedule for Rating Disabilities from its beginnings in the early 20TH
Century has been medically based, as are all other major disability
compensation systems; (b) the Schedule represents a consensus among
Congress, VA, and the veteran community; and (c) the current medically-
based schedule has been a valid basis for equitably compensating
America‘s disabled veterans for so long, and VA sees no reason to
validate the ratings solely from an economic perspective.
The study of the President‘s Commission on Veterans‘ Pensions (the
Bradley Commission), referenced by GAO in its 1997 report, concluded
that the basic purpose of disability compensation for VA was not to
strictly adhere to the basic standard of assigning percentages based on
average impairment of earning capacity. Furthermore, VA‘s standard has
been primarily a physical disability standard that also takes into
consideration pain, suffering, shortening of life, disfigurement, and
social inconvenience. The report also states that on the whole,
veterans‘ compensation tends to result in average wage losses of those
who are disabled being made up through compensation.
At meetings during the course of this audit, VA reported that the
Department intends to update each portion of the Schedule for Rating
Disabilities as soon as a comprehensive review is completed. VA does
not believe it is appropriate to develop a firm timetable for future
changes while the initial review is ongoing.
* Study and report to Congress the effect that a comprehensive
consideration of medical treatment and assistive technologies would
have on the VA disability programs‘ eligibility criteria and benefit
package. The analysis should estimate the effects on the size, cost,
and management of the program and other relevant VA programs and
identify the legislative action, if any, necessary to initiate and fund
such change.
Do not concur - The proposed concept would present a radical change
from VA‘s current program. This recommendation presumes that VA,
Congress, and the veteran community would all be supportive of the idea
that in order to receive full benefits, veterans should be required to
take full advantage of the range of modern medical treatment and
assistive devices available through the Veterans Health Administration.
The recommendation erroneously takes for granted that disabled veterans
do not currently receive such treatment and assistance. Many of VA‘s
treatment and rehabilitation programs (for example, post-traumatic
stress disorder treatment programs and spinal injury treatment and
rehabilitation programs) are among the highest rated in the world.
General Comments:
GAO‘s report states that a valid study of labor market data should be
done as a basis for updating the Schedule for Rating Disabilities.
(page 24):
* VA is not at all confident that such a study is feasible or would be
useful. For example, the National Research Council completed a study
for the Social Security Administration earlier this year titled,
’Visual Impairments Determining Eligibility for Social Security
Benefits.“
One conclusion of the study was that it is not possible to establish a
relationship between visual function and employment. While visual
function
is clearly measurable, the inability to establish a relationship
between
it and employment only underscores the difficulty in establishing a
relationship for more complex conditions based on subjective and
objective findings.
* Clearly, it is not an easy task to determine how disease and injury
affect the ability to work. Therefore, the major disability
compensation systems in the world have settled on medical impairments
as the basis of their determinations.
* Finally, it is not clear from the report that GAO understands that
the
great majority of disabled veterans are working, including a number who
are evaluated at 100 percent. The term ’disability“ for VA purposes
encompasses all gradations of impairment from slight to total. Many who
are fully employed suffer the effects of their disability in various
ways, some subtle and some obvious. There may, for example, be pain,
anxiety, fatigue, weakness, or nausea that does not prevent employment
but that would certainly make it more difficult to work. Therefore,
fully employed veterans may deserve compensation based on a medical
impairment even if the effects on employment are not obvious and are
hard to measure.
The GAO report generalizes that the updated criteria have not fully
captured the benefits afforded by advances in treatment and that the
current program design does not assess individuals under corrected
conditions. It specifically states that the effects that medication to
control severe mental illness may have on an applicant‘s ability to
work
are not automatically factored into decision making. The report asks to
what extent would programs require some beneficiaries to accept
assistance
as a precondition for benefits.
* GAO‘s statement is not borne out by the facts. A thorough study of
the
Schedule for Rating Disabilities and its application would reveal that
disabilities are commonly evaluated based on disabling effects while on
treatment. For example, there is an extensive section on evaluating
joints after replacements (although this section has not yet been
updated), and VA evaluates heart disease after coronary artery bypass;
peripheral vascular disease after arterial bypass or grafting; renal,
liver, and heart disease after transplant; Hodgkin‘s disease following
treatment; and diabetes mellitus and hypertension while on treatment.
Of the approximately 147,000 veterans service-connected for
hypertension, for example, over 90 percent are evaluated at zero or 10
percent indicating that they are being treated effectively, are taking
their medication, and have been evaluated taking into account the
benefits of treatment. Without treatment, their disability ratings
would be much higher.
* In reference to mental disorders, if GAO means that VA does not
speculate in its ratings on what the possible effectiveness of full
treatment might be, that is certainly correct. No one can be sure
whether a particular mental disorder (or other types of disorders) will
respond even to optimal treatment. However, the evaluation criteria
take
into account all beneficial effects of medications that a veteran may
take.
A rating is assigned based not on a diagnosis but on the actual effects
of a mental disorder on social and occupational impairment. Ratings
reflect
that better functioning veterans receive less compensation.
The report states that VA may be providing benefits to some who have
little, if any, reduced earning capacity and may be denying or
undercompensating other individuals whose condition severely reduces
earning capacity.
* This sweeping statement is without a specific example of either
situation. Furthermore, this assessment reverts to the concept of
individual assessment based on an individual‘s particular disability
and job. In 1933, VA abandoned the occupational variant concept and
returned to the original so-called:
’average man“ concept of evaluation that is still in use, and which is
a reflection of 38 U.S.C. 1155.
Further, the report states that the law does not specifically require
VA to conduct reviews of disability determinations, as SSA does. This
is correct. Review examinations are ordinarily scheduled only when a
condition has been shown to be unstable or is expected to improve or is
only minimally disabling. Conducting additional examinations in cases
that do not meet these criteria would be a waste of resources and would
be unlikely to result in substantial savings.
The report implies that veterans are not receiving nor taking advantage
of optimal modern treatment but offers no supporting evidence. It also
suggests that benefits should be linked to the acceptance of treatment.
* Service-connected veterans are offered free treatment at VA medical
facilities if they receive greater than a zero-percent evaluation. The
more than four million veterans, both service-connected and
…nonservice-connected, seen annually in VA‘s medical system indicates
large numbers already take advantage of this treatment.
* Many people with mental disorders, for example, both veterans and
non-
veterans, do not take their medications regularly. To some extent, this
may occur because of the effects of the mental disorder itself.
Withholding or decreasing compensation in the case of veterans who are
already mentally disabled but fail to take their medication is a
punitive concept not in keeping with VA‘s mission.
Note: GAO comments supplementing those in the report text appear at the
end of this appendix.
[End of comment letter]
GAO Comments:
1. VA cites the 1955 President‘s Commission on Veterans‘ Pensions
(commonly called the Bradley Commission) as support that VA‘s
disability ratings represent noneconomic factors, such as pain and
suffering, in addition to average loss of earnings. However, as we
reported in 1997,[Footnote 24] ’the Commission‘s overall recommendation
with regard to the Schedule was that it should be revised thoroughly on
the basis of factual data to ensure that it reflects veterans‘ average
reduction in earning capacity, as required by law. The Commission
stated that the basic purpose of the program is economic maintenance
and, therefore, it is appropriate to compare periodically the average
earnings of the working population and the earnings of disabled
veterans—“ Even if the ratings are intended to reflect noneconomic
factors, this does not negate the need for updating the schedule due to
changes in the labor market. The extent to which, if at all, disability
compensation reflects noneconomic factors is a policy issue which lies
beyond the scope of this report.
2. We recognize that veterans who are paid disability benefits can also
be receiving various types of treatment and assistance. Our
recommendation reflects the need for more information on the
implications of integrating the effects of treatment and assistance
into the disability determination process, including the process to
determine (1) the impact of physical and mental conditions on earnings
and (2) the appropriate type and timing of benefits--such as cash,
medical, and vocational assistance--to minimize the reduction of
earnings associated with the disabilities.
3. We recognize that the link between medical impairments and the
ability to work is complex and difficult to measure and can be affected
by other factors like social support and individual motivation. Yet the
VA program, by legislative design, compensates for loss in earning
capacity that results from injuries or medical conditions. Thus, we
believe, it is important to maintain good data on the skills and
demands in the labor market to provide the best estimate of loss in
earning capacity that is reasonably associated with particular injuries
and conditions. In our 1997 report, we lay out options for the design
and methodology for estimating loss in earnings among veterans with
disabilities.[Footnote 25] But VA‘s comment underscores the larger
point we are making: Past assumptions that underlie these programs are
increasingly outmoded as the confluence of scientific, economic, and
social forces are redefining the relationship between impairments and
abilities. Additional information on how programs can take advantage of
this change will help Congress make better-informed decisions on
disability policy.
4. We recognize that veterans can work and still receive disability
compensation benefits. In fact, at the beginning of fiscal year 2002,
two-thirds of veterans had a rating at 30 percent or less, implying
that many veterans receiving disability compensation are working.
Moreover, we recognize that VA‘s use of an ’average“ reduction in
earnings capacity implies that some veterans rated at 100 percent are
employed, including those without an actual reduction in earnings. See
comment 1 for our response to VA‘s point that benefits may be partially
compensated on noneconomic factors.
5. See the third paragraph of our response to VA comments in the body
of the letter (p. 33).
6. As we report in 1997, VA conducted the Economic Validation of the
Rating Schedule (ECVARS) in the 1960s in response to the Bradley
Commission recommendations and recurring criticisms that ratings in the
schedule were not accurate. This study was designed to estimate the
average loss in earning capacity among disabled veterans by calculating
the difference between the earnings of disabled veterans, by condition,
and the earnings of nondisabled veterans, controlling for age,
education, and region of residence. On the basis of the results, VA
concluded that of the approximately 700 diagnostic codes reviewed, the
ratings for 330 overestimated veterans‘ average loss in earnings due to
their conditions, and about 75 underestimated the average loss among
veterans.
[End of section]
Appendix III: Five-Step Sequential Evaluation Process for Determining
DI
and SSI Eligibility:
To determine whether an applicant qualifies for DI or SSI disability
benefits, SSA uses a five-step sequential evaluation process. In the
first step, an SSA field office determines if an applicant is working
at the level of substantial gainful activity and whether he or she
meets the applicable nonmedical eligibility requirements (for example,
residency, citizenship, Social Security insured status for DI, and
income and resources for SSI). An applicant who is found to be not
working or working but earning less than the substantial gainful
activity level (minus allowable exclusions), and who meets the
nonmedical eligibility requirements, has his or her case forwarded to a
state Disability Determination Service (DDS) office. Applicants who do
not meet these requirements, regardless of medical condition, are
denied benefits. DDS offices gather medical, vocational, and other
necessary evidence to determine if applicants are disabled under the
Social Security law.
In step two, the DDS office determines if the applicant has an
impairment or combination of impairments that is severe and could be
expected to last at least 12 months. According to SSA standards, a
severe impairment is one that significantly limits an applicant‘s
ability to do ’basic work activities,“ such as standing, walking,
speaking, understanding, and carrying out simple instructions; using
judgment; responding appropriately to supervision; and dealing with
change. The DDS office collects all necessary medical evidence, either
from those who have treated the applicant or, if that information is
insufficient, from an examination conducted by an independent source.
Applicants with severe impairments that are expected to last at least
12 months proceed to the third step in the disability determination
process; applicants without such impairments are denied benefits.
At step three, the DDS office compares the applicant‘s condition with
the Listing of Impairments (the Medical Listings) developed by SSA. The
Medical Listings describe medical conditions that, according to SSA,
are severe enough ordinarily to prevent an individual from engaging in
substantial gainful activity. An applicant whose impairment is cited in
the Medical Listings or whose impairment is equally as severe or more
severe than those impairments in the Medical Listings and who is not
engaging in substantial gainful activity is found to be disabled and
awarded benefits. An applicant whose impairment is not cited in the
Medical Listings or whose impairment is less severe than those cited in
the Medical Listings is evaluated further to determine whether he or
she has vocational limitations that, when combined with the medical
impairment(s), prevent work.
In step four, the DDS office uses its physician‘s assessment of the
applicant‘s residual functional capacity to determine whether the
applicant can still perform work he or she has done in the past. For
physical impairments, residual functional capacity is expressed in
certain demands of work activity (for example, ability to walk, lift,
carry, push, pull, and so forth); for mental impairments, residual
functional capacity is expressed in psychological terms (for example,
whether a person can follow instructions and handle stress). If the DDS
office finds that a claimant can perform work done in the past,
benefits are denied.
In the fifth and last step, the DDS office determines if an applicant
who cannot perform work done in the past can do other work that exists
in the national economy.[Footnote 26] Using SSA guidelines, the DDS
considers the applicant‘s age, education, vocational skills, and
residual functional capacity to determine what other work, if any, the
applicant can perform. Unless the DDS office concludes that the
applicant can perform work that exists in the national economy,
benefits are allowed. At any point in the sequential evaluation
process, an examiner can deny benefits for reasons relating to
insufficient documentation or lack of cooperation by the applicant.
Such reasons can include an applicant‘s failure to (1) provide medical
or vocational evidence deemed necessary for a determination by the
examiner, (2) submit to a consultive examination that the examiner
believes is necessary to provide evidence, or (3) follow a prescribed
treatment for an impairment. Benefits are also denied if the applicant
asks the DDS to discontinue processing the case.
[End of section]
Appendix IV: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Kay E. Brown, Assistant Director (202) 512-3674
Brett S. Fallavollita, Analyst-in-Charge (202) 512-8507:
Staff Acknowledgments:
The following people also made important contributions to this report:
William A. McKelligott, Barbara W. Alsip, and Daniel A. Schwimer.
FOOTNOTES:
[1] References to the SSI program throughout this report refer to
disabled or blind, not aged, recipients who are of working age. SSI
benefits are also available to children with disabilities, although SSA
uses a different definition of disability for children than for adults.
[2] In addition, VA provides a disability pension to certain veterans
who are permanently and totally disabled by non-service-connected
impairments and served during a wartime period. Under the Veterans
Education and Benefits Expansion Act of 2001, enacted on
December 27, 2001, veterans who are 65 years of age or older do not
have to be permanently and totally disabled to become eligible for
pension benefits, as long as they meet the other requirements for
income and military service.
[3] These figures do not include cash benefits awarded to other
eligible groups, such as disabled widow(er)s and disabled adult
children of disabled workers (DI) and children with disabilities (SSI).
Included among the 5.3 million DI beneficiaries are about 1.1 million
beneficiaries who were dually eligible for SSI disability benefits
because of the low level of their income and resources. DI and SSI data
are based on 2001 calendar year while VA data are based on 2001 fiscal
year.
[4] Regulations currently define SGA for both the DI and SSI programs
as employment that produces countable earnings of more than $780 a
month for nonblind disabled individuals. The SGA level is indexed to
the annual wage index. The SGA level for DI blind individuals, set by
statute and also indexed to the annual wage index, is currently defined
as monthly countable earnings that average more than $1,300.
[5] The Ticket to Work and Work Incentives Improvement Act of 1999
(Public Law 106-170) was signed into law in December 1999. In February
2002, SSA began sending tickets to beneficiaries living in the 13
states chosen for the first round of implementation. SSA regulations
require that to be eligible to receive a ticket, a beneficiary must,
among other factors, have a permanent medical condition or a condition
for which medical improvement is possible but cannot be predicted (a
beneficiary whose impairment is expected to improve is not eligible to
receive a ticket unless the individual has undergone at least one
continuing disability review). Participation in the ticket program is
voluntary.
[6] For example, the DI work incentives provide for a trial work period
in which a beneficiary may earn any amount for 9 months within a 60-
month period and still receive full cash benefits. The SSI work
incentives, among other features, allow beneficiaries to earn more than
the SGA level and retain part of a cash benefit.
[7] U.S. General Accounting Office, Social Security: Disability
Programs Lag in Promoting Return to Work, GAO/HEHS-97-46 (Washington,
D.C.: Mar. 17, 1997).
[8] U.S. General Accounting Office, Social Security Disability
Insurance: Multiple Factors Affect Beneficiaries‘ Ability to Return to
Work, GAO/HEHS-98-39 (Washington, D.C.:
Jan. 12, 1998).
[9] Veterans‘ Benefits, 38 U.S.C. §§ 1110 and 1155.
[10] We met with several veterans service organizations to discuss the
issues in this report. These organizations stated that they believe
disability compensation benefits, in addition to representing payment
for economic loss, also represent compensation for noneconomic loss due
to an injury or illness as well as service to the country.
[11] A veteran can receive a 0 percent noncompensable rating that may
be increased to a compensable rating of 10 percent or more if the
veteran‘s condition worsens. A 0 percent rating generally means that VA
has determined that a veteran has a condition that can be classified as
service-connected; however, it is not severe enough to qualify for
monetary compensation on the basis of the medical criteria specified in
the schedule.
[12] Congress sets the specific benefit amount for each of the
disability ratings. Congress typically adjusts the benefit amount each
year. In 2002, the basic monthly amount for veterans without dependents
ranged from $103 for conditions assigned a rating of 10 percent to
$2,163 for conditions assigned a rating of 100 percent.
[13] U.S. General Accounting Office, Need to Update Medical Criteria
Used in VA‘s Disability Rating Schedule, GAO/HRD-89-28 (Washington,
D.C.: Dec. 29, 1988).
[14] Our analysis excludes SSA‘s changes to the childhood-related
Medical Listings.
[15] Office of the Inspector General, Social Security Administration,
Status of the Social Security Administration‘s Updates to the Medical
Listing, A-01-99-21009 (Washington, D.C., 2000).
[16] The Government Performance and Results Act of 1993, Public Law
103-62, requires SSA to develop performance indicators that assess the
relevant service levels and outcomes of each program activity.
[17] Agencies are permitted to revise the performance targets in their
performance plans--based upon congressional action, the occurrence of
unanticipated exigencies, consideration of actual performance data from
the prior year, and other reasons--under the Government Performance and
Results Act of 1993 as implemented by OMB Circular No. A-11, Part 2:
Preparation and Submission of Strategic Plans, Annual Performance
Plans, and Annual Program Performance Reports (Washington, D.C., 2000).
[18] Social Security Administration, ’Semiannual Unified Regulatory
Agenda,“ Federal Register 67, no. 92 (13 May 2002): 34016 - 34038.
[19] SSA does not consider the effects of treatment that has been
prescribed but not received under certain circumstances, such as when
the treatment is contrary to the established teaching and tenets of the
individual‘s religion.
[20] SSA refers to this level of ability to work despite physical and
mental limitations as a residual functional capacity. Specifically, SSA
evaluates whether the applicant has an impairment that prevents him or
her from performing previous work or considering his or her age,
education, and work experience, performing any other kind of
substantial work that exists in the national economy.
[21] U.S. General Accounting Office, VA Disability Compensation:
Disability Ratings May Not Reflect Veterans‘ Economic Losses, GAO/
HEHS-97-9 (Washington, D.C.: Jan. 7, 1997).
[22] U.S. General Accounting Office, SSA Disability: Other Programs May
Provide Lessons for Improving Return-to-Work Efforts, GAO-01-153
(Washington, D.C.: Jan. 12, 2001). This report also addresses the
reorientation of the social insurance systems of Sweden and The
Netherlands toward a return-to-work focus. In addition, this report
addresses the German social insurance system, which has had a long-
standing focus on the goal of rehabilitation before pension.
[23] In general, for the three private insurers that we studied,
claimants are initially considered eligible for disability benefits
when, because of injury or sickness, they are limited in performing the
essential duties of their own occupation and they earn less than 60 to
80 percent of their predisability earnings, depending upon the
particular insurer. After 2 years, this definition generally shifts
from an inability to perform one‘s own occupation to an inability to
perform any occupation for which the claimant is qualified by
education, training, or experience. It is this latter definition that
is most comparable to the definition used by SSA.
[24] See GAO/HEHS-97-9, p.15.
[25] See GAO/HEHS-97-9.
[26] By definition, work in the national economy must be available in a
significant amount in the region where the applicant lives or in
several regions of the country. It is inconsequential whether (1) such
work exists in the applicant‘s immediate area, (2) job vacancies exist,
or (3) the applicant would actually be hired.
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