Current Status of the Federal/State Arrangement for Administering the Social Security Disability Programs

In response to a congressional request, GAO reviewed the operations of four state disability determination services (DDS) and the oversight responsibility of the Social Security Administration (SSA) to determine: (1) the effectiveness of the joint federal/state administration of the Social Security Disability Insurance and Supplemental Security Income programs; and (2) whether the federal government should take over the entire administration of these programs.

GAO found that: (1) state laws and practices influence or control many administrative aspects of the programs' operations; (2) conflicts between SSA directives and state laws and practices caused inordinate delays in hiring additional personnel to handle increased workloads; (3) there was a significant variance among examiners' caseloads; (4) staffing composition and entry-level requirements varied widely among the states; and (5) the lack of uniformity was caused, in part, by SSA failure to regulate DDS administrative practices. GAO examined two alternatives to the present arrangement: (1) total federalization, with SSA administering all disability determination functions; and (2) contracting out, with private entities administering these functions. GAO found that: (1) total federalization would add more than 11,000 employees to the federal rolls; and (2) contracting out would raise a number of concerns as to the suitability of having such complicated and expensive programs run by the private sector. GAO found no evidence that a change from the current arrangement would produce better disability decisions or achieve program cost savings. GAO plans to address SSA management and administration in the areas of: (1) vocational rehabilitation; (2) consultative examinations; (3) decentralization of DDS; and (4) implementation of changes mandated by the 1984 disability amendments.