FMA PRESENTS TESTIMONY ON STRATEGY TO RESOLVE SOCIAL SECURITY ADMINISTRATION HEARING BACKLOG - March 24, 2009

Testimony for the Record

Before the United States House of Representatives
House Committee on Ways and Means
Subcommittee on Social Security
Subcommittee on Income Security and Family Support

March 24, 2009

Joint Hearing on Eliminating the Social Security Disability Backlog

Adequate and Timely Budgets Crucial to Making Progress on the Social Security Administration Hearing Backlog

Statement of James Fell
Immediate Past President Chapter 275
Federal Managers Association

Chairman Tanner, Chairman McDermott, Ranking Member Johnson, Ranking Member Linder and Members of the House Ways and Means Subcommittees on Social Security and Income Security and Family Support:

My name is Jim Fell and I am here today representing nearly 800 managers in the Social Security Administration’s Office of Disability Adjudication and Review (ODAR) in my current role as Vice President of the Federal Managers Association (FMA) Chapter 275 and Vice Chairman of FMA’s Social Security Conference. Please allow me to take a moment and thank you for this opportunity to present our views before your Subcommittees. As federal managers, we are committed to carrying out the mission of our agency in the most efficient and cost effective manner while providing necessary services to millions of Americans.

Currently I serve as the Hearing Office Director in the Cincinnati, Ohio, Office of Disability Adjudication and Review and recently accomplished 38 years of federal service, 35 of which were with SSA. I have been in SSA management for 29 years, the first 12 in SSA Operations in district field offices and the last 17 in ODAR, first as a hearing office manager and now as a Hearing Office Director. I was also an active member of the Hearing Process Improvement (HPI) Steering Committee created by former Commissioner Kenneth S. Apfel to study the effectiveness of HPI. I have held the positions of President and Vice President of FMA Chapter 275, Office of Disability Adjudication and Review Managers Association (ODARMA) for the past 15 years. Please keep in mind that I am here on my own time and of my own volition representing the views of FMA and do not speak on behalf of SSA.

Established in 1913, the Federal Managers Association is the largest and oldest association of managers and supervisors in the federal government. FMA was originally organized to represent the interests of civil service managers and supervisors in the Department of Defense and has since branched out to include some 35 different federal departments and agencies including managers and supervisors within the Social Security Administration. We are a nonprofit, professional, membership-based organization dedicated to advocating excellence in public service and committed to ensuring an efficient and effective federal government. As the ODAR Managers Association within FMA, our members and their colleagues are responsible for ensuring the successful administration of the Social Security Administration’s disability determination process and providing needed services to American customers. As you are keenly aware, the Social Security Administration plays a vital role in serving over 160 million American workers and their families. Each month, SSA pays out benefits to 48 million beneficiaries, including over seven million low-income Americans who depend on the agency’s Supplemental Security Income program to stay afloat in a cost-inflating world and nearly 7.2 million disabled Americans who receive benefit payments through Social Security Disability Insurance. These programs amount to the agency paying out nearly $650 billion in benefits per year. At a February 28, 2008, hearing before the House Appropriations Committee, Commissioner Astrue testified that SSA’s productivity had increased over 15 percent since fiscal year 2001. Considering the magnitude of its mission, the Social Security Administration does a remarkable job administering critical programs.

In the Office of Disability Adjudication and Review, however, there are 765,527 pending requests for a hearing, an increase of 4,714 cases since the beginning of the fiscal year. It now takes an average of 499 days to process a typical request for a hearing and these delays continue to tarnish SSA’s otherwise strong record of service to the American public. At the beginning of 2002, SSA had 468,262 pending hearing requests. In seven years, that number increased to over 765,000, despite the fact that dispositions are at record levels. The files simply awaiting preparation for review by an Administrative Law Judge (ALJ) at the close of February 2009 totaled 456,442 cases, an increase of 25,173 cases since the beginning of the fiscal year.

As managers and supervisors within ODAR, we are acutely aware of the impact these backlogs are having on our ability to deliver the level of service the American public deserves. I appeared before the Social Security Subcommittee just two years ago and I am here once again to confirm what you’ve heard several times before - the ongoing lack of adequate staffing levels and resources have directly contributed to the backlog. The lack of resources can be directly contributed to the underfunding of the agency by Congress over the last decade. Several years of untimely budgets further compound the problem. If these delays and inadequacies continue, clearing the disability case backlog will be impossible and service delivery will continue to deteriorate.

By way of background, when a request for a hearing is received at a local Social Security office, it is automatically propagated into our computer system by a case intake employee in ODAR who adds ODAR-specific coding such as ALJ assignment, site of the hearing and the representative involved. Basic screening is done to ensure timeliness of filing, verify procedural issues are met and determine the need for critical or expeditious handling. An acknowledgement is prepared and in some offices, a CD is burned and bar codes are prepared to send to the claimant or representative.

If staffing allows, ALJs or attorneys will screen the cases for anything that might qualify it as an “on the record” (OTR) decision. This allows for cases to be decided favorably and paid without a hearing based on the evidence in file. However, such cases are rare and if an OTR is not possible, the electronic record will await preparation for ALJ review. The national average for this period of inactivity is 164 days. In the Dallas region, a file will wait only 66 days on average, but in the Chicago Region, the wait averages 229 days. In all but 75 offices, the wait for folder preparations exceeds the national average. The files simply awaiting preparation for review by an Administrative Law Judge (ALJ) at the close of February 2009 totaled 431,269 cases, a decrease of 22,729 cases since the beginning of the fiscal year. We are encouraged by this decrease and the promise it holds. However, these delays will continue to exist simply due to the volume of work coming in and the lack of staff to tackle it.

The disproportion of workloads among the regions also continues to be a cause for concern and must be addressed. Significant efforts were made to address this situation within the last two years but without ongoing attention and fine tuning to make the best effort to balance resources and workload, these efforts will not yield the desired results. With the promised addition of staff, we will be able to begin to address these backlogs; however, once again, we are seeing staffing decisions being made on the basis of where there is physical room to put the ALJs and employees rather than caseload. Continuing to make staffing decisions using these criteria only perpetuates the existing staff and workload imbalances.

Cases are generally worked in hearing request date order. Those cases deemed critical or in dire need may be given preference. The “workup” of the file involves a support person who reviews and orders the evidence, identifies each exhibit, obtains the jurisdictional documents and provides a brief summary of the evidence in file. Once the file is completed and the exhibit list is prepared, it is referred to an ALJ for review and scheduling instructions. It is then scheduled for a hearing based on the individual ALJ instructions. Scheduling requires coordinating the schedules of the ALJ, the claimant, the representative, medical and vocational experts, a reporter and hearing room availability. The claimant and representative must be given a Notice of Hearing at least twenty days in advance of the hearing. These hearings can be done in person or by video in the local hearing office, a permanent remote site or a temporary remote site, such as a hotel or local government office.

After the case is heard, the ALJ can make a decision or order supplemental records and a consultative examination if necessary. Once the ALJ has all the evidence and testimony needed to make a decision, he/she will write instructions for the decision writer. At the end of February, there were 32,270 cases nationally in which an ALJ had made a decision but was waiting for an attorney or paralegal to draft the decision. This number has been growing in part because the Senior Attorney Adjudicator’s availability to address decision writing is reduced by the time they spend on their adjudication responsibilities, such as review of existing claims and drafting of on the record decisions.

When the written decision is completed, it is made available for the ALJ to review, edit, return for redraft if necessary and electronically sign. After it is signed, an alert is sent to the support staff to print, mail and code the case to completion. It is my understanding that this mailing process will be shortly automated to send the decision to a central mailing site. Once the decision is mailed and the coding is complete, we have a disposition.

We at FMA appreciate the attention the Subcommittees and Commissioner Astrue are placing on examining the reasons for the backlog and addressing remedies to the problem. ODAR began fiscal year 2009 with 456,442 pending cases awaiting preparation for a hearing. Those cases will wait at least one year before any action is even initiated to prepare them for review and hearing in front of an Administrative Law Judge. In February, processing times across the nation ranged from a low of 346 days in the Boston region to a high of 616 days in the Chicago region. Once again, the large difference in regions is disconcerting. The American public deserves better service.

Within ODAR, production is measured by the number of dispositions completed per day by an Administrative Law Judge. In FY05 and FY06, this record-level figure was 2.2 dispositions per day per ALJ. In FY08, ALJs went even further by averaging 2.3 dispositions per day. Current performance through February is back in the 2.2 range and likely represents the best achievable level of production. This level of performance will allow ODAR to meet the 500 disposition per ALJ figure that was requested as a minimum by the Office of the Chief ALJ last October. At the end of February 2009, SSA employed 1,142 ALJs, which would allow us to dispose of 571,000 cases if each ALJ worked 500 cases. The problem with this production level is that it’s only good enough to handle the incoming work, not the backlog. For the current fiscal year through February, receipts totaled 256,831 (an increase of 22,219 during the same period last year), while ALJs completed 237,758 dispositions. As you can see, without significant increases in the number of ALJs and appropriate support staff levels, the best we can do is stay even, which means the number of pending hearing requests remains above 765,000.

Let’s take a closer look at the numbers. Five years ago, SSA leadership determined that a fully productive ALJ could produce a maximum of 2.5 dispositions per day, a number we have yet to achieve. With 250 work days, an ALJ should dispose of 625 cases in any given year. We currently employ 1,142 judges, which under this scenario would mean ODAR could dispose of 713,750 cases in a year. Even if ALJs produced only 2.2 dispositions per day, ODAR could dispose of 628,100 cases a year. The math is clear. Without holding ALJs to a stronger level of production and supply them with adequate staff to prepare cases, the backlog will never stop being a backlog.

We at FMA believe that it is imperative that both the agency and Congress recognize the reality of the ALJ production level. It is the key to the solution. By acknowledging what has been defined as acceptable and using it to compute the number of potential dispositions, we can accurately foresee where we can go in terms of working down the backlog. From there, we can compute what we need to achieve an appropriate pending case level. With an average disposition level of 2.2 per day, we will not be able to reduce the backlog without more judges and staff to support them.

In FY08, SSA hired 190 Administrative Law Judges, which could translate into an additional 94,500 – 132,300 dispositions if each ALJ issued 500 – 700 dispositions per year, as requested by the Chief ALJ. However, 68 judges retired during the same period. In FY09, SSA is planning to hire an additional 157 judges, but is projected to lose 60 to retirement. While this is certainly a step in the right direction, Administrative Law Judges alone will not solve the problem. Without additional staffing, the current level of prepared work would be distributed among more judges, essentially resulting in the same dispositional outcome. Without adequate support staff to prepare cases for the judges, both existing and new, we will not achieve an increase in hearing dispositions. In recent years, however, budgetary constraints have forced the agency to hire additional Administrative Law Judges without providing adequate support staff to prepare the cases for hearing. We recognize that the Commissioner is trying to address the backlog by adding these judges; however, additional ALJs without the supporting clerical staff to prepare cases in a timely manner will not solve the problem.

With the recent increase in funding for SSA from Congress, it is likely ODAR will be filling 400 - 500 staff positions. We are encouraged by this, but in order to maintain an adequate ALJ to staff ratio in each office, several hundred more staff will have to be hired. The Commissioner is publicly acknowledging the need for support staff and hiring authority is coming our way. Unfortunately, we are already half way through the fiscal year and training staff can take upwards of a year. As the first six months of FY09 were funded with a continuing resolution (CR), it is unlikely that we will see much impact from the current influx until FY10. The untimely passage of budgets is further tying our hands from getting the job done. While we are grateful Congress is beginning to recognize the needs of the agency, this feast or famine approach is hindering the agency’s productivity.

As mentioned, adequate clerical support is necessary to prepare cases for hearing, as well as staff to write a disposition after the ALJ has made his/her decision. As it currently stands, hearing offices do not even have the staff to accommodate the current judges, let alone enough staff to accommodate the new judges and process the over 51,366 new cases the Office of Disability Adjudication and Review receives each month. If receipts remained flat, over 765,000 cases will remain pending, 36 percent of which are over 365 days old. At the beginning of FY09, ODAR had 166,838 cases that would reach 850 days by the close of FY09. As of March 12, ODAR had disposed of 100,833, or 61 percent, of the 850 day old cases. We are on target to complete the remaining cases by the end of the year and the Commissioner and staff should be commended on their dedication to tackling this portion of the backlog.

With the aging Baby Boom population, as well as the current economic downturn, it is reasonable to assume that receipts will continue to out-pace dispositions. In fact, ODAR received almost five percent more cases than anticipated in FY08 and ended the year with 14,069 more cases than at the close of FY07. Additionally, the first quarter of FY09 saw receipts higher than expected, mainly due to our ongoing economic challenges. When the economy slows, disability claims increase. As the requests for hearings continue to rise, more is demanded from ODAR staff on all levels. The bottom line is that the hearing offices lack sufficient staff to process the work on hand, much less even begin to work on new cases. It is evident that under the best case scenario, the current staffing levels in ODAR barely maintain the status quo. That means that the backlog stays the same and processing times continue at a rate which nears 500 days.

The accepted staff to ALJ ratio is roughly four and one half production staff per ALJ. However, this only ensures productivity necessary to handle incoming work, not the backlog. For offices with heavy backlogs, the four and one half to one standard is inadequate. Quality and composition of staff also impacts productivity. Additionally, management and administrative employees should not be included in these figures, as they are not the employees performing the production work on hearing requests. It is our experience that distribution of judges and staff is often based on physical space and not an office’s caseload. This must be addressed if we are serious about tackling the backlog in the most efficient manner possible.

Average pending cases per ALJ range from a low of 477 in the Dallas region to a high of 903 in Seattle. Five regions average over 700 pending cases per ALJ. Individual offices range from a low of 288 pending cases to a high of 1,442 and nine offices exceed 1,000 cases per ALJ. On a national level, processing times range from 346 days in Boston to 616 in Chicago. At the end of February, 32,270 decisions have been made by the ALJs but are waiting to be drafted by a decision writer.

The solutions to the backlog problem start with timely budgets and adequate staffing levels which will allow us to address the pending cases. As of last month, just over 765,000 requests for a hearing were pending. However, it is worth noting that the agency can reasonably process 450,000 – 550,000 cases during a given fiscal year. As such, the actual “backlog” at this point is around 300,000 cases.

SSA has undertaken 37 initiatives to achieve each of the four aspects of Commissioner Astrue’s plan to eliminate the backlog. The Commissioner should be applauded for his commitment to delivering a level of service acceptable to the American public and as managers and supervisors in ODAR, we are dedicated to working with the Commissioner to reach his goals. A commitment from Congress is also necessary if we are to succeed in providing a level of service acceptable to the American people we serve.

The first point on the Commissioner’s plan is to accelerate the review of cases likely or certain to be approved, otherwise know as Compassionate Allowances. This concept has been introduced in a variety of iterations over the years. The idea is admirable; however, we expect that this will have little impact on ODAR’s pending cases, as many of these are issued at the initial and reconsideration levels.

The Commissioner also laid out a number of initiatives designed to Improve Hearing Office Performance, the second of his four-pronged approach. As previously noted, there are 166,838 cases that will age to 850 days in FY09 and we are on track to tackle this unacceptable level of service by the close of this year. Additionally, giving adjudication powers to attorney advisors has the benefit of adding to dispositions; however, it redirects the work of these very skilled attorneys from reviewing and advising ALJs on the most difficult cases and makes them unavailable for decision writing. In many instances, these employees are not replaced with others to do their original tasks and those tasks go uncompleted or are redirected to others who are already overburdened. Improving Hearing Office Performance will never be achieved without additional staff.

The third aspect of the Commissioner’s plan is to Increase Adjudicative Capacity through Streamlined Folder Assembly, which has made additional folders available for hearings as evidenced by the 52,533 cases prepared using this method in fiscal year 2008. It has been expanded to the electronic folder, but this process was optional for ALJs and requires additional review time on their part because of the “rough” nature of the preparation.

The introduction of the National Hearing Center (NHC) has the potential to greatly expand the agency’s capacity to redirect the resources where the cases are. It is our understanding that installing video centers in heavily impacted parts of the country so that the claimant can go to a video center in order to have his/her case heard by the NHC or other Hearing Office via video is the goal. We believe the potential for delivery of service with this process is huge. However, we once again caution that in order to hear these cases, we still need staff to prepare, schedule and draft decisions. Without adequate staff support, the NHC will have no cases to hear. In FY08, the NHC received 4,650 cases, but was able to make decisions on only 2,151 of those cases. In order to even begin making a dent in the backlog, several thousand more cases will have to be heard at the NHC.

Along the same lines, additional video equipment has the potential to expand the number of video hearings. In fact, in some impacted areas, we understand that stand alone video sites are being built that will allow assistance to be provided from around the country. However, we must not forget that without adequate staff to prepare cases, additional electronic capacity is a moot point. Furthermore, regulations allow the claimants and their representatives to opt out of the process and our business process also allows the ALJs to opt out. The practice only works when you have parties that will use it.

Under this section of the Commissioner’s plan is an expectation in place regarding the productivity of ALJs. As mentioned earlier, a productive, trained ALJ should reasonably be able to dispose of 500 – 700 cases a year. Not surprisingly, ALJs conducted 14,733 more cases in FY08 than in FY07.

Increasing Efficiency with Automation and Business Processes is the final aspect of the Commissioner’s plan. There are a large number of initiatives under this goal. The greatest percentage of case files are now in the electronic folder format. Increasing our electronic capabilities will allow us to balance workloads more efficiently. Although many cultural and training challenges remain, we believe this will ultimately provide for an efficient process. Acquiring new buildings and hiring and training staff simply take too long to have any immediate effect on the backlog. In fact, by the end of FY08, 655,457 cases were filed electronically representing 86 percent of ODAR’s caseload.

Much of ODAR’s initial promise of increased efficiency was tied to the success of the ePulling initiative; however, the pilot program did not prove successful. We have heard that there is a new iteration of this program that holds promise. Our ability to pull cases and serve the public may very well rest on this new program. However, ePulling is still very much a work in progress and we are unlikely to see any progress this fiscal year. Implementation of eScheduling would certainly free up additional individuals whose services could be used to complete other tasks, including folder preparation. Given the complicated nature of the scheduling process, which takes into account many schedules and many individual scheduling preferences, we believe this will be a difficult challenge.

The temporary service area realignments went a long way to adjusting some of the imbalances in the workloads. We believe that the electronic nature of our cases provides us with significant opportunities to expand this concept to individual work categories. Any office with excess writing or pulling capacity should have that capacity redirected to offices with significant backlogs. No office should be allowed to process their work in an average of under 300 days when there are 30 offices with processing times of around 400 days and 26 offices with processing times above 600 days. We must find an efficient way to better balance and redistribute the work.

The Electronic Records Express (ERE) initiative also has significant promise and a pilot project is currently underway. While representatives have the ability to submit records using this process, currently they do not have access to the files via a secure Web site. This requires the local office to provide CDs with the evidence and we believe results in significant duplicate submissions since they cannot confirm what evidence is on file.

Many reports are available to provide enhanced management information and management training has been improved. These initiatives are certainly supported by FMA, as management of the workload is enhanced by trained employees and adequate tools; however, the critical issue once again is the lack of adequate staff to actually do the work. We know what needs to be done; we simply do not have enough people to do it. Furthermore, management is not allowed to hold employees accountable for production standards, making ongoing performance measures a challenge.

Ultimately, this is a numbers game. Should Congress define what it considers to be an adequate level of service, we believe the agency can define what we need to get there. None of the initiatives outlined above, whether alone or combined, is the silver bullet that will eliminate the backlog. We either have to slow the cases from coming in at the front end, which would require significant changes in legislation, or we have to provide more capacity on the back end. The challenge is yours.

To enable SSA to meet the goals set forth in Commissioner Astrue’s plan to eliminate the hearing backlog, Congress must approve a sufficient level of funding for the agency. Between 2001 and 2007, Congress appropriated, on average, $150 million less than the President requested each year. The value of this differential is equivalent to processing an additional 177,000 initial claims and 454,000 hearings. In the ten years prior to fiscal year 2008, Congress appropriated nearly $1.3 billion less than the President’s request. Without a doubt, this has had a devastating effect on the services provided to the American public, as evidenced by the situation we are in today.

Recognizing the needs of SSA, Congress appropriated $150 million above the President’s request for FY08 in an effort to bring down the backlog. Congress should be applauded for their commitment to serving the American people in this capacity. In fact, it is this increase which allowed the agency to hire the additional 190 ALJs. Imagine what we could have accomplished with adequate staff to provide support to the additional ALJs.

Unfortunately, for the first six months of FY09, we operated under a continuing resolution (CR) and as a result, ODAR has had to endure hiring and overtime limitations. Continuing resolutions have become the norm rather than the exception and it is significantly hindering our ability to get the job done. With the passage of the FY09 Omnibus Appropriations bill (P.L. 111-8), these restrictions have been lifted. The bill included $126.5 million above President Bush’s FY09 request, which was already six percent over the FY08 appropriation. This will allow the agency to go forward in hiring staff. However, hiring and training staff takes time and consequently, we will not see the benefits of this funding increase until FY10 has started. In order for funds to be properly spent, budgets must be implemented by October 1st every year. We simply can no longer afford to pass budgets halfway through the fiscal year, essentially tying the hands of our already beleaguered organization.

In addition to the increase in FY09 funding, the economic stimulus bill (P.L. 111-5) provided necessary and timely funds to SSA in order to improve its service delivery issues. It is crucial SSA allocate these funds to the areas that need them the most. Of the $1 billion provided to SSA in the stimulus, it is estimated the agency will be able to hire 5,000 – 6,000 employees with $500 million of the funds. The remaining $500 million will replace the National Computer Center to ensure the new facility is functional prior to the time the current center is no longer operational. We encourage the agency to ensure the new hires are placed where the agency needs them the most – in field offices and as clericals in hearing offices. In his first budget to Congress, President Obama requested $11.6 billion for SSA’s administrative expense in FY10. This is an increase of $1.1 billion or ten percent over the current fiscal year. Without a doubt, these funds would have a direct impact on the service delivery of the agency. We applaud the President for his commitment to solving the backlog problem and urge Congress to appropriate his request.

To remedy the unprecedented backlog situation, Congress should at a minimum pass the President’s 2010 budget request of $11.6 billion for SSA’s Limitation on Administrative Expenses account before the start of the fiscal year. Under his budget, the agency would be able to process tens of thousands of more hearings in FY10 than in FY09. It is estimated that forty percent of SSA’s 65,000 member workforce will retire by 2014. In FY06 and FY07, SSA replaced one worker for every three that retired. The President’s budget will allow for a 1 to 1 replacement ratio and maybe even some additional staff. While this will not allow us to eliminate the backlog immediately, we will be able to make significant strides to reducing it. We must reiterate that if we are forced to endure another CR, service delivery will suffer.

In addition to having an immediate impact on the current backlog, underfunding the Social Security Administration will negatively impact every service area of the agency. Staffing at SSA will soon reach its lowest level since 1972; however, SSA today has nearly twice the number of beneficiaries it had in 1972. Never has hiring sufficient staff been more crucial. Reversing this trend is a necessary step to reduce the backlog.

While the President’s budget request for FY10 is a start, it is certainly not a cure all solution. Throwing money at the problem will not fully solve it without a well-trained, dedicated staff of federal employees willing to avert a crisis in the coming years. We believe this is the workforce we have now, strengthened under the leadership of former-Commissioner Barnhart and Commissioner Astrue. By fully funding the President’s request, we can continue this tradition.

In this era of shrinking budgets, SSA has attempted to maximize its use of scarce resources to provide the best possible service to the American public. The challenges faced by the managers and supervisors are not short term; they are a demographic reality. The same citizens putting stress on the Social Security trust fund because they are approaching retirement are also entering their most disability-prone years. ODAR is struggling to handle the current workload and will be hard pressed to manage the anticipated increase in hearing requests without additional staff.

We are the men and women who work with disabled Americans everyday. We see people of all ages come in and out of our offices seeking the services they depend on for survival from the Social Security Administration. We are committed to serving a community of Americans in need, but we need you to provide us with the necessary resources to help them. Thank you for your time and consideration of our views and I am happy to answer any questions you may have.