Ways and Means Subcommittee Examines Changes to the SSDI Appeals Process

The House Ways and Means Subcommittee on Social Security held a hearing on July 25 regarding changes to the adjudication process for the Social Security Disability Insurance (SSDI) program. Specifically, lawmakers discussed the Social Security Administration's proposal to reinstate the reconsideration stage of the SSDI appeals process in the ten states that have experimented with removing it for the last 20 years. Changes to the determination and appeals process have been a prominent part of the McCrery-Pomeroy SSDI Solutions Initiative – read all about the determination and appeals process here.

Witnesses testifying at the hearing were Patricia Jonas of the Social Security Administration (SSA), Elizabeth Curda of the Government Accountability Office, Will Morton of the Congressional Research Service, Jeff Price of the National Association of Disability Examiners, Lisa Ekman of the National Organization of Social Security Claimants' Representatives on behalf of the Consortium for Citizens with Disabilities, and Ronald Cass of Cass & Associates.

Although the Administration has not officially submitted a regulation restoring the reconsideration stage, Jonas discussed how SSA plans to phase in the stage over the next three years as part of a greater effort to reduce the large backlog and wait times for SSDI decisions. According to SSA, the number of pending hearings fell below 1 million for the first time since 2014 earlier this year, and it expects about 900,000 hearings to be pending by the end of Fiscal Year (FY) 2018. CRS notes that the average wait time for an appeals hearing was 605 days at the end of FY 2017; added to the average 111 days to process initial claims and 101 days for reconsideration, meaning that some applicants wait over two years for a decision on their application. By adding reconsideration back to the ten states that currently don't have it, SSA hopes that it will allow a uniform determination process across all 50 states while helping to reduce the backlog of appeals hearings. Their goal is to reduce the wait time for hearings decisions to 270 days by the end of FY 2021.

Most experts agree that the current process – in which 40 states have reconsideration, nine do not, and one has it in most of the state but not all of it – doesn't make much sense.

The Administration is proposing to solve this disparity by restoring the reconsideration phase in every state. This option – which was proposed in the President’s budget – would help to reduce the amount of adjudicative hearings both by granting some benefits earlier in the process and by discouraging those who do not qualify for benefits from continuing the appeals process. Most experts believe the net effect would be a modest reduction in SSDI awards, which the Congressional Budget Office estimates would result in $1.5 billion over ten years and the Social Security chief actuary estimates would improve the solvency of the SSDI trust fund by 0.01 percent of payroll (5 percent).

Another option, proposed by Jon Dubin in his chapter in SSDI Solutions: Ideas to Strengthen the Social Security Disability Insurance Program and others, would instead eliminate reconsideration entirely and improve the initial development of disability applications. Because reconsideration is considered a "rubber stamp" on initial determinations in many cases, it often just delays benefits for those who are eligible and discourages improved initial case development. Dubin submitted a ten-page statement for the record to the subcommittee arguing for this approach.

During the hearing, witnesses Ekman and Price argued that simply restoring reconsideration is not the right move. Ekman offered that resources devoted to reconsideration should be targeted towards the initial stage development. Price suggested reforming the reconsideration stage so that it is an effective step, perhaps by allowing more specialized adjudicators or offering claimants the ability to submit additional evidence in an informal conference.

Several lawmakers shared their concerns about the proposal. Chairman Sam Johnson (R-TX) argued that perhaps SSA should wait until a full commissioner has been approved by the Senate before instituting such a large change in the process. Ranking Member John Larson (D-CT) agreed, noting that he believes the process is faulty and needs to be reexamined. Other members of the subcommittee voiced similar concerns: Representatives Tom Rice (R-SC), Bill Pascrell (D-NJ), Mike Bishop (R-MI), and Darin LaHood (R-IL) all spoke against any change that could extend the wait times for SSDI applicants without proper proof that reconsideration is effective.

Regardless of whether reconsideration is restored, the determination process should be improved to be more consistent and reduce wait times. It is good that lawmakers are reigniting a healthy debate on reforming the SSDI determination and adjudication process. The McCrery-Pomeroy SSDI Solutions Initiative recently announced a second phase with a commissioned paper on examining SSDI adjudication as well. Taking a closer look at improving the process can move us closer to improving SSDI's finances and its function as a support for people with disabilities. Policymakers should consider looking to the many available options to improve SSDI's administration.