Office of the Inspector General
Larry G. Massanari
Acting Commissioner of Social Security

Inspector General

Medical Evidence of Record Collection Process at State Disability Determination Services (A-07-99-21003)

The attached final report presents the results of our audit. Our objectives were to: (a) review and assess the efficiency of the medical evidence of record collection process at State Disability Determination Services (DDS), and (b) assess the DDS’ ability to provide the Social Security Administration with management data.

Please comment within 60 days from the date of this memorandum on corrective action taken or planned on each recommendation. If you wish to discuss the final report, please call me or have your staff contact Steven L. Schaeffer, Assistant Inspector General for Audit, at (410) 965-9700.

James G. Huse, Jr.

Executive Summary

Our objectives were to: (a) review and assess the efficiency of the medical evidence of record (MER) collection process at State Disability Determination Services (DDS); and (b) assess the DDS’ ability to provide the Social Security Administration (SSA) with management data.

SSA is responsible for establishing the policies on developing disability claims under the Disability Insurance (DI) and Supplemental Security Income (SSI) programs. Disability determinations under SSA’s DI and SSI programs are performed by each State’s DDS in accordance with Federal regulations. DDSs are responsible for obtaining adequate medical evidence to support the disability decision. In doing so, DDSs may purchase consultative examinations (CE) to supplement the MER obtained from claimants’ treating sources. SSA reimburses DDSs for 100 percent of allowable expenditures.

SSA instructs DDSs to make every reasonable effort to obtain MER from claimants’ treating sources. SSA’s instructions define every reasonable effort as: (1) making an initial request for MER from the treating source; (2) making a follow-up request any time between 10 and 20 calendar days after the initial request if the MER has not been received; and (3) allowing a minimum of 10 calendar days from the follow-up request for the treating source to respond. If MER is not received within 10 calendar days from the follow-up request, the DDS can purchase a CE—an expensive and time-consuming process.

The current MER collection times account for a considerable portion of overall disability claims processing times because the processes of requesting and receiving MER are slow and labor-intensive for both the DDS and the claimant’s treating source. First, the DDS sends a MER request letter to the treating source(s) identified by the claimant on his/her disability application. The treating source photocopies the MER and returns it to the DDS via mail or, in some cases, facsimile. Timeliness of MER receipt is dependent on the treating source’s workload and cooperation. As such, the time it takes treating sources to respond to DDS requests for MER can vary from a few days to several weeks.

We calculated the time it took eight DDSs to receive MER from claimant treating sources during Fiscal Year 1998. For the 663,293 MER purchased by the 8 DDSs, 64.8 percent of the MER were received within 30 days from the date of request. For the remaining 35.2 percent, the 8 DDSs waited more than 30 days to receive the MER. This represented 233,300 MER at a cost to SSA of almost $3 million. Six of the eight DDSs received 65 76 percent to 88 percent of their MER within 30 days. However, the North Carolina and Oklahoma DDSs received MER within 30 days for only 39 percent and 53 percent of their requests, respectively.

Our review also disclosed that delays in receiving MER from treating sources resulted in SSA paying for MER that was not received by the DDS until after the disability decision was made. The 8 DDSs in our review expended over $1 million to purchase 78,709 MER that were not received until after the DDS made the disability decision. The North Carolina DDS accounted for 60 percent of these MER purchases. Delays in DDSs receiving MER from treating sources can, but do not necessarily, result in the DDSs purchasing costly CEs in order to obtain medical evidence to support the disability decision. Due to insufficient management data, we were unable to determine whether delays in receiving these 78,709 MER resulted in the DDSs purchasing unnecessary CEs.

We found that the DDS’ ability to provide SSA with management data related to MER collection times varied. This variance was attributed to DDSs using different computer systems to collect MER data and to SSA not providing DDSs with uniform MER data collection requirements.

SSA is currently involved in the Specialized MER Professional Relations Officer project. This project dedicates a professional or medical relations officer solely to activities related to MER collection and is expected to last 2 years. There are six DDSs participating in the project: Puerto Rico, Florida, Illinois, Louisiana, Nebraska, and Idaho. Since tThe project is in the initial stages, and to date there are no reportable results. ., but The purpose of the project is to determine whetherif assigning one professional relations officer in each DDS to duties solely to MER retrieval will promote the timely receipt of quality MER and ultimately decrease CE costs. Expected to result in improved MER quality and decreased CE costs.

In collecting medical evidence, SSA must consider standards implemented as a result of the Health Insurance Portability and Accountability Act (HIPAA) of 1996. HIPAA requires the Secretary of the Department of Health and Human Services (HHS) to adopt national uniform standards to be followed by health plans, health care providers, and health insurers in disclosing medical information. Although HHS may not regulate SSA’s disclosure of medical information, the new regulations will have a significant impact on SSA’s ability to obtain MER from medical sources.

We recommend that SSA:

• Pursue options for improving MER collection times at DDSs experiencing problems in receiving MER within 30 days from the date of the request. This should include sharing best practices of DDSs that have been innovative in obtaining MER timely.

• Conduct a study to determine whether savings in CE costs could be realized by providing a financial incentive to medical providers who submit MER within 30 days from the date of the request.

• Improve its oversight of the DDS MER collection process by: (a) developing uniform MER data collection requirements for DDSs; and (b) performing periodic evaluations of MER collection processes and times at DDSs to develop best practices.

SSA agreed with our first recommendation, but did not agree with our second and third recommendations. With regard to our second recommendation, SSA stated that an internal focus group determined that the fee paid for MER is not a critical issue, and that a financial incentive would raise the total cost of obtaining evidence without improving compliance by the providers. SSA also disagreed with third recommendation, stating that uniform data collection requirements would impose a burden on DDSs to make software and processing adjustments or to undertake a prohibitive manual process. (See Appendix D for SSA’s comments.)

In its comments to our second recommendation, SSA stated that raising the fee for MER would simply raise the total cost of obtaining evidence without improving compliance by the providers. Our recommendation was not intended to imply an increase in MER payment amounts; nor, was it intended to provide an incentive payment to providers who do not comply with timely submission of MER. Rather, the study should consider paying the current fee to providers who submit MER within 30 days, and paying a lesser fee to providers who exceed the 30-day submission date.

With regard to our third recommendation, we acknowledge SSA’s concern that software and processing adjustments may provide an initial burden on DDSs. However, we do not believe that software modifications or processing adjustments are insurmountable problems given the importance of management information to SSA’s oversight of the disability determination process. Furthermore, as DDSs are converted to the IBM AS/400 computer system, we would expect improvements in the DDS’ ability to collect electronic data accurately and timely.

SSA agreed with our first recommendation. The full text of SSA’s comments is included in Appendix D.

SSA did not agree with recommendation 2 "conduct a study to determine whether savings in CE costs could be realized by providing a financial incentive to medical providers who submit MER within 30 days from the date of the request." SSA stated that an internal focus group determined that the fee paid for MER is not a critical issue. Furthermore, SSA stated that a financial incentive would raise the total cost of obtaining evidence without improving compliance by the providers. SSA also stated that current high priority workloads and the differences among DDS’ systems make the recommended study problematic.

SSA disagreed with recommendation 3 "improve oversight of the DDS MER collection process by: a) developing uniform MER data collection requirements for DDSs, and b) performing periodic evaluations of MER collection processes and times at DDSs to develop best practices." SSA stated that uniform data collection requirements would impose a burden on DDSs to make software and processing adjustments or to undertake a prohibitive manual process. SSA also stated that in order for it to perform periodic evaluations, most of the DDSs would have to manually track MER and the need for CEs in cases where MER is not received or is not received in a timely manner.

In its response, SSA provided technical comments that were incorporated in this final report, as appropriate.

We acknowledge SSA’s concern regarding the MER collection times reported for the North Carolina DDS. However, we do not concur with SSA’s position that the North Carolina DDS’s data should be excluded from our report. We clearly state, in footnote 8, that the North Carolina DDS’s MER collection times are based on MER payment dates instead of receipt dates. Due to unavailable data, we do not know if the timing differences in the two dates would result in a material difference in our MER collection times analysis. However, in consideration of SSA’s comments, we added the MER collection times with the North Carolina DDS data excluded to footnote 8.

In its comments to recommendation 2, SSA stated that raising the fee for MER would simply raise the total cost of obtaining evidence without improving compliance by the providers. This recommendation was not intended to imply an increase in MER payment amounts. Nor, was it intended to provide an incentive payment to providers that do not comply with timely submission of MER. Rather, the study might consider paying the current fee to providers that submit MER within 30 days of the request and paying a fee less than the current fee to providers that exceed the 30-day submission date.

In regards to recommendation 3, we acknowledge SSA’s concern that software and processing adjustments may provide an initial burden on DDSs. However, we do not believe that software modifications or minor processing adjustments are insurmountable problems given the importance of management information to SSA’s oversight of the disability determination process. Furthermore, as DDSs are converted to the IBM AS/400 computer system we would expect improvements in the DDS’ ability to collect electronic data accurately and timely.

The MER collection process is a critical element of disability claims processing. As such, we strongly believe that SSA needs to improve its oversight of the MER collection process. In doing so, SSA should establish uniform data collection requirements for claims processing information including MER. Without uniform MER data collection requirements, SSA may not be able to identify and resolve problems related to untimely MER submissions. And, SSA will encounter problems in analyzing MER data similar to the North Carolina DDS data problems identified in this report. Although the North Carolina DDS had the ability to collect various electronic data information, the absence of uniform data collection requirements resulted in different information being collected by the DDS than what was collected by the other DDSs in our review. In its comments to this report, SSA stated that the non-uniformity of data collection and different data systems make it difficult to conduct programmatic reviews of the DDSs. We believe this is further support for implementing our recommendation.

Table of Contents

APPENDIX B – Status of Prior Recommendation

APPENDIX C – SSA’s Computer Conversion Timeline for DDSs

APPENDIX D – Agency Comments

APPENDIX E – OIG Contacts and Staff Acknowledgements

Acronyms

Introduction

Our objectives were to: (a) review and assess the efficiency of the medical evidence of record (MER) collection process at State Disability Determination Services (DDS),; and (b) assess the DDS’ ability to provide the Social Security Administration (SSA) with management data.

SSA is responsible for establishing the policies on developing disability claims under the Disability Insurance (DI) and Supplemental Security Income (SSI) programs. Disability determinations under SSA’s DI and SSI programs are performed by each State’s DDS in accordance with Federal regulations. DDSs are responsible for obtaining adequate medical evidence to support the disability decision. In doing so, DDSs may purchase consultative examinations (CE) to supplement the MER obtained from claimants’ treating sources. SSA reimburses DDSs for 100 percent of allowable expenditures.

In making disability determinations, the DDS develops a claimant’s complete medical history for a 12-month period based on the earliest of: (1) the application filing date; (2) the date last insured; (3) the prescribed period ending date; or (4) the attainment of age 22. If the disability is alleged to have begun during the past 12 months preceding before the application date, and does not meet one of these four criteria, then the medical history is developed based on the alleged disability onset date. To develop the claimants’ medical history, DDSs obtain and review MER from claimants’ treating sources. MER includes, but is not limited to, copies of laboratory reports, prescriptions, x-rays, ancillary tests, operative and pathology reports, consultative reports, and other technical information that documents the claimant’s health condition.

SSA instructs DDSs to make every reasonable effort to obtain MER from claimants’ treating sources. SSA’s instructions define every reasonable effort as: (1) making an initial request for MER from the treating source; (2) making a follow-up request any time between 10 and 20 calendar days after the initial request if the MER has not been received; and (3) allowing a minimum of 10 calendar days from the follow-up request for the treating source to respond. If MER is not received within 10 calendar days from the follow-up request, the DDS can purchase a CE—an expensive and time-consuming process.

Congress authorized SSA to pay for MER under the SSI program since its inception in 1974 because it was considered unreasonable to expect a claimant to pay for MER under a needs-based program. In 1980, Congress authorized SSA to pay for MER under the DI Program. In doing so, Congress believed that MER would be received more timely if payment was made, and costs would be reduced since CEs may not be needed.

To accomplish our objective we:

• Reviewed sections of the Social Security Act, the Code of Federal Regulations, and SSA’s Program Operations Manual System (POMS).

• Randomly selected 10 DDSs for on-site field work and obtained electronic data files of MER and CE payments made during the period of October 1, 1997, through September 30, 1998.

• Conducted site visits at SSA, Baltimore, Maryland; the Wisconsin DDS; and the Kansas DDS.

• Compared MER and CE payment amounts in the electronic data files obtained from the 10 DDSs to the MER and CE payment amounts reported to SSA on the Report of Obligations (Form SSA-4513) to validate the completeness of the data.

• Performed an analysis of MER receipt times for eight DDSs by calculating: (a) the time elapsed between the date the DDS requested MER and the date the MER was received by the DDS; and (b) the number and cost of MER received and paid for after the date the disability decision was made (see Appendix A).

• Obtained information from the 48 continental United States DDSs on their MER collection process.

• Reviewed information on SSA and DDS pilot MER projects received from DDSs and SSA’s Central and Regional Offices.

• Reviewed Booz-Allen & Hamilton’s (BAH) Report on the Use, Storage, and Exchanges of Electronic Medical Records and Documents in the Health Industry.

• Reviewed the Health Insurance Portability and Accountability Act (HIPAA) of 1996.

• Reviewed SSA’s 2010 Vision Plan dated August 2000.

We conducted our audit between June 1999 and January 2001 in Kansas City, Missouri. The entities reviewed were State DDSs and the Office of Disability under the Deputy Commissioner for Disability and Income Security Programs. Our audit was conducted in accordance with generally accepted government auditing standards.

Results of Review

Our review showed that improvements are needed in MER collection times. Our analysis identified delays in DDSs receiving MER from treating sources. We found that these delays resulted in SSA paying for MER that was not received by the DDSs until after the disability decision was made. We also found that the DDS’ ability to provide SSA with management data related to MER collection times varied. This variance was attributed to DDSs using different computer systems to collect MER data and to SSA not providing DDSs with uniform MER data collection requirements.

The DDS sends a MER request letter to the treating source(s) identified by the claimant on his/her disability application. The treating source photocopies the MER and returns it to the DDS via mail or, in some cases, facsimile. Timeliness of MER receipt is dependent on the treating source’s workload and cooperation. As such, the time it takes treating sources to respond to DDS MER requests can vary from a few days to several weeks.

We calculated the time it took eight DDSs to receive MER from claimant treating sources during Fiscal Year (FY) 1998. For the 663,293 MER purchased by the 8 DDSs, 64.8 percent of the MER was received within 30 days from the date of request (see Appendix A). For the remaining 35.2 percent, the eight8 DDSs waited more than 30 days to receive the MER. This represented 233,300 MER at a cost of $2,964,615 to SSA. The following chart provides the MER collection times for the eight DDSs.

Six of the eight DDSs received 65 76 percent to 88 percent of their MER within 30 days. However, the North Carolina and Oklahoma DDSs, received MER within 30 days for only 39 percent and 53 percent of their requests, respectively. SSA should consider options for improving MER collection times at these DDSs.

Our review also disclosed that delays in receiving MER from treating sources resulted in SSA paying for MER that was not received by the DDS until after the disability decision was made. The 8 DDSs in our review expended $1,011,772 to purchase 78,709 MER that were not received until after the DDS made the disability decision, as shown in the following table.

According to SSA’s instructions, DDSs are to review MER received after the disability decision and determine whether it has an affect on the initial disability decision. The DDS staff we interviewed stated that paying for MER received after the initial disability decision continues because: (1) the MER may be needed if the claimant appeals the initial decision; (2) the DDSs do not want to alienate treating sources by refusing to pay for untimely MER; and/or (3) payment is required by State law.

We found that the DDS’ ability to provide SSA with management data related to MER collection varies. The variance exists because DDSs use different computer systems to collect MER data and SSA has not provided DDSs with uniform requirements for MER data collection.

We found that the ability of DDSs to provide information and the type of information DDSs can provide varies and this presented us with several problems in collecting and analyzing MER data for this review. The DDSs use multiple, disparate and incompatible computer systems and software to process disability claims. There are 54 DDSs that support a variety of software programs. Currently, there are 26 DDSs using WANG computer systems. However WANG no longer provides technical support to these DDSs. SSA is in the process of converting these 26 DDSs to the IBM AS/400 computer system used by other DDSs. The conversion for the first DDS—Wisconsin—was scheduled to begin on October 1, 2000. However, as of January 2001, the conversion had not begun. See Appendix C for the DDS computer conversion timeline.

A March 1997 Office of the Inspector General (OIG) report, The Social Security Administration’s Payment for Medical Evidence of Record Obtained by State Disability Determination Services (A-07-95-00833), recommended that SSA capture data on MER collection times to determine the extent to which MER is not being submitted timely. In its comments to the report, SSA agreed to perform an evaluation of MER collection times within 9 months of the date of the OIG report or by December 1997. Based on status of recommendation information obtained from SSA’s Management Analysis and Audit Program Support staff in June 2000, the evaluation was not completed because of DDS backlogs and workload pressures caused by high application rates. Appendix B contains SSA’s comments on A-07-95-00833 and the status of the report’s recommendation.

We found that SSA does not have adequate oversight of the MER collection process. SSA has not provided DDSs with uniform MER data collection requirements. As such, DDSs choose what MER information is collected resulting in inconsistent information being collected at DDSs.

Also, SSA does not monitor MER collection times. The MER information we requested from the DDSs for our review is essential management information that both the DDS and SSA should use to monitor the timeliness of MER requested from treating sources. For example, the Illinois DDS was unable to provide information on MER receipt times because the information is not captured by the DDS. Therefore, we question how or if the DDS determines the timeliness of MER receipt. Furthermore, without MER collection time information, the DDS could prematurely purchase costly CEs instead of making every reasonable effort to obtain MER as outlined in SSA’s instructions.

SSA’s most recent MER initiative is the Specialized MER Professional Relations Officer project. This project dedicates a professional or medical relations officer solely to activities related to the collection of MER and is expected to last 2 years. There are six DDSs participating in the project: Puerto Rico, Florida, Illinois, Louisiana, Nebraska, and Idaho. Since tThe pilot project is in the initial stages, and to date there are no reportable results. The purpose of the project is to determine ifwhether assigning one professional relations officer in each DDS to duties solely to MER retrieval will promote the timely receipt of quality MER and ultimately decrease CE costs.expected to result in improved MER quality and decreased CE costs.

HIPAA requires the Secretary of the Department of Health and Human Services (HHS) to adopt national uniform standards to be followed by health plans, health care providers, and health insurers in disclosing medical information. Although HHS may not regulate SSA’s disclosure of medical information, the new regulations may have a significant impact on SSA’s ability to obtain MER from medical sources. SSA realizes the significance of HIPAA on the disability determination process and has contracted with BAH to review the effect of HIPAA standards on electronic medical information. Furthermore, SSA has assigned responsibilities for implementation of HIPAA and related electronic medical information activities to the Office of Disability and Income Support Programs.

According to SSA, there are three HIPAA standards that may impact the disability determination process: (1) electronic data standards; (2) security standards; and (3) privacy standards.

Electronic data interchange (EDI) is the electronic transfer of information. EDI allows entities within the health care system to exchange medical, billing, and other information, as well as process transactions in a fast and cost effective manner. The health care industry recognizes the benefits of EDI and many entities within the industry have developed their own EDI formats. HIPAA required HHS to adopt national standards for EDI formats for health care information transactions, as well as code sets to be used in those transactions. Code set means any set of codes used for encoding data elements, such as tables of terms, medical concepts, medical diagnosis codes, or medical procedure codes.

HHS published the final rule for the "standards for electronic transactions" in the Federal Register on August 17, 2000. Most covered entities have 24 months to comply with the standards. SSA will be affected by these standards because medical providers may not be willing to provide medical records to SSA unless it is done electronically using a standardized coding system.

The security of health information is especially important when the information can be directly linked to an individual. Confidentiality is threatened by the risk of improper access to electronically stored information and by the interception of the information during electronic transmission. Also, there is a potential need to associate signature capability with information being electronically stored or transmitted.

HIPAA requires HHS to establish security and electronic signature standards for health care information and individually identifiable health care information maintained or transmitted electronically. Health plans, health care clearinghouses, and health care providers would use the security standards to develop and maintain the security of electronically transmitted health care information.

The HHS Health Care Financing Administration is coordinating the development of standards for security and electronic signature. This effort involves staff from various Federal agencies including SSA. These standards will impact SSA if information has to be encrypted.

Individuals who provide sensitive information to health care professionals want assurance that the information will be protected during the course of their treatment and in the future. HIPAA requires HHS to establish standards to protect the privacy of individually identifiable health information maintained or transmitted by health plans, health care clearinghouses, and certain health care providers. The HHS has adopted comprehensive regulations that would prohibit the disclosure of most patient information except as authorized by the patient or as explicitly permitted by the legislation.

HHS published the final rule for the "standards for privacy of individually identifiable health information" in the Federal Register on December 28, 2000 and it became effective on April 14, 2001. Most covered entities have 24 months to comply with the standards. SSA will be affected by these standards because providers may take a cautious, restrictive approach to implementing the privacy rules regarding disclosure of medical records. it may face restricted privacy rules in obtaining medical records.

Conclusions and Recommendations

In 1994, SSA announced its plans to redesign the disability determination process in a report titled Plan for a New Disability Claims Process. In this report, SSA attributed lengthy disability claims processing times, in part, to delays DDSs experienced in receiving MER from claimant treating sources. The report acknowledged the value of the treating sources’ information and suggested the establishment of a national fee reimbursement schedule for medical evidence. Furthermore, the report suggested rewarding the treating source based on timeliness and quality of the medical evidence.

Our review shows that improvements are needed in the MER collection process. Our analysis of MER collection times at eight DDSs found that DDSs experienced delays in receiving MER from claimants’ treating sources. As a result of these delays, SSA paid for MER that was not received until after the DDSs made the initial disability decision.

We also found that SSA does not have adequate oversight of the DDS MER collection process. SSA has not established uniform MER data collection requirements nor does it monitor MER collection times. Finally, SSA must continue to give immediate attention to the implementation of HIPAA standards to ensure the DDS’ ability to obtain timely and uniform electronic information from the health care community.

We recommend that SSA:

1. Pursue options for improving MER collection times at DDSs experiencing problems in receiving MER within 30 days from the date of the request. This should include sharing best practices of DDSs that have been innovative in obtaining MER timely.
2. Conduct a study to determine whether savings in CE costs could be realized by providing a financial incentive to medical providers who submit MER within 30 days from the date of the request.
3. Improve its oversight of the DDS MER collection process by: (a) developing uniform MER data collection requirements for DDSs; and (b) performing periodic evaluations of MER collection processes and times at DDSs to develop best practices.

SSA agreed with our first recommendation. Specifically, in June 2001, SSA plans to begin a 2-year pilot, "Specialized Medical Evidence of Record Professional Relations Officer" in six States. The purpose of the pilot is to determine whether assigning one professional relations officer in each DDS to duties related solely to MER retrieval will promote the timely receipt of quality MER and ultimately decrease CE costs.. The full text of SSA’s comments is included in Appendix D.

SSA did not agree with our second recommendation and 2 "conduct a study to determine whether savings in CE costs could be realized by providing a financial incentive to medical providers who submit MER within 30 days from the date of the request." SSA stated that an internal focus group determined that the fee paid for MER is not a critical issue. Furthermore, SSA stated that a financial incentive would raise the total cost of obtaining evidence without improving compliance by the providers. SSA also stated that current high priority workloads, and the differences among DDS’ systems, make the recommended study problematic.

SSA also disagreed with third recommendation 3 "improve oversight of the DDS MER collection process by: a) developing uniform MER data collection requirements for DDSs, and b) performing periodic evaluations of MER collection processes and times at DDSs to develop best practices." SSA and stated that uniform data collection requirements would impose a burden on DDSs to make software and processing adjustments or to undertake a prohibitive manual process. SSA also stated that in order for it to perform periodic evaluations, most of the DDSs would have to manually track MER and the need for CEs in cases where MER is not received or is not received in a timely manner. (See Appendix D for SSA’s comments.)

In its response, SSA provided technical comments that were incorporated in this final report, as appropriate.

In its comments to our second recommendation, SSA stated that raising the fee for MER would simply raise the total cost of obtaining evidence without improving compliance by the providers. Our recommendation was not intended to imply an increase in MER payment amounts; nor, was it intended to provide an incentive payment to providers who do not comply with timely submission of MER. Rather, the study should consider paying the current fee to providers who submit MER within 30 days, and paying a lesser fee to providers who exceed the 30-day submission date.

With regard to our third recommendation, we acknowledge SSA’s concern that software and processing adjustments may provide an initial burden on DDSs. However, we do not believe that software modifications or processing adjustments are insurmountable problems given the importance of management information to SSA’s oversight of the disability determination process. Furthermore, as DDSs are converted to the IBM AS/400 computer system, we would expect improvements in the DDS’ ability to collect electronic data accurately and timely.

We acknowledge SSA’s concern regarding the MER collection times reported for the North Carolina DDS. However, we do not concur with SSA’s position that the North Carolina DDS’ data should be excluded from our report. We clearly state in footnote 8 that the North Carolina DDS’ MER collection times are based on MER payment dates instead of receipt dates. Due to unavailable data, we do not know whether the timing differences in the two dates would result in a material difference in our MER collection time analysis. However, in consideration of SSA’s comments, we added the MER collection times exclusive of the North Carolina DDS to footnote 8.

The MER collection process is a critical element of disability claims processing and we strongly believe that SSA needs to improve its oversight of this process. In doing so, SSA should establish uniform data collection requirements for claims processing information, including MER. Without uniform data collection requirements, SSA will encounter problems in analyzing MER data similar those found with the North Carolina DDS data identified in this report. Although the North Carolina DDS had the ability to collect various electronic data information, the absence of uniform data collection requirements resulted in different information being collected by the DDS than what was collected by other DDSs in our review. In its comments to this report, SSA stated that the non-uniformity of data collection and different data systems make it difficult to conduct programmatic reviews of the DDSs. We believe this is further support for implementing our recommendation.We acknowledge SSA’s concern regarding the MER collection times reported for the North Carolina DDS. However, we do not concur with SSA’s position that the North Carolina DDS’s data should be excluded from our report. We clearly state, in footnote 8, that the North Carolina DDS’s MER collection times are based on MER payment dates instead of receipt dates. Due to unavailable data, we do not know if the timing differences in the two dates would result in a material difference in our MER collection times analysis. However, in consideration of SSA’s comments, we added the MER collection times with the North Carolina DDS data excluded to footnote 8.

In its comments to recommendation 2, SSA stated that raising the fee for MER would simply raise the total cost of obtaining evidence without improving compliance by the providers. This recommendation was not intended to imply an increase in MER payment amounts. Nor, was it intended to provide an incentive payment to providers that do not comply with timely submission of MER. Rather, the study might consider paying the current fee to providers that submit MER within 30 days of the request and paying a fee less than the current fee to providers that exceed the 30-day submission date.

In regards to recommendation 3, we acknowledge SSA’s concern that software and processing adjustments may provide an initial burden on DDSs. However, we do not believe that software modifications or minor processing adjustments are insurmountable problems given the importance of management information to SSA’s oversight of the disability determination process. Furthermore, as DDSs are converted to the IBM AS/400 computer system we would expect improvements in the DDS’ ability to collect electronic data accurately and timely.

The MER collection process is a critical element of disability claims processing. As such, we strongly believe that SSA needs to improve its oversight of the MER collection process. In doing so, SSA should establish uniform data collection requirements for claims processing information including MER. Without uniform MER data collection requirements, SSA may not be able to identify and resolve problems related to untimely MER submissions. And, SSA will encounter problems in analyzing MER data similar to the North Carolina DDS data problems identified in this report. Although the

North Carolina DDS had the ability to collect various electronic data information, the absence of uniform data collection requirements resulted in different information being collected by the DDS than what was collected by the other DDSs in our review. In its comments to this report, SSA stated that the non-uniformity of data collection and different data systems make it difficult to conduct programmatic reviews of the DDSs. We believe this is further support for implementing our recommendation.

Appendices

Appendix A

We randomly selected 10 Disability Determination Services (DDS) to provide electronic data on medical evidence of record (MER) and consultative examination (CE) payments issued during the period of October 1, 1997 through September 30, 1998. The 10 DDSs were Arizona, Delaware, Illinois, Massachusetts, New York, North Carolina, South Dakota, Tennessee, Virginia, and Wisconsin.

We experienced difficulties in obtaining data from the 10 randomly selected DDSs and dropped 4 DDSs from our review. The New York and Tennessee DDSs were dropped because of their participation in recent Social Security Administration (SSA), Office of the Inspector General audits. The South Dakota DDS was dropped because it could not provide electronic data files. The Arizona DDS was dropped because it could not electronically provide all data elements required for the audit. These four DDSs were replaced with the Iowa, Utah, Oklahoma, and Kansas DDSs.

Accordingly, we obtained electronic data on CE and MER payments from the Delaware, Illinois, Iowa, Kansas, Massachusetts, North Carolina, Oklahoma, Utah, Virginia, and Wisconsin DDSs. We also received supporting information including the claimant name and Social Security number (SSN). The Illinois and Virginia DDSs were excluded from the review because they were unable to provide all requested information.

The following table shows the MER records included in our analysis and the associated MER payments. We segregated the MER records into six categories based on the elapsed time between the MER request date and the MER receipt date. Our analysis included MER records with a received date between October 1, 1997 and September 30, 1998.

We obtained Calendar Year (CY) 1997, CY 1998, and Fiscal Year (FY) 1999 electronic versions of the National Disability Determination Services System (NDDSS). From the NDDSS we downloaded information on the claimant name, claimant SSN, filing date, decision date, and type of decision. We then matched information contained in the FY 1998 DDS data files to the NDDSS data.

The next step was to limit our review to those FY 1998 MER that contained a disability decision date after October 1, 1997. Once this step was complete, we compared the MER received dates to the disability decision dates and selected those MER with the latest disability decision date.

Appendix B

SOCIAL SECURITY

MEMORANDUM

We appreciate the opportunity to comment on this draft audit report since evidence collection and related issues are so vital to disability processing time improvements.

SSA, in the Disability Process Redesign, plans to undertake a thorough reevaluation of policies and procedures relative to the collection of evidence in support of disability applications. This reevaluation will include a thorough study of the relative effects of multiple factors on such performance measures as processing time and consultative examination purchase rates (and dollar amounts). Untimely submission of medical evidence of record (MER) is but one factor in this complex of issues that SSA needs to consider. For example, at least some of the delay in MER development and receipt is mail time, from the DDS to the source, and from the source back to the DDS. Facsimile MER and other forms of electronic transmission of MER being pursued by SSA offer promise to reduce MER processing time within the current MER payment system.

While we concur with your view that payment for MER should serve as an incentive for timely and responsive submission of medical evidence, our evaluation, which should be completed within 9 months, is designed so as to take a broader view of MER; therefore, we are not prepared at this time to address your specific recommendation for statutory change. If the results of our evaluation show that statutory changes are needed, SSA will then propose the necessary legislation.

Our technical comments on the report are attached for your consideration. Staff questions may be directed to Dan Sweeney on extension 51957.

OIG Contacts and Staff Acknowledgements

Rona Rustigian, Acting Director, Disability Program Audit Division (617) 565-1819
Mark Bailey, Deputy Director, (816) 936-5591

In addition to those named above:

Ron Bussell, Auditor-in-Charge
Ken Bennett, Auditor

For additional copies of this report, please contact the Office of the Inspector General’s Public Affairs Specialist at (410) 966-5998. Refer to Common Identification Number A-07-99-21003.