Identifying SSA's Sequential Disability Determination Steps Using Administrative Data

Introduction

Under the disability determination process used by the Social Security Administration (SSA), each determination that an applicant is either eligible (allowed) or ineligible (denied)—under Disability Insurance (DI) and/or Supplemental Security Income (SSI)—has a specific regulatory basis that is cited by program administrators. Decomposing broad disability trends requires identification of those bases and the steps of the determination process at which they are cited. For example, the recent increase in the number of allowances has been accompanied by a change in the composition of allowances. For DI, the percentage of allowances based on vocational, educational, and age-specific factors increased from 28 percent to 47 percent in the 10 years prior to 2009 (SSA 2011a). In this case, decomposing recent program growth permits researchers to identify subcategories driving the growth. To give another example, decomposing trends in denials at various steps of the determination process may permit researchers to consider to what extent the process counterbalances increases in applications during recessions, keeping program costs in check.

The purpose of this note is to facilitate research on trends in allowances and denials by documenting how the steps of the determination process and the bases for medical eligibility decisions can be identified in administrative data. Specifically, the steps in the initial determination process can be identified using the Regulation Basis Code (RBC), which appears in Social Security's administrative data systems as well as related research data sets. The RBC documents the detailed reason for each SSA determination, in terms of medical, medical-vocational,¹ and other criteria. The RBC is recorded in the National Disability Determination Service System (NDDSS); in turn, the NDDSS is used to construct the so-called 831 disability applicant files (from Form SSA-831 data) as well as related research files. We classify the RBCs by program and age (DI, SSI adult, SSI child) and step of the determination process at which they are invoked. Our frequency tabulations show that some codes are numerically important at a given step and others represent a range of technical denials, rare findings, or data errors. Further, we provide the proportions of determinations observed for each basis code at each step, using the 831 file for 2010 as a benchmark.

Program Background

The two disability programs administered by SSA have financial and nonfinancial criteria for eligibility. In the case of the DI program, financial eligibility is based on (1) past earnings criteria involving the total number of quarters worked while making Federal Insurance Contributions Act (FICA) contributions, and (2) the number of quarters worked in years immediately before disability onset. Both criteria are used to define the applicant's insured status. For SSI, financial eligibility is based on current income and resources² to target payments to individuals with limited financial means.

While the nonfinancial criterion for SSA's retirement program is straightforward (if the applicant's age is greater than or equal to the full retirement age or the early retirement age, then the applicant is eligible), the nonfinancial (largely medical) criteria for DI benefits (or for SSI disability payments) are complex. In fact, there are multiple medical criteria—or combinations of medical and vocational criteria—under which an applicant can be found medically eligible or medically ineligible. In addition, there are outcomes that are not medical in nature; for example, an applicant can be denied if he or she refuses to submit to a consultative examination or refuses to follow prescribed treatment.

SSA uses the same disability determination process in administering the two disability programs, DI and SSI. Financial and other nonmedical screens are implemented by SSA field offices. For applicants found eligible under those screens, the initial medical determinations are made by Disability Determination Service (DDS) agencies in each state. However, if an applicant is denied at the initial DDS level, he or she has the option of pursuing a sequence of appeals, including appealing to (1) the DDS itself, known as reconsideration;³ (2) an administrative law judge (ALJ); (3) the Appeals Council; and finally (4) a federal court.

The RBC records information about the determinations made by the DDS, including initial determinations and reconsiderations. The purpose of this note is to help researchers and program analysts interpret the particular medical, medical/vocational, or other criterion that is invoked by the DDS in its allow/deny determination of a given applicant. The importance of the RBC is that it permits an analyst to parse program outcomes in terms of the effects of the particular medical, medical/vocational, or other criterion used to determine medical eligibility. Next, we outline the sequential disability determination process used by SSA and DDS agencies—the decision-making structure underlying field office intake decisions and the detailed DDS determination outcomes represented in the RBC.

SSA's Disability Determination Process

The disability determination process described in this study is used by Social Security field offices and state DDS agencies to make initial disability determinations. Field offices implement step 1 of the five-step disability determination process, and DDS agencies are responsible for the medical determinations at steps 2–5. The specific criteria used by the DDS in its allow/deny determinations are identified in the RBC, which is included in the NDDSS data generated by DDS agencies. The RBC describes the basis for initial determinations and reconsiderations. Outcomes of higher-level appeals, such as decisions of ALJs, are in principle, based on the same criteria as DDS determinations, but such appeals decisions are not included in the NDDSS data generated by DDS agencies. ALJ-level decisions are recorded in the Case Processing and Management System.

Former Commissioner Robert M. Ball (1978) provides an insight that is useful in trying to understand the design of the determination process. For the sake of efficiency, the process implies a screening strategy:

The idea was to screen quickly the large majority of cases that could be allowed on reasonably objective medical tests and then deal individually with the troublesome cases that didn't pass the screen. (157)

For example, the first three stages of the adult disability determination process represent screens:

• claimants who are engaging in substantial gainful activity (SGA) are denied (step 1) without any consideration of medical criteria,
• those without severe impairments are denied (step 2), and
• those with the most highly disabling or fatal impairments are allowed (step 3).

In Ball's characterization, the “troublesome” cases are the residual, which are evaluated on a case-by-case basis using both medical and vocational factors (step 4 and possibly step 5).⁴

Because the processes for adults and children differ, we discuss them separately.

Adults

The steps in the disability determination process for adults are diagrammed in Chart 1, adapted from Lahiri, Vaughan, and Wixon (1995).

Chart 1.
Disability determination for adults

SOURCE: Authors' illustration adapted from Lahiri, Vaughan, and Wixon (1995).

Step 1: Financial screens. For both DI and SSI, Social Security field offices screen out applicants who work and have earned income above the SGA limit. Those claims are denied on the basis of applicants' work activity. SGA is “work that involves doing significant and productive physical or mental duties and is done (or intended) for pay or profit.”⁵ In most cases, applicants with earnings above the SGA threshold amount are denied on grounds that their earnings indicate that they are not permanently and totally work disabled; otherwise, the application is referred to the DDS.⁶ The SGA amount for nonblind beneficiaries was $1,010 per month in 2012.

In addition, field offices verify insured status for DI applicants. Analogously, field offices ensure that countable income and resources are below the relevant thresholds for SSI applicants. These financial determinations are not technically part of the sequential determination process and thus are not represented in the RBC, but for the sake of efficiency, they are normally undertaken (at least on a preliminary basis) by field offices as part of the step 1 process.⁷

Step 2: A medical screen to deny applicants without a severe impairment. An applicant is denied at step 2 if his or her impairment(s) is considered not severe. According to SSA's Program Operations Manual System (POMS), under step 2:

“it must be determined whether medical evidence establishes a physical or mental impairment or combination of impairments of sufficient severity as to be the basis of a finding of inability to engage in any substantial gainful activity (SGA). When medical evidence establishes only a slight abnormality or a combination of slight abnormalities which would have no more than a minimum effect on an individual's ability to work, such impairment(s) will be found “not severe,” and a determination of “not disabled” will be made…”⁸

Applicants are also denied if their impairments fail the duration test; that is, if the impairment (1) is not expected to result in death, and (2) has neither lasted 12 months nor is expected to last for a continuous period of 12 months. The duration test is typically invoked at step 2, but may also be invoked at step 3, 4, or 5.

Step 3: A medical screen to allow applicants who are the most severely disabled. Medical evidence on an applicant's impairment is assessed under step 3 using codified clinical criteria called the Listing of Impairments, which includes over 100 impairments. Applicants with impairments that “meet” the Listings are allowed with no further evaluation, based solely on medical criteria. Moreover, if an applicant has an impairment not included in the Listings, but considered medically equivalent to a listed impairment, the impairment is said to “equal the Listings” and the applicant is allowed.⁹ Applicants who are not allowed at step 3 have impairments that, although severe, are not severe enough to consider the applicants disabled purely on medical grounds. Such applicants are evaluated further at step 4 and, possibly, step 5.

Step 4: Can severely impaired applicants work in their past jobs? At this step, the DDS considers whether an applicant's residual functional capacity (RFC) meets the skill and task requirements of his or her past relevant work. The evaluation of RFC determines to what extent the applicant can perform basic work-related activities associated with jobs previously held—usually jobs held in the 15 years before adjudication.¹⁰ Applicants who are judged able to perform past work are denied; the claims of remaining applicants are passed on for evaluation under step 5.

Step 5: Can severely impaired applicants do other work in the national economy? At step 5, the applicant's RFC is considered, along with vocational factors—specifically, age, education, and work experience—to determine whether he or she can work in jobs other than those previously held. The vocational factors are used to determine whether the applicant can work in employment consistent with his or her residual capacity. This determination often involves the use of a set of tables referred to as the medical-vocational guidelines (sometimes known as the vocational grid¹¹) and medical vocational profiles.¹² At step 5, remaining applicants are either allowed or denied.

Beginning in 1999, SSA implemented modifications to the disability determination procedures in states known as prototype states.¹³ One modification was to allow DDS decision makers the discretion to proceed directly to step 5 when there is insufficient evidence about the claimant's work history to make the evaluation at step 4. Under this procedure, referred to as expedited vocational assessment, applicants may be denied if they are judged able to perform work in the national economy. However, if they are judged unable to do that, the DDS is required to return to and complete step 4. Expedited vocational assessment was extended to the other states in August 2012.¹⁴

SSI Children

Some of the steps in the disability determination process for children are similar to those for adults. Steps in the process for children are diagrammed in Chart 2.

Chart 2.
Disability determination process for children

SOURCE: Authors' illustration.

NOTE: Although the disability determination process for children includes a medical screen and a functional assessment as a single step (step 3), for analytical purposes we discuss them separately as step 3a and step 3b.

Step 1: Financial screens. Children may not qualify for DI benefits on their own earnings record.¹⁵ However, they may qualify for SSI payments on their own in some cases or as part of a unit including their parent(s). For SSI, field offices evaluate income and resource eligibility under a complex set of rules. Field offices also verify whether the child is working at SGA because those up to age 18, some of whom may be working, are evaluated under the determination process for children. If a child is engaging in SGA, the claim is denied and not referred to the DDS.

Step 2: A medical screen to deny applicants without a severe impairment. The DDS denies a child applicant at step 2 if he or she does not have a medically determinable impairment or if his or her impairment(s) is considered not severe. Child applicants are also denied if their impairments fail the duration test; that is, if the impairment (1) is not expected to result in death, and (2) has neither lasted 12 months nor is expected to last for a continuous period of 12 months. If the impairment(s) is considered severe and if any impairment meets the duration test, the claim will proceed to the next step.

Step 3a:¹⁶ A medical screen to allow the most severely impaired applicants. If the child has one or more severe impairments, the DDS will decide if any severe impairment meets one of the Listings for children. The Listings cover the major body systems and include descriptions of common physical and mental impairments (such as cerebral palsy, mental disorders, and asthma), along with specific medical severity criteria. As with adults, if the impairment does not meet the Listings, the DDS decides if it medically equals the Listings. If the child has one or more impairments that meet or medically equal the requirement of a Listing and meet the duration requirement, the DDS will find the child disabled and the determination is complete.

Step 3b: Can a severely impaired child function at home, at school, and in the community? If the child has one or more impairments that are severe but do not meet or medically equal a Listing, the DDS will decide whether the impairment or impairments “functionally equal” the Listings. That means that the DDS assesses the effects of any impairment on the child's ability to function at home, at school, and in the community. In particular, the DDS considers questions such as—

• What activities is the child able or not able to perform?
• Which activities are limited in comparison with children of the same age without the impairment?
• What type and amount of help does the child need to complete age-appropriate activities?

Once the DDS has evaluated the extent to which the child can perform activities, it evaluates how much the child is limited in each of six domains. The domains are broad areas of functioning intended to capture all that a child can or cannot do. The six domains are as follows:

1. Acquiring and using information,
2. Attending to and completing tasks,
3. Interacting and relating with others,
4. Moving about and manipulating objects,
5. Caring for himself or herself, and
6. Maintaining health and physical well-being.

If a child's impairment or combination of impairments results in “marked” limitations in two or more of these domains of functioning, or an “extreme” limitation in one domain, then his or her impairment(s) functionally equals the Listings. A marked limitation in a domain is one in which a child's impairment interferes seriously with his or her ability to independently initiate, sustain, or complete activities. An extreme limitation in a domain is one in which a child's impairment interferes very seriously with those abilities.

Identifying the Sequential Steps Using Regulation Basis Codes

The detailed RBC values are somewhat different for DI (under Title II—Old-Age, Survivors, and Disability Insurance—of the Social Security Act) and SSI (under Title XVI of the Act) and, because they include a number of administrative outcomes, are considerably more detailed than the sequential determination steps might suggest.

We recode the individual regulation basis values into sequential disability determination steps in Tables 1 through 3. In deriving the recode, we consulted program experts and the documentation from Social Security administrative sources—the basis for day-to-day use of RBCs by program administrators. We also compared coding from other sources by examining the coding that is used in annual SSA publications. Specifically, the Annual Statistical Report on the Social Security Disability Insurance Program (SSA 2011a, Tables 63 and 64) classifies medical decisions at step 2 onward for DI determinations. The SSI Annual Statistical Report (SSA 2011b, Tables 73 and 74) does a similar classification for SSI determinations. In addition, we prepared the coding that was used in several analytical studies, including Lahiri, Vaughan, and Wixon (1995); Hu and others (2001); Dwyer and others (2002/2003); Lahiri, Song, and Wixon (2008); and Autor and others (2011). We also compared those different coding schemes and consolidated differences.¹⁷ These comparisons establish the broad consistency of the recode presented here with documentation from program administrators, published tables, and recent analyses.

The frequencies of the sequential disability determination steps are shown in Tables 1 through 3 using the 831 file for 2010.¹⁸ When comparing those results to frequencies based on other data sources, several features of the sample universe used in our tabulations should be noted. First, data are shown for primary DI and SSI disability claims, where the claimant is a worker (for DI claims), an SSI adult, or an SSI child. Second, step 1 determinations are generally not included because the majority of those decisions are made in the field offices. Denials made at the field office level are not referred to the DDS and are not represented in the NDDSS data. Third, researchers often remove 831 observations that can functionally be considered duplicates. For example, because the 831 data are transaction based, if an applicant filed more than one claim for the same program, each claim would generate a new record. Moreover, if the researcher is undertaking a person-based analysis, he or she may choose to purge records so that each person is represented by a single record. We show frequencies with duplicates included as a benchmark that could be easily replicated. Finally, our frequency tabulations include only DDS initial determinations; that is, for DDS denials that are appealed, our tabulations do not represent the final determination made by SSA.

In this note, we describe the steps in the initial disability determination process and provide a classification of RBCs for DDS decisions made in 2010.¹⁹ This will allow researchers to create classifications that are comparable to official SSA publications and previous analytical studies. We hope this facilitates research about trends in disability claims and the outcomes of those claims.