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APPENDIX D S~OR Sip This appendix describes the major types of services that the Social Security Administration (SSA) performs. These services are carried out through a variety of physical facilities that include: Approximately i,300 district offices (DOB) 37 teleserv~ce centers (TSCs), including 4 megasites 10 regional offices 6 program service centers (PSCs) 3 data operation centers (DOCs) 132 hearing offices The Title XVI Folder Servicing Operation A headquarters complex that separately houses: the central management/adm~nistrative/staff components the Office of Central Records Operations the National Computer Center (NCC) the Office of Disability and International Operations (ODIO) ~ Most services provided by the SSA involve more than one of these facilities. The SSA also interacts with other federal and state agencies such as the U.S. Department of the Treasury, the Internal Revenue Service (IRS), state disability determination services, and the Health Care Financing Administration (HCFA) for Medicare payments. In the following sections the committee lists the major services that the SSA's computer systems must support, with an indication of how the task is carried out, which facilities are currently involved, and the associated volume of work. The committee has identified 17 different types of tasks. 87

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88 Issuing Social Security Numbers The process of getting a social security number (SSN) is called enumeration. The current standard method for obtaining one requires that every applicant must provide the SSA with evidence of age, identity, and U.S. citizenship or lawful alien status. In addition, any individual age 18 or older must consent to a face-to-face interview with a SSA staff member when applying for a new number. Increasingly, enumeration of newborns is being done through a process by which parents elect to apply for a SSN for their newborns as part of the birth registration process. If parents choose to use this process, the states provide certain basic identifying information to the SSA electronically, an SSN is assigned, and a card is mailed to the parents. Currently, SSNs can be secured through the enumeration-at-birth (EAB) service in 46 states. California will begin Participation in 1991 the remaining 3 states are still evaluating their position. As of 198S, the SSA had issued 326,850,000 SSNs. The typical yearly enumeration workload is 12 million to 13 million requests; approximately 40 percent of these requests are for assignment of a new SSN. In fiscal year 1988, changes in the tax laws that required enumeration of dependents significantly increased the enumeration workload: about 23 million requests for social security cards were processed that year. After 1990, workloads are expected to stabilize at previously typical levels. Getting an SSN is now done by an on-line entry of a request to a batch program. Applicants usually receive their card in 2 weeks. This function is a candidate for full on- line validation and processing of the requests, even though the actual document would still have to be mailed to the applicant's residence. ~ .1. ~ 7 ~ O Replacing SSN Cards and Updating Information More than half of the enumeration workload involves requests for replacement SSN cards to reflect name changes or to replace cards that have been lost or damaged. Applications for replacement cards can be obtained by telephone or by visiting a field office. Since the applicant's identity must be verified, the applicant must either visit a field office or mail to the office original proof of identity. Field office personnel make an on- line request for a replacement card to be issued. The requests are processed in batch mode at the NCC, and the new card is mailed from the NCC within a few days. I

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89 Providing General Information Information such as brochures on benefits or procedures can be obtained from field offices or by using the national 800 telephone number to reach a teleservice center (TSC). During high call periods, TSCs collocated with district offices (DOB) may use DO personnel to handle some of the telephone workload. In addition, calls received by a TSC during a Me _ ~ _ t 1 ~ ~ ~ ~ ~ ~ ~ - ~ ~ ~~ += J ~ O period ot nigh local workloads may be switched to remote Aims. However, personnel at the remote TSCs may not be as well informed about specific local Questions. For example. . ~ . .. _~. . . . ~ , , questions anout tne Black Lung program resulted in a sizable workload in West Virginia but are rare in other states. The demand for general information increases greatly when there are public announcements or legislative changes, but the request rate is reduced when users find the lines busy. The general information workload is difficult to predict, but it can be a significant burden to the available telephone line facilities. It can overload access circuits, increasing the rate of busy signals, which lead to customer dissatisfaction. Crediting Records of Earnings The SSA must maintain accurate records of an individual's earnings in order to determine both eligibility for program benefits and benefit payment amounts. At present the SSA maintains over 332 million separate earnings records in its master earnings file. Over 100 million accesses are made to this file every year for processing claims, responding to requests for earnings statements, and for other activities. The SSA obtains earnings information by processing the data submitted by employers as required by IRS form W-3, which is a summary of the information individuals receive from their employers on TRS form W-2. The SSA processes all W-3 information for transmittal to the TRS. including information on FICA contributions Laid. The SSA records ~ data about the wage and se~f-employment income for which Federal Insurance Contributions Act (FICA) contributions are due, as well as noncovered earnings, pension payments, and other non-FICA information. W-3 data mav be submitted bv emolovers on .. .. ~ magnetic media or on paper forms. Paper W-3s are sent to the DOCs for scanning or keying to magnetic tape; the information is then transmitted to the NCC for processing. Data on magnetic media are received directly by the NCC. Approximately 235 million wage items were processed in fiscal year 1988. Of these, 148 million were reported on magnetic media, and 87 million were on form W-3.

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go Wage amounts are posted to an employee's earning record on an annual basis. Earnings reports are due to SSA by January 30 of the year following the year in which earnings were paid, but a 30-day grace period is permitted before earnings reports are considered late. The posting of these earnings is now accomplished by July of the same year, 5 months after the last annual earnings report is received in February. Earnings reports received late from employers may not be posted on time. In addition, earnings postings are subject to correction as past tax records are corrected. Public Law 95-216, enacted in December 1977, changed the agency's earnings reporting requirement from a quarterly to an annual requirement. Earnings records containing yearly total earnings are accessible on-line for the years 1951 to the present. Detailed records containing a breakdown of earnings under different employers are accessible on-line for 1978 to the present. Earnings before 1951 are not on- line; however, the importance of pre-1951 information is diminishing. Because wage amounts are posted in the year following the one in which they are earned, neither the last nor current year's earnings may be available when a retirement claim is made. If a claimant has not accumulated enough quarters of coverage to qualify for benefits unless the current year's earnings are credited to his/her record, these earnings must be documented separately. In addition, the use of current earnings levels in the computation of benefits may result in a higher benefit amount. Determining Medicare Part-A Payments The apportionment of monies to the three SSA trust funds--Old Age and Survivors Insurance (OASI), Disability Insurance (DI), and Health Insurance (HI)--is prescribed by law on the basis of total wages reported. Certification of total wage amounts reported is made to the Secretary of the Treasury. This information is shared with the HCFA, in effect providing that agency with information concerning Medicare Part-A payments. Providing Estimates of Benefits In order to assist individuals in planning for their retirement, the SSA provides benefit estimates on request. Generally, benefit estimates are provided through two mechanisms: I. The Personal Earnings and Benefit Statement (PEBES)--This service provides individuals with a record of their earnings to date and an estimate of retirement, disability, and survivors' benefits. The disability and survivors' benefit estimates

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91 assume a current death or onset of disability and are based on posted earnings; retirement estimates use both the posted earnings and the requester's projected future earnings. The service is initiated by submitting a completed form SSA-7004-PC-OPR to the SS~ An SSN holder can request the form via the SSA's national 800 telephone number or can obtain it from any of the SSA's district offices. Completed forms are mailed by the SSN holder to one of the SSA's three DOCs. The DOC keys the information in a batch process and transmits it to the NCC overnight using a remote job entry (RJE) service. The NCC processes the data and sends the information to a contractor, who prints and mails the PEBES to the SSN holder. Although the capability exists for personnel in a modern DO to enter the request on-line for immediate processing at the NCC, this service is not made available to the public because of limited processing capacity at the NCC. Before the introduction of PEBES, the average yearly number of requests for earnings statements from individuals was 3.3 million. In the first 7 months of fiscal year 1989, the SSA received 4.6 million requests for PEBES. 2. Pre-retirement processing at DOs--Individuals who are close to retirement age may contact an SSA office to find out what benefit Davment they can expect to receive when they retire. _ ., . . ~ . ~ ~ -a ~ r wetting Immediate, complete benefit-payment information is not always possible, since, as explained above, current-year earnings must be documented separately and pre-1951 earnings are not on-line. However, a DO can provide an unedited earnings summary' allowing an inquirer to verify that earnings were posted correctly, and does, of course, determine the exact amount of a benefit payment during the development of a claim once one has been filed. Initiating Retirement Benefits This process normally begins when an applicant for OASI benefits calls or visits an SSA office. Although many individuals still prefer to visit an office for assistance, most initial OASI claims can be handled through telephone and mail contact. To establish a claim each person must file an application and submit the evidence needed to establish entitlement (e.g., evidence of identity, age, marriage, divorce, and current-year earnings). In 1988, the SSA received 3.1 million OASI applications for workers and family members. There were 38.6 million Old Age, Survivors, and Disability Insurance (OASDI) beneficiaries as of September 30, 1988; of these, 34.5 million received OASI benefits. The beneficiary population is expected to increase during the next 20 years as life expectancies

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92 increase and baby boomers reach retirement age. Al] field offices have access to a modernized claims system (MCS), which provides for automated entry and control of claims data. Approximately 99 percent of all initial claims can be taken using the MCS screens. Of these 99 percent, approximately 80 to 85 percent can be completely adjudicated in MCS; that is, the SSA can collect all application data, control the development process, and trigger an award or disallowance in the Claims Automated Processing System (CAPS). The other 15 or 20 percent of claims taken through MCS require that adjudication be triggered via a paper form. Field offices now have final authority to authorize an award or a disallowance on 99 ~ ~ ~ . ., ~ , ~ , ~ ~ . . ~ . ~ . . ~ . percent or calms, wan tne otner 1 percent requlrmg authorization In a processing center. Claims such as those involving dual entitlement are typically processed through the Manual Adjustment, Credit, and Award Process (MADCAP), usually triggered via a paper input document from the processing center. Adjudicating Disability Claims Individuals who have earned sufficient quarters of coverage and who meet the definition of being disabled under Title II of the Social Security Act are eligible for benefit payments under the DI program. Because eligibility for benefits is based partially on medical information, which is subject to interpretation, the adjudication of disability benefits is more complex than is adjudication of OASI benefits. As in the OASI claims process, an applicant for DI applies for benefits with the SSA, which determines if the applicant's work record qualifies him or her for disability benefits. The state Disability Determination Section (DDS) requests medical evidence and makes the initial determination of disability. Once all determinations of eligibility have been made, the DO triggers payment of benefits (or a disallowance notice) via an automated system. In most cases, before entitlement to disability benefits can begin, the applicant must serve a waiting period of 5 full calendar months, during which time no benefits are paid. Claimants who are dissatisfied with the disability decision made in their case can appeal the decision. Reconsideration of the case by the DDS is the first of four levels of administrative appeal available to the claimant. After administrative appeals have been exhausted, the claimant may take his or her case to the appeal board. The following is an approximate breakdown of the disposition of the initial claims received in fiscal year 1988:

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93 36% Approved 35~o Disapproved and not appealed 15% Disapproved, appealed,] and denied 14~o Disapproved, appealed,] and granted 100% Records are established and maintained on the SSA's Master Beneficiary Record (MBR) for disability beneficiaries by the CAPS and MADCAP systems, as they are for OASI beneficiaries. The paper folders that document their claims, however, are maintained by the Office of Disability Operations until the beneficiary reaches age 59, at which time the folder is transferred to the PSC. A DI beneficiary's benefits are converted from DI to OAST when the beneficiary attains age 65. After an individual is determined to be disabled, the law requires a periodic review to determine whether the individual continues to be disabled. These continuing disability reviews (CDRs) are scheduled based on the likelihood of medical improvement. If improvement is expected, a CDR is generally scheduled between 6 and 24 months after entitlement. If improvement is possible but not predictable (most cases), a CDR is set for 3 years after entitlement. If improvement is not expected, a CDR is set for 7 years from entitlement. The beneficiary and medical sources are contacted for evidence, and the DDS determines whether disability continues or has ceased. If disability continues, another CDR is set. When a CDR is due, the case is system controlled, and alerts are generated for individual states based on budgeted workloads. The reviews themselves are done manually, requiring folder movement, beneficiary and medical source contact, and evaluation of evidence. In fiscal year 1989 the SSA did 337,000 medical CDRs. In addition, 29,000 work-issue CDRs were performed to determine whether these individuals had returned to work at a level indicating substantial gainful activity. In fiscal year 1988, 1.2 million workers applied for DI benefits; there were 4.1 million DI beneficiaries in the same year. Approximately 23 percent of these beneficiaries receive their payments through a representative payee. Administering Provisions for Supplemental Security Income The SSA also administers Title XV] of the Social Security Act to ensure a minimum level of income for needy aged, blind, and disabled people. Federal funding for Title XVI programs, which include Supplemental Security Income (SSI), comes from general revenues rather than from the Social Security trust fund. The federal payment rate and eligibility iTncludes all levels of appeals, beginning with reconsideration.

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94 requirements are uniform nationwide, but almost all states provide supplements, at varying rates, to the federal payment. In fiscal year 1988 nearly 1.3 million SSI applications were taken by the SSA. At the end of that year, there were 4.5 million Title XVI beneficiaries, over 66 percent of whom were blind and/or disabled. Payments in calendar year 1988 totaled $13.8 billion; of this amount, $10.8 billion came from federal funds and $3.0 billion from state supplemental funds. Because eligibility for the SSI program is based on need rather than a person's history of earnings as documented in SSA's records, establishment of eligibility can be much more complex under Title XV! than under Title II. In addition, the SSA must redetermine payee eligibility on a periodic basis. This is done in a variety of ways, ranging from evaluation of a simple form completed by the payee to complete reverification of a payee's eligibility by field office personnel. In the case of the needy disabled, the disability determination process is the same as that used for disabled claimants under Title XVI. The SSI system is automated for both claims and post-entitlement actions. However, input data for the claims process (and certain other processes) are still captured on paper forms and transcribed for data entry in coded format. In addition, programmatic software code has not been modernized. The SSA is currently developing the functional requirements for a modernized SSI system. The SSI master file, called the Supplemental Security Record (SSR), is distinct from the master file of Title II beneficiaries (the MBR). A new copy of the file is sent to the Treasury Department each month. An annual cross-check flags individuals listed in multiple payment systems. Determining Dependents, Benefits If a retiree has an eligible spouse and/or eligible children, each eligible family member can receive a payment based on the retiree's earnings. Children are eligible up to age 18, or to any age if the child was disabled before attaining age 22. A disabled widow(er) over age 50 may also be eligible based on a deceased beneficiary's record. This results in a higher total payment to the family than would accrue to the retiree alone. When the spouse is eligible for retirement benefits based on his or her own earnings record as well as that of the retiree, benefits are computed on both records. If the SSA determines that the spouse would receive more benefits if entitled on the retiree's record alone, the spouse receives his or her own benefit payment plus an amount that, when added to this payment, will make the spousal payment equal to what he or she would have received if entitled to benefits solely on the retiree's record. This action ensures that the spouse receives the highest benefit for which he or she is eligible.

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9s In cases such as these, where a comparison of Pro individual records is needed, manual processing is usually necessary through the MADCAP system. On-line access to multiple earnings records facilitates the computation. Benefits may also be paid to eligible dependents in the case of the death or disability of the covered individual. The most common case is one In which the retiree dies and leaves a surviving wife. These cases are processed through the MADCAP system. Most of them are Bmally adjudicated at the DO, although some very complex cases and some involving systems alerts will be forwarded to a processing center for adjudication. The results of the processing are entered into the automated system; if changes in the status of the case arise subsequently, a manual recomputation is required. Processing Medicare Part-B Funds The SSA withholds the premiums for Medicare Part B from the benefit payments of individuals who have chosen Part-B coverage and who are in current pay status. The records are flagged, and several batch-processing programs at the NCC document and reconcile the transfer of funds. Premiums from individuals who are in conditional, deferred, or uninsured status are collected by HCFA through its separate operations for billing entitlement and remittances (SOBER) billing system. Updating Post-entitlement Personal Infonnation Information that affects entitlement to benefits, benefit payment amount, or receipt of payment must be reported to the SSA. Types of post-entitlement information normally reported include the following: Changes in name or address Changes in marital status Requests for electronic funds transfer or changes in EFT account information Post-entitlement earnings Changes in status of dependents Notification of death The SSA's post-entitlement workload also includes responding to inquiries from

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96 beneficiaries. Beneficiaries may contact the SSA by telephone, by mail, or by visiting a field office. Most telephone reports/inquiries are received and handled by personnel at the teleservice centers (TSCs). If a post-entitlement event can be handled with a system input, the telese~v~ce representative (TSR) handles it to completion. If the event will require extensive development, the TSR refers the item to a field office by administrative message. Personnel in field offices arid TSCs make nearly all inputs to the system interactively. However, while the on-line transactions access the master files as paTt of the data-collection process, most on-line transactions do not directly modify the SSA's databases. Rather, they update on-line pending files that feed batch update processes. Most of the SSA's master files are updated on a daily basis. The only exceptions to the batch update processes are certain critical systems that require immediate update to their databases. In addition, the DDS database is updated on-line by the states' DDSs. The SSA's automated master files are maintained at the NCC. Two backup tape copies are created: one is kept at the NCC, and the other is kept off-site in a secure facility. Some post-entitlement information reports result in documentation in the claims folder as well as modification of the database. The SSA has over 70 million active and inactive . . ~ . ~ - ~ . ~ . ~ . . ~ . . ~ ~ ~ ~ ^~e claims towers. n1gn-act1vlty folders remain in bbA ottlce space (merged files) at the processing centers. Low-activ~ty folders are maintained in SSA warehouse space or in record centers managed by the National Archives and Records Administration (NARA) (active files). Folders are maintained in merged or active file space until all beneficiaries are no longer currently entitled to benefits. At that time the folders are put into archival storage at an NARA site and are eventually destroyed. Post-entitlement access to low-activity folders numbers approximately 7 million per year. Modifying Records to Reflect Cost-of-Living Adjustments Nearly all benefits payment records must be modified to reflect annual cost-of-liv~n~ adjustments. These adjustments, which used to take 2 continuous weeks of automated processing, are now accomplished in 24 hours. The processing is performed wholly at the NCC. 1 ~ Providing Records for Production of Benefits Checks - o Benefits are paid monthly to over 40 million beneficiaries. Magnetic tapes that document records of new payments and changes to existing records of payment to be made

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97 to beneficiaries are sent monthly to the U.S. Department of the Treasury. The Treasury processes the tapes against copies of master payment tapes that it maintains. Payments are made by the Treasury in check form or by EFT, as desired by the beneficiary. The number of OASDI benefit payments made by EFT was 16.6 million in 1986, or 44.1 percent. As of September 1990, 52.6 percent of OASDI and 18.2 percent of SSI payments were made by EFT. Beneficiaries continue to receive payments until a "delete" request from the SSA is processed by the Treasury. Should a processing failure occur at the NCC, payment tapes from the previous month would be used by the Treasury to issue payments. Since these tapes would not reflect any changes made during the current month, overpayents and underpayments would result. Such incorrect payments would be corrected as soon as updated payment tapes could be produced by the SSA. Responding to Inquiries About Payments People who inquire about missing or incorrect payments call the 800 number telephone service and then are directed to the DOs or the TSCs. Because payments are made on a monthly basis and inquiries generally are received soon after payments are made, this workload is very cyclic. Obtaining Information about Death from State Records The SSA obtains information from states concerning the deaths of beneficiaries using an automated State death-match operation. This data exchange helps the SSA ensure that it does not continue to make benefit payments to deceased beneficiaries. Handling Overpayments and Underpayments Of the more than 400 million payments made in 1986, approximately 3.6 million were incorrect. Overpayments and underpayments are caused by a number of factors. Many payment amounts are incorrect because reports of changes in beneficiary status are sometimes incorrect, delayed, or not received. Chief among the types of information whose receipt affects payment amounts are notification of death, changes in status of surviving

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98 dependents, and reports of beneficiary earnings.2 In addition, delays and errors within the SSA's processes and revisions of disability claims determinations after appeal can result in overpayments and underpayments. Numerous remedies for overpayments are available, including offset of benefit payments (for current beneficiaries). Using primarily manual collection methods, debt collection staffs at the PSCs try to collect overpayments. Debt collection workloads depend directly on the volume of incorrect payments. Legislation sets limits on the amounts a beneficiary may earn before his or her benefits are affected. Current limits are as follows: Age 65 and older Under age 65 / Monthly Annually $780 $9,360 $570 $6,840