A recent report from the Office of Inspector General (OIG) for Social Security shows the agency will save nearly $4 billion over the next 10 years since it has reinstated the Request for Reconsideration phase of the disability appeals process.
Over the last few years Social Security has phased out a pilot program in a number of states that skipped the Reconsideration level, which is the first appeal for people who received denials on their initial disability applications. Instead of filing the Reconsideration appeal, which has an extremely low approval percentage, claimants in these states filed an appeal for a Hearing before an Administrative Law Judge (ALJ). The vast majority of disability cases will end up at the ALJ level eventually if a claimant continues to pursue a claim that is unfavorable.
The one major advantage of getting rid of the Request for Reconsideration phase, which is basically a review of the initial application decision, which is why the approval percentages are so low, is that it cuts down the amount of time a typical Social Security disability case lasts. Most Request for Reconsideration level cases are decided in about 3-6 months, which is a burdensome amount of extra time for a disability applicant who can’t work and earn a full-time living, to wait. Social Security’s studies show that many claimants give up on the process after being denied twice and with less people in the process the agency is saving money. To be fair, most states had the Reconsideration phase as part of the process already, but it will take some time for the other states that eliminated this phase to get used to the frustrating reality of being denied benefits for up to two years or longer before they can have their case decided by an ALJ.
The Summary
For this review, we analyzed Calendar Year (CY) 2015 data to allow time for the cases denied to be resolved through later appeals. We also analyzed Fiscal Year (FY) 2018 data because it was the most recent available for ALJ decisions when we started our audit. In CY 2015, claimants waited an average of 310 days to receive an allowance determination at the reconsideration level. This was 535 days fewer than claimants waited in FY 2018 in States where the first level of appeal was a hearing by an ALJ.
Of the 616,917 claimants denied at the reconsideration level in CY 2015, we estimate 86,400 (14 percent) did not take action after the reconsideration denial while 530,500 claimants (86 percent) appealed to an ALJ and/or filed new claims. Of the 530,500 claimants, we estimate 290,000 (55 percent) subsequently received allowance decisions.
In FY 2018, it took on average 79 days longer for a claimant to receive an allowance decision by an ALJ in States with the reconsideration level of appeal. Specifically, it took an average 924 days for a claimant in a State with the reconsideration level to receive an allowance decision by an ALJ, as compared to 845 days for a claimant in a State without the reconsideration level.
Reinstating the reconsideration level allows for a uniform disability process that standardizes services for all claimants nationwide. With reinstatement of the reconsideration level, the Agency estimated $3.9 billion in program savings over a 10-year period (FYs 2019 to 2028).
