Statement of the Consortium for Citizens with Disabilities
Task Force on Work Incentives Implementation
before the
Ticket to Work and Work Incentives Advisory Panel
Quarterly Meeting
May 18, 2004
Members of the Panel:
Welcome back to the Washington area. The Consortium for Citizens with Disabilities (CCD) Task Force on Work Incentives Implementation again appreciates this opportunity to address your quarterly meeting. We note that the terms of several long time panel members, including the chair, will be ending later this summer. Before our formal comments, we want to applaud your service to this panel and the attention you have devoted to the operational details and myriad policy questions of this very complex law. Your work has been of tremendous value to those of us following the implementation of the Ticket to Work and Work Incentives Improvement Act (TTWWIIA), PL 106-170. We recognize that you have had to give considerable time in attending these meetings and taking part in countless teleconferences throughout the year. This panel has made the implementation of TTWWIIA a very open and informative process and we deeply appreciate your efforts.
TTWWIIA is nearing completion of its initial rollout with the final issuance of Tickets in the phase III states later this year. Some aspects of the law – such as the extension of premium free Part A Medicare coverage, provision of protection and advocacy services to beneficiaries and the grants to states for health care infrastructure development -- have been implemented with few if any problems. Optional programs like the Medicaid buy-in have been adopted in almost half the states although further progress in that arena may be impeded by state budget difficulties. Still --other elements of TTWWIIA have not produced the results that were expected when PL 106-170 passed.
Some of the problems arising in TTWWIIA – such as weaknesses in the Medicaid buy-in and a definition of employment network that excludes many federal employment programs, such as those serving veterans on SSDI -- result from statutory language and thus necessitate a legislative solution. We expect there to be consideration of changes to TTWWIIA in the next Congress. However, other problems in urgent need of attention can be resolved administratively through changes in regulation or policy guidance. It is to these matters that we direct the remainder of our statement and ask you to use your offices to press the Social Security Administration (SSA) to act quickly in addressing them.
THE TICKET AND VOCATIONAL REHABILITATION AGENCIES
The Ticket to Work program was designed to give beneficiaries of Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) access to an array of job training and career counseling providers. However, the Ticket program is half way through the third and final phase of implementation and State vocational rehabilitation (VR) agencies have 90 percent of the ticket assignments. There are differing opinions as to the role VR agencies played in this development. Certainly, also, the weak financial incentives for employment networks (ENs) to participate in the program [discussed in the next section] are a major contributing factor. However, SSA's regulatory interpretations of the law and policy guidance with respect to VR participation in the Ticket program - such as Transmittal 17 - bear a significant share of responsibility for this set of circumstances.
It has always been the position of our task force for that Section 1148 (c)(1) of the law gives VR the choice of participating in the Ticket program and seeking compensation under one of the EN payment systems, or of not participating in the Ticket program and seeking compensation under the traditional cost reimbursement program. We also thought this necessary to protect the ability of beneficiaries to receive services from VR without sacrificing their Tickets. That section of TTWWIIA reads as follows:
“Each State agency administering or supervising the administration of the State plan approved under title I of the Rehabilitation Act of 1973 (29 U.S.C. 720 et seq.) may elect to participate in the Program as an employment network with respect to a disabled beneficiary. If the State agency does elect to participate in the Program, the State agency also shall elect to be paid under the outcome payment system or the outcome-milestone payment system in accordance with subsection (h)(1).”
This sense of VR's separate role from the Ticket program was reinforced by additional language in that section allowing state agencies to choose on a “case-by-case” basis whether to seek compensation for successfully serving a beneficiary with a ticket under the traditional “cost reimbursement” program or under one of the new EN payment systems created by the Ticket program.
“With respect to disabled beneficiaries that the State agency does not elect to have participate in the [Ticket] Program, the State shall be paid for services provided to that beneficiary under the system of payment applicable under Sec. 222(d) and subsection (d) and (e) of Sec. 1615.”
In our estimation, this provision of the law allows VR to serve ticket-eligible beneficiaries outside the Ticket program and seek compensation under the traditional cost reimbursement system.
Unfortunately, SSA's regulations and policy guidance turned “voluntary participation” into “mandatory participation” and with that brought a host of complications for beneficiaries, ENs and state agencies. SSA declared in section 411.350 of the regulations that a state agency must participate in the Ticket program if it wishes to receive any type of payment from SSA, i.e., either through one of the EN payment systems or through the traditional cost reimbursement program.
“411.350 Must a State VR agency participate in the Ticket to Work program?
Yes. Each State agency administering or supervising the administration of the State plan approved under title I of the Rehabilitation Act of 1973, as amended (29 U.S.C. 720 et seq.), must participate in the Ticket to Work program if it wishes to receive payments from SSA for serving disabled beneficiaries who are issued a ticket.”
“411.355 What payment options does a State VR agency have under the Ticket to Work program?
(c) The State VR agency may seek payment only under its elected EN payment system whenever it serves as an EN. When serving a beneficiary who was not issued a ticket, the State VR agency may seek payment only under the cost reimbursement payment system.”
Then, Section 411.585 of the Ticket regulations severely limited VR’s ability to seek cost reimbursement.
“411.585 Can a State VR agency and an EN both receive payment for serving the same beneficiary?
Yes. It is possible if the State VR agency serves the beneficiary as an EN. In this case, both the State VR agency serving as an EN and the other EN may be eligible for payment based on the same ticket (see Section 411.560).
(a) If a State VR agency is paid by us under the cost reimbursement payment system with respect to a ticket, such payment precludes any subsequent payment by us based on the same ticket to an EN or to a State VR agency serving as an EN under either the outcome payment system or the outcome-milestone payment system.
(b) If an EN or a State VR agency serving a beneficiary as an EN is paid by us under one of the EN payment systems with respect to a ticket, such payment precludes subsequent payment to a State VR agency under the cost reimbursement payment system based on the same ticket.”
SSA declared in subsequent guidance contained in Transmittal 17 that automatic assignment of the Ticket occurs whenever a beneficiary with a Ticket seeks services from VR and signs a plan for employment with the state agency.
Once a payment is made under cost reimbursement or an EN payment system, no payment can be made under the other payment system. On the other hand, if VR is paid under an EN payment system, the regulations do allow for shared payments when both an EN and a State VR agency serve the same ticket-eligible beneficiary. By these regulations, SSA has subsumed the traditional cost reimbursement program under the Ticket program and brought about considerable confusion on the part of state agencies, providers and beneficiaries.
We are all familiar with the various complaints this situation has created. For example, if VR and an EN are working together with a beneficiary, the EN could choose the milestone/outcome payment system and become eligible for the first milestone payment when the beneficiary works for one month with earnings above the SGA amount. This would trump VR from any payment under the cost reimbursement system, regardless of the amount VR has invested in that beneficiary. On the other hand, ENs operating under the outcome payment system object to the fact that they must wait to get paid until the beneficiary goes completely off benefits whereas, by choosing cost reimbursement, VR gets paid when the beneficiary works for 9 months above SGA.
The regulatory interpretation of the law by SSA has created a significant disincentive for ENs to participate in the Ticket program. VRAs are also at risk to lose a significant amount of program income that could be used to assist additional individuals with disabilities in finding employment.
Most importantly, the impact on the beneficiary can be severe. For example, if beneficiaries with a Ticket seek services from VR and their cases are closed after 9 months above SGA, their Tickets are terminated. The beneficiaries lose the potential for 51 more months of services that they could have received from an EN. In addition, once SSA pays VR under the cost reimbursement system, the beneficiary may not take his or her Ticket to an EN for payment under the outcome or milestone-outcome payment system. Moreover, as fewer ENs participate in the Ticket program, VR becomes the default Ticket-taker. If a state agency then has to impose an order of selection due to financial constraints, disability beneficiaries will have nowhere to turn and will be right back to where they started – languishing on the disability rolls.
We believe that SSA should revise its policies to permit payments under both the VR traditional cost reimbursement system and the employment network payment system for the same ticket-eligible beneficiary. Under this arrangement, a State VR agency would provide vocational rehabilitation services, including supported employment and other time-limited employment-related services and supports, directly or through contracts with community rehabilitation programs, including Employment Networks (ENs), and then bill SSA under the traditional cost reimbursement payment system when an individual is earning at or above SGA for 9 consecutive months. An EN would then be able to accept the beneficiary’s Ticket after VR reimbursement billing is submitted to SSA. A similar concept has been proposed by the Adequacy of Incentives Workgroup. Our task force has not had time to examine the final details of the AoI workgroup recommendations and cannot, at this time, say whether that approach represents the ideal solution to the VR-Ticket dilemma. We do feel though that this overall concept could resolve many of the current conflicts between the Ticket and VR programs
EN PAYMENT SYSTEM
Even if the issues with Ticket to Work and the vocational rehabilitation system were resolved tomorrow, the inadequate reimbursements offered to private employment networks [ENs] would continue to serve as a deterrent to their participation. Since the Ticket regulations were finalized, our task force has maintained that the payments to ENs are far too low to attract any but the most highly-capitalized providers. Milestone payments were to be set at a total amount below the outcome payment system in order to control cost estimates of the legislation as it proceeded through Congress. Those of us who participated in the development of the Ticket program expected, perhaps naively, that SSA would set the milestone-outcome payment as close as possible to the outcome payment. Since the outcome payment system is limited to 40 percent of the average disability benefit, we thought that the milestone-outcome payment limit would be set at a level reflecting only a minor reduction in order to comply with the law. This would mean that the milestone-outcome payment would be set at 99 percent of the overall outcome payment, not at the 85 percent level set in the regulations. Additionally, with the current outcome payment set at 40 percent of the average benefit, we thought the milestone-outcome payment should be set no lower than 39 percent of the average benefit, not the approximately 34 percent level established.
Another policy change that would improve the environment for EN participation in the Ticket program would be to allow outcome payments to employment networks (ENs) when SSI and SSDI beneficiaries reduce but do not necessarily eliminate their dependency on cash benefits. As stated earlier, ENs are only eligible for outcome payments if beneficiaries’ dependency on cash benefits is eliminated i.e., they receive zero cash benefits. Such a policy change would recognize the heterogeneity of the population targeted by Ticket to Work by allowing a beneficiary to progress in reasonable steps to full self-sufficiency. It would encourage EN participation by providing greater shared risk with providers and it would allow payment for persons with the most significant disabilities who want to work, even if it is only part-time. It would also recognize the fact that, any reduction in reliance on benefits results in some savings to the trust fund and is preferable to a beneficiary's remaining totally dependent on the disability programs.
The Commissioner has the authority to pursue such a policy. Our understanding of Congressional intent is based on the following sections in P.L. 106-170:
· Section 2(b)(1) of P.L. 106-170, which specifies that the purpose of the legislation is to provide health care and employment preparation and placement services to individuals with disabilities that will enable those individuals to reduce their dependency on cash benefit programs.
· Section 2(b)(4) of P.L. 106-170, which further specifies that the purpose of the legislation is to establish a return to work ticket program that will allow individuals with disabilities to seek the services necessary to obtain and retain employment and reduce their dependency on cash benefit programs. [emphasis added]
· Section 1148(h)(5)(C) of the Social Security Act, as added by P.L. 106-170, which directs the Commissioner of SSA to submit a report on the Adequacy of Incentives to Congress by December 17, 2002, consult with the Ticket Panel, and “implement” the necessary adjusted payment rates prior to full implementation of the Ticket program. The target population of the AOI study includes “individuals who work and receive partial cash benefits.” [emphasis added]
· Section 101(d) of P.L. 106-170, which specifies that the Commissioner shall determine “the most efficacious” payment methods and ensure that they are in place for full implementation of the program on a timely basis (i.e., before November 2004).
PROPOSED REGULATIONS
The Ticket program is a new approach to service delivery and SSA had to make many, if not most, of its Ticket policy determinations prior to any actual experience with the program. With full implementation of the program only a few months away, SSA now has significant information with which to amend some of these policy interpretations.
Congress gave SSA the authority to revisit Ticket program rules once actual experience indicated that those policies were a hindrance to success of the program. Section 1148(h)(5)(A) reads:
"the Commissioner shall periodically review the percentage specified in paragraph (2)(C) [the fixed percentage of the payment calculation base on which outcome payments are based], the total payments permissible under paragraph (3)(C) [setting the difference in payment between the outcome and milestone-outcome payment schedules], and the period of time specified in paragraph (4)(B) [the 60 month outcome payment period] to determine whether such percentages, such permissible payments and such period provide an adequate incentive for employment networks to assist beneficiaries to enter the workforce, while providing for appropriate economies. The Commissioner may alter such percentage, such total permissible payments or such period of time to the extent that the Commissioner determines, on the basis of the Commissioner's review under this paragraph, that such an alteration would better provide the incentive and economies described in the preceding sentence."
After consultation with the Ticket to Work and Work Incentives Advisory Panel, Section 1148(h)(5)(C) states that the Commissioner "shall implement the necessary adjusted payment rates prior to full implementation of the Ticket to Work and Self-Sufficiency Program."
These and other legislative citations in the law provide ample evidence that Congress wanted SSA to modify the Ticket once it became clear that particular policies were impeding the success of the program. As of March 1, 2004, only 40,000 of the 7 million tickets that had been mailed had been assigned. With only 388 of the approximately 1,100 employment networks (ENs) under contract with SSA accepting ticket assignments, most of the ticket assignments are still going to State VR agencies. ENs are dropping out of the Ticket program at a faster rate than those that are joining. Testimony before this panel and Congress has demonstrated that participation by ENs will continue to be severely limited as long as the incentives for EN participation are almost non-existent.
At your quarterly meeting in February, Deputy SSA Commissioner Martin Gerry spoke to many of the foregoing issues as well as other regulatory matters pertaining to Ticket eligibility. He indicated that an internal SSA workgroup along with the Adequacy of Incentives Workgroup hoped to present the Commissioner with some recommendations "in the next 3 to 4 months" with a Notice of Proposed Rulemaking (NPRM) to follow shortly thereafter. It's now been three months since that meeting. If Commissioner Gerry's plans are on schedule, then presumably we would see an NPRM by July, August, or September. And how long after that before any concrete changes might occur?
Our task force continues to believe that the basic premise of the Ticket to Work remains sound. We appreciate the fact that SSA has responded in the past to requests for changes to the Ticket program and we understand that the regulatory process takes time. The agency did increase the number and amount of milestone payments in response to early expressions of dissatisfaction by providers. However, SSA has been talking about draft regulations to address problems plaguing the Ticket program for over a year.
Time is of the essence. Our task force urges you to press the Commissioner to issue proposed regulations quickly in order to move forward with the changes that must be made to make the Ticket program work before full implementation occurs this November.
American Association on Mental Retardation
American Association of People with Disabilities
American Network of Community Options and Resources
American Occupational Therapy Association
Council of State Agencies for Vocational Rehabilitation
Easter Seals
International Association of Business, Industry and Rehabilitation
National Alliance for the Mentally Ill
National Association of Protection and Advocacy Systems
National Organization of Social Security Claimants' Representatives
NISH
Paralyzed Veterans of America
The Arc of the United States
United Cerebral Palsy
United Spinal Association
U. S. Psychiatric Rehabilitation Association [formerly IAPSRS]
World Institute on Disability