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January 10, 2002

Social Security Issues Final Regulations for the Ticket to Work and Work Incentives Improvement Act (TWWIIA)

On December 28, the Social Security Administration (SSA) published final regulations for the new "Ticket" program authorized by Congress under the 1999 Ticket to Work and Work Incentives Improvement Act (TWWIIA, P.L. 106-170). TWWIIA is a major effort on the part of Congress to try and end the pervasive disincentives to employment inherent in SSA's disability income support and health coverage programs (SSI, SSDI, Medicare and Medicaid). TWWIIA has received broad bipartisan support both in Congress and from the Bush and Clinton Administrations as a major step forward in addressing the very high unemployment rate among Americans with severe disabilities, including adults with severe mental illnesses (estimated as high as 85%).

Background on the Ticket to Independence Program

The "Ticket" program is a major feature of TWWIIA and is intended to offer Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) recipients a voucher that can be used to obtain employment, training or vocational services from the provider of the consumer's choice. The basic idea of the "Ticket" program is to maximize consumer choice by allowing beneficiariesto select their own employment or rehabilitation provider. That provider is then paid based only on a successful outcome - defined in the law as successfully getting people in a job and off of SSI and/or SSDI cash benefits.

By paying employment providers only for successful ongoing job placements, the program is designed to place greater emphasis on ongoing workplace supports (for a period of up to 5 years), rather than pre-employment assessments with no ongoing post-placement support. Research on successful employment interventions for adults with severe mental illnesses has demonstrated that ongoing job-related supports are much more effective than pre-employment services or job search assistance.

Final Regulations Retain Provisions That Could Disadvantage SSI and SSDI Beneficiaries With Severe Mental Illnesses

SSA's final rules appear to retain a number of provisions the draft Notice of Proposed Rulemaking (NPRM) published in December 2000 that are likely to make it difficult for many SSI and SSDI beneficiaries with severe mental illnesses to effectively use the Ticket program. For example, the final regulations retain a restriction that prevents a beneficiary classified as "medical improvement expected" (MIE) from receiving a Ticket until after their first continuing disability review (CDR). SSA also retained provisions limiting beneficiaries to one Ticket per period of eligibility for SSI and SSDI - thereby forcing many consumers into having to get off benefits and initiate a new application in order to get another Ticket.

What Happens Next?

Beginning on February 8, SSA will begin to send out notices to eligible SSI and SSDI beneficiaries in 13 pilot states that Tickets are available to them. These 13 pilot states are: Arizona, Colorado, Delaware, Florida, Illinois, Iowa, Massachusetts, New York, Oklahoma, Oregon, South Carolina, Vermont and Wisconsin. In addition, the national Program Manager for the Ticket program, MAXIMUS Corporation, has already begun recruiting Employment Networks in these 13 states. It is these Employment Networks that will directly serve Ticketholders. Despite the efforts of SSA and MAXIMUS to reach out to private and non-profit employment and vocational providers to sign up as Employment Networks, there is growing concern that too few have been recruited in these 13 states to result in meaningful consumer choice. This is especially the case with respect to private and non-profit agencies serving adults with severe mental illnesses, i.e. psychosocial rehabilitation programs, clubhouses, CMHCs and consumer-run programs. NAMI affiliates in these 13 pilot states are therefore urged to reach out to agencies and programs in your area to encourage them to consider signing up as an Employment Network. More information on how providers can sign up to be an Employment Network is available at through the MAXIMUS toll-free number (1-866-968-7842) or through SSA's Employment Support programs website at: www.ssa.gov/work/ResourcesToolkit/networks2.html.

NAMI will continue to monitor both SSA's implementation of the final Ticket regulations and efforts in the 13 pilot states to make Tickets available to SSI and SSDI beneficiaries and recruit Employment Networks. A listing of providers that have already signed up to be Employment Networks in the 13 pilot states is available at: www.ssa.gov/work/ServiceProviders/endirectory.html.

Below is a brief analysis of provisions in the final regulations of concern to SSI and SSDI beneficiaries with severe mental illnesses. The full text of SSA's final regulations can be viewed at: www.ssa.gov/work/ResourcesToolkit/FinalRegs2002.html. NAMI's comments on the draft Ticket regulations can be viewed at: www.nami.org/update/20010227.html

1. Eligibility for Tickets - MIE (Section 411.125)
   Citing administrative feasibility, SSA kept in place its original proposal to bar eligibility for a Ticket to anyone designated Medical Improvement Expected (MIE) that has not had their first Continuing Disability Review (CDR). At the same time, SSA claims that it will "evaluate" the methodology used to classify individuals MIE to "assess possible ways to improve the system for use in identifying those beneficiaries for whom near-term medical improvement should preclude the immediate receipt of a Ticket."

   This is particularly troubling to NAMI for several reasons. First, a high proportion of SSI and SSDI beneficiaries classified as MIE have severe mentalillness as the primary basis for their successful disability claim. Second, historically, SSA has had a tremendous backlog in completing CDRs, resulting in significant delays until these mandated reviews are completed. SSA decision is certain to result in significant delays in beneficiaries with severe mental illnesses in getting Tickets. This runs counter research indicating that early employment and rehabilitation interventions are more effective in serving most consumers.

2. Eligibility for Tickets for Individuals Below Age 18 (Section 411.125)
   Although SSA acknowledges that a majority of public comments on the proposed regulations supported giving Tickets to individuals under 18, they plan to "at a later time, explore the possibility of expanding the age criteria" for Ticket receipt, thus individuals under age 18 will not be able to receive Tickets under SSA's final rules.

3. Ticket Eligibility Per Period of Entitlement to SSI and SSDI (Section 411.125)
   As noted above, in the final regulations SSA retains the limit of one Ticket per period of entitlement to SSI (Title XVI) and SSDI (Title II). NAMI had urged SSA to allow individuals to be eligible for another Ticket when the cash value of their first Ticket is exhausted, i.e. when the first 60 non-consecutive month limit had been reached.

   This one Ticket per eligibility period limit is especially troubling for SSI beneficiaries participating 1619 programs allow for extended health and cash benefits for beneficiaries entering the workforce. These SSI beneficiaries often retain "eligibility" for benefits under 1619(b) even though they are not receiving any cash benefits. For these individuals, the Ticket could be fully paid out and the person would come back into payment status and not be able to get another Ticket because they are still considered to be in the same "period of disability."

   In addition, some individuals with high upfront rehabilitation costs who are served by their state vocational rehabilitation (VR) agency will see their chance to fully benefit from a Ticket limited. In many cases, VR agencies are reimbursed for the full costs of services, even if the cost is higher than the total value of the Ticket, so long as a person achieves nine months of Substantial Gainful Activity (SGA). Since nine months of SGA still leaves a person eligible to receive SSI or SSDI, the person will still be on the rolls, not having achieved full independence. However, these individuals will no longer have access to services because they will not have a Ticket. This will be particularly unjust in the rehabilitation of individuals with severe mental illness, since state VR agencies have generally done a strikingly poor job of tailoring VR programs to the needs of persons with severe mental illness.

   In the final regulations, SSA did make an important change in the "one Ticket per entitlement period" restriction to accommodate "Expedited Reinstatement" section of TWWIIA. TWWIIA provides for a 60-month Expedited Reinstatement that follows the termination of benefits due to work. Expedited Reinstatement allows an individual actively using a Ticket to be automatically reinstated to cash benefits (pending a CDR after six months) in the case of a recurrence of acute symptoms or impairment (e.g. a psychiatric episode or break). The final rules clarify that individuals reinstated to benefits through Expedited Reentry can receive another Ticket in the first month of entitlement or eligibility.

4. Timely Progress and CDRs (Section 411.180)
   SSA appears to have accepted a recommendation made by NAMI other disability advocacy organizations to allow a beneficiary that works during the initial 24-month period after activating a Ticket (during which work is not required) to "bank" those months of work and later apply them to the work requirements in the first 12-month progress review period. Ticket recipients are required to show "timely progress" toward the goal of employment. However, SSA chose not to allow banking of work to satisfy progress requirements in periods after that first 12-month progress review period. Nor did SSA agree to consider increasing levels of earnings below SGA (or amounts of work below SGA) to meet the progress requirements in the regulations. SSA claims that, to do otherwise, would be inconsistent with the requirement that beneficiaries demonstrate an "ability to work at levels which will reduce their dependence on cash benefits." SSA also contends that allowing the "banking" of work in the first 24 months would allow beneficiaries to pursue college or post-secondary education without threat of CDRs.

   SSA appears to have retained a provision that would allow placement of a Ticket in inactive status only during the first 24-month period of use. SSA notes that they will still permit intermittent employment in the subsequent progress review periods. Presumably then, if a beneficiary stops pursuing an employment plan after the first 24 months, then they would have to request expedited reentry and could be subject to a CDR (Section 411.220(a)).

5. Employment Networks (ENs) (Section 411.300) In comments on the NPRM, NAMI and many other advocacy groups raised concerns that requiring licensing or certification of ENs could prevent innovative and non-traditional providers such as clubhouses and consumer-run programs from participating. In the final rules, SSA notes that the law "does not require certification, licensing or registration per se." Instead, SSA clarifies that the final regulations will require "qualified staff" and ENs to comply with applicable state laws. Further, SSA notes that if medical and health services are provided, they must be provided by appropriately licensed personnel. Specifically, SSA notes that "we did not intend to give the impression in the proposed rule that all ENs must be licensed to provide medical services." Finally, as to whether a family member or a friend could actually serve as an EN for an individual consumer, SSA claims that the law requires ENs have "some level of education, experience, or expertise in providing employment related services." Thus, "friends, family members or other persons must meet these requirements to qualify as ENs."

6. State Vocational Rehabilitation (VR) Agencies Serving Ticket-Holders (Section 411.385 and Section 411.585)
   The final regulations retain SSA's view that a beneficiary with a Ticket who signs an Individualized Plan of Employment with a VR agency will be considered to have assigned the Ticket to that VR agency. SSA also kept the rule that payment to a VR agency under the EN payment system precludes payment under the traditional cost reimbursement system. SSA justifies this view by citing congressional intent: "we believe that Congress included the third sentence in [this section] to make the securing of services by a beneficiary with a Ticket from a state VR agency electing cost reimbursement a mutually exclusive alternative to a beneficiary's obtaining services from an EN."

7. Employment Network (EN) Payment Systems (Subpart H)
   The payment systems for ENs are perhaps the most complex and important provisions in the TWWIIA regulations, particularly with respect to the "outcome-milestone" payment system. Congress provided SSA with wide discretion in how to craft this system with general guidance to ensure that providers are rewarded for helping beneficiaries meet individualized goals that are short of getting completely off of cash benefits. At the same time, Congress wanted to ensure that the outcome-milestone payment system did not reward providers for ineffective pre-employment services that never result in meaningful outcomes. Greater detail on the EN payment systems is available in NAMI's comments to SSA on the NPRM at www.nami.org/update/20010227.html.

   SSA made four changes to the outcome-milestone payment system in partial response to comments from advocacy groups, including NAMI. SSA rejected as administratively impractical suggestions that a graduated fee system be adopted, that individual fees be set or that the Program Manager negotiate fees with ENs. SSA also chose not to narrow the gap between the outcome and outcome-milestone payment systems out of cost considerations and to maintain "incentives" to ENs to choose the outcome payment system. SSA also rejected suggestions that pre-employment milestones be paid given projections that a "significant number of beneficiaries who would achieve them would not eventually leave the disability rolls because of work or earnings."

   SSA's final regulations made the following changes to the EN payment rules:

   1. Two more milestones were added to the initial two proposed. The first milestone will occur when a beneficiary works for one calendar month and has gross earnings above SGA. A fourth milestone is met when the beneficiary works 12 calendar months within a 15-month period and has gross earnings above SGA. The SGA threshold used is the applicable one for "statutorily blind" and non-blind beneficiaries. The original two milestones (3 calendar months of 12 of work above SGA and 7 calendar months within 12 above SGA) become the 2nd and 3rd milestones.
   2. The total value of the milestone payments was doubled to approximately 20 percent of the potential payments possible under the outcome-milestone system. This amounts, in 2001 terms, to milestone payments equal to $3096 for SSDI beneficiaries and $1874 for SSI beneficiaries.
   3. SSA will spread over 60 months - rather than 12 - the recapture of milestone payments from outcome payments.
   4. a flat outcome payment rate of 34 percent has replaced the graduated monthly outcome payment rates. Thus an outcome payment will be 34 percent of the payment calculation base.

      SSA had originally proposed that ENs submit with their requests for outcome payments a beneficiary-completed "Work Activity Report" that would include information about their use of PASS plans, IRWEs and other work incentives. In NAMI's view, this requirement had significant potential to create an adversarial relationship between beneficiaries and ENs. By requiring Ticketholders to alert ENs as to incentives they are concurrently using, it would almost certainly increase the time it takes for the EN to get paid, thereby discouraging many ENs from serving some beneficiaries. SSA is instead now suggesting that beneficiaries get the proper forms from their SSA field offices and complete these with the assistance of the SSA personnel, not ENs (Section 411.575(b)).

   5. Outcome Payments for SSI Beneficiaries
      SSA's draft regulations failed to include any special provisions for SSI beneficiaries participating in programs under 1619 - an existing program that allows extended health coverage and sliding scale cash benefits for SSI recipients returning to work. Because participants in 1619 are slow to move completely off of cash benefits, they represent unattractive risk EN providers participating in the Ticket program (i.e., outcome payments to ENs are generally triggered only when cash benefits end completely). Thus, NAMI and many other disability groups argued for either larger outcome payments for SSI beneficiaries, or outcome payments for a partial reduction in cash benefits due to work. However, in the final rules, SSA claims that the statute does not permit them to allow for either. Instead, SSA references a study the agency is required to make on the adequacy of incentives for ENs to serve harder-to-serve" populations.

   6. Payments to ENs and Overpayments (Section 411.575)
      In response to concerns over administrative burdens imposed on ENs, SSA will now require submission of payment requests and evidence of beneficiary work and earnings on a quarterly basis. In response to objections that ENs obtain wage evidence from a beneficiary's employer - thereby raising privacy concerns - SSA added two more types of evidence that an EN can supply: a) an unaltered copy of a beneficiary's pay stub or b) an unaltered copy of the beneficiary's estimated tax return for those that are self-employed. Citing statutory prohibitions against SSA paying an EN and a beneficiary for the same month, SSA rejected suggestions that the agency not hold beneficiaries liable for overpayments and recovery actions.

   7. EN Disagreements with SSA over Payment Requests (Section 411.590)
      Concerns were raised by disability advocates that the proposed regulations allowed ENs to dispute a beneficiary's right to benefits, if that would affect their ability to get paid. In the final regulations, SSA claims that it "understands the concerns" and, as a result, referred to the administrative review process in rules. To avoid creating adversarial relationships between ENs and beneficiaries, SSA states that in 411.590[c] and [d], the final rules makes clear that "an EN cannot appeal a determination we make about a beneficiary's right to benefits, but they may furnish evidence in support of their claims for payment." SSA has chosen to leave in place the ability of ENs to select which beneficiaries they serve - in order to be consistent with the "voluntary nature of the program" and to avoid reducing the numbers of ENs who might choose to participate in the program. However, SSA will be required to evaluate whether some beneficiaries are not being served under the Ticket program as a result of lack of access to ENs (Section 411.315 (a)(3)).

   8. Dispute Resolution (Subpart I)
      In the final regulations, SSA retains the 3-step dispute resolution process - along with existing timeframes for responses from the PM and SSA that are set forth in the proposed rule for disputes between beneficiaries and ENs that are not state VR agencies. If the PM is asked to review a dispute after an EN's internal grievance process is followed, the final rules requires the national Program Manager to contact the EN for relevant information and evidence, a summary of the beneficiary's position, solutions proposed by the EN and reasons these were rejected by the beneficiary. There is no apparent requirement that the beneficiary be independently contacted for their side of the dispute.

   9. $1 for $2 Demonstration for SSDI Beneficiaries
      In the final regulations, SSA makes no reference to comments about this mandatory demonstration program, but does acknowledge the importance of other studies called for in the law (e.g., the adequacy of incentives study). SSA also notes that the agency "will consider all of these interesting demonstration ideas as we continue to explore the best ways to serve beneficiaries with disabilities and reduce their barriers to work and self-sufficiency." This is in response to suggestions by NAMI and other advocacy groups that SSA use its demonstration authority to test various payment options and funding schemes.

      Disabled Adult Children (DACs)
      SSA did use the final rules to respond to comments submitted about DACs - by NAMI and other disability advocacy organizations - regarding the ability to move on and off SSDI cash benefits to the same extent as other beneficiaries. SSA claims that under section 202[d][6] of "the Act" (presumably Social Security) "an individual whose entitlement to child's insurance benefits based on disability has terminated may again become entitled to such benefits if he or she has not married and he or she is under a disability which began before the end of the 84th month following the month in which his or her most recent entitlement to child's insurance benefits terminated because he or she ceased to be under a disability." It appears that SSA is claiming that existing law addresses the concerns about DACs and their ability to take advantage of TWWIIA without losing access to their childhood level of benefits if necessary.

      SSA Awards Benefit Planning and Assistance and Outreach Grants

      In addition to issuing final regulations on the Ticket program on December 28, SSA has also been releasing funds for a separate program authorized by TWWIIA - the Benefit Planning, Assistance and Outreach (BPAO) program. NAMI strongly supported the inclusion of the BPAO program in TWWIIA. One of the most daunting obstacles to employment for SSI and SSDI beneficiaries with severe mental illnesses is the fear associated with losing cash benefits and health care coverage through Medicare and Medicaid.

      While TWWIIA and other SSA work incentive programs are intended to help ease the transition from dependence on public benefits to employment, the complicated eligibility rules and restrictions are troubling. Further, the severe penalties associated with violating these very complicated rules, i.e. complete loss of cash and health care coverage, makes many beneficiaries reluctant to even attempt work when they are otherwise clinically and functionally able to do so. This is especially the case with beneficiaries that have attempted work in the past, only to later be faced with the severe financial penalties associated with an overpayment of cash benefits.

      The BPAO program is intended to provide assistance to SSI and SSDI beneficiaries with reliable, independent and accurate information about the consequences of work - how much can be earned without penalty, how to access extended Medicare and Medicaid coverage, how to access the Ticket program, how to develop a PASS plan, etc. BPAO grants have thus far been allocated to 117 separate projects in every state. These BPAO programs operate independent of national and SSA field offices. In many states, SSA has awarded BPAO grants to state and local Centers for Independent Living (CIL) - agencies that have traditionally served individuals with physical disabilities. To inquire about which agency in your state or community was awarded the BPAO grant in your area, contact your local SSA field office, or visit: www.ssa.gov/work/ServiceProviders/statebystate.html.

      Finally, SSA has also awarded grants under the new Protection and Advocacy (P&A) program that Congress authorized as part of TWWIIA to assist SSI and SSDI beneficiaries in accessing employment and vocational services. This new PABSS program is intended to assist all SSI and SSDI beneficiaries in both obtaining services and resolving disputes with state VR agencies and ENs. PABSS grants have thus far been awarded to most of the designated P&A agencies across the country. More information on this program is available at:www.ssa.gov/work/ServiceProviders/pa.html

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