SSA has made steady progress in its efforts to improve the implementation of the Ticket-to-Work program, but continuing operational difficulties threaten to compromise program success.
A. Key to Findings Related to Market Operation
Overall, the basic features of the TTW market are functioning, but significant trouble spots persist. Data for June 2007 indicate that 171,533 beneficiaries have assigned their Ticket. More than 1,200 ENs are currently approved, including SVRAs in all states and the District of Columbia. Payments are being made to ENs under the new payment systems: by mid-June 2007, 26,090 milestone or outcome payments totaling $7.1 million had been made on behalf of 3,069 TTW participants. Nevertheless, the program has yet to meet expectations. Participation rates are low in light of survey data that indicate an unfulfilled demand for employment services. The PMRO has had difficulty in recruiting new providers, and many ENs have let their contract with SSA expire; as a result, there were 200 fewer providers in June 2007 than in fall 2006. Participation data show that two-thirds of current providers have not yet accepted a Ticket.
SSA is trying to strengthen the TTW market and foster changes in beneficiary and provider behavior by revising the regulations that determine how the market works. These efforts have been underway almost since the beginning of the program in 2002. They were also anticipated by the authorizing legislation, which included provisions for the SSA commissioner to assess the program as it rolled out, make changes that would help achieve program goals more effectively (or recommend changes for which legislation would be required). Some solutions tried by SSA—such as producing information to help ENs find operating capital and introducing a streamlined payment claims process—have not had a measurable effect. Recognizing the need for more sweeping revisions, SSA published a set of proposed TTW regulations on September 30, 2005. These new regulations became final on May 20, 2008.
Our analysis of these regulations indicates that they would substantially improve financial incentives for ENs, although many might continue to struggle financially unless they had complementary sources of funding. It also appears that the new regulations could substantially reinvigorate TTW, but the very long delay in finalizing them has left the market to flounder. Almost three years elapsed between the first publication of the proposed regulations in September 2005 and the publication of the final regulations in May 2008.2 During this period, more ENs have essentially withdrawn from the TTW market, recruitment of new providers has stalled, and a general sense that the program is not working prevails. As a result, TTW seems to have lost its early momentum, and that loss might have diminished the chance that the new regulations will quickly put the program back on the path toward the vibrant market envisioned in the legislation.
1. Beneficiary Demand for Employment Services
TTW participation remains low but continues to grow. As of December 2005 (the last month for which we have complete data), beneficiary demand for TTW services, as measured by the rate at which beneficiaries assign their Tickets, continued to rise. In Phase 1 states the participation rate had risen to 1.8 percent, up from 1.4 percent for December 2004 (Thornton et al. 2007). Participation rates have continued to rise—albeit slowly—in Phase 1 states since the early months of program rollout. Participation rates in Phase 2 and 3 states, though lower, are rising as well. This trend primarily reflects the later rollout, but it is also indicative of fewer SVRA assignments from pipeline clients; beneficiaries appear to have assigned their Ticket to ENs in Phase 2 and 3 states at rates on par with assignments to SVRAs in Phase 1 states at comparable points after rollout.
Beneficiaries’ reported employment goals suggest growth potential for TTW. The survey data suggest that demand for employment and employment-related services among Social Security disability beneficiaries is much greater than the early TTW experience suggests. Although only a small share of beneficiaries is employed or actively seeking employment at any given time, substantial proportions of beneficiaries have not only set goals that include work but also see themselves working in the future. In fact, 16 percent expect to earn enough to leave the rolls within five years—approximately 1.5 million beneficiaries. There is no getting around the fact that age, poor and deteriorating health, extreme functional limitations, and prolonged detachment from the labor force make program exit through work highly unlikely for a large majority of beneficiaries. A substantial minority, however, say they believe that exit through work is an achievable goal.
Self-reported expectations about exit due to work are much higher than historical rates for actual exits due to work. According to SSA estimates, only half of one percent of beneficiaries exited the rolls due to work before TTW. The difference between this rate and the 16 percent expected rate might largely reflect unrealistic optimism on the part of survey respondents or their limited of awareness of the barriers and disincentives that deter beneficiaries from realizing their goals. The survey findings indicate, for example, that many beneficiaries lack reliable transportation, find the workplace inaccessible, or are discouraged from working by others.
Nevertheless, the positive work expectations of many beneficiaries give TTW a basis on which to build. A major goal of SSA’s recent program changes is to increase EN and beneficiary participation. If ENs and SVRAs become more aggressive in addressing barriers to employment in response to the regulatory changes, more beneficiaries may well participate in TTW. One group that might be brought into TTW under the new regulations is the population of beneficiaries whose attempts to assign their Ticket have been unsuccessful. Although the estimated number of such beneficiaries is small as a share of all beneficiaries, the survey data suggest that they may outnumber current TTW participants.
Outreach might stimulate substantial TTW participation, especially among recently employed beneficiaries under age 55. About 40 percent of survey respondents who had not assigned their Ticket indicated some interest in future TTW participation, yet prior to interview only about one-quarter of them were aware of the program. Of course, many reasons explain why survey self-reports of future participation and employment plans are not borne out, as documented in earlier research. Nonetheless, TTW could attract a larger share of the approximately 40 percent of beneficiaries with an interest in employment. For example, the new payment regulations would enable ENs to receive substantial payments for beneficiaries who work at moderate levels; this change may enable ENs to serve people who would not earn enough to trigger outcome payments in the short term, but who might achieve that level of earnings after an extended period. Outreach is likely to be more effective and efficient when targeted to those most likely to have work goals and expectations—particularly recently employed beneficiaries under age 55.
Many beneficiaries, especially TTW participants, already use services to support their employment efforts, including traditional employment-support services and health-related services. Data from the 2005 NBS indicate that 35 percent of all beneficiaries in Phase 1 and 2 states used these services in 2004, a much larger share than the approximately one percent of Phase 1 and 2 beneficiaries who had assigned their Ticket by the time they were sampled for the survey. Services included not only conventional work supports (for example, training and job-search assistance) but also a wide array of health-related services (for example, occupational therapy, counseling, and adaptive equipment), which beneficiaries see as enhancing their ability to work or to live independently. Administrative data also indicate more service use than implied by TTW participation rates. For example, our analysis of the impact of TTW on SVRA enrollment found that four to five percent of beneficiaries in the Phase 2 and 3 comparison states had open SVRA cases during 2002 and 2003 (Exhibit XII.8).
Despite widespread use of services among all beneficiaries, TTW participants were substantially more likely than the average beneficiary to have used services, and those participants who availed themselves of services did so for more hours and were more likely than the average beneficiary to report that they were using services to find a job. Interestingly, however, 52 percent of service-using participants did not report using the services to find a job or to get a better job, which suggests that many participants’ goals differ from the program objective of increasing earnings to the point at which an individual no longer receives benefits. Participants were more likely to assign their Ticket to an EN if they had low benefits, were African American, had minor children, or had been on the rolls for a year or less. Those with mental retardation, sensory or other nervous system disorders, severe mental health problems, or in need of assistance to perform a daily activity were more likely to assign their Ticket to an SVRA than to an EN. Not surprisingly, these characteristics are similarly associated with the likelihood of assignment under one of the new payment systems.
Participants who assigned their Ticket to an EN received fewer services than those who assigned their Ticket to an SVRA; they were less satisfied with the services they received. In addition, participants who assigned their Ticket to an EN were significantly less likely than those who assigned their Ticket to an SVRA to report receiving any services (including services from outside TTW). Moreover, even when participants using ENs reported that they received services, they tended to report fewer hours of services received, on average, than those who assigned their Ticket to an SVRA. Similarly, EN participants who used services were less likely to report that they used services to find a job or a better job. This pattern does not bode well for ENs, which can generate full TTW payments only if participants earn enough to leave the benefit rolls. We also found that participants who assigned their Ticket to an EN as opposed to an SVRA were less likely to report that the services were useful, more likely to report unmet service need, and more likely to report problems with services and providers as the reason for unmet need.
The differences in service use, unmet need, and satisfaction with services between beneficiaries who assigned their Ticket to an EN and those who assigned their Ticket to an SVRA may reflect underlying differences in the two populations. However, differences in the service provision rules or survey timing issues could partly explain this as well. Nonetheless, in addition to the differences in characteristics noted above, we observed large differences in the employment outcomes of the two groups. While about one-third of each group was employed at interview, the mean hours, wages, and monthly earnings of those who assigned their Ticket to an EN significantly exceeded the mean hours, wages, and monthly earning of those who assigned their Ticket to an SVRA.
Unmet demand for employment services still exists among the total beneficiary population, which includes TTW participants and nonparticipants. However, the demand for and use of services does not necessarily relate to a beneficiary’s interest in or ability to work at a higher level. The recent changes to the TTW program may be able to chip away at some of the barriers to service use and employment, thus increasing beneficiary participation in both.
2. The Supply of Employment Services
Our last report (Thornton et al. 2007) concluded that the high percentage of Tickets assigned to SVRAs and the high percentage assigned under the traditional payment system appear to have limited the extent to which TTW represents a dramatic break from the past. More recent data reinforce our conclusion. An overwhelming majority of in-use Tickets are assigned to SVRAs (93 percent as of December 2005), and most are assigned under the traditional payment system, which is available to SVRAs only (88 percent of all in-use Tickets in December 2005). In fact, these statistics substantially understate the role of SVRAs in providing employment services to beneficiaries because SVRAs do not obtain Tickets from more than half of the SSDI/SSI beneficiaries they serve. We also found that the share of Tickets assigned to SVRAs is gradually increasing, as is the share assigned under the traditional payment system.
As discussed below, there is little evidence to suggest that TTW has either expanded the number of private providers serving beneficiaries or substantially changed the way that public or private providers serve beneficiaries. Given the payment experience to date, it appears that the new payment systems are not rewarding enough to induce a substantial change in provider behavior; nor are they likely to become so unless they change dramatically.
TTW has not yet substantially expanded the number of private providers that serve beneficiaries or substantially changed service delivery. It appears that TTW has only partially met its goal of increasing the supply of rehabilitation providers available to serve SSA beneficiaries. On a positive note, by April 2007, more than 1,300 non-SVRA providers were registered as ENs and may now receive payments from SSA when they successfully serve beneficiaries. However, only about 45 percent have accepted a Ticket, and only about 25 percent have accepted five or more Tickets. Also, the EN enrollment rate has slowed, and the EN dropout rate is increasing; about one-third of ENs whose contracts ended have decided not to re-enroll.
Further, interviews conducted for previous reports (Chapter X of Thornton et al. 2007; Thornton et al. 2004, 2006) show that the vast majority of current ENs served beneficiaries before they became ENs and have not significantly changed their operations or client base in response to TTW. This finding is consistent across providers that have been operating as ENs in Phase 1 states since 2002 and as providers in Phase 2 and 3 states; many of the latter became ENs only recently. Several ENs said that they would have served interested beneficiaries even without TTW, in many instances under contract to an SVRA. For the most part, these ENs did not see TTW as providing them with substantial new financing or recruitment opportunities.
Change in SVRA service delivery has been limited. SVRA interviewees to date have indicated that TTW has not changed the way they provide services to beneficiaries, except that many now pay more attention to benefits planning by either referring clients to the local WIPA or doing the planning themselves. They continue to report that TTW administration is onerous and that they are taking steps to reduce the burden.
SVRAs also report that their budgets are particularly tight. Some have been forced to place beneficiaries on waiting lists despite the potential for payment under TTW. As with private providers, they see TTW not as a promising new opportunity to generate revenue but as an added burden.
The original TTW payment systems provided little financial incentive for ENs to participate actively in the TTW market. Fewer than half (48 percent) of ENs that have accepted Tickets have received any payments. As of late 2006, payments were highly concentrated among a few ENs; only 19 percent have received $50,000 or more. Long waits and complicated paperwork exacerbate the payment problem. Changes made by SSA in 2006 and 2007 to assist ENs with enrollment and payment processing may improve lag times in the future, but this report’s payment analysis does not address payment claims for earnings during those years. The experience of SVRAs that have accepted Tickets under the new payment system is similar. Even though payments are gradually increasing, the cost analysis in Chapter IX suggests that few providers are likely to find TTW financially attractive unless SSA significantly boosts revenue per assigned Ticket.
The number of employment-service providers has decreased, and the method of service delivery has changed little. Providers find that TTW is cumbersome and not conducive to financial gain. Changes to procedures and regulations may improve providers’ assessment of TTW in time if those changes make TTW sufficiently financially attractive for providers to offer the types and extent of services that beneficiaries need and want.
3. SSA Support for TTW Market Operations
Total payments by SSA to employment-support service providers have increased gradually over the past two decades, but with greater variability since 1999. The general decline in employment-support payments since 1999 does not seem attributable to TTW rollout. Reimbursements to SVRAs under the traditional system continue to account for the vast share of SSA employment-support spending, although payments under the new system have been increasing steadily since the TTW rollout.
SSA has completed TTW rollout and continues to address trouble spots in program administration, especially payment speed and complexity. It appears that changes in SSA’s administrative procedures have triggered a shift toward an SSA culture that is more supportive of return to work, but recent budget constraints appear to be seriously compromising SSA’s efforts to promote return to work. Efforts to market the program to providers and beneficiaries have not been measurably successful.
The composition of SSA payments to providers of employment services has not changed dramatically since the advent of TTW, but the overall volume of payments has generally decreased. Although TTW might have contributed to this decline because of differences between the new and traditional payment systems, the timing of the decline across the three phases does not show the pattern we would expect if TTW were a major factor. It is more likely that external economic trends explain the downturn.
SVRAs continue to select the traditional payment system for the vast majority of clients. Several SVRAs that once accepted a Ticket under one of the new payment system are no longer doing so. As of September 2006, all but 10 of the 64 SVRAs had accepted at least one Ticket under a new payment system, and total payments to SVRAs under the new systems had reached $1.2 million.
The number of ENs receiving payments was increasing, but only 23 percent of all ENs have received a payment, or about half of those that accepted a Ticket. Payments received by ENs almost doubled from July 2005 to September 2006, reaching a cumulative total of $4.9 million, but they remain very low relative to the number of Tickets assigned, and are highly concentrated among the few ENs that have accepted large numbers of Tickets. Only 14 percent of EN-assigned Tickets had generated at least one payment.
One reason for the low number of payments received under the new system is the long lag time between the earnings month and payment month. The median lag time for first payments is 7 months, and 25 percent of first-payment cases had lag times in excess of 12 months. Nonetheless, the medians for first payments reflect a shortening of the lag time relative to what it was when the program was first rolled out. Lag times for second and higher-order payments tend to be even longer, except for the relatively small share of payment claims filed under the expedited payment process. The slow payment process continues to be a major factor affecting both payment estimates and TTW market operations under the new payment system. However, we do not know what part of the process is driving the lag since we do not know what the lag times are for each component part. This is an important qualifier, because SSA has little or no ability to shorten the time from the earnings month to the month in which the EN submits a claim.
SSA completed the TTW rollout and is attempting to address remaining trouble spots, especially payment speed and complexity. In October 2004, SSA had mailed Tickets to all of the approximately 10 million Ticket-eligible beneficiaries. SSA is now mailing Tickets only to those who first met Ticket-eligibility requirements after the rollout was completed (mostly new adult beneficiaries). Altogether, SSA had mailed over 12 million Tickets by June 2007; 10 million recipients are still eligible to use their Ticket.
SSA has aggressively addressed the early implementation problems. Having reduced the backlog of “post-entitlement” work—mostly verification and recording of earnings reports—the agency has made it easier to rapidly verify Ticket eligibility and process payment requests. SSA also streamlined the EN application process, established an EN help desk, and automated its earnings tracking and verification systems. The agency also introduced an expedited process for outcome payments following the initial payment. So far, however, providers have not used the expedited process enough to make a difference in the average processing times. The median time from the earnings month to the payment month for claims generated by earnings in the first half of 2004 continued to be seven to nine months, depending on the type of claim.
Changes in administrative procedures appear to have started a cultural shift in SSA that makes the agency more supportive of return-to-work. SSA staff members interviewed for this report suggested that a culture shift within SSA is making the agency more supportive of return-to-work than it was in the years before TTW. It appears that the shift stems from the fact that many employees who serve beneficiaries with disabilities are learning about and have become more extensively involved in efforts to improve and document beneficiary earnings. Many received training on TTW and, more broadly, on the SSDI and SSI work incentive features; many have been introduced to and are using new data systems that track employment and other post-entitlement outcomes; and many were involved in the concerted effort to clear the post-entitlement workload backlog.
Congress has recently pushed the agency to focus on reducing the backlog of pending disability determinations. As a result, the extra resources that had been used to promote return-to-work efforts appear to have been redirected. It is therefore not clear that the shift in the attitude toward beneficiary employment will be sustained.
Past efforts to further increase the supply of providers were not successful. As part of a post-rollout push to stimulate demand for services get more providers to join the TTW market, SSA and the two Program Managers turned to a new marketing campaign. Although the Program Manager initiated a recruitment campaign in five localities, the effort appears to have had little impact on EN recruitment as of late September 2005.
SSA’s new regulations offer ENs enhanced financial incentives. Our analysis of the new regulations suggests that some ENs would be able to generate positive returns under the new regulations if they carefully target their recruitment and service delivery efforts. In particular, ENs would have a strong financial incentive to accept Tickets from beneficiaries who were initially moved into jobs by SVRAs. The more generous milestone payments, made possible by the new regulations, would encourage ENs to help more beneficiaries secure jobs that provide a starting point for long-term employment. Thus, the new regulations might induce providers to participate more actively in the TTW market and expand beneficiaries’ overall employment efforts.
B. Impacts of TTW on Beneficiary Behavior
It is safe to say that TTW has probably sparked a small, relatively rapid increase in beneficiary enrollment in employment services. Early impact results for beneficiary earnings and benefit receipt are inconclusive, however. Differences in trends for the latter outcomes across the early and late rollout states could not be distinguished from differences in trends that existed prior to TTW. As a result, it is not possible to tell whether TTW had an effect on these outcomes, whether the findings just reflect SSA’s strategy of rolling out TTW first in the states that were most well prepared for this major programmatic change, or whether the findings are accounted for by other unidentified factors that were having differential effects on outcomes in the early and later rollout states in advance of TTW. Based on administrative statistics for outcome payments and suspensions or terminations because of work, future impacts are likely to be larger than any impacts in the first two years, but they are not likely to be as strong in the near future as the impacts that Congress envisioned.
We estimate that TTW increased service enrollment in Phase 1 and 2 states by as much as 0.7 percentage point in its second year, or 19 percent of the enrollment rate we would have expected in the absence of the program. When projected to the second year for all states, this increase represents over 35,100 beneficiaries, including 32,000 enrolled at SVRAs and 3,100 enrolled at other ENs. The projected second-year impact on service enrollment is higher than the projected first-year impact of approximately 20,000, a hopeful sign of a larger impact in later years.
It is possible, however, that some of the estimated impact reflects the effect of TTW on how service enrollment is measured. Prior to TTW we could only observe beneficiary enrollment for SVRA services after the beneficiary’s SVRA case was closed. Now, however, we can identify beneficiary enrollment before case closure if the SVRA receives the beneficiary’s Ticket. Even if the effect of the change in measurement on the impact estimates were as large as it could possibly be, however, the estimated impact of TTW on enrollment remains positive, albeit much smaller, representing just 9,100 beneficiaries nationally in the second year, including 6,000 enrolled at SVRAs and 3,100 enrolled at other ENs. Consistent with expectations, the size of the estimated impact was much larger for younger beneficiaries than for older beneficiaries. There is little variation in estimated impact by beneficiary Title (SSDI-only, SSI-only, and concurrent).
Any impact of TTW on beneficiary earnings and benefits in the first two years of the program (2002-2003) was too small to detect with any degree of confidence. If TTW had any success in increasing beneficiary earnings or reducing benefit receipt, those effects were masked by differences between states in employment and benefit-receipt trends that pre-dated TTW, along with the underlying variation in beneficiary outcomes from state to state and over time.
It is possible that impacts on earnings and benefits will increase in the third year after the rollout and later. There are three reasons to expect some increase First, with time, some beneficiaries who participated in TTW in those two years are likely to increase their earnings and exit the rolls due to work. Second, participation rates continued to grow after 2003. Third, growth in the economy after 2003 likely provided better employment opportunities to some participants. Impacts on SSDI benefit receipt, especially, are likely to take a long time to develop, because SSDI beneficiaries must complete the TWP and the three-month grace period before they lose their benefits—a period of 12 months if they have not used any TWP months before assigning their Ticket.
Nonetheless, impacts on TTW participants are not likely to double the rate of permanent exits due to work from the pre-TTW level of approximately half a percentage point. The Congressional “findings” in the Ticket Act itself indicate that even such a small increase in exits would generate billions in benefits savings over the work life of the beneficiaries. The trends we observed in TTW payment data led us to conclude that TTW’s impact on participant exits will not reach the Ticket Act’s benchmark unless participation increases to well above the level in Phase 1 states observed during the analysis period, which ended in 2004, or unless participants, on average, have their benefits suspended or terminated for many more months than they have to date.
It is possible that TTW’s effect on exits due to work among all beneficiaries (including nonparticipants) could substantially exceed impacts on exits due to work among TTW participants for the simple reason that SSA’s administrative and other efforts, ancillary to TTW, might induce exits by nonparticipants. Even if the number of such exits is large, however, it might be a mistake to attribute them to TTW; although TTW might have been the driving force behind SSA’s overall efforts to improve return-to-work outcomes, presumably many, if not all, of the ancillary changes could have been implemented without TTW.
It will become increasingly difficult to attribute future earnings increases and benefit declines specifically to TTW, even if they occur. The phased rollout created an opportunity to estimate the effect of TTW by comparing beneficiary behavior between states with and without TTW. Once TTW was rolled out nationwide in 2004, however, such comparisons were no longer possible. As a result, future evaluation efforts will probably not be able to separate the effects of TTW on earnings and benefit outcomes from the effects of other confounding factors, including other efforts to improve employment outcomes for people with disabilities (for example, the Medicaid Buy-in). Future evaluation efforts will focus on tracking TTW performance measures such as overall beneficiary work effort, use of employment-support services, program exits due to work, TTW payments, and beneficiary earnings, but will not be able to specifically attribute any improvements to TTW.
While beneficiaries in the AOI groups defined by Congress have generally demonstrated lower-than-average participation rates in TTW, other factors—such as age, education, and the presence of children under age six living in the household—seem to play a greater role than the nature of the individual’s disability in shaping participation patterns. In passing the Ticket Act, Congress acknowledged that providers might be unwilling to accept Tickets from some beneficiaries because the TTW’s performance-based payment system may not cover service costs. As part of an effort to address such a concern, Congress required SSA to conduct a study of TTW participation among four groups of AOI beneficiaries:
• Group 1: Beneficiaries who require ongoing support and services to work
• Group 2: Beneficiaries who require high-cost accommodations to work
• Group 3: Beneficiaries who work but earn a subminimum wage
• Group 4: Beneficiaries who work and receive partial cash benefits
Data from the 2005 NBS show that 67 percent of all beneficiaries fall into one of the four AOI groups, and most of the 67 percent falls into Groups 1 and 2. The high percentage of AOI members is consistent with the expectations of the Ticket to Work Adequacy of Incentives Advisory Group, with research findings based on the administrative definitions for the AOI groups used in earlier TTW evaluation reports, and with the definition of disability used in administering Social Security disability programs.
Although the findings on TTW participation indicate that providers are equally willing to accept Tickets from AOI and non-AOI beneficiaries, overall, we found some evidence for providers’ concern about their ability to serve AOI beneficiaries adequately or to induce them to participate in TTW. This observation applies especially to those in Groups 1 and 2, who might require more intensive or long-term support if they are to secure employment. Their participation rates are relatively low, and they are more likely than others to have assigned their Ticket to an SVRA under the traditional payment system. Although these groups had low involuntary nonparticipation rates, those in the groups whom we interviewed reported greater unmet service needs than those in other AOI groups.
Research by McGrew (2005) indicates that, if properly designed, performance-based payment systems can address the needs of individuals with the most severe disabilities. The problems we observed may be an artifact of the low payment rates under the original system, which might be addressed by the newly modified payment system. In addition, it is possible that the findings result from implementation challenges in the early stages of TTW. Thus, we are unable to determine the degree to which the findings are attributable to the adequacy of TTW incentives.
C. The Future of the TTW Market
Assessing the progress and future of TTW depends fundamentally on program expectations. On the surface, those expectations seem modest. The Ticket Act indicated that the program would be successful if it could increase the rate at which beneficiaries exit the rolls due to work from 0.5 percent to 1.0 percent. These seemingly small numbers, however, represent a substantial change for the SSI and SSDI programs, which support some 10 million people with conditions and impairments that, according to SSA, have prevented them from engaging in substantial gainful activity. For these programs, the observed rate of exits due to work has persisted at below 0.5 percent for years, even in the face of numerous programmatic and economic changes (Berkowitz 2003; Social Security Administration 2006; Newcomb et al. 2003).
Furthermore, the changes sought by TTW seem large when viewed from the perspective of SSA operations, which have historically focused on paying benefits appropriately and efficiently, not on supporting return-to-work. TTW has required SSA to train staff in more than 1,300 field offices and to institute an entirely new service to help beneficiaries understand how work affects their benefits. Long-term SSA administrators have described the process of implementing TTW as comparable to launching the entire SSI program in 1974.
The changes expected of TTW are enormous when considered from the perspective of the employment-service providers, who have operated for many years in a cost-reimbursement system and are now being asked to continue in a riskier performance-based payment system. Many providers operate as nonprofits and may therefore be poorly positioned to find the working capital required to sustain TTW operations when the payments they receive for moving a beneficiary into successful employment are spread over five years. Newer providers may be hesitant to enter the market until they can clearly see ways to enroll enough beneficiaries to make TTW an attractive option compared with other service markets in which they could participate (such as acting as a subcontractor to an SVRA). All providers are likely to be concerned about how to navigate TTW’s complex reporting requirements.
Finally, TTW does not directly address what some regard to be the most significant barrier to return-to-work for SSDI beneficiaries: 100 percent loss of benefits once monthly earnings have exceeded the substantial gainful activity level for a sufficient period (i.e., the “cash cliff”).
Given all of these factors, it would have been surprising if TTW had produced dramatic changes in its first three years of operation (2002 through 2005). Not only did the program roll out gradually, but beneficiaries, providers, and operations staff clearly need time to respond to the new market. For example, SVRAs generally need more than two years to move a beneficiary into employment, and many beneficiaries have taken months to initiate services by assigning their Ticket. Thus, any changes resulting from the program are likely to emerge slowly.
Some lessons, however, have surfaced more quickly. In particular, it appears that the milestone-outcome and outcome-only systems provide little financial incentive for providers to participate in the TTW market. Fortunately, the Ticket Act accords the SSA Commissioner the authority to modify the payment rules and other aspects of the market in order to make it more efficient.
SSA used that authority when it issued new payment regulations. As noted, our review of the new regulations suggests that providers that carefully target and deliver services will have a much better chance of covering their costs and earning a profit under the new payment systems. Thus, the new rules may breathe new life into the TTW market, particularly if SSA can roll them out in a way that convinces providers to give the market another chance.
Regardless of how the new regulations play out, TTW marks an important step toward more widespread employment and greater self-sufficiency for people with disabilities. The field continues to learn about the best methods for helping people with disabilities understand and improve both their opportunities and their potential. And we are still identifying ways to integrate TTW into other employment initiatives. For example, at least one EN uses outcome payments to pay a wage subsidy to its SSDI beneficiary clients; that is a share of outcome payments to cushion the beneficiary’s landing from the “cash cliff”. Employers could potentially act as ENs and use outcome payments to subsidize or pay for accommodations.
In addition, overall progress toward increasing the employment of people with severe disabilities, including SSI and SSDI beneficiaries, means greater acceptance of the idea that many such individuals can successfully support themselves if they get employment assistance. Indeed, SSA has advanced that idea simply by mailing Tickets, recruiting new providers, training its staff, and improving how it tracks beneficiary employment. The challenge now is to build on these efforts and to sustain the policy, programmatic, and market momentum that could bring people with disabilities into the economic and social fold of American life.