Administration with earnings information for updating the individual's earnings record. Then when a claim for benefits is filed on his account, the earnings are used to calculate the benefit rate for the worker, his family, or his survivors. Continuing payment is handled by a master file of all social security beneficiaries. This file is updated by activity initiated by either a report submitted by a beneficiary or some other person or by controls in the system itself.

ISSUING SOCIAL SECURITY NUMBERS

Most of the processes for issuing social security numbers today are manual. For instance, applications for numbers are normally mailed to Baltimore where the applications are processed and the numbers issued.

If a person or his employer requires a number immediately, a local Social Security office can transmit the application information necessary to obtain the card to Baltimore over the telecommunications system. The application is then expeditiously processed, and the number sent to the district office over the telecommunications system. The social security card itself is mailed to the applicant.

Telecommunications is also used to issue replacement social security cards for those that have been lost or misplaced. In most of these cases, the individual completes a new application at the district office. The office sends the individual's number, as he entered it on the application, and identifying information over the telecommunications system to the central computer complex. There it is electronically compared to the social security number and identifying information contained in Social Security Administration's permanent records. The results are returned to the district office using the telecommunications system and a duplicate social security card is issued.

Retirement, survivors, and disability insurance benefits

For most of us, visiting a Social Security office does not bring to mind a young person obtaining a social security card, but a man or woman applying for benefits: an older person who will retire soon, a widow with young children, a worker who has been disabled. Every day thousands of people in these categories apply for social security benefits. Usually they visit a district office where they are interviewed and complete the necessary forms. However, in recent years, more and more claims are handled over the telephone. The district office employee interviews the claimant by telephone, completes the application based on the claimant's answers, and then mails the application to him. The applicant reviews the form to make sure the information is correct, then signs it, and returns it to the district office along with any proofs he has been requested to furnish.

After the claim is received, the district office requests the worker's earnings record from Baltimore by using the telecommunications system. The elec tronic earnings record is accessed, verified as accurate, and mailed to the requesting district office. The data keyed by the district office is retained in the claims system. The district office reviews all the claims material, makes the decision on the claim, and forwards the assembled material to a payment center for review.

In the reviewing office, the most complex cases are again reviewed. After final approval of the claim, data from the adjudicative document (either retained on computer records from when the earnings record was requested or keyed in the reviewing office) is processed in a series of computer operations. As a result of these operations the initial benefit check and the master beneficiary record (MBR) are prepared.

If a working individual has not filed a retirement claim within 3 months of becoming age 65, the Social Security Administration contacts him to obtain an application, principally to establish his eligibility to medicare. This is accomplished by screening Social Security Administration's electronic records for those persons 64 years and 9 months who have not yet filed a claim. These records are then matched to a tape file provided to us by the Internal Revenue Service (IRS). This tape, in social security number sequence, contains the address of all persons who filed a tax return. The worker's earnings record and address are combined and sent to the closest district office to contact the individual and advise him of his potential eligibility.

After an individual's claim for benefits has been processed, information about his entitlement is added to the master beneficiary record. This record, on 500 reels of magnetic tape, contains basic social security information on all bene

ficiaries entitled to retirement, survivors, disability and health insurance benefits, and special age 72 benefits paid from general funds.

This master beneficiary record is in social security number sequence and contains, in addition to each worker's number, complete identification of all beneficiaries including mailing address, entitlement data, benefit amounts, and benefit payment history. In an active status on this tape file at the close of May 1973, there were 33,040,163 individual social security beneficiaries.

The primary use of the master beneficiary record is to prepare regular monthly benefit checks. Each month transcripts of the record are sent from the Baltimore office to the payment centers by tape-to-tape high-speed telecommunications for transfer to the Treasury Department's regional disbursing centers, where the checks are printed. On June 3, 1973, as a result of this process 25,076,510 checks were mailed for 28,544,148 beneficiaries. The total amount of the checks was $3.9 billion.

New information which may affect social security benefits is received daily in social security district offices, payment centers, and Social Security Administration central office components, as well as from various State agencies. Many actions changes of address, reports of death, student and work notices-are keyed by the district office directly into the master beneficiary record system using the telecommunications network. These actions, entered by local offices, totaled 532,593 during April 1973. Those items not entered directly into the master beneficiary record by the district office also reach the system on a 1-day timeframe, once the course of action is determined at the other points of origin. This may be via the telecommunication system or, in the case of payment centers. a day's accumulation is batched and transmitted electronically via tape to tape. The new information is edited, merged, sorted, and associated with the appropriate master beneficiary record in a daily update process at Baltimore. The action items are then directed to 1 or more of 20 different posteligibility operations which perform the necessary decision processes within the same day update cycle. The decisions may involve starting or stopping benefit payments, adjusting amounts, preparing letters for the beneficiary explaining our action or referring the action to related folders for review.

In addition, the master beneficiary record system itself will identify as needed those beneficiaries who become eligibile for health insurance benefits, are due for a review of representative payee or disability status, and those whose benefit amounts may be increased because of additional earnings. Such systems identification assures that the individual will be advised on a timely basis of events or options which may affect his benefit while minimizing his need for knowledge of a complex law.

The posteligibility operation is one of the larger within the Social Security Administration in terms of the volume of items processed and the number of computer operations involved.

With this degree of activity on our master beneficiary record, it is essential that, when an individual either calls or walks into a local security office, accurate information is available to respond to specific beneficiary needs and inquiries. To accomplish this, Social Security Administration has developed a three-stage information system which offers optimum responsiveness to the individual request.

Microfiche of the master beneficiary record

Each district and branch office has as the backbone of its information system a file of the master records in clear langauge for all Social Security Administration beneficiaries living within the State. This file is in alphabetic order and is on microfiche-3- by 5-inch film containing thousands of individual records. The file is completely reissued every 6 months and contains not only active master beneficiary records but records of disallowances, railroad retirement eligibility, and entitlement to black lung benefits. With this file, a social security employee is able to answer many questions while the individual is on the telephone or at the office.

Master beneficiary record query system

For those cases where there has been recent action or where the individual is visiting from another State, the district office can query the master beneficiary

Yearly, 2 million beneficiaries have their benefit amounts increased automatically under this process. Another 100,000 have their monthly amount adjusted upward to give credit for work months between age 62 and 65, where no benefit was payable.

record using the telecommunication system and receive a teletype reply giving the status of any account on the master beneficiary record. Turn around time is determined by the time of day the message is sent and is usually within 36 hours, 72 hours at the most.

Critical case procedure

While most beneficiary inquiries can be answered satisfactorily by reference to the microfiche files or a teletyped query to the master beneficiary record, and most actions affecting the status of an individual's benefit can be keyed directly into the master beneficiary record system, in a workload of the size of the Social Security Administration's there are occasional undue delays in payment of an individual's benefit. When such a situation comes to the notice of the Social Security Administration the critical case procedure is put into effect. With this procedure, the beneficiary will either receive a benefit check or an explanation of why one is not due and and payable, within 10 days. The notice of critical case is sent via the telecommunication system directly to the payment center from the receiving district office. At the same time, the district office, via telecommunications instructs the central computer complex to send master beneficiary record information on the case directly to the payment center. This gives the payment center maximum time to locate the folder from which to certify payment. If the folder cannot be found, the payment center has all the information from the tape master record for the same purpose. While the need for this action is small in proportion to our total workload-only 7,767 cases in April-it is of utmost significance to the individual who relies on his social security check to meet daily living expenses.

Teleservice centers

To make the services of our local offices as convenient to the public as possible, we have, over the past few years, established 16 area teleservice centers. These are staffed with personnel trained to give full response to questions regarding not only social security benefits but also other community services and referral agencies. These centers have a single toll free telephone number for ease in calling and enough telephone equipment so a busy signal is only rarely encountered. The centers are equipped with microfiche files of the master beneficiary record for the areas involved and also with direct access to the telecommunication system. In this way, they can prepare action or information requests for transmission to the master beneficiary record system at the same time an inquiry is received by telephone from the beneficiary. If a signature or other material is needed, the center employee can either mail the request or refer the case to the appropriate district office for action without further involving the beneficiary. Health insurance for the aged-Medicare

The medicare program provides protection against the costs of health care for virtually all persons over age 65. Beginning in July 1973, it will be extended to cover disability insurance beneficiaries who have been entitled to disability benefits for 24 months or more.

Basic protection, financed through contributions paid while the individual is working, is provided against the costs of inpatient hospital services and related posthospital care for individuals who are eligible for any type of social security or railroad retirement monthly benefit when they attain age 65 (whether retired or not).

Benefits supplementing those provided under the hospital insurance program are available to all persons 65 and over, and effective in July to disability insurance beneficiaries (excluding certain aliens and subversives), on a voluntary basis. Those who choose to enroll pay a monthly premium, and this is matched by the Federal Government out of general revenues. (Beginning in July, enrollment is automatic for social security beneficiaries; but the individual still has the option of not particinating.) An aged person receiving public assistance (either cash payment or medical assistance) can be enrolled in the supplemental medical insurance plan by his State public assistance agency which pays the premium for the recipient. All but a handful of States have agreements to "buy in" for their welfare recipients. All told, about 95 percent of the aged who could have enrolled have elected to do so.

Responsibility for administering medicare is divided between the Social Security Administration and designated Blue Cross/Blue Shield organizations, and private insurance companies, called intermediates and carriers. Extensive communications are required between the Social Security Administration and the intermediaries and carriers in accomplishing the objectives of this program. The following are the basic operational health insurance/supplemental medical insurance processes:

The Social Security Administration is responsible for establishing the basic eligibility to medicare benefits, issuing the proper identification card to the beneficiary, maintaining the basic eligibility record, and supplying information to the intermediaries and carriers. The basic eligibility decision is made through the routine claims processing operations described above. These processes establish the necessary central master records and provide a medicare identification card to the beneficiary. The health insurance master utilization record is the primary vehicle for keeping track of the beneficiary's status under medicare and for supplying information to intermediaries and carriers. The basic eligibility decision is made through the routine claims processing operations described above. These processes establish the necessary central master records and provide a medicare identification card to the beneficiary. The health insurance master utilization record is the primary vehicle for keeping track of the beneficiary's status under medicare and for supplying information to intermediates and carriers. Since an individual's protection under medicare is limited, it is necessary to maintain information on how much protection he has used and how much remains. The utilization record is maintained on a national basis by the Social Security Administration so that information on every beneficiary will be available to all intermediaries and carriers, which handle geographic areas. Every beneficiary's use of medicare protection is reported to the Social Security Administration by the intermediary or carrier and this information is posted to the master record. When a beneficiary enters a hospital, he presents his medicare card. The intermediary, on behalf of the hospital, contacts the Social Security Administration which certifies the eligibility of the patient. Blue Cross, the largest intermediary, has its own wire system. The individual Blue Cross plans submit their inquiries to the central Blue Cross site in Chicago, where they are accumulated and transmitted, tape-to-tape, to the Social Security Administration. The replies are returned the same way. Other intermediaries and carriers use Social Security Administration's payment center or district office facilities, a separate telecommunications system, or mail the queries to the Social Security Administration. The Social Security Administration's reply shows whether or not the patient is eligible, if the deductible amount has been previously paid, and how much coverage the patient has previously used. The hospital or doctor is then paid by the intermediary or carrier. The bill that is submitted by the provider of service is forwarded to the Social Security Administration where it is used to update the master utilization record. (Better than one-half of the bills are submitted to us on magnetic tape.)

Social security district offices do not have a direct involvement with processing medicare workloads, but they do assist all parties involved in such activities as locating claim numbers, ordering replacement health insurance cards, answering general questions from beneficiaries regarding eligibility, payment of part B premiums, etc. The district office can query centrally maintained master records, vin the telecommunications system, in answering these requests.

The following chart depicts only the basic flow of claims for health insurance benefits. Some vital related functions, which do not appear on the chart, are: the establishment of conditions of participation for providers of services: the survey. by State agencies under contract with us, of providers, to see that they meet preset quality level; the development and maintenance of agreements with over 6.700 hospitals, about 4,000 skilled nursing facilities. 2.200 home health agencies, and 2,000 independent laboratories: maintaining relationships with the quarter of a million physicians in active practice-most of whom, at some time, treat a medicare patient; and, collecting premiums from over 20 million persons enrolled in the Supplementary Medical Insurance Program. The bulk of the premium collections are made by deductions from social security, civil service retirement. or railroad retirement benefits. Other premium collections of about $5.3 million a year result from monthly or quarterly bills to people who are not receiving monthly benefits.

Title XVI of the Social Security Act, enacted by Public Law 92-603, provides for supplemental security income payments to aged, blind, and disabled individuals whose income and resources are below certain levels prescribed by law. The law includes an optional State supplement provision which, if the State agrees, will be administered by the Social Security Administration. In cases of dire need, immediate cash advance payments can be made by the local office. The program is to go into effect on January 1, 1974.

The administrative demands of the new Supplemental Security Income program require a central electronic data processing system. Because of basic differences in the payment concept, the necessity for rapid implementation, and for minimizing the impact upon existing social security systems, the processing of this workload cannot be incorporated into the present system for the old-age survivors, disability and health insurance programs. However, the new Supplemental Security Income Computer System will use the information in these title II systems, as well as in other computer systems.

The focus of any claims processing system for the supplemental security income program will be on the individual applying for payment. Since individuals applying for the supplemental security payment will be facing present and immediate financial need, determinations of eligibility are best made at the local level and payment initiated through the use of improved communication systems and processing methods.

This claims processing system will be designed so that all applicants receive a speedy determination and payment within a reasonable period after application, considering service to the client, cost, and technology. This includes both the basic supplemental security income payment and any State supplement administered by the Social Security Administration. This system should also provide for controlling the advance payment as well as payments based on findings of presumptive disability.

Although the computer system for processing supplemental security income applications will be separate from those used to process claims under existing social security programs, we expect that these systems will be exchanging information about applicants under all programs in the following manner: Once an individual applies for supplemental security income payments, his social security number will be entered into the central systems for the retirement, survivors, disability and health insurance programs, and black lung program. If