FEDERAL INFORMATION SYSTEMS AND PLANS-FEDERAL USE AND DEVELOPMENT OF ADVANCED INFORMATION TECHNOLOGY

(Part 2)

TUESDAY, JUNE 26, 1973

HOUSE OF REPRESENTATIVES,

FOREIGN OPERATIONS AND

GOVERNMENT INFORMATION SUBCOMMITTEE

OF THE COMMITTEE ON GOVERNMENT OPERATIONS,

Washington, D.C. The subcommittee met, pursuant to recess, at 10 a.m., in room 2203, Rayburn House Office Building, Hon. William S. Moorhead (chairman of the subcommittee) presiding.

Present: Representatives William S. Moorhead, Bill Alexander, James V. Stanton, John N. Erlenborn, and Gilbert Gude.

Also present: William G. Phillips, staff director; Norman G. Cornish, deputy staff director; and Stephen M. Daniels, minority professional staff, Committee on Government Operations.

Mr. MOORHEAD. The Subcommittee on Foreign Operations and Government Information will please come to order.

Today the subcommittee will continue the second phase of hearings on Federal use of information and communications technology. First we will hear the last of four witnesses called to discuss particular examples of information and/or communications systems being built or operated by Federal agencies.

Last week we heard testimony about the integrated municipal information systems sponsored by the Department of Housing and Urban Development, about the disaster warning system, or decision information distribution system (DIDS) being built by the Defense. Civil Preparedness Agency, and about the Federal Information Centers operated by the General Services Administration.

Today our first witness is Mr. Richard Shepherd, Director of the Systems Coordination and Planning Division at the Social Security Administration. Mr. Shepherd will discuss the Social Security Administration data acquisition and response system, which is known as SSADARS.

Mr. Shepherd, we very much appreciate your testimony. The Social Security Administration is well thought of by the American people, but there is this lurking fear that perhaps we are just going to become numbers and information concerning our life histories, stored in data banks, might be obtained by unauthorized people for unauthorized use.

You do have a long statement and, without objection, it will be printed in full in the record, along with the accompanying charts and appendices. As we discussed before the hearing, you do have an oral

summary.

You may proceed, Mr. Shepherd.

STATEMENT OF RICHARD D. SHEPHERD, DIRECTOR, DIVISION OF SYSTEMS COORDINATION AND PLANNING, OFFICE OF ADMINISTRATION, SOCIAL SECURITY ADMINISTRATION; ACCOMPANIED BY WILLIAM MOOG, TECHNICAL RESOURCES; RICHARD SCHUCK, ADMINISTRATIVE AND MANAGEMENT SYSTEMS; ROBERT BEVERIDGE, OPERATING SYSTEMS; AND HENRY PATT, DIRECTOR, DIVISION OF STATISTICS, OFFICE OF RESEARCH AND STATISTICS Mr. SHEPHERD. Thank you.

Mr. Chairman and members of the committee, I am Richard D. Shepherd, Director, Division of Systems Coordination and Planning, Office of Administration, Social Security Administration, representing the Honorable Arthur E. Hess, Acting Commissioner of Social Security. With me today are three of my assistant division directors: Mr. William Moog, Technical Resources; Mr. Richard Schuck, Administrative and Management Systems; and Mr. Robert Beveridge, Operating Systems. With me also is Mr. Henry Patt, Director, Division of Statistics, Office of Research and Statistics.

The Social Security Administration has considerable experience in the use of automatic data processing (ADP) and telecommunications in information systems. Its ADP complex in Baltimore, Md., is one of the largest in the world.

The records it maintains there to administer the Nation's social insurance program must be considered huge by any standards. Since the early 1960's, it has been using telecommunications systems extensively to transmit information between its offices. And it is now in the process of replacing some of its telecommunications systems with a modern teleprocessing system, the Social Security Administration Data Acquisition and Response System (SSADARS). I am happy to be here today to share our experience in this important area with you.

In general, my remarks will cover four areas. First, I would like to give you some background on how SSA is organized to carry out its responsibilities.

Second, I will describe the information systems the Social Security Administration uses in its operations, including a description of our current telecommunication operation utilizing the General Service. Administration's Advanced Record System, which we refer to as the ARS, and a projection of our operations utilizing our new Social Security Administration Data Acquisition and Response System (SSADARS).

Third, an explanation of how these systems are used in services to the public.

And fourth, the Social Security Administration's views on the need for interconnecting the telecommunications system we use with other Government or private systems.

The Social Security Administration is responsible for administering three major national social insurance programs. The retirement,

survivors, and disability insurance program pays monthly cash benefits to over 28 million individuals, a little more than one out of eight Americans.

The medicare program protects most Americans 65 or older against the cost of medical care. Effective July 1, 1973, this protection will be extended to cover social security disability beneficiaries who have been receiving benefits on the basis of disability for 24 or more consecutive months.

The supplemental security income program will provide a Federal basic income level for eligible aged, blind, and disabled persons. The new program, which will go into operation in January 1974, will replace the present multiplicity of requirements in the present FederalState welfare programs for the aged, blind, and disabled with uniform national standards. It will be financed from general revenues. About 5.3 million persons are expected to receive Federal benefits under the program in January 1974.

The Social Security Administration also administers the black lung benefits program. About 250,000 people-coal miners, and their families were receiving benefits at the end of 1972.

To administer these programs, the Social Security Administration utilizes an organizational structure that can be described in three major parts.

First, more than a thousand district and branch offices in cities and towns throughout the 50 States provide direct service to the public. Men and women visit or telephone these offices to obtain social security cards, apply for social security benefits, and effective this month, supplemental security income payments, to report events, such as a change of address, that may affect their benefit payments, or to obtain information about social security.

Second, the central office computer complex, located in Baltimore, Md., carries out most of the major automatic data processing involved in maintaining earnings records, processing claims and computing benefit amounts, and making changes in benefit rolls so that the right check will be delivered to the right person at the right time. This is also where the Social Security Administration's master records are maintained.

The major files are: the master earnings record, which maintains a record of earnings for each account that has been established. To date approximately 207 million accounts have been established and approximately 343 million earnings items are posted yearly. The master beneficiary record, which contains the information on all entitled beneficiaries needed to pay monthly benefits, contains a record of over 33 million entitled beneficiaries, and over 29 million of these people are in current payment status.

The health insurance master record, which contains information about individuals' entitlement to medicare and a record of their utilization of covered services, this information is used in making pavments on medicare claims. This file contains records on approximately 20 million entitled individuals. In addition a supplemental security income (SSI) master file is in the process of being established. This is the file that will contain the records of the 5.3 million people that will be entitled to benefits under the supplemental security program.

Third, the payment center complex. There are seven payment centers, also referred to as program centers. These are large case process

ing installations located in New York, Philadelphia, Baltimore, Birmingham, Chicago, Kansas City, and San Francisco. The payment centers review the more complex claims sent to them from the district offices and process cases that require manual processing, such as computer exceptions.

They also have an important data entry function. Information from the files is coded and keyed for entry into the central computer complex.

Other organizations also perform important functions in administering the social security program. Most of the work involved in paying claims for health insurance benefits is done by 130 intermediaries and carriers, which are nongovernment organizations such as Blue Cross and Blue Shield plans and private insurance companies.

Under contracts with us, these companies receive, process and pay most of the claims for health insurance benefits submitted by hospitals or other providers of services, beneficiaries, and physicians. State vocational rehabilitation agencies make determinations for disability insurance benefits.

Telecommunications systems are the primary link for transmitting information from one point to another in the Social Security Administration. They provide an effective method for entering data from throughout the country into our automatic data processing operations, and for transmitting information from one processing location to another.

I would like to emphasize several points about the Social Security Administration's use of telecommunications. First, telecommunication systems are an integral part of the overall systems that are used to administer the social security program.

Second, the great majority of information transmitted over the system consists of program data messages. That is information transmitted for direct entry into the computer operations, or computer output transmitted to the field offices for further action or to provide information to a beneficiary.

For example, about 85 percent of the present SSA traffic on the advance record system consists of a program of data messages.

Third, the Social Security Administration's operating systems, that is, the systems used to process claims and maintain benefit payments, determine traffic patterns on the telecommunication systems we use. For greatest possible efficiency, the telecommunication systems we use must be designed to meet these traffic patterns and the characteristics of our operating systems.

SSA uses two basic types of telecommunication systems. First, it uses high speed tape-to-tape transmitting systems, to transmit data. between the central office and the payment centers and between the central ADP complex and the health insurance intermediaries and carriers.

The number of terminals on these systems is relatively small, and the data transmitted is relatively large. The second type of telecommunication system that the Social Security Administration uses, and the one I think you are most interested in, provides the electronic communication between a large number of district and branch offices and the central office in Baltimore.

At the present time, SSA uses the GSA advanced record system for this purpose. This is a low-speed teletype system. The traffic transmitted from any field office is relatively small.

However, since there are more than 1,000 social security installations with advanced record system terminals, the total volume of our traffic is high. Our use of this system is largely for data entry into the ADP system. For this purpose, the data messages are gathered in three switching centers located in West Virginia, Kansas, and California, and transmitted in batches over high-speed limits to Baltimore.

This system is also used to transmit messages back to the field office from the central ADP complex and to send administrative messages between the various offices. The SSA is currently in the process of establishing a new telecommunication system, the Social Security Administration data acquisition and and response response system, called

SSADARS.

This system is designed to meet several critical needs. It will provide the additional teleprocessing capability that will be needed to handle the increase in workloads created by the supplemental security income program.

Second, it will have the capability to permit local offices to send inquiries to a data base in Baltimore and receive replies within seconds. Through an interconnection with the ARS, similar capability will also be provided to our offices that will remain on the ARS system.

Third, through the use of modern terminal equipment we will improve the data entry operations. For instance, format and data field identification data, which under the present arrangement must be repeated in message after message, will not have to be rekeyed each time. The system will also perform some on-line editing functions.

SSADARS is scheduled to go into full operation by next January. At that time it will provide telecommunications for 463 social security offices that have high volume workloads. This is about one-quarter of the total number of our offices.

The ARS system will continue to be used for remaining offices. Projection of the cost for continuing to rely entirely on the advanced record system versus the cost of using the advanced record system with the SSADARS as now planned indicates that SSADARS should produce a savings of about $18 million in the 5 fiscal years from 1974 through 1978. This is savings in direct cost for equipment lines and other teleprocessing costs.

Let me briefly describe some of our major program operations to show how our information systems are used in support of these operations.

First, issuing social security numbers. Although most of the processes for issuing social security numbers today are manual, telecommunications is being used in two large applications. First, when a worker or employer requires a number immediately, a local social security office can send the application information to Baltimore by telecommunications. The number issued will be sent back by the same system. A similar system using telecommunications is used to issue replacement cards when a worker has lost his card but knows what his number is. In these cases the alleged number can be verified by wire and a replacement card can be issued.