Employment and Training Administration
Washington, D. C. 20210






April 2, 1996















Unemployment Insurance Service




Proposal to Modify the Benefits Quality Control Program

  1. Purpose. To provide information on a proposal to modify the Benefits Quality Control (BQC) program and to offer an opportunity to comment on the proposal.

  2. References. UIPL 41-95 (August 24, 1995), "Draft Narrative Describing the System for Enhancing Unemployment Insurance (UI) Performance: The 'UI Performs' System."

  3. Background. Beginning in 1993, a team of senior State Employment Security Agency (SESA) managers and Unemployment Insurance Service (UIS) staff known as the Performance Enhancement Workgroup (PEWG) developed the outlines of a comprehensive new closed-loop system for helping ensure continuous improvement in UI operational performance. This new system, called UI Performs, is described in UIPL 41-95, issued August 21, 1995, which solicited comments from SESAs. The UI Performs design is now being refined in the light of responses to UIPL 41-95; the system will be phased in over 3-4 years as the various components are completed.

    When complete and fully operational, UI Performs will comprise a renewed affirmation of long-standing principles for Federal-State cooperation; a redesigned process for operational planning and the execution of improvement activities; various mechanisms to ensure that performance in key areas at least exceeds certain minimum levels; and the redesign of many performance measurements plus the regular validation of key performance measures. The measures were selected to enable the UI system's success to be judged by how well it serves its ultimate customers--claimants and employers. Most of the data used to construct existing and new UI Performs easures are already in State databases; UI Performs should not appreciably increase measurement effort overall.

    The measurement redesign aspect embraces the results of three initiatives which predated UI Performs: Revenue Quality Control, which developed new measures for tax performance to replace those previously gathered under the Quality Appraisal (QA) system; the Performance Measurement Review (PMR) project, which updated QA benefit payment timeliness and quality measures; and data validation. The team designing UI Performs also proposed substantial changes in the Benefits Quality Control (BQC) system for measuring benefit payment accuracy, including the assessment of the accuracy of decisions to deny eligibility.

    This issuance deals with proposed modifications to the BQC program, intended to make it the benefits accuracy measure appropriate for UI Performs. The proposal was developed in part to help fulfill the Department's commitment to the Vice President's National Performance Review (NPR) to "reexamine the present mix of systems for improving the performance of the unemployment insurance program...[with] a substantial focus on the BQC program." (The NPR issue paper is Appendix I of the attached paper).

  4. The Proposal. The attached proposal was developed after a thorough review of BQC in the PEWG process. In the context of the NPR mandate, this set of changes represents how BQC's resources can "best be divided between measurement, analysis and direct support for program improvement" in the context of the larger UI Performs system.

    The following changes are proposed for BQC:

    Reductions in required sample sizes;

    Greater flexibility in how States verify claims data;

    A review of the existing BQC data record with the object of reducing its size;

    Elimination of the requirement that States release payment accuracy (overpayment and underpayment rates) in a public forum;

    More elaborate breakdowns of accuracy data when the Department reports them to help users more readily see the effect of different State laws and policies on overpayment and underpayment rates;

    The eventual measurement of the accuracy of decisions to deny, as well as to pay, claims; and

    Resources freed up by the reductions in measurement effort made available to pursue the goals of UI Performs overall, with an emphasis on continuous improvement.

  5. Next Steps and Timetable. Once the proposed changes are in final form, the Department will implement them incrementally as quickly as possible. Because of clearances, additional developmental work, and pilot testing, full implementation will take a few years. However, a number of key changes will be made in this calendar year.

    Elimination of State Release June 1996

    Sample Size Reductions Summer 1996

    Verification Flexibility Summer 1996

    Denials Accuracy (Pilot Begins) October 1996

    "Building Block" Data Breakdown January 1997

    DCI Review/Changes January 1997

    Denials Accuracy (Nationwide Start) October 1999

  6. Action Required. SESA administrators are requested to share these materials with affected staff and comment as appropriate. Please send comments to Burman Skrable, Office of Quality Control, 200 Constitution Avenue, NW, Room S-4015, Washington, DC 20210, Att: TEUQ, with cc to appropriate Regional Office staff. Comments should be sent 45 days from the date of this UIPL.

  7. Inquiries. Direct questions to your Regional Office; or to Burman Skrable on (202) 219-5220.

  8. Attachment. "Measuring UI Benefit Payment Accuracy Under UI Performs: Proposed Changes to Benefits QC" (February 1996)