Deputy Social Security Commissioner Paul B. Simmons told the Senate Aging Committee yesterday that his agency is moving as quickly as possible to "humanize" its procedures and make sure people are not dropped from the disability rolls on the basis of inadequate evidence or cursory examinations.

"We are trying to humanize the system," Simmons said, responding to testimony that improper psychiatric standards and incorrect presumptions by Social Security about the ability of mentally ill people to work is forcing thousands off the rolls who are totally incapable of holding jobs.

From January, 1981, to August, 1982, Social Security, acting at Congress' behest, reviewed 183,000 cases involving mentally ill beneficiaries and made initial determinations, which are subject to appeal, to drop 86,000.

Committee Chairman John Heinz (R-Pa.) said that evidence was overwhelming that the procedures and standards for removing people are wrong and produce "nightmare results . . . driving people literally to the brink of death." Heinz said Social Security should stop reviews of the mentally ill until it has greatly improved procedures.

Simmons denied that the Reagan administration had "toughened the program," but agreed that "deficiencies in the administrative process" exist and go back many years. He said the current administration had taken a number of steps to make the process more personal instead of leaving it a purely "paper process."

These steps included instituting face-to-face interviews at the start of the review and also at the first level of appeal, doubling quality-control surveys of state agency decisions, eliminating back billing of people (sometimes for years of benefits) if they are removed from the rolls and requiring the states to review all medical evidence.

He said he hoped to improve medical definitions of mental illness in cooperation with the American Psychiatric Association, enlist more trained medical personnel in decision-making and make sure that capacity to function in a job is not simply inferred from the fact that people can function in the less stressful surroundings of the home.