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Johnson Opening Statement: Hearing on Social Security’s Payment Accuracy

June 14, 2011

The American people have just been told by the Trustees for Social Security and Medicare that these programs are headed towards insolvency. So when they hear Social Security is owed billions due to wrongful payments, Americans want, need, and deserve answers.

In FY 2009, overpayments totaled $6.5 billion for the retirement, disability, and Supplemental Security Income or SSI program, with most in the SSI program.  Worse, these numbers do not reflect lost savings resulting from Social Security falling behind on eligibility reviews.  

These reviews fall into three broad categories.  First, so-called SSI redeterminations are a periodic review of non-disability eligibility factors such as income and assets.  Social Security reduced the number of redeterminations by more than 60 percent between FY 2003 and FY 2008, resulting in $3.3 billion in lost program savings in FYs 2008 and 2009, according to Social Security’s Inspector General.     

The second category is work continuing disability reviews, known as work CDRs, where Social Security checks to see if one is making too much to remain on disability.  Should someone receiving disability benefits make over $1000 per month, referred to as substantial gainful activity, they may no longer qualify.

For the five-year period ending FY2009, wage errors in the Social Security Disability Insurance program accounted for nearly $1 billion annually, or about a third of total retirement and disability program overpayment error dollars.

Of these errors, two thirds resulted from beneficiaries’ failure to report their work activity.  The other third were associated with Social Security’s failure to timely complete a work CDR after they were told by beneficiaries that they had returned to work.  As a result it can take months or years before Social Security sends a notice demanding repayment of sometimes tens of thousands of dollars of accrued overpayments.  That’s maddening!

As we will hear today, if Social Security had better data matching capability and completed more reviews of earnings sooner, payment errors could be resolved more quickly or never happen in the first place.    

Lastly, Social Security has fallen behind reviewing the medical status of those receiving disability benefits.  In FY2010, Social Security had a backlog of 1.4 million medical CDRs. When these reviews aren’t done on time, people who no longer qualify will continue to receive benefits they don’t deserve.

Also these reviews not only provide savings to Social Security, they also provide savings to Medicare and Medicaid.  In fact, here’s how much we stand to save if they’re done on time.  For every dollar invested in a medical CDR, twelve dollars in savings is returned to these programs.  The return on each dollar invested in a work CDR is fifteen dollars.  Reviewing the asset and income levels of SSI recipients returns seven dollars for each dollar spent.  In the name of fiscal responsibility that’s time and money well spent.

However these savings won’t be achieved if Social Security isn’t committed, as it should be, to protecting precious taxpayer dollars.  Recently, the President, and the Congress were able to reach a bipartisan agreement on this year’s funding for Social Security’s operations.  I hope as we seek to achieve a similar bipartisan result we will also work together to ensure that Social Security does all it can to fight waste, fraud, and abuse.  The American taxpayers who foot the bill deserve nothing less.

Our witnesses today include those on the front lines of case processing, who represent managers of the State Disability Determination Services and managers of local Social Security offices.  We will also hear from the Social Security Inspector General about important work they do in their special investigative units fighting fraud.

We need answers and I’m counting on all our witnesses to provide them.