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GAO Report: Disability Programs Susceptible to Physician-Assisted Fraud

December 11, 2014

Washington, DC – Today, House Ways and Means Subcommittee on Social Security Chairman Sam Johnson (R-TX) and Senate Finance Committee Ranking Member Orrin Hatch (R-UT) highlighted a new Government Accountability Office (GAO) report detailing how the Social Security Administration’s (SSA) $200 billion disability benefits programs are at risk for physician-assisted fraud.

The GAO found that SSA’s current anti-fraud efforts are hindered by inadequate employee training and disincentives for employees to report fraudulent activity.  In addition, the GAO found that SSA’s new initiatives to combat physician-assisted fraud are fraught with inadequate planning, data and coordination, thereby placing the nearly bankrupt Disability Insurance (DI) Trust Fund at an increased risk.

In discussing the report, Chairman Johnson said,  “Medicare doesn’t allow dirty doctors to treat seniors, yet Social Security won’t even question the medical evidence doctors provide.  The disability scandals in Puerto Rico and New York would never have been possible without crooked doctors helping to bilk hard working taxpayers of millions of dollars in annual benefits for nearly 200 undeserving recipients.  It’s time Social Security did a better job protecting the disability program from fraud and abuse.  Congress can help by passing my Stop Disability Fraud Act, which keeps Social Security from using evidence from dirty doctors.” 

“Physician-assisted fraud is a serious problem, and as the GAO points out, Social Security’s current response has been woefully insufficient and inadequate,” Ranking Member Hatch said.  “The disability trust fund is depleting at a rapid rate and each instance of fraud strains scarce resources needed for the truly disabled.  The Social Security Administration has a duty to the American people to ensure that disability benefits go to deserving Americans and that tax dollars received from hard-working American taxpayers are not wasted or stolen.”

SSA uses medical evidence to make determinations on disability benefits applications and is dependent on physicians to provide truthful and accurate medical evidence.  Recently, a number of schemes have come to light wherein fraudsters collude with physicians to submit fraudulent disability applications in order to receive cash payments from SSA.  While it is difficult to determine the exact amount of physician-assisted fraud, each case can cost SSA hundreds of thousands of dollars.  The DI Trust Fund is anticipated to be depleted in 2016.

Key findings from the GAO report follow and a full copy of the report can be found HERE:

Improved Employee Procedures and Training Needed: According the GAO report, “Unless SSA and the DDSs work to remedy performance measures that primarily focus on and reward timeliness, possibly at the expense of delving into potentially problematic claims, the agency will remain vulnerable to potential fraud. Further, absent enhanced and consistent training, front-line staff may lack the expertise to identify and report potential fraud.”

Initiatives Hampered by Mismanagement: According the GAO report, “SSA has launched several initiatives to detect and prevent potential fraud, but their success is hampered by a lack of planning, data, and coordination. … Absent a coordinated and cohesive effort, SSA could undermine the success of its new initiatives and remain vulnerable to physician-assisted fraud in the future.”

Medical Evidence from Sanctioned Physicians: According the GAO report, “SSA has not fully evaluated the risk associated with accepting medical evidence from physicians who are barred from participating in federal health programs. … SSA has some controls in place to help ensure that sanctioned physicians do not perform exams on behalf of the agency. However, the agency could be exposing itself to risk by using medical evidence from physicians who are sanctioned by either federal or state governments.”