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Following W&M Leadership, SSA Taking Important Steps to Address Disability Fraud

April 26, 2017

Today, the Ways and Means Social Security Subcommittee, chaired by Rep. Sam Johnson (R-TX), held a hearing to examine the Social Security Administration’s (SSA) efforts to prevent, identify, and manage fraud in the SSA’s disability programs. The discussion follows several high-profile, multi-million-dollar cases of disability fraud, including a scheme in Kentucky and West Virginia to fraudulently obtain $550 million in lifetime benefits.

Describing the risk disability fraud presents, Chairman Johnson said:

“Social Security pays hundreds of billions of dollars in benefits each year. If left undiscovered, fraud rings like those uncovered in Huntington, West Virginia, New York City, and Puerto Rico have the potential to cost hard-working taxpayers billions of dollars.”

In fiscal year 2017, the SSA will pay over $940 billion to approximately 62 million Social Security beneficiaries. As Seto J. Bagdoyan, the Government Accountability Office’s Director of Forensic Audits and Investigative Service, explained:

“Given their scope and scale, these programs are inherently risky and vulnerable to fraud. And recent cases, like the ones you mentioned, Mr. Chairman, highlight schemes through which individuals fraudulently obtained hundreds of millions of dollars in disability benefits.”

Sean Brune, an assistant deputy commissioner at the SSA, reaffirmed the agency’s commitment to preventing fraud, detecting and prosecuting fraudsters, and reclaiming every stolen dollar.

He pointed to the Social Security Subcommittee’s leadership and provisions in the Bipartisan Budget Act of 2015 as key drivers in helping the agency address vulnerabilities and move forward with solutions to address them before fraud happens. Mr. Brune described several anti-fraud efforts, including the Cooperative Disability Investigations program:

“We continue to expand our cooperative disability investigations, or CDI program. The CDI program places our partners in [the Office of the Inspector General] and law enforcement in a position to stop people who attempt to fraudulently receive benefits. Chairman Johnson and this Subcommittee have long championed this CDI program, and we thank you for that support.”

Acknowledging that more work lies ahead, Mr. Brune said:

“We are working to increase prevention through advanced predictive analytics. We will measure our progress, and continue to keep you informed as we move forward.”

But, as a new GAO report—requested by Chairman Johnson—highlights, the agency lacks a comprehensive, risk-based strategy and outcome-oriented performance metrics by which to measure the success of these efforts. As Mr. Bagdoyan noted:

“SSA has taken some steps to establish an organizational culture and structure conducive to fraud risk management in its disability programs … But it has yet to comprehensively assess these risks or develop a strategic approach to ensure its anti-fraud activities effectively mitigate these risks.”

He added:

“Without conducting a fraud-risk assessment that aligns with leading practices and developing an anti-fraud strategy, SSA’s disability programs likely remain vulnerable to new fraud schemes and the agency will not be able to effectively prioritize its risks and related anti-fraud activities.”

At the hearing, the SSA committed to conducting a fraud-risk assessment, in line with the GAO’s recommendation.

Subcommittee Members expressed their interest in helping the SSA develop an overall strategy to stop disability fraud. As Chairman Johnson concluded at the end of the hearing:

“We all agree disability fraud is a serious issue. We need to make sure fraudsters don’t continue to benefit at the expense of hardworking taxpayers. While Social Security has taken important steps to prevent fraud, there is still work to be done. I’m committed to working with Social Security and all of my colleagues to make sure the agency has all the tools to stop fraud.”

CLICK HERE to learn more about today’s hearing.