Fraud And Disability Equal A Multibillion Dollar Black Hole For Taxpayers [View all]

[GiaGiovanni]

http://www.forbes.com/sites/richardfinger/2013/01/14/fraud-and-disability-equal-a-multibillion-dollar-balck-hole-for-taxpayers/

...The numbers substantiate a shift to these hard to (dis)prove afflictions. Over the past three decade’s awards for mental illness climbed from 16% of total claims to one third by 2010. During the same period “back pain” increased its market share from 13 to 28%....

A study by the NBER (National Bureau of Economic Research) found that for workers with low paying jobs, SSDI including Medicare replaced, on average, 90% of working income. (SSDI recipients get free Medicare after two years of receiving benefits.) In times of tepid job growth, like now for instance, wages are often stagnant, so if there is a choice between working at minimum wage versus doing nothing and earning almost equal amounts, sloth trumps exertion much more often than not.

...[S]econdly, the qualification standards have been severely watered down. As evidenced by above statistics “back pain” is questioned much less today. It is not difficult to claim otherwise when a person says they are depressed. Also, more attention is paid to the applicants claims of pain and special trust is placed in the report made by the applicants own physician. Third, once invited into the club, why leave. In 1983, 163 per 1,000 people terminated benefits. Jump ahead to 2011 and that number has collapsed to only 74 per 1,000. In a crummy job market the incentive is to stay put... A fourth reason is that the labor participation rate, at 63.7%, is at its lowest levels in generations. This translates that of the millions who have thrown in the towel looking for employment, many have elected to enter the SSDI lottery. This leads us to the huge issue of fraud.

“We know there are individuals who will purposely withhold or fabricate information to collect government benefits they are not entitled to receive”. Those are the words of the Office of the Inspector General from their hearing on “combating disability waste, fraud, and abuse”. The Senate conducted their own investigation which concluded that fully one quarter of all disability insurance claims decisions were flawed, improperly addressing “insufficient, contradictory, and incomplete evidence, thus increasing the chances of rewarding nondisabled persons.” The study also determined the Social Security Administration (SSA) failed to establish that claimants were properly screened to certify that they satisfied metrics in the Social Security Administration’s (SSA) medical “Listing of Impairments” to meet eligibility requirements that would qualify them for the DI program. The Inspector General’s office identified billions in fraud. The Senate study implies many billions more in abuses. Much of the ongoing program cheating comes from those who continue to collect disability payments but are stealthily employed on the side. Not surprisingly, some of the SSDI wounds are self-inflicted. The SSA loses hundreds of millions continuing to pay those who were honest and notified that they were returning to work. The agency is supposed to conduct CDR’s or Continuing Disability Reviews to check in and determine the status of the disabled. I know it surprises everyone that there is a huge backlog and SSA is severely understaffed in this area. Probably the biggest area of abuse is those who gingerly slip through the vetting net and shouldn’t be getting disability payments in the first place. The contrived complexity of the SSDI system has spawned a cottage industry of doctors and specialized legal teams to navigate the byzantine multi-tiered documentation process. While the integrity of most lawyers and doctors is beyond reproach there are a few bad apples that make their living gaming the system. Remember what your mother preached, “if at first you don’t succeed, try, try again”. This small nugget of wisdom pays off especially when applying for SSDI. Often applicants may be turned down on the first or second attempt to receive benefits. Many times it is only through a court hearing that cases get resolved. Per a study by D. Autor and M. Duggan as many as 40% of all disability awards comes through the appeals process. Some judges gain the reputation of never seeing a claim they didn’t like………never refusing anyone. They also found in one recent year the SSA paid out as much as half a billion dollars to claimants attorneys....