Government programs always begin with the best of intentions. Some Americans of an earlier age had little or no income when retired at age 62 and so were offered retirement benefits. Since wives of the 50s and 60s often stayed home to attend domestic affairs, an array of spousal benefits were added. Then children’s benefits. And survivor’s benefits. And when earnest, hard-working construction people fell from buildings, or factory workers suffered heart attacks, strokes, or developed terminal cancers and were too weak to work, Social Security Disability paid them benefits.
That was all well and good until disability became institutionalized and, to a degree-automatic. According to the Wall Street Journal, nearly 11 million people were receiving disability benefits at an annual cost of $136 billion in 2012. With that many people receiving disability benefits, the definition of “disabled” would have to include maladies of a less severe nature than those for which the program was intended.
Seventy-five people were arrested yesterday in Puerto Rico and accused of defrauding the Social Security Disability program. The fraudulent “team” included doctors and a former SSA worker as well as the alleged cheaters themselves receiving benefits.
There are in all 6,600 paid benefit claims which could be stopped as the result of this alleged fraud. Yet, this is likely the tip of the iceberg as the arrests occurred in Puerto Rico. How much fraud is occurring in SSA’s disability programs in the rest of the country? And why is this happening?
- The structure of the program is itself one of the reasons. Some disabilities are apparent but many alleged disabilities have no observable or apparent symptoms. A claimant could allege disability due to back injury, for example. Nearly everyone of a certain age has pains of one type of another. One person may claim those pains are disabling and attempt to claim benefits while another sloughs them off and continues working. The person who claims benefits can usually find a medical practitioner who will attest to “treating the patient for months.” Such “verification” comes complete with a set of medical records.
- The Social Security Disability program pays attorneys directly to represent clients whose disability claims have been denied. Attorney fees are usually limited to $4,000 per claim but it is common for disability specializing attorneys or agencies to juggle as many as 40-50 cases at one time. Do the math.
- Disability claims are taken by federal government employees who then ship the files to state agencies for medical decisions. The idea is to have an independent “hands-off” medical decision but attorneys for disability claimants can be hyperactive at this time, schmoozing state disability examiners with whom they are all too familiar. The state has an incentive to grant, rather than deny federal disability benefits, preferring federal benefits and Medicare eligibility to state assistance.
- The disability appeals process can last for years. If denied at the initial claims level or at the second level of appeal, a third appeals level or hearing can be set in which the attorney argues and demonstrates why his client meets the technical definitions of disability. Failing that, the claimant can continue the process in civil courts.
- Disability payments are set at maximum payment levels, providing additional incentives to win an award. In other words, a disabled worker of age 40 would have his benefits computed as if he were aged 67, the full retirement age. A successful claim would confer additional benefits to minor children, and the disabled worker would also receive Medicare eligibility.
- Once a worker receives disability, it is virtually impossible for SSA to stop the claim until 13 months have passed, even when the disability recipient returns to work. The disability review process is cumbersome, inefficient, impossible for most people to understand, frustrating to SSA workers, and has an appeals process which can extend for years-during which benefits must be paid.