Posts Tagged With: wall street journal

Government Vows To Clean Up Disability Program Waste

Government tries to clean up disability program

(By Hoppy Kercheval in Hoppy’s Commentary | December 30, 2013)

(NOTE: the views expressed here are those of Hoppy Kercheval and his alone. If you want some accurate information about the Social Security Disability Determination Process, you would be wise to read socialNsecurity, the Confessions of a Social Security Judge. Available on Amazon.com. See  http://www.amazon.com/socialNsecurity-Confessions-Social-Security-Judge/dp/1449569757 )

The federal government may finally be getting a handle on the runaway Social Security Disability Insurance Program. The Wall Street Journal reports that the Social Security Administration is “tightening its grip on 1,500 administrative law judges to ensure that disability benefits are awarded consistently and to reign in fraud in the program.”

SSDI payments have risen dramatically in recent years.  A combination of the economic downtown driving more unemployed workers to the program and liberal awarding of benefits by some judges has raised SSDI rolls 20 percent in the last six years to 12 million people, with an annual budget of $135 billion.

At this rate, the disability program will have spent all its reserves by 2016, forcing either an increase in payroll taxes or a cut in benefits.

The Journal reports that the administrative law judges (ALJ) will no longer have “complete individual independence.”  Instead, they will be subject to supervision and management from the Social Security Administration (SSA).

The Association of Administrative Law Judges (AALJ) , the union representing the judges says it fears that will open the process to political interference, but that’s a straw man.  Many of these disability judges need someone looking over their shoulder.

The poster boy for waste, fraud and abuse in SSDI is ALJ  D.B. Daugherty of Huntington.  As a Social Security administrative law judge, Daugherty awarded benefits in virtually every case… thousands of them.  He worked closely with attorney Attorney Eric Conn, who advertised heavily in West Virginia and Kentucky, looking for potential clients.

According to the Journal, Daugherty once told a colleague, “Some of these judges act like it’s their own damn money we’re giving away.”  Daugherty resigned after the Journal first reported the story in 2011.

During the Great Depression, when Congress was first considering a federal insurance program for the disabled (the law didn’t pass until almost 20 years later), a Social Security Advisory Council actuary warned of costs beyond “anything that can be forecast.”

The fear was that well-intentioned assistance for any person with impairments of mind or body that would keep him from being gainfully employed for their rest of his life would devolve into a version of unemployment.

That warning has proven prophetic as this country’s Social Security Disability Insurance (SSDI) program has spun out of control and is now on course to run out of money by 2016.

Sunday night, CBS 60 Minutes aired a segment entitled “Disability USA,” which probed the abuse of SSDI.  Steve Kroft reported that SSDI rolls have risen 20 percent just in the last six years to 12 million people, with a budget of $135 billion.

West Virginia, despite a small population, is a big contributor to the SSDI rolls.  The AP reports that “West Virginia leads the nation in the percentage of adults receiving government assistance for disabilities.”

A big reason for the surge in SSDI is that people who have had their claims denied are hiring law firms that specialize in winning appeals.

According to 60 Minutes, “Last year, the Social Security Administration paid a billion dollars to claimants’ lawyers out of its cash-strapped disability trust fund.  The biggest chunk–$70 million—went to Binder & Binder, the largest disability firm in the country.

Jenna Fliszar, a lawyer who used to work for Binder & Binder and represent clients from West Virginia and other states, told CBS, “I call it a legal factory because that’s all it is.  They have figured out the system and they’ve made it into a huge national firm that makes millions of dollars a year on Social Security Disability.”

In 2011, the Wall Street Journal’s Damian Paletta reported on one Huntington-based disability judge who nearly always sided with the claimant.  Judge David B. “D.B.” Daugherty awarded benefits in all but four of 1,284 cases during one fiscal year.  The national average is 60 percent approval.

A report by the Committee on Homeland Security and Government Affairs estimates that Daugherty awarded more than $2.5 billion in benefits in the last 7 years of his career.

The Journal reported that Daugherty worked closely with lawyer Eric Conn, who advertises heavily in southern West Virginia and eastern Kentucky, looking for potential clients. Daugherty resigned after the Journal’s reports. Conn, who continues a thriving practice in SSDI cases, was evasive in a brief interview with 60 Minutes about his relationship with the former judge.

The abuse of the SSDI system has caught the attention of the Senate Committee on Government Affairs. It held a hearing Monday and issued a report finding “a raft of improper practices by the Conn law firm to obtain disability benefits, inappropriate collusion between Mr. Conn and a Social Security Administrative Law Judge (Daugherty), and inept agency oversight which enabled the misconduct to continue for years.”

The Committee report says Daugherty’s bank records show $96,000 in cash deposits from 2003 to 2011, for which Daugherty refused to explain the origin or source of the funds.

As one of the SSDI administrative judges said, “If the American public knew what was going on in our system, half would be outraged and the other half would apply for benefits.”

Frankly, it’s predictable that Americans hit by hard economic times are tempted to latch on to any government help they can, especially when there is an alliance of lawyers, doctors and judges willing to shepherd them through the system.

In doing so, however, they are squandering taxpayer dollars and bankrupting a legitimate program.

Meanwhile, earlier this year federal authorities arrested 75 people in Puerto Rico on charges of defrauding SSDI out of millions of dollars.  A former Social Security employee teamed with complicit doctors to falsely diagnose individuals as mentally incapable of working.

But the problem is not just the outliers like Daugherty and the Puerto Rican scam.

As the Journal reports, there is widespread disparity in how judge’s rule.  “Dozens of judges awarded benefits in 90 percent of their cases, while others were much less likely to find someone unable to find work, denying benefits in more than 80 percent of their cases, data showed.”

SSDI is an essential part of the country’s safety net.  Those who are impaired, either in mind or body, and cannot work are entitled by law to support.  However, it’s important to remember that SSDI is not another option for the unemployed, nor should it be an easy target for scammers.

Politicians like to say they can save taxpayer dollars by tightening up on waste, fraud and abuse–it’s easier than proposing real budget cuts–but in the case of SSDI, they’re right about the profligate misspending.

During the House Ways and Means Subcommittee on Social Security hearing on Thursday January 16th, Rep. Tim Griffin (R- Ark.) raised questions about the disability program’s efficiency and accuracy in the wake of recent high-profile fraud cases.

Social Security Administration Inspector General Patrick O’Carroll and SSA Acting Commissioner Carolyn Colvin testified before the subcommittee about the SSA’s ability to root out fraud and handle employees who are implicated in a scheme.

Colvin testified that 99 percent of disability payments are made correctly. Griffin, however, noted recent disability schemes in New York, Puerto Rico and West Virginia and challenged the accuracy of Colvin’s claim.

That talking point, Griffin said, “needs to be erased” because the nature of fraud makes it impossible to know how rampant abuse of Social Security disability has become.

Griffin also questioned the SSA’s ability to reprimand and fire SSA employees who are investigated or implicated in disability schemes.

“…We all know that in order to fire someone, they do not have to be innocent until proven guilty in a court of law applying (the) beyond a reasonable doubt standard,” Griffin said. “That’s not the standard to fire people.”

O’Carroll said the preference is to place an employee on leave without pay while investigating criminal activities; however, sometimes employees are left in place and monitored in an effort to identify co-conspirators.

Ms. Colvin is running the agency until the White House nominates a commissioner, and the White House has not signaled when it might move on the vacancy.

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Social Security Judge Found Unconscious But Alive

Under fire retired Social Security Judge recently found unconscious by police 

BARBOURSVILLE, W.Va. — A Barboursville police report released Friday said police recently found a former federal administrative law judge, who has been under investigation, in his car barely breathing after what may have been a suicide attempt.

Retired Social Security Administrative Law Judge David Daugherty has been under fire since a 2011 report.

Various media reports Saturday detailed the police report concerning David Daugherty.  That report said he was found unconscious in his car Monday afternoon in a Barboursville church parking lot.

The report said the police found a garden hose running from the car’s exhaust into the passenger side of the vehicle.

Judge Daugherty was taken to a hospital and later released.

Judge Daugherty retired in 2011 shortly after a story in the Wall Street Journal focused on the high rate in which he approved Social Security disability cases. Judge Daugherty was placed on leave after the story broke. Allegations of fraud have been under investigation by a U.S. Senate committee. The committee recently held a congressional hearing.

The fraud is so rampant, and disability cases have so proliferated in recent years, that the Social Security’s Disability Trust Fund may run out of money in only 18 months, says Sen. Tom Coburn, R-Okla., whose office undertook the investigation.

Coburn’s report on widespread fraud focuses in large part on a veritable “disability claim factory” allegedly  run by Attorney Eric C. Conn out of his small office in Stanville, Kentucky, a region of the country where 10 to 15 percent of the population  receives disability payments.

The report documents how Attorney Conn allegedly worked together with Social Security Administrative Law Judge David Daugherty (ALJ)  and a team of favored doctors with checkered pasts, including suspended licenses in other states, who rubber stamped approval of disability claims. In most cases, the claims had been prepared in advance with nearly identical language by staffers in Conn’s law office.

The report found that over the past six years, Attorney Conn allegedly paid five doctors almost $2 million to provide favorable disability opinions for his claimants.

In 2010, the last year for which records are available, Judge Daugherty approved 1375 disability cases prepared by Attorney Conn’s office and denied only 4 of them – an approval  rate that other administrative law judges have described as nearly  impossible.

Judge Daugherty, 75 years old, processed more cases than all but three judges in the U.S. He had a wry view of his less-generous peers. “Some of these judges act like it’s their own damn money we’re giving away,” Mr. Daugherty told a fellow Huntington judge, Algernon Tinsley, who worked in the same office until last year, Mr. Tinsley recalled.

Judge Daugherty was a standout in a judicial system that has lost its way, say numerous current and former judges. Judges say their jobs can be arduous, protecting the sometimes divergent interests of the applicant and the taxpayer.

Some former judges and staff said one reason Judge Daugherty was allowed to continue processing so many cases was because he single-handedly helped the office hit its monthly goals. Staff members can win bonuses and promotions if these goals are surpassed as part of performance reviews.

Critics blame the Social Security Administration, which oversees the disability program, charging that it is more interested in clearing a giant backlog than ensuring deserving candidates get benefits. Under pressure to meet monthly goals, some judges decide cases without a hearing. Some rely on medical testimony provided by the claimant’s attorney.

The report found, “Judge Daugherty telephoned the Conn law firm each month and identified a list of Mr. Conn’s disability claimants to whom the judge planned to award benefits. Judge Daugherty also indicated, for each listed claimant, whether he needed a “physical” or “mental” opinion from a medical professional indicating the claimant was disabled.”

The report says that when Senate staffers and the Social Security Administration’s Office of the Inspector General began an investigation based on tips from whistle blowers, Attorney Conn and Judge Daugherty began communicating with disposable, pre-paid cell phones. It also alleges they contracted with a local shredding company to destroy 13 tons of documents. Attorney Conn also allegedly destroyed all the computer hard drives in his office.

In 2011, the SSA placed Daugherty on administrative leave. He retired shortly after that.

Attorney Conn’s legal fate is now in the hands of the Justice Department.

The alleged  fraud highlights an endemic problem in Social Security disability benefit awards. The Coburn report says a random examination of 300 case files by Congressional staff found more than a quarter of  the case files “failed to properly address insufficient, contradictory, or incomplete evidence,” suggesting a high rate of fraud or abuse.

Daugherty served as a Cabell County circuit judge for 7 years beginning in 1977.

By Jeff Jenkins in News | October 19, 2013

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Federal Investigators Widen Probe of Doctors In Potentially Large Scale Disability Fraud Scheme

Social secruity

Social secruity (Photo credit: SalFalko)

Social Security administrative Law Judges (ALJ) are approving more claims for disability benefits in 2013 than in previous years. A federal probe in 2011 revealed wide spread disparities in the approval rates of different states and among ALJs in the same office. The chances of being awarded disability benefits appear to be influenced by the State one lives in and the ALJ who is assigned to hear your case. Your chances increase dramatically if the medical doctor who examines you files a report stating that you cannot work because of a physical or mental impairment that prevents you from sitting for long periods of time or from concentrating on specific job assignments.

Disorders of the back are the most common type of physical impairment. Physical evidence of a condition that can reasonably be expected to result in a serious impairment is easy to ascertain.  Mental impairments are harder to prove than physical impairments. They are more subjective. In the case of an allegation of a mental impairment, judges are forced to rely more heavily on the expert opinion of a trained mental health professional, usually a clinical psychologist or a psychiatrist.

Federal investigators on Wednesday, August 21, searched six facilities in Puerto Rico as part of a broadening probe into potential widespread disability fraud.

Investigators from the Federal Bureau of Investigation (FBI) and the Social Security Inspector General’s office (SSIG), among others, searched five doctors‘ offices and one other location as part of their sweep, a spokeswoman for the U.S. attorney said. The spokeswoman wouldn’t comment further, saying it was part of a continuing investigation and that the six search warrants were sealed.

Doctors play a big role in determining whether people qualify for federal disability benefits because their recommendations often sway state disability determiners and Federal Administrative Law Judges (ALJ) working for the Social Security Administration. Criminal investigators have been looking into whether doctors were paid to improperly create documents detailing applicants’ inability to work.

The federal investigation into disability fraud was launched in 2011 after a page-one article in The Wall Street Journal revealed widespread disparity in how some states and U.S. territories implement the Social Security Disability Insurance (SSDI) program. The chances of winning benefits could vary widely based on where someone applied for benefits, even though standards are supposed to be uniform.

 

In 2006, just 36% of initial applicants in Puerto Rico were awarded benefits. In December 2010, the award rate had jumped to 69%. By 2010, nine of the top 10 U.S. ZIP Codes for workers receiving disability benefits were on the island.

At the time, SSA officials said the high number of recipients and the high award rate was due to the island’s weak economy and a lack of adequate health care for workers.

The program is overseen by the Social Security Administration (SSA) in Baltimore, but the State Disability Determination Service (DDS) is responsible for performing an initial screening to determine eligibility. Social Security officials said in 2011 that Puerto Rico had rigorous standards and a virtually nonexistent error rate.

The characteristics of Puerto Rico’s beneficiaries differed from other areas. In addition to the large clusters in certain zip codes, federal data showed that 33.3% of Puerto Rican beneficiaries qualified because of “mood disorders,” a rate that is at least 10 percentage points higher than any U.S. state.

Disability examiners and federal judges say mental disorders are harder to measure. decisions are often based on medical opinions contained in Consultative Examinations (CE) issued by doctors to make a determination.

 This probe that has been ongoing for two years.  Federal authorities have made 68 arrests in Puerto Rico alone.

The inspector general from the U.S. Social Security Administration has stated that prosecutors have now also charged a former Social Security employee as well as three doctors with having taken part in assisting individuals in making false disability insurance claims. They worked to help individuals to falsely claim that they were too injured or sick to be able to work.

Disability InsuranceIn return, the suspects were allegedly provided a certain portion of the disability insurance payments of the scammers.

Typically, the cuts that they received from the disability insurance payments ranged from $150 to $6,000. Among those who were charged, dozens included individuals who had actually made these fake claims. The arrests come on the heels of an investigation that had been conducted by the Wall Street Journal in 2011, which looked into unusual claims that were being made in Puerto Rico.

This case also draws attention to an increasing problem that the federal government is currently facing, which is the ballooning disability insurance payments within a program that has standards that are notoriously soft regarding the actual definition of what a disability actually is. For instance, in 2011, when the investigation began from the news paper giant, the federal payments in that program reached $190 billion.

It has been suggested that the reason that disability insurance payments have been growing as quickly as they have – now paying out to over 14 million Americans – is that it has become a sneaky safety net for individuals who are unable to find adequate jobs, but who desperately need to make an income, as the average annual payment is up to twice the income of employment at minimum wage. Another contributor to the growth is that the average age of the workforce is getting higher, and older individuals have a higher risk of experiencing health problems.

SSDI was designed as a way to provide benefits for people who can’t work because of mental or physical health problems, and Americans can qualify for benefits because of ailments ranging from severe back pain to terminal cancer. A lifetime of benefits, including access to Medicare, can cost the government about $300,000 a person.

The program became a safety-net-of-last-resort for millions of Americans during the recent economic downturn, including many who had collected unemployment benefits and had hoped to return to the workforce. SSDI had 7.6 million beneficiaries in 2003, and that number swelled to 10.9 million by the end of 2012. More than 200,000 of the beneficiaries are in Puerto Rico, according to federal data.

SSDI paid out $136.7 billion in disability benefits last year, almost twice as much as the government spent on food stamps. The vast majority of people who receive disability benefits never leave the program to return to the workforce.

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Social Security Judges Operate With Virtually No accountability

A Congressional Report from the House Ways and Means Committee  Confirms Social Security Judges Operate with Virtually No Oversight or Accountability.

Washington, DC – The Office of Inspector General (OIG) issued the second of a two-part report identifying Administrative Law Judges (ALJ) who are considered outliers because of the number of their disability decisions rendered either favorable or unfavorable.  The report comes in response to a June 16, 2011 bipartisan request from Members of the Ways and Means Social Security Subcommittee asking the Social Security Administration’s (SSA’s) Inspector General to review ALJ workloads, adherence to Agency policies and procedures, and quality reviews.  The Members made that request in the wake of a Wall Street Journal article exposing the practices of a West Virginia ALJ who granted awards in 1,280 of the 1,284 disability cases he handled.

Social Security Subcommittee Chairman Sam Johnson (R-TX) said, “ALJs are supposed to be making their decisions on behalf of the Commissioner of Social Security, but this report confirms that ALJs operate with virtually no oversight and no accountability.

“On review, Social Security disagreed with 1 out of 7 ALJ awards but couldn’t reverse those decisions.  What kind of a process allows a bad decision to stand because the decision-maker can’t be challenged? That’s just not right.  Given that the Social Security Disability Insurance program will become insolvent in just a few short years, it is more important than ever that we protect taxpayers and ensure that the program pays benefits only to those who are truly disabled.”

http://www.disabilityjudges.com/state/california/downey

http://www.disabilityjudges.com/

Background:

Background:

The key findings of the report, “Congressional Response: The Social Security Administration’s Review of Administrative Law Judges’ Decisions” are summarized below:

The Administrative Procedures Act (APA) prevents an agency from improperly influencing an ALJ’s decision and protects ALJ decisional independence.  However, ALJs must follow agency regulation, policy, and procedure in making decisions.  Under the law, the agency may not review the decisions of a specific ALJ before their decisions are processed (such reviews are referred to as pre-effectuation reviews).

Reviews after a decision is processed, or post-effectuation reviews, along with special studies may target the decision of a specific ALJ based on anomalies in productivity or allowance rates.   Based on these reviews, the SSA can issue directives to an ALJ for policy compliance; take disciplinary action; or identify training needs to bring ALJs more closely into alignment with Agency policies and procedures.

Recently, the SSA conducted three types of reviews of ALJs’ decisions. Two of these involve a selected sample of cases to determine if regulations, policies, and procedures have been followed and also to identify training needs.  The third was a series of special post-effectuation studies based on anomalies of decisions by seven ALJs that came to the SSA’s attention.  Out of these special studies performed, one ALJ was identified as not following polices and procedures, was corrected, and became compliant.

The OIG concluded that the SSA has authority to review ALJ decisions but faces legal restrictions in conducting those reviews. Changes to current law would be needed to allow the SSA to review and correct decisions of specific ALJs based on unusually high or low allowance rates.

http://waysandmeans.house.gov/News/DocumentSingle.aspx?DocumentID=288715

Social Security Judges are under fire from Congress which recently discovered how much they are paying out in benefits. In a recent series of articles in the Wall Street Journal and other media, judges are being focused on for approving every disability case that comes before them. http://online.wsj.com/article/SB10001424052748704681904576319163605918524.html; http://www.sltrib.com/sltrib/news/51934862-78/disability-security-social-judges.html.csp; http://www.alternet.org/newsandviews/article/592475/wall_street_journal_tries_to_smear_west_virginia_judge_over_social_security_rulings?page=entire; http://www.huntingtonnews.net/4769; ).” target=”_blank”>(http://online.wsj.com/article/SB10001424052702303654804576347790598676096.html; http://online.wsj.com/article/SB10001424052748704681904576319163605918524.html; http://www.sltrib.com/sltrib/news/51934862-78/disability-security-social-judges.html.csp; http://www.alternet.org/newsandviews/article/592475/wall_street_journal_tries_to_smear_west_virginia_judge_over_social_security_rulings?page=entire; http://www.huntingtonnews.net/4769; ). Some in Congress are wondering why we need to pay a judge $167,000.00 a year to rubber-stamp every case that comes before him. A lawyer at the GS-9 level making $40,000.00 a year or less could do the same and save millions of dollars a year. The Law of Averages says that even a trained chimpanzee would be right about half the time, and he would work for peanuts.

Americans seeking Social Security disability benefits will often appeal to one of 1,500 administrative law judges (ALJ) who help administer the program. In the first half of 2011, 27 ALJs awarded social security benefits 95% of the time because of pressure from Commissioner M. Astrue. Nationwide over 100 ALJs are approving 9 out of every 10 cases that come before them. The cases they fail to approve are likely to be approved by the Appeals Council, which works for the Commissioner. Senate and House Committees are investigating the issue. Approving all cases without even reviewing the file is called “paying down the backlog”. Judges are under pressure to move cases quickly in order to clear a backlog of 730,000 pending cases. The pressure comes directly from the Commissioner of Social Security. This is one of the things that I discuss in detail in the book “socialNsecurity”, available at

http://www.amazon.com/SocialNsecurity-ebook/dp/B006VOQIKK

I put it in proper perspective. Having spent about 20 years observing the competing forces that produce a judge who reverses 100% of his cases, while another reverses less than 10%, I have a better handle on this issue than a reporter who writes a sensational article. Much of my insight and explanation of the competing forces is spelled out in my book “socialNsecurity, Confessions of a Social Security Judge”. Anyone looking for more historical and recent statistics on this subject along with an explanation of how the system works can find easy readable information in my book.

Categories: Social Security Judges | Tags: , , , , , , , , , | Leave a comment

Social Security Judges Under Fire

Social Security Judges are under fire from Congress which recently discovered how much they are paying out in benefits. In a recent series of articles in the Wall Street Journal and other media, judges are being focused on for approving every disability case that comes before them. (http://online.wsj.com/article/SB10001424052702303654804576347790598676096.html; http://online.wsj.com/article/SB10001424052748704681904576319163605918524.html; http://www.sltrib.com/sltrib/news/51934862-78/disability-security-social-judges.html.csp; http://www.alternet.org/newsandviews/article/592475/wall_street_journal_tries_to_smear_west_virginia_judge_over_social_security_rulings?page=entire; http://www.huntingtonnews.net/4769; ). Some in Congress are wondering why we need to pay a judge $167,000.00 a year to rubber-stamp every case that comes before him. A lawyer at the GS-9 level making $40,000.00 a year or less could do the same and save millions of dollars a year. The Law of Averages says that even a trained chimpanzee would be right about half the time, and he would work for peanuts.
Americans seeking Social Security disability benefits will often appeal to one of 1,500 administrative law judges (ALJ) who help administer the program. In the first half of 2011, 27 ALJs awarded social security benefits 95% of the time because of pressure from Commissioner M. Astrue. Nationwide over 100 ALJs are approving 9 out of every 10 cases that come before them. The cases they fail to approve are likely to be approved by the Appeals Council, which works for the Commissioner. Senate and House Committees are investigating the issue. Approving all cases without even reviewing the file is called “paying down the backlog”. Judges are under pressure to move cases quickly in order to clear a backlog of 730,000 pending cases. The pressure comes directly from the Commissioner of Social Security. This is one of the things that I discuss in detail in the book “socialNsecurity”, available at http://judgelondonsteverson.com; and I put it in proper perspective. Having spent about 20 years observing the competing forces that produce a judge who reverses 100% of his cases, while another reverses less than 10%, I have a better handle on this issue than a reporter who writes a sensational article. Much of my insight and explanation of the competing forces is spelled out in my book “socialNsecurity, Confessions of a Social Security Judge”. Anyone looking for more historical and recent statistics on this subject along with an explanation of how the system works can find easy readable information in my book.

Categories: Social Security Benefits | Tags: , , , , , | Leave a comment

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