Posts Tagged With: West Virginia

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.

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

The Judge Who Could Not Say No

HUNTINGTON, W.Va.—Americans seeking Social Security disability benefits will often appeal to one of 1,500 judges who help administer the program, where the odds of winning are slightly better than even. Unless, that is, they come in front of David B. Daugherty.

[Judge_A1] The Herald-DispatchJudge David B. Daugherty

In the fiscal year that ended in September, the administrative law judge, who sits in the impoverished intersection of West Virginia, Kentucky and Ohio, decided 1,284 cases and awarded benefits in all but four. For the first six months of fiscal 2011, Mr. Daugherty approved payments in every one of his 729 decisions, according to the Social Security Administration.

The judge has maintained his near-perfect record despite years of complaints from other judges and staff members. They say he awards benefits too generously and takes cases from other judges without their permission.

Staffers in the Huntington office say he hears a disproportionate number of cases filed by one area attorney. Mr. Daugherty has been known to hold hearings for as many as 20 of this lawyer’s clients spaced 15 minutes apart.

Mr. Daugherty is 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. 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.

This breakdown is one reason why Social Security Disability Insurance—one of the federal government’s two disability programs—is under severe financial strain. It paid a record $124 billion in benefits in 2010 and is on track to become the first major entitlement program to go bust. Government officials said last week it is expected to run out of money in 2018.

Social Security Disability Awards

The U.S. program’s tribulations come as other countries are trying to limit the costs of their disability programs. In the U.K., officials have proposed requiring routine re-evaluations of people with disabilities to see if their conditions have changed. Australia has proposed that some beneficiaries participate in job-training programs, with the goal of eventually moving them off government support.

American applicants for disability benefits must first seek approval from state officials, who play a lead role in an initial review. Applicants twice denied can then appeal to one of the Social Security Administration’s administrative law judges. The judges are appointed by the federal agency after a competitive exam and screening process.

Hearings, which aren’t open to the public because of medical-privacy rules, typically last an hour and include either the judge or the applicant’s attorney questioning the petitioner. Medical or employment experts can testify, too. Judges consider an applicant’s health, age, education and job prospects before making a legally binding decision.

The average disability-benefit approval rate among all administrative judges is about 60% of cases. But there are Daugherty equivalents dotted across the country. In the first half of fiscal 2011, 27 judges awarded benefits 95% of the time, not counting those who heard just a handful of cases. More than 100 awarded benefits to 90% or more of applicants, according to agency statistics.

Mr. Daugherty, 75 years old, processes more cases than all but three judges in the U.S. He has 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.

[judgeconn] Damian PalettaJudges and local attorneys have complained about the volume of disability cases brought before Judge Daugherty by one lawyer, Eric C. Conn.

Mr. Daugherty, in a written response to questions about the comment, said such a phrase is “more or less a standing joke” among disability-benefit review offices around the country. “No more, no less.”

He said every decision he makes “is fully supported by relevant medical reports and physical and/or mental residual functionary capacity assessments from treating or examining doctors or other medical professionals.”

When asked about Mr. Daugherty, Social Security Administration Commissioner Michael Astrue said in an interview there were several “outliers” among administrative law judges, but that he has no power to intervene because their independence is protected by federal law. Their appointments are lifetime.

“We mostly have a very productive judiciary that makes high-quality decisions, and we’ve got some outliers and we’ve done what we can,” said Mr. Astrue. “Our hands are tied on some of the more extreme cases.”

Social Security Administration officials acknowledge they are trying to clear a backlog of 730,000 cases. But they say they remain focused on ensuring taxpayer money isn’t wasted. “We have an obligation to the people in need to provide them their benefits if they qualify, but we also have an obligation to the taxpayer not to give benefits to people who don’t qualify,” Mr. Astrue said.

Following inquiries from The Wall Street Journal, the Social Security Administration’s inspector general’s office launched an investigation into Mr. Daugherty’s approval rate, according to several people briefed on the matter. Mr. Daugherty said he isn’t aware of any investigation.

Sholten SingerJudge Daugherty, left, an active member of the Huntington, W. Va., community, performed in a recent play.

Social Security, with an $800 billion annual budget, is one of the government’s largest expenses, and is best known for sending monthly payments to retired Americans. But it also pays disability claims for 18 million people each year, with numbers pushed higher because of the recent recession. The federal government runs two separate programs to assist people unable to work because of a debilitating mental or physical disability.

For some, applying for benefits can be an agonizing process that takes more than two years. Benefits are modest—they can run around $1,000 a month—but come with access to government-run health plans Medicare and Medicaid. Analysts estimate the total package costs $300,000 over a beneficiary’s lifetime.

To clear the backlog of cases, the Social Security Administration in 2008 pushed judges to move between 500 and 700 cases a year, something less than half of judges were managing at the time, according to Mr. Astrue, the commissioner. To compensate, judges began making many decisions “on the record,” which means they grant benefits to applicants without meeting them, hearing testimony or asking questions, according to several judges. This has been a favorite approach for Mr. Daugherty, people who have worked with him say.

Mr. Daugherty doesn’t dispute the characterization, and said in these circumstances he weighs “the evidence in the same manner as in cases requiring a hearing.” He said the process “saves the agency a great deal of money and work hours.”

The Social Security Administration “cares only about number of resolutions; quality is no longer a serious concern,” James S. Bukes, a Pittsburgh administrative law judge, wrote in a recent letter to the House subcommittee that oversees Social Security. Mr. Bukes, who approved 46% of disability applicants through the first half of this fiscal year, said the system “wastes millions of dollars by granting claims that are not meritorious.”

Mr. Daugherty became a Social Security judge in 1990 after serving as an elected Cabell County circuit court judge during he 1970s and 1980s. Born and raised in Huntington, he introduces himself as “D.B.,” according to program notes for a recent local production of “Titanic: The Musical,” in which Mr. Daugherty played John Jacob Astor. He’s also a devotee of karaoke.

“He is a very, very well respected man in the community,” said Nancy Cartmill, president of the Cabell County Commission. “He’s been there for years.”

In 2005, he reached 955 decisions, approving benefits in 90% of the cases. From 2006 through 2008, he decided 3,645 cases, approving benefits roughly 95% of the time. Last year, at 99.7%, he had one of the highest award rates in the country, and is on pace to award even more benefits in 2011, according to agency statistics.

As Mr. Daugherty’s numbers rose, judges, staff and local attorneys began complaining about the volume of cases brought before the judge by one Kentucky lawyer.

The lawyer, Eric C. Conn, runs his Social Security practice out of a collection of connected mobile homes in Stanville, Ky., where he erected a giant statue of Abraham Lincoln in the parking lot. His smiling face adorns billboards up and down U.S. Highway 23, and his slogan is “he gets the job done.” Mr. Conn hired Mr. Tinsley, the former Huntington judge, and promotes him on local billboards, too. Mr. Conn often brings an inflatable replica of himself to events. His website address is mrsocialsecurity.com.

Judges and staff in the Huntington office have complained to supervisors that Mr. Daugherty assigns himself Mr. Conn’s cases, including some that were assigned to other judges, two former judges and several staff said. Cases are supposed to be assigned randomly.

According to a court schedule of Mr. Daugherty’s day reviewed by The Wall Street Journal dated Feb. 22, 2006, Mr. Daugherty held 20 hearings spaced 15 minutes apart for Mr. Conn and his clients in a Prestonsburg, Ky., field office. Such days can be a bonanza for lawyers: The average fee for one approval is between $3,000 and $3,500 and can go as high as $6,000.

“The Conn situation was something we really harped on,” said Jennifer Griffith, a master docket clerk in the office until she left in late 2007. “We made sure management knew about it. We gave them every chance to come up with some sort of logical explanation or to get it to stop, and that never happened.”

Mr. Daugherty said he prefers a crammed timetable because he is dyslexic and must fit all of his hearings within four or five days each month because he “simply cannot spend that much time in the courtroom.”

Holding hearings within just a few days “allows me sufficient time to review and prepare for hearings, resulting in full and complete knowledge of the documents in the case prior to hearing,” he added.

Huntington’s chief administrative judge, Charlie Andrus, said he was notified on four occasions of Mr. Daugherty either taking cases assigned to other judges or taking unassigned cases. Mr. Andrus said he issued a written directive on April 29 that “no case was to be reassigned between judges by anyone unless I gave specific permission.”

Mr. Daugherty said he believed judges could take cases “so long as no other [administrative law judge] had seen or reviewed the file.” He said he was “recently reminded that that is no longer true and I promptly returned the cases to the original assignees.”

Stephen Sammons, 37, of Mavisdale, Va., said he injured his neck and back in a truck accident in 2001. He continued working until 2008 when the pain became unbearable, he said. He quit his job and filed for disability benefits.

Several doctors authorized by the Social Security Administration to look at his injuries disputed his claim that his condition was caused by the accident. He retained Mr. Conn, and the case ended up before Huntington judge Toby J. Buel Sr., who rejected the claim in February 2010.

Mr. Conn resubmitted Mr. Sammons’ claim, and Mr. Sammons said he was surprised when Mr. Conn’s office called and said he wouldn’t have to appear before the judge and would only have to see a doctor, selected by Mr. Conn. The new medical records were filed to Mr. Daugherty, who approved the case without Mr. Sammons having to appear.

Mr. Daugherty declined to comment on the case.

A possible connection between Messrs. Daugherty and Conn is a subject of the inspector general’s investigation, according to two people familiar with the probe. Neither Messrs. Conn or Daugherty have been accused of wrongdoing. Mr. Daugherty said he has “absolutely not” received anything of value from Mr. Conn or his associates for processing the lawyer’s cases. He said he has denied a “goodly number” of Mr. Conn’s cases over the years, though he couldn’t provide a specific figure.

Mr. Conn declined multiple interview requests, and didn’t respond specifically to written questions. In a statement, he said he had “not been contacted by any one indicating any investigation being conducted.”

He added: “I have tried very hard in my 18 years of being a lawyer to represent my clients and the profession honestly and ethically seeking results based on the merits of my client’s cases and the results that come from hard work and not from any improper conduct.”

Some former judges and staff said one reason Mr. 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.

Dan Kemper, who began working as a judge in the Huntington office with Mr. Daugherty in 1990, said the Social Security agency’s management refused to intervene because of the numbers Mr. Daugherty delivered for the office. He said he complained for years about the number of cases Mr. Daugherty approved without interviewing applicants. Mr. Kemper, who was known in the area as “Denying Dan” for his relatively strict approach, retired in 2007 because he felt the system was unfair.

“The only way you could really get that many cases out was to grant them all, because it was so much easier,” Mr. Kemper said.

In late April, the Huntington office held 50 of Mr. Daugherty’s cases—all approvals for Mr. Conn’s clients—so they could be processed in May, because the office had already hit their monthly goal, people familiar with the matter said. Those applicants will have to wait an additional month to receive benefits. Mr. Conn, who receives a percentage of the back pay owed to his clients, will collect more fees because of the delay. The Huntington office will get a head start on the next month’s target.

Mr. Daugherty said cases are held to space out his approvals, which he attributed to “the ‘numbers game’ that most, if not all, federal agencies are subject to.”

Mr. Andrus said cases weren’t held to meet monthly numbers. He said Mr. Daugherty’s cases can be held because other applicants might have been waiting longer for benefits and those cases might take priority.

In a brief telephone interview in April, Mr. Daugherty blamed high poverty rates especially in Eastern Kentucky for his large case load and high approval rate.

“People would really be surprised at how little education those people have,” he said. “If they have a fourth-grade education, they couldn’t get a job if their lives depended on it.”

Written by Damian Paletta, WSJ, at damian.paletta@wsj.com

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