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.

More Disability Claimants Forced To File In Federal Court

Social Security Disability Approvals Decline

Attorney John Bednarz thought he had a clear-cut case to win Social Security disability benefits (SSID) for his client.
The 39-year-old man had Huntington's disease, a debilitating and often fatal disorder that caused tremors in his hands, left him off-balance and suffering from frequent bouts of confusion.
An employee at the Social Security Administration (SSA), State Disability Determination Service (DDS) didn't see it that way, however, and denied the initial claim twice. Mr. Bednarz appealed the case to an administrative law judge (ALJ), who upheld the Agency's decision.

Ultimately his client prevailed after Mr. Bednarz filed an appeal in Federal District Court. It was a long struggle that took far more time than it should have, he said.
"This case is one that really got me," Mr. Bednarz said. "He had a degenerative neurological impairment. He had involuntary movement in his right hand and symptoms of dementia. … A diagnosis like this is essentially a death sentence."
His client is not alone in his struggle.
Administrative law judges (ALJ) who hear cases for the Social Security Administration's Office of Disability Adjudication and Review (ODAR) have become more selective in the cases they approve, data show, forcing an increasing number of claimants to file suit in federal court. (See former ALJ
 http://www.amazon.com/socialNsecurity-Confessions-Social-Security-Judge/dp/1449569757)
In the Wilkes-Barre ODAR, the percentage of cases approved has steadily declined the past three years, mirroring a nationwide trend.
Appeals spike.
In fiscal 2010, the office granted 64 percent of the cases. That dropped to 54 percent in 2011, 48 percent in 2012 and 47 percent in 2013, according to data compiled by Social Security. Statewide, 42 percent of cases were approved at the administrative law judge level in 2013.
The increase in denials has led to a huge spike in appeals filed in federal court for the Middle District of Pennsylvania, a review of the court docket shows. As of Nov. 22, 204 appeals were filed, compared to 117 in all of 2012, a 74 percent increase. That compares to 90 appeals in 2011 and 113 in 2010.

Officials with SSA say the higher denial rate is partly attributable to an increase in filings due to the poor economy, which historically leads more people with marginal disabilities to seek benefits.
Several attorneys who represent claimants agree economic factors may have played a role. But they're concerned the system has become increasingly stacked against claimants due, in part, to the SSA's propensity to hire judges who formerly worked for Social Security. There is also concern judges are being subjected to outside pressure that may make them more prone to deny cases.
"I'm not saying everyone is perfectly honest and that there is not fraud, but we see a lot of cases being denied that appear legitimate," said Steven Rollins, a Harrisburg attorney who specializes in disability claims. "You have more of a shift of judges who have become more in tune to affirm a denial and are less willing to grant cases."
Unable to engage.
In 2013, the Social Security Disability system paid 8.9 million workers an average monthly benefit of $1,129 at a total cost of $10 billion, according to the agency. To qualify, claimants must prove they are unable to engage "any substantial gainful activity" due to a mental or physical impairment which has lasted 12 months, is expected last 12 months or will result in death.
The initial determination is made by the State DDS based solely on a review of medical records, attorneys said. Roughly 25 to 35 percent of claimants are approved at that level, Mr. Rollins said. If denied, the case goes before an ALJ - an attorney hired through Social Security to conduct an independent review. The judge can hold a hearing that includes testimony from the claimant and physicians.

The are currently 1,500 ALJs in the nation. In Pennsylvania, judges preside in Wilkes-Barre, Harrisburg and Philadelphia.
If the ALJ denies the claim, it goes to the Appeals Council within Social Security. The final step is federal court. A judge will review the entire record and has the power to award benefits or return the case to the ALJ for further review.
Few data.
There are no national statics on the percentage of cases remanded. A review of the federal court docket in the Middle District of Pennsylvania shows that of the 90 appeals filed in 2011, the last year for which full data are available, 56 were either affirmed, dismissed or withdrawn by the plaintiffs. Most of the cases filed in 2012 and 2013 remain pending.
Mark Hinkle, a spokesman for SSA, said there is always a debate over whether the agency approves or disapproves too many cases. The agency does not seek to influence ALJs, who have complete independence.
"Our judges have qualified decisional independence to enhance public confidence in the fairness of our process, to protect people applying for disability, and to ensure that they issue decisions free from pressure to reach a particular result," he said in an email.
As for the overall decline in approval rates, Mr. Hinkle said the agency believes several factors have played a role.
"We have seen an increase in the number of disability cases based on the aging of the baby boom generation and the economy, and when this occurs it is expected that the approval rate will decrease when the number of applications increase," Mr. Hinkle said.
Jonathan Stein, an attorney with Community Legal Services in Philadelphia, said he believes the decrease in ALJ approvals is partly tied to a change in the make up of judges hired to review the cases.
Under pressure to speed up review of cases, the SSA hired an additional 500 ALJs within the past three years. Mr. Stein said. A large percentage of those attorneys previously worked for SSA, Mr. Stein said.
ALJs are supposed to issue rulings based solely on the evidence. Mr. Stein said he can't help but question whether their experience with the agency may influence how they view cases.
"When you are a judge you must be independent. You follow SSA rules and have to make independent decisions," he said. "The reality is, when you spent most of your life in the system, it will shape your views."
Charles Hall, an attorney from North Carolina who writes a blog about Social Security issues, said there is also concern that the changing political climate toward entitlement programs and media stories that have focused on judges who have high approval ratings may be unduly influencing judges.
Sick or bums?
"There is a great deal of public sympathy for people who are sick or disabled.  On the other side here are people who say (recipients) are lazy bums who ought to get back to work," Mr. Hall said. "Judges are human beings. The same things that affect the rest of us affects them."
Mr. Hall said SSAy may have unintentionally influencedALJs by publicly posting data on the percentage of cases they approve. If a judge's rulings are out of whack with others within his or her region, that could play on their minds, he said.
The data, which are available on SSA's website, show approval rates vary significantly among judges. In Pennsylvania, Judge Craig De Bernardis in Wilkes-Barre and Judge Christopher Bridges in Harrisburg had some of the highest approval rates between 2010 and 2013, data show. Judge De Bernardis approved 97 percent of his cases in 2010 and 96 percent in 2011, the two years he served. Judge Bridges' approval rating varied from 90 to 96 percent between 2010 and 2013.
Highest rate
The highest approval rating in the Wilkes-Barre office in 2013 belonged to Judge Eugene Brady, who approved 56 percent of cases. On the other end of the spectrum are Judge Michelle Wolfe, who approved 34 percent of the cases, and Judge Therese Hardiman, who approved 38 percent of her cases.
Several judges in Wilkes-Barre also saw significant drops in their approval percentages since 2010. The most notable change is Judge Hardiman. In 2010, she approved 73 percent of the cases she heard. That dropped to just 38 percent in 2013.
Mr. Rollins said he's also concerned news media stories that focused on abuses within the system and judges who award a high percentage of cases may influence decisions.
He noted coverage of a recent Senate investigation that raised questions of whether a West Virginia judge had colluded with an attorney to approve an inordinate number of the attorney's cases.
The investigation, led by Sen. Tom Coburn of Oklahoma, revealed Judge David Daugherty, who no longer hears cases, approved 1,375 of cases filed by attorney Eric Conn, denying only four.
"Judges are not immune to publicity," Mr. Rollins said. "I suspect if I'm in their position, I'm looking over my shoulder if others are being investigated and I'm seeing stories about too many allowances."
While they have concerns about the system, Mr. Rollins stressed he believes the majority of judges try to be fair. The cases they review are rarely clear cut, he said, and require analysis of hundreds of pages of medical records.
"I think, by and large, they do the right thing," Mr. Rollins said.
Mr. Bednarz, the attorney for the Wilkes-Barre man with Huntington's disease, said he also feels most judges do the best they can. He fears legitimate cases are being lost, however, because many claimants don't have attorneys to represent them.
(But see http://www.amazon.com/socialNsecurity-Confessions-Social-Security-Judge/dp/1449569757)
Attorneys are only paid in disability cases if they obtain benefits for their client. Because the cases are so difficult, attorneys have become increasingly selective about which cases they will take, he said. That means some marginal cases that may have merit fall by the wayside.
"It is much more difficult than it has ever been being a social security practitioner," he said.
(Morgan-Besecker, T.; Times Tribune, Scranton,PA, Dec 1, 2013)