Health Care Fraud and Abuse, Mental Disorders and “Back Pain” Lead the Way

For years now we have been hearing about the crackdown on Medicare and Medicaid fraud by the HHS Office of Inspector General (OIG).  Nearly every day there are new press releases from OIG and local U.S. Attorney’s Offices regarding the latest arrest of dishonest Medicare suppliers, providers, and beneficiaries. But there has long been another  federal program that has been a victim of health care fraud — the Social Security Disability Insurance (SSDI) program. 

For instance, on August 21, the Wall Street Journal (WSJ) reported that federal agents arrested 75 people (three doctors, 71 beneficiaries, and a former Social Security Administration employee) in Puerto Rico for SSDI fraud. The article indicated that 30 more people could be indicted and the SSDI benefits of 6,600 people could be terminated. The arrested beneficiaries were indicted after they were caught performing tasks their alleged disabilities should have made impossible. A prior 2011 article in the WSJ had described how Puerto Rico had become one of the easiest places to obtain SSDI benefits, with nine of the top 10 postal ZIP codes for disabled workers.

Some Americans have also heard the story of the tree trimmer who, after performing his services, asked his customer to make the check out to his mother because he was on disability. Who did this tree trimmer ask this favor of?  U.S. Senator Tom Coburn (R-Okla.). This chance encounter lead to an 18-month investigation by the Senate’s Permanent Subcommittee on Investigations. The report of the subcommittee found that more than a quarter of SSA decisions failed to properly address insufficient, contradictory, or incomplete evidence. The report’s findings corroborate a 2011 internal quality review conducted by SSA itself, which found that on average nationwide, disability decisions made at the administrative law judge level had errors or were insufficient 22 percent of the time. As reported by Laura Trueman, Sen. Colburn, a medical doctor, reviewed SSDI applications in 100 cases, finding that “in about 75 percent of the cases…people were not truly disabled.”

According to an article by Richard Finger in Forbes, since January 2009, 5.9 million people have been added to the SSDI program, swelling its rolls to 10.9 million or one in 14 workers in 2012 and paying $136.7 billion in benefits. Finger suggests his readers examine Social Security’s Adult Listing of Impairments to see the long list of conditions for which a worker can obtain disability payments.  Two growth areas for disability are apparently Mental Disorders and Musculoskeletal Systems (back pain), possibly because they are so difficult to disprove. According to the article, mental illness and “back pain” awards have more than doubled in the past three decades.  Mental health awards grew from 16 percent of total SSDI awards in 1980 to a full one-third in 2010. Back pain based awards increased from 13 percent to 28 percent during this same period. To underscore the incentive to obtain SSDI, Fingers cites a August 2006 study of the National Bureau of Economic Research (NBER) which found that for lowly paid workers, SSDI plus Medicare replaced, on average, 90 percent of their income. As Fingers notes, recipients of SSDI are eligible for Medicare (at no cost) once they receive SSDI for two years.

Reports of SSDI abuses are nothing new. As early as the year 2000, a study by the Cato Institute found that the SSA was handing out a “flood of benefits under the SSDI program to persons who are not disabled and thus have no legitimate reason to receive those benefits.”  According to the study, “a review of SSDI cases and a look at SSDI statistics show a clear pattern of SSA officials’ turning a blind eye to all standards and common sense when passing out benefits.” For example, the study found that “SSA officials frequently award full SSDI benefits to persons who pursue disability discrimination claims under the Americans with Disabilities Act”, despite the fact that a plaintiff must argue that he is fully capable of performing a desired job to assert an ADA claim. Worse yet, the study found that “in many cases SSA awards SSDI benefits to persons whose ADA claims were dismissed precisely because the persons were not disabled, even under the ADA’s more lenient definition of ‘disability.'”