Audit Report - A-04-95-06020

Office of Audit

Special Joint Vulnerability Review of the Supplemental Security Income Program (A-04-95-06020)  12/16/97

TABLE OF CONTENTS

EXECUTIVE SUMMARY

INTRODUCTION

RESULTS OF REVIEW

CONSULTATIVE EXAMINATIONS

MALINGERING

Other Disability Fraud/Abuse Cases
SSI and Medicaid Savings
Joint Review Recommendations
New Legislation

RECOMMENDATIONS

APPENDICES

Appendix A - Agency Comments
Appendix B - Major Report Contributors
Appendix C - SSA Organizational Chart

EXECUTIVE SUMMARY

OBJECTIVE

The objective of this audit was to identify vulnerabilities in the disability determination process that subject the Supplemental Security Income (SSI) Disability Program to abuse.

BACKGROUND

A Georgia family became the subject of the joint review initiated after the Georgia Disability Determination Service (DDS) notified the Social Security Administration (SSA) Region IV personnel of its concern that the family`s SSI recipients may have been coached to malinger during consultative examinations (CE). SSA, the Office of the Inspector General (OIG) , and the Georgia DDS formed a team to evaluate the alleged irregularities. The team initially identified about 300 family members comprising 4 generations of the extended Georgia family, including 181 SSI recipients. The team selected 151 SSI recipients under age 55 for continuing disability reviews (CDR), to begin in the summer of 1995. As of March 1996, SSA had discontinued benefits to 84 family members based on completed CDRs. As of March 1997, about 500 Georgia family members had been identified by the Georgia DDS.

INTRODUCTION

OBJECTIVE

The objective of this audit was to identify vulnerabilities in the disability determination process that subject the SSI Disability Program to abuse.

BACKGROUND

The SSI program, authorized in 1972 under title XVI of the Social Security Act, is a cash assistance program financed from general funds of the U.S. Treasury. The SSI program assures eligible individuals a minimum level of income who are aged, blind, and disabled. Eligibility requirements are uniform throughout the 50 States and the District of Columbia. There is no minimum age limit in establishing eligibility on the basis of blindness or disability. Monthly SSI payments for disabling impairments are determined mainly by individual income and resources.

Until 1990, the regulatory criteria for determining disability in children were different from those used for adults. The Supreme Court decision in Sullivan v. Zebley (1990) required SSA to determine childhood disability in a manner comparable to the determination of disability in adults. All children who had SSI benefits denied or terminated for medical reasons, between

January 1980 and February 1991, became members of the Zebley class. SSA estimated that 452,000 children were affected by the court decision. Additional elements for the disability decision process were developed. IFAs were used to evaluate children’s disabilities. Children eligible for benefits under the new rules were also considered for retroactive benefit entitlements.

The new evaluation process expanded the method of determining the equivalency of children’s medical impairments to SSA’s medical listings criteria and allowed a determination of disability based on a finding that a child’s impairments were functionally equivalent to a listed impairment. Children not meeting the listings criteria were given IFAs to determine the extent to which the impairment limited the child’s ability to function independently, effectively and appropriately in an age appropriate manner in general domains and behaviors, namely cognitive, communicative, motor, social, and personal skills. Recognizing that children’s functioning varies widely from age to age, the new regulations contained age-appropriate guidelines. For the first time, detailed guidelines for evaluating mental disorders in children covered conditions such as drug addiction and alcoholism, anxiety disorders, hyperactivity, and personality disorders. Since the Zebley decision, the number of children eligible for SSI has increased dramatically, both due to the reversal of past denial decisions and the increase in new applications.

SSA published data that shows since SSI payments began in 1974, the number of eligible children has increased from 70,000 severely disabled children, almost all of them under age 18, to nearly 1 million children in 1995. Monthly SSI payments rose from an estimated $30 million in 1974, to $436 million in 1995. A 1996 study found that once eligible, beneficiaries who are disabled at birth or during childhood are likely to remain on the rolls for long periods of time. The analysis found that during the period 1975 to 1993, the expected duration of pre-retirement age benefits increased from about 11 years to nearly 18 years for SSI. The increase related to the decreasing age of awardees and the increasing incidence of mental impairments as a diagnosis. These changes can be seen in the substantial growth in the number of children receiving SSI after 1989, from 296,000 in December 1989, to 974,000 in December 1995.

SSA is responsible for administering the SSI disability program and contracts with State DDS offices to perform determinations of claimants’ disabilities. To supplement evidence obtained from the claimants’ physicians or other treating sources, the DDSs are authorized to purchase medical examinations, x-rays, and laboratory tests on a consultative basis. The DDSs are reimbursed by SSA for 100 percent of allowable expenditures.

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National Program Integrity Meeting

Representatives of SSA Regional and District offices and representatives of DDSs from the States of Georgia, Wisconsin, California, and Illinois met through a series of conference calls in mid-1996 to develop recommendations for fighting disability fraud. All of the participants were experienced in dealing with disability fraud and program abuse. Our interviews of these individuals disclosed that the Georgia family cases were not isolated instances. These representatives cited many instances where similar abuses were occurring nationwide. This representative cross section of SSA components illustrates that the fraud problems encountered throughout SSA and the proposals for change were strikingly similar. The group developed a uniform set of recommendations dealing primarily with prevention, but also detection and penalties. These recommendations were presented at the National Fraud Conference sponsored by SSA and OIG in September 1996. Several of their prevention and detection recommendations are included in this report.

History of the Review

Program abuses by the Georgia family surfaced in 1992, after the Georgia DDS received reports of numerous family claims for SSI. The Georgia DDS notified SSA Region IV personnel of its concern that SSI recipients in the family’s residential area may have been coached to malinger during CEs to fraudulently obtain SSI disability payments.

An SSA regional official reported that in February 1993, a member of the Georgia family was suspected to have malingered during a CE with a local psychologist frequently used by the DDS. The malingering suspicions were confirmed when the CE was repeated by another physician. Other DDS medical staff had complaints about the local psychologist’s inadequate medical evidence. The DDS wrote to the psychologist concerning 10 specious evaluations he had performed and visited him to discuss his failure to report malingering. The DDS efforts had no effect.

Another family claimant, a 23 year old mother of 2 children, made no effort to cooperate during the CE. With an IQ score of 55, she complained of hallucinations consistent with paranoid schizophrenia. The psychologist referred her to the Department of Family and Children Services (DFCS). Two home visits from the State showed the claimant had no impairments. She presented herself as competent to DFCS and incompetent to SSA. Another CE by the same psychologist showed her as incompetent. The DDS identified discrepancies in the CE provider’s medical reports when compared to other corroborating evidence from school psychologists’ reports and test results. The DDS decided to remove the psychologist as a CE provider. SSA was not notified of the DDS decision, since there was no procedural requirement to do so. SSA could have created a list to identify removed providers for release to SSA field and regional offices, other DDSs, and Federal/State agencies which administer programs with which CE providers might be involved (e.g., Medicaid and Medicare).

In late 1994 and early 1995, SSA’s Office of Disability (OD) began reviewing the Georgia family claims with common diagnoses of slow learning and hyperactivity, nerves and hallucinations. In isolation, the 11 initial cases did not appear unusual. However, when compared with the aggregate family claims, patterns of potential abuse emerged indicating potential vulnerabilities in the eligibility process. In March 1995, results of the OD reviews were shared with members of the special joint review team, comprised of staff from SSA, Georgia DDS, and OIG’s OI and OA, which had been assembled to assess SSA`s vulnerability. A female SSI recipient, who acted as a representative payee (Rep Payee) for several family members, became the principal focus of the joint review.

In mid-1995, SSA initiated CDRs for selected recipients. The majority of initial eligibility determinations were completed between 1990 and 1993. The team formed a cooperative effort to evaluate the alleged irregularities. About 300 family members, including 181 SSI recipients, were identified in the extended Georgia family. In August 1995, the OA Region IV audit staff joined the effort. These recipients became the basis for this review.

OIG Investigative Activity

As part of the joint review, OI investigated allegations of fraud in this particular case. We will describe those events that transpired in awarding the claims and subsequent actions to terminate the individuals’ benefits that resulted in a declination by the Assistant U.S. Attorney.

One reason the cases were declined for prosecution resulted from the failure of SSA to prove that recipients were not disabled at the time they applied for SSI benefits. SSA cessations were based on medical improvement at the time of the reviews. Another reason was SSA’s inability to locate the disability case folder for the recipient alleged to have coached individuals to malinger during psychological examinations or feign disability. In the absence of the folder, SSA could not show medical improvement and could not terminate this individual’s benefits. In addition, no proof of coaching could be established. A third reason cited for declination was SSA’s use of the psychologist responsible for many of the medical reports for 15 years, making it difficult to prove the reports were false.

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SCOPE

Our objective was to identify the vulnerabilities disclosed by the joint effort of the SSA, DDS, and OIG team in the disability determination process that subjected the SSI Disability Program to abuse.

To accomplish our objective, we:

reviewed the laws and regulations relating to SSI disability benefits and SSA Disability Digests.

reviewed SSA policies and procedures in the Program Operations Manual System.

conducted discussions with SSA regional personnel and the Georgia DDS to determine the procedures used in processing disability claims.

reviewed OD’s preliminary analyses of case folder documentation.

analyzed CDRs of 151 SSI recipients under the age of 55 from the population of 181 SSI recipients identified in the extended Georgia family.

reviewed case folders and SSI records for the first 66 SSI recipients whose SSI benefits were discontinued upon completion of the CDRs.

provided information on the 66 discontinued cases to SSA’s Office of the Actuary for calculation of estimated cost savings on the Georgia family.

We limited our review to the 66 cessations, because we believed the vulnerabilities identified in those cases would be representative of the conditions in the entire Georgia family. Since the sample was judgmentally selected, the review results were not projected to the total population of recipients. Our review of documentation was limited to the vulnerabilities identified in SSA’s preliminary review.

We reviewed the internal controls necessary to meet our objective. Audit work was performed at the following locations: the SSA Regional Office in Atlanta, Georgia; SSA/OIG/OA field office (FO) in Birmingham, Alabama; and the Georgia DDS. The field work was completed in February 1996. Our audit was performed in accordance with generally accepted government auditing standards.

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RESULTS OF REVIEW

A review of the Georgia family cases shows that the SSI program is susceptible to abuse. Policy, procedures, and detection of abuse can be strengthened by monitoring and evaluating the performance of CE providers, and placing greater emphasis on the detection of malingering during the initial claims process and CDRs. The DDS did not employ all relevant procedures in evaluating eligibility for SSI disability. The joint review found that information requests from third party sources were not being adequately performed within the DDS. Little educational evidence was obtained in the way of school records and teacher evaluations or other independent corroboration of claimants’ statements. No mention was made of applicants’ attempts to manipulate the psychological testing, or the level of effort put forth during testing. SSA’s preliminary review of case folders and documentation revealed the determinations were based on misleading or inaccurate information from claimants, third parties, or medical sources.

The CDRs performed by SSA on the 66 Georgia family recipients in our sample, (22 adults and 44 children), resulted in the cessation of SSI benefits: 58 were due to medical improvement, 7 were due to lack of cooperation, and 1 was due to gainful employment. The majority of medical disabilities, 53 percent, related to mental retardation, 33 percent were various physical and emotional disorders, and 14 percent were attention deficit/hyperactivity disorders. Psychological evaluation reports concluded that 24 of the 66 recipients, 14 adults and 10 children, malingered during the CDRs. The DDS believes most of the claimants initially qualified on the basis of malingering. The rising costs of processing these false applications burdens the DDS and SSA FOs.

The 66 recipients received in excess of $1.06 million in SSI disability benefits, through June 1995, including over $431,000 in benefits to the 24 malingerers. Due to the volume of payments, we believe SSA should identify SSI recipients in the remainder of the 500 members of the extended Georgia family disclosed to date and conduct CDRs. SSA should calculate the cost/benefit results of the CDRs. We also believe the payment status of 15 individuals who continued to receive title II benefits as of December 1996 should be reviewed since SSI benefits had ceased due to medical improvement.

The CDRs performed by SSA revealed two primary areas of vulnerability in the SSI disability review process: consultative examinations and malingering.

CONSULTATIVE EXAMINATIONS

The DDS’s strong reliance on a single provider to perform CEs causes the SSI program to be vulnerable to abuse.

The DDS frequently used one local psychologist with offices in Statesboro and Vidalia, Georgia to perform CEs. A review of the Georgia family showed there were a number of treating physicians and psychologists in the area. The local psychologist participated in the initial CEs of 38 of the 66 discontinued claimants in our sample, or about 58 percent of the cases; and 13 of the 24 malingering cases, or 54 percent. He also participated in two of the CDRs. The presence of the local psychologist in so many of the Georgia family’s discontinued claims brings into question his independence and objectivity during the initial claims process.

We found discrepancies between the local psychologist’s findings and the observations of other independent third parties. A case worker from the Georgia DCFS, a social services agency, who made home visits to the Georgia family, said she never saw abnormal children. Yet, this psychologist always found problems with the family. He continued to treat these SSI recipients and received Medicaid payments. The DDS medical staff had complaints about the psychologist’s inadequate medical evidence. The DDS wrote to the psychologist concerning 10 unsatisfactory evaluations he had performed and visited him to discuss his failure to report malingering. However, the psychologist failed to see anything wrong. An SSA attorney in the Office of Hearings and Appeals said this psychologist never found a claimant to malinger, even in records going back 20 years.

On November 2, 1993, the DDS informed the Office of Hearings and Appeals that the Disability Adjudication Section (DAS) had ended its working relationship with the psychologist. After the standards for Consultative Examinations and Existing Medical Evidence were published in the Code of Federal Regulations in August 1991, DAS staff psychologists became increasingly concerned with the quality of this CE provider’s work. The three specific areas of concern were: consistently lower than expected intelligence test results; frequent diagnostic conclusions based on subjective reports of claimants; and the total absence of suspected malingering in evaluations, even when the CE provider had been alerted. The DDS did not notify SSA of its decision. The DDSs should be required to notify SSA whenever providers are disqualified for cause or questionable "canned" medical reports or other data are received.

SSA does not require rotation of CE providers nor do DDSs adequately rotate CE providers, which results in excessive reliance on a single professional. SSA should not permit DDSs to use as consultants those professionals who treat, or continue to treat, claimants for their medical/emotional conditions when the independence of the CE provider may be suspect. DDSs do not monitor or periodically evaluate the performance of CE providers for any patterns of potential program abuse. In poor rural areas, residents are often without means to pay for medical services and medical providers are in short supply. Reliance on Government programs such as SSI and Medicaid by both parties may impair the independence of the CE. While we recognize that rotating and monitoring CE providers may be difficult in rural areas, we believe this would reduce similar incidences of program abuse.

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MALINGERING

The lack of information regarding the level of effort in CE reports on psychological test results causes the SSI program to be vulnerable to abuse.

The DDS we reviewed generally obtained medical evidence, some educational evidence such as teacher evaluations and school records, parental statements, hospital records, and other types of evidence to corroborate claimants’ statements for SSI disability. Although psychological reports in the initial determinations contained observations on the claimants` physical appearance and demeanor and test scores on the various tests administered by the treating sources and/or CEs, the reports did not contain any comments on the extent of effort put forth by the claimants during the examinations.

Our comparison of SSA/OD preliminary analyses with CEs performed by licensed psychologists during the CDR process contained the following examples of malingering, coaching, misleading and conflicting evidence provided by claimants, third parties, or medical sources:

Case 1

SSA/OD identified a claimant with alleged bad nerves, partial blindness, and a partial hearing problem. The claimant requested that questions concerning her hearing problem be repeated, because she was almost deaf. Yet, the claimant had no problem hearing questions addressing her other alleged impairments. The claimant said she had always attended special education classes and had never reached the 12th grade. This contradicted information she had provided in

1990 about having a high school diploma. The claimant also alleged she had been hospitalized with a nervous breakdown, but neither the hospital nor her treating physicians had any record of her hospitalization or breakdown.

The claimant’s mother, also an SSI recipient, accompanied her to a CE with the local psychologist and reported contradictory histories. The claimant reported that her mother helped her cook meals and pay her bills. During her own CE 2 months earlier, the mother had alleged the claimant always managed her, the mother’s, money. The psychologist found the claimant’s IQ to be in the mentally retarded range, noting she would be dependent for the rest of her days.

Subsequent to her receiving entitlement, the claimant filed applications on behalf of her two children and assisted her father in processing an application. She asked if her father could be sent to the same psychologist and receive disability payments pending a final decision. The SSA reviewer considered these accomplishments remarkable considering the psychologist`s diagnosis. The claimant received $17,238 in SSI benefits as of October 1994.

Case 2

The psychologist performing the CDR identified the claimant, an extremely uncooperative child who offered little information about himself, as malingering and capable of significantly better performance than noted in the test results. According to a teacher questionnaire, the child`s parents instructed the child to do whatever was necessary to keep the checks coming. The claimant received $56,444 in SSI benefits as of June 1995, based on the initial determination of mental retardation.

Case 3

The psychologist conducting the CDR identified the child as malingering, noting the child used her left hand on all tasks during a "Developmental Test of Visual-Motor Integration" even though the child was actually right-hand dominate. The claimant received $13,308 in SSI benefits as of June 1995, based on an initial determination of mental retardation.

Case 4

The psychologist performing this CDR concluded there was no evidence of mental retardation, the original disabling condition diagnosed at age 4. DDS noted that every time the claimant tried to talk, the mother would put her hand over his mouth. The teacher’s report indicated the child was in regular classes, and there was no evidence of mental retardation. The teacher commented that the claimant’s concentration problems were no more than a normal first grader. The mother alleged attention deficit/hyperactivity disorder 2 years earlier, but the claimant had ceased medication a year earlier. Also, the teacher noticed no change in his behavior. The claimant received $16,668 in SSI benefits as of June 1995, based on the initial determination of mental retardation.

We compared the information developed on these and other cases during the CDR process with documentation obtained during the initial determinations. There was no mention of malingering or attempts to manipulate the psychological testing procedures during the initial determination process. The DDS noted tests for malingering are useful. Despite the large percentage of mental retardation and physical/emotional disorders, there was little educational evidence obtained during the initial determination process to corroborate the alleged disabilities.

Prior to Zebley, the decision under childhood procedures was based solely on the child’s ability to meet or equal the impairment listings for adults or the CEs, when performed. In 1991, the DDS began to request third party documentation for children`s cases in the same manner as for adults. In the 66 cessations reviewed, educational evidence obtained nearly tripled, from 37 instances initially, to 95 at the time of the CDRs. Determinations of medical recovery for concurrent beneficiaries, i.e., individuals receiving both title II and title XVI benefits, apply to both programs. Although the DDS reviewed both titles, 15 of the 66 terminated recipients analyzed were receiving title II benefits as of December 1996. SSA needs to capture this kind of information in the form of additional comments or codes on the SSI master file. This information should then automatically be highlighted on SSID to alert subsequent users to potential fraud/abuse. The 120 character remarks field on the SSID could easily accommodate a specific comment such as "potential abuse/year" or codes, or a field could be added at the end of this on-line query.

The DDSs do not emphasize to CE providers and treating sources the need to include comments in the report of evaluation about the level of effort put forth on psychological exams by SSI applicants who allege mental retardation, which results in improper evaluations. Additional information from reliable third party sources such as State agencies that service these claimants, teachers, and former employers would alert the DDSs to possible malingering. School records should be obtained for adults to support allegations of a history of mental deficiencies. Also, there are no procedures that require CE providers to verify the identity of the applicant being tested. The DDSs need to employ psychological testing designed to detect malingering, the use of photographs or other identification to verify the identity of claimants attending CEs, obtain school records and teacher evaluations, and obtain other independent corroboration of the claimants’ statements. To maximize this information, prior claims folders, including appropriate files of other family members, should be associated and reviewed.

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Other Disability Fraud/Abuse Cases

The DDS recently identified a similar disability fraud/abuse case involving an extended family in another rural area of Georgia. Five SSA offices and three DDSs contacted around the country were of the opinion that the Georgia family was not an isolated instance of coaching and malingering to obtain government benefits. All eight offices had experienced similar instances of disability fraud/abuse. Two offices stated that fraud within the disability program is extensive. Another office remarked that every region in the country has experienced some variation of the fraud perpetrated by the Georgia family.

Although the cases encountered were not always identical to the Georgia family, four of the offices cited numerous cases in which claimants file false disability claims with the assistance and coaching of physicians and translators. As in the Georgia family case, many of the applicants used the same translators and physicians during the evaluations. One DDS currently has 130 cases of interpreter fraud under review. The DDS independently hired translators that speak the required languages to preclude fraudulent coaching by interpreters hired by the applicants. Another office estimated that in about 50 percent of the cases involving translators, applicant information is suspect.

A DDS office observed that the number of fraudulent disability cases reported by SSA has increased dramatically since the agency retained additional investigators to examine and seek prosecutions. Two convictions of fraudulent disability claims related to children have been obtained, and similar cases are being reviewed for possible prosecution. The DDS annually sends deterrent letters to about 40 to 60 applicants found to have made blatantly false statements during the claims process. The letters contain a warning regarding the penalties for false statements.

Although several offices cited cases that were not as large, either monetarily or in number of family members as detected in the Georgia family, 1 office experienced 30 to 40 similar instances of disability fraud every year. Fraud cases in this office are often identified through information provided by third parties. Another example involved 80 members of an extended family in a rural county in which benefits to 70 percent of family members were ceased based on CDRs.

Two offices thought SSA’s policies and procedures regarding the determination of disability cases were vulnerable to abuse. One office cited reliance on third party information and limited medical evidence. Many disability applicants were counseled on how to obtain SSI benefits before they left their countries of origin. Many of the symptoms alleged by the claimants are identical. Due to the preponderance of fraudulent disability claims, this SSA office, in cooperation with the Federal Bureau of Investigation, Internal Revenue Service, Postal Service, and U.S. Attorney, formed a white-collar crime task force. To date, the task force has successfully prosecuted 25 to 30 SSI recipients and reopened another 65 cases now under investigation. The group is pursuing administrative actions on fraudulent claims along with prosecutions. The benefits paid to these claimants have been deemed overpayments subject to recovery and are also being pursued.

In 1994, SSA provided a 3-year grant to a DDS to create a fraud unit. The goal of the unit was to focus on investigating suspicious claims prior to adjudication and to prevent fraudulent payments. The unit experienced some difficulty in its first 2 years in staffing the investigative positions, but recently has had some success in denying claims. In an effort to maximize the potential of this type of unit, SSA is creating five additional DDS fraud units, which are expected to become operational by February 1998. These units will include experienced criminal investigators. In addition to investigations to prevent payments on fraudulent claims, criminal investigations will be conducted to seek prosecution of doctors, middlemen and interpreters conspiring with claimants to obtain fraudulent disability benefits.

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SSI and Medicaid Savings

We estimate that Federal funds of approximately $2.1 million in SSI and Medicaid benefits could be realized based on the 66 initial cessations as of February 1996, plus 24 supplemental cessations in the Georgia family since that date, for a total of 90 cessations as of March 1997. The estimated range of savings was $1.7 million to $2.5 million. Savings were based on the results of our review and actuarial projections provided by SSA`s Office of the Chief Actuary. It is also likely that additional savings will result when the remainder of CDRs are completed.

Using the detailed data provided by OIG/OA, the actuary estimated that some cessations would be reversed on appeal and applied benefit savings based on historical data developed on SSI recipients selected for CDRs and discounted the savings to present value. The actuary qualified the estimates, stating that characteristics of a selected group such as the extended Georgia family may differ significantly from the general population of SSI recipients selected for periodic reviews. The range of savings results from variable factors in the payment of benefits, such as the number of cases that can be expected to have SSI benefits terminated for reasons other than CDR`s and the number that can be expected to resume benefits after initial cessation.

Joint Review Recommendations

Based on the review results, the SSA Regional Office, Georgia DDS, and OA developed interim recommendations designed to reduce or eliminate SSI payments to individuals who do not meet the SSI eligibility requirements for disability. The tentative recommendations were:

establish and implement an educational coordinator or equivalent position at DDSs to develop a working relationship with individual schools, school systems, State department personnel, and teachers in the area covered by the DDS;

provide updated training for all DDS personnel responsible for processing SSI applications to emphasize the nature and extent of evidence needed for proper SSI eligibility determinations, and to recognize typical patterns of program abuse so appropriate action can be taken; and

modify the SSID to include comments or codes for the identification of potential fraud/abuse cases.

SSA will continue to use CDR procedures to discontinue SSI payments to other recipients who do not meet the eligibility requirements for continuing disability.

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New Legislation

Recent legislative changes will affect SSA`s administration of the SSI disability program. The PRWOR Act of 1996, section 212, requires SSA to conduct CDRs on SSI child recipients at least once every 3 years. Section 211 eliminates the comparable severity standard and the maladaptive behavior criteria from personal and behavioral functioning for children’s disabilities. The legislation directs SSA to discontinue the use of IFAs in evaluating children`s disabilities and requires SSA to redetermine the eligibility of SSI recipients enrolled under the eliminated provisions no later than 1 year after enactment of the law.

Section 231 also requires the Commissioner to report annually to the President and Congress on the SSI program regarding, among other things, historical and current data on allowances and denials, reconsiderations, administrative law judge hearings, appeals council reviews, Federal court decisions, and characteristics of recipients and program costs. We believe the implementation of a management control system to monitor the cost/benefit results of all redeterminations and CDRs would be a valuable tool for SSA`s use in reporting the results of changes in SSI eligibility provisions under the newly enacted legislation.

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RECOMMENDATIONS

We continue to support the joint review recommendations and believe that SSA should:

Establish and implement an educational coordinator or equivalent position at DDSs to develop a working relationship with individual schools, school systems, State department personnel, and teachers in the area covered by the DDS.

Provide updated training for all DDS personnel responsible for processing SSI applications to emphasize the nature and extent of evidence needed for proper SSI eligibility determinations, and to recognize typical patterns of programabuse so appropriate action can be taken.

Modify the SSID to include additional comments or codes for the identification of potential fraud/abuse cases, subject to SSA`s evaluation of the most advantageous method of presentation on the SSID.

In addition to the interim recommendations made by the joint review team, we are also recommending that SSA:

Identify SSI recipients in the remainder of the 500 members of the extended Georgia family and conduct CDRs and evaluate the results, individually and collectively, to determine if there is any pattern or potential patterns of fraud that may warrant referral to OI.

Review the payment status of individuals in the Georgia family who continued to receive title II benefits as of December 1996, since SSI benefits ceased for these individuals due to medical improvement.

Emphasize to DDSs the need to rotate CE providers where medical services are available (especially in high-risk profile cases) and to identify any potential patterns of program abuse during monitoring and periodic evaluation of CE providers.

Require DDSs to identify providers who issue questionable "canned" medical reports and determine whether these reports should be disqualified.

Require DDSs to notify SSA when CE providers are disqualified for cause and require SSA to establish a list of disqualified providers for release to SSA field and regional offices, other DDSs, and Federal/State agencies which administer programs with which CE providers might be involved (e.g., Medicaid and Medicare).

Emphasize to DDSs the need to avoid using as CEs the same professionals who are shown not to be independent because they treated, and/or continue to treat, claimants for their medical/emotional conditions. DDSs should act in accordance with authority established in section 416.919i which permits them to use other sources in instances when they feel they are not receiving independent evaluations.

Require DDSs, when contracting for CEs, to emphasize to CE providers and treating sources the need to include comments in the report of evaluation about the level of effort put forth on psychological exams by SSI applicants who allege mental retardation, or stipulate testing designed to detect malingering in high-risk profile cases. The DDSs should also be required to adhere to procedures for obtaining school records, teacher evaluations, and other corroborating evidence of claimants’ statements.

Implement a management control system to monitor the cost/benefit results of all redeterminations and CDRs for SSA reporting purposes under the provisions of the PRWOR Act of 1996.

The following suggestions and observations were developed by the OIG investigative team in Atlanta, Georgia. These recommendations are for SSA’s consideration:

Add questions in the SSI interview process to enlist the identities of the applicant`s immediate family drawing SSI (e.g. parents, siblings and children).

Conduct CDRs on children ages 7 to 17 every 2 years for possible medical improvement.

Diary pre-school aged children where mental impairment has been established and conduct a CDR after the child has completed 1 year of school.

Establish a mechanism for periodic evaluation (possibly at 2 or 3 year intervals) of the quality of the medical reports provided by consultative sources.

Use standard operating procedures with minimum variations to develop cases involving more than one subject. Variations in procedures can taint evidence and lessen prosecutive appeal.

Refrain from the inclusion in medical reports of personal opinions and comments that are neither medically verifiable nor germane to the issues that have a tendency to appear biased and prejudicial.

Refer all related claims folders to OI as a package when more than one subject is involved so that the fraud potential can be assessed as a whole.

Refer allegations of fraud solely to OIG/OI which has statutory responsibility for the conduct of potential criminal investigations and expertise and familiarity with prosecutive guidelines in the various jurisdictions. Even though the violation may be egregious, the monetary loss is usually the most significant factor in determining the prosecutive merits.

Conduct training for all OIG/OA personnel and other SSA operating components on what constitutes fraud and what is necessary for a successful prosecution.

Limit the number of persons for whom an individual may act as a Rep Payee (other than for children, step-children, and adopted children) unless the individual is serving in a fiduciary capacity.

Notify OI as soon as a potential disability fraud case is detected. There is no need to hold a case open for fraud development, since it can be denied for non-disability factors.

Encourage each of SSA’s components to strictly adhere to SSA guidelines in the development and adjudication of cases.

Ensure that all routine development for medical, as well as nonmedical, determinations, is completed by appropriate personnel before the fraud aspects are developed since such development could have a bearing on the potential fraud.

Ensure that information pertaining to the status of open OI cases is restricted and provided to SSA managers on a "need to know" basis only. OI case information should not be routinely disseminated.

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AGENCY COMMENTS

SSA generally agreed with the three recommendations proposed by the joint review and all but one of the OA recommendations. SSA implemented two recommendations and agreed to implement suggested actions or to reemphasize existing policies in eight of the remaining recommendations during Fiscal Year 1998. With regard to the remaining 14 suggestions and observations, SSA stated that they are examining them and will take appropriate action as necessary.

The only recommendation with which SSA disagreed involved OIG’s suggestion that DDSs avoid using as CEs the same professionals who are shown not to be independent because they treated, and/or continue to treat, claimants for their medical/emotional conditions. In its response, SSA stated that, although it shared the OIG’s concern about potential or perceived conflicts-of-interest arising from CEs performed by a treating source, it did not agree with the implication that a treating source cannot be independent. SSA explained that a treating physician is the medical expert most familiar with a claimant’s condition and, because of the treating relationship, the treating physician is in the best position to evaluate the effects of the condition on a claimant’s ability to perform substantive gainful activity.

Additionally, SSA explained that legal requirements, as detailed in the Code of Federal Regulations sections 404.1519h and 416.919h, state that the treating source is the preferred source for CEs. Accordingly, the Agency would have to rescind these regulations if it changed its policy regarding the preferred source for performing a CE. Therefore, SSA stated that without more compelling data than that presented in this report, they could not justify changing the present policy. (See Appendix A for the full text of the Agency’s comments.)

OIG RESPONSE

We believe that SSA misunderstood the intent of our recommendation related to the need for DDSs to seek independent sources for some CEs. We do not suggest that SSA revise current regulations or policies that define treating physicians as the preferred source to perform a CE. In fact, in most cases we agree that the treating source is the most knowledgeable and cost-efficient authority to evaluate and provide a conclusion regarding a claimant’s ability to perform substantive gainful activity.

Nevertheless, as evidenced by the cases presented in this report, DDSs sometimes encounter treating sources who they believe to be unreliable due to relations or circumstances that cast doubt on the source’s objectivity toward the claimant; or questionable evidence and reporting practices that may include indications of feigned disabilities or coaching, or the virtually identical reporting of symptoms and laboratory findings for other claimants. As such, our recommendation suggested that SSA should:

"emphasize to DDSs the need to avoid using as CEs the same professionals who are shown not to be independent because they treated, and/or continue to treat, claimants for their medical/emotional conditions. DDSs should act in accordance with authority established in section 416.919i which permits them to use other sources in instances when they feel they are not receiving independent evaluations." (Emphasis added.)

The OIG affirms this recommendation and requests that SSA reconsider its position regarding reemphasizing DDS’s authority to use other sources when they believe that a treating source cannot provide an independent CE.

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APPENDICES

Appendix B

MAJOR REPORT CONTRIBUTORS

Gary A. Kramer  Director, Program Audits
Betty Alexander  Deputy Director, Program Audits
William C. McMillan  Deputy Director, Program Audits (Acting)
Shable B. Benefield Auditor-in-charge
Douglas L. Boyer  Auditor
Robert Daniels, Jr.  Auditor