SOCIAL SECURITY ADMINISTRATION
DISABILITY INSURANCE AND
SUPPLEMENTAL SECURITY INCOME CLAIMS
APPROVED IN 2006 BUT NOT PAID
July 2010
A-01-10-11009
AUDIT REPORT
Mission
By conducting independent and objective audits, evaluations and investigations, we inspire public confidence in the integrity and security of SSA’s programs and operations and protect them against fraud, waste and abuse. We provide timely, useful and reliable information and advice to Administration officials, Congress and the public.
Authority
The Inspector General Act created independent audit and investigative units, called the Office of Inspector General (OIG). The mission of the OIG, as spelled out in the Act, is to:
Conduct and supervise independent and objective audits and investigations relating to agency programs and operations.
Promote economy, effectiveness, and efficiency within the agency.
Prevent and detect fraud, waste, and abuse in agency programs and operations.
Review and make recommendations regarding existing and proposed legislation and regulations relating to agency programs and operations.
Keep the agency head and the Congress fully and currently informed of problems in agency programs and operations.
To ensure objectivity, the IG Act empowers the IG with:
Independence to determine what reviews to perform.
Access to all information necessary for the reviews.
Authority to publish findings and recommendations based on the reviews.
Vision
We strive for continual improvement in SSA’s programs, operations and management by proactively seeking new ways to prevent and deter fraud, waste and abuse. We commit to integrity and excellence by supporting an environment that provides a valuable public service while encouraging employee development and retention and fostering diversity and innovation.
MEMORANDUM
Date: July 16, 2010 Refer To:
To: The Commissioner
From: Inspector General
Subject: Disability Insurance and Supplemental Security Income Claims Approved in 2006 But Not Paid (A-01-10-11009)
OBJECTIVE
The objective of our review was to identify Disability Insurance (DI) and Supplemental Security Income (SSI) claims that were medically allowed for disability benefits in Calendar Year 2006 but had not been paid.
BACKGROUND
The Social Security Administration (SSA) provides DI and SSI disability benefits to eligible individuals under Titles II and XVI of the Social Security Act. To receive disability benefits, an individual must first file an application with SSA. An SSA field office then determines whether the individual is performing substantial gainful activity and whether he or she meets the non-disability criteria for benefits. If so, field office staff generally forwards the claim to the disability determination services (DDS) in the State or other responsible jurisdiction for a disability determination. Once the DDS makes a determination, it sends the claim to an SSA office for final processing or to a Disability Quality Branch for review before final processing.
If the claimant disagrees with the initial disability determination, he or she can file an appeal within 60 days from the date he or she is notified of the determination. In most cases, there are three levels of administrative appeal that an individual may request: (1) reconsideration by the DDS, (2) hearing by an administrative law judge (ALJ), and (3) review by the Appeals Council. After completing the administrative review process, dissatisfied claimants may appeal to the Federal courts.
According to SSA’s Office of Disability Program Management Information, for Fiscal Year 2006, there were over 3.5 million cases decided at the initial, reconsideration, and ALJ levels. Table 1 shows the breakdown of claims for each of the three levels.
Table 1
Level of Determination Number of Claims Allowances Percent Denials/ Dismissals Percent
Initial 2,482,870 869,005 35% 1,613,866 65%
Reconsideration 500,806 65,105 13% 435,701 87%
ALJ 550,011 341,007 62% 209,004 38%
TOTAL 3,533,687 1,275,117 2,258,571
During our review, Impact of the Social Security Administration’s Claims Process on Disability Beneficiaries (A-01-09-29084), we found an individual who was medically allowed for a disability benefit in Calendar Year 2006 but was not paid as of July 2008. In October 2008, we referred this case to SSA, whose staff concluded the claim should have been paid. We initiated this review to determine the extent of this issue.
METHODOLOGY
We obtained a file containing all DI and SSI disability allowances for Calendar Year 2006 that were decided by either a DDS or an ALJ. We initially identified a total of 123,332 DI claimants and 358,826 SSI claimants who were medically allowed for disability payments but were not receiving them as of July 2008. Through further analysis, we determined most of these individuals had received benefits at some point and were no longer eligible (for example, individual was deceased) or were never eligible for payments because they did not meet the non-medical criteria. However, as of January 2010, we identified 61 cases that appeared to need corrective action by SSA. We referred these 61 cases to SSA’s Office of Operations for review and appropriate action. (See Appendix B for our scope and methodology.)
RESULTS OF REVIEW
Based on our review, SSA determined that most of the 61 cases we identified needed corrective action as these claimants had not received payments based on the medical allowance decisions issued in Calendar Year 2006.
Of the 61 cases we referred,
• 45 (74 percent) needed corrective action and SSA calculated $814,862 in past due benefits,
• 15 (25 percent) did not need corrective action, and
• 1 (1 percent) was still being reviewed by SSA as of July 2010.
CLAIMANTS WHO DID NOT RECEIVE BENEFITS
In 45 cases, the DI and SSI claimants should have received payments for the medical allowance decision for which they had not been paid. We determined that 29 of the 45 claimants received some type of benefit from SSA other than their unpaid allowance claim; therefore, these individuals may have believed this was the only benefit they were entitled to receive. As of July 2010, the Agency calculated past due benefits of $814,862 to 41 claimants; and in 4 cases, SSA had not yet calculated past due benefits. Additionally, these claimants will receive about $255,168 in benefits over the next 12 months. Of the $814,862 in past due benefits,
$698,102 was calculated for 34 DI claimants, with an average past due benefit of $20,532; and
$116,760 was calculated for 7 SSI claimants, with an average past due benefit of $16,680.
Table 2 shows the range of past due benefits SSA had calculated for the 45 claimants as of July 2010 and Table 3 shows their disabilities.
Table 2
Past Due Benefits Range Number of Claimants Percent
$0 to $10,000 21 47%
$10,001 to $25,000 6 13%
$25,001 to $50,000 9 20%
$50,001 to $100,000 5 11%
SSA in Process of Calculating Past Due Benefits 4 9%
TOTAL 45 100%
Table 3
Type of Disability Number of Claimants Percent
Mental Disorders 25 56%
Musculoskeletal 5 11%
Malignant Neoplastic Diseases 3 7%
Neurological 3 7%
Special Senses and Speech 3 7%
Immune System Disorders 2 4%
Cardiovascular 1 2%
Endocrine 1 2%
Impairments that Affect Multiple Body Systems 1 2%
Respiratory 1 2%
TOTAL 45 100%
For example, an individual diagnosed as having a mental disorder applied for DI benefits in October 2005 and was allowed in February 2006 but was not paid. As a result of our referral, SSA determined this claimant should have been paid for his 2006 allowance, and the Agency calculated a past due benefit of $39,345 for the period March 2006 through March 2010. According to SSA, the individual did not receive the DI benefit because the claim was never processed.
In another example, an individual with a musculoskeletal disability applied for SSI payments in December 2005 and was allowed by the DDS in February 2006 but was not paid. According to SSA, the Agency was not aware that the SSI payment was not processed as the claimant’s file was not on a control listing. SSA calculated a past due SSI payment of $16,227 for the period January 2006 through March 2010.
Reasons Why Claimants Did Not Receive Their Benefits
The 45 claimants did not receive their benefits because of employee error that occured while the individuals’ claims were being processed. Some of the cases involved manual processing of the claim because of a processing limitation in SSA’s system. Table 4 shows which type of SSA office worked the cases that resulted in the claimants not receiving benefits, and Table 5 shows the number of cases by Region.
Table 4
Office That Caused Error Number of Claimants Percent
Field Office 42 93%
Payment Service Center 2 5%
Disability Quality Branch 1 2%
TOTAL 45 100%
Table 5
SSA Region Number of Claimants Percent
Region 1 – Boston 5 11%
Region 2 – New York 5 11%
Region 3 – Philadelphia 4 9%
Region 4 – Atlanta 12 27%
Region 5 – Chicago 6 13%
Region 6 – Dallas 3 7%
Region 7 – Kansas City 2 4%
Region 8 – Denver 0 0%
Region 9 – San Francisco 8 18%
Region 10 – Seattle 0 0%
TOTAL 45 100%
For example, one claimant who was diagnosed with a musculoskeletal disability was allowed DI benefits in September 2006. SSA needed to process the DI claim manually; however, the field office never processed the claim, and this resulted in the claimant not receiving her DI benefits. SSA calculated a past due DI benefit totaling $854 for the period April 2006 through March 2010. This claimant began receiving SSI payments in December 2006, around the same time she was allowed DI benefits; therefore, she might not have been aware that she should have started receiving DI benefits as well.
In another case, a claimant had a hearing disability and was allowed a DI benefit in March 2006. The Disability Quality Branch selected her claim for review before final processing. After review, the Disability Quality Branch did not transfer the case to the field office for final processing, resulting in the claimant not receiving her DI benefits. As of July 2010, SSA has not yet determined how much this individual should receive in past due benefits.
Another claimant was allowed DI benefits in October 2006 for a cardiovascular disability; however, the field office did not process his DI benefit correctly. Therefore, this individual did not receive his DI benefit. The Agency calculated a past due benefit of $27,731; however, the claimant had not yet received the past due benefit as he was in payment suspension because SSA was selecting a representative payee for this individual.
CLAIMANTS SHOULD HAVE RECEIVED BENEFITS EARLIER THAN THEY DID
While identifying our population for this review, we found 19 claimants who were receiving widows’ benefits; however, it appeared they should have started receiving benefits earlier than they did. We referred these 19 cases to SSA’s Office of Operations for review and appropriate action.
SSA determined 16 of the 19 claimants should have received benefits earlier than they did. The Agency applied an incorrect month of entitlement while processing these cases, which caused the claimants to start receiving benefits later than they should have. The Agency calculated $122,154 in past due benefits for these 16 DI claimants. Table 6 shows the Regions where these cases were processed.
Table 6
SSA Region Number of Claimants Percent
Region 1 – Boston 0 0%
Region 2 – New York 2 13%
Region 3 – Philadelphia 1 6%
Region 4 – Atlanta 3 19%
Region 5 – Chicago 3 19%
Region 6 – Dallas 2 13%
Region 7 – Kansas City 0 0%
Region 8 – Denver 0 0%
Region 9 – San Francisco 4 25%
Region 10 – Seattle 1 6%
TOTAL 16 100%
For example, in one case, a claimant with a musculoskeletal disability was allowed in August 2006 for a disabled widow’s benefit. The Agency established the claimant’s month of entitlement at age 60 for a widow’s benefit and did not consider her disabled widow’s benefit. This resulted in the widow receiving benefits 9 months later than she should have. The Agency calculated past due benefits of $10,035.
We plan to do further work in this area to determine the extent of this issue concerning disabled widows who should have received benefits earlier than they did.
CONCLUSION AND RECOMMENDATION
Our review of allowance decisions issued in Calendar Year 2006 found 45 beneficiaries who were not paid as of 2010—4 years after the decisions to pay the claimants were made by SSA. These 45 cases represent only 0.004 percent of the 1.3 million allowance decisions issued in 2006. Additionally, while identifying our population for this review, we found 16 individuals who were receiving widows’ benefits; however, they should have started receiving benefits earlier than they did. We plan to perform further work in these two areas to determine the extent of unpaid disability allowance decisions and underpaid disabled widows.
We referred the 45 unpaid allowance cases and 16 widows’ cases to SSA, and the Agency initiated its review and corrective action as soon as we notified them of these cases. The Agency calculated past due benefits of $814,862 for the 45 unpaid claimants and $122,154 for the 16 underpaid disabled widows.
We recommend that SSA complete its work on the 45 unpaid claimants and 16 widows we identified and ensure all past due benefits are paid to beneficiaries as appropriate.
AGENCY COMMENTS
SSA agreed with our recommendation. Comments are included in Appendix C.
/s/
Patrick P. O’Carroll, Jr.
Appendices
APPENDIX A – Acronyms
APPENDIX B – Scope and Methodology
APPENDIX C – Agency Comments
APPENDIX D – OIG Contacts and Staff Acknowledgments
Appendix A
Acronyms
ALJ Administrative Law Judge
DDS Disability Determination Services
DI Disability Insurance
POMS Program Operations Manual System
SSA Social Security Administration
SSI Supplemental Security Income
U.S.C. United States Code
Appendix B
Scope and Methodology
To achieve our objective, we:
• Reviewed applicable sections of the Social Security Act and the Social Security Administration’s (SSA) regulations, rules, policies, and procedures.
• Reviewed prior Office of the Inspector General reports.
• Obtained a file of all disability claims with an initial, reconsideration, or hearings level allowance in Calendar Year 2006. From this file, we:
Identified 358,826 Supplemental Security Income claimants who were medically allowed for disability payments but were not receiving them as of July 2008.
Identified 123,332 Disability Insurance claimants who were medically allowed for disability benefits but were not receiving them as of July 2008.
Reviewed SSA mainframe queries and conducted further analysis to identify 61 cases which appeared to need corrective action as these claimants did not receive payment for their medical allowance issued in Calendar Year 2006.
Referred these 61 cases to SSA’s Office of Operations for review and appropriate action.
Additionally, while we were identifying our population for this review, we found 19 cases in which it appeared the claimants should have started receiving benefits earlier than they did. Therefore, we also referred these 19 cases to the Office of Operations for review and any necessary corrective action.
We conducted our audit between January and July 2010 in Boston, Massachusetts. The entity audited was the Social Security Administration’s Regional Commissioners under the Deputy Commissioner for Operations. We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We tested the data obtained for our audit and determined them to be sufficiently reliable to meet our objective. We believe the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.
Appendix C
Agency Comments
MEMORANDUM
Date: July 9, 2010 Refer
Refer To: S1J-3
To: Patrick P. O'Carroll, Jr.
Inspector General
From: James A. Winn /s/
Executive Counselor
to the Commissioner
Subject: Office of the Inspector General (OIG) Draft Report, “Disability Insurance and Supplemental Security Income Claims Approved in 2006 But Not Paid” (A-01-10-11009)—INFORMATION
Thank you for the opportunity to review and comment on the draft report. We appreciate OIG’s efforts in conducting this review. Attached is our response to the report recommendations.
Please let me know if we can be of further assistance. Please direct staff inquiries to
Candace Skurnik, Director, Audit Management and Liaison Staff, at (410) 965-4636.
Attachment
COMMENTS ON THE OFFICE OF THE INSPECTOR GENERAL’S DRAFT REPORT, “DISABILITY INSURANCE AND SUPPLEMENTAL SECURITY INCOME CLAIMS APPROVED IN 2006 BUT NOT PAID” (A-01-1011009)
We agree with your findings and recommendation.
COMMENTS ON RECOMMENDATION
Recommendation
We recommend that SSA complete its work on the 45 unpaid claimants and 16 widows we identified and ensure all past due benefits are paid to beneficiaries as appropriate.
Comment
We agree. We are currently working these claims and will pay all past due benefits as appropriate by July 2010.
[In addition to the information listed above, SSA also provided additional comments, which were incorporated in the report where appropriate.]
Appendix D
OIG Contacts and Staff Acknowledgments
OIG Contacts
Judith Oliveira, Director, Boston Audit Division
Phillip Hanvy, Audit Manager
David Mazzola, Audit Manager
Acknowledgments
In addition to those named above:
Katie Greenwood, Auditor
Kevin Joyce, IT Specialist
Frank Salamone, Senior Auditor
For additional copies of this report, please visit our web site at www.socialsecurity.gov/oig or contact the Office of the Inspector General’s Public Affairs Staff Assistant at (410) 965-4518. Refer to Common Identification Number A 01 10 11009.
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Office of Management and Budget, Income Maintenance Branch
Chairman and Ranking Member, Committee on Ways and Means
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Social Security Advisory Board
Overview of the Office of the Inspector General
The Office of the Inspector General (OIG) is comprised of an Office of Audit (OA), Office of Investigations (OI), Office of the Counsel to the Inspector General (OCIG), Office of External Relations (OER), and Office of Technology and Resource Management (OTRM). To ensure compliance with policies and procedures, internal controls, and professional standards, the OIG also has a comprehensive Professional Responsibility and Quality Assurance program.
Office of Audit
OA conducts financial and performance audits of the Social Security Administration’s (SSA) programs and operations and makes recommendations to ensure program objectives are achieved effectively and efficiently. Financial audits assess whether SSA’s financial statements fairly present SSA’s financial position, results of operations, and cash flow. Performance audits review the economy, efficiency, and effectiveness of SSA’s programs and operations. OA also conducts short-term management reviews and program evaluations on issues of concern to SSA, Congress, and the general public.
Office of Investigations
OI conducts investigations related to fraud, waste, abuse, and mismanagement in SSA programs and operations. This includes wrongdoing by applicants, beneficiaries, contractors, third parties, or SSA employees performing their official duties. This office serves as liaison to the Department of Justice on all matters relating to the investigation of SSA programs and personnel. OI also conducts joint investigations with other Federal, State, and local law enforcement agencies.
Office of the Counsel to the Inspector General
OCIG provides independent legal advice and counsel to the IG on various matters, including statutes, regulations, legislation, and policy directives. OCIG also advises the IG on investigative procedures and techniques, as well as on legal implications and conclusions to be drawn from audit and investigative material. Also, OCIG administers the Civil Monetary Penalty program.
Office of External Relations
OER manages OIG’s external and public affairs programs, and serves as the principal advisor on news releases and in providing information to the various news reporting services. OER develops OIG’s media and public information policies, directs OIG’s external and public affairs programs, and serves as the primary contact for those seeking information about OIG. OER prepares OIG publications, speeches, and presentations to internal and external organizations, and responds to Congressional correspondence.
Office of Technology and Resource Management
OTRM supports OIG by providing information management and systems security. OTRM also coordinates OIG’s budget, procurement, telecommunications, facilities, and human resources. In addition, OTRM is the focal point for OIG’s strategic planning function, and the development and monitoring of performance measures. In addition, OTRM receives and assigns for action allegations of criminal and administrative violations of Social Security laws, identifies fugitives receiving benefit payments from SSA, and provides technological assistance to investigations.