EYE on OIG - January 22, 2008

Contents:
 

• CDI Program Feature
• Recent CDI Case Highlights
• OIG Audit Report Highlights
• SSA OIG by the Numbers

CDI Program Feature

On October 1, 2007, the Social Security Administration (SSA) Office of the Inspector General (OIG) marked the 10th anniversary of its Cooperative Disability Investigative (CDI) Program. In celebration of this notable achievement, we are dedicating this edition of the Eye on OIG to the CDI Program, as well as to the people who have contributed to its unqualified success.
 
Unique Investigative Program Helps Preserve Taxpayer Funds

Most people can't imagine the mental distress and anguish caused by losing one's home and having to relocate-as did thousands of New Orleans residents in the wake of Hurricane Katrina in 2005. One of these evacuees applied for Supplemental Security Income (SSI) in August 2006, claiming paranoia and depression. In his application, the Houston, Texas resident stated, "Every time I wake up, I feel like I am in an ocean of dead people."

However, disability examiners quickly noticed discrepancies between these claims and the man's behavior. During a medical examination, a physician contracted by SSA noted that the claimant could not remember his date of birth or the names of the current or past U.S. presidents.

Prior to 1998, SSA might have approved this man's SSI claim based solely on his allegations, having no way to verify mere suspicions. In that year, however, SSA created the Cooperative Disability Investigations (CDI) pilot project as part of the Agency's "Key Initiative" to combat fraud.

The project, which would focus on initial disability claims as well as continuing disability reviews, was conceived in the wake of two widely publicized cases of disability fraud on a grand scale. In one of these cases, Georgia State officials notified SSA of a scheme involving more than 500 disability beneficiaries from 121 families who all were connected in some way.

An investigation revealed that family members, including children, had been coached to feign mental disabilities during examinations and interviews. SSA, which had paid more than $1 million to these individuals, conducted case reviews and terminated benefits based on medical improvement. However, none were criminally prosecuted due to a lack of evidence that they had not been disabled when they first applied for benefits.

This and other similar cases garnered media coverage and subsequent attention from Congress and its investigative arm, the General Accounting Office (GAO). By the fall of 1997, SSA had initiated the CDI pilot project to increase confidence in its stewardship of public funds. Early in 1998, the first five CDI Units became operational in Atlanta, Baton Rouge, Chicago, New York City, and Oakland.

                   

Today, the CDI Program consists of 19 CDI Units operating in 17 States. CDI blends traditional investigative techniques with a unique collaborative approach that acknowledges the complexity of SSA's disability programs. Each Unit consists of OIG special agents, State or local law enforcement, and personnel from SSA and/or State Disability Determination Services (DDS). SSA and OIG headquarters components provide administrative and program support to the Units.

CDI Team Leaders stress the importance of including SSA and DDS program experts as part of the investigative team. Atlanta CDI Team Leader Tom Brancaccio referred to SSA management support specialist Ernestine McCaskill as an "invaluable resource," and the "heart and soul" of the Atlanta CDI Unit. He added that the Unit could not operate without Debra Love, its DDS representative, who encourages her colleagues to refer suspicious claims and conducts CDI training for all new disability examiners.

Houston CDI Team Leader Carol Durkin has given the nickname "Encyclopedia Britannica" to the Unit's SSA employee, Wanda Davenport, because she provides a wealth of information about SSA regulations. Durkin added that Davenport's work as a liaison to SSA field and regional offices is critical to the Unit's success.

After cases are analyzed from a program standpoint, the Unit's law enforcement personnel conduct a criminal investigation. The results of that investigation are then provided to prosecuting authorities as well as to the DDS and SSA for use in making claims decisions. "CDI investigations provide a fair and balanced look at claims," said Dennis Lynch, Deputy Assistant Inspector General for Investigations.

Lynch, who until recently managed the national CDI Program, added that CDI reports become part of the claims record, and help DDS and SSA personnel ensure that they are legitimately approving or denying claims.

In the case of the Hurricane Katrina evacuee, the disability examiner referred the case to the CDI Unit in Houston based on the suspicious medical findings. CDI investigators soon gathered evidence indicating that man was feigning or exaggerating his disability. In an interview, the man admitted he was unemployed only because he was waiting for his claim to be approved. When asked if he was disabled, the man and his wife laughed. In separate interviews, his family members denied that the man suffered from any mental disability.

These and other investigative results proved very useful to the disability examiner who subsequently evaluated-and denied-the man's claim, preventing the potential loss of thousands of dollars in benefits. These potential savings represent the core mission of the CDI Program. Through FY 2007, the CDI Program has been responsible for $882 million in projected savings to SSA's disability programs.

That is money that can instead be used to pay truly disabled individuals now and into the future, notes Oakland CDI Team Leader Durrell Mackey. CDI Units "assist the DDS in making the correct decision in a pending claim, and by extension preserving payments for individuals who are truly disabled and in need of assistance," said Mackey, who worked as an SSA teleservice representative before becoming a special agent.

In addition to monetary savings, CDI investigations also sometimes result in criminal or civil prosecutions. However, CDI cases are often turned down by prosecutors because the government incurs no monetary loss. "This is not traditional law enforcement," said Lynch. "Many of these cases are pre-effectuation-these people are caught before they are ever paid."

When CDI cases are declined for prosecution, however, investigators have another option: they can refer the case to the OIG's Office of the Chief Counsel (OCCIG). OCCIG attorneys can initiate civil monetary penalty (CMP) proceedings against those who attempt to defraud SSA, even if benefits are never paid. OCCIG can impose penalties of up to $5,000 per false statement made in determining benefit eligibility or amount.

"I love the CMP program," said St. Louis CDI Team Leader Diane Stowe. "It's frustrating that we can't get a lot of convictions [due to no fraud loss]. Now we can refer to it to OCCIG in those cases."

When the program was implemented, some in the disability advocacy community expressed concern that the program would unfairly target vulnerable disability claimants, denying them needed benefits. In response, OIG officials point out that not all CDI reports find evidence of fraud or similar fault-on the contrary, some provide evidence to support claims. CDI Team Leader Stowe remembered that one of her first investigative subjects was an elderly woman who had never been to the doctor because she didn't have health insurance.

"When I went to her house to interview her, her son said she couldn't come to the door. She was on the couch and just couldn't get up," said Stowe. "It made me feel good when she was approved [for benefits]. People think we're out to get them, and we're not-we're just trying to seek the truth."

Generally any such concerns have been countered by staunch support from other corners. Officials from both the National Association of Disability Examiners (NADE) and GAO have endorsed the Program as one of the best ways to improve disability program integrity. In a 2003 statement submitted to Congress, the acting NADE president called CDI "a visible and very effective front-line defense," and she called for nationwide expansion of the program.

CDI Units have also garnered praise from government agencies for their accomplishments. In 2006, for example, the Florida Department of Law Enforcement awarded the Tampa CDI Unit its Davis Productivity Award, citing the Unit's efforts to reduce disability fraud.

Despite this local recognition, CDI Units operate largely unnoticed by the media and the public. For Brancaccio, however, the importance of the CDI mission outweighs any desire to be part of a more high-profile team. "We conduct investigations that would not ordinarily be pursued…the CDI Units provide an investigative asset to [SSA] that was not previously available," said Brancaccio. He added that his favorite aspects of his job are the camaraderie among Unit members and the ability to work a variety of cases independently.

Many CDI personnel expressed the hope that the Program will eventually be expanded to all 50 States. Pierre Hayes, a former Denver CDI Unit member who is now the SSA operations coordinator for the national CDI Program, said it is important to provide that resource to all SSA regional and DDS personnel in evaluating disability claims. "I just imagine how much money [additional CDI Units] would save the Agency…they are relatively inexpensive when you consider how much money they return," said Hayes.

Linda McMahon, SSA's Deputy Commissioner for Operations, oversees the Agency components responsible for the funding and operation of the CDI units. McMahon cited "tight budgets" that many Federal agencies are currently facing, but she pledged to continue to explore further expansion of the CDI Program.

"The track record of the CDI units speaks for itself," said McMahon. "These units are very successful, and I see nothing but continued success for the CDI Program."

Louisiana Man Falsely Alleges Seizure Disorder in Disability Claim

The Baton Rouge, Louisiana CDI Unit investigated a 36-year-old man who appealed his denied Title II and Title XVI disability claim, in which he alleged that he was unable to work due to seizures. The SSA office in Lake Charles, Louisiana referred the claim to the CDI Unit based on inconsistent medical findings.

A CDI investigation found that the man's former co-workers and supervisors believed the man had feigned seizures at his previous place of employment. The investigators also learned that the man was employed while awaiting his appeal, and they interviewed his current employer, who reported that the man was never absent and had not claimed any medical conditions on his employment application.

When CDI investigators discovered that the claimant had several outstanding warrants, he was arrested. During the arrest, the claimant appeared to experience a seizure. When his vital signs were assessed as normal, he was asked to stop feigning the seizure. He immediately complied and was transported to jail without incident. SSA subsequently denied the man's disability claim.

Parole Officer Reports SSI Recipient's Work Activity and Drug Use

The Seattle, Washington CDI Unit investigated a 25-year-old man whose parole officer alleged that he was feigning disability to continue receiving SSI payments. Although his payments had been suspended due to incarceration, they were reinstated and continued after a medical review in 2002 during which the man alleged back pain, depression, and post-traumatic stress disorder. The man had previously received SSI payments as a child due to a psychiatric condition.

The CDI investigation revealed that although the man stated in his claim that he could not work, he had recently held two seasonal jobs, as a golf course maintenance worker and a welder's helper. His employers reported that the man displayed no limitations in performing his job duties. Moreover, the man had worked both jobs at the same time for several months.

Investigators further determined that the man had provided a false address to SSA, and was actually residing with his girlfriend. In addition, the parole officer who referred the case stated that the man had failed several drug tests, testing positive for methamphetamines. SSA subsequently terminated the man's SSI payments.

Physician Assessed $2,000 Penalty for False Statements in SSI Claim

The St. Louis, Missouri CDI Unit investigated a former physician after the Missouri Disability Determination Services referred the initial Title II and Title XVI disability claim based on the man's suspicious behavior at a consultation examination and during a telephone conversation with an SSA claims representative. The claims representative reported that the man had first stated that his children were paying his bills, but later contradicted himself by saying that his children were in school and the family had no money and no resources.

CDI investigators gathered evidence that the man concealed income and resources from SSA in his initial disability claim, in order to qualify for SSI, a program intended for low-income individuals with few assets or resources. The investigation revealed that the man lived on a golf course, in a home worth approximately $500,000, and also owned a second home in Fort Lauderdale, Florida, which he neglected to report to SSA. The investigation also revealed discrepancies in the man's work history that indicated he may have worked as a physician beyond his date of disability onset.

SSA subsequently denied the man's disability claim. Criminal prosecution was declined, but the Office of Investigations (OI) referred the case to OCCIG for CMP consideration. In December 2007, OCCIG reached a settlement with the claimant in which he agreed to pay a $2,000 penalty based on his false statements to SSA.

Disability Beneficiary Runs Home-Based Concrete Coating Business

In 2004, the SSA OIG Fraud Hotline received an anonymous allegation that a Title II disability beneficiary was running a business from his home. When SSA initiated a medical review based on the allegation, the man denied owning a business, claiming that an affective mood disorder and esophageal cancer prevented him from driving or working. SSA then referred the case to the Chicago CDI Unit, which opened an investigation.

CDI investigators first interviewed the beneficiary's neighbors and associates, all of whom stated that the man did not appear to have any mental or physical disability. Investigators later posed as customers at the man's concrete coating business, where he prepared a written estimate for resurfacing a driveway. When the beneficiary was later interviewed at an SSA office, he admitted that he ran a business from his home, earning approximately $2,500 per month. He refused to say why he had not reported his income to SSA or whether he had reported the income to Federal and State tax authorities.

SSA subsequently assessed a $3,478 overpayment due to the man's work activity. Although criminal prosecution was declined, OI referred the case to OCCIG for CMP consideration. OCCIG developed the case and reached a settlement in December 2007, when the beneficiary agreed to pay a $4,000 penalty based on his false statements to SSA.

Social Security Administration Employees Receiving Benefits (View Report A-01-07-27116)

The Social Security Administration (SSA) has over 65,000 employees who administer the Old-Age, Survivors and Disability Insurance (OASDI) and Supplemental Security Income (SSI) programs. Some of those employees are themselves receiving OASDI benefits or SSI payments. We conducted a review to identify SSA employees who may be receiving OASDI benefits or SSI payments inappropriately because of their earnings.

Our review, which matched SSA employee data against a file of OASDI beneficiaries and SSI recipients, identified 194 employees-174 who received OASDI benefits and 20 who received SSI payments. Our analysis showed that overall, SSA ensured that employees who are entitled to OASDI or SSI are paid the appropriate benefits. However, we identified eight employees who were overpaid $245,311 in OASDI benefits because of their earnings. By stopping these benefits, the Agency will save $124,176 over the next 12 months. We also referred these employees to our Office of Investigations (OI) for criminal investigation. As of November 2007, three of the eight cases were with the U.S. Attorney's Office or the District Attorney's Office for prosecution due to possible fraud. The U.S. Attorney's Office declined to prosecute another three cases, which were being handled by SSA administratively. SSA was also taking administrative action on the remaining two cases.

Ensuring that all SSA employees who receive benefits report changes-including earnings-that impact benefit eligibility or amount demonstrates SSA's ability to lead by example. This also supports the Agency's strategic goal of preventing improper payments and fraud. Because SSA took prompt action and worked with OI investigators on the cases we identified, we did not make any recommendations for further action.

Controls for Issuing Social Security Number Verification Printouts (View Report A-04-07-27112)

Federal law generally gives individuals the right to access information about themselves contained in SSA's systems of records. In January 2002, SSA began issuing Social Security number (SSN) verification printouts, which contain the numberholder's name and SSN. In Fiscal Year (FY) 2006, SSA offices issued about 6.3 million of these SSN printouts. We conducted a review to determine whether SSA's internal controls over the issuance of SSN printouts were effective.

To conduct this review, we analyzed transaction data on FY 2006 SSN printouts. We also interviewed officials from SSA field offices and the SSA components responsible for SSN printout regulations and policies. Finally, we visited 21 offices and observed SSA personnel issuing SSN printouts.

We believe SSA's controls for issuing SSN verification printouts should be strengthened. Our review showed that unlike a Social Security card, the SSN printout contains no significant security features other than a stamp indicating which field office issued the document, and an SSA employee signature. Although the appearance of a Social Security card and an SSN printout vary significantly, both documents contain the numberholder's and SSN. Although the SSN printout clearly states that the only true proof of one's SSN is the Social Security card, our review found that the printout is treated by some third parties as an equal-or even superior-verification of an individual's SSN. Therefore, we believe the issuance of SSN printouts should be afforded the same control and care as the issuance of Social Security cards.

We made several recommendations to SSA, including that they require individuals requesting SSN printouts to present the same type of identity documents as those requesting replacement Social Security cards; limit the number of SSN printouts an individual may obtain; perform routine integrity reviews involving the issuance of SSN Printouts; and refer potential SSN misuse to OIG.

Since inception, the CDI Program has achieved projected savings to SSA of $882 million and savings to other agencies of $540 million.

During the week January 7 - January 11, 2008, the SSA OIG Fraud Hotline received 832 allegations.

During Fiscal Year 2008 to date, the SSA OIG Fraud Hotline has received a total of 10,183 allegations. Of those, 8,079 (79 percent) were allegations of Title II or Title XVI disability program fraud.

Our website provides guidelines for reporting fraud and a way to submit an allegation to our Fraud Hotline. For more information, click here.