SSA Disability Benefits:

Enhanced Policies and Management Focus Needed to Address Potential Physician-Assisted Fraud

GAO-15-19: Published: Nov 10, 2014. Publicly Released: Dec 10, 2014.

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What GAO Found

The Social Security Administration (SSA) has policies and procedures in place for detecting and preventing fraud with regard to disability benefit claims. However, GAO identified a number of areas that could leave the agency vulnerable to physician-assisted fraud and other fraudulent claims:

  • SSA relies heavily on front-line staff in the offices of its disability determination services (DDS)—which have responsibility for reviewing medical evidence—to detect and prevent potential fraud. However, staff said it is difficult to detect suspicious patterns across claims, as directed by SSA policy, given the large number of claims and volume of medical information they review. Moreover, DDS offices generally assign claims randomly, so staff said it would only be by chance that they would review evidence from the same physician.
  • SSA and, in turn, DDS performance measures that focus on prompt processing can create a disincentive for front-line staff to report potential fraud because of the time it requires to develop a fraud referral. Four of the five DDS offices GAO visited count time that staff spend on documenting potential fraud and developing fraud referrals against their processing time. Some staff at these DDS offices said this creates a reluctance to report potential fraud.
  • The extent of anti-fraud training for staff varied among the five offices GAO visited and was often limited. SSA requires all DDSs to provide training to newly hired staff that includes general information on how to identify potential fraud, but does not require additional training. The five DDS offices GAO visited varied in whether staff received refresher training and its content—such as how to spot suspicious medical evidence from physicians—and staff at all levels said they needed more training on these issues.
  • SSA has not fully evaluated the risk associated with accepting medical evidence from physicians who are barred from participating in federal health programs. Although information from these physicians is not necessarily fraudulent, it could be associated with questionable disability determinations.

SSA has launched several initiatives to detect and prevent potential fraud, but their success is hampered by a lack of planning, data, and coordination. For instance, SSA is developing computer models that can draw from recent fraud cases to anticipate potentially fraudulent claims going forward. This effort has the potential to address vulnerabilities with existing fraud detection practices by, for example, helping to identify suspicious patterns of medical evidence. However, SSA has not yet articulated a plan for implementation, assigned responsibility for this initiative within the agency, or identified how the agency will obtain key pieces of data to identify physicians who are currently not tracked in existing claims' management systems. Furthermore, SSA is developing other initiatives, such as a centralized fraud prevention unit and analysis to detect patterns in disability appeals cases that could indicate fraud. However, these initiatives are still in the early stages of development and it is not clear how they will be coordinated or work with existing detection activities.

Why GAO Did This Study

SSA relies on medical evidence to determine whether the millions of new claimants each year qualify for disability benefits. This evidence—and those who provide it—have been the subject of intense scrutiny as questions have been raised about the potential for fraud schemes that include falsified medical evaluations. GAO was asked to study physician-assisted fraud in SSA's disability programs.

GAO reviewed (1) how well SSA's policies and procedures are designed and implemented to detect and prevent physician-assisted fraud, and (2) the steps SSA is taking to improve its ability to prevent physician-assisted fraud. GAO reviewed relevant federal laws and regulations, visited 5 of the 54 DDS offices that were selected to obtain geographic and office structure variation, and analyzed DDS data to identify whether federally sanctioned physicians (as of the end of January 2014) may have submitted evidence on behalf of claimants. GAO also interviewed SSA officials, as well as private disability insurers and others knowledgeable about SSA's programs to identify key practices for fraud prevention.

What GAO Recommends

GAO recommends SSA identify ways to remove potential disincentives for detecting and referring potential fraud, enhance its training efforts, evaluate the threat of physician-assisted fraud, and ensure that new and existing fraud efforts are coordinated. SSA agreed with four of our five recommendations, partially agreed with one, and noted plans to address all of them.

For more information, contact Daniel Bertoni at (202) 512-7215 or bertonid@gao.gov

Recommendations for Executive Action

  1. Status: Open

    Comments: SSA partially agreed with this recommendation, citing that their employees take their stewardship responsibilities seriously and that field office and disability determination services (DDS) employees are the agency's first and best line of defense against fraud. The agency said that it will continue to encourage its employees to report potential fraud and give them the tools that they need to be successful. We will close this recommendation when SSA explores potential disincentives (e.g., performance standards) for staff to detect and prevent physician-assisted fraud, and develops and disseminates promising practices to minimize these disincentives.

    Recommendation: To improve the ability of the agency to detect and prevent potential physician-assisted fraud, and to address potential disincentives for staff to detect and prevent physician-assisted fraud, SSA should review the standards used to assess DDS performance; and develop and distribute promising practices to incentivize staff to better balance the goal of processing claims promptly with the equally important goal of identifying and reporting evidence of potential fraud.

    Agency Affected: Social Security Administration

  2. Status: Open

    Comments: SSA agreed with this recommendation and said that it will research how to identify denial cases for this purpose in FY 2015. We will close this recommendation once SSA issues additional policy guidance to DDSs to report all claims with potentially fraudulent medical evidence.

    Recommendation: To improve the ability of the agency to detect and prevent potential physician-assisted fraud, and to ensure that the agency captures complete information on suspicious claims, SSA should issue guidance to remind DDSs of its existing policy to report all claims with potentially fraudulent medical evidence to the SSA's Office of the Inspector General (SSA OIG), even if sufficient evidence exists to deny a claim.

    Agency Affected: Social Security Administration

  3. Status: Open

    Comments: SSA agreed with this recommendation and had begun to enhance its training during our review. Additionally, SSA issued a DDS Administrator Letter to all DDSs providing an overview of fraud reporting, investigation, and prosecution to reinforce the importance of agency anti-fraud efforts. The letter included an overview of fraud procedures, a reminder of anti-fraud responsibilities and policies, and links to available anti-fraud training tools. SSA said that it will continue to work to enhance training for all DDS employees. The training will include the significance for reporting fraud and the business procedures. SSA also plans to develop an on-going training strategy that incorporates recent OIG findings and trends to stay aware of shifting schemes to defraud the disability program. We will close this recommendation once the training strategy is completed.

    Recommendation: To improve the ability of the agency to detect and prevent potential physician-assisted fraud, and to help front-line staff identify potentially fraudulent activity, SSA should enhance its training efforts by ensuring it provides fraud-related refresher training to all DDS employees on a regular basis. Such training should include the identification of suspicious medical evidence and providers, as well as the processes and procedures for reporting such information. To facilitate its efforts, the agency could coordinate with the SSA OIG and draw on the type of training provided by Cooperative Disability Investigations' units.

    Agency Affected: Social Security Administration

  4. Status: Open

    Comments: SSA stated that it believes the best opportunity to further evaluate the possible review of the license statuses of medical evidence providers is in conjunction with the implementation of the National Vendor File, part of the national Disability Case Processing System, which is under development. The agency anticipates limited data for exploration prior to FY 2017.

    Recommendation: To improve the ability of the agency to detect and prevent potential physician-assisted fraud, and to address the potential risks associated with medical evidence submitted by sanctioned physicians, SSA should evaluate the threat posed by this information and, if warranted, consider changes to its policies and procedures.

    Agency Affected: Social Security Administration

  5. Status: Open

    Priority recommendation

    Comments: SSA has taken positive steps to outline its plans to combat potential fraud, however the agency has not yet identified the actions it will take to detect and prevent potential physician-assisted fraud. SSA stated that in FY 2014, the Acting Commissioner of Social Security approved and signed a charter reinstituting the National Anti-Fraud Committee (NAFC), co-chaired by the Inspector General (IG) and SSA's Deputy Commissioner for Budget, Finance, Quality, and Management. The NAFC's mission is to support national and regional strategies to combat fraud, waste, and abuse. Throughout FY 2014, the NAFC monitored 11 different anti-fraud initiatives, and continued to monitor SSA's anti-fraud activities in FY 2015. SSA said that it would enhance its anti-fraud efforts and develop a comprehensive plan that will consider the agency's resourcing and staffing levels, available technology, and the integration of all of SSA's activities, in FY 2015. In November 2014, SSA established the Office of Anti-Fraud Programs (OAFP) to provide centralized oversight and accountability for the agency's anti-fraud initiatives and further outlined the roles and responsibilities of this office. Specially, OAFP, in consultation with the OIG and other SSA components, will lead the development and implementation of SSA's anti-fraud initiatives and activities. This will include efforts to mitigate fraud through data analytics that utilize SSA's existing data systems. In March 2016, SSA revised the NAFC charter to help ensure executive oversight of the agency's efforts to combat fraud, waste, and abuse. As of October 2016, SSA had developed a strategic plan for its anti-fraud efforts that will include use of data analytics. However, this plan does not specifically address actions to combat potential physician-assisted fraud. We will continue to monitor SSA's progress to identify and prevent fraud schemes that include physicians.

    Recommendation: To improve the ability of the agency to detect and prevent potential physician-assisted fraud, and to help ensure new initiatives that use analytics to identify potential fraud schemes are successful, SSA should develop an implementation plan that identifies both short- and long-term actions, including: (1) timeframes for implementation; (2) resources and staffing needs; (3) data requirements, e.g., the collection of unique medical provider information; (4) how technology improvement will be integrated into existing technology improvements such as the Disability Case Processing System and National Vendor File; and (5) how different initiatives will interact and support each other.

    Agency Affected: Social Security Administration

 

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