Social Security Disability Benefits:
Agency Could Improve Oversight of Representatives Providing Disability Advocacy Services
GAO-15-62: Published: Dec 3, 2014. Publicly Released: Jan 5, 2015.
What GAO Found
Little is known about the extent to which states are contracting with private organizations to help individuals who receive state or county assistance apply for federal disability programs. Representatives from these private organizations help individuals apply for Supplemental Security Income (SSI) and Disability Insurance (DI) from the Social Security Administration (SSA). Available evidence suggests that this practice—known as SSI/DI advocacy—accounts for a small proportion of federal disability claims. Using a variety of methods, including interviewing stakeholders, GAO identified 16 states with some type of SSI/DI advocacy contract in 2014. In addition, GAO analyzed a sample of 2010 claims nationwide and estimated that such contracts accounted for about 5 percent of initial disability claims with nonattorney representatives, or about 1 percent of all initial disability claims. Representatives working under contract to other third parties, such as private insurers and hospitals, accounted for an estimated 30 percent of initial disability claims with nonattorney representatives.
Three selected sites represented different approaches to SSI/DI advocacy, but were similar in many respects. For example, Minnesota contracted with 55 nonprofit and for-profit organizations, while Hawaii and Westchester County, New York, each had a single contractor: a legal aid organization, and a for-profit company, respectively. At the same time, all three sites targeted recipients of similar state and county programs, such as General Assistance, and generally paid contractors only for approved disability claims, among other similarities.
Key Stakeholders Involved with Social Security Disability Advocacy
SSA has controls to ensure representatives follow program rules and regulations, but these controls are not specific to those working under contract to states or other third parties and may not be sufficient to assess risks and prevent overpayments—known by SSA as fee violations. Specifically:
Despite the growing involvement of different types of representatives in the initial disability determination process, SSA does not have readily available data on representatives, particularly those it does not pay directly. This hinders SSA's ability to identify trends and assess risks, a key internal control. SSA's existing data are limited and are not used to provide staff with routine information, such as the number of claims associated with a given representative. SSA has plans to combine data on representatives across systems, but these plans are still in development.
SSA does not coordinate its direct payments to representatives with states or other third parties that might also pay representatives, a risk GAO identified in 2007. In cases involving SSI/DI advocacy contracts, a representative may be able to collect payments from both the state and from SSA, potentially resulting in an overpayment—a violation of SSA's regulations.
Why GAO Did This Study
For years, states and counties have helped individuals who receive state or county assistance apply for federal disability programs. Federal benefits can be more generous, and moving individuals to these programs can allow states and counties to reduce their benefit costs or reinvest savings into other services. Some states have hired private organizations to help individuals apply for federal benefits, but the extent and nature of this practice is not well-known. GAO was asked to study this practice.
This report examines (1) what is known about the extent to which states have SSI/DI advocacy contracts with private organizations, (2) how SSI/DI advocacy practices compare across selected sites, and (3) the key controls SSA has to ensure these organizations follow SSI/DI program rules and regulations. GAO reviewed relevant federal laws, regulations, and program rules; selected three sites to illustrate different contracting approaches; reviewed prior studies, including one by SSA's Office of the Inspector General with a generalizable sample of disability claim files; and interviewed SSA, state, and county officials and contractors.
What GAO Recommends
GAO recommends that SSA (1) consider ways to improve data and identify and monitor trends related to representatives, and (2) enhance coordination with states, counties, and other third parties with the goal of improving oversight and preventing potential overpayments. SSA partially agreed with our recommendations and noted that it may consider additional actions related to representatives.
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Recommendations for Executive Action
Comments: In July 2017, SSA reported that it is approaching the conclusion of the first phase of a new initiative, called Registration, Appointment and Services for Representatives (RASR). This initiative aims to register all appointed representatives and improve relevant business processes and data collection. SSA reported that it had to postpone the first release of RASR, originally targeted for December 2016, due to some systems issues. SSA stated that it has not yet set a new target date for the first release. SSA stated that this new application will enhance data collection and management of representatives' information and that it will help make strides toward better oversight and improved data analysis and reporting. We will consider closing this recommendation when these efforts are completed.
Recommendation: As part of initiatives currently under way to improve agency information on claims with appointed representatives and detect potential fraud associated with representatives, the Commissioner of the Social Security Administration should consider actions to provide more timely access to data on representatives and enhance mechanisms for identifying and monitoring trends and patterns related to representation, particularly trends that may present risks to program integrity. Specifically, SSA could (1) Identify additional data elements, or amendments to current data collection efforts, to improve information on all appointed representatives, including those under contract with states and other third parties; (2) Implement necessary policy changes to ensure these data are collected. This could include enhancing technical systems needed to finalize SSA's 2008 proposed rules that would recognize organizations as representatives; and (3) Establish mechanisms for routine data extracts and reports on claims with representatives.
Agency Affected: Social Security Administration
Comments: In July 2017, SSA stated that it added a section to a new form--Form SSA-1698, Fee Agreement for Representation before the Social Security Administration--that claimants and representatives can use to enter into fee agreements. According to SSA, this form requires the disclosure of fees that the representative will receive from a third party and the amount of those fees. SSA expects this form to be in use upon OMB approval. Similar language already exists in another form--Form SSA-1560-U4, Petition to Obtain Approval of a Fee for Representing a Claimant before the Social Security Administration--that claimants and representatives can use for fee petitions. SSA stated that these forms are (and will be) included in the folder of evidence that adjudicators may review before determining whether and how much to authorize in fees. According to SSA, disclosure and approval of any third party fees, with potential adjustment of the fee, by both the claimant and SSA should help prevent excessive fees. While the proposed change to the form may help improve transparency of fee arrangements, the potential for a representative to receive a payment from SSA and also receive a payment from a state or other third party still exists. Unless SSA and the state or other third party share information on their payments or have policies and procedures in place to prevent such cases, representatives could still receive both SSA and state payments that total more than the SSA-authorized fee. In order to address this vulnerability, we continue to believe that SSA should enhance coordination or issue guidance to states and other third parties about this vulnerability, which could include SSA sharing best practices for preventing these types of overpayments. For example, one state requires contracted organizations to submit copies of their signed form 1696 (Appointment of Representative) so the state could verify the representative checked the appropriate box for payment.
Recommendation: To address risks associated with potential overpayments to representatives and protect claimant benefits, the Commissioner of the Social Security Administration should take steps to enhance coordination with states, counties, and other third parties with the goal of improving oversight and preventing and identifying potential overpayments. This coordination could be conducted in a cost-effective manner, such as issuing guidance to states and other third parties on vulnerabilities for overpayment; sharing best practices on how to prevent overpayments; or considering the costs and benefits, including any privacy and security concerns, of providing third parties controlled access to portions of the eFolder to facilitate the detection of potential overpayments.
Agency Affected: Social Security Administration