Committee for a Responsible Federal Budget

New Report Finds Abuse of Disability Insurance System

Oct 9, 2013 | Social Security

Earlier this week, the Senate Committee on Homeland Security and Governmental Affairs convened a hearing addressing fraudulent behavior in the Social Security Disability Insurance System, which has already garnered significant national attention. The Chairman of the Committee, Sen. Tom Carper (D-DE) released a report on a two-year, in-depth investigation into allegations of fraud in rural Kentucky, committed by Judge David Daugherty and attorney Eric Conn. The report and hearing focused on a specific case study, and suggested that increased pressure on appellate legal judges to review cases and decrease hearing backlogs led to irresponsible behavior in this instance.

This report found evidence of collusion and policy violations by Judge Daugherty and Mr. Conn, which led to the third-highest benefit award rate in the country. In addition to a presenting a number of specific findings regarding the relationship between Judge Daugherty and Mr. Conn, the report makes a number of recommendations for reform of the SSDI system as a whole. Recommendations include: strengthening the ALJ quality review process, prohibiting the use of doctors with revoked or suspended licenses, and reform of the medical-vocational guidelines, among others.

During the hearing, Senator Coburn described these specific fraudulent measures that were undertaken by Mr. Conn and Judge Daugherty to ensure hearings would award benefits in a timely fashion. Senator Levin argued that the findings of this investigation strengthen the case for greater oversight and efficiency in the SSDI program. Senator Coburn echoed those thoughts and hopes this investigation will encourage others to take a hard look at the program and support needed reforms.

We've talked before about SSDI reform, and this latest report, though a specific case study, draws more attention to Disability Insurance and the potential for reform. While fraud is important to address, more complete reforms are needed to ensure the solvency and sustainability of disability insurance. A few months ago, CRFB's Senior Policy Director Marc Goldwein offered his thoughts on problems with SSDI:

The Social Security disability system is broken in many ways. Not only is the program financially insolvent, but the system is wrought with fraud, needlessly complex, difficult to navigate, inconsistent and unfair in determining eligibility, inflexible to changes in the structure of the workforce, administratively overburdened, almost completely uncoordinated with other government policies, and unable to help or reward those who are interested in reentering the workforce. 

SSDI is projected to become insolvent in 2016, so it is imperative that measures be taken to shore up this important program. If Congress can move past the current manufactured crises, they should take concrete steps to ensure the sustainability and solvency of SSDI, by looking at all available options.