U.S. Congressman Sam Johnson (R-TX), Chairman of the House Committee on Ways and Means Subcommittee on Social Security, today announced a hearing on combatting disability waste, fraud and abuse.  The hearing will take place on Tuesday, January 24, 2012, in B-318 Rayburn House Office Building, beginning at 10:30 a.m.

In view of the limited time available to hear witnesses, oral testimony at this hearing will be from invited witnesses only.  However, any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Subcommittee and for inclusion in the printed record of the hearing.

BACKGROUND

In December 2011, the Subcommittee began a hearing series focusing on the history of the Disability Insurance (DI) program, the income security it provides, and its financing challenges.  DI benefits currently average $1,111 per month for disabled workers.  According to the Social Security Administration (SSA), almost half of families receiving DI benefits rely on these benefits for the majority of their family income.  On average, each disability benefit award is valued at $250,000 in DI and Medicare benefits over a beneficiary’s lifetime. 

Over the past four decades DI program annual costs have climbed from $18 billion to $124 billion as the number of those receiving benefits has more than tripled from 2.7 to 9.7 million.  Demographic changes also played an important role as during this same period the size of the overall workforce has grown, the large baby-boom generation has aged into its most disability-prone years, women have entered the workforce and become insured for benefits should they become severely disabled, and Congress has periodically reevaluated and revised eligibility guidelines.  Wage levels, the basis for both the program’s financing and its benefit levels, have also risen.  In their 2011 Annual Report, the Social Security Trustees project that the DI Trust Fund will become exhausted in 2018, at which point revenues will cover only 86 percent of benefits.  

As DI program enrollment has increased, so too has the potential cost of error, waste, fraud, and abuse.  The DI program has an overpayment rate of 1.5 percent, but in fiscal year (FY) 2010, each tenth of a percentage point in payment accuracy represents about $706 million in retirement and disability program outlays, according to the SSA.  DI medical and work-related overpayments detected by the SSA have grown from about $860 million in FY 2001 to about $1.4 billion in FY 2010, according to the Government Accountability Office.  While the agency collected or recovered $839 million in overpayments in FY 2010, DI overpayment debt reached $5.4 billion.  The SSA has no agency-wide performance goals for debt collection. 

One of the SSA’s FY 2012 Agency Performance Plan priority goals is to “ensure the effective stewardship of our programs by increasing our program integrity efforts.”  In the Plan, the agency pledged to “continue to demonstrate an unyielding commitment to sound program integrity efforts by minimizing improper payments and strengthening efforts to protect program dollars from waste, fraud, and abuse.” 

FY 2012 goals include completing 592,000 full medical continuing disability reviews (CDRs), an increase of 82 percent over FY 2010.  CDRs are a valuable tool in ensuring that disability beneficiaries continue to be eligible for the benefits they receive.  Every dollar spent on CDRs results in a least $10 in lifetime program savings, including savings accruing to Medicare and Medicaid.  At the beginning of FY 2011, there was a backlog of 1.4 million medical CDR cases.  In the Budget Control Act of 2011, Congress authorized $13 billion in additional funds above the discretionary budget caps over the next ten years exclusively for program integrity work.  According to the SSA, these funds will enable the agency to complete nearly 8 million full medical CDRs, eliminating the DI CDR backlog by 2016. 

Another important tool in combatting fraud is the Cooperative Disability Investigation (CDI) program.  The FY 2012 Performance Plan identified a strategic goal to “preserve the public’s trust in our programs” with the objective to “protect our programs from waste, fraud, and abuse,” by expanding the CDI program as resources may permit.  The CDI program was created in 1998 as a joint effort between the SSA and OIG, working with the State Disability Determination Services and State or local law enforcement, to pool resources for the purpose of preventing fraud in the SSA’s disability programs.  Since the program’s inception, the CDI program efforts nationwide have resulted in savings of $1.9 billion in Social Security disability benefits and $1.2 billion in programs such as Medicare and Medicaid, for a total savings of approximately $3.1 billion.

In announcing the hearing, Social Security Subcommittee Chairman Sam Johnson (R-TX) said, “Waste, fraud, and abuse in the disability insurance program cheat honest, hardworking American taxpayers.  As we work to secure the future of this program, we need to protect the American taxpayer from con artists who are stealing from the system by making sure benefits are paid only to those who deserve them.”

FOCUS OF THE HEARING

The hearing will focus on the SSA’s efforts to minimize improper payments and protect taxpayers’ dollars from waste, fraud, and abuse. 

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

Please Note: Any person(s) and/or organization(s) wishing to submit for the hearing record must follow the appropriate link on the hearing page of the Committee website and complete the informational forms. From the Committee homepage, https://waysandmeans.house.gov, select “Hearings.”  Select the hearing for which you would like to submit, and click on the link entitled, “Click here to provide a submission for the record.”  Once you have followed the online instructions, submit all requested information. ATTACH your submission as a Word or WordPerfect document, in compliance with the formatting requirements listed below, by the close of business on Thursday, February 7, 2012.  Finally, please note that due to the change in House mail policy, the U.S. Capitol Police will refuse sealed-package deliveries to all House Office Buildings. For questions, or if you encounter technical problems, please call (202) 225-1721 or (202) 225-3625.

FORMATTING REQUIREMENTS:

The Committee relies on electronic submissions for printing the official hearing record.  As always, submissions will be included in the record according to the discretion of the Committee.  The Committee will not alter the content of your submission, but we reserve the right to format it according to our guidelines.  Any submission provided to the Committee by a witness, any supplementary materials submitted for the printed record, and any written comments in response to a request for written comments must conform to the guidelines listed below.  Any submission or supplementary item not in compliance with these guidelines will not be printed, but will be maintained in the Committee files for review and use by the Committee.

1. All submissions and supplementary materials must be provided in Word or WordPerfect format and MUST NOT exceed a total of 10 pages, including attachments. Witnesses and submitters are advised that the Committee relies on electronic submissions for printing the official hearing record.

2. Copies of whole documents submitted as exhibit material will not be accepted for printing. Instead, exhibit material should be referenced and quoted or paraphrased.  All exhibit material not meeting these specifications will be maintained in the Committee files for review and use by the Committee.

3. All submissions must include a list of all clients, persons and/or organizations on whose behalf the witness appears.  A supplemental sheet must accompany each submission listing the name, company, address, telephone, and fax numbers of each witness.

The Committee seeks to make its facilities accessible to persons with disabilities.  If you are in need of special accommodations, please call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four business days notice is requested).  Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above.

Note: All Committee advisories and news releases are available on the World Wide Web at http://www.waysandmeans.house.gov/.