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70–885 2011

SOCIAL SECURITY’S PAYMENT ACCURACY 

JOINT HEARING 

BEFORE THE

SUBCOMMITTEE ON OVERSIGHT 

AND

SUBCOMMITTEE ON SOCIAL SECURITY 

OF THE

COMMITTEE ON WAYS AND MEANS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

JUNE 14, 2011

Serial No. 112–OS5 

Printed for the use of the Committee on Ways and Means 

( 


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COMMITTEE ON WAYS AND MEANS 

SUBCOMMITTEE ON SOCIAL SECURITY 

SAM JOHNSON, Texas, Chairman 

KEVIN BRADY, Texas 

PAT TIBERI, Ohio 

AARON SCHOCK, Illinois 

RICK BERG, North Dakota 

ADRIAN SMITH, Nebraska 

KENNY MARCHANT, New York 

XAVIER BECERRA, California 

LLOYD DOGGETT, Texas 

SHELLEY BERKLEY, Nevada 

FORTNEY PETE STARK, California 

SUBCOMMITTEE ON OVERSIGHT 

CHARLES W. BOUSTANY, JR., Louisiana, Chairman 

DIANE BLACK, Tennessee 

AARON SCHOCK, Illinois 

LYNN JENKINS, Kansas 

KENNY MARCHANT, New York 

TOM REED, New York 

ERIK PAULSON, Minnesota 

JOHN LEWIS, Georgia 

XAVIER BECERRA, California 

RON KIND, Wisconsin 

JIM MCDERMOTT, Washington 

JON TRAUB, Staff Director 

JANICE MAYS, Minority Staff Director 


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C O N T E N T S 

Page 

Advisory of June 14, 2011, announcing the hearing ............................................. 2 

WITNESSES 

Honorable Carolyn Colvin, Deputy Commissioner, Social Security Administration ........................................................................................................................ 9 

Honorable Patrick P. O’Carroll Jr., Inspector General, Social Security Administration ................................................................................................................. 21 

Dan Bertoni, Director, Education, Workforce, and Income Security Issues, 

U.S. Government Accountability Office .............................................................. 29 

Ann P. Robert, Deputy Director, Bureau of Disability Determination Services, 

Illinois Department of Human Services, on behalf of the National Council 

of Disability Determination Directors ................................................................ 53 

Joseph Dirago, President, National Council of Social Security Management 

Associations .......................................................................................................... 63 

SUBMISSIONS FOR THE RECORD 

Social Security Administration ............................................................................... 93 

Government Accountability Office .......................................................................... 99 

National Council Of Disability Determination Directors ..................................... 101 

Huntington’s Disease Society of America (HDSA) ................................................ 103 


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SOCIAL SECURITY’S PAYMENT ACCURACY 

TUESDAY, JUNE 14, 2011 

U.S. HOUSE OF REPRESENTATIVES,

COMMITTEE ON WAYS AND MEANS,

SUBCOMMITTEE ON OVERSIGHT,

JOINT WITH

SUBCOMMITTEE ON SOCIAL SECURITY, 

Washington, DC. 

The subcommittees met, pursuant to call, at 2:40 p.m., in Room 

1100, Longworth House Office Building, the Honorable Charles 

Boustany [chairman of the Subcommittee on Oversight] presiding. 

[The advisory of the hearing follows:] 


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HEARING ADVISORY 

FROM THE COMMITTEE ON WAYS AND MEANS 

Chairmen Boustany and Johnson Announce 

Hearing on Social Security’s Payment Accuracy 

June 14, 2011 

House Ways and Means Oversight Subcommittee Chairman Charles Boustany, 

Jr., MD (R–LA) and Social Security Subcommittee Chairman Sam Johnson (R–TX) 

today announced that the Subcommittees on Oversight and Social Security will hold 

a hearing on the accuracy of payments made by the Social Security Administration 

(SSA). The hearing will take place on Tuesday, June 14, 2010, in 1100 Longworth House Office Building, beginning at 2:00 P.M. 

In view of the limited time available to hear from 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 Committee and for inclusion in the printed record of the hearing. A list of invited witnesses will follow. 

BACKGROUND: 

According to the President’s fiscal year 2012 Budget request, next year the SSA is expected to distribute nearly $820 billion in benefits to over 60 million people. 

These benefits will be paid primarily through three major programs administered 

by the SSA: the Social Security Old-Age and Survivors’ Insurance (OASI) program, 

which will distribute $620 billion to 45 million retired workers and their spouses, 

dependents, and survivors; the Social Security Disability Insurance (DI) program, 

which will distribute $135 billion to nearly 11 million beneficiaries unable to work 

due to disability and their eligible spouses and children; and the Supplemental Security Income (SSI) program, which will distribute nearly $50 billion to over 8 million low-income people who are aged, blind, or disabled. 

One out of four American households receives some income from Social Security, 

and distribution of such significant sums of taxpayer dollars means that even a very 

low overpayment rate can result in a substantial loss to the taxpayer and the Social 

Security program. According to the latest available data, in FY 2009 overpayments 

included $841 million in the OASI program, $1.7 billion in the DI program, and $4.0 

billion in the means-tested SSI program. Without action, these error costs will grow 

significantly as benefit costs for Social Security alone are projected to increase nearly 70 percent over the next ten years. 

For the five-year period ending fiscal year 2009, errors involving the determination of ‘‘substantial gainful activity,’’ essentially whether earnings are high enough 

to end eligibility for DI benefits, account for the majority of overpayment errors, 

nearly $1 billion annually, or 36 percent of total retirement, survivors, and disability program error dollars. Of these error dollars, 64 percent resulted from beneficiaries’ failure to report their work activity. The other 36 percent were associated 

with the SSA’s failure to schedule a work continuing disability review (CDR) after 

the beneficiary notified the SSA that they returned to work. Once a beneficiary notifies the SSA of their earnings, it may be months or years before the SSA sends an 

overpayment notice to the beneficiary, demanding repayment of sometimes tens of 

thousands of dollars of accrued overpayments. 

Other program integrity reviews generate significant long-term savings for taxpayers and are critical to ensuring that only those eligible continue to receive benefit payments. Medical CDRs are periodic reviews conducted to ensure recipients are 

still disabled according to Agency rules. In FY 2009, these reviews have generated 

$12.50 in savings for every dollar invested. Despite their substantial savings, the 

frequency of these reviews is declining. The number of completed medical CDRs fell 


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65% between FY 2004 and FY 2008, with a backlog of more than 1.5 million medical 

CDRs at the end of FY 2010. The SSA Office of Inspector General (OIG) estimates 

that this backlog may lead to as much as $1.1 billion in overpayments in 2011 

alone. 

SSI program integrity work has followed a similar pattern, with funding levels 

and redeterminations peaking in 2003, falling through 2007, and then beginning to 

rise again in 2008. These periodic reviews of non-medical SSI eligibility factors are 

used to determine if a recipient remains eligible for the program and yield $7 in 

program savings for every dollar spent. The use of SSI redeterminations has decreased by more than 60% between FY 2003 and FY 2008, resulting in $3.3 billion 

in lost program savings in FYs 2008 and 2009, according to the SSA OIG. 

In announcing the hearing, Chairman Boustany said, ‘‘Whether through error 

or outright fraud, overpayments across the government are a substantial 

problem costing taxpayers tens of billions of dollars each year. The Oversight Subcommittee is reviewing these overpayments in a series of hearings, taking a closer look to identify how overpayments occur and funding 

solutions to better protect taxpayer dollars and program beneficiaries.’’ 

In announcing the hearing, Chairman Johnson said, ‘‘We are facing a debt crisis because Washington spends too much and wastes too much. Payments 

that are wrong due to fraud or poor management at Social Security are unacceptable. Americans whose hard earned wages support these programs 

want, need and deserve better.’’ 

FOCUS OF THE HEARING: 

The Subcommittees will examine the SSA’s efforts to improve payment accuracy 

for the OASI, DI, and SSI programs, including the backlogs associated with these 

efforts and how these backlogs might be reduced to better protect taxpayer dollars. 

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, 

http://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 document, in compliance 

with the formatting requirements listed below, by the close of business on Tuesday, June 28, 2011. 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 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. 


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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/. 

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Chairman BOUSTANY. This hearing will come to order. Good 

afternoon. I am pleased to welcome everyone to this afternoon’s 

joint hearing on payment accuracy in programs administered by 

the Social Security Administration. As with past subcommittee 

oversight hearings on Medicare fraud and refundable tax credits, 

today’s hearing is aimed at better understanding improper payments in Social Security programs and how taxpayer dollars might 

be better protected. 

Next year alone, the Social Security Administration is tasked 

with the enormous responsibility of distributing nearly $820 billion 

to over 60 million beneficiaries. With the staggering size and complexity of these programs Social Security is particularly vulnerable 

to erroneous payments, fraud, and management challenges. 

We are here today to explore these challenges and consider what 

might be done to correct them and better protect both beneficiaries 

and taxpayers. 

By any standard, the scope of these problems is considerable. Social Security issued at least $8 billion in improper payments in fiscal year 2010. According to GAO and the Social Security inspector 

general, this number does not capture the full extent of overpayments. 

Regardless of whether a payment occurs because of simple error 

or outright fraud, improper payments harm Social Security programs in the long term, jeopardizing benefits for those who may 

need them in the future. They also cost taxpayers billions of dollars 

each year. With publicly held Federal debt set to eclipse GDP in 

the coming years, we can no longer ignore billions of dollars in 

overpayments, regardless of how they occur. While the numbers involved with wasteful Social Security spending might be overwhelming, the solutions that would reduce them are no mystery. 

Today we will be discussing proven methods for reducing improper payments, such as continuing disability reviews and redeterminations which can save the taxpayer as much as $15 for every 

dollar spent. We will also be discussing how these cost-saving activities are on the decline, falling as much as 65 percent in recent 

years, billions of dollars in overpayments that might have otherwise been prevented. 

There is much that needs to be done to reduce improper payments and better protect taxpayer dollars. Social Security should 

build on past successes, with data exchanges using information the 

government and beneficiaries already have to make payments more 


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accurate. And they need not only to get this information in a timely 

fashion, they need to put it to use more quickly than they have in 

the past. 

Too often the agency is not responsive to beneficiaries. Many of 

us have heard reports from our constituents about the agency waiting months or years to send out overpayment notices which can 

lead to tens of thousands of dollars in additional overpayments and 

underpayments. In other cases, beneficiaries may inform the agency of a change in their income or medical status, and years go by 

without action by Social Security. This has to change. 

I look forward to hearing from the witnesses today about how 

these problems may occur and what might be done to prevent 

them. With these programs, like others, every dollar spent on an 

improper payment is a dollar that does not go to a legitimate beneficiary, and each one further weakens the program. And with the 

Social Security program heading towards insolvency, a time when 

we could just kick this can down the road is past, if there ever was 

one at all. 

As the Ways and Means Subcommittees on Oversight and Social 

Security, we have an obligation to Social Security beneficiaries and 

taxpayers to understand the size of the problem and what might 

be done to improve it. 

I hope today’s hearing will cast new light on these issues, and 

I thank our guests for joining us for the support and discussion. 

Before I yield to the ranking member of the Subcommittee on 

Oversight, Mr. Lewis, I ask unanimous consent that all members’ 

written statements be included in the record. Without objection, so 

ordered. 

Chairman BOUSTANY. And now I yield to Mr. Lewis, the ranking member of the Oversight Subcommittee. 

Mr. LEWIS. I thank the chairman for holding this hearing today. 

We both agree that improper payments should not happen. However, we disagree on how to fix the problem. I believe that we need 

to fund the agency. Republican budget cuts harm beneficiaries, 

harm taxpayers, and harm the Social Security Trust Fund. We will 

see this clearly today. The Republicans’ failure to fund the agency 

will cost taxpayers more than $200 million in improper payments 

this year alone. Some now seem surprised, they seem very surprised, and are here asking the agency, ‘‘What went wrong? What 

more needs to be done?’’ 

We and the witnesses all know the answer to these questions. 

The agency needs more funding, more money, more staffing, more 

resources. It is that simple. The President’s request for next year, 

if funded, will save taxpayers $9 billion in improper payments over 

the next decade and up to $58 billion in the long run. We do not 

need a hearing to learn this. Therefore, I believe there must be 

something more. Why are we having this hearing? 

I again, and I have said at each hearing we have held, that am 

troubled. I remain concerned by the path of this committee. 

I continue to ask, ‘‘Who is next? Who else is on your list?’’ We 

started this year with seniors and proposals to end Medicare. The 

committee then moved to teachers and their pension, and then to 

women’s health and the uninsured. Last month the targets were 

middle-class working families and the unemployed. Now we have 


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come back to the seniors and added severely disabled adults and 

severely disabled children in very poor families. I am concerned 

about the people being added to this list. 

Today we are witnessing a self-fulfilling prophecy. Republican 

budget cuts are being used to put the Social Security Administration in a very bad light. The truth is that the agency’s overpayment 

rate is extremely low. This agency provides vital payments to over 

60 million Americans and families. One out of four households depends on these programs, including my friend, your neighbor, and 

the grandparents who live up the street. I ask that we all are 

mindful not to cast these Americans in a bad light. 

I want to thank each and every one of the witnesses for being 

here today. Also I thank the employees of the Social Security Administration for their dedication and for their hard and good work 

each and every day. 

Mr. Chairman, with that I want to thank you and I yield back 

my time. 

Chairman BOUSTANY. I thank the gentleman. 

Chairman BOUSTANY. I now yield to Mr. Johnson, the chairman of the Social Security Subcommittee. 

Chairman JOHNSON. Thank you. Welcome, you guys. 

The American people have been told by the trustees for Social 

Security and Medicare that these programs are headed toward insolvency. So when they hear Social Security is owed billions due to 

wrongful payments. Americans want, need and deserve answers. In 

fiscal year 2009, overpayments totaled $6.5 billion for the retirement, disability, and supplemental security income, or SSI program, with most in the SSI program. Worse, these numbers do not 

reflect lost savings resulting from Social Security falling behind on 

eligibility reviews. 

These reviews fall into three broad categories: first, so-called SSI 

determinations or a periodic review of nondisability eligibility factors such as income and assets. Social Security reduced the number 

of redeterminations by more than 60 percent between fiscal year 

2003 and 2008, resulting in $3.3 billion in lost program savings in 

fiscal years 2008 and 2009 according to the Social Security’s inspector general, who is out there. 

The second category is work continuing disability reviews, known 

as work CDRs, where Social Security checks to see if one is making 

too much to remain on disability. Should someone receiving disability benefits make over $1,000 per month, referred to as a substantial, gainful activity, they may no longer qualify. And for the 

5-year period ending 2009, wage errors in the Social Security disability insurance program counted for nearly $1 billion annually, or 

about a third of the total retirement and disability program overpayment error dollars. Of these errors, two-thirds resulted from a 

beneficiary’s failure to report their work activity. The other third 

were associated with Social Security’s failure to timely complete a 

work CDR after they were told by beneficiaries that they had returned to work. As a result it can take months or years before Social Security sends a notice demanding repayment of sometimes 

tens of thousands of dollars of accrued overpayments. That is kind 

of crazy. 


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As we will hear today, if Social Security had better data-matching capability and completed more reviews of earnings sooner, payment errors could be resolved more quickly or never happen in the 

first place. 

Lastly, Social Security has fallen behind reviewing the medical 

status of those receiving disability benefits. In fiscal year 2010, Social Security had a backlog of 11⁄2 million medical CDRs. When 

these reviews aren’t done on time, people who no longer qualify 

will continue to receive benefits that they don’t deserve. Also, these 

reviews not only provide savings to Social Security, they also provide savings to Medicare and Medicaid. In fact, here is how much 

we stand to save if they are done on time. For every dollar invested 

in a medical CDR, $12 in savings is returned to these programs. 

The return on each dollar invested in a work CDR is $15. Reviewing the asset and income levels of SSI recipients returns $7 for 

each dollar spent. In the name of fiscal responsibility that is time 

and money well spent. 

However, these savings won’t be achieved if Social Security isn’t 

committed, as it should be, to protecting taxpayer dollars. Recently 

the President and the Congress were able to reach a bipartisan 

agreement on this year’s funding for Social Security’s operations. I 

hope as we seek to achieve a similar bipartisan result, we will also 

work together to ensure that Social Security does all it can to fight 

waste, fraud, and abuse. The American taxpayers who foot the bill 

deserve nothing less. 

Our witnesses today include those on the front lines of case processing, who represent managers of the State disability determination services and managers of the local Social Security offices. We 

will also hear from the Social Security inspector general about important work they do in their special investigative units fighting 

fraud. We do need answers and I am counting on all our witnesses 

to help provide them. 

Thank you, Mr. Chairman. 

Chairman BOUSTANY. I thank the gentleman. 

Chairman BOUSTANY. Mr. Becerra. 

Mr. BECERRA. Mr. Chairman, thank you for holding this hearing. Social Security is a sacred compact between Americans of all 

generations. It ensures that billions of retirees, disabled workers, 

and children can live a life of dignity. 

This year 155 million workers will contribute more than $690 billion in taxes to Social Security, and nearly 56 million Americans 

will collect their earned Social Security benefits. Social Security 

has never once failed to pay earned benefits on time and in full, 

even through 13 recessions, including the Bush recession we are recently going through. That is a track record that most would die 

for and it is the reason Social Security has the support and trust 

of the American people. 

Some of my colleagues have suggested that Americans’ hardearned tax contributions to Social Security are not real and that 

Social Security is broke. That suggests a fundamental misunderstanding and misrepresentation of Social Security. The U.S. Treasury bonds in Social Security’s Trust Fund are real, and the trust 

fund is $2.7 trillion strong. Yet some insist on misleading the public about it to support their proposals to cut guaranteed benefits 


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and take trillions of dollars out of the trust fund for private accounts. I dare anyone, Mr. Chairman, who is willing to take this 

challenge to find a better all-in-one retirement, disability, and life 

insurance plan in the private marketplace that can match Social 

Security. 

The most immediate dangers to Social Security are the reckless 

cuts to its operating budget that put at risk its ability to deliver 

earned benefits on time in the right amount. 

Mr. Chairman, we need to hold an oversight hearing on Social Security budget. It is long overdue. The nearly $1 billion cut to Social Security’s already lean but efficient operating budget cuts into 

the bone. Social Security’s costs of operation are already less than 

1 percent of its total budget. 

Today’s hearing topic, preventing improper payments to safeguard the Social Security Trust Fund, is important; but my colleagues seem to be ignoring the elephant in the room: You get what 

you pay for. And the current budget driven by Republicans in the 

House does not fully pay for the Social Security Administration’s 

efforts to prevent errors. 

The Social Security Administration already has a very low overpayment rate, three-tenths of 1 percent for Social Security, and 

about 8 percent for the more complex SSI program. In 2009 SSA 

saved $12.50 for every dollar it invested in continuing disability reviews, which prevent payments to people who are no longer eligible 

for benefits. Social Security’s actuary has estimated that if we simply funded the program over the next 4 years, as the Social Security Administration has proposed, the American taxpayer and Social Security would save $58 billion. 

But the Republican budget for fiscal year 2011 froze Social Security’s funding for program integrity. And the House Republican fiscal year 2012 budget would cut the Social Security Administration’s operating budget a total of some $10 billion over the next 

decade. That is penny-wise and pound-foolish. These budget cuts, 

like privatization schemes, put Social Security’s Trust Fund and 

the tax contributions of millions of current and future beneficiaries 

in jeopardy. They also handcuff Social Security in its efforts to protect the trust fund and Americans’ contributions by detecting and 

preventing overpayments, the very stated purpose of today’s hearing. 

Mr. Chairman, let me once again publicly request that this Committee on Ways and Means, through its subcommittee of jurisdiction, perform its constitutional duty of oversight over the budget of 

Social Security. Rather than just nibble around the edges, let us let 

the sun shine on every aspect of Social Security’s budget so that 

all Americans witness for themselves what is going on with Social 

Security’s funding. 

Mr. Chairman, thank you and I look forward to hearing the witnesses. I yield back the balance of my time. 

Chairman BOUSTANY. I thank the gentleman. 

Chairman BOUSTANY. Now I would like to welcome our witnesses. And thank you for being patient. We had a series of votes 

that got us off to a late start. 

First we have Ms. Carolyn Colvin, Deputy Commissioner for the 

Social Security Administration. Welcome. 


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We have Mr. Patrick O’Carroll who is the Inspector General for 

the Social Security Administration. Mr. O’Carroll, welcome. 

Mr. Dan Bertoni is Director for Education, Workforce, and Income Security Issues at the Government Accountability Office. Welcome, sir. 

Ms. Ann Robert, who is the Deputy Director for the Bureau of 

Disability Determination Services for the Illinois Department of 

Human Services, and is here today on behalf of the National Council of Disability Determination Directors, welcome. 

And Mr. Joseph, is it Dirago or Dirago? 

Mr. DIRAGO. Dirago. 

Chairman BOUSTANY. Dirago, who is President of the National 

Council of Social Security Management Associations. 

I want to thank you all for being with us today. We look forward 

to your testimony. You will each have 5 minutes to present your 

testimony, which is our customary approach, with your full written 

testimony submitted for the record. 

Ms. Colvin, you may begin. 

STATEMENT OF THE HONORABLE CAROLYN COLVIN, DEPUTY 

COMMISSIONER, SOCIAL SECURITY ADMINISTRATION, 

WASHINGTON, D.C. 

Ms. COLVIN. Thank you. Chairman Johnson, Chairman 

Boustany, Ranking Member Becerra, Ranking Member Lewis and 

Members of the Subcommittees, thank you for inviting me to discuss our efforts to ensure the accuracy of our benefit payments. I 

am SSA’s deputy commissioner and the agency accountable official 

for improper payments. 

We pay nearly $60 billion in benefits to almost 60 million people 

each month. We are committed to making those payments timely 

and accurately. Minimizing improper payments is so important 

that we made preserving the public’s trust in our programs one of 

our four strategic goals. 

We have worked hard to improve our payment accuracy, but we 

cannot maintain our recent success without adequate resources 

that will allow us to do the work for which we are responsible. Our 

complex programs require knowledgeable and experienced employees to analyze cases, make decisions, and implement changes. 

The same employees who conduct our program integrity initiatives also make determinations on SSI, retirement, and disability 

applications and handle a wide variety of other responsibilities. 

Our employees are our best defense against improper payments, 

and all of the SSI discussed today depends on having an adequate 

number of well-trained staff to keep up with our work, which has 

surged in the last few years and continues to increase. 

We have been innovative and proactive in adopting strategies to 

allow us to meet the challenges we face. Our information technology resources have been critical to our success. For example, in 

fiscal year 2010, we reduced the time it takes to get a hearing decision to the lowest point in 5 years. Currently the average wait for 

a hearing decision is below 1 year for the first time since 2003. We 

kept pending initial disability claims significantly below our goal, 

and achieved the lowest average speed of answer and busy rates 


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on our 800 number since we began keeping statistics nearly a decade ago. 

We increased the accuracy of our SSI payments in fiscal year 

2009 and fiscal year 2010. We continue to increase on-line claims 

with nearly 40 percent of retirement claims and about 31 percent 

of disability claims currently filed on line through our highly regarded Internet site. I am happy to report that in fiscal year 2010, 

99.6 percent of our OASDI payments were free of overpayments. 

The supplemental security income, or SSI, program is more complex, and our overpayment accuracy rate for the program reflects 

that complexity. Still, with the increase in SSI redeterminations we 

have improved. In fiscal year 2008 our SSI overpayment accuracy 

rate was 89.7 percent. In fiscal year 2009 we raised it to 91.6 percent. And we continue this positive trend in fiscal year 2010 by increasing it to 93.3 percent, the highest it has been since 2005. 

Our most valuable tools to maintain the integrity of our programs are continuing disability reviews, or CDRs, and SSI redeterminations. We estimate that every dollar invested in CDRs yields 

at least $10 in lifetime program savings, including savings accruing 

to Medicare and Medicaid. Every dollar spent on SSI redeterminations yields more than $7 in program savings over 10 years, including savings accruing to Medicaid. 

We use technology to help us prevent and detect improper payments. For example, unreported financial accounts and wages are 

the major causes of improper payments in the SSI program. Therefore, we have developed a process called access to financial institutions, or AFI, to electronically identify financial accounts of SSI applicants and recipients. We plan to complete AFI rollout to all 

States by the end of this month. After 2013 when AFI is fully implemented, we project that AFI could yield a $20 return for every 

dollar invested. 

We also made the SSI wage reporting process more efficient and 

user friendly by implementing an automated system to report 

wages over the telephone. This system automatically updates our 

records, which increases accuracy and saves beneficiaries and our 

employees time. 

Before I close, I want to mention our hard-working, dedicated 

employees who are the real key to maintaining the American 

public’s trust in our program. Our employees continue to provide 

exemplary service and increase their productivity despite recordsetting increases in our workloads. 

Equally important to our success is adequate and sustained funding to carry out our vitally important program integrity work. We 

have proven that when you invest in us we produce results. 

We appreciate your past support for our agency and our programs and look forward to your continued support. I am happy to 

answer any questions you have. Thank you. 

Chairman BOUSTANY. Thank you, Commission Colvin. 

[The prepared statement of Ms. Colvin follows:] 


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Chairman BOUSTANY. Mr. O’Carroll, you may proceed. 


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STATEMENT OF THE HONORABLE PATRICK P. O’CARROLL, JR., 

INSPECTOR GENERAL, SOCIAL SECURITY ADMINISTRATION, 

WASHINGTON, D.C. 

Mr. O’CARROLL. Good afternoon, Chairman Boustany, Chairman Johnson, Ranking Member Lewis, Ranking Member Becerra 

and members of both subcommittees. Thank you for the invitation 

to testify today. SSA administers about $60 billion in benefits to almost 60 million beneficiaries every month. Payment accuracy is of paramount 

importance to the agency. SSA and agencies across government 

have increased efforts to reduce improper payments, particularly 

since Congress passed the Improper Payments Elimination and Recovery Act, or IPERA. 

With a history of identifying SSA’s improper payments through 

audits and investigations, my office was asked by the IG community to assume a leadership role with OMB and the Treasury Department on implementing IPERA and the President’s Executive 

Order. 

For fiscal year 2009, SSA estimated improper payments totaling $8 billion. The agency estimated overpayments of $2.6 billion for its 

Retirement, Survivors and Disability Insurance program, and $600 

million in underpayments. Its SSI program had an estimated $4 

billion in overpayments and $800 million in underpayments. 

SSA seeks to improve payment accuracy in both programs. The agency set up plans to commit nearly $800 million towards program integrity this year, with an emphasis on tools such as continuing disability reviews, or CDRs, and SSI redeterminations. 

SSA considers overpayments unavoidable if the law requires the 

payments to be made. In other words, the agency does not consider 

improper any payments it makes to a beneficiary who would have 

been ineligible if SSA had conducted a CDR when it came due. 

However, we believe these payments should be part of the discussion about SSA’s payment accuracy, because these payments 

should not have been made and cannot be recouped. 

SSA projects a backlog of about 1.4 million medical CDRs at the 

end of fiscal year 2011. Our audit work has found the agency would 

have avoided paying hundreds of millions of dollars to ineligible 

beneficiaries if CDRs and SSI redeterminations were conducted 

when they were due. SSA must utilize any and all tools that can 

prevent payment errors before they occur. 

My office for years has encouraged SSA to use data matching to 

protect agency funds. To reduce SSI overpayments, OIG recommended that SSA obtain a beneficiary’s bank account information and access other private databases rather than rely on self-reporting. In recent years SSA implemented the Access to Financial 

Institutions project which allows the agency to check an applicant 

or recipient’s bank account to verify resources. 

We have also made other data-matching recommendations to 

SSA involving potential matches of beneficiary information to marital status, workers compensation and vehicle ownership records. 

We are also pursuing an exemption from the Computer Matching 

and Privacy Protection Act to facilitate the OIG’s work in this area. 

Our support for stewardship activities has never wavered. 

IPERA allows an IG to use a percentage of money collected from 


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recovery of audits of the IG’s agency. Unfortunately, SSA has determined that benefit overpayments from its trust fund in the SSI 

program are not covered under IPERA. The provision only applies 

to audits of SSA’s administrative budget, which represents only 1 

percent of the total budget. Therefore, we continue to pursue the 

establishment of self-supporting fund for integrity initiatives, such 

as our Cooperative Disability Investigations program, and CDRs 

and redeterminations. 

In conclusion, SSA has made strides to comply with the request 

to report its improper payments, identify causes, and allocate resources to prevent future errors. We encourage the agency to commit to stewardship activities to prevent improper and unnecessary 

payments. 

My office will continue to work with your subcommittees and 

SSA in these and future efforts to improve payment accuracy in 

SSA’s benefit programs. Thank you again for the invitation to testify today and I will be happy to answer questions. 

Chairman BOUSTANY. Thank you, Mr. O’Carroll. 

[The prepared statement of Mr. O’Carroll follows:] 


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Chairman BOUSTANY. Mr. Bertoni, you may proceed. 


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STATEMENT OF DAN BERTONI, DIRECTOR, EDUCATION, 

WORKFORCE, AND INCOME SECURITY ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE, WASHINGTON, D.C. 

Mr. BERTONI. Mr. Chairman, ranking members, Members of 

the Subcommittees, good afternoon. I am pleased to discuss our 

work on overpayments in SSA’s disability insurance program, 

which paid over $120 billion in benefits last year. The program has 

grown substantially in recent years and is poised for further 

growth as the baby-boom generation ages and places additional 

strain on the DI Trust Fund. Thus it is important that SSA maintain a robust process to detect and recover program overpayments. 

My testimony summarizes our ongoing work and focuses on the 

extent to which SSA makes and ultimately recovers work-related 

overpayments and program policies and vulnerabilities that may 

contribute to overpayments. 

In summary, DI program overpayment detections grew from 

about $860 million in 2001 to about $1.4 million last year. Our review and SSA’s own estimates suggest that most overpayments are 

due to unreported earnings that exceed program limits. If beneficiaries return to work and do not notify SSA, overpayments can 

accrue, and in 49 of 60 randomly selected cases we reviewed there 

was no indication that beneficiaries had reported work and earnings as required. 

While SSA recovered over $800 million in overpayments last 

year, repayment by beneficiaries can take decades, and total outstanding debt carried on SSA’s books currently exceeds $5 billion. 

Despite its policy to request full repayment within 36 months SSA 

lacked agency-wide performance goals for timely debt recovery, and 

does not require supervisory review and approval of repayment 

plans exceeding 3 years. Our case file review shows that such plans 

frequently exceeded 20 years, with one plan extending over 200 

years to recover a $27,000 overpayment. 

We also found that for repayment plans extending beyond 2049 

SSA’s tracking system does not reflect the total balance due the 

agency, and as the years pass this underreporting will likely become more significant. 

Work continuing disability reviews, or work CDRs, are a primary 

tool for SSA to identify work activity and earnings. However, it relies on IRS earnings data that can be more than a year old when 

received and matched against SSA’s rolls, allowing overpayments 

to accrue for extended periods. Managers and staff at all four processing centers cited aged data as a major obstacle to limiting the 

occurrence and size of overpayments. Moreover, in the cases we reviewed, earnings data was already between 6 and 26 months old 

when received by SSA. 

In prior work we have recommended that SSA seek more timely 

data sources, such as the National Directory of New Hires, or 

NDNH, which includes quarterly wage information and is used by 

several Federal programs to detect and prevent overpayments. Despite acknowledging a potential positive return by using the directory, SSA does not use it for large-scale data-matching with its DI 

beneficiary rolls due to concerns about the potential workloads it 

could generate. 


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Beyond earnings time limit issues, we found that work CDRs are 

not initiated by SSA staff for many months after receiving the initial IRS alert. In the 60 cases we reviewed the median time they 

were pending development after the alert was received was 7 

months, with one case lingering more than 15 months. For about 

a third of all cases, individuals were overpaid an additional 18 

months or more due to delays in starting the work CDR. 

SSA officials told us the staff shortages and competing workloads, such as initial claims and medical CDRs, are among the factors delaying work CDR processing. We also found that SSA lacks 

formal performance goals for days work CDR cases on pending development or days taken to process them, although it has established similar goals for the medical CDR process. In the absence of 

such goals, cases can go unworked for extended periods, and we 

found considerable variation in processing times at the four centers 

visited, ranging from 82 days to nearly 1,000 days and resulting in 

combined overpayments of over $1 million. 

Within the last year SSA has begun to better track work CDR 

completions, prioritize IRS alerts with a greater likelihood of larger 

overpayments and improved processing center procedures for initiating and completing CDRs. While these and other initiatives represent positive steps, it is too early to assess what impact it may 

ultimately have on overpayment detection and recovery. 

Mr. Chairman, that concludes my statement. I am happy to answer any questions that you or other Members of the Committees 

may have. 

Chairman BOUSTANY. Thank you, Mr. Bertoni. 

[The prepared statement of Mr. Bertoni follows:] 


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Chairman BOUSTANY. Ms. Robert, you may proceed. 


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STATEMENT OF ANN P. ROBERT, DEPUTY DIRECTOR, BUREAU 

OF DISABILITY DETERMINATION SERVICES, ILLINOIS DEPARTMENT OF HUMAN SERVICES, ON BEHALF OF THE NATIONAL COUNCIL OF DISABILITY DETERMINATION DIRECTORS, SPRINGFIELD, ILLINOIS 

Ms. ROBERT. Chairman Boustany, Chairman Johnson, Ranking 

Member Lewis, Ranking Member Becerra, my name is Ann Robert 

and I am pleased to be here today to testify about the role of the 

DDSs relative to SSA’s payment accuracy. I am here to testify on 

behalf of the National Council of Disability Determination Directors, which is a professional association consisting of the managers 

and the directors of the Disability Determination Services located 

in each State, also in the District of Columbia and Puerto Rico. 

The DDSs are State agencies that are 100 percent federally funded by SSA. They employ 14,500 full-time State employees and they 

process over 4.3 million disability claims under the Social Security 

Act annually. The DDSs partner with Social Security to provide 

public service to individuals applying for disability. DDSs recognize 

the benefits of program integrity and assist SSA with this program 

integrity by adjudicating the continuing disability reviews. The 

purpose of the continuing disability review is to determine whether 

or not an individual continues to be eligible for benefits. This is a 

very complex process, and in the DDS can be a multiphase process. 

SSA estimates that every dollar spent will generate $10 in lifetime 

savings. This is a cost-effective workload and certainly has a significant return on investment. 

Fiscal year to date, DDS has had accuracy of its workload of 98 

percent. But this workload cannot be done without sufficient staff 

in the DDS. From the beginning of fiscal year 2011 to present, the 

DDSs nationally have an attrition rate of 12.8 percent in their disability examiners and an overall staff attrition rate of 10.3 percent. 

SSA imposed a hiring freeze in early fiscal year 2011. The attrition 

of trained examiners and the inability to hire will severely limit 

the ability of the DDSs to process initial cases, reconsideration 

cases, to work additional CDRs, and will result in significant backlogs nationally. 

We thank you for the increased funding that you provided in the 

past for the initial—for the escalated initial case workload. Funding of the CDR work, however, was not sufficient and the backlog 

continues to grow. Funding the various workloads to provide a balance of program service and stewardship is challenging at best, and 

more difficult in these economic times. DDS staff are to be commended on their dedication to public service and their hard work. 

These staff remain flexible and committed to all workloads, working diligently to meet all SSA workload targets. 

One example was when SSA was funded by Congress in 1996 for 

a 7-year plan to eliminate the CDR backlog. At that time SSA authorized the DDSs to hire, and they did so. The 7-year plan allowed 

for an incremental increase in the CDRs, so that plan and the ability to hire allowed the DDSs to complete that workload. SSA, with 

the assistance of the DDSs, successfully completed that plan. 

The CDR process begins with SSA. SSA determines the number 

of CDR cases to be worked by the DDS each year. And those cases 

that require a full medical review are sent to the DDS. Although 


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case adjudication is a complex task, the CDR review requires a 

side-by-side analysis of the prior allowance with the current medical evidence typically, in most DDSs, requiring the expertise of a 

senior examiner. If medical improvement is documented along with 

the beneficiary’s ability to work, the CDR will be ceased. 

If the beneficiary appeals, that CDR will come back to the DDS 

for a second review. If that case is not reversed, the CDR can come 

back to the DDS a third time to a disability hearing officer who 

will conduct a face-to-face hearing. 

The increasing complexity of the disability program criteria require approximately 12 to 18 months for an initial examiner to become productive and independent. Attrition at the DDS is critical 

in 11 DDSs experiencing more than 20 percent attrition rate with 

their examiners since the beginning of fiscal year 2011. 

SSA and DDS need sufficient funding for hiring to balance workloads, to provide public service and stewardship. Without such 

funds the DDSs will be unable to maintain the current level of accuracy and production for all workloads. Those most vulnerable 

will suffer. 

DDS has recognized Commissioner Astrue for his leadership during these unprecedented times and commits to work with SSA on 

a plan that can accomplish all those workloads. 

Thank you again for the opportunity to present testimony, and 

I would be happy to answer any questions. 

Chairman BOUSTANY. Thank you, Ms. Robert. 

[The prepared statement of Ms. Robert follows:] 


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Chairman BOUSTANY. Mr. Dirago, you may proceed. 


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STATEMENT OF JOSEPH DIRAGO, PRESIDENT, NATIONAL 

COUNCIL OF SOCIAL SECURITY MANAGEMENT ASSOCIATIONS, WASHINGTON, D.C. 

Mr. DIRAGO. Chairmen Boustany and Johnson, Ranking Members Lewis and Becerra, and Members of the Subcommittees, I am 

Joe Dirago, the President of the National Council Social Security 

Management Associations, NCSSMA, and the District Manager of 

the Social Security office in Newburgh, New York. I appreciate this 

opportunity to speak on behalf of 3,400 Social Security managers 

in field offices and teleservice centers around the country. 

NCSSMA shares the concerns expressed about improving SSA’s 

payment accuracy. It is fitting that this hearing is held on Flag 

Day, a symbol of our country’s vigilance and perseverance. Social 

Security has persevered as the safety net of America for 76 years. 

We ask that Congress be vigilant about ensuring that this great 

program remain strong to address its stewardship responsibilities 

and maintain service levels vital to millions of Americans. 

Appropriations for SSA are an excellent investment and return 

on taxpayer dollars. With the additional funding provided by Congress in recent years, significant progress was made with program 

integrity initiatives which yield $7 to $12.50 in savings for every 

dollar invested. 

Despite workload increases, our 2011 appropriation was below 

the 2010 level. This has resulted in a hiring freeze, a drastic reduction of overtime hours, and postponements of efficiency improvements. Public service repercussions are being felt throughout offices as they experience tremendous pressure to process growing 

workloads with diminished resources. 

A California manager says: We handle close to 2,000 visitors a 

week. Recent retirement losses are affecting the service we provide 

and we cannot interview the public fast enough. As field office employees are responsible for interviewing the public, answering the 

telephones, processing claims, and working critical program integrity cases, service is eroding. 

An Alabama manager says: Waiting times and backlogs are increasing and we do not have sufficient staff to reverse the trend. 

Unless we can hire, the backlogs will continue to grow and service 

to the public will deteriorate. Most of SSA has been under a hiring 

freeze, and this will result in the loss of over 3,500 employees in 

2011. Because attrition is not even, some offices are becoming severely understaffed. 

A Kansas manager says: My office has lost seven employees in 

the last 6 months, with no replacements. I have 16 individuals on 

staff eligible for retirement. The thought of a 2-year hiring freeze 

is terrifying and additional losses would be devastating. We have 

a highly skilled but aging workforce, with 23 percent of our employees eligible to retire today. Because it takes about 2 years to 

train a new hire, significant concerns exist about the loss of institutional knowledge. 

Increased workloads, coupled with staffing reductions, are not a 

formula for payment accuracy. Employees are forced to work at an 

accelerated rate which compromises quality. There is little time for 

training, mentoring, and quality reviews, which translates to payment errors. 


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NCSSMA supports investments to ensure accurate payments, but 

SSA’s capacity is directly impacted by its funding levels. Fewer SSI 

redeterminations and medical CDRs were completed from 2006 to 

2008 due to inadequate funding. Increased appropriations in 2009 

and 2010 allowed us to process substantially more program integrity workloads, yielding about $6 billion in savings each year. Program integrity activities included in the 2012 budget request would 

yield over $9 billion in savings by completing 2.6 million SSI redeterminations and 592,000 medical CDRs. 

We sincerely appreciate your interest in the vital services Social 

Security provides, and we certainly recognize the difficult budget 

environment. However, Social Security touches the lives of nearly 

every American family and sufficient resources are necessary. 

NCSSMA respectfully requests your support of full funding of the 

President’s 2012 SSA budget on behalf of our agency and the 

American public that we serve. 

We also request your support for dedicated funding to improve 

payment accuracy. This will allow SSA to process its core workloads, accomplish program integrity initiative, and save taxpayer 

dollars. 

Thank you for the opportunity to testify at this hearing and for 

consideration of our recommendations. 

Chairman BOUSTANY. Thank you, Mr. Dirago. 

[The prepared statement of Mr. Dirago follows:] 


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Chairman BOUSTANY. Now we will proceed with questions, and 

I will begin. 

Mr. O’Carroll, in your testimony you said—this was in your written testimony—Federal agencies reported $125 billion in improper 

payments during fiscal year 2010 alone. And just to put that number in perspective that is $4,000 every second, nearly $15 million 

every hour. And the Office of Inspector General has estimated that 


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Social Security overpaid $8 billion in fiscal year 2009. But this 

number does not include a host of other overpayments. 

Can you provide more detail on these other overpayments to give 

us a better sense of the scale of this problem? 

Mr. O’CARROLL. Yes, Chairman. What we are using is that SSA 

has reported about a 3.2 percent overpayment rate. And that includes overpayments that are avoidable and unavoidable. 

What we are saying is SSA should consider both the avoidable 

ones and the unavoidable. Unavoidable ones occur when SSA 

doesn’t conduct a CDR when scheduled, that amount of money 

keeps building, as is the backlog on CDRs right now. 

And we believe that if you start including that amount, it will 

bring the rate up from 3.2 percent up to as high as 5.2 percent. 

When you have to make payments at a certain time, when a check 

goes out, and then we find out or SSA finds out later that the person was deceased and that amount of money went out, we believe, 

whether it was by law that it went out or by accident, it is still 

money that should be recouped. 

Chairman BOUSTANY. I thank you. At the end of fiscal year 2010, Social Security was owed over $15 billion because of past 

benefit overpayments. How does this relate to the agency’s reporting of $8 billion in improper payments, and how old is most of that 

debt? 

Mr. O’Carroll, do you want to start with that? 

Mr. O’CARROLL. Yes, Mr. Chairman. SSA every year is either 

unable to collect debt or writes it off, and that is a big portion of 

the debt. That written-off debt happens every year, and that is cumulative. And what we are saying is that when you take the written-off debt, plus the debt from overpayments and you add it together, that is where you are getting up into the double digits in 

terms of overpayments. 

Chairman BOUSTANY. Ms. Colvin, would you comment on that? 

Ms. COLVIN. By law there are some situations where we do not 

consider a payment and overpayment. For instance, if someone appeals a decision, during the time that they are waiting for that decision to be resolved, they may be accumulating an overpayment if 

that appeal is found in our favor versus the beneficiary’s. So that 

amount of money that will have accumulated would not be considered overpayment under the law. However, we still would be notifying the individual of the overpayment and we would make collection attempts. 

There are also other situations where if we apply the retirement 

earnings test and we anticipate that an individual will be earning 

a certain amount of money and therefore their benefit is based on 

that amount, and then at the end of the year we find that the person made more money than we anticipated, so part of that might 

have been overpayment, again, by law, that is not considered to be 

an improper payment, but we do attempt to make the collection. 

Chairman BOUSTANY. Right, I understand what the law says. 

What we are trying to get at is the magnitude of the problem, 

given the situation with solvency issues going forward with Social 

Security, and that is why I am directing the question along those 

lines. Of the outstanding debt, how much does Social Security write 

off each year? 


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Ms. COLVIN. The amount is about—I am sorry, just a minute. 

Chairman BOUSTANY. Mr. O’Carroll, do you want to comment? 

Mr. O’CARROLL. I believe $980 million is the write-off every year, just shy of $1 billion. Is that what your figures were showing? 

Ms. COLVIN. Yes. It is a small amount compared to the amount 

that we collect. The amount that we write off is generally a result 

of an individual not being able to make the payment, and it is a 

very small percentage. I was trying to get the exact dollar amount, 

and I will provide it to you a little bit later. 

Chairman BOUSTANY. I thank you. I will now yield to the ranking member, Mr. Lewis. 

Mr. LEWIS. Thank you very much, Mr. Chairman. Let me thank 

each of the witnesses who testified. 

Ms. Colvin, this seems like a very simple issue before us. Let me 

make sure that I am not missing something. In 2008 and 2009, for 

every $1 we spent making sure that people receiving a disability 

benefit are still disabled, we saved $12.50; is that right? Ms. COLVIN. Our data reflects that for every $1 that we spend on CDRs we are returning $10 for every $1. 

Mr. LEWIS. So I am in the neighborhood? 

Ms. COLVIN. Yes. And for the redeterminations in the SSI pro- gram, it is $7 for every $1 spent over a 10-year period. 

But we also have a number of tools that we have been able to 

develop that will allow us to address some of the improper payments. The AFI system that I mentioned in my testimony that 

would allow us to be able to verify financial accounts that have 

been identified for SSI recipients or detect accounts that have not 

been reported, we estimate that when that system is fully rolled 

out in 2013 there will be a $20 return for every $1 invested. So we 

believe that the investment in program integrity work is a good investment and that it is very cost-effective. 

Mr. LEWIS. Now, if we cut the budget further, like the Republicans plan to do, Social Security will do a full disability review; is 

that right? 

Ms. COLVIN. That is correct. 

Mr. LEWIS. Can you explain what is right about that? 

Ms. COLVIN. Well, the same people that do initial claims and 

other responsible workloads, or workloads that we have responsibility for, are the same people that do the CDRs and the redeterminations. So whenever there is a reduction in the funds that we 

receive, that means that we have got to balance those workloads 

further. 

So if you just look at the $1 billion cut that we have had for 

2011, we have had a freeze on for the entire funding period. And 

when you have that freeze and you are losing senior people—and 

as one of the speakers indicated it is the seasoned examiners that 

do the redeterminations of the CDRs—as you are losing them, then 

you are going to—and do not have the ability to replace them, that 

is going to impact the number of CDRs that we are going to be able 

to do. 

We are budgeted for CDRs this year. We have in fact, if I look 

at the numbers, we are looking at doing 329,000 medical CDRs in 

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CDRs. So we will be able to do more with more funding. Just as 

we did the 329,000 medical CDRs that we will be doing in 2011, 

if we get less funds that means we will do less than that amount. 

So the resources that we receive tie directly into the number of 

CDRs that we guess that we are able to do. 

Mr. LEWIS. So if I understand this correctly, cutting the budget 

will mean more payments will be made to people who should not 

receive them; am I right? 

Ms. COLVIN. That is correct. 

Mr. LEWIS. Well, this all seems very simple to me. If you do not 

want improper payments, do not cut the budget. Am I missing 

something? 

Ms. COLVIN. No, I don’t think that you are. The most effective 

tool that we have for addressing overpayments is our CDRs. When 

we do CDRs we are able to identify incorrect payments. As was 

mentioned before, the largest or the major contributing factor to 

overpayments in CDRs are unreported wages. And if we have not 

in fact joined the CDRs, then we are in fact going to have individuals—I am sorry, our SGA, the substantial gainful activity. If we 

are not doing those CDRs we are not going to identify that people 

are in fact being paid that are not entitled to the benefits; or if we 

do the medical CDRs, if we don’t do those we are not going to identify that the people who now are able to return to work because 

their disability would allow them to do substantial gainful activity. 

So we are going to have people on the rolls who should not be on 

the rolls. 

It has been demonstrated that the more redets we do, the higher 

our accuracy rate is. The more CDRs that we do, the fewer improper payments we have. 

Mr. LEWIS. Ms. Colvin, Republican budget cuts harm beneficiaries. There are tens of millions of people who depend on your 

agency and a million more waiting for benefits. Who are these people? In your experience are they honest people? What type of disability do these people have? Who are the programs designed to 

help? 

Ms. COLVIN. I think you know that our programs are very complex. We find that these are people who may not have reported 

their earnings because it is a very difficult program to understand, 

and they may in fact not have reported it timely. There are other 

situations where the timing—— 

Chairman BOUSTANY. The gentleman’s time is up. If you could 

wrap up your answer on this. 

Ms. COLVIN. I would say that these are not fraudulent cases, 

these are improper payments. And there is a difference between 

fraud and improper payments. 

Mr. LEWIS. Thank you. Thank you, Mr. Chairman. 

Chairman BOUSTANY. I thank the gentleman. The chair now 

recognizes the chairman of the Social Security Subcommittee, Mr. 

Johnson. 

Chairman JOHNSON. Thank you, Mr. Chairman. 

Mr. O’Carroll, I think cooperative disability investigation units 

are the key to reducing fraud in the Social Security program; would 

you agree? 

Mr. O’CARROLL. Yes, Mr. Chairman. 


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Chairman JOHNSON. And it is better to catch potential payments on the front end rather than paying them and trying to 

chase bad payments afterwards. 

Can you tell us how these units operate, the success your office 

has had for the prosecution and fraud perpetration, and how these 

units might be better used to prevent improper Social Security payments? 

Mr. O’CARROLL. Yes, Mr. Chairman. We are very proud of our 

CDI program. It is sort of a hybrid in that we have DDS employees, we have State employees, we have SSA employees, we have IG 

investigators and we have State investigators, and we work in conjunction with DDSs so that when there is suspected fraud at the 

applicant level, it is brought to our attention, we review it, we use 

databases to determine whether or not the person has resources, 

whether or not the person is showing any work activity or other 

issues, and then we do surveillance. 

And what we are finding with this initiative is we are able to 

prevent the funds or the benefits from being awarded, so there is 

no need to recapture lost money; it is just stopping payments at the 

front end. It is also a very good deterrent. We have CDI Units in 

a number of cities, some of which are represented by the members 

of this committee. And at the moment, we are at 23 CDI units in 

21 States. And our return on investment on them is anywhere from 

about $12 to $14 to $1. It is rather inexpensive to set it up, but 

the deterrent factor is dramatic. 

And we have got the word out, because we have seen videos on 

YouTube and other places saying, ‘‘Don’t commit fraud against Social Security or one of the fraud investigative units will catch you.’’ 

So it is working quite well. 

Chairman JOHNSON. Are we implementing technology as much 

as we can? It seems to me we got too many people with their finger 

in the pie. 

Mr. O’CARROLL. I think the solution to the problems we are 

talking about today is technology. What we are finding is that, 

when you or I walk into a store, pretty much the vendor knows everything about us when we are doing that transaction. We, with 

our government recources, should have that same type of information and we should be using that in our decisions, whether somebody does show gainful activity, whether somebody is working 

when they are not, and what their resources are. 

We found, as an example, by using just regular databases to 

verify property owned by people that are receiving SSI benefits, 

that we are able to identify that they have resources, they have 

property, et cetera. 

And we found, by using just that database, there is about an $8 

to $1 return on investment there. So I am thinking in the long 

range with SSA, there has got to be a lot more technology put into 

place. 

Chairman JOHNSON. Yes, I agree. You have made a number of 

recommendations that would help reduce the total amount of overpayments over the past 5 years. The monetary impact of those recommendations total over $9 billion. 

Would you tell us what a few examples of those recommendations are and why they haven’t been implemented? 


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Mr. O’CARROLL. Our biggest job, Mr. Chairman, is make sure 

SSA strikes a balance between service and stewardship. So a lot of 

our audit work deals with the number of CDRs, whether the CDR 

backlog is increasing, whether they are conducting the right proportion of CDRs for 18 year olds, and adults. We are constantly 

watching that balance, and we are identifying where money could 

be saved. 

On the other side of it with our investigations, we are taking a 

look at those who are taking advantage of the helpless, in terms 

of bad rep payees that are supposedly watching out for the benefits 

of those in their care. We are taking a look at those that are defrauding the programs and claiming that they are disabled when 

they are not. So we have a very good record there. 

Chairman JOHNSON. Yeah, you do. 

Ms. Colvin, how does the Social Security Administration decide 

whether to implement one of the inspector general’s recommendations or not? Nine billion dollars is a lot of money to be left on the 

table. 

Ms. COLVIN. The overriding factor relative to whether or not we 

implement a recommendation would be a resource issue. However, 

we have implemented a number of major technology systems which 

have been very effective in helping us to detect and prevent improper payments. I mentioned the automated financial—the financial system, the AFI, the access to financial institutions. 

Ms. COLVIN. We also have the SSI Wage Telephone Reporting 

project, which allows individuals to call in and report their wages. 

We have a number of different tools that have been developed over 

the years, and we are continuing to look at ways of automating 

even more of what we do. But clearly it is a balance between the 

resources to do direct services—— 

Chairman JOHNSON. Well, you are listening to the IG when he 

talks to you, right? 

Ms. COLVIN. Oh, yes, I think that many of the recommendations 

have been very valid recommendations. 

Chairman JOHNSON. Thank you. 

Chairman BOUSTANY. I thank the gentleman. 

The chair now recognizes the ranking member of the Social Security Subcommittee Mr. Becerra. 

Mr. BECERRA. Thank you, Mr. Chairman, and thank you to all 

of you for your testimony. 

It seems to me this is boiling down to an issue of resources. Does 

anyone here claim that in your work or in your investigations, employees at the Social Security Administration who are conducting 

these redeterminations or these disability reviews are lazy? Does 

anyone claim that they are—these employees are incompetent? 

Would anybody here raise their hand and say that they are overworked and have a massive caseload to work with on these disability reviews? Okay. 

So it is resources. So it is what you put in helps determine what 

you get out. And, Mr. Chairman, I have a couple of charts I am 

hoping that we can put up on the screens. One is a budget for medical continuing disability reviews, and the second will be one for 

SSI income reviews. If I could get those up in a second, or right 

now, if we could put them up. 


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It seems to me that if we make the investments we need to let 

these reviews go forward, we are not just doing right by Americans 

who paid into the system so they could collect on their benefits, but 

we are also saving the taxpayers money. 

Commissioner Colvin, let me ask you this. My understanding is 

that the chief actuary for Social Security has said that if we make 

the modest investments in these review programs that you have in 

place, these integrity review programs, that over the course of 10 

years, you could save the taxpayers somewhere around $58 billion. 

Is that still accurate? 

Ms. COLVIN. Well, clearly, from the data that we have already 

provided, we have demonstrated that an investment in program integrity activities returns significant dollars to the taxpayers. The 

challenge for us is having adequate and sustained funding, because 

the same people who do the CDRs and the redets also do the initial 

claims. 

Mr. BECERRA. So let me have you take a look at the chart, 

that—I don’t know if you could see the charts on the screen, it 

might be difficult for you to see, but essentially what it shows that 

in years when we budgeted money for medical continuing disability 

reviews, the CDRs, your employees performed at pretty high rates. 

And the moment you saw funding for the review program drop, so 

did the number of reviews you could do. 

And so input in, output out. And if you don’t have the resources, 

folks who were already overworked are going to have a hard time 

producing the results, which it is not just a matter of producing the 

results on these reviews, it is not saving the taxpayer money the 

way we know can if we do these reviews. So we give people what 

they deserve, but no more than what they deserve. 

Let me ask another question. Mr. O’Carroll, I know that you 

have mentioned that there is some $8 billion or so in overpayments. If I were to say to you there are $300 billion in overpayments in Social Security, I suspect that you would be here every 

day telling us we have got to do something, right? 

Mr. O’CARROLL. Correct. 

Mr. BECERRA. I am going to ask for another chart to be put up 

called—that I have labeled ‘‘Social Security Overpayment Rate 

Versus Major Weapons Systems Cost Overrun Rates.’’ I don’t know 

if you can see this. 

Mr. O’CARROLL. I am not the IG at Defense, Mr. Becerra. 

Mr. BECERRA. Yes, I know you are not the IG of Defense, but 

what we are being told is that some $300 billion in a Pentagon 

budget of some $700 billion is being spent on cost overruns and 

programs that have been over the years costing us far more than 

we have had or than we thought we would have to spend. 

Now, if you take a look to the far left of that chart, you see the 

overpayments from the Social Security Administration, their retirement survivor benefits portion and the Social Security disability 

portion. And to the right you see Army, Navy and Air Force and 

their cost overruns. Now, again, you are not the IG for DOD, but 

I would think that if we are going to spend this much time trying 

to help you figure out what we can do to reduce the overpayments 

in Social Security, that we would want to spend some time taking 


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a look at DOD when we see the massive amount in cost overruns 

that we see daily at Department of Defense. 

Mr. O’CARROLL. The best way to answer that, Mr. Becerra, is 

that it’s important to look at the overpayments across government. 

When you are looking at Defense, you should also look at all the 

other departments. Quite frankly, we do reach a level at SSA that 

it is of concern, and that is why we are paying so much attention 

to improper payments. I think everybody is in agreement there. 

Mr. BECERRA. And I think everyone agrees we should be doing 

that. But I hope that what we do is go after the big fish and not 

just after the little fish, because if we recall, most of these programs that we are talking about under Social Security are for folks 

who are elderly or are disabled. 

Mr. Chairman, the final point I will make is this. We have heard 

that if you invest a dollar in these program integrity initiatives 

with SSA, you save $12.50. If I were to ask you how much money 

would you have today if you invested a dollar today, at the very 

beginning of Google’s public offering how much would you have, the 

answer would be $5. 

So if you think Google is a good bet, so is investing in SSA’s program integrity initiatives. 

I yield back. 

Chairman BOUSTANY. I thank the gentleman. 

Certainly we have no jurisdiction over defense spending, but I 

hope the appropriate committee is doing vigorous oversight as 

these subcommittees are doing. So I thank the gentleman. 

The chair now recognizes Mr. Buchanan for questions. 

Mr. BUCHANAN. Yes. I would like to thank the chairman for 

convening these hearings, and I would like to thank all of our witnesses for being here today. I represent one of the most heavy senior districts. We have 300,000 seniors 55 and older and 200,000 65 

and older, so this is an extremely important issue to my constituents, and I know that it is a big issue. We want to do all we can 

to eliminate waste, fraud and abuse so that we can focus on eliminating backlogs in the system. 

This is a general question for the witnesses, anybody who would 

like to respond. Is there a particular region in the United States 

with unusual high rate of fraud and abuse, and if there is, or if you 

have identified a certain region or two, what are we doing about 

targeting fraud in that general region? 

Ms. Colvin, do you have an answer? 

Ms. COLVIN. I don’t believe that I can answer that question relative to a specific region. I would be happy to research that and 

provide an answer for the record. 

Mr. BUCHANAN. Mr. O’Carroll. 

Mr. O’CARROLL. Yes, sir. We have one of the largest fraud or 

antifraud hotlines in government, and we receive about 150,000 

calls a year in relation to fraud. We monitor it very carefully. We 

look at trend analysis. We are constantly watching what areas are 

reporting potential fraud. But it is not an easy answer in terms of 

saying that, any one area is worse than any other. It has a lot to 

do with the demographics and also how the U.S. Attorney’s Offices 

prioritize prosecutions, et cetera. 


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But I think we have got a fairly good handle on where the fraud 

is against SSA. We dedicate as many resources as we can in the 

Office of Inspector General to be out in the field, and we are constantly going to SSA’s offices, meeting with them, asking for trends 

in their area, and giving them advice on antifraud initiatives. 

Mr. BUCHANAN. Part of the reason I asked the question is in— 

for example, in Florida, in Medicare, Miami and Dade Counties, for 

example, seems to be much higher than the balance of the State, 

it is my understanding, someone mentioned to me. 

So, Mr. Bertoni, do you have any comments on that? 

Mr. BERTONI. On an engagement-specific basis we may identify 

areas that look to be areas where there is more fraud, waste or 

abuse. But, again, it is not fraud until somebody has—there has 

been a conviction. From time to time, depending on the job we are 

doing, though, we may go down to certain areas where there are 

hard concentrations of individuals in a particular program. 

We do spend a considerable amount of time in Florida, in Texas, 

in New York, in California, but it is not specifically because we are 

chasing fraud and abuse, but it is where much of the use is. 

Mr. BUCHANAN. Ms. Robert, do you have anything to add to 

that, any thoughts on that, about certain parts of the country is 

more challenging than others in terms of fraud and abuse? 

Ms. ROBERT. No, we don’t have any information on that. I think 

Mr. O’Carroll mentioned earlier the CDI units, those are located in 

21 States, and certainly our efforts to try to address fraud and 

abuse. 

Mr. BUCHANAN. Ms. Colvin, let me ask you, it is my understanding that the Social Security Administration has been growing 

their on-line system for new retirees in terms of new applications. 

Do you believe the on-line electronic system will help us reduce 

fraud, or do you think it will open us up for more fraud? 

Ms. COLVIN. I believe that on-line services are important. It is 

what the public expects. I don’t believe that if we do it correctly, 

that there would be any greater emphasis of fraud than we would 

have without the on-line. In fact, I think that probably at times it 

would demonstrate that we probably would have less, but I don’t 

enough data to be able to tell you the answer to that. 

Mr. BUCHANAN. Mr. Dirago, one quick question. My district, as 

I mentioned, is one of the oldest districts. As you can imagine, I 

get a lot of seniors that come into our offices. We have two offices 

in our region. And in terms of the help line, the feedback that I 

got in preparing for this today, we still have a lot of people that 

are confused. They feel like there is a lot of misinformation. What 

are we doing to try to fix some of these problems for seniors? 

Mr. DIRAGO. You are referring to the national 800 number? 

Mr. BUCHANAN. Yes. 

Mr. DIRAGO. That really wouldn’t be our area of expertise. Perhaps Ms. Colvin could answer. I am representing managers and 

TSC managers, and, you know, that is not an area of expertise that 

I would have. 

Mr. BUCHANAN. Ms. Colvin, generally it is—the help line that 

seniors can call in terms of filing as a new senior for Social Security, there seems to be a lot of confusion with that. I didn’t know 

if you were doing anything to improve the system. 


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Ms. COLVIN. Well, we will certainly look at—— 

Mr. BUCHANAN. The help desk, I guess you would call it. 

Ms. COLVIN. I will certainly look at the concern you have 

raised. I am not aware that there are issues of misinformation, et 

cetera. But we will certainly go back and take a look at that and 

give you an answer for the record. 

Mr. BUCHANAN. Okay. What I will do is I will get you the feedback that we are getting to your office, and maybe you can respond 

back. Thank you, and I thank the witnesses. 

I yield back, Mr. Chairman. 

Chairman BOUSTANY. The chair now recognizes Mr. Smith for 

questioning. 

Mr. SMITH. Thank you, Mr. Chairman, and to our panel. Mr. 

Bertoni, just for clarification you said that overpayments tend to be 

increasing, they are on the rise; is that accurate? 

Mr. BERTONI. In the work CDR area, yes. 

Mr. SMITH. And that policies and procedures are kind of contributing to that; is that accurate? 

Mr. BERTONI. That is correct. Essentially our view is that not 

only are there internal management and operational issues that 

could be addressed with the agency, but certainly that the feeds in, 

that the data that the agency is relying on to do these work CDRs, 

the IRS wage management is coming in already, could be up to 2 

years old, so they are basically working with overpayment situations that are fairly extended. 

And to the extent that they are not working, the claims, once 

they land in the agency, that additional time also is factored into 

the overpayment period. At the end of the day, individuals could 

get a letter indicating they will have a $30,000 overpayment, which 

is unfair to them and certainly unfair to the taxpayers should this 

debt ultimately be written off. 

Mr. SMITH. Right. And so, in a general view did you estimate 

in terms of what might be innocent or, you know, an innocent mistake and what may not be? 

Mr. BERTONI. No, we really did not isolate that. We just know 

that there are a substantial number of overpayments in this program, that the outstanding debt is in excess of $5 billion, and that 

much of that debt is being written off, about $460 million last year 

and over the last 10 years about 4 billion. 

So we don’t know specifically what the reasons are for that, but 

oftentimes it is mistakes on the agency’s part. Individuals don’t understand the reporting requirements and/or employers are just simply not reporting timely. There is a myriad of reasons. 

Mr. SMITH. Mr. O’Carroll, could you elaborate perhaps on that? 

Mr. O’CARROLL. Yes, Mr. Smith. What we are finding with the 

work CDRs in most cases is that it is identified that the person is 

working. It has to be—the CDR has to be conducted to determine 

whether or not their gainful activity exceeds what is allowed. And 

what we found, which goes with the chart that was shown, is that 

when there is a lot of attention given towards doing CDRs, it reduces the backlog, and it will keep SSA current, so you are not seeing the 1- and 2-year backlogs that Mr. Bertoni is talking about. 

So what we are saying is that right now SSA is doing a good job 

on the work CDRs, but they are still not doing enough CDRs to reVerDate Nov 24 2008 03:57 Dec 02, 2011 Jkt 070885 PO 00000 Frm 00089 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\70885.XXX GPO1 PsN: 70885

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duce the backlog. So the incoming number of work reports are not 

being addressed on a regular basis. Although, as I said, they are 

doing a much better job than they did in the past, they have to do 

twice as many work CDRs now to start cutting into the backlog, 

dropping the backlog down so that type of debt can be whittled 

down. 

Does that answer your question? 

Mr. SMITH. Thank you. 

Ms. Colvin. 

Ms. COLVIN. I would just like to say that the whole area around 

work and substantial gainful activity is very complex, and many of 

the recipients do not understand those rules. The cases are also 

very difficult to work. 

We have a number of legislative proposals that are contained in 

the President’s 2012 budget which are designed to address some of 

those problems. One is the Work Incentives Simplification Pilot 

that I know the Commission has talked to a number of you about, 

which would simplify the rules around work, which we think would 

substantially reduce the number of overpayments due to work. 

There are also a number of proposals that relate to data sharing, 

being able to share data with States and local jurisdictions and private insurers who handle workmen’s compensation so that we can 

properly do the offsets that often result in errors; as well as other 

data sharing around other government pensions where we would 

have to do an offset. 

So we think the program is just very complex, and that if it were 

simplified, and so we do urge you to support those proposals that 

are contained in the President’s budget. 

But as Mr. O’Carroll had said, the more we can do CDRs, including work CDRs, the less overpayments we have, because we catch 

them early, and we will then be able to address them. 

Mr. SMITH. Thank you. I yield back. 

Chairman BOUSTANY. I thank the gentleman. 

The chair now recognizes Dr. McDermott. 

Mr. MCDERMOTT. Thank you, Mr. Chairman. 

We seem to have another example here of the difference between 

the Democrats and the Republicans. As most of you know, there 

are 43 million people living in poverty in this country. And in the 

programs we are talking about here, Social Security Disability, we 

have had 10.2 million people, and we have got 9.1—in Social Security. 

These are people at the bottom of the economic ladder. They are 

there because they don’t have anything else. They have either been 

disabled at work and they are getting something, or they don’t even 

qualify for Social Security and so they are getting SSI. And it 

strikes me that what we have here is a perfect example of what 

happened at Katrina. 

Now, Democrats believe that the government is supposed to solve 

a problem, and that you work to keep trying to make it work better, and that ultimately, when a problem comes like Katrina, you 

go out and you get in your FEMA and you drive down and you fix 

it. 

But the Republicans don’t believe that the government’s job is to 

fix this kind of stuff. They don’t believe in a social safety net. They 


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basically believe these people ought to get by on their own or somehow go out and find themselves a job or whatever. They have never 

met most of the kinds of folks who are here. I have worked with 

these people in my professional life before I came here. And when 

you get in the FEMA car run by Republicans, you get what you got 

in New Orleans. This country looked like a Third World country. 

It looked like about 2 inches above 80 in our response to that hurricane. 

Now, this is exactly the same thing. When Clinton came in, there 

was additional money put in and for more CDRs, and the level of 

waste and fraud and abuse went down, and as soon as Mr. Bush 

came in, they whacked off that additional money, and the numbers 

started going up. That is exactly what the chart that Mr. Becerra 

put before us showed. 

And then Mr. Obama came in, and we put more money in, and 

the numbers started going down. And now we have the Ryan ruin 

budget, and the numbers are going to go up because they are pulling money out of the CDRs. 

You are dealing with 20 million people who are living under the 

poverty level and are supposed to report monthly if their income 

went up or down $25. And if they are up $5 over the limit, they 

are ineligible for a payment. Now, these are widows, these are the 

injured, severely disabled who can’t go to work. 

Is there any way, Mr Dirago, you can see that we can fix this 

without putting additional money in this budget into more CDR 

coverage? 

Mr. DIRAGO. Well, I really feel it is a resource issue in terms 

of the amount of work we are able to accomplish, on program integrity issues like the medical CDRs and the work CDRs. It is a product of having the staff in the offices in order to do it, and right now 

with the staffing losses, we are seeing a potential loss of 3,500 people in the agency, so our offices are extremely overextended, and 

there is little time to address these workloads. 

So we do the best we can with what we have, but when addressing to payment accuracy, it does come down to resources. People 

need to be trained properly. There needs to be mentors for new 

hires that come into the offices so they can do the work accurately. 

They need the time to do the work. 

Mr. MCDERMOTT. How long does it train—how long does it 

take for somebody to become truly competent in evaluating these 

disability files that are 2 and 3 inches thick? 

Mr. DIRAGO. Well, in terms of the field office level—and I can’t 

respond in terms of the DDS—but in terms of the field offices and 

getting a claims representative to the point where they are competent, they come in and go through an initial 4-month training period where it is 40 hours a week just dedicated to learning the job. 

There is no graduate course in Social Security Administration. People have to be trained for 40 hours a week for 4 months. After that, 

they come out of the training pool, they know the basics to handle 

simple, routine applications, not complex things like program integrity workloads. So they get mentored, there is a proficiency process 

in the agency in terms of bringing them up to speed, and it probably takes about 2 years for a claims representative to be skilled 

and knowledgeable to handle these kinds of things. 


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Mr. MCDERMOTT. What is the program the President put in his 

budget for the work incentive program that you are talking about? 

Ms. COLVIN. It will allow us to simplify the process so that the 

reporting requirements will not be as rigid, and individuals would 

not be automatically removed because they had some earnings. 

So we think that the simpler the program is, the easier it will 

be for the beneficiaries to understand what they need to do. 

And I do want to emphasize that when we have money for CDRs, 

accuracy rates—and particularly SSI redeterminations, the accuracy rate goes up. There is a chart that the staff has that shows 

that there is a direct correlation between the number of redeterminations that are done and the accuracy rate. 

And so as we have had to cut back on doing CDRs and redeterminations because of our budget losses, our accuracy rates are 

going to go down. And whenever we have a reduction in our funds, 

we are looking at not only reducing direct services with people 

walking in the front door, but we are also looking at reducing program integrity work. 

Chairman BOUSTANY. The gentleman’s time has expired. 

Mr. Marchant. 

Mr. MARCHANT. Thank you, Mr. Chairman. 

In recent newspaper articles, the Wall Street Journal, for instance, has focused on some administrative courts that are approving 95, 96, 97 percent of all disability applicants for disability insurance, and there are some areas in Puerto Rico that the recipients are a disproportionate percentage of those that applied. 

Do you find, Mr. O’Carroll—do you find any correlation between 

areas where there is a very high rate of approval of disputed cases 

and fraud follow-up? 

Mr. O’CARROLL. Mr. Marchant, we are bedeviled by the recent 

publicity that has come out on Puerto Rico. We have been watching 

approval rates, and we have been watching the number of people 

coming on in Puerto Rico for a while, but we really didn’t address 

it sufficiently. 

So right now we are working very closely with SSA, and we are 

taking a look at the quality of the claims in terms of the people 

coming onto the rolls there. And what we are trying to provide, 

which I think you are getting at—what we are trying to do is send 

a message out there that you just don’t apply to SSA and get approved automatically, that you have to actually be disabled to receive benefits. 

So we are trying to provide more oversight of what is going on 

in Puerto Rico. And then you have mentioned the situation in West 

Virginia, where we are also taking a look. We are trying to take 

a look to see if there is any really nexus in terms of the high 

amount of people that are coming on, is that something that just 

happened in that region? Is it very common that most people are 

approved? We are looking very closely at that. We are working very 

closely with SSA’s disability adjudication and review staff to take 

a look at that. 

We are working very hard on it. We have a presence here. We 

are conducting investigations in Puerto Rico and West Virginia. We 

have got a lot of resources on it, but I don’t have a real answer for 


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you yet. I can assure you that we are looking across the country 

to see if there are spikes like that, though. 

Mr. MARCHANT. Well, my constituents are regularly—when 

they watch TV, they are regularly given the opportunity to call the 

number of an attorney that can assist them in getting on disability. 

As far as widows, it looks like it is not the widows that are participating in fraud, it is the people that are claiming to be disabled 

and that are not disabled. In fact, it looks like the claims are 10 

times the amount of fraud among the group that are claiming to 

be disabled. 

And my constituents are beginning to make the connection between a dollar stolen from the Social Security Administration is a 

dollar stolen from their future security of their pension, and they 

are beginning to make these correlations. So the public is behind 

you. I would urge you to keep up the good work. 

Is there a way, in a disability case, where you have an attorney involved, and in many instances there are, you know, $10,000. It 

is not uncommon for a case to have a cash award of 10- or 12- or 

$14,000, and many times there are 3-, 4-, $5,000 of that goes to the 

attorney. If you later find out that that was a fraudulent case and 

you try to make a recovery, do you have recourse against just the 

recipient and applicant, or do you have resource against the attorney as well? 

Mr. O’CARROLL. We have recourse against them in that we can 

assess a civil monetary penalty. If you lie to Social Security, and 

we can show that you lied, and it is not prosecuted, we can pursue 

you civilly, usually for $5,000 per false statement. So we have been 

using that. 

I have to assure you that we want to make sure that the right 

people get the right amount of money, and those that are defrauding Social Security get caught. And what we are trying to find is 

any systemic issue where, as an example, some facilitator is trying 

to get claims approved by using false evidence, or false information 

or boilerplate information. We are looking into that. We have made 

arrests in the past, and we will make more in the future, because 

what we are trying to do is save that $1 of government money for 

everybody in the future. 

Mr. MARCHANT. Thank you. 

Chairman BOUSTANY. I thank the gentleman. 

Mr. Paulsen, you are recognized. 

Mr. PAULSEN. Thank you, Mr. Chairman. 

I want to go back and focus a little bit of discussion or attention 

regarding matching databases in order to determine the accuracy 

of SSA’s determinations of SSI’s recipients’ real property resources. 

And, Ms. Colvin and Mr. O’Carroll, I think you can comment on 

this. There are many factors that affect a supplemental security income recipient’s eligibility for the program, including their ownership of real property. In one study I know the inspector general estimated that about 300,000 recipients were paid more than $2.2 

billion that they might not have been entitled to because of unreported real property. Is this information, real property ownership, 

is it not readily available to Social Security, and if not, why not? 

Ms. COLVIN. Information is available relative to real estate or 

real property ownership, and we are right now in the process of 


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looking at what is necessary to begin to do that data matching, and 

we believe that the return on investment there would be positive. 

Mr. PAULSEN. Mr. O’Carroll, can you follow up on that? 

Mr. O’CARROLL. Yes, Mr. Paulson. As we found in that audit, 

as you noticed, SSA does have in field offices access to databases 

where they can verify resources such as real property. The purpose 

of our report is to highlight that, so that when a person is approved 

for benefits, the next step should be to take a look to see if that 

person has resources out there. 

One of our current initiatives is an effort to obtain and use more 

financial intelligence. We are using that ourselves and are trying 

to identify fraud against Social Security. We are going to different 

vendors on the market with different types of information. For example, when people file a claim with SSA, we could tell if the IP 

address that they are using has been known for fraud in the past. 

And we are going to try to use those best practices that we are 

coming up with, and financial intelligence, to share that with SSA 

so that they see if they are being defrauded by people who have 

resources but aren’t telling them about it. 

Mr. PAULSEN. And those best practices, when you pass them 

on, or you expect to pass them on, and you get that financial intelligence, does that become a resource issue for the Department, I 

mean, to undergo utilizing that information? 

Mr. O’CARROLL. Well, what we are hoping to do is to see if 

there are going to be cost savings. Something that I never mentioned before is that the dollars that are saved through our accounting efforts and under the Improper Payment Elimination and 

Recovery Act, in some agencies those funds are going back to the 

agency to be used towards other antifraud initiatives. Unfortunately, with SSA, since most of the money is from the trust fund, 

we are not seeing any access to recovered funds, and that might 

be something that could be changed with the Improper Payments 

Elimination and Recovery Act so that we could get some of our 

audit savings money back to use for more financial intelligence 

projects like this. 

Mr. PAULSEN. Ms. Colvin, let me do a follow-up, too, because 

I know there was another study that was done back just a couple 

of years ago with the inspector general, but in order to receive SSI 

payments, a recipient can’t be out of the country for more that than 

a certain number of days, right? It is like 30 consecutive days. And 

one study, I think, found that something like a quarter billion in 

benefits went overseas, right, so the people were out longer than 

they were supposed to. How does the agency track whether beneficiaries are actually here in the United States or they have actually gone abroad? 

Ms. COLVIN. That is a very complex area that we are delving 

into now to determine what type of special data sharing we can— 

there are matching agreements we can enter into to be able to address that issue. In most situations, they are supposed to identify 

that every 30 days if they are out of the country, they have to be 

back in the country. That is an area that certainly has some risk, 

and so we will be constantly looking at what data is out there that 

we can match to be able to ensure where those individuals are. We 

have to be very careful about targeting individuals just because 


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they are out of the country, but we think there are some ways to 

begin to look at that and address it a little bit more. 

Mr. PAULSEN. So, Ms. Colvin, do you feel that you are working 

on that kind of data-sharing arrangement, for instance, with Homeland Security, for instance, to actually make some progress on this 

area right now? Is that something—— 

Ms. COLVIN. I don’t know what we are doing with Homeland 

Security specifically, but I will tell you that we have about 1,500 

data-sharing agreements. We are always looking at additional 

records that we might be able to match with. 

You asked if that is a resource issue. To some degree it is, but 

we think that the return on investment would be sufficient that we 

would want to pursue those kinds of things where we would see a 

value to the agency. So we are going to be looking at additional reports that we—or additional data-sharing agreements that we 

could enter into. 

Chairman BOUSTANY. I thank the gentleman. 

The chair now recognizes Mr. Brady, who has been waiting patiently. 

Mr. BRADY. Thank you, Mr. Chairman. Just a couple of 

thoughts. 

Our district is in Hurricane Alley, both Hurricane Rita, Hurricane Ike. It has been 2 years since Hurricane Ike devastated our 

region, 2 years since Congress passed legislation authorizing disaster recovery, and we are still waiting to get the money for our 

communities. I would not be holding any parades for the Obama 

administration on disaster recovery, unfortunately. Secondly, if we are talking about wasted money, the $820 billion 

wasted in the stimulus, spent, and today we have fewer Americans 

working today than when the stimulus began. In fact, all those 

shovel-ready projects, we actually have 70,000 fewer construction 

workers today since we spent all that money. There is plenty of 

waste and fraud and abuse throughout this whole government system, and we shouldn’t hesitate to go after every dollar of this, 

which leads to another point. 

I was interested in Mr. Becerra’s chart, but I did note 2003 to 

2008 there was zero dollars dedicated to continuing—medical continuing disability reviews, yet during several of those years, 3 of 

them, they performed more reviews than they do today. It seems 

Social Security performs reviews when they choose to, regardless of 

the dedicated funding. It really goes back to the point that Mr. 

Bertoni and Inspector General O’Carroll made, which is a lot of the 

key systems are not in place to use these dollars well. 

In fact, looking at the medical, the continuing disability reviews, 

it is one thing that 64 percent of the wasted dollars occurred because the beneficiaries didn’t tell us about their work activity, but 

more than a third came after they told us they received income and 

Social Security did not act. 

Mr. Bertoni made the point that there is a real key issue with 

the utilization of current automation and the need for better supervision. So, Ms. Colvin, I would ask you, in 2004, GAO recommended you use the National Directory of New Hires, which the 

agency uses for SSI cases, to alert the agency to wages earned by 

those receiving benefits with an estimated return of 40 percent on 


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each dollar invested. So the question is why have you not yet implemented that idea? 

Ms. COLVIN. The information that I have is that we, in fact, did 

do a study in 2010 relative to new hires. And as you correctly indicate, we do use it for SSI, but we have found it to be less effective 

for Title II. We find that the information comes in quarterly; we 

need to have it monthly. 

There has been an analysis done on that, and so we have not 

found that utilization of the new hire data will provide the type of 

return that you have. I would be happy to provide you with what 

our review and analysis has determined. 

Mr. BRADY. Thank you. 

Just so I heard you right, 6 years after the GAO recommended 

you use this national directory, rather than implement it, you did 

a study last year and decided that theoretically it might not work, 

but you have never implemented it to see that it does? 

Ms. COLVIN. We use the new hire data for SSI, we do not use 

it for Title II. 

Mr. BRADY. Right, even though that was recommended in 2004? 

Ms. COLVIN. Well, I believe that the agency’s analysis of that 

differs from the analysis that was provided by the Office of Inspector General. 

Mr. BRADY. Six years after its recommendation was made and 

no actual implementation occurred. 

I would also ask you this. The amount of days it takes SSA to 

process the earnings and overpayments is not acceptable by anyone, particularly when the individual self-reports. They have told 

us they get the money. 

GAO contends that you have no agencywide performance goals, 

and you lack a good supervisory control. So why should Congress 

appropriate more funds for CDRs when you are lacking basic management controls? 

Ms. COLVIN. The money that Congress appropriates are for the 

medical CDRs specifically, and we have always, to my understanding, been able to do the number of CDRs for which we are 

budgeted. As I mentioned before, work CDRs are very complex. 

Normally we have had some challenges in that area, I would be 

first to admit as the accountable official for improper payments 

that is an area that I am looking at. 

We very recently have given directions that we would like to see 

that those work CDRs are done within 30 days of the time that the 

individual reports that they are returning to work. 

So this is an area that does need attention, and it is an area that 

we are challenged. And so I agree it needs more—— 

Mr. BRADY. I do think it needs a great deal more work. There 

is bipartisan support for this. This is a leaky bucket, and before we 

pour more money into it, we probably need to fix those holes and 

make sure we are actually getting the bang for the buck and have 

the right management tools in place to use these dollars. 

I yield back. 

Chairman BOUSTANY. I thank the gentleman. 

I want to thank all of our witnesses for being here today and for 

your testimony. Please be advised that Members may have some 


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written questions that they submit to you. Those questions and answers would be part of this hearing record. 

Chairman BOUSTANY. Thank you for being here, and this hearing is now adjourned. 

[Whereupon, at 4:37 p.m., the subcommittees were adjourned.] 

[Questions for the Record follow:] 


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