U.S. GOVERNMENT PUBLISHING OFFICE

33–390 WASHINGTON : 2019

STOPPING DISABILITY FRAUD: 

RISK, PREVENTION, AND DETECTION 

HEARING 

BEFORE THE

SUBCOMMITTEE ON SOCIAL SECURITY 

OF THE

COMMITTEE ON WAYS AND MEANS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

APRIL 26, 2017 

Serial No. 115–SS02 

Printed for the use of the Committee on Ways and Means 

( 

ii 

COMMITTEE ON WAYS AND MEANS 

KEVIN BRADY, Texas, Chairman 

SAM JOHNSON, Texas 

DEVIN NUNES, California 

PATRICK J. TIBERI, Ohio 

DAVID G. REICHERT, Washington 

PETER J. ROSKAM, Illinois 

VERN BUCHANAN, Florida 

ADRIAN SMITH, Nebraska 

LYNN JENKINS, Kansas 

ERIK PAULSEN, Minnesota 

KENNY MARCHANT, Texas 

DIANE BLACK, Tennessee 

TOM REED, New York 

MIKE KELLY, Pennsylvania 

JIM RENACCI, Ohio 

PAT MEEHAN, Pennsylvania 

KRISTI NOEM, South Dakota 

GEORGE HOLDING, North Carolina 

JASON SMITH, Missouri 

TOM RICE, South Carolina 

DAVID SCHWEIKERT, Arizona 

JACKIE WALORSKI, Indiana 

CARLOS CURBELO, Florida 

MIKE BISHOP, Michigan 

RICHARD E. NEAL, Massachusetts 

SANDER M. LEVIN, Michigan 

JOHN LEWIS, Georgia 

LLOYD DOGGETT, Texas 

MIKE THOMPSON, California 

JOHN B. LARSON, Connecticut 

EARL BLUMENAUER, Oregon 

RON KIND, Wisconsin 

BILL PASCRELL, JR., New Jersey 

JOSEPH CROWLEY, New York 

DANNY DAVIS, Illinois 

LINDA SA ́ NCHEZ, California 

BRIAN HIGGINS, New York 

TERRI SEWELL, Alabama 

SUZAN DELBENE, Washington 

JUDY CHU, California 

DAVID STEWART, Staff Director 

BRANDON CASEY, Minority Chief Counsel 

SUBCOMMITTEE ON SOCIAL SECURITY 

SAM JOHNSON, Texas, Chairman 

TOM RICE, South Carolina 

DAVID SCHWEIKERT, Arizona 

VERN BUCHANAN, Florida 

MIKE KELLY, Pennsylvania 

JIM RENACCI, Ohio 

JASON SMITH, Missouri 

JOHN B. LARSON, Connecticut 

BILL PASCRELL, JR., New Jersey 

JOSEPH CROWLEY, New York 

LINDA SA ́ NCHEZ, California 

iii 

C O N T E N T S 

Page 

Advisory of April 26, 2017, announcing the hearing ............................................ 2 

WITNESSES 

Sean Brune, Assistant Deputy Commissioner, Office of Budget, Finance, 

Quality and Management, Social Security Administration .............................. 9 

Seto J. Bagdoyan, Director, Forensic Audits and Investigative Service, Government Accountability Office ............................................................................. 21 

QUESTIONS FOR THE RECORD 

Question asked in testimony by The Honorable David Schweikert, of Arizona, 

to Sean Brune, Assistant Deputy Commissioner, Office of Budget, Finance, 

Quality and Management, Social Security Administration .............................. 58 

Questions submitted by The Honorable Linda Sa ́nchez, of California, to Sean 

Brune, Assistant Deputy Commissioner, Office of Budget, Finance, Quality 

and Management, Social Security Administration ............................................ 59 

Questions submitted by The Honorable Sam Johnson, of Texas, Chairman, 

Subcommittee on Social Security, to Sean Brune, Assistant Deputy Commissioner, Office of Budget, Finance, Quality and Management, Social Security Administration .......................................................................................... 62 

SUBMISSION FOR THE RECORD 

Shannon Benton, Executive Director, The Senior Citizens League .................... 64 

(1) 

STOPPING DISABILITY FRAUD: 

RISK, PREVENTION, AND DETECTION 

WEDNESDAY, APRIL 26, 2017 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON WAYS AND MEANS, 

SUBCOMMITTEE ON SOCIAL SECURITY, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 10:00 a.m., in Room 

2020, Rayburn House Office Building, Hon. Sam Johnson [Chairman of the Subcommittee] presiding. 

[The advisory announcing the hearing follows:] 

2 

ADVISORY 

FROM THE COMMITTEE ON WAYS AND MEANS 

SUBCOMMITTEE ON SOCIAL SECURITY 

FOR IMMEDIATE RELEASE CONTACT: (202) 225–1721 

Wednesday, April 26, 2017 

SS–02 

Chairman Johnson Announces Hearing on 

Stopping Disability Fraud: Risk, Prevention, 

and Detection 

House Ways and Means Social Security Subcommittee Chairman Sam Johnson 

(R–TX), announced today that the Subcommittee will hold a hearing entitled ‘‘Stopping Disability Fraud: Risk, Prevention, and Detection.’’ The hearing will focus on 

the agency’s ability to identify and manage fraud risk, and the status of the Social 

Security Administration’s antifraud initiatives. The hearing will take place on 

Wednesday, April 26, 2017 in room 2020 of the Rayburn House Office Building, beginning at 10:00 a.m. 

In view of the limited time to hear witnesses, oral testimony at this hearing will 

be from invited witnesses only. However, any individual or organization may submit 

a written statement for consideration by the Committee and for inclusion in the 

printed record of the hearing. 

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS: 

Please Note: Any person(s) and/or organization(s) wishing to submit written comments 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 make a submission, 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 Wednesday, May 10, 2017. For questions, or if you encounter technical problems, please call (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 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 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. 

All submissions and supplementary materials must be submitted in a single document via 

email, provided in Word format and must not exceed a total of 10 pages. Witnesses and submitters are advised that the Committee relies on electronic submissions for printing the official 

hearing record. 

All submissions must include a list of all clients, persons and/or organizations on whose behalf 

the witness appears. The name, company, address, telephone, and fax numbers of each witness 

must be included in the body of the email. Please exclude any personal identifiable information 

in the attached submission. 

Failure to follow the formatting requirements may result in the exclusion of a submission. All 

submissions for the record are final. 

3 

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 TDD/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 at 

http://www.waysandmeans.house.gov

f 

/ 

Chairman JOHNSON. Thank you all for being here. Welcome to 

today’s hearing on how Social Security is preventing and identifying fraud in its disability program. 

Last month Eric Conn, a lawyer from Kentucky, pled guilty to fraud that would have caused Social Security to pay $550 million 

in lifetime benefits due to fraudulent submissions. Back in Texas, 

we would say that Conn is as crooked as the Brazos River. And it 

is pretty crooked. In his plea, Mr. Conn said he worked with doctors to submit false medical evidence and that he paid Social Security administrative law judges around $10,000 every month to approve claims. Conn was at this since 2004. 

Sadly, this isn’t the only major fraud case to hit the disability 

program in recent years. There is New York, where New York City 

police officers and firefighters claimed 9/11-related injuries, when 

many of them never even worked at Ground Zero, in order to get 

disability benefits they didn’t deserve. 

And Puerto Rico, where a former Social Security employee was 

in cahoots with a dirty doctor, who provided fraudulent medical 

evidence that resulted in taxpayer-funded benefits that should 

never have been paid in the first place. 

Like organized crime, these recent scandals reveal fraud rings 

made up of doctors, lawyers, and even Social Security’s own employees. It is a get-rich-quick scheme worth tens of thousands of 

dollars for every person who illegally benefits. These fraud cases 

show how Social Security hasn’t always been able to stop disability 

fraud. 

Now, while the Bipartisan Budget Act of 2015 included many 

commonsense ideas from this Subcommittee that try to address the 

problem, these cases have brought to light the reality is that it is 

like playing catchup. Bottom line, Social Security has to be one 

step ahead of the fraudsters. 

At today’s hearing, we are going to take a hard look at Social Security’s efforts to fight fraud in its disability programs and stop it 

before a single dollar of benefits is paid. Social Security has a number of antifraud initiatives, but without any way to judge their effectiveness, we don’t know if they are working or not. 

Today the Government Accountability Office will release its first 

report looking at agency efforts under its new fraud risk management. This report looks at how well Social Security is assessing 

and managing fraud risk in its disability programs. As we will hear 

today, in recent years, while Social Security has taken some steps 

in the right direction, there is still important work to do to prevent 

fraud. Social Security pays hundreds of billions of dollars in benefits each year, and if left undiscovered, fraud rings like those unVerDate Sep 11 2014 08:24 Feb 22, 2019 Jkt 033390 PO 00000 Frm 00007 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\33390.XXX 33390
4 

covered in Huntington, West Virginia, New York City, and Puerto 

Rico, have the potential to cost hardworking taxpayers billions of 

dollars. 

I know stopping fraud is a goal that we all share, and although 

Social Security has increased its efforts to fight fraud, we need to 

be sure it is doing all it can to do so. 

I thank our witnesses for being here today, both of you, thank 

you so much, and look forward to hearing your testimony. 

I will now recognize Mr. Larson for any opening statement he 

cares to make. 

Mr. LARSON. Thank you, Mr. Chairman. And let me further underscore what the Chairman had to say with respect to the work 

of this Committee, and I would like to applaud his efforts, and particularly that of my predecessor on this Committee, Xavier Becerra, 

who worked extraordinarily well together. 

We owe the 61 million Social Security beneficiaries efficient administration and our most robust efforts to combat fraud, waste, 

and abuse wherever it exists. And while the actual number of fraud 

and erroneous payment cases is relatively small, those who seek to 

defraud the Social Security Administration, and the beneficiaries 

they serve, deserve nothing less than the harshest punishment. I 

don’t know about that crooked river in Texas, but certainly we 

ought to make sure that is the case. 

And, again, I want to applaud this Chairman and my predecessor, and the continued work I know that this Committee will do. 

Many of the important actions the Social Security Administration 

has already taken to combat fraud were the results of the efforts 

here by this body. 

The Social Security Administration, as the Chairman established 

already, uncovered fraud and went after fraud that existed in West 

Virginia, in New York City, and in Puerto Rico, as the Chairman 

has indicated. For persons who abuse the public position of trust, 

such as doctors, attorneys, and current and former SSA employees, 

the law increased the penalties to 10 years in prison. I think in everyone’s estimation on this Committee and in the public, anyone 

who messes with the sacred trust of the American people in the 

program and government that they rely on the most deserves the 

maximum amount of punishment that the law can provide. And, 

again, I want to compliment our Chairman and the work of this 

Committee. 

I also want to point out, though, that what we need to do as well 

is to take a look at the current funding levels. And while there has 

been a very focused area on fraud, abuse, and waste, we have noticed that while the increase of recipients with the baby boomers, 

coming through the process right now, has risen dramatically, the 

cuts in the overall Administration have dropped. This is problematic. Many of the frontline people in Social Security are actually 

the people that are out there recognizing and preventing the fraud, 

abuse, and waste. 

They are the ones that pick up on the patterns. They are the 

ones that, along with the Inspector General, are working on the 

kinds of reforms and processing that we need to catch this at the 

early stage. Further compounded by this issue, the very people we 

are sworn to serve then find themselves in longer waiting lines, in 

5 

trouble that is reached in the disability areas, the worst it has ever 

been at a wait that exceeds 18 months, and in large part because 

there isn’t the capacity there for us to reach out and serve these 

very deserving people. 

And so I think it is important that we catch up on the fraud and 

we continue, as this Committee and this Chairman has led, to do 

so. 

We also must recognize the very dire needs of the large group of 

people that are coming through this system while we are experiencing even further cuts, who are also disadvantaged by the fact 

that the technology that we have at our disposal has not been fully 

modernized within the Social Security Administration so that we 

can use both technology and the very human services that are required in the face-to-face contacts throughout our country and in 

all of our districts by the Social Security Administration. It is my 

sincere hope that we can do that. 

Also, Mr. Chairman, if I might, I would like to submit for the 

record an LA Times article on the Trump proposal to eliminate the 

Social Security payroll tax and why that could be extraordinarily 

problematic in terms of our ability not only to fight fraud, but also, 

I think, jeopardizes the ability of the fund itself. 

And as this Committee in general—in the Subcommittee, but 

also the Committee in general—considers tax reform, I believe that 

this and other articles are salient, and I would ask permission to 

submit for the record. 

Chairman JOHNSON. Without objection. 

[The submission of the Honorable Mr. Larson follows:] 

6 


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los Angeles Times 

Trump's proposal to eliminate the Social Security payroll tax may be his worst idea yet 

Michael Hiltzik 

AprillO, 2017 

President Trump meets with his fiscal brain trust, budget director Mick Mulvaney, center, and 

Treasury Secretary Steven Mnuchin. Are they plotting to eviscerate Social Securit y? (Evan Vucci 

I Associated Press) 

President Trump's tax reform agenda is in trouble. That's not news, but one proposal that his 

team has floated as a way, ostensibly, to cut taxes on the middle class is. According to the 

Associated Press, they're toying with the idea of eliminating the payroll tax, which funds Social 

Security and part of Medicare, or cutting it drastically. 

This is an absolutely terrible idea, partially because it smells like a back-door way of cutting 

Social Security benefits. It needs to be nipped in the bud. 

"This proposal is a Trojan horse," the veteran Social Security advocate Nancy J. Altman told me. 

"It appears to be a gift in the form of middle-class tax relief, but would, if enacted, lead to the 

destruction of working Americans' fundamental economic security." 

To understand why, one needs to examine the history and mechanics of Social Security, 

something the Trump team hasn't tried or doesn't care to do. But we can. 
7 


33390A.002

This proposal is a Trojan horse ... [that) would, if enacted, lead to the destruction of working 

Americans' fundamental economic security. 

The "contributory" nature of Social Security, through which beneficiaries pay for their eventual 

benefits via the payroll tax, dates back to its very origins in 1935. 

The most commonly quoted defense of the payroll tax comes from Franklin Roosevelt, who 

called the feature "straight politics" and explained: "We put those payroll contributions there 

so as to give the contributors a legal, moral and political right to collect their pensions .... With 

those taxes in there, no damn politician can ever scrap my social security program." But FOR 

didn't say that until 1941, six years after enactment, when he was interviewed for a 

government study. 

The real rationale for the payroll tax was more nuanced. FOR's Committee on Economic 

Security, which drafted the program in 1934, had engaged in a spirited debate over whether to 

fund Social Security via general government revenues or from worker contributions. 

There were several reasons to choose the latter. One was to make clear that Social Security 

wouldn't be a welfare program, but a retirement insurance benefit provided by right. 

Inevitably, the committee reported, a "gratuitous" pension - one funded by the general 

budget, "must be conditioned upon a 'means' test," w hich meant it would be delivered only to 

the poorest Americans and fulfill only the slighted needs. 

"The gratuitous pension, in fairness to the legitimate demands of other needy groups, must 

hold all grantees down to a minimum standard," the committee advised Congress. A 

contributory system that amounted to an annuity, "can be ample for a comfortable existence, 

bearing some relation to customary wage standards." That's essentially the Social Security 

retirement system we have today. 

Social Security's creators thought that the contribution system would not only ensure that 

benefits would be reasonably large, but that they wouldn't get too large. The idea was that the 

strain on workers' take-home pay resulting from too much expansion in the program would 

stay Congress' hand. As it happened, Social Security proved to be so popular that the public 

remained on board through several expansions, including coverage of spouses and dependents, 

and the addition of disability insurance in 19S6. 

As FOR foresaw, endowing Social Security with its own revenue stream has protected it over 

the years from grasping politicians - mostly conservatives, who have aimed since 1935 to 

eviscerate the program. The weekly or bi-weekly payroll deductions that go to the program 

have given workers a proprietary interest in benefits that has been hard to undermine. 

That's why President Obama's 2010 deal w ith Congress to cut the employee share of the payroll 

tax temporarily-to 4.2% of wage income from 6.2%- also was a terrible idea. (Employers 

pay another 6.2%, but their share wasn't affected by the 2010 deal.) 
8 

f 


33390A.003

The tax cut was a device to put a few more bucks into families' pockets during the depths of the 

Great Recession. But although it was understood that the lost revenues would be made up 

dollar for dollar from the federal budget, the arrangement risked permanently undermining the 

system's finances. Making it worse, the cut failed to steer the additional funds to the families 

who needed it the most. Every worker got the same tax break- billionaires got the same 

maximum $2,136 cut as anyone else earning the maximum $106,800 in wages subject to the 

payroll tax at the t ime. 

Under the targeted Making Work Pay program that was replaced by the payroll tax cut after 

Republicans refused to continue the program, low-income families were entitled to up to $800 

- any family earning $40,000 or less would have received more from Making Work Pay than 

t he tax cut, while everyone else, including CEOs and members of Congress, did better under the 

new arrangement. 

The full payroll tax eventually was restored after two years, but the erosion of the link between 

wages and Social Security has lived on; to this day, some people still think Social Security is 

financed by the federal budget, even though t hat's not the case. 

The Trump proposal potentially raises the manipulation of the payroll tax to a new level. The 

details reported by the Associated Press are sketchy and preliminary. But thus far, there's no 

indication that Trump views this change as a temporary measure. If it's designed as a 

permanent conversion of Social Security's revenue stream from the payroll tax to general 

revenues, that's a wide-open door to budget-cutting at the expense of retirees and workers. 

Already, conservatives and budget hawks repeat as a mantra that the cost of Social Security is 

"unsustainable." That's t heir claim even though the program runs a surplus today and ensuring 

its fiscal stability for the future would require a modest increase in the tax rate or removal of 

t he cap on taxable wages ($127,200 this year). 

Scrapping the payroll tax would make it easier for Congress to cut Social Security benefits under 

t he guise of saving the government money. And that's just another way to funnel more money 

to the rich, at t he expense of the working class. And who needs that, other than people who 

already have enough? 
9 

Mr. LARSON. Thank you, Mr. Chairman. 

I also would like to thank our witnesses, and we look forward to 

hearing from them and the ensuing questions that will come. 

Chairman JOHNSON. Thank you. 

As is customary, any Member is welcome to submit a statement 

for the hearing record. 

Before we move on to our testimony today, I want to remind our 

witnesses, please limit your oral statements to 5 minutes. We get 

fidgety up here. However, without objection, all of the written testimony will be made a part of the hearing record. 

We have two witnesses today seated at the table. They are Sean 

Brune, Assistant Deputy Commissioner, Office of Budget, Finance, 

Quality and Management, Social Security Administration. That is 

a long title. 

Seto Bagdoyan, Director, Forensic Audits and Investigative Service, Government Accountability Office, is also with us. 

Mr. Brune, welcome and thanks for being here. Please proceed. 

STATEMENT OF SEAN BRUNE, ASSISTANT DEPUTY COMMISSIONER, OFFICE OF BUDGET, FINANCE, QUALITY AND 

MANAGEMENT, SOCIAL SECURITY ADMINISTRATION 

Mr. BRUNE. Chairman Johnson, Ranking Member Larson, and 

Members of the Subcommittee, thank you for inviting me to discuss 

how the Social Security Administration works to detect and prevent fraud in our programs. I am Sean Brune, Assistant Deputy 

Commissioner for Budget, Finance, Quality and Management at 

Social Security Administration. 

We appreciate your leadership on this important topic. In particular, we appreciate the support the Congress provided in passing 

recent legislation, which included provisions that have already enhanced and strengthened our ongoing antifraud efforts. 

Even with those new tools, we must remain constantly vigilant 

to protect the agency’s benefit programs from fraud. 

It is despicable that some people will try to take advantage of 

our programs, which serve the most vulnerable members of society. 

Our message to those who attempt to defraud Social Security is 

clear: We will find you, we will seek the maximum punishment 

under law, and we will fight to restore the money you have stolen 

from the American people. 

Today I will give you an overview of our antifraud efforts since 

we last discussed this issue with the Subcommittee in 2014. We 

would like to thank the Government Accountability Office for recognizing the progress we have made and their acknowledgement 

that we have established an organizational culture and structure 

conducive to fraud risk management. 

In 2014, we established the Office of Anti-Fraud Programs to 

centralize oversight and accountability for our antifraud efforts. 

This office leads our ongoing work to maintain policies and internal 

controls to detect and prevent fraud before we make a benefit payment. 

We agree with GAO’s recommendations to complete a comprehensive fraud risk assessment of our disability program. We will 

complete this assessment by the end of the year, and we are movVerDate Sep 11 2014 08:24 Feb 22, 2019 Jkt 033390 PO 00000 Frm 00013 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\33390.XXX 33390
10 

ing forward to integrate ongoing risk assessments into our antifraud efforts. 

Next I would like to discuss a few important aspects of our antifraud program. 

We are excited to expand our use of data analytics technology to 

combat fraud, including use of the Anti-Fraud Enterprise Solution, 

or AFES tool. AFES is a multi-year, multi-phase initiative that will 

replace and expand our current antifraud systems. The tool will 

provide advanced data analytics to help us identify and investigate 

high risk transactions across all of our programs. It will run in real 

time to identify situations that look similar to known fraud 

schemes or are otherwise unusual, and score cases for their relative 

fraud risk. The tool will integrate with the fraud referral form to 

improve our coordination and information sharing about alleged 

fraud with the Office of Inspector General, OIG. 

We continue to expand our Cooperative Disability Investigations, 

or CDI, program. The CDI program places our partners in OIG and 

law enforcement in a position to stop people who attempt to fraudulently receive benefits. Chairman Johnson and this Subcommittee 

have long championed the CDI program, and we thank you for that 

support. In particular, recent legislation requires the agency to expand the CDI program to cover all States and territories. We currently have 39 units that cover 33 States, the Commonwealth of 

Puerto Rico and the District of Columbia. We will continue to work 

within available agency funding to secure law enforcement partners to cover the remaining 17 States and territories. 

In another important effort, for more than a decade our Fraud 

Prosecution Project has sent our attorneys to the Department of 

Justice to act as Special Assistant U.S. Attorneys. These attorneys 

have increased the number of prosecutions of violations of the Social Security Act. They obtain criminal sanctions, including imprisonment, and recover funds for the agency through criminal restitution and forfeiture. 

Before concluding my statement, I would like to acknowledge the 

contribution of our frontline employees. In all our antifraud efforts, 

our frontline employees remain an important line of defense in detecting and preventing fraud. Our employees prevent fraud by 

promptly referring allegations to the OIG for investigation and by 

assisting the OIG in developing case information for fraud investigations. 

As I have discussed today, we have a comprehensive and integrated antifraud program. We use a risk-based framework to manage our fraud risk and we are working to increase prevention 

through advanced predictive analytics. We will measure our 

progress and continue to keep you informed as we move forward. 

As an important reminder, everyone can play a role in protecting 

our investment in Social Security. If you suspect fraud, report it 

online to the OIG at oig.ssa.gov/report or by phone through the 

OIG’s Social Security Fraud Hotline at 1–800–269–0271. 

I would be happy to answer any questions you have. 

[The prepared statement of Mr. Brune follows:] 

11 


33390A.004

COMMITTEE ON WAYS AND MEANS 

SUBCOMMITTEE ON SOCIAL SECURITY 

U.S. HOUSE OF REPRESENTATIVES 

April 26, 2017 

STATEMENT FOR THE RECORD 

SEAN BRUNE 

ASSISTANT DEPUTY COMMISSIONER 

FOR BUDGET, FINANCE, QUALITY, AND MANAGEMENT 

SOCIAL SECURITY ADMINISTRATION 
12 


33390A.005

Chairman Johnson, Ranking Member Larson, and Members of the Subcommittee: 

Thank you for inviting me to discuss how the Social Security Administration (SSA) takes 

seriously our charge to efficiently and effectively detect, deter, and mitigate fraud in the Social 

Security programs. I am Sean Brune, the Assistant Deputy Commissioner for Budget, Finance, 

Quality, and Management at SSA. We have testified before tllis Subcommittee several times 

about our anti-fraud efforts, and we appreciate your leadership on this impmtant topic over the 

years, and your leadership on enacting anti-fraud legislation. 

Background 

I would like to provide a brief overview of our programs. We admitlister the Old-Age, 

Survivors, and Disability Insurance (OASDI) program, commonly referred to as "Social 

Security." Individuals eam coverage for Social Security retirement, survivors, and disability 

protection and benefits by working and paying Social Security taxes on their eamings. 

We also administer the Supplemental Security Income (SSI) program, which provides monthly 

payments to people with limited income and resources who are aged, blind, or disabled. Adults 

and children under age 18 can receive payments based on disability or blindness. General tax 

revenues fund the SSI program. 

Few government agencies touch the lives of as many people as we do. Social Security pays 

monthly benefits to approximately 62 million individuals, consisting of 42 million retired 

workers and 3 million of their spouses and children; 9 million workers with disabilities and 2 

million dependents; and 6 million surviving widows and widowers, children, and other 

dependents of deceased workers. During fiscal year (FY) 2017, we expect to pay more than 

$940 billion to Social Security beneficiaries. In addition, in FY 2017, we expect to pay nearly 

$55 billion in Federal benefits to a monthly average of approximately 8 million SSI recipients. 

In carrying out these programs, our discretionary administrative costs represent about 1.3 percent 

of benefit payments that we paid under the OASDI and SSI programs. 

SSA Anti-Fraud Coordination 

We can all agree that fraud in any government program degrades the public's trust in their 

government and the integrity of the program. We have no tolerance for fraud. We face the 

ongoing challenge of protecting the agency's benefit programs from fraud. It is despicable that 

some people will try to take advantage of our programs, which serve the most vulnerable 

members of our society. Nevertheless, we are dedicated to improving our efforts to detect and 

prevent fraud, and to deter attempts to defraud the program. Our message to those who attempt 

to defraud Social Security is clear: We will find you; we will seek the maximum punishment 

under the Jaw; and we will fight to restore the money you have stolen from the American people. 

Traditionally, our front line employees have been the first line of defense against fraud in our 

programs. These employees are llighly skilled and trained to spot anomalies indicative of 
13 


33390A.006

potential fraud, which they refer to the Office of the Inspector General (OIG) -the agency lead 

for comhauing fraud - for further investigation. Through this fraud allegation process and other 

efforts, the agency has been able to detect a munber of fraud schemes in recent years, and has 

provided critical support to OIG in its fraud investigations. 

That said, we are working to rapidly increase our fraud prevention capabilities. When the 

agency testified before this Subcommittee in Febmary 2014, we described onr existing efforts 

and new initiatives to combat fraud. We take a risk-based approach to reducing fraud , focused 

first on mitigating the highest risk issues. 

Since that time, we have made a number of organizational, program, and technology-driven 

changes to our processes that continue to strengthen our ability to detect auempts to defraud. 

Today I will give you an overview of how we have enhanced our anti-fraud efforts since that 

time, and our priorities going forward. 

In close coordination with OIG, we use a variety of techniques that identify suspected fraud and 

help investigators analyze suspicious or questionable claims. We are using data analytics and 

employing technology to root out fraud. We have engaged in inter-agency infom1ation sharing. 

For example, we participated in the Department of Labor , Internal Revenue Service, 

Supplemental Nutrition Assistance Program, and Temporary Assistance for Needy Families 

workgroup to discuss collaborative solutions to combat fraud schemes that in1pact multiple 

programs. We would like to thank the Government Accountability Office (GAO) for 

recognizing the progress we have made and our efforts to establish an organizational culture and 

st111cture conducive to fraud risk management. As GAO notes, onr efforts are still evolving. 

Yet, we are confident we will make substantial progress to address fraud risks and respond to 

emerging risks. 

The Office of Anti-Fraud Programs 

We have a strong commitment to uphold our responsibility to detect and prevent fraud in onr 

programs. In 2014, we committed resources to bring renewed focus and prioritize our efforts to 

efficiently and effectively detect, deter, and mitigate fraud, waste, and abuse in our programs by 

establishing the Office of Anti-Fraud Programs (OAFP). OAFP provides centralized oversight 

and accountability for our anti-fraud program. OAFP leads our anti-fraud activities and works 

across organizational lines to ensure employees throughout the agency receive training designed 

to raise awareness about fraud and have the tools they need to combat fraud. For example, 

OAFP designs and implements mandatory national anti-fraud training for employees on a regular 

basis. 

OAFP is an integral component in onr efforts to implement the agency Anti-Fraud Strategic 

Plan. This plan supports a comprehensive approach to prevent fraud across all of the programs 

we administer, including the disability program, and aligns our anti-fraud efforts with the 

Agency Strategic Plan and the GAO repo1t, A Framework for Managing Fraud Risks in Federal 

Programs. The GAO report identified leading practices for managing fraud risks and identified 

control activities to prevent, detect, and respond to fraud in Federal programs. Our agency Anti2 
14 


33390A.007

Fraud Strategic Plan describes how we are developing and implementing a comprehe11sive 

unified anti-fraud program to align with GAO's framework. 

National Anti-Fraud Committee 

We established the current National Anti-Fraud Committee (NAFC) in 2014 to provide a focal 

point for our national and regional anti-fraud efforts. The NAFC is a visible demonstration of 

our commitment to combating fraud in our programs, and consists of executive members from 

aU of our Deputy Commissioner-level and agency-level components, as well as the OIG. 

The NAFC provides an open forum for agency senior executives to communicate on efforts to 

address fraud challenges. The committee evaluates potential anti-fraud initiatives introduced by 

the Regional Anti-Fraud Commiuees, workgroups, and employee suggestions to determine 

whether regional projects can and should be expanded or enhanced for national adoption. As we 

continue to develop our agency anti-fraud strategy, the NAFC will measure and recommend 

necessary corrective action to ensure our initiatives achieve our stated objectives and goals. We 

will seek opportunities to prioritize those initiatives and activities through a risk based approach 

to mitigating the risk of program fraud. For example, as a result of the NAFC, we have 

expanded anti-fraud initiatives that have commenced in one region and expanded them to other 

locations. In short, the NAFC works to make sure our agency remains focused on improving our 

anti-fraud efforts, and communicates the importance of all employees reporting alleged fraud to 

OIG. 

Fraud Risk Assessment 

Recently, GAO issued an audit report titled SSA Disability Benefits: Comprehensive Strategic 

Approach Needed to Enhance Anti-fraud Activities. We agreed with GAO's recommendations 

and are moving forward to integrate those recommendations into our anti-fraud efforts. 

GAO recommended that we complete a comprehensive fraud risk assessment of SSA's disability 

program that is consistent with leading practices, ru1d develop a plan to regularly update the 

assessment. We will conduct frand risk assessments on our progrruns, beginning with the 

disability program this fiscal year. For example, we will be reviewing the disability process 

from the initial claim through the end ofthe adjudication process to identify possible 

vulnerabilities aJld detellJliJ1e, through data analysis, whether existing controls mitigate fraud 

1isk. Based on this assessmeut, we will develop a fraud risk management strategy for the 

disability program that is consistent with leading practices identified in the GAO report, ·'A 

Framework for Managing Fraud Risks in Federal Programs." 

GAO recommended we develop, document and implement an anti-fraud strategy that is aligned 

with our assessed fraud risks. We will prioritize and align the agency's anti-fraud strategy to 

outcomes of the fraud risk assessment focusing on disability, and the other programs we 

administer. We will ensure our fraud ris.k assessments are consistent with leading practices and 

develop a plan for regularly updating the assessments. We will identify and assess risks for 

likelihood and impact, and prioritize to address first those risks that yield the highest impact. 

3 
15 


33390A.008

GAO recommended we work with components responsible for implementing anti-fraud 

initiatives to develop outcome-oriented metrics, including baselines and goals, where 

appropriate, for antifraud activities. We are collaborating across all agency components, and 

with our OIG, to develop and implement outcome-oriented metrics, including baselines and 

goals, where appropriate, for anti-fraud activities. We have already requested input from our 

010 on new metrics that would more effectively measure our progress identifying and reducing 

fraud. 

GAO recommended we review progress toward meeting goals on a regular basis, and 

recommended that the NAFC make changes to control activities or take other corrective actions 

to any initiatives that are not meeting goals. As we identify new fraud risks, we will develop 

new anti-fraud activities to reduce and prevent fraud in the disability program. The NAFC will 

make changes to internal control activities or take other conective actions to any initiatives that 

are not meeting goals. 

We believe that integrating GAO's recommendations will further align our anti-fraud program 

with GAO's framework for managing fraud risks. 

SSA Anti-Fraud Efforts 

Fighting fraud is a multi-faceted effort, which is reflected in the tools we already use to fight 

fraud. Our anti-fraud efforts cover all Social Security programs, including disability, retirement 

and survivors, and enumeration. Below, I provide examples of our anti-fraud efforts relating to 

our disability programs. 

Employees on the Front Lines of Fighting Fraud 

In all of our anti-fraud efforts, our front-line employees remain au important line of defense in 

detecting and preventing fraud, and we remain conunitted to improving our anti-fraud training 

for these employees. Since 2014, we have required anti-fraud training for all agency and 

disability deternunation services (DDS) employees. The ammalmandatory national anti-fraud 

training ensures employees remain informed on the current and proper means to support the 

agency's efforts to detect and prevent fraud. When our field office employees and State 

disabiUty exalfliners uncover potential fraud , we instruct them to report all fraud allegations to 

the OIG Office of Investigations Field Division using the electronic refenal form. Our 

employees prevent fraud by promptly refetring allegations to oro for investigation, and assisting 

OIG by developing case information for fraud investigations. On average, our employees refer 

around 20,000 allegations relating to disability to OIG each year, more than what the OIG 

receives from all other sources. We also provide ad hoc training related to handling claims 

associated with third party facilitator disability fraud (including fraud schemes involving 

claimants' representatives, physicians, or government employees). While detecting fraud is not 

new to the agency, this mandatory training provides an overview of SSA's anti-fraud fighting 

efforts and strategies for identifying and repotting potential fraud. 

4 
16 


33390A.009

Fraud Prevention Units 

As part of the agency's focus on anti-fraud initiatives, we established Fraud Prevention Units 

(FPU) in 2014. FPUs are specialized fraud units of disability examiners dedicated to evaluate 

and act on probable fraud cases perpetrated through third pruty facilitators. FPU examiners also 

compile data from the cases to help us fmther develop analytical tools to identify potential fraud. 

Moreover, our employees in the FPUs serve a critical role in assisting OIG with its investigations 

and prosecutions of fraud cases. Our analysts conduct research, analyze, and evaluate 

information to support fraud investigations. They also develop recommendations for improving 

operational policy, procedures, and internal controls to prevent the recUirence of fraud. Through 

their review of medical documentation and evidence, we have identified a variety of different 

"potential fraud'' scenarios. ExlUllples include, but are not limited to, attorneys who rely on 

altered or fabricated medical opinions; psychiatrists who prepare template-style medical records, 

generic wording, exaggerated symptoms and limitations; and potentially fabricated medical 

records that clearly conflict with other medical sources in file. 

Special Assistant United States Attorneys Fraud Prosecution Project 

For more than a decade, in partnership with the Deprutment of Justice (DOJ), we have placed a 

number of attorneys from our Office of the General Counsel in several United States Attorney's 

Offices around the country to bring Federal criminal charges against individuals who defraud 

Social Security programs. These Special Assistant United States Attorneys (SAUSAs) have a 

focus and conunitment to seek the maximum punishment under the law for all persons who 

defraud Social Security. These attorneys are dedicated to Social Security fraud cases and have 

increased the number of prosecutions of violations of the Social Security Act. They obtain 

criminal sanctions, including imprisonment, and recover funds for the agency through criminal 

restitution and forfeiture. For example, SSA's fraud prosecutors in the U.S. Attomey's Office 

for the District of Puerto Rico were involved in prosecuting the case against third-party fraud 

facilitators involving a disability fraud scheme. 

The fraud prosecution project produces good outcomes. Since FY 2003, our fraud prosecutors 

have secured over $60 million in restitution and more than 1,000 convictions. During the first 

half of FY 2017, our SAUSAs successfully obtained at least 119 guilty pleas and convictions. 

This led to over $10.3 million in restitution, including more than $6.3 million in restitution to 

SSA. We are committed to maintaining our prior level of commitment with the SA USA 

program. 

Anti-Fraud Cmmnunications 

Our anti-fraud prevention efforts also involve communicating with the public about fraud, 

including communications with our beneficiaries and claimants. We are telling our customers, 

our employees, and the public at large, through multiple channels, that fraud is not tolerated and 

will be investigated and prosecuted. Since 2014, we have added language in millions of the 

notices we send to beneficiaries and claimants telling them to report any suspected fraud to our 

OIG and include the OIG fraud website and Fraud Hotline phone number. In addition, on our 

5 
17 


33390A.010

applications, and our redetennination and continuing disability review forms, we inform 

individuals that they provided infonnation to us under penalty of perjury and that they could be 

liable under law for providing false information. 

Further, our anti-fraud communications go beyond these direct communications with 

beneficiaries and claimants. For example, on a regular basis, we publish Social Security blog 

posts infonning the public about our anti-fraud efforts across our programs. Our public affairs 

specialists across the country regularly interact with groups, organizations, and individuals to 

promote our anti-fraud messaging and to provide such groups with SSA fact sbeets, posters, and 

other information that promote our strong anti-fraud message. Our website also contains 

information on how to report suspected fraud and examples of what we are doing to combat 

fraud. 

We also communicate regularly with our employees regarding their responsibility to refer all 

suspected fraud to the OIG for full investigation. At the national , regional and local levels, the 

OIG provides ongoing feedback to the agency on successful fraud prosecutions resulting from 

allegations referred by our employees. 

Anti-Fraud Data Analytics 

In addition to our commitment to engaging in fraud risk assessments, we continue to review 

national data for trends and fact pattems that suggest fraudulent activity. The use of data 

analytics enhances our fraud prevention and allows us to develop analytical tools to determine 

common characteristics and patterns of fraud. In addition to the fraud referrals initiated by our 

employees, we use these automated tools to help us uncover potential fraud or other suspicious 

behavior in the programs we administer. Since 2013, we bave successfully applied data aualytics 

to identify and prevent fraudulent activity in the electronic services business process. As we 

continue to expand our use of data analytics and technology to detect and prevent disability 

fraud, we are expanding on the use of predictive modeling to determine common characteristics 

and patterns of anomalous behavior based on known cases of fraud. We have completed proofs 

of concept using case characteristics identified in the New York and Puerto Rico conspiracies to 

help build new analytical models and to determine if those characteristics could identify 

potentially fraudulent transactions in other localities. 

An important initiative in enhancing our analytic capabilities to prevent fraud is the Anti-Fraud 

Enterprise Solution (AFES). The AFES will allow the agency to more accurately identify and 

take action on more difficult-to-identify high-risk transactions across our programs and 

processes, including disability, electronic services, retirement, SSI, and intemal employee 

systems. Notably, in disability cases, the AFES will help the agency to stop fraudulent 

transactions before payments are made. AFES will include five key features of anti-fraud 

management into our business process: I) data analytics, 2) incident management, 3) workflow 

management, 4) systems communications, and 5) business intelligence. This integrated system 

will provide a uniform platfonn and infrastmcture for advanced data analytics. It will also 

modernize our case management and workflow capabilities to allow OIG to conduct more 

efficient and timely inquiries and investigations of possible fraud incidents as we identify them. 

Ultimately, AFES will also enhance our ability to make data-driven anti-fraud decisions and 

6 
18 


33390A.011

better infonn stakeholders, such as this Subcommittee and the public, on the progress of our antifraud efforts. 

As part of the AFES development strategy, in December 2016 we procured ffiM's Counter 

Fraud Management software and have recently installed this software on our systems 

infrastructure. We will run the software in real-time as claims, including disability claims, are 

processed in order to prevent fraud by referTing suspicious claims for OIG investigation before 

adjudication. AFES will assess all claims to identify situations that appear to be similar to 

known fraud schemes or are otherwise considered to be high-risk. Trained employees in 

centralized units will review claims that raise flags before we authorize payments. The software 

will become more effective over time; as we identify new suspicious or fraud trends, we will 

continuously improve the ability of the software to identify such trends when reviewing claims. 

One of the first applications that will benefit from the AFES systems incident management, 

workflow management, and systems communications features is the redesign of the e lectronic 

form that employees use to refer potential program violations to OIG for fm1her investigation. 

As described above, currently our employees use an online electronic referral form, to report 

fraud allegations to the OIG. Integrating the fraud referral form into AFES will enhance our 

ability to identify interrelated claims and high-risk transactions across our programs. It will also 

modernize our workflow capabilities and assist OIG in conducting more efficient and timely 

inquiries and investigations of possible fraud. Integrating the fraud referral form into AFES will 

provide data to enhance our models quickly and make data-driven anti-fraud dec isions. Lastly, 

the redesign of the fraud referral form will better position SSA to comply with the Fraud 

Reduction and Data Analytics Act of2015. 

AFES is a multi-year, multi-phase effort that will replace and expand OAFP's cuJTent anti-fraud 

systems, processes, and models. The agency will use the outcome of the fraud risk assessmeor 

on disability to form our strategy to implement new analytical models to prevent fraud in the 

disability program. Future phases will follow in subsequent years to include all of the agency's 

service delivery processes. 

SSA Anti-Fraud EITorts Strengthened by New Legislative Provisions 

In addition to the steps we have taken to increase our anti-fraud capabjjjties, recently legislation 

has included provisions that enhanced and strengthened our on-going anti-fraud efforts. 

Cooperative Disability Investigations Units 

The Cooperative Disability Investigations (CD I) Program is a key anti-fraud initiative that plays 

a vital role in combating fraud and abuse within our disability programs. Chairman Johnson, and 

tltis Subcommittee, have long championed the CD! program, and we thank you for that support. 

Importantly, the CD! units prevent benefit payments from being made in cases involving fraud. 

CD! units consist of personnel from SSA, OIG, State DOSs, and state/local law enforcement, and 

they review initial disability claims and post-entitlement activities when our front-line employees 

suspect possible fraud. CD! units obtain evidence of material fact to resolve questions of fraud. 

7 
19 


33390A.012

A recent legislative provision now requires the agency to expand the CDI program to cover all 

States and Territories no later than October 1, 2022, subject to the availability of funding and 

participation of local law enforcement agencies. Currently, the CDI Program consists of 39 units 

that cover 33 states, the Commonwealth of Pue1to Rico, and the District of Columbia. With 

available agency funding and participation from local law enforcement, we will expand the 

number of CDI units needed to cover the 17 remainiJ1g States (and remaining Territories). We 

are currently slated to open one CDI unit in FY 2017, and will target implementation of two to 

four units per year thereafter until nationwide coverage is complete. 

During FY 2016, the CDI program reported approximately $268 million in projected savings to 

SSA 's disability programs and approximately $323 million to non-SSA programs, such as 

Medicare, Medicaid, housing assistance, and nutrition assistance programs. Moreover, since the 

program launched in FY 1998 through September 2016, CDI efforts contributed to 

approximately $3.5 billion in projected savings to SSA's programs, and approximately $2.4 

billion in projected savings to non-SSA programs. 

Exclusion of Certain Medical Sources of Evidence 

In addition, we appreciate the leadership of Chairman Johnson, and this Subcommittee, in 

bringing greater focus on excluding tainted medical evidence. Chai.Iman Johnson introduced a 

provision - now law - that provides that unless we find good cause to do so under our ntles, we 

will not consider evidence furnished by medical sources convicted of certain felonies, excluded 

from participation in Federal health care programs, or assessed with a CMP, assessment, or both, 

for submitting false evidence.1 It ensures that we continue to make our disability determination 

decisions based on the best available evidence from n11stworthy medical sources. 

To implement this provision, we published a final rule that was effective November 2, 2016 that 

requires excluded medical sources of evidence to inform us in writing of their exclusion(s) each 

tin1e they submit evidence to us that relates to a claim for Social Security disability benefits or 

payments. For those sources who do not inform us of their excluded status, where appropriate, 

we will refer them to our OIG for any action it deems appropriate, including i.IJVestigation and 

CMP pursuit. Moreover, prior to effectuating an allowance where a disability examiner has 

evaluated evidence under recent legislation, the case must first be sent to our quality component 

to ensure proper application of such legislation. We are also working to add automated matching 

to identify these sources and their evidence. 

New and Stronger Civil Monetary Penalties 

1 GAO bad previously recommended that "[l]o address the potelllial risks associated with medical evidence 

submined by sanctioned physicians, SSA should evaluate the threal posed by this information and , if wananted. 

consider changes 10 its policies and procedures." See GA0-15-19, SSA Disability Benefits: Enhanced Policies and 

Managemem Focus Needed 10 Address Potemial Physician-Assisted Fraud (Nov. 2015). We would noce that section 

812 or the Bipanisan Budget Act or 20 15, which generally prohibits consideration of evidence by sanctioned 

medical providers. addresses the GAO reconuneudation. 

8 
20 

f 


33390A.013

People, including third party facilitators, who commit fraud against our programs may be 

assessed civil monetary penalties for their actions, as well. Recent legislation also increased the 

penalty for conspiracy to commit Social Security fraud and certain offenses committed by people 

who violate positions of tmst, such as doctors and lawyers submitting false medical evidence, 

and current and former Social Security employees. 

Conclusion 

As good stewards of our resources and the Social Security Trust Funds, and SSI program dollars, 

it is our duty to work aggressively to prevent and detect fraud and recover the overpayments 

from the fraud. We have a comprebensive and integrated anti-fraud program. We are working 

to increase prevention through advanced predictive analytics. We will continue 10 measure our 

progress. 

We appreciate this Subconunittee's assistance in these efforts and stand ready to work with 

Congress to maintain the pnblic 's trust and confidence in our very important social insurance 

programs. We also appreciate GAO's comprehensive review and analysis of our work in this 

area, and look forward to implementing GAO's helpful recommendations as we embark on a 

fraud risk assessment analysis of our disability programs. 

As a critical reminder, everyone can play a key role in protecting his or her investment in Social 

Security. When members of the public suspect fraud , we ask that they report it to OIG. OIG 

evaluates every allegation of fraud and, for those cases where it determines fraud has occurred, 

aggressive ly pursues the case. II is easy to report fraud online by visiting OIG's Fraud, Waste, 

and Abuse page at http://oig.ssa.gov/repmt , or by telephone through OIG's Social Security Fraud 

Hotline at 1-800-269-0271. 

9 
21 

Chairman JOHNSON. Have you seen any decrease in it lately? 

Mr. BRUNE. Decrease in fraud? I think our efforts are positioned 

to mitigate the evolving fraud risk. 

Chairman JOHNSON. Good. 

Mr. Bagdoyan, you are recognized. 

STATEMENT OF SETO J. BAGDOYAN, DIRECTOR, FORENSIC 

AUDITS AND INVESTIGATIVE SERVICE, GOVERNMENT ACCOUNTABILITY OFFICE 

Mr. BAGDOYAN. Thank you, Mr. Chairman. Chairman Johnson, 

Ranking Member Larson, and Members of the Subcommittee, I am 

pleased to appear before you this morning to discuss GAO’s new report on SSA’s antifraud activities in its disability insurance programs, whose expenditures total over $200 billion a year to about 

19 million recipients. 

Given their scope and scale, these programs are inherently risky 

and vulnerable to fraud, and recent cases, like the ones you mentioned, Mr. Chairman, highlight schemes through which individuals fraudulently obtained hundreds of millions of dollars in disability benefits. 

Today I will highlight three key takeaways from this report. 

First, SSA has taken some steps to establish an organizational culture and structure conducive to fraud risk management in its disability programs. Specifically, SSA instituted mandatory antifraud 

training, established a centralized antifraud office to coordinate 

and oversee the agency’s fraud risk management activities, and 

communicated the importance of such efforts. 

These actions are generally consistent with GAO’s fraud risk 

framework, a copy of which is right by my side here, a set of leading practices intended to guide Federal program managers when 

developing antifraud activities in a strategic way. However, SSA’s 

antifraud office, the Office of Anti-Fraud Programs, or OAFP, faces 

challenges establishing itself as the coordinating body for the agency’s antifraud initiatives. For example, the OAFP has had multiple 

acting leaders, though SSA recently appointed a permanent leader 

to provide accountability for the agency’s antifraud activities. 

Second, SSA has taken initial steps to identify and address fraud 

risks in its disability programs, but has as yet to comprehensively 

assess these risks or develop a strategic approach to help ensure 

its antifraud activities effectively mitigate these risks. Over the 

last year, SSA gathered information about fraud risks, but these efforts generally have not been systematic and did not assess the significance, likelihood, or impact of all risks that were identified. 

SSA also has several prevention and detection activities in place 

to address known fraud risks in its disability programs, such as 

fraud examination units, which review disability claims to help detect fraud perpetrated by third parties. Further, SSA has not developed and documented an overall antifraud strategy that aligns its 

antifraud activities to its fraud risks. Leading practices call for 

Federal program managers to conduct periodic fraud risk assessments and develop a strategy to address identified fraud risks. 

Without conducting a fraud risk assessment that aligns with 

leading practices and developing an antifraud strategy, SSA’s disability programs likely remain vulnerable to new fraud schemes, 

22 

and the agency will not be able to effectively prioritize its risks and 

related antifraud activities. 

Third, SSA monitors its antifraud activities through the OAFP 

and its advisory body, the National Anti-Fraud Committee, but the 

agency does not have effective performance metrics to evaluate the 

impact of such activities. The OAFP has responsibility for establishing performance and outcome-oriented goals for them. It collects metrics to inform reports about its antifraud initiatives, and 

the NAFC receives regular updates about antifraud initiatives. 

However, the comprehensiveness and relevance of the metrics 

varies across initiatives, and some initiatives do not have any 

metrics. Of the 17 initiatives listed in SSA’s 2015 antifraud report, 

ten had metrics that did not focus on outcomes and four did not 

have any metrics. For example, SSA lacks a metric to help monitor 

the effectiveness of its fraud examination units. Leading practices 

in fraud risk management call for managers to monitor and evaluate antifraud initiatives, with a focus on measuring outcomes. 

Without outcome-oriented performance metrics, SSA may not be 

able to evaluate its antifraud activities, review progress, and determine whether changes are necessary. 

In closing, I would underscore that it is essential for SSA to place 

a high policy priority on deploying effective preventative processes 

and controls to help narrow the window of opportunity for fraudulent activity in its disability insurance programs and safeguard the 

government’s substantial investment in these programs. Fully and 

timely implementing the four recommendations in our report would 

be essential in this regard. 

Chairman Johnson, that concludes my remarks. I look forward to 

the Subcommittee’s questions. 

[The prepared statement of Mr. Bagdoyan follows:] 

23 


33390A.014

For Release on Delivery Expected at 1 0 a.m . ET 

Wednes<lay. April 26, 2017 

GA0·17-585T 

United States Government Accountability Office 

Testimony 

Before the Subcommittee on Social 

Security, Committee on Ways and 

Means, House of Representatives 

SSA DISABILITY 

BENEFITS 

Antifraud Efforts Need a 

Comprehensive Strategic 

Approach 

Statement of Seto J. Bagdoyan, Director 

Forensic Audits and Investigative Service 
24 


33390A.015

Chairman Johnson, Ranking Member Larson, 

and Members of the Subcommittee: 

I am pleased to be here today to discuss the Social Security 

Administration's (SSA) approach to managing fraud risks in its disability 

programs. SSA provides cash benefits through two main programs to 

millions of Americans with disabilities who are unable to work: Disability 

Insurance (01) and Supplemental Security Income (SSI). Collectively, 

payments from these programs were about $200 billion in fiscal year 

2015. Although the extent of fraud in these programs is unknown, highprofile cases have highlighted instances in which individuals fraudulently 

obtained benefits. For example, according to a report from SSA's Office 

of the Inspector General (OIG), over 70 individuals in New York pled 

guilty in 2014 to participating in a conspiracy to obtain at least $14 million 

in fraudulent SSA disability benefits. 01 and SSI are on the Office of 

Management and Budget's list of programs designated as high risk for 

improper payments, which include, but are not limited to, payments made 

as a result of fraud. 

Today, we are publicly releasing a report that addresses SSA's actions to 

manage fraud risk in its disability programs and the extent to which these 

actions align with leading practices.' My statement highlights the key 

findings and recommendations from that report. Specifically, my 

statement discusses SSA's actions for managing fraud risks in its 

disability programs and the extent to which these actions align with 

leading practices for (1) establishing an organizational culture and 

structure conducive to fraud risk management, (2) identifying, assessing, 

and addressing fraud risks in its disability programs, and (3) monitoring 

and evaluating its fraud risk management activities. 

To identify and examine SSA's actions, we reviewed SSA documents 

inCluding annual antifraud reports, operational guidance, and prior SSA 

OIG and GAO reports. We also interviewed SSA officials from across the 

agency's headquarters including those in the Office of Anti-Fraud 

Programs (OAFP). In addition, we interviewed staff in all three of SSA's 

fraud examination units? To assess SSA's actions, we compared them 

with leading practices identified in our July 2015 A Framework for 

1

GAO. SSA 0/sabiOty Benefits: Comprehensive Strategic Approach Noe<iod to Enhance 

Antifraud Activities. GA0·11·228 (Washirogtoo, D.C.: April17, 2017). 

2

SSA refers to these units as rravd prevention units. 

Page 1 GA0-17-585T 
25 


33390A.016

Managing Fraud Risks in Federal Programs (Fraud Risk Framework).3 In 

add~ion, we assessed SSA's actions against federal internal control 

standards such as those related to managing fraud risks.• The report 

being released today includes further details about our methodology. Our 

work was performed in accordance with generally accepted government 

auditing standards. 

With respect to the first set of leading practices. we found that SSA has 

taken steps to establish an organizational culture and structure that are 

conducive to managing fraud risks in its disability programs. but some 

efforts are relatively recent. The agency has demonstrated a senior-level 

commitment to combating fraud in its disability programs and has worked 

to involve all levels of the agency in setting an antifraud tone. For 

example, in April 2014, SSA reestablished the National Anti-Fraud 

Committee (NAFC) to provide support for national and regional antifraud 

activities.• The NAFC is composed of deputy commissioners from across 

the agency and other SSA executives who meet at least quarterly, which 

helps to demonstrate a senior-level commitment to combating fraud-one 

of the Fraud Risk Framework's leading practices.• The NAFC invites 

regional staff to its regular meetings and to an annual conference to 

report on the progress of SSA's antifraud initiatives, which helps involve 

multiple levels of the agency in setting an antifraud tone. SSA also 

demonstrated a commitment to combating fraud at all levels of the 

agency when it implemented the first annual mandatory antifraud training 

in 2014 for all SSA and Disability Determination Services (DDS) staff. 

According to SSA officials, 97 percent of SSA employees and all DDS 

employees except for those on extended leave completed the annual 

antifraud training in 2016. 

SSA further demonstrated a commitment to antifraud efforts when it 

established the OAFP in November 2014. The OAFP is responsible for 

coordinating antifraud efforts, developing antifraud policies, and creating 

and implementing fraud mitigalion plans across SSA. among other things. 

3

GAO. A Framewotl< for Managing Fraud Risks In Federal Progroms. GA0.15-593SP 

(Washington. D.C.: July 2015). 

4

GAO, Standards for lntemal Control in the Fedora/ Govemm6nt, GA0.14·704G 

(Washington. D.C.: September 2014). 

srhe NAFC was fO<med in 1996 b<lt met on an ad hoc basis from September 2003 to 

Marcll2014. 

61n fiscal year 2016. for example. the NAFC met seven times. 

Pago2 
26 


33390A.017

These responsibilities are consistent with leading practices. According to 

the Fraud Risk Framework, agency managers can show commitment to 

combating fraud by creating a structure with a dedicated entity to lead 

fraud risk management activities and coordinate antifraud initiatives 

across the agency. In addition, leading practices call for the designated 

antifraud entity to, among other things. serve as the repository of 

knowledge on fraud risks and controls and lead or assist with trainings 

and other fraud-awareness activities. Since the OAFP was established, 

the office has performed several of these activities. For example, the 

OAFP has taken steps to coordinate antifraud initiatives across SSA by 

gathering information about progress on the initiatives, and has helped 

create antifraud training materials for the agency. 

Although these and other actions are generally consistent with leading 

practices in fraud risk management, the OAFP faced challenges during its 

first 2 years to fully establish itself within the agency. Specifically, the 

OAFP faced challenges related to a lack of consistent leadership and 

established institutional relationships. However, recent actions. if 

sustained, may help to address these challenges: 

Lack of consistent leadership: Until recently, the OAFP had not had a 

permanent leader who provided accountability for the agency's 

antifraud initiatives. When the OAFP was established, SSA 

designated the OAFP associate commissioner as the agency's chief 

fraud prevention officer. According to SSA officials, from the summer 

of 2015 until September 2016, two Senior Executive Service (SES) 

candidates served successive 6-month periods as the OAFP's acting 

associate commissioner. In September 2016, a third SES candidate 

was appointed as the acting associate commissioner of the OAFP. 

Upon confirmation as a member of the SES. he became the OAFP's 

permanent associate commissioner and assumed the role of SSA's 

chief fraud prevention officer in October 2016. according to SSA 

officials. 

Lack of established institvtional relationships: The OAFP is a relatively 

new, small office that is still building relationships and establishing its 

role across the agency for which it is charged with overseeing fraud 

risk management efforts. According to SSA officials, the process of 

building relationships across the agency will likely require additional 

time to become more fully implemented. The OAFP is relatively small 

compared with the size and complexity of SSA's 11 components. In 

fiscal year 2016, the OAFP had approximately 60 full-time equivalent 

staff, who were in charge of coordinating antifraud initiatives, among 

other tasks. across SSA, whiCh employs over 60,000 full-time 

Pago3 
27 


33390A.018

equivalent staff, excluding DDS staff. The OAFP is also in the process 

of overcoming perceptions of mission overlap. For example, according 

to SSA officials, there were initial concerns about the OAFP's role in 

identifying potential fraud overlapping with the OIG's role in 

investigating potential fraud. In August 2015, the Acting 

Commissioner of SSA approved a memo to components across the 

agency including the OIG that clarified the function and 

responsibilities of the OAFP. 

With respect to the leading practices for identifying, assessing, and 

addressing fraud risks-the second area we addressed in our report-we 

found that SSA has undertaken efforts over the last year to identify fraud 

risks in its disability programs but has not comprehensively assessed the 

identified risks. For example, in spring 2016, SSA engaged a contractor to 

develop a fraud risk assessment methodology that could be refined and 

updated over lime and to conduct a pilot study of fraud risks in SSA's 

disability programs by applying the risk assessment method. However, 

this effort was not intended to be a comprehensive fraud risk assessment, 

according to SSA officials. Leading practices in fraud risk management 

call for the agency's designated antifraud entity to lead fraud risk 

assessments and plan to conduct updated assessments on a regular 

basis. In planning the fraud risk assessment, leading practices call for 

managers to tailor the fraud risk assessment to the program by, among 

other things, identifying appropriate tools, methods, and sources for 

gathering information about fraud risks and involving relevant 

stakeholders in the assessment process. Fraud risk assessments that 

align with leading practices involve ( 1) identifying inherent fraud risks 

affecting the program, (2) assessing the likelihood and impact of those 

fraud risks, (3) determining fraud risk tolerance, ( 4) examining the 

suitability of existing fraud controls and prioritizing residual fraud risks, 

and (5) documenting the results.' 

SSA plans to assess fraud risks, but it is unclear when or how an 

assessment of its disability programs will occur and whether it will follow 

leading practices.• SSA's antifraud plans for 2016 to 2018 include an 

objective to conduct regular fraud risk assessments but do not specify 

7

GA0.15-593SP. 

*ln April2015. SSA's OIG reoommended that SSA conduct a fraud risk assessment. 

SpeCifically, lhe OIG l'eQOmmended that SSA take a risk-based approach to combating 

fraud, weighing the qualitative and quantitative impacts of various fraud risks on the 

organization's reputation, finances. and operations. SSA agreed but as of January 2017, 

had not yet addressed the recommel')(lation. 
28 


33390A.019

which programs will be included. In addition, it is uncertain when or how 

SSA will conduct these assessments because the plans do not describe 

interim steps or specific time frames. Further, it is not clear which agency 

stakeholders will be involved in the process or what specific tools, 

methods, and sources SSA will use to gather information about fraud 

risks. SSA's plans state that it will use information produced by its dataanalytics system to assist with its risk assessments but this data-analytics 

system is in the early stages of development and it may be years before 

the system produces information on disability fraud schemes and trends 

that could be incorporated into a fraud risk assessment.• According to a 

senior OAFP official, the risk-assessment effort is on hold because the 

OAFP is focusing its staff resources on developing its data-analytics 

system. However, information on the relative likelihood and impact of 

fraud risks identified through a fraud risk assessment can help ensure 

that the data-analytics system is appropriately targeted and that the 

OAFP's resources are focused on SSA's most significant fraud risks. 

Moreover, although SSA has several control activities that seek to 

prevent, detect, and respond to fraud in its disability programs, it has not 

developed and documented an antifraud strategy to guide its design and 

implementation of these activities and help ensure it has sufficient and 

appropriate controls in place to mitigate its most significant fraud risks. as 

called for in leading practices. SSA's antifraud activities include. among 

other things, specialized units that investigate potential disability fraud 

and antifraud communications to the public. In addition, after large-scale 

fraud schemes in SSA's New York region highlighted the possibility that 

third parties could facilitate fraud against SSA, the agency established 

fraud examination units in 2014 to help detect these types or fraud 

schemes in the future. SSA has other program integrity activities that can 

help detect potential fraud in its disability programs. although these 

activities were not designed for this specific purpose. For example, SSA 

performs analytics to prevent and detect suspicious online transactions, 

such as unusual direct deposit requests. ' 0 According to SSA officials, in 

fiscal year 2016. SSA reviewed over 29,000 suspicious online 

transactions and referred 1.460 of those transactions to the OIG. Some of 

9A$ noted in our Fraud Risk Framework. managers can use data on fraud schemes and 

trends from monitoring and detectiOn activities-suCh as data-analytic$ systems-to help 

identify fraud risks. Managers may also conduct interviews. hold brainstorming sessions. 

or use surveys to gather information on fraud risks. GA0-15·593SP. 

10tndividuals receiving certain SSA benefits-including retirement and Ol-ean use SSA·s 

online services to start or c::hange drtect deposit of their benefits. among other things. 

Pagos 
29 


33390A.020

these transactions may involve disability benefits. SSA has reported on 

the status of its antifraud initiatives and has a plan that includes high-level 

goals and objectives for managing fraud risks. However, it is unclear if 

SSA's antifraud initiatives are targeting the most significant fraud risks in 

SSA's disability programs because SSA has not developed or 

documented an antifraud strategy that aligns antifraud activities to its 

most significant fraud risks. 

With respect to the leading practices for monitoring and evaluating 

activities-the third area we addressed in our report-we found that SSA 

monitors its antifraud activities for its disability and other programs 

through the OAFP and NAFC, but the metrics SSA uses do not enable 

effective monitoring and evaluation. According to SSA documents, the 

OAFP is responsible for monitoring SSA's antifraud activ~ies and 

establishing performance and outcome-oriented goals for them. The 

OAFP receives updates from the components that are responsible for 

each antifraud initiative and has shared these updates with the NAFC 

through periodic meetings and with Congress through reports about 

SSA's antifraud initiatives. However, we found that SSA does not track 

most of its antifraud initiatives via outcome-oriented me tries to help the 

agency regularly measure progress in achieving targets. Of the 17 

ongoing initiatives listed in SSA's 2015 antifraud initiatives report, we 

found that 10 had metrics that were not outcome-oriented, and 4 did not 

have any metrics. For example, the percentage of staff trained in fraud 

detection and prevention methods (an output) is listed as a metric of the 

antifraud training initiative, but SSA does not evaluate the outcomes 

associated with those trainings such as the change in particular behaviors 

following the trainings (e.g., the number of referrals to the OIG about 

schemes covered during the trainings). In addition, the 2015 report lists 

the fraud examination units and fraud case reviews as initiatives but does 

not include metrics for either. Further, the majority of antifraud initiatives 

do not provide targets against which to measure performance and track 

progress relative to a baseline. 

SSA recognizes the importance of monitoring, but it is unclear how it 

plans to evaluate its antifraud activities and adapt them if necessary. We 

have previously reported that agencies may face challenges measuring 

outcomes of fraud risk management activities in a reliable way. These 

challenges include the difficulty of measuring the extent of deterred fraud, 

isolating potential fraud from legitimate activity or other forms of improper 

Pago6 
30 


33390A.021

payments, and determining the amount of undetected fraud." However. 

as described in the Fraud Risk Framework, managers can gather 

additional information on the short-term or intermediate outcomes of 

some antifraud initiatives, which may be more readily measured than 

ultimate benefits. For example, although SSA does not have a metric to 

monitor the fraud examination units or to evaluate their effect on fraud. it 

is possible for SSA to identify more immediate outcomes such as the 

number of potential fraud patterns that the units uncover while reviewing 

disability claims that may involve third-party fraud'2 Although SSA's 

antifraud strategic plan for 2016 to 2018 highlights the importance of 

monitoring to help strengthen fraud risk management activities. it does 

not include specific steps for monitoring its antifraud initiatives. Identifying 

performance metrics, including baselines and targets as appropriate, and 

requiring additional information from the responsible components on 

progress made would help the OAFP and NAFC better monitor whether 

SSA is achieving its antifraud goals. Without this information, the OAFP 

and NAFC may not be able to determine whether SSA's antifraud 

activities are operating effectively or determine whether changes are 

necessary. 

In conclusion, although many of SSA's actions are consistent with leading 

practices and demonstrate a commitment to managing fraud risks, gaps 

exist in the agency's fraud risk assessment, corresponding strategy 

design, and monitoring of antifraud activities. Despite some foundational 

efforts such as piloting a method for conducting future assessments, until 

it conducts a thorough, systematic assessment of its fraud risks. SSA will 

lack robust information on the risks that may most affect the integrity of its 

disability programs. As a result, SSA may be using its resources to 

combat fraud schemes that are unlikely to materialize or that have a 

relatively minimal effect on SSA's finances or reputation. Although SSA 

plans to assess fraud risks, it is unclear when an assessment of its 

disability programs will occur and whether it will reflect leading practices. 

Absent a comprehensive fraud risk assessment that aligns with leading 

practices and is regularly updated, SSA will not be equipped to address 

the fraud schemes that are considered to be the most significant before 

they occur. imil a~y. without developing, documenting, and implementing 

11GA0-15-593SP. 

12

1n addition to reviewing di$8bility claims to help uncover potenti.a1 fraud schemes. the 

fraud examination units reevaluate disability claim decisions that could have been tainted 

by knOwn fraud sChemes. 
31 


33390A.022

a comprehensive antifraud strategy that builds on a comprehensive risk 

assessment, as called for by leading practioes, SSA cannot ensure that 

its antifraud control activities are targeted to its fraud risks, and therefore 

may be using its resources for program integrity efforts inefficiently. 

Further, without establishing outcome-oriented metrics and then regularly 

reviewing progress toward meeting these goals, the OAFP will not be 

able to detenmine whether the agency's antifraud control activities are 

working as intended. 

In the report that we publicly released today, we make several 

recommendations to address gaps In SSA's management of fraud risks. 

Specifically, we recommend that the Acting Commissioner of SSA direct 

the OAFP to take the following four actions for its disability programs: 

lead a comprehensive fraud risk assessment that is consistent with 

leading practices, and develop a plan for regularly updating the 

assessment; 

develop, document, and implement an antifraud strategy that is 

aligned to its assessed fraud risks; 

work with components responsible for implementing antifraud 

initiatives to develop outcome-oriented metrics, including baselines 

and goals, where appropriate for antifraud activities; and 

review progress toward meeting goals on a regular basis, and 

recommend that the NAFC make changes to control activities or take 

other corrective actions on any initiatives that are not meeting goals. 

In reviewing a draft of the report, SSA agreed with our recommendations 

and emphasized its commitment to preventing and detecting fraud. 
32 


33390A.023

GAO Contact and 

Staff 

Acknowledgments 

C101t2S) 

Chairman Johnson, Ranking Member Larson, and Members of the 

Subcommittee, this concludes my prepared remarks. l would be happy to 

answer any questions that you may have at this time. 

For further Information regarding this testimony, please contact Seto J. 

Bagdoyan, (202) 512-6722 or bagdoyans@gao.gov. In addition, contact 

points for our Offices of Congressional Relations and Public Affairs may 

be found on the last page of this statement. Individuals who made key 

contributions to this testimony are Cindy Brown Sames (Director), Tonita 

Gillich (Assistant Director), Holly Dye, Erin Godtland, Joel Green, and 

Erin Mclaughlin. 

Page 9 GA0-17-S85T 
33 


33390A.024

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33390A.025

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35 

Chairman JOHNSON. Thank you, sir. I appreciate that. 

As is customary, for each round of questions, I will limit my time 

to 5 minutes and will ask my colleagues to also limit their questioning time to 5 minutes as well. 

Mr. Brune, a longstanding frustration of mine is how hard it has 

been for Social Security to get some of its fraud cases prosecuted. 

What is Social Security doing to make sure that the cases get prosecuted and what role do Social Security Special Assistant U.S. Attorneys play? 

Mr. BRUNE. Chairman Johnson, thank you for the question. For 

over a decade, in partnership with the Department of Justice, we 

have placed dozens of our attorneys from the Office of General 

Counsel in several United States Attorney’s Offices around the 

country to bring Federal criminal charges against individuals who 

defraud Social Security. 

These Special Assistant U.S. Attorneys (SAUSAs) are dedicated 

to Social Security fraud cases, and they have increased the number 

of prosecutions. During fiscal year 2017 in the first 6 months of the 

fiscal year, our SAUSAs, as was in my written statement, obtained 

at least 119 guilty pleas, leading to over $10.3 million in restitution. I believe those are the outcome-oriented metrics that Mr. 

Bagdoyan is encouraging us to employ. We look to advance more 

outcome-oriented metrics. We agree with the GAO recommendation. 

In addition to the SAUSA program, the Special Assistant U.S. 

Attorney program, our Office of Inspector General refers fraud 

cases to the U.S. Attorney’s Office, even in jurisdictions without 

fraud prosecutors, and is able to obtain convictions in those jurisdictions when the cases meet the Office’s criteria for prosecution. 

Chairman JOHNSON. It is up to the U.S. Attorney if they want 

to have a Special Assistant U.S. Attorney, and it sounds like you 

are offering up free labor to U.S. Attorneys. Why don’t all of them 

take you up on it? 

Mr. BRUNE. Well, I would defer to the Department of Justice on 

that question. We believe the partnership has been very successful. 

We are committed to continuing the Special Fraud Prosecution 

Project. 

Chairman JOHNSON. Thank you. Mr. Brune, it sounds like your 

new antifraud software should quickly identify fraud so we don’t 

have more of these multimillion dollar fraud schemes, and that is 

a good thing, but when the time comes to get DOJ to prosecute, is 

it going to be harder to get them to take on a case when the dollars 

aren’t as big? In my view, even $1 of fraud is a dollar too much. 

Mr. BRUNE. Chairman Johnson, we agree. One dollar of fraud 

is a dollar too much. Our stated position for a long time has been 

we have a zero tolerance for fraud. 

Relative to your question, we believe that fraud prosecution is 

important. It occurs after the fact. Our efforts are interested in continuing the prosecution of folks who defraud the program, but to 

increase our preventative activities. In that regard, in my written 

statement I mentioned the Anti-Fraud Enterprise Solution. This 

tool will help us to focus our limited resources on the cases that 

have the highest risk, that are, in fact, those third-party facilitator 

36 

cases, and hopefully we will be able to identify them both quicker 

and take more prompt action because of the analytics that we run. 

Chairman JOHNSON. Is there anything you need from the Congress to make sure DOJ is prosecuting fraud cases that you identify? 

Mr. BRUNE. At this point, I think we have an excellent ongoing 

rapport with the Department of Justice. We are committed to 

maintaining our program and making sure that the Special Assistant U.S. Attorneys are positioned to prosecute the cases. 

Chairman JOHNSON. Thank you. 

Mr. Larson, you are recognized. 

Mr. LARSON. Thank you, Mr. Chairman. 

Mr. Brune, the Social Security Administration has about 61,700 

employees right now, which is down from over 67,000 in 2010. That 

is approaching a 10 percent loss. Is that correct? 

Mr. BRUNE. Approximately, yes. 

Mr. LARSON. Social Security has many more beneficiaries today 

than it did in 2010. Right now there are about 61 million people 

receiving their earned benefits, roughly 7 million more than in 

2010. That is about a 13 percent increase. Would you agree with 

that? 

Mr. BRUNE. With my quick math, yes, that is about accurate. 

Mr. LARSON. Yeah. My quick math and yours are about the 

same, so, yes. 

Mr. BRUNE. The numbers are the numbers. 

Mr. LARSON. And at the same time, the Social Security Administration’s basic operating budget has fallen by 10 percent since 

2010 after adjusting for inflation. So you have less money, but have 

to serve more people. Is that a fair statement? 

Mr. BRUNE. Our beneficiary rolls have grown, yes. 

Mr. LARSON. So, Mr. Chairman, I would like to submit for the 

record this analysis of SSA’s budget numbers by the Center on 

Budget and Policy Priorities, with the Chairman’s permission. 

Chairman JOHNSON. Without objection. 

[The submission of the Honorable Mr. Larson follows:] 

37 


33390A.026

Center on Budget and Policy Priorities 

Budget Cuts Squeeze Social Security Administration Even as Workloads Reach Record Highs 

Kathleen Romig 

June 3, 2016 

The Social Security Administration's (SSA) core operating budget has shrunk by 10 percent since 

2010 after adjusting for inflation, even as the demands on SSA have reached all-time highs as 

the baby boomers have aged into their peak years for retirement and disability. Budget cutting 

-due mostly to the 2011 Budget Control Act's (BCA) tight appropriations caps, as further 

reduced by sequestration- has lowered SSA's operating budget from an already low 0.9 

percent of overall Social Security spending to just 0. 7 percent, forcing the agency to do more 

with significantly less (see Figure 1).121 The cuts have hampered SSA's ability to perform its 

essential services, such as determining eligibility in a timely manner for retirement, survivor, 

and disability benefits, paying benefits accurately and on time, responding to questions from 

the public, and updating benefits promptly when circumstances change. 

FIGURE 1 
38 


33390A.027

SocIa I Sec u rlty AdmIn lstratlo n 

Faces Increased Workload 

with Fewer Resources 

Percent change since 2010 

-10% 

SSA core 

operating 

budget 

-5% 

SSA 

staff 

12% 

Disability Social 

decisions Security 

appealed beneficiaries 

Note: Figures compare 2010 to latest available (2016 for 

operating budget. 2015 for everything else) 

Source: Social Security Administration 

l"ENTr::R ON BUDGET AND POLICY PRIORITIES CBPPORG 

As a result, SSA's track record of exemplary customer service has suffered: 

• Budget cuts forced SSA to impose a hiring freeze in 2011, which led to a deterioration in SSA 

phone service that the agency has only partially reversed. In 2016, the average caller to SSA's 
39 


33390A.028

800 number can expect to spend over 15 minutes on hold, and nearly 10 percent of callers will 

receive busy signals. 

The cuts also affected SSA field offices, where people can apply for benefits, replace lost Social 

Security cards, or report name changes (due to a marriage or divorce, for example). SSA has 

closed 64 field offices and 533 mobile offices since 2010 and reduced hours at remaining 

offices. Before the budget cuts, more than 90 percent of applicants could schedule an 

appointment within three weeks; by 2015, fewer than half could. 

During the Great Recession, the number of Disability Insurance {DI) applications- and 

rejections- rose dramatically, yet SSA lacked the resources to keep up with appeals from 

rejected applicants. The average wait for a hearing rose from 360 to 540 days between 2011 

and 2016. The number of applicants awaiting a hearing has risen to over 1 million, an all-time 

high. 

Lack of adequate staff forced SSA to delay critical behind-the-scenes work necessary to pay 

benefits accurately and on time, such as awarding widows' benefits when their spouses die and 

adjusting benefits for early retirees and disabled workers with earnings. Beneficiaries wait an 

average of four months for SSA to complete these tasks. 

One of the nation's most popular and effective programs, Social Security provides a foundation 

of income on which workers can build for their retirement, as well as valuable social insurance 

protection both to workers who become disabled and to families whose breadwinner 

dies. Beneficiaries earn their Social Security benefits by working and paying Social Security 

payroll-tax contributions. Over 59 million retirees, disabled workers, survivors, and their 

families receive these benefits each year - a number that has grown by 6 million in just the 

past five years.i31 

Nearly every American comes to SSA at some point - either in person, on the phone, or 

through its expanding online services - and they do so at the best and worst moments of their 

lives. They use SSA services when they have a baby, get married, or start a new job. They 

depend on SSA staff to help them when they face a life-altering disability, the death of a spouse 

or parent, or decisions about financing their retirement years. They expect excellent service 

and - importantly - they have paid for it. The money used to administer Social Security 

comes from workers' contributions to Social Security, but only to the extent that Congress 

allows SSA to spend it.I•J 

Throughout most of its history, SSA has had a reputation, both within and outside the agency, 

for administrative excellence. 

Social Security Advisory Board, 1999 

Failing to invest in customer service is penny-wise and pound-foolish. As then-Social Security 

Commissioner Michael Astrue, appointed by President George W. Bush, told the Senate in 

2012, "At some point, we will have to handle every claim that comes to us, every change of 
40 


33390A.029

address, every direct deposit change, every workers' compensation change, every request for 

new or replacement Social Security cards. The longer it takes us to get to this work, the more it 

costs to do." 

SSA's administrative budget is one of many important priorities covered by the appropriation 

bill for the Departments of labor, Health and Human Services (HHS), and Education, which has 

faced large cuts since 2010. 1

51 Congress should provide sufficient funding for all of the 

essential work in that bill -not just SSA's essential services, but also urgent new initiatives 

such as responding to the Zika outbreak and the opioid epidemic. 

Amid Hiring Freeze, SSA's Phone Service Deteriorated 

SSA's national toll-free telephone number serves as the gateway to the agency's services, 

fielding 37 million calls in 2015. 1

61 Trained agents at 27 teleservice centers provide services 

such as answering questions about SSA's programs, taking claims for retirement benefits, and 

setting up appointments. Callers can also access automated services on the 800 number 24 

hours a day. 

When the teleservice centers are adequately funded and staffed, SSA's 800 number performs 

well. However, starting in 2011, budget cuts forced SSA to freeze hiring, and the teleservice 

centers lost many agents through attrition. In just three years, SSA lost more than 15 percent 

of its 800 number staff.171 Wait times and busy rates spiked (see Figure 2). lSI In 2014, wait 

times peaked at over 22 minutes and busy rates at 13 percent. After a small funding increase in 

2014 enabled SSA to replace some of the agents lost during the hiring freeze, service began to 

rebound -though it remains well below previous levels.1

91 

When SSA's 800 number doesn't work well, problems surface elsewhere. Callers unable to 

reach agents quickly are more likely to call or visit field offices, which is more time-consuming 

for the beneficiary and costlier for the agency. This inefficiency doesn't serve beneficiaries, the 

agency, or taxpayers well. 

FIGURE 2 
41 


33390A.030

Funding Cuts Undermined Social Security 

Administration Phone Service 

25minutes 

20 

15 

10 

5 

0 

2010 

Average wait time on SSA's 800 number 

2011 2012 2013 2014 2015 2016. 

Percent of calls receiving busy message when requesting agent service 

15% 

12 

9 

6 

3 

0 

'Estimate 

Source· Social Security Admlnlstratlon 

CENTER ON BUDGET AND POLICY PRIORITIES I CBPP.ORG 
42 


33390A.031

Cuts in Staff and Hours Force Field Office Clients to Wait 

The public can conduct business at SSA field offices in almost every community in America. 

Social Security field staff assisted 41 million visitors in 2015.1101 People visit field offices for 

many reasons, including to apply for benefits, report changes in their names, or replace lost 

Social Security cards. In addition to serving clients face to face, field offices received 28 million 

calls in 2015.1

111 

The same employees who maintain our stewardship responsibilities must also handle 

applications for benefits, so without sufficient resources and trained staff we cannot keep up 

with both service improvements and our important program integrity work. 

Social Security Commissioner Michael Astrue, 2012 

While SSA has introduced many online services, including applying for retirement or disability 

benefits and for replacement Social Security cards, these cannot replace in-person 

service. Even as the number of online applications more than doubled from 2010 to 2015, the 

number of visits to field offices stayed fairly steady.1121 In addition, many online applications, 

especially those for disability benefits, require follow-up work by staff. 

Budget cuts, however, have forced 5SA to cut staff and hours in the field. Between 2010 and 

2015, SSA lost about 2,000 field office staff.1

131 SSA also had to cut field office hours to 31 hours 

a week.1

14

1 And SSA has closed 64 field offices since 2010, along with 533 mobile offices.ll51 

SSA's field offices have long been lauded for their excellent service, but rising case loads 

combined with budget cuts have driven up wait times. Field offices must serve nearly the same 

number of visitors in fewer hours and with fewer staff, which has forced applicants to wait 

weeks for appointments. 1

161 Before the budget cuts, more than 90 percent of applicants could 

schedule an appointment within three weeks; by 2015, fewer than half could (see Figure 3).1171 

SSA will always need to provide high quality service in the field. Many cases require it: though 

straightforward requests can be handled online or by phone, more complex cases often require 

face-to-face help. SSA primarily serves Americans who are elderly or disabled, often at 

traumatic moments in their lives such as the onset of a disability or the death of a spouse. Its 

clients are diverse and include people suffering from severe mental impairments and people 

with limited ability to speak English. Its staff provide critical guidance to workers making 

complex, life-altering decisions. Providing prompt and thorough service in the field reduces 

errors that SSA staff must otherwise untangle later. 

FIGURE 3 
43 


33390A.032

Cuts Force Most Social Security Applicants to 

Walt Over Three Weeks for Appointments 

Percent of appointments scheduled within 21 days 

100% 

75 

50 

25 

0 

2010 2011 2012 2013 2014 2015 

Source; Social Security AdmlntstraUon 

CENTER ON BUDGET AND POLICY PRIORITIES I CBPP ORG 

Funding Cuts, Rising Appeals Caused Large Backlog in Disability Hearings 

SSA pays disability benefits through the Social Security Disability Insurance (DI) and 

Supplemental Security Income (SSI) programs to workers with impairments severe enough that 

they can't support t hemselves and their families.1

18l The average processing time for an initial 

disability claim has held fairly steady in recent years at three to four months. However, denied 

applicants who appeal must typically wait at least another year before an administrative law 

judge (AU) decides their case. 

During the Great Recession, Dl applications soared due to high unemployment - and SSA 

denied most of them, causing the number of rejected applicants to spike.1

191 In 2011, SSA 

denied 2.2 million initial Dl applicants, significantly expanding the pool of rejected applicants 

over pre-Great Recession levels.1

201 Many of these rejected applicants appealed their decisions, 

causing the number of hearing requests to rise nearly 50 percent.1

211 But Congress, instead of 

providing additional resources for these record-high hearing requests, cut SSA's operating 

budget. 

FIGURE4 
44 


33390A.033

Cuts Worsen Backlog for Social Security 

Disability Hearing Decisions 

500days 

400 

300 

200 

100 

0 

2010 

1,200,000 

1,000,000 

800,000 

600,000 

400,000 

200,000 

0 

'Estimate 

Average processing time for hearing decisions 

2011 2012 2013 2014 2015 

Hearing cases pending at end of year 

2010 2011 2012 2013 2014 2015 2016* 

Source: Social Security AdmlnlstraUon 

CENTER ON BUDGET AND POLICY PRIORITIES I CBPP ORG 
45 

f 


33390A.034

Rising workloads, combined with funding cuts, caused the hearings backlogs to mount. 1

22

1 Even 

as the annual number of beneficiaries appealing their decisions is returning to pre-recession 

levels, huge backlogs from those peak years remain. The backlog of pending cases, which was 

shrinking before the funding cuts, has grown by over SO percent since 2010, topping 1 million in 

2015 (see Figure 4).1

231 Meanwhile, the average wait for a hearing decision rose from 360 to 

540 days between 2011 and 2016. 

The hearings backlog has a high human cost. Waiting a year and a half for a final decision, as a 

typical appellant does, causes financial and medical hardship. Some applicants lose their 

homes or must declare bankruptcy while awaiting a hearing. Their health often worsens; some 

even die.1

2

•1 The longer that applicants wait for a final decision from SSA, the weaker their 

attachment to the labor force becomes- which makes it harder to find work when they finally 

get an answer, whether or not they ultimately receive benefits. 

Cuts Impede SSA's Behind-the-Scenes Work, Hurting Beneficiaries 

In addition to front-line service, SSA does a large amount of behind-the-scenes work to pay 

benefits accurately and on time. SSA's payment service centers handle tasks such as awarding 

widows' benefits when their spouses die, issuing back payments for Dl beneficiaries who had to 

wait a year or more for a hearing, resolving complex claims issues, reinstating benefits or 

Medicare coverage when appropriate, and adjusting benefits for early retirees and disabled 

workers with earnings. 

Because of budget cuts, beneficiaries wait far too long- four months, on averagel

251- for SSA 

to complete these tasks, which are necessary to receive accurate and timely benefit 

payments.l

261 This backlog creates unnecessary hardship for beneficiaries. For example, a 

retired widow must wait months after her husband dies to begin receiving her survivor's 

benefit. A disabled worker who promptly reports his earnings when he returns to work may 

receive overpayments for months, then have to repay them. 

These backlogs cost the program as well. Though SSA aggressively pursues overpayments, for 

example, it takes additional work to do so, and some overpayments are never recovered 

despite SSA's best efforts.l

271 In addition, many beneficiaries visit SSA field offices to ask about 

cases held up for long periods in SSA's payment service centers, which drives up traffic and wait 

times. 
46 

Mr. LARSON. Does the Social Security Administration or the actuaries have projections about how the number of beneficiaries will 

grow in the next few years and in the decades facing the large 

number of baby boomers coming through the process? 

Mr. BRUNE. Yes, Congressman Larson. The actuary updates 

those projections regularly. 

Mr. LARSON. And so it is only going to continue to grow. 

My point here is that I think the Chairman needs to be applauded, as does the Committee, for addressing the whole issue of 

fraud, but we can’t continue, and I don’t think we give enough 

credit to the frontline people, and I am going to ask Mr. Bagdoyan 

questions about the culture that has been established there, but I 

don’t think we give them enough credit, and we can’t continue to 

shrink them and see our waiting lists go up while we face this 

large number of baby boomers, like Mr. Pascrell, that are coming 

through the process. So I just wanted to make sure that we had 

those items for the—that data for the record. 

And, Mr. Bagdoyan, you talked at length about the culture of 

antifraud. Could you describe that more, about how—when you did 

your findings that this was embedded within the Social Security 

Administration? And you mentioned different metrics that they are 

not performing up to. And my question would be, would they be 

performing them better if they had the staff and the capability and 

the technology to do so? 

Mr. BAGDOYAN. Well, sure, I would be happy to respond, Mr. 

Larson. 

The culture, we did notice that there are multiple efforts underway. Training is one, 97 percent of staff had received antifraud 

training, for example, for fiscal year 2016, so that is an important 

number to hit. 

The establishment of the OAFP as the central unit for antifraud 

activities is also a step in the right direction, and it also permeates 

a cultural shift, if you will. 

And in terms of the resourcing question, that would be driven by 

strategy, which we referred to in our report and also I made a couple of remarks about. You have to have a strategy that will dictate 

to you what you exactly need, where, and when, and how to deploy 

it, in order to have a sense of the dollars and numbers and technology that you would need. 

Mr. LARSON. Even with this built-in culture, with the growth 

rate of Social Security, there are over 61 million beneficiaries now, 

and the projections are up to 10 years it will increase by 28 percent 

to over 78 million. 

Do you think that is going to require better staffing and an increase in staffing or do you think that we can continue at the current rates that we are at? 

Mr. BAGDOYAN. Well, again, the level of staffing will be dictated by what needs to be done. Right now I think OAFP has approximately 60 or so staff to oversee a rather enormous portfolio 

of benefits that are paid out, so that will have to be looked at as 

part of the strategic planning effort, but I can’t really give you a 

number or even a guess as to how many people they would need. 

47 

You would also have to add processes and procedures as well as 

technology, coordination with stakeholders, and other factors to arrive at a whole. 

Mr. LARSON. Acting Social Security Commissioner Carolyn 

Colvin testified to Congress in 2012 about what was happening 

with the error rate and accounts of both overpayments and underpayments to beneficiaries. It was well below 1 percent, but she 

noted that back then, it was at 0.36 percent. What she observed 

then is that if Congress wished to reduce errors, the error rate further, it needed to stop squeezing the budget of the Social Security 

Administration. Would you agree with that? 

Mr. BAGDOYAN. Well, that was outside the scope of my work, 

but clearly resourcing would have to be looked at going forward. 

Mr. LARSON. Thank you. 

Chairman JOHNSON. Mr. Kelly, you are recognized. 

Mr. KELLY. Thank you, Chairman. 

I know both of you come from a lot of experience in the private 

sector. And I think we are all concerned with funding and how 

things get funded, but in the private sector, we have seen pretty 

much the same evolution; as technology has developed, we have 

found out that we can do actually more sometimes with less and 

we have seen people pivoting to different ways of making a living. 

What I am trying to understand, in 1990, there were fewer than 

21⁄2 percent of working age Americans actually on the check. By 

2015, the number stood at 5.2 percent. How did that change—with 

all the technology, with all the changes, with all the things that we 

look at in lifestyles, what is driving that number? I mean, do either 

of you have an answer to that? 

And then going through your private sector experience, what 

happens in the private sector when you experience these type of 

things, increasing money is usually the first thing people say, but 

then after that, you say, well, wait a minute, how much money can 

we continue to throw at a problem with the technology we have 

today, the ability we have today to cross-reference and data collect 

and analyze? That does bring a degree of effectiveness and efficiency that you have to have in the private sector in order to stay 

in business. 

So just from the perspective that you are both in in the private 

sector, not the government, where people actually have to pay for 

things out of their own pocket and actually make a dollar stretch 

farther by being more effective and more efficient, what do you see 

that is taking place right now? 

Quite frankly, I don’t mind spending money as long as it is a 

positive return on the investment for taxpayers. Spending money 

for the sake of spending money is saying the answer is we have to 

have a bigger government with more people involved and spend 

more money. To me, that is not the answer. It doesn’t work in the 

private sector. 

So if you can just give me your experience in the private sector 

and what you would see differently about what you are doing right 

now as opposed to what you did before? 

Mr. BRUNE. Thank you, Congressman Kelly. I think that the efforts that we are undertaking right now align well with the GAO’s 

48 

framework, which is, I believe, inclusive of both Federal risk management as well as private sector risk management best practices. 

Our interest is to move more of our analytical resources earlier 

in the process so that we are preventing rather than chasing after, 

the fraud that has been perpetrated. It is important to continue 

prosecutions. The convictions and restitution orders serve as a good 

deterrent for folks who think they may want to rip off the American public. However, the best action, we believe, is prevention upfront. Our employees do that through identifying anomalies or suspect transactions. 

Technology is going to aid us substantially. The amount of data 

that an individual can review and analyze is much less than what 

our software can analyze. The package we procured has 12 distinct 

technology capabilities, helping us analyze, report, manage those 

cases better so that we identify earlier and take quicker actions. 

Mr. KELLY. Okay. If you can, any explanation for the growth, 

because a lot of the work that people do today is less stressing on 

them physically because of the development that we have seen on 

on-the-job actual work that has really relieved a lot of the stress 

on people physically. How did it grow? How did it double from 

1990? How in 20 some years, 27 years did we see this growth that 

should have been—I think we should see it going down in working 

age people, not going up. 

Mr. BRUNE. Right. Our actuary has reported that growth in the 

program number of beneficiaries is largely attributable to demographic factors, the aging of the baby boomers, as well as the 

growth of participation in the workforce by women. 

Indeed, some of the nature of work has changed, and that has 

allowed folks to both enter and exit the workforce more readily as 

well as stay in the workforce longer, but the primary factor is the 

aging of the baby boomers. 

Mr. KELLY. Mr. Bagdoyan, we are almost out of time. 

Mr. BAGDOYAN. Yes, Mr. Kelly. I would echo much of what 

Commissioner Brune just mentioned. This document is all about 

prevention. You have to front load your controls, predictive data 

analytics, which are widespread in the private sector. 

I know from one of my credit card companies that always flags 

me for things that look out of the ordinary with a quick phone call 

to say, is this you making this rather large purchase. So they have 

ways of flagging these things that really don’t look quite right, and 

that is definitely one of the items in the toolbox for Social Security 

Administration that is absolutely needed. 

But I will also go back to my original point about an overall 

strategy driving all these things, so that is important to get upfront 

and get it right. 

Mr. KELLY. I appreciate you both coming, but it is hard in 5 

minutes to get to some of these things. I think we are all concerned 

that Social Security stay solvent, but participation in the workforce, we all know where the revenue comes from, but I am still 

concerned. I don’t know how things would have doubled. With the 

advancements we have had for on-the-job people, why they would 

be experiencing these trends, it doesn’t make sense to me. But 

thank you both for being here. 

Thank you, Chairman. 

49 

Chairman JOHNSON. Mr. Pascrell, you are recognized. 

Mr. PASCRELL. Thank you, Mr. Chairman. And thank you to 

our panelists. Both of you have terrific backgrounds, and we are 

honored to have you before the Committee. 

I would like to start by asking a question to Mr. Bagdoyan. 

Mr. BAGDOYAN. Yes. 

Mr. PASCRELL. Can you describe further, I know you started to 

do this before, what it means to have an antifraud culture at any 

agency, particularly the one we are talking about now, and how the 

GAO found this to be embodied in the Social Security Administration? Could you be as brief as possible, but direct as possible? 

Mr. BAGDOYAN. Yes. Absolutely. Well, the culture is the sense 

of importance that would permeate the agency to take this issue 

very seriously. It comes from the tone at the top and it is embedded 

throughout the organization at its multiple levels. 

Mr. PASCRELL. So your estimation, in other words, is that the 

SSA does have this as a priority? No question in your mind about 

that? 

Mr. BAGDOYAN. I think they have taken a lot of significant 

steps in that direction. It is going to take a long-term effort to sustain that, which is as important, if not more important. Absolutely. 

Mr. PASCRELL. Thank you. I want to reiterate the statements 

made by my colleagues, on both sides of the aisle, that the integrity 

of Social Security, that program, is crucial. I mean, somehow folks 

got the idea that if we stop fraud, which is critical, that we will 

be able to sustain Social Security. No one is saying that here today. 

We know, however, it is an intricate part of what we are doing and 

a very important part. So maintaining vigilance is the responsible 

way to govern and the right thing to do for our constituents. 

I am proud of the enhanced funding that we have been able to 

secure to combat fraud, but as a new Subcommittee Member here 

on this Committee, I know a trend over the years. This is the 

eighth hearing on fraud since 2012. We need oversight, to be sure, 

but I want to make sure we are keeping the entirety of the Social 

Security program in perspective. 

We need to continue to push to ensure that the Social Security 

program is strengthened for years to come, which is why I am 

proud to support Congressman Larson’s efforts in the Social Security 2100 Act. It is the only in depth proposal that has really been 

made about Social Security. 

The SSA’s mission is not just to make sure that the wrong people 

don’t get benefits, but that the right people get their benefits, and 

this is why we need to keep an eye on the budget. And you have 

heard some things today that are pretty alarming to me in terms 

of the increase in population that you serve. 

Do you have a dollar amount, Mr. Brune, in your mind of estimate of fraud in the general program we call Social Security? 

Mr. BRUNE. Congressman Pascrell, thank you for the question. 

I do not have a dollar amount of the general amount of fraud. As 

GAO has recommended, we are looking to be data driven. What we 

are doing is assessing the program for risk. We are going to make 

that risk assessment with our disability prevention units, our disability examiners that actually adjudicate claims that involve 

fraud. They are our agency experts. We are going to base our acVerDate Sep 11 2014 08:24 Feb 22, 2019 Jkt 033390 PO 00000 Frm 00053 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\33390.XXX 33390
50 

tions on their experience, what they have seen in actuality both as 

far as frequency and types of incidents. 

Mr. PASCRELL. You do have data for the last 10 years, obviously, and you looked at that data. You certainly can begin to extrapolate some things as to where we are going. Is it worse than 

we thought in that direction too, so that it helps you in prospective 

budgets in the future, I would think. 

Mr. BRUNE. Well, Congressman Pascrell, as I said, any amount 

of fraud is too much, and—— 

Mr. PASCRELL. Well, of course. 

Mr. BRUNE. Yes. And we are take—— 

Mr. PASCRELL. I am not trying to minimize fraud. What I am 

tying to do is—are we doing what we are supposed to be doing to 

help you do your job, because we do not know the massiveness of 

the fraud. I had no idea. 

Mr. BRUNE. This Subcommittee has been extremely helpful in 

providing new tools to the agency, the stiffer penalties, the updating of the civil monetary penalty amounts, the expansion of the 

CDI program, all in recent legislation have provided us tools that 

we need to ensure that the program is safe from fraudulent activity. 

Mr. PASCRELL. Which part of Social Security has most of the 

problems of fraud, disability, SSI, general programs, children? 

Chairman JOHNSON. Your time has expired. 

Mr. PASCRELL. I am sorry? 

Chairman JOHNSON. Your time has expired, sir. 

Mr. PASCRELL. Can I get that one question in, sir? 

Chairman JOHNSON. All right. 

Mr. PASCRELL. Thank you. 

Mr. BRUNE. Our strategy covers all of our programs, retirement, 

survivors, and disability insurance. 

Mr. PASCRELL. I know that, but which one is the worst? 

Mr. BRUNE. We are vigilant on all programs because we have 

found issues in each type of program. 

Mr. PASCRELL. Thank you, Mr. Brune. 

Thank you, Mr. Chairman. 

Chairman JOHNSON. You bet. 

Mr. Renacci, you are recognized. 

Mr. RENACCI. Thank you, Mr. Chairman. 

I want to thank the witnesses for their participation in today’s 

hearing. 

Additionally, I want to thank Chairman Johnson for holding this 

hearing. Hearings have become somewhat novel these days, but it 

is a great way for us to listen and hear from witnesses. 

I am encouraged to hear that in recent years the SSA has been 

proactive in taking steps to reduce fraud, I am pleased to see the 

collaborative efforts that have been implemented through the National Anti-Fraud Committee, and the recent installation of the 

IBM counter-fraud management software. These are positive steps 

in the right direction. However, I think that more can be done, and 

that we owe it to our constituents to continue working to stay 

ahead of criminals and further reduce fraud. As I have heard already, $1 of fraud is $1 too much, so I appreciate your efforts. 

51 

Throughout my business career, I found that my employees and 

I were most successful when we set achievable goals and identified 

the appropriate steps to accomplish our goals. That ensured that 

every member of our team knew the desired outcome and could be 

held accountable when target goals were not met. 

Mr. Brune, I found it interesting that the GAO report had found 

that the SSA does not track many of its antifraud initiatives 

through outcome-oriented metrics. It was on page 6 of the GAO testimony. Can you discuss the steps that the SSA is taking to evaluate the effectiveness of the antifraud initiatives that are being led 

by the SSA? 

Mr. BRUNE. Thank you. Yes, Congressman. The GAO report did 

also note that we do have some metrics. We just need to improve 

them, and we are working hard to do so. You are correct, and we 

agree, we have more important work to do, as the Chairman said. 

Part of what we are doing is in the software that you mentioned, 

the counter-fraud management tool, that tool will improve our reporting capability. It has inherent case management and reporting 

functionality, which is an improvement over what we use right 

now, which is largely manual counts and special runs from our 

databases, special queries into our databases. 

In addition, we have already consulted with our Office of Inspector General to get their input on which outcome-oriented metrics 

they believe would be most helpful for us. We have started the 

process of doing the fraud risk assessment of the disability program 

as GAO recommended. That, as I said in my statement, will be 

complete by the end of the year. 

That will inform our efforts. I want to underline this point in response to a question Mr. Pascrell raised, we are taking a risk-based 

approach; we are going to devote our attention first to the highest 

risk wherever those risks lie, at the initial claim level, at the reconsideration level, or at the appellate level. We are taking an entire 

focus on the program and focusing on the biggest problems first. 

Mr. RENACCI. I appreciate that. And, again, that gets back to 

the business model Mr. Kelly talked about. I mean, I was in business as well. And as I travel my district, I continue to hear about 

businesses who are doing more with less, and they are using more 

analytical tools to do more of the job that needs to be done, so I 

appreciate that we are looking toward that, because I think that 

is important. We need to use those tools. And it is just not about 

throwing more money or more staff; it is about using the tools we 

have. So I appreciate your work in moving in that direction. 

Mr. Brune, in your testimony, I think you accurately described 

the employees who work in the field offices around our country as 

the front line in protecting against potential fraud and abuse. I 

think that is important too. You have to get it in the beginning. 

It is a lot more costly at the end. 

You mentioned that starting in 2004 there was now annual 

training for all agency and DDS employees on antifraud measures. 

What has been the result of that increased training? 

Mr. BRUNE. I think this gets to the question of relative importance of the priority. It has increased at all levels of the organization, the awareness that our antifraud responsibilities are a significant responsibility, that every one of us plays a role in identifying 

52 

an issue, reporting it, and making sure that the Inspector General 

has the information they need to properly investigate the allegation. 

We also support our employees throughout the country, not only 

in our fraud prevention units, but in addition to our field offices 

and hearing offices. We support the investigation process by providing the Inspector General information that they think would be 

valuable for them as investigative leads. 

So as they are investigating cases, we help them develop that information. 

Mr. RENACCI. One last question, I know I am running out of 

time. There are bad guys in every one of these agencies. There are 

bad lawyers working with every one of these agencies. Are we 

working with the other agencies so if they know the bad attorneys 

that are causing some of these issues we can cross-reference them? 

What are we doing with that? 

Mr. BRUNE. That is a great question, and the answer is yes. We 

are part of an interagency working group with Federal benefit-paying agencies. We use that working group to share information 

about proven practices as well as to explore data sets that would 

be of high-value interest to us. The more data we have to look at, 

the more our software tool can identify these anomalies, and so we 

are working with all Federal benefit-paying agencies to coordinate 

our efforts. 

Mr. RENACCI. Thank you. 

I wasn’t picking on my attorney colleagues or friends, but I yield 

back. 

Chairman JOHNSON. Thank you. 

Mr. Schweikert, you are recognized. 

Mr. SCHWEIKERT. Thank you, Mr. Chairman. 

Forgive me, is it Bagdoyan? 

Mr. BAGDOYAN. Yes, Bagdoyan, Mr. Schweikert. 

Mr. SCHWEIKERT. Can you walk me through just a couple 

things. I am sure it is in here somewhere, I just haven’t been able 

to find it. First off, in bad acts, fraud, how many are being found 

in the requests for benefits and what is being found when someone 

is already receiving benefits? What have you found differently? 

Mr. BAGDOYAN. Well, for me, it is a hard question to answer 

because that was not in our scope of work. I think from what I 

have seen, it is distributed fairly even. 

Mr. SCHWEIKERT. Okay. 

Mr. BAGDOYAN. The risk assessment that we are talking about 

is what would get to those kinds of things, whether you are talking 

about the bread and butter type of fraud schemes versus the big 

black swans, you know, low probability but high consequence type 

of things that I think the Chairman alluded to in his examples. 

So it is—where the paperwork comes in, it is evaluated, it is 

signed off by a physician, for example, adjudicated by an administrative judge, that is a continuum. So where it starts is obviously 

with the bad paperwork that, as part of the conspiracy in this case, 

runs throughout the process of benefit. 

Mr. SCHWEIKERT. But you could appreciate the elegance of 

finding that there is a bad act in the initial part of the process and 

not, you know, a year or two into payments being received? 

53 

Mr. BAGDOYAN. Correct. 

Mr. SCHWEIKERT. Can I walk you through—and I was trying 

to make notes to myself to try to find an elegant way to say this, 

but—— 

Mr. BAGDOYAN. Sure. 

Mr. SCHWEIKERT [continuing]. There is a difference between 

an algorith—— 

Mr. BAGDOYAN. Algorithmic. 

Mr. SCHWEIKERT [continuing]. Algorithmic mechanism that 

says, hey, these attributes tie into these attributes, these attributes 

where this person goes up on the risk profile, and a data capture 

model. And my fear is building algorithms is wonderful except for 

there is a small problem: In some ways it is a couple decades out 

of date in the way we find fraud. 

The fact of the matter is you used your credit card example, the 

credit card example is capturing a data capture at that second. 

That second says, hey, he is buying sky diving equipment, except 

we—— 

Mr. BAGDOYAN. He doesn’t skydive. 

Mr. SCHWEIKERT [continuing]. We have never seen him being 

a really big outdoors person. And in today’s world, particularly— 

let’s say I come and make an application. There are the commercial 

databases, but the ability to even touch, say, green light, red light 

on my income model, how much was passive, how much is active, 

you know, I mean, these databases now know what type of ice 

cream I eat, how many of us here use a Safeway shopping card or 

that type and—you know, when we are buying something, and the 

levels of data even down to the value of my home, the value of my 

income, the value of my activities, the analysis of what I have been 

buying on my credit card. 

Do we see any movement to use data capture to immediately say, 

hey, there is something here that does not line up with the types 

of application, instead of saying, let’s build an algorithm and look 

for outliers? 

Mr. BAGDOYAN. Right. Yeah, I think the system that Commissioner Brune mentioned, which came into being after our audit 

work was completed, so I don’t have much insight into it, but it 

sounds like, if you would care to explain that a little bit more—— 

Mr. SCHWEIKERT. And so the simple question is are you reaching out and tagging, capturing data from commercial and private 

databases? 

Mr. BRUNE. That is in our plan, Congressman. As I said in my 

statement, we wish to have an integrated, multi-faceted, realtime 

approach, and I think that is what you are describing. 

Integrated meaning multiple data sources, including the information that our employees observe and that they enter into the system. 

Multi-faceted meaning internal, external data sets possibly. And 

realtime meaning when the data is entered into the system. 

Mr. SCHWEIKERT. And forgive my instinct, and maybe I am excessively data-centric, I believe you are doing it backwards, absolutely backwards. 

Has there been a calculation done on what the cost per prosecution, you know, successful prosecution has been—— 

54 

Mr. BAGDOYAN. I am not aware of it at GAO. 

Mr. SCHWEIKERT [continuing]. Where you can do the all-in 

costs of the cost of staff, the cost of office, the cost of—you know, 

everything that has gone into that, and saying we have had these 

many prosecutions that are successful? I am just very curious right 

now in the model that is being used, because it sounds very human 

centered in a world of data. I am just curious, what is our cost per 

bad actor caught? 

Mr. BAGDOYAN. Yeah. I would—I would not know, and I don’t 

think GAO has looked into that, sir. 

Mr. SCHWEIKERT. Any? 

Mr. BRUNE. Congressman, as I stated in response to a prior 

question, we are very interested in moving from a pay and chase 

into a prevention model. And I believe our expansion of the cooperative disability investigation units, which this Subcommittee has 

supported—— 

Mr. SCHWEIKERT. Do you know your cost per prosecution right 

now, successful prosecutions, your all-in cost? 

Mr. BRUNE. I would defer to our Office of General Counsel, but 

I think we could provide you that—— 

Mr. SCHWEIKERT. Could you make a note—— 

Mr. BRUNE. We could provide you an answer for the record. 

Mr. SCHWEIKERT [continuing]. And find that for me? 

And with that, Mr. Chairman, I yield back. 

Chairman JOHNSON. Mr. Rice, you are recognized. 

Mr. RICE. Thank you, Mr. Chairman. And very interesting hearing. I always learn a lot at these hearings. 

Mr. Brune, you said earlier that, and it goes really to what Mr. 

Schweikert was just asking you about, in 2015, I may be quoting 

the numbers wrong, 113 convictions and you recovered $14 million. 

And you said you were putting people in the U.S. Attorneys Offices 

around the country. What kind of people? Are these lawyers you 

are putting in the U.S. Attorneys Offices? 

Mr. BRUNE. Yes, sir. They are fraud prosecutors, they are general counsel employees who are on loan to the Department of Justice, U.S. Attorneys Office. 

Mr. RICE. Have you found that—you know, in South Carolina, 

I was a tax lawyer for 25 years, and for the first 10 years of my 

practice, the local solicitors, local district attorneys were the people 

who were responsible for prosecuting tax fraud, and they weren’t 

interested in doing that, so it was hard to get somebody to pursue 

it, so the State appointed a special attorney general that oversaw 

tax fraud, and all of a sudden, the prosecution of these cases mushroomed. 

Is that the same kind of thing with U.S. attorneys? Are they 

hesitant to pursue these Social Security fraud cases? Is that why 

you are putting people in their offices? 

Mr. BRUNE. We have a successful partnership with the Department of Justice. They have, you know, vast responsibilities, but 

there are prosecutorial thresholds in different jurisdictions, and 

that is one of the reasons why we have partnered with them for 

the fraud prosecution project. 

Mr. RICE. How many lawyers—these people are lawyers? How 

many people are you putting in—how many have you—— 

55 

Mr. BRUNE. A couple dozen. 

Mr. RICE. A couple of dozen? So you have 24, let’s say, 25, and 

they have 113 convictions in 2015 and they recovered $14 million. 

So that kind of gives you a little cost-benefit analysis right there. 

Do you know, these people who are getting these convictions, I 

am sure a lot of them are guilty pleas, are they going to jail? I 

mean, are they suffering real consequences from this? 

Mr. BRUNE. Real consequences, yes. I would say there are cases 

which have included imprisonment. Restitution is significant in 

most of these convictions, or plea agreements. 

Mr. RICE. Now, I know that, you know, a lot of these are just 

individuals who are defrauding the government, but in some of 

these cases, there are massive conspiracies that involve government employees. And what really, really just bothers the heck out 

of me, it is like this thing with the veterans in Phoenix, you know, 

these government employees lie on these forms and kill people, yet 

they remain government employees, because the Federal employees 

unions are so strong and they have so many protections, that we 

can’t fire them, and they still get their pensions even though they 

are killing people. 

So what I am curious about, these two massive frauds that are 

listed in our materials here, the thing in New York where there 

were 134 indictments, $14 million recovered, is that judge, is he 

still a judge, is he still getting paid, is he still—— 

Mr. BRUNE. The judge was involved in the West Virginia case. 

Mr. RICE. Okay. 

Mr. BRUNE. And, no, he is no longer a judge. 

Mr. RICE. You know, I read in these materials anecdotally that 

he lives in Myrtle Beach, South Carolina, now, which is where I 

live. That is my district. That is the city I live in. Interesting. I 

need to look this guy up, this David Daugherty. It was said that 

there were 1,700 claimants, and that—the attorney now has pled 

guilty, but apparently this fellow, he is out fine, living in Myrtle 

Beach. I wonder if he has an oceanfront house. 

Is he still drawing a Federal pension? 

Mr. BRUNE. Congressman, as you rightly observed, we do not 

have, under current statute, the authority to revoke his pension. 

However, if a Federal employee is involved in a fraud conspiracy, 

as you just described, a court order could require restitution, and 

so, therefore, the pension would be offset until Social Security is restored. 

Mr. RICE. Let me ask you, if we put forth a legislative fix for 

that, I mean, would that be something that you would support, 

that people who are found guilty of these massive fraud type 

things, they would lose their Federal benefits, all of them? 

Mr. BRUNE. We would be happy to talk to you about that. 

Mr. RICE. I yield back my time. 

Chairman JOHNSON. Thank you. And Mr. Larson, you are recognized for 1 minute. 

Mr. LARSON. Thank you again, Mr. Chairman. 

I just wanted to point out a couple of things. Number one, I 

agree with my colleagues, you learn an awful lot just by sitting and 

listening to the questions that your colleagues have. 

56 

I, too, was in the private sector, I ran a business myself and 

know what it is like to meet a payroll, and really do appreciate the 

fact that you can oftentimes do more with less, especially, you 

know, if you have the right tools than if you have the right technology available to you. 

But I just note here for the record, Mr. Chairman, that I believe 

as of 2016 the Social Security Administration has already instituted its own hiring freeze. Is that correct? 

Mr. BRUNE. Yes, sir. 

Mr. LARSON. It is not replacing employees due to loss, due to 

attrition, has severely restricted overtime, closed offices and reduced the hours that remaining offices are open to the public, cannot fulfill the statutory mandate to mail Social Security statements 

to taxpayers and has cut back substantially on other expenditures, 

most notably for example, IT spending, which is 30 percent lower 

than it was in fiscal year 2015. 

Now, as any good businessman would understand in the face of 

this, and especially if you are in a service-oriented business, which 

I happened to be when I had my small business, you have to make 

adjustments. 

And this culture that Mr. Bagdoyan was talking about, and I 

think the points that my colleagues made about what we need to 

do in terms of conviction, in terms of the actual penalties and actually, in fact, poster child for that if you abuse this system, what 

are the consequences, what are the results? And for any Federal, 

any employee or any conspiracy that exists, they deserve the maximum amount of punishment. And we should do everything we can 

to make an example out of that. 

By the same token, the very thing we are trying to create this 

culture within, which would save us money by making sure that 

we are dropping, you know, by dropping the frontline members who 

are actually carrying out these functions, it just seems to me that, 

you know, doing more with less is great, unless you are overwhelmed by the numbers and it just seems apparent that with the 

large number of baby boomers coming in, I don’t know if there has 

been any metrics that say, Mr. Bagdoyan, how we are going to be 

able to deal with this large increase given both the attrition, and 

the hiring freeze, and everything that is currently going on. 

Mr. RICE. Would the gentleman yield? 

Mr. LARSON. Sure. 

Mr. RICE. If there were 24 of these special prosecutors and they 

recovered $14 million that is what, about a half million dollars 

apiece? I will tell you what, they pay for themselves. 

Chairman JOHNSON. I want to thank my colleagues for being 

here. And we all agree that disability fraud is a serious issue and 

we need to make sure that fraudsters don’t continue to benefit at 

the expense of hardworking taxpayers. 

While Social Security has taken important steps to prevent 

fraud, there is still work to be done. And I am committed to working with Social Security and all of my colleagues to make sure the 

agency has all the tools it needs to stop fraud. 

I want to thank our witnesses for their testimony and thank you 

also to our Members for being here. With that the Committee 

stands adjourned. 

57 

[Whereupon, at 11:04 a.m., the Subcommittee was adjourned.] 

[Questions for the Record follow:] 

58 

f 


33390A.035

INSERT FOR PAGE 41, LINE 23 

The average cost per Social Security Special Assistant U.S. Attorney (SA USA) is 

about $ 167,000. This includes payroll and benefits costs. In FY 2016, the 

projected total was $4 million. 
59 


33390A.036

Ways and Means Subcommittee on Social Security 

Hearing on Social Security Disability Insurance Fraud 

Rep. Linda Sanchez 

April26, 2017 

Thank you Mr. Chairman, and thank you to the witnesses 

for being here with us today. 

I agree with the sentiments of many of my colleagues: 

fraud is never okay. Not only does fraud waste taxpayer 

dollars, it jeopardizes the program for those who truly 

need it. Those who have worked a majority of their lives 

paying in to Social Security, and now need some support 

due to a tragic accident, or a life altering illness. 

Disability Insurance, like Social Security Old Age 

Insurance, is an earned benefit. And it is vital to protect 

the program from fraud and abuse so those who truly need 

it are able to access their earned benefits. 

While there have been some recent examples of elaborate 

schemes of crooked judges and dishonest lawyers filing 

fraudulent claims, Social Security disability fraud is rare. 

In 2016, disability insurance had a combined 

overpayment and fraud rate of just .36 percent. 

More often than not, it is Social Security's front line 

employees who are the ones uncovering schemes, or 

denying claims they believe to be fraudulent. We don't 

hear about most of these claims, because Social Security 

employees are doing their jobs well. 
60 


33390A.037

Congress has not been inattentive to the limitations of the 

Social Security Administration in combatting fraud. The 

2015 Bipartisan Budget Agreement provided some much 

needed funding to help fight fraud, it tightened penalties 

for violating the public trust, and created stricter 

guidelines for filing claims. 

And Social Security has made significant improvements 

too, establishing an agency wide anti-fraud team, setting 

up special units to focus on uncovering fraud, and 

expanding the use of data analytics to detect patterns of 

fraud. 

These initiatives will help Social Security's front line 

employees identify fraud. However, it is also these very 

employees that are the most effected by the budget 

constraints imposed by Congress. The number of 

Americans filing for Social Security Disability Insurance 

is expected to grow year after year. 

At the end of2015, 8.9 million disabled Americans 

received disability insurance. By 2020, that number is 

projected to increase to 9.3 million and to 9.8 million by 

2025. 

2 
61 

f 


33390A.038

That's nearly 1 million new recipients over the next 8 

years, and many more cases than that to be reviewed. 

However, despite this ever increasing work load, Social 

Security has been flat funded since 2010. We keep 

expecting Social Security to do more and more with less 

and less. 

If we are serious about eliminating disability insurance 

fraud at Social Security, we need to provide employees 

with the resources they need to be successfuL 

Questions: 

Mr. Brune, on average, how many cases do each of the 

front-line employees see per year, and how does that 

compare to 201 0? 

Do you expect the number of cases assigned to each 

employee to increase over the next five or ten years? 

3 
62 


33390A.039

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(2021 225-3625 

'll.lnsllingron, 'El(!; 20515- 6ii& 

hup'lfwaysandmeans.house.gov 

May 25,2017 

Assistant Deputy Commissioner, 

Office of' Budget, Finance, Qualily, and Management 

Social Security Administration 

640 I Security Boulevard 

Woodlawn, MD 2 1207 

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Thank you for your testimony before the Committee on Ways and Means at the April 26, 

2017 Social Security Subcommittee hearing entitled "Stopping Disability Fraud: Risk, 

Prevention, and Detection." In order to complete our hearing record, I would appreciate 

your responses to the following: 

I. One of the key findings of the Government Accountability Office's (GAO's) 

review of the SSA's anti-fraud initiatives was that, of the 17 SSA ami-fraud 

initiatives reviewed, 10 didn't have outcome-oriented metrics, and four didn't 

have any metrics at all. How is the SSA improving its metrics to become more 

outcome oriented? 

2. Please provide a detailed phm of how you will conduct the fraud risk assessment 

recommended in the GAO report, and include timelines and milestones. 

3. The SSA isn't the only federal agency with an appeals process that allows 

attomeys to represent claimants. Tite SSA has a process to ban lawyers from 

continuing to represent Social Security claimants. If a lawyer has been banned 

from another agency, CMS or the VA for instance, is this infomtation 

automatically shared? If so, what is the process and how often is it shared? If 

not, what is stopping you and other agencies fTom working together to identify 

bad actors? 

4. How many cases per year has the SSA presented to US Attorneys over the past 

ten years? Of those cases, how many were forwarded for prosecution, and how 

many were forwarded for civil action? 
63 

[Submissions for the Record follow:] 


33390A.040

a. Of those cases forwarded for prosecution, how many were prosecuted and 

how many were declined? Of those prosecuted, how many resulted in a 

conviction? 

b. Of those forwarded for civil action, how many were accepted and how 

many were declined? Of those accepted how many were found in favor of 

the US Government? 

c. Of those declined for criminal or civil action, bow many have resulted in 

civil monetary penalties or sanctions? 

5. The SSA recently awarded a conlrnct to lBM to provide anti-fraud sotlware. 

What do you expect to be able to do with this product that you can't do now and 

how soon will it take to intcgrnte into the SSA's systems? Please provide a 

timeline and milestones for this project. 

1 would appreciate your responses to these questions by June 8, 2017. Please send your 

response to the altention of Amy Shuart, Staff Director, Subcommittee on Social 

Security, Committee on Ways and Means, U.S. House of Representatives, 2018 Rayburn 

House Oflice Building, Washington, OC 20515. In addition to a hard copy, please 

submit an electronic copy of your response in Microsoft Word format to 

mm.russcll@mail.housc.gov. 

Tha•tk you for taking the time to answer these quostions for the record. If you have any 

questions concerning this request, you may reach Amy at (202) 225-9263. 

Sam Johnson 

Chai nnan 

Subcomm.ittee on Social Security 
64 


33390A.041

Committee on Ways and Means Subcommittee on Social Security 

U.S. House of Representatives 

Hearing on "Stopping Disability Ft·aud: Risk, Pt·evention, and Detection" 

Hearing date: April26, 2017 

Statement of Shannon Benton, Executive Director 

The Senior Citizens League 

909 N. Washington Street, Suite 300, Alexandria, VA 223 14 

http://www.scniorsleague.org I (703) 548-5568 

THE SENIOR CITIZENS LEAGUE STATEMENT ON THE 

SOCIAL SECURITY DISABILITY INSURAi"I/CE PROGRAM 

Mr. Chainnan and Members of the House Ways and Means Committee's Subcollllnittee 

on Social Security, my name is Shannon Benton. After serving for 14 years in the United States 

Anny, I have been on staff with 1l1e Senior Citizens League, which also is known as TSCL, 

since 1999, and now serve as its Executive Director. Both TSCL and I share your deep concern 

about senior citizens, including the need to protect the Social Security programs on which tlus 

nation's senior citizens rely. It is a pleasure to subnlit this statement on behalf ofTSCL on this 

very important issue. 

Founded in 199 5, the Senior Citizens League ("TSCL") is one of the largest nonpartisan 

seniors groups in the United States, with over I million members and supporters. TSCL's 

members consist of vocally active senior citizens concerned about the protection of their Social 

Security, Medicare, and veteran/military retiree benefits. TSCL's mission is to promote and 

assist members and supporters, to educate and alert senior citizens about their rights and 

freedoms as Ututed States citizens, and to protect and defend the benefits senior citizens have 

earned and for which they have paid. TSCL has led the way on fighting threats to retirees, such 

as that posed by providing benefits to illegal aliens under the proposed U.S.-Mexico Social 

Security Totalization Agreement. TSCL also has exposed the manipulation of the Consumer 

Price Index by the Bureau of Labor Statistics, which has the effect of reducing the Social 

Security COLA. 

In 2015, TSCL conducted a survey of its members and provided a report to Congress 

evaluating and proposing specific ways in wluch the financial hemorrhaging of the Social 

Security Trust Funds can be brought to an end, with the financial stability of both Trust Funds 

protected, through Congressional adoption of meaningful reforms. Also, in August 2015, TSCL 

submitted a statement to the Senate Finance Conm1ittee and the House Ways and Means 

Collllnittee on "Strengthening SSDI: Ideas and Priorities from The Senior Citizens League." On 

January 20, 2017, TSCL issued a White Paper on "Curtailing Waste. Fraud, and Abuse in the 

Social Security Disability Insurance Program." TSCL is continuing to work on other ideas for 

refom1 of the DI Program, using the Freedom of Infonnation Act to obtain never-before released 

infonnation as to the specific problems in the system, and will then use that infonnation to craft 

legislative proposals for common-sense refonn in the program. 
65 


33390A.042

EXECUTIVE SUMMARY 

The Socia.! Security Administration ("SSA") administers not only the nation's Social 

Security Old-Age Insurance Program ("OASI") providing earned retirement benefits, but also the 

Disability Insurance (" 01'') program. Together known as the "Old-Age Survivors and Disability 

Insurance Trust Fund" ("OASDI Trust Fund"), the program is funded by a payroll tax of6.2 

percent each from employers and employees (for a total of 12.4 percent) on wages, up to a limit 

of S 127,200. Prior to 20 15, 81 percent of revenue went to the OASI Fund, and 19 percent was 

deposited into the 01 Fund. Based on those figures, the 2015 Annual Report of the Trust Funds 

Trustees projected that the OASI Trust Fund would be sufficient to cover program expenses until 

2033, but that the DI Trust Fund would be depleted by late 2016.t 

Of the two funds, it is the 01 Trust Fund that has been under the greater pressure, being 

required to pay benefits far in excess of anything Congress previously anticipated, due to the fact 

that the DI program has serious problems. This threatens the financial integrity of not only the 

DI program, but also the Social Security retirement benefit program, which has been tapped 

repeatedly by Congress to cover losses io the 01 program. Although it began in 1956 as a small 

program, the or program has increased dramatically io size in receot years to where, in 2015, its 

total annual cost was approximately $140 billion, and there were ahoost 11 million persons 

receiving 01 benefits. The average lifetime bene tit for a Dl recipient is approximately 

$300,000.

2 

Rather than address problems inherent in the or program, in October 2015, Congress 

chose to do what many members previously had promised not to do - transfer income from the 

OASI Trust Fund to the 0 1 Trust Fund to "kick the can down the road." In the Bipartisan Budget 

Act of 2015, P.L. No. 114-74, Congt·ess allocated 0.57 additional percentage points of the 

OASI tax to tbe DI Fund for the yen s 2016,2017, and 2018. This reallocation of the payroll 

tax to the or Trust Fund is projected to extend the date of depletion of the or Trust Fund 

reserves from the end of2016 until the end of2022. However, it also has the effect ofleaving 

less money in the OASI Trust Fund available to pay retirement benefits to retirees, and hastening 

the date of depletion of the OASI Trust Fund. 

The Social Security Administration has already admitted several !laws in the 01 program 

in testimony to Congress. For example, many DI applicants have been shown to have 

exaggerated the extent and length of their injuries to collect disability payments, and once 

receiving Dl benefits, bave no desire to return to work even if physically able to do so. 

In this statement, TSCL explores tbe history of the or Fund, its original function, its 

current poor administration, and why payments from the fund have grown exponentially. We 

1 If allowed to beeome depleted, under current law, benefits paid from the D! Tmst Ftmd automatically 

would be reduced to cotTespond to the Fund's cwTent income levels. See htlps://www.ssa.gov/oaclltr/20 15/ 

tr20 J5.pdf. 

2 See CBS News 60 Minutes, "Disability, USA," bnp://www.cbsnews.com/ newsldisabiliw-usal. 
66 


33390A.043

also review and make proposals to modify its operation. If Congress intends to save the OAS 

and Dl programs from collapse, the time to act is now, before it is too late. 

ANALYSIS 

The federa l Dl Program is hemorrhaging money. In 2015, the DI Trust Fund had total 

receipts of$118.6 billion, but bad $146.6 billion in total expenditures, resulting in a decrease in 

trust fund assets of$28.0 billion for that one year. At the end of2015, the total DI Tntst Fund 

balance was only $32.3 billion,

3 with the certainty it would be unable to pay all claims before the 

end of FY 2016. As a result, in late 2015, Congress rearranged payroll taxes to shift billions of 

dollars from the retirement trust fund to the disability trust fund during 2016, 2017, and 2018. 

The abusive nantre of this stop-gap measure illustrates why every person who receives Social 

Security retirement benefits (or expects to receive them in the future)4 should be concerned as to 

how this problem occurred and how to fix it. 

When the OAS program was created, it provided benefits to certain retired workers and 

their dependent family members, and to survivors of deceased workers. In 1956,5 Congress 

created the DI Program to provide benefits to certain disabled workers, their spouses and 

widows/widowers, and children. SSA administers these programs together, managing them with 

two separate trust funds, the OASI Fund and the DI Fund. 

As is the case with most government programs, since the enactment of the Social 

Security Act ("the Act") in 1935, the OASI program has been expanded numerous times, 

almost always increasing the number of persons receiving benefits, increasing the amount of the 

benefits paid, and expanding the purposes for which benefits are paid - often without providing 

the additional revenues to pay those benefits. In 1939, the Act was amended to provide 

dependents benefits and survivors benefits, and has been further amended numerous times since 

then in ways beyond the scope of this statement. 

Since its inception in 1965, the federal DI p•·og•·am has provided for cash benefits to 

disabled workers age 50-64, and to certain adult disabled children of retired, disabled, or 

deceased workers. In 1958, DI was broadened to provide benefits to dependents; in 1960, to 

pem1it those under age 50 to receive benefits; and in 1967 to provide benefits for disabled 

spouses. ln 1972, the waiting period was rednced from six months to five months, and the age 

before which a "childhood disability" must have begun was increased from 18 to 22. Also, 

Medicare coverage was extended to persons rece iving disability benefits for 24 consecutive 

months. 

The singular federal effort to bring restraint to DI spending occurred in 1980, after 

Congress witnessed unexpected growth in the program, and faced the stark reality that few 

' https://www.ssa.gov/OACf/STATS/tablc4a2.hunl 

' In fact, 94 percent of"miltermiats" seem io tmdersrand what Congress apparemly does not - that tlte 

Social Security system is tailing - and thus they do not expect to receive bene fits when they retire. 

https://www.fool.com/retirementl20t6/08106/94-of-millermials-bclieve-this-is-the- fate-of-soci.aspx. 

s See Social Security Act Amendments of 1956. 
67 


33390A.044

persons receiving disability benefits ever returned to work. The 1980 legislation limited 

disability benefit levels, established a periodic review of continuing disability requirements, 

enhanced rehabilitation and work incentive provisions, and withheld payment of benefits to 

incarcerated felons. Since 1980, however, Congress has done nothing to reign in the OASDI 

programs. 

In 1982, Congress was back to expanding the Dl program, passing legislation ensuring 

that benefits could continue during an appeal of a decision to cease benefits, and giving 

claimants the right to a face-to-face evidentiary hearing at the reconsideration level of appeal. 

The Social Security Act Amendments of 1983 (which raised the age to qualify for full Social 

Security retirement benefits) allowed disabled workers and widows/widowers to remain on the 

DI rolls for up to an additional two years before "converting" to age-based benefits. 

In 2014, the average annual payment to Disabled Workers of$13,985 exceeded the 

poverty level that year, which was $1 1,670. Additionally, many beneficiaries also receive Dl 

benefits for their spouses and/or their children. Moreover, the average annual payments does not 

include the multitude of public and private benefits which the disabled wo•·ken and their 

families rece ive. The result of these continual program expansions, uncoupled with any 

corresponding way to pay for them, has resulted in a 75-year unfu nded obligation of the 

OASDI Trust Funds which now bas reached $14.2 trillion.

6 That's trillion - with a "t." 

The problem of inadequacies in the Dl Trust Fund is nothing new. As The Senior 

Citizens League has reported,

7 on II occasions before 2015, Congress reacted to Dl Trust Fund 

insolvency problems with sho1t-tem1 solutions, by "bon owing" funds f1·om the OASI Fund.

8 

This short-tem1 rebalancing or reallocation of funds has been decried by many for years as an 

unsatisfactory method of avoiding the urgency of the Dl Trust Fund solvency problem, and as 

Congress refusing to face up to the need for an actual legislative solution to protect the solvency 

of the DI Trust Fund. In other words, it is like reatTanging the deck chairs on the Titanic. 

What's more, Congress' 2015 reallocation ofOASDI funds was in direct conflict with a 

rule that had been adopted by the House of Representatives at the outset of the 11 4'h Congress, 

on January 6, 2015, designed to prevent consideration by the House of any bill that would permit 

such a reallocation of the payroll tax.9 That rule was designed to prohibit legislation authorizing 

the transfer of funds from the OASl Tmst Fund to the DI Trust Fund, unless Congress first 

enacted legislation to address and improve the program's long-tem1 finances. to 

' SeeR. Boccia & R. Greszler, "Social Security ProgJ'ams Face Depletion in Ncar Future" The Daily 

Signal (June 28, 2016);sec also 2016 Ttustees Report at75, Table IV.B6. 7 See "Are Social Security Benefit Cuts More Likely?", The Social Security aud Medicare ADVISOR, 

March 2015, h!!p://seniorsleague.org/social-securily- benefit-<:nts-likelW. 8 http:f/www.ssa.gov/OACT/ProgDataldescribeoasi.hnnl. 9 The mle. H. Res. 5. was introduced by Congressman Kevin McCm1hy {R-CA-23). The provision 

goveming Tmst Ftutds was supponed by Chainnan of the Subcommiltee on Social Security Sam Johnson {R-TX-3). 10 See hnps://www.congress.govlbill/ll4th-congress.lhouse-resolution/5. Section 3(q) of House Resolulion 

5. 
68 


33390A.045

Both Congress and the SSA are now treating the DI Trust Fund solvency problem as 

having been cured - until the end of2022- but that is not the case. 11 Unfortunately, without 

public pressure from those who rely on Social Security retirement benefits, Congress can be 

expected to avoid the next crisis in the DI Tmst Fund in the same way - by robbing Peter to pay 

Paul. 

A. PROCEDURES FOR OBT A.INL"'G DISABILITY BENEFITS. 

The procedures for detennining eligibility for disability benefits and the amount of those 

benefits for eligible persons ("the DI claim procedure") are complicated, and certain of those 

procedural steps may be in need of amendment to help arrive at a fairer and more adequately 

functioning system. The steps involved in the DI claim procedure12 include the Initial Claim 

Procedure, a solely document-based approach where a claimant files a claim with the SSA. 

According to SSA, a team (consisting of a State disability examiner and a State agency medical 

or psychological consultant) usually makes an initial determination at the first level, 

13 and then 

transmits that application to the Disability Detennination Services ("DDS") office in the 

applicant's State. It is the State agency that makes the final initial disability determination in 

each case. 

In the case of the. approximately 65 percent of applications which are initially denied, a 

claimant may either refile at a later date, or appeal. If the claimant wishes to contest the SSA 

denial of benefits, there are foUl" levels of appeal14: (i) reconsideration by a different examiner 

(with a 10-15 percent success rate); (ii) bearing (before an ALJ, and with a lawyer); 

(iii) Appeals Council review; and (iv) filing suit in federal district court. 

Importantly, at hearings in front of an ALJ, the government is not •·ep•·esented by a 

lawyer. There are over 750,000 such hearings annually, and between 45 and 66 percent of 

claimants who request a hearing before an ALJ are awarded benefits. 15 Even though the 

claimant has counsel, thet·e is no attorney •·epresenting SSA a t the hearing to ask questions 

or contest tile award of benefits. 

On the small chance that neither the ALJ nor the Appeals Council awards benefits, a 

claimant may file a civil action in U.S. district court, seeking reversa l of the administrative 

denial and a disability award. This is considered the fourth level of appeaL Reportedly, very 

few disability claimants (less than I percent) avail themselves of this option, and most such suits 

11 See, e.g., www.ssab.gov/Facts-and-Figures!Did-You-Know-Charts/ Disability-Ttust- Fund-Solvency. 12 See bups://faq.ssa.govlliltkloortal/34011/34019/Atticlc/3718/How-do-1- apply-for-Social-Securitydisability-benefits. 

" See Statement of Michael J. Astme. Collllllissioner. Social Security Administration, before the 

Collllllittee on Ways and Means. Subeollllllittee on Social Sectuity (JtUJe 27, 20 12). 

bllps://www.ssa.govllegislation/tcstimony 062712.bnnl. 

" See SSA Publication 05-10058. See also Statement of Michael J. Astme, Conunissioner, Social Secmity 

AdministraJion, before the Commiuee on Ways and Means, Subconuniuce on Social Security (June 27, 2012), 

bups:J/www.ssa.gov/ legislation/Jeslimony 062712.huul. 

" See www.allsup.com; "~vw.in sib ed sabili ties org; bup://www.ssdrc.com/ 10-3.hlllll (Social Securily 

Resource Center). 
69 


33390A.046

(70 percent or more) are w1successful. Only at this stage of review, in federal court, is the 

govemment represented by legal counsel. 

B. PROPOSALS TO REFORM THE DI PROGRAM. 

Over the years, many groups have submitted proposals to reform the Dl program, 

including government agencies like the Congressional Budget Office, the Social Security 

Administr·atioo itself, the Govemmeut Accountability Office, and the Social Security 

Advisory Board, an independent govermnent agency. In March of2013, the Advisory Board 

held a forwn and received presentations on fisca l ref onus from a variety of non-govenunental 

contributors. In addition, individuals and groups such as professors, nonprofit organizations, 

think tanks, members of Congress, government otlicials, etc have submitted plans for reform. 

For example, in 2014 (! 13th Congress) Senator Tom Coburn (R-OK) (now retired) introduced a 

bill to comprehensively reform Dl insurance with the Protecting Social Security Disability Act of 

2014, S. 3003 (1131h Cong.). In the recently-ended 114'11 Congress, Seoato•· Orl'io Hatch (RUT), Chainnan of the Senate Finance Committee, introduced three bills on August 4, 2015 

related to SSDI. 
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C. PERVERSE INCENTIVES 

What began as a modest federal program designed to help a small number of disabled 

workers in 1956 has today become a vast federal program, where benefits paid far outstrip 

employment taxes paid. Yet, for many years Congress has been impervious to making any 

meaningful changes in the program - whether by way of tightening eligibility, tempering 

benefits, or increasing payroll taxes. Instead, each time the program is in danger of nmning in 

the red, Congress takes the easy way out, reallocating payroll taxes from retirement benefits to 

disability benefits. Although every current and future recipient of federal retirement benefits 

should be concerned about this Congressional "sleight of hand," Congress has had insufficient 

"push back" from seniors. Indeed, in the past, other than seniors who have learned about this 

problem from TSCL and a few other sources, very few seniors even have been aware of the 

problem - but the tide on public awareness bas been turning, with increasing press coverage. 

On March 22, 2013, National Public Radio broadcast and published a storyt6 that 

explains that the growth in the number of persons on disability has "skyrocketed ... even as 

medical advances have allowed many more people to remain on the job, and new laws have 

banned workplace discrimination against the disabled." Just one of tbe interesting revelations in 

the report was that, in 1961, only 8.3 pea·cent of newly disabled wor kers alleged back 

problems (difficult-to-verify or disprove), but now the number exceeds one-third of aU DI 

recipients. Morcver, NPR a·eported that states were hiring private companies to help them 

transition workers from state welfare programs to tbe two federal disability programs - DI and 

SSI." An October 2013 investigation into the 01 program by CBS News' 60 Minutes show 

exposed that an increasing amount of benefits are paid not to disabled persons, but rather paid to 

a ttorneys representing claimants who manipulate the system to the advantage of their clients, 

and themselves.t 8 The DI program was well summarized by one of the 1,500 Administrative 

Law Judges who helps administer the program, Marilyn Zahm: "If the American public knew 

what was going on in our system, half would be outraged and the other half would apply for 

benefits."t9 This broken 01 system did not occur by accident. Rather, there are politically 

powerful forces which benefit from the continuation of a system which grants disabled status to 

those who are not truly disabled, and which allows large fee awards to lawyers. What few 

understand is that both federal and state governments are, in large part, to blame. 

I . Incumbent fedea·al office holders look better when large numbea·s of unemployed 

pea·sons aa-e re-classified as disabled. Persons receiving 01 benefits are not counted among 

those who are unemployed - unless they actively have been seeking employment, which is 

extremely rare. Generally then, the more persons classified as disabled, the fewer unemployed 

16 C. Jodffe-Wali, "Unfit for Work." National Public Radio, All Things Considered aod This AmeJic.au 

Life. ll" p://apps.npr.orgilmfit-for-workl. 11 See C. Joffe-Walt, ··unfit for Work: The stan ling rise of disability in Amelica," supra. 10 S. Kroft, "Disability, USA," 60 Minutes (October 10, 2013) hnp://www.cbs news.com/ucws/disabilirvusa/. 19 See hnp://www.cbsnews.com/uews/disabilitv-usa/. 
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8 

persons are actually counted as unemployed, resulting in an understatement of the true rate of 

unemployment, and giving the false appearance that the economy is healthier than it truly is20 

2. State governments would prefe•· for •·esidents to be re-classified as disabled than 

to remain on state welfare. Persons receiving federal DI benefits do not receive benefits on 

state welfare rolls. States do not appear to care that the federal govemment must pay disability 

benefits which are not deserved, so long as state budgets are balanced. 21 

3. Individuals prefe1· to receive 01 benefits over state unemployment welfare 

benefits. There is a time limit imposed by each state for receiving unemployment benefits, but 

there is no such limit for DI benefits. And, after two years on DI, individuals qualify for 

Medicare. Although disability benefits may not seem like a great amount of money, consider 

that $14,500 is the amount that an individual would earn working 50 weeks (2,000 hours) at a 

job at the cmTent federal minimum wage of$7.25 per hour.22 Compare that $14,500 to the 

altemative of receiving approximately S 13,000 annually in OJ benefits (which can add up to an 

average of$300,000 in lifetime benefits), and Medicare benefits that could be worth many 

thousands more annually, plus the various other non-cash benefits that may be available. The 

actual net eamings of working versus receiving only DI benefits is about $1,500 - or 75 cents 

per hour. 

4. Lawyers who •·epresent claimants are a well funded lobby fo•· the cun·ent system. 

The current system works beautifully for the lawyers of claimants. Lawyers for claimants have 

no attomey opposition. Some law finns make scores of millions of dollars annually for assisting 

disability claimants in presenting claims before SSA. 23 

zo See, e.g. , http://mouey.cnn.com/2011/06/0l/news/eeouomy/ disabled workers/. 

'' See, e.g. , http://cagw.org/medial\vastewatcher/disability-uew-wclfare. 12 However, those who live in states where welfare benefits are extremely liberal may view the mancr 

differently, such as Hawaii. the District of Coltuubia. and Massachusetts. See, e.g., "Welfare Payouts lop S20 per 

hour in eight stales." Dowotreodcom (Jan. 9, 2014). reporting on a study by the CATO Institute, 

http://downlrend.com/ robertgellilwelfare-payouts-lop-20-per-hour-in-eight-states. 

" See, e.g. , h!!p://www. wsj.com a~ticles/SD l 0001424052970203518404.5770 96632862 007046 (two 

attorneys in Binder law fum eruned $88 million in fees during 20 I 0). 
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9 

RECOMMENDATIONS 

TSCL has urged seniors to make their views known to Congress. TSCL recommends 

tbat reform of tbe DI program should begin with the following four refomlS. 

I. Aggressively Move against DI F1·aud. SSA regularly claims that it is aggressively 

moving against OJ fraud. For example, it reports that: 

One of our most effective measures to guard against fraud is the Cooperative 

Disability Investigations program. Under the program, we investigate 

suspicious disability claims early, before making a decision to award benefits. In 

eflect, we proactively stop fraud before it happens. In fiscal year 2012, with the 

help of state and local law enforcement, the program reported nearly $340 million 

in projected savings to the disability programs. This resulted in a •·etu1·n on 

investment of $17 for each $1 spent. [Emphasis added.j24 

The annual savings of $340 million from the DI program, presumably calculated as occurring 

over multiple years, must be compared against the total benefit payments of the program of about 

$143 billion in calendar year 2015. The fraud being caught is only the tip of the iceberg. 

Prosecutions for fraud should be brought, as necessary. 2s IfSSA's numbers are correct, that 

there is a $17 savings for each $1 spent, then SSA should be required to dramatically increase 

spending on programs such as the Cooperative Disability Investigations program. SSA should 

be required to expand its fraud programs at least until its current ratio of 17: I drops to near I: I. 

Therefore TSCL Supports SSA's testimony in this hearing promising to increase significantly its 

anti-fraud efforts. 

2. Restructure DJ Adjudicatory P•·ocess. It was reported by SSA that, in mid-2016, 

there were over I million cases currently awaiting a hearing.26 Part of the reason for this backlog 

is that the process is unduly complex, with too many types of appeals. The SSA has reacted to 

this backlog in exactly the wrong way. SSA Deputy Commissioner Gmbcr was criticized in a 

Congressional hearing for choosing not to usc appropriated funds to hire sufltcient numbers of 

ALJs to hear and resolve the rising backlog of cases, but rather moving many thousands of 

pending cases from AlJs to attorney examiners, who are SSA employees, lacking "requisite 

decisional independence." The subcommittee chair reasonably asked whether such a delegation 

to attorney examiners violates the Administrative Procedure Act, and whether it could have other 

"' SSA Disability Facts, hnps://www.ssa.gov/disabilirvfacts/facts.html. 

lS See, e.g., Social Security Disability Insurance Fraud Scheme iu New Yod<, Office of the Inspector 

General, SSA, (Jan 16, 2014). https://oig.ssa.gov/newsroom/ cougressional-testimonyJjant6; Social Security 

Disability Insurance Fraud Conspiracy in Pueno Rico, Office of the Inspector General, SSA (Sepi. 18, 20 13). 

https:i/oig.ssa.gov/newsroom/congressiona !-testimony/sept 19 26 See Testimony of Theresa L. Gmber, Deputy Commissioner. Disability Adjudication and Review, U.S. 

Social Security Administration, before the Subconunittee on Regulatory Affairs and Federal Management. U.S. 

Senate CollUilittee on Homeland Security & Governmental Aft> irs, p. I (May 12, 2016). 

http://www.hsgac.senate.gov/ hearingslexamining-due-process-in-adminislrative- hearings 
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LO 

adverse legal consequences. See id., Opening Remarks of Senator James Lankford, p. 2. SSA 

should entrust the authority to hear appeals ofDI claims only to ALJs. 

3. Eliminate the "Reconsideration" Step, with All Determinations Reviewed by 

ALJs for Compliance with Fedet·al Law. This proposal is consistent with legislation 

introduced by Senator Tom Cobum. Four levels of appeal for disability benefits make no sense 

- federal constitutional litigation has only two. An initial decision by an examiner is subject to 

review by an ALJ, and should not be subject to being overtumed by another examiner. 

Moreover, no decision of an examiner should commit the agency until it has been reviewed by 

an ALJ for compliance with the law. In this way, erroneous initial decisions to grant benefits can 

be stopped before they occur. No one SSA employee should have the unreviewable power to 

grant benefits which can last a lifetime. 

4. Require SSA to Be Represented by Counsel at DI Hearings. A paper was 

presented at the 2015 SSDl Solutions Initiative Conference entitled "Social Security: 

Restructuring Disability Adjudication.'m A key component of the suggested restructuring 

process would transform the role of SSA from that of an "uninvolved non-party in the hearings 

and appeals process," to that of a party, "directly represented [by counsel] and engaged in 

iJldividual disability hearings before ALJs.'' !d. at I. Arguing that involvement ofSSA 

"adversary" counsel at the hearing stage would promote administrative justice for all parties in a 

disability hearing, the authors pointed out that the presence of a SSA legal representative would 

benefit the claimant, "enabling a range of activities designed to expedite hearings and appeals; 

and, where possible, to reach early decisions in substantial numbers of cases, leaving only those 

claims where there is a significant question, for hearing." !d. at 9. This paper also proposed a 

number of rules, including a revision of the attorney fee standards set forth in 20 C.F.R. Part 404. 

Pointing out that the current system inherently rewards delay- " the longer a case is pending, 

the greater the attorney's fee [id. at 14]" - such a circumstance contravenes not only widespread 

concern over the case backlog, but also a claimant's ne·ed for financial assistance. TSCL 

supports both of these recommendations. 

5. lnCI'ease Usage of Continuing Disability Reviews. TSCL supports the March 14, 

2016, recommendations made by the U.S. Government Accountability Office to improve efforts 

to increase savings through its Continuing Disability Reviews ("CDRs").28 By modifying its 

case selection priorities, these CDRs can become a source of important savings for the Dl 

Program. 

27 See bup:lfssdisolutions.orstsites/defauh/files/engelglendeuingwolfe O.pdf. 28 See https://www.gao.gov/products/GA0-16-250.