II

103D CONGRESS

2D SESSION S. 1863

To amend title II of the Social Security Act to institute certain reforms

relating to the provision of disability insurance benefits based on substance abuse and relating to representative payees, and for other

purposes.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 23 (legislative day, FEBRUARY 22), 1994

Mr. COHEN (for himself, Mr. DOLE, Mrs. KASSEBAUM, Mr. KOHL, Mr.

LUGAR, Mr. THURMOND, Mr. GRASSLEY, Mr. WARNER, Mr. DOMENICI,

Mr. CHAFEE, Mr. BENNETT, and Mr. STEVENS) introduced the following

bill; which was read twice and referred to the Committee on Finance

A BILL

To amend title II of the Social Security Act to institute

certain reforms relating to the provision of disability

insurance benefits based on substance abuse and relating

to representative payees, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Social Security Disabil5 ity and Rehabilitation Act of 1994’’.
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1 SEC. 2. REFORM OF MONTHLY INSURANCE BENEFITS

2 BASED ON DISABILITY INVOLVING SUB3 STANCE ABUSE.

4 (a) SOCIAL SECURITY DISABILITY INSURANCE.—

5 (1) IN GENERAL.—Section 223 of the Social

6 Security Act (42 U.S.C. 423) is amended by adding

7 at the end the following new subsection:

8 ‘‘Limitation on Payment of Benefits by Reason of

9 Substance Abuse

10 ‘‘(j)(1)(A) Notwithstanding any other provision of

11 this title, no individual whose disability is based in whole

12 or in part on a medical determination that the individual

13 is a drug addict or alcoholic shall be entitled to benefits

14 under this title based on such disability with respect to

15 any month, unless such individual—

16 ‘‘(i) is undergoing, or on a waiting list for, any

17 medical or psychological treatment that may be ap18 propriate for such individual’s condition as a drug

19 addict or alcoholic (as the case may be) and for the

20 stage of such individual’s rehabilitation at an insti21 tution or facility approved for purposes of this para22 graph by the Secretary (so long as access to such

23 treatment is reasonably available, as determined by

24 the Secretary), and

25 ‘‘(ii) demonstrates in such manner as the Sec26 retary requires, including at a continuing disability
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1 review not later than one year after such determina2 tion, that such individual is complying with the

3 terms, conditions, and requirements of such treat4 ment and with the requirements imposed by the Sec5 retary under subparagraph (B).

6 ‘‘(B) The Secretary shall provide for the monitoring

7 and testing of all individuals who are receiving benefits

8 under this title and who as a condition of such benefits

9 are required to be undergoing treatment and complying

10 with the terms, conditions, and requirements thereof as

11 described in subparagraph (A), in order to assure such

12 compliance and to determine the extent to which the impo13 sition of such requirements is contributing to the achieve14 ment of the purposes of this title. The Secretary may re15 tain jurisdiction in the case of a hearing before the Sec16 retary under this title to the extent the Secretary deter17 mines necessary to carry out the preceding sentence. The

18 Secretary shall annually submit to the Congress a full and

19 complete report on the Secretary’s activities under this

20 paragraph.

21 ‘‘(C) The representative payee and the referral and

22 monitoring agency for any individual described in subpara23 graph (A) shall report to the Secretary any noncompliance

24 with the terms, conditions, and requirements of the treat-
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1 ment described in subparagraph (A) and with the require2 ments imposed by the Secretary under subparagraph (B).

3 ‘‘(D)(i) If the Secretary finds that an individual is

4 not complying with the terms, conditions, and require5 ments of the treatment described in subparagraph (A), or

6 with the requirements imposed by the Secretary under

7 subparagraph (B), or both, the Secretary, in lieu of termi8 nation, may suspend such individual’s benefits under this

9 title until compliance has been reestablished, including

10 compliance with any additional requirements determined

11 to be necessary by the Secretary.

12 ‘‘(ii) Any period of suspension under clause (i) shall

13 be taken into account in determining any 24-month period

14 described in subparagraph (E) and shall not be taken into

15 account in determining the 36-month period described in

16 such subparagraph.

17 ‘‘(E)(i) Except as provided in clause (ii), no individ18 ual described in subparagraph (A) shall be entitled to ben19 efits under this title for any month following the 24-month

20 period beginning with the determination of the disability

21 described in such subparagraph.

22 ‘‘(ii) If at the end of the 24-month period described

23 in clause (i), the individual furnishes evidence in accord24 ance with subsection (d)(5) that the individual continues

25 to be under a disability based in whole or in part on a
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1 medical determination that the individual is a drug addict

2 or alcoholic, such individual shall continue to be entitled

3 to benefits under this title based on such disability.

4 ‘‘(iii) Subject to clause (iv), if such an individual con5 tinues to be entitled to such benefits for an additional 24-

6 month period following a determination under clause (ii),

7 clauses (i) and (ii) shall apply with regard to any further

8 entitlement to such benefits following the end of such ad9 ditional period.

10 ‘‘(iv) In no event shall such an individual be entitled

11 to benefits under this title for more than a total of 36

12 months, unless upon the termination of the 36th month

13 such individual furnishes evidence in accordance with sub14 section (d)(5) that the individual is under a disability

15 which is not related in part to a medical determination

16 that the individual is a drug addict or alcoholic.

17 ‘‘(2)(A) Any benefits under this title payable to any

18 individual referred to in paragraph (1), including any ben19 efits payable in a lump sum amount, shall be payable only

20 pursuant to a certification of such payment to a qualified

21 organization acting as a representative payee of such indi22 vidual pursuant to section 205(j).

23 ‘‘(B) For purposes of subparagraph (A) and section

24 205(j)(4), the term ‘qualified organization’—
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1 ‘‘(i) shall have the meaning given such term by

2 section 205(j)(4)(B), and

3 ‘‘(ii) shall mean an agency or instrumentality of

4 a State or a political subdivision of a State.

5 ‘‘(3) Monthly insurance benefits under this title

6 which would be payable to any individual (other than the

7 disabled individual to whom benefits are not payable by

8 reason of this subsection) on the basis of the wages and

9 self-employment income of such a disabled individual but

10 for the provisions of paragraph (1), shall be payable as

11 though such disabled individual were receiving such bene12 fits which are not payable under this subsection.’’.

13 (2) CONFORMING AMENDMENTS.—

14 (A) Section 205(j)(1) of such Act (42

15 U.S.C. 405(j)(1)) is amended by inserting ‘‘, or

16 in the case of any individual referred to in sec17 tion 223(j)(1)(A)’’ after ‘‘thereby’’.

18 (B) Section 205(j)(2)(D)(ii)(II) of such

19 Act (42 U.S.C. 405(j)(2)(D)(ii)(II)) is amended

20 by striking ‘‘legally incompetent or under the

21 age of 15’’ and inserting ‘‘legally incompetent,

22 under the age of 15, or a drug addict or alco23 holic referred to in section 223(j)(1)(A)’’.
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1 (b) SUPPLEMENTAL SECURITY INCOME.—Paragraph

2 (3) of section 1611(e) of the Social Security Act (42

3 U.S.C. 1382(e)) is amended to read as follows:

4 ‘‘(3)(A)(i) No person who is an aged, blind, or dis5 abled individual solely by reason of disability (as deter6 mined under section 1614(a)(3)) shall be an eligible indi7 vidual or eligible spouse for purposes of this title with re8 spect to any month if such individual’s disability is based

9 in whole or in part on a medical determination that the

10 individual is a drug addict or alcoholic, unless such indi11 vidual—

12 ‘‘(I) is undergoing, or on a waiting list for, any

13 medical or psychological treatment that may be ap14 propriate for such individual’s condition as a drug

15 addict or alcoholic (as the case may be) and for the

16 stage of such individual’s rehabilitation at an insti17 tution or facility approved for purposes of this para18 graph by the Secretary (so long as access to such

19 treatment is reasonably available, as determined by

20 the Secretary), and

21 ‘‘(II) demonstrates in such manner as the Sec22 retary requires, including at a continuing disability

23 review not later than one year after such determina24 tion, that such individual is complying with the

25 terms, conditions, and requirements of such treat-
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1 ment and with the requirements imposed by the Sec2 retary under clause (ii).

3 ‘‘(ii) The Secretary shall provide for the monitoring

4 and testing of all individuals who are receiving benefits

5 under this title and who as a condition of such benefits

6 are required to be undergoing treatment and complying

7 with the terms, conditions, and requirements thereof as

8 described in clause (i), in order to assure such compliance

9 and to determine the extent to which the imposition of

10 such requirements is contributing to the achievement of

11 the purposes of this title. The Secretary may retain juris12 diction in the case of a hearing before the Secretary under

13 this title to the extent the Secretary determines necessary

14 to carry out the preceding sentence. The Secretary shall

15 annually submit to the Congress a full and complete report

16 on the Secretary’s activities under this subparagraph.

17 ‘‘(iii) The representative payee and the referral and

18 monitoring agency for any individual described in clause

19 (i) shall report to the Secretary any noncompliance with

20 the terms, conditions, and requirements of the treatment

21 described in clause (i) and with the requirements imposed

22 by the Secretary under clause (ii).

23 ‘‘(iv)(I) If the Secretary finds that an individual is

24 not complying with the terms, conditions, and require25 ments of the treatment described in clause (i), or with the
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1 requirements imposed by the Secretary under clause (ii),

2 or both, the Secretary, in lieu of termination, may suspend

3 such individual’s benefits under this title until compliance

4 has been reestablished, including compliance with any ad5 ditional requirements determined to be necessary by the

6 Secretary.

7 ‘‘(II) Any period of suspension under subclause (I)

8 shall be taken into account in determining any 24-month

9 period described in clause (v) and shall not be taken into

10 account in determining the 36-month period described in

11 such clause.

12 ‘‘(v)(I) Except as provided in subclause (II), no indi13 vidual described in clause (i) shall be entitled to benefits

14 under this title for any month following the 24-month pe15 riod beginning with the determination of the disability de16 scribed in such clause.

17 ‘‘(II) If at the end of the 24-month period described

18 in subclause (I), the individual furnishes evidence in ac19 cordance with section 223(d)(5) that the individual contin20 ues to be under a disability based in whole or in part on

21 a medical determination that the individual is a drug ad22 dict or alcoholic, such individual shall be entitled to bene23 fits under this title based on such disability.

24 ‘‘(III) Subject to subclause (IV), if such an individual

25 continues to be entitled to such benefits for an additional
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1 24-month period following a determination under

2 subclause (II), subclauses (I) and (II) shall apply with re3 gard to any further entitlement to such benefits following

4 the end of such additional period.

5 ‘‘(IV) In no event shall such an individual be entitled

6 to benefits under this title for more than a total of 36

7 months, unless upon the termination of the 36th month

8 such individual furnishes evidence in accordance with sec9 tion 223(d)(5) that the individual is under a disability

10 which is not related in part to a medical determination

11 that the individual is a drug addict or alcoholic.

12 ‘‘(B)(i) Any benefits under this title payable to any

13 individual referred to in subparagraph (A), including any

14 benefits payable in a lump sum amount, shall be payable

15 only pursuant to a certification of such payment to a

16 qualified organization acting as a representative payee of

17 such individual pursuant to section 1631(a)(2)(A)(ii).

18 ‘‘(ii) For purposes of clause (i) and section

19 1631(a)(2)(D), the term ‘qualified organization’—

20 ‘‘(I) shall have the meaning given such term by

21 section 1631(a)(2)(D)(ii), and

22 ‘‘(II) shall mean an agency or instrumentality

23 of a State or a political subdivision of a State.’’

24 (c) EFFECTIVE DATES; AUTHORIZATIONS.—
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1 (1) IN GENERAL.—Except as provided in para2 graph (2), the amendments made by this section

3 shall apply to benefits payable for determinations of

4 disability made 90 or more days after the date of

5 the enactment of this Act.

6 (2) CURRENT DETERMINATIONS.—

7 (A) IN GENERAL.—With respect to any in8 dividual described in subparagraph (B), the

9 Secretary of Health and Human Services shall

10 provide during the 3-year period beginning after

11 the date of the enactment of this Act for the

12 application of the amendments made by this

13 section to such individual with the time periods

14 described in such amendments to begin upon

15 such application.

16 (B) INDIVIDUAL DESCRIBED.—An individ17 ual is described in this subparagraph if such in18 dividual is entitled to benefits under title II or

19 XVI of the Social Security Act based on a dis20 ability determined before the date described in

21 paragraph (1) to be based in whole or in part

22 on a medical determination that the individual

23 is a drug addict or alcoholic.

24 (3) AUTHORIZATION OF APPROPRIATIONS.—

25 There are authorized to be appropriated such sums
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1 as may be necessary to carry out the purposes of the

2 provisions of, and the amendments made by, this

3 section.

4 SEC. 3. PRIORITY OF TREATMENT.

5 The Secretary of Health and Human Services,

6 through the Administrator of the Substance Abuse and

7 Mental Health Services Administration, shall assure that

8 every individual receiving disability benefits under title II

9 or XVI of the Social Security Act based in whole or in

10 part on a medical determination that the individual is a

11 drug addict or alcoholic be given high priority for treat12 ment through entities supported by the various States

13 through any substance abuse block grant authorized under

14 law.

15 SEC. 4. ESTABLISHMENT OF REFERRAL MONITORING

16 AGENCIES REQUIRED IN ALL STATES.

17 The Secretary of Health and Human Services shall,

18 within 1 year of the date of the enactment of this Act,

19 provide for the establishment of referral and monitoring

20 agencies for each State for the purpose of carrying out

21 the treatment requirements under sections 223(j)(1) and

22 1611(e)(3)(A) of the Social Security Act (42 U.S.C.

23 423(j)(1) and 1382(e)(3)(A)).
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1 SEC. 5. PROCEEDS FROM CERTAIN CRIMINAL ACTIVITIES

2 CONSTITUTE SUBSTANTIAL GAINFUL EM3 PLOYMENT.

4 (a) SOCIAL SECURITY DISABILITY INSURANCE.—

5 Section 223(d)(4) of the Social Security Act (42 U.S.C.

6 423(d)(4)) is amended by inserting the following after the

7 first sentence: ‘‘If an individual engages in a criminal ac8 tivity to support substance abuse, any proceeds derived

9 from such activity shall demonstrate such individual’s abil10 ity to engage in substantial gainful activity.’’.

11 (b) SUPPLEMENTAL SECURITY INCOME.—Section

12 1614(a)(3)(D) of the Social Security Act (42 U.S.C.

13 1382(a)(3)(D)) is amended by inserting the following

14 after the first sentence: ‘‘If an individual engages in a

15 criminal activity to support substance abuse, any proceeds

16 derived from such activity shall demonstrate such individ17 ual’s ability to engage in substantial gainful activity.’’.

18 (c) EFFECTIVE DATE.—The amendments made by

19 this section shall apply to disability determinations con20 ducted on or after the date of the enactment of this Act.

21 SEC. 6. CONSISTENT PENALTY PROVISIONS FOR SSDI AND

22 SSI PROGRAMS.

23 (a) FELONY PENALTIES FOR FRAUD.—

24 (1) IN GENERAL.—Subsection (a) of section

25 1631 of the Social Security Act (42 U.S.C. 1383a)

26 is amended by striking ‘‘shall be guilty of a mis-
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1 demeanor and upon conviction thereof shall be fined

2 not more than $1,000 or imprisoned for not more

3 than one year, or both’’ and inserting ‘‘shall be

4 guilty of a felony and upon conviction thereof shall

5 be fined under title 18, United States Code, or im6 prisoned for not more than five years, or both’’.

7 (2) REPRESENTATIVE PAYEES.—

8 (A) SSDI.—Subsections (b) and (c) of sec9 tion 208 of such Act (42 U.S.C. 408) are

10 amended to read as follows:

11 ‘‘(b)(1) Any person or other entity who is convicted

12 of a violation of any of the provisions of this section, if

13 such violation is committed by such person or entity in

14 his role as, or in applying to become, a certified payee

15 under section 205(j) on behalf of another individual (other

16 than such person’s spouse or an entity described in section

17 223(j)(2)(B)(ii)), shall be guilty of a felony and upon con18 viction thereof shall be fined under title 18, United States

19 Code, or imprisoned for not more than five years, or both.

20 ‘‘(2) In any case in which the court determines that

21 a violation described in paragraph (1) includes a willful

22 misuse of funds by such person or entity, the court may

23 also require that full or partial restitution of such funds

24 be made to the individual for whom such person or entity

25 was the certified payee.
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1 ‘‘(3) Any person or entity convicted of a felony under

2 this section or under section 1632(b) may not be certified

3 as a payee under section 205(j).

4 ‘‘(c) For the purpose of subsection (a)(7), the terms

5 ‘social security number’ and ‘social security account num6 ber’ mean such numbers as are assigned by the Secretary

7 under section 205(c)(2) whether or not, in actual use, such

8 numbers are called social security numbers.’’

9 (B) SSI.—Subsection (b)(1) of section

10 1632 of such Act (42 U.S.C. 1383a) is amend11 ed by striking ‘‘(other than such person’s

12 spouse)’’ and all that follows through the period

13 and inserting ‘‘(other than such person’s spouse

14 or an entity described in section

15 1611(e)(3)(B)(ii)(II)), shall be guilty of a fel16 ony and upon conviction thereof shall be fined

17 under title 18, United States Code, or impris18 oned for not more than five years, or both.’’

19 (b) CIVIL ADMINISTRATIVE PENALTIES.—

20 (1) SSDI.—Section 208 of the Social Security

21 Act (42 U.S.C. 408) is amended by adding at the

22 end the following new subsections:

23 ‘‘(e) For administrative penalties for false claims and

24 statements with respect to which an individual or other
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1 entity knows or has reason to know such falsity, see chap2 ter 38 of title 31, United States Code.

3 ‘‘(f) In the case of the second or subsequent imposi4 tion of an administrative or criminal penalty on any per5 son or other entity under this section, the Secretary may

6 exclude such person or entity from participation in any

7 program under this title and titles V, XVI, XVIII, and

8 XX, and may direct that such person or entity be excluded

9 from any State health care program (as defined in section

10 1128(h)) and any other Federal program as provided by

11 law.’’

12 (2) SSI.—

13 (A) IN GENERAL.—Section 1632 of such

14 Act (42 U.S.C. 1383a) is amended by adding at

15 the end the following new subsections:

16 ‘‘(c) For administrative penalties for false claims and

17 statements with respect to which an individual or other

18 entity knows or has reason to know such falsity, see chap19 ter 38 of title 31, United States Code.

20 ‘‘(d) In the case of the second or subsequent imposi21 tion of an administrative or criminal penalty on any per22 son or other entity under this section, the Secretary may

23 exclude such person or entity from participation in any

24 program under this title and titles II, V, XVIII, and XX,

25 and may direct that such person or entity be excluded
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1 from any State health care program (as defined in section

2 1128(h)) and any other Federal program as provided by

3 law.’’

4 (B) CONFORMING AMENDMENT.—The

5 heading for section 1632 of such Act (42

6 U.S.C. 1383a) is amended by striking ‘‘FOR

7 FRAUD’’.

8 (c) EFFECTIVE DATE.—The amendments made by

9 this section shall be effective on or after the date of the

10 enactment of this Act.

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