Supplemental Security Income: Disability Program Vulnerable to Applicant Fraud When Middlemen Are Used
Published: 1995-08-31T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Pursuant to a congressional request, GAO reviewed fraudulent claims for disability benefits under the Supplemental Security Income (SSI) program, focusing on: (1) the extent of fraudulent applications submitted by non-English speaking immigrants using middlemen; (2) factors that contribute to SSI vulnerability to such fraudulent applications; and (3) government initiatives to combat such fraudulent activities.
section_title: What GAO Found
paragraphs: GAO found that: (1) although the Social Security Administration (SSA) has been aware of allegations of SSI fraud related to the use of middlemen since 1990, the number of applicants who have obtained SSI benefits illegally through the use of middlemen is unknown; (2) the number of immigrants receiving SSI disability benefits rose from 45,000 in 1983 to 267,000 in 1993; (3) in California, about 6,000 potentially fraudulent applications have been identified, of which about 30 percent represent SSI claims being paid; (4) ineligible SSI recipients can receive about $113,000 in SSI, Medicaid, and Food Stamp benefits by the time they are 65 years old; and (5) SSA has established a task force in California to combat fraudulent applications involving middlemen and has terminated benefits for 207 recipients, as of April 1995. In addition, GAO found that SSI is vulnerable to fraudulent applications involving middlemen because SSA: (1) management practices and bilingual staff shortages enable applicants to use middlemen; (2) performs only limited monitoring of middlemen; (3) has limited funds for investigations; (4) has not coordinated its efforts to monitor middlemen with state Medicaid agencies; and (5) needs a better strategy to keep ineligible applicants from ever being accepted on SSI rolls.

section_title: Letter
paragraphs: Recent media reports and congressional hearings have focused attention on allegedly fraudulent claims for disability benefits that have been filed by legal immigrants under the Supplemental Security Income (SSI) program. Such fraudulent claims have been facilitated by middlemen who provided translation services and involved themselves in the SSI application process of non-English-speaking immigrants. It has been alleged that middlemen have coached SSI claimants on how to appear mentally disabled, have used dishonest health care providers to submit false medical evidence to those determining eligibility for benefits, and have provided false information on claimants’ medical and family histories. As a result of these allegedly fraudulent activities, people have obtained SSI disability benefits to which they are not entitled.
Given your concern about this issue, we agreed to (1) determine the extent of fraudulent applications submitted by non-English-speaking immigrants using middlemen, (2) describe factors that contribute to the SSI program’s vulnerability to such fraudulent applications, and (3) describe federal and state initiatives to combat such fraudulent activities.
To meet our objectives, we interviewed officials from, and reviewed available data provided by, Social Security Administration (SSA) headquarters, regional offices, and several field offices, as well as disability determination services (DDS) offices in three states. We also met with representatives from California’s Medicaid Fraud Control Unit and with officials in the U.S. Attorney’s Office in Seattle, Washington. We coordinated our study with then-Department of Health and Human Services’ (HHS) Office of Inspector General (OIG) and discussed with them their efforts to investigate cases of suspected fraud involving middlemen. Our work was conducted from May 1994 through June 1995 in accordance with generally accepted government auditing standards.
subsections: section_title: Background
paragraphs: Authorized in 1972 under title XVI of the Social Security Act, the SSI program is administered by SSA. Until recently, SSA was an agency within HHS. Effective March 31, 1995, it became an independent agency. SSI provides cash benefits to aged, blind, or disabled individuals whose income and resources are below certain levels. Individuals seeking SSI benefits on the basis of disability must meet financial eligibility requirements and disability criteria. SSI is federally funded, and most states provide recipients a supplement. SSA determines applicants’ financial eligibility; DDS offices, which are state agencies funded and overseen by SSA, make the initial determination of applicants’ medical eligibility. In 1994, more than 6 million SSI recipients received nearly $22 billion in federal benefits and $3 billion in state benefits. The maximum federal SSI monthly benefit in 1995 is $458 for an individual and $687 for a couple if both spouses are eligible.
To be eligible for SSI, individuals must be U.S. citizens or legal immigrants.Also eligible for SSI benefits are certain other immigrants, classified by public assistance programs as permanently residing in the United States under color of law (PRUCOL). Under the SSI program, the PRUCOL category includes refugees, defined by INS as people who are outside their country of nationality and unable or unwilling to return to that country because of persecution or a well-founded fear of persecution. Refugees are eligible to become lawful permanent residents after 1 year of continuous presence in the United States, and most do.
Most SSI recipients are also eligible for Medicaid and food stamps. Medicaid is a federal/state matching entitlement program administered by HHS’ Health Care Financing Administration (HCFA). Medicaid provides medical assistance to low-income aged, blind, or disabled individuals; members of families with dependent children who receive benefits from the Aid to Families With Dependent Children program; and certain other children and pregnant women. The Food Stamp program, administered by the Department of Agriculture’s Food and Nutrition Service, is a federally funded entitlement program that provides food stamp coupons to low-income families.
subsections: section_title: Applying for SSI Benefits
paragraphs: To apply for SSI disability benefits, an individual must generally file a claim, in person, by telephone, or by mail, with an SSA field office. Usually, an SSA field office claims representative interviews the claimant in person or by telephone to determine whether the claimant’s income and resources meet SSI financial eligibility criteria and to obtain information about the claimant’s disability. In the case of a non-English-speaking claimant, if the claims representative does not speak the claimant’s language, an interpreter participates in the interview. The SSA claims representative is also available to help the claimant complete the application form. If the claimant is deemed financially eligible, the SSA field office refers his or her claim to the state DDS for a medical review.
DDS decides whether a claimant’s physical or mental impairment meets SSI disability criteria. To be considered disabled, a claimant must be unable to engage in any substantial gainful activity because of a physical or mental impairment that is expected to last at least 12 months or to result in death. To make a determination, DDS obtains and reviews medical evidence from health care providers who have treated the claimant. If DDS finds the medical evidence insufficient or possibly fraudulent, it orders a medical consultative examination (CE). DDS is generally responsible for ensuring that there is no language barrier between the claimant and the CE provider. If the CE provider does not speak the claimant’s language, DDS can either arrange for an interpreter or allow the claimant to use his or her own interpreter. If the claim is denied, an appeals process is available.
SSA conducts a redetermination on each case periodically to ensure that recipients continue to be eligible for SSI according to financial eligibility criteria. The frequency of redeterminations varies based on anticipated changes in income and other factors; however, a redetermination is performed on every case at least once every 6 years. SSA has also been authorized to conduct periodic continuing disability reviews (CDR) to ensure that people whose medical condition has improved and who are no longer disabled leave SSI’s rolls. We previously reported that SSA had conducted relatively few CDRs for several years. In 1994, to increase the number of CDRs that SSA conducted under the SSI program (only 11,000 were conducted in 1994) the Congress instituted a requirement that SSA conduct at least 100,000 CDRs on SSI cases each year for the next 3 years, beginning with fiscal year 1996. SSA is also required to conduct CDRs on at least one-third of disabled SSI recipients who turn 18 years old in each of the next 3 years.
If an SSA or DDS office suspects that a claim is fraudulent and the CE does not refute that suspicion, that claim is referred to the OIG for investigation.Generally, the function of the OIG is to work with SSA to develop evidence to establish potential violations of the Social Security Act; decide whether suspected fraud cases meet federal, state, or county guidelines for criminal or civil prosecution; and formally prepare and present cases for prosecution to the U.S. Attorney or the District Attorney.
The Congress is considering legislation that could have a significant impact on both immigrants already receiving SSI benefits and those applying for SSI benefits. The House of Representatives passed H.R. 4 in 1995, which includes a provision that would generally bar legal immigrants, except for lawful permanent residents who are 75 years old or older and who have lived in the United States for at least 5 years and refugees in the country fewer than 6 years, from receiving certain welfare benefits, including SSI benefits. The Senate is considering a similar measure that would eliminate eligibility for all noncitizens except for legal immigrants who have worked in the United States long enough to qualify for Social Security disability benefits—at least 10 years—and recent refugees and veterans.
section_title: Extent of Fraudulent Applications by Non-English-Speaking Immigrants Using Middlemen Is Unknown
paragraphs: Although some ineligible non-English-speaking immigrants obtain SSI benefits by using middlemen, the actual number of people who do so is unknown. During the past decade, the SSI immigrant caseload has grown dramatically, as compared with the U.S. citizen caseload. To serve those immigrants who do not speak English, interpreters were introduced to the SSI application process. By 1990, SSA was aware that some non-English-speaking applicants were using middlemen to defraud the SSI program and were collecting SSI benefits for which they were ineligible. Because SSI recipients generally remain on the rolls for a long time, the cost of a single mistake in determining eligibility is high: We estimate that one ineligible recipient could improperly receive a total of about $113,000 in federal benefits by the time he or she is 65 years old.
As mentioned previously, little is known about the actual number of non-English-speaking immigrants receiving SSI as a result of fraudulent applications made with the assistance of middlemen. Most of the suspected cases of middleman fraud identified so far have been in California and Washington—about 6,500 cases. In both states, there has been a concerted effort to uncover fraudulent claims facilitated by middlemen. Washington’s intergovernmental task force on SSI middleman fraud, for instance, identified the following case: A Washington middleman who ran a business submitting fraudulent SSI claims was convicted of fraud. For a fee of between $2,000 and $3,000 from each applicant, he had provided inaccurate information on their SSA forms, coached them to feign mental impairments, and provided false translations at their medical examinations. At least 500 of the more than 1,000 immigrants he had coached qualified for benefits; as of November 1994, 95 of these recipients had received about $3.2 million in benefits. Three of the 500 have been convicted of fraud. The SSI claims of these 500 recipients, as well as other potentially fraudulent claims that have been identified, are subject to SSA reviews. SSA has begun implementing reviews of 460 suspected fraudulent claims in Washington.
subsections: section_title: Immigrant Caseload and Need for Interpreters Have Risen Dramatically
paragraphs: During the past decade, the immigrant portion of the SSI disability caseload rose much more rapidly than the U.S. citizen portion of the caseload. Between 1983 and 1993, the number of U.S. citizens receiving SSI disability benefits rose from approximately 2.3 million to 4.2 million—less than a twofold increase. In comparison, during the same period, the number of immigrants receiving SSI disability benefits rose from 45,000 to 267,000—approximately a sixfold increase. This increase is particularly dramatic when contrasted with the increase in the number of immigrants admitted annually to the United States in the past decade; that is, 628,132 were admitted in 1983, compared with 1,000,630 in 1993.
The immigrant component of the SSI disability caseload is important because it is different from the rest of the caseload in one obvious, but significant, way: Many immigrants do not speak or understand English. As a result, when they apply for SSI benefits, they need someone to translate for them during their interactions with the English-language SSI system. SSA field offices often maintain interpreters on staff for the languages that are prevalent in their geographical areas, but sometimes field offices are unable to meet the need for interpreters. As a result, non-English-speaking applicants have been free to involve their own interpreters in the application process except where fraud is suspected.
section_title: Fraud Problem Had Surfaced by 1990
paragraphs: Many of the SSA and DDS offices we visited had recognized middleman fraud as a problem by 1990. Some middlemen were suspected of taking advantage of non-English-speaking claimants’ lack of sophistication and apprehensions about being in a new country, thus leading claimants to believe that middleman services were an essential support in navigating the SSI system. Middlemen were known to have coached claimants to feign forms of mental impairment, such as delayed stress syndrome or depression; controlled SSA interviews by answering all questions asked of claimants; prepared applications for numerous claimants using identical wording to describe the same mental impairments; and established relationships with unscrupulous doctors who helped them defraud the SSI program by submitting false medical evidence.
In 1990, for example, SSA’s San Francisco regional office sent a memorandum to SSA headquarters, describing trends in disability claims involving suspected middleman fraud. The memorandum highlighted the following trends: claimants often alleged mental disorders; the same middleman represented many claimants at their SSA field office interviews and at their CEs; and the same physician provided essentially identical medical reports for many claimants. One California DDS branch office identified 176 claimants who had used the same middleman, who was suspected of routinely providing false information and coaching claimants, and the same treating doctor, who allegedly provided “interchangeable” medical reports.
section_title: Fraudulent Applications Are Costly
paragraphs: The result of such middleman involvement in the SSI application process is that some non-English-speaking immigrants collect SSI benefits to which they are not entitled. This situation is especially problematic because we estimate that each person collecting illegal SSI benefits costs the program thousands of dollars a year. Moreover, once claimants are accepted into the SSI program, it is likely that they will remain on the rolls for a long time.
On the basis of a recent study of the duration of stay on SSI disability rolls, SSA reported that the expected mean lifetime disability stay of new SSI recipients before they reach age 65 is about 11 years. Thus, given the average federal monthly SSI benefit in December 1994 of $384, a recipient improperly admitted to the program could collect about $51,000 in SSI benefits to which he or she was not entitled. Moreover, the cost to the government could be higher than just the SSI payments, because in most states, Medicaid benefits and food stamps are automatically provided to SSI recipients. As a result, the recipient could improperly receive total federal benefits worth about $113,000.
section_title: Several Factors Contribute to SSI’s Vulnerability to Applicant Fraud When Middlemen Are Used
paragraphs: There are various reasons for which SSI is vulnerable to fraudulent applications when middlemen are involved. First, some SSA management practices permit middleman involvement. In addition, SSA has a shortage of bilingual staff to handle non-English-speaking applicants. Third, unavailable documentation of applicants’ medical histories as well as translations provided by interpreters at applicants’ medical examinations make disability determinations difficult. Moreover, SSA’s monitoring of middlemen remains limited until SSA’s planned interpreter database is developed and completed, and HHS OIG investigations of cases of suspected fraud involving middlemen were hampered by a lack of resources. In addition, SSA has no formalized procedures for regularly working with state Medicaid agencies—a type of coordination that could help SSA identify cases of suspected fraud. Finally, SSA needs a more effective programwide strategy for keeping ineligible SSI applicants off the rolls.
subsections: section_title: Some SSA Management Practices Enable Applicants to Use Middlemen
paragraphs: Some of SSA’s current management practices—in particular, certain provisions of SSA guidance and procedures—enable non-English-speaking applicants to use middlemen. For example, SSA guidance states that if an applicant does not have an interpreter, SSA will provide one. This practice places secondary responsibility for providing translation services on SSA field offices. The result is that SSA field offices are not generally required to use their bilingual staff for translating in interviews unless an applicant does not provide his or her own interpreter. When the applicant does provide an interpreter, SSA will generally use the applicant’s interpreter as long as there is no reason to suspect that he or she is unreliable. SSA also allows applicants to use their relatives or friends as interpreters, even though unscrupulous middlemen sometimes pose as relatives or friends. Moreover, SSA’s broad definition of a qualified or reliable interpreter enables an applicant to use almost any interpreter he or she chooses. Finally, SSA procedures allow claimants to apply for SSI at any SSA field office, even though doing so enables them to abuse the system. When some middlemen or claimants learn that a certain SSA field office has staff who can speak the language of the claimant, they can go instead to a different field office, where no employees speak the language, thereby retaining control of the interview portion of the application process.
section_title: SSA Has a Bilingual Staff Shortage
paragraphs: SSA’s bilingual staffing problems exacerbate program vulnerabilities that arise because of some of SSA’s management practices. HHS OIG reported in 1990 that the number of bilingual SSA employees was insufficient to provide adequate service to non-English-speaking individuals. As a result, SSA has hired more bilingual staff. However, some SSA field offices remain without enough staff who can speak the languages needed. According to 1993 and 1994 SSA data, at least 45 field offices at which non-English-speaking individuals represented 10 percent or more of the workload needed additional bilingual staff. Furthermore, an SSA San Francisco regional office study of 1,198 cases from 1992 and 1993 found that when an interpreter was required, field office personnel were able to interpret in less than an estimated 5 percent of the cases when the language was other than Spanish. One California field office we visited had encountered 127 people speaking 19 languages in a single day. Because of the shortage of SSA staff who can speak the necessary languages, there may be more instances of SSI applicants using middlemen than would otherwise be necessary.
section_title: Difficulties in Obtaining Adequate Medical Information Heighten Chances for Fraud
paragraphs: SSI’s vulnerability to fraud when middlemen are used is enhanced by difficulties in obtaining adequate medical information and other kinds of information useful to the disability determination process of non-English-speaking claimants. Documentation of the individual claimant’s medical history from the claimant’s home country may be limited or nonexistent. As a result, there is little longitudinal history of the claimant’s health before his or her arrival in the United States. Furthermore, when a claimant undergoes a medical examination in the United States with a provider who does not speak his or her language, the claimant needs an interpreter.
When claimants are allowed to provide their own interpreters at medical examinations, SSI becomes more vulnerable to fraud. If a middleman provides a false translation of a claimant’s symptoms or coaches the claimant on how to behave during the examination, the provider could make an incorrect medical assessment and submit inaccurate medical evidence to the state DDS. Moreover, some middlemen bring claimants to dishonest providers who are willing to submit false medical evidence to DDS.
Although DDS can order a CE if the applicant’s medical information is inconclusive, the middleman may be able to manipulate this exam if the provider does not speak the applicant’s language or have his or her own translator. In addition, DDS may be hindered in collecting essential information on the claimant’s education and work experience. Taken together, these information deficits can seriously impede the DDS as it attempts to accurately assess the claimant’s ability to work.
section_title: SSA Monitoring of Applicants’ Use of Middlemen Is Limited
paragraphs: Despite recent changes in some SSA procedures, SSA’s monitoring of middlemen is limited. Although data on interpreters are being collected, they are not currently being incorporated into a central database. Rather, hard copy data are being maintained in the case files of individual claimants. SSA is beginning to design an automated system for tracking middlemen. However, it may not be completed for several years, and SSA has no interim monitoring procedures in place.
As a result of congressional hearings in February 1994 and the Social Security Independence and Program Improvements Act of 1994, SSA now requires all non-SSA interpreters to complete and sign a form containing their name, address, and relationship to the applicant. These forms are maintained in applicants’ files, providing a potentially valuable body of information. But because the data collected on these forms are not being entered into an automated database, no central file exists to help SSA identify and track middlemen suspected of fraud. Thus, when an SSA field office encounters a new interpreter, it has no easy means to determine his or her reliability or whether he or she has a record with other field offices.
SSA recently began developing a nationwide database of interpreter information that will identify reliable interpreters and flag middlemen who are convicted or suspected of fraud. According to SSA, this database could be operational in 1996 or 1997. But we believe it could be some time after that before users will be able to retrieve comprehensive interpreter data from this database, because SSA will probably have to compile and input considerable information, such as the signed interpreter forms previously discussed. Furthermore, work to develop the interpreter database has been somewhat slow to date, according to one SSA official, because some SSA automated systems are still being modernized.
In the interim, SSA has no formal procedures in place to monitor middlemen. Two of the California field offices we visited maintained their own lists of suspect middlemen, but these lists were not being regularly shared with other SSA offices. The California DDS also maintains a list of suspect middlemen that it has submitted to the SSA regional office, but that office has not distributed the list to SSA field offices.
section_title: HHS OIG Lacked Funds for Sufficient Investigations
paragraphs: During the last several years that HHS OIG was responsible for investigating SSI middleman fraud, it investigated very few cases. In fact, SSA field offices said they had become hesitant to forward suspect claims because of what they perceived as a lack of interest by HHS OIG. According to HHS OIG, it had too few resources to perform more SSI investigations and was concentrating its resources on cases with a larger payoff.
HHS OIG, which was responsible for investigating fraudulent SSI claims until March 31, 1995, completed 10 middleman fraud investigations between 1987 and April 1995. These investigations resulted in the conviction of five middlemen. HHS OIG also participated with other federal and state investigators in some joint investigations of middleman fraud.
SSA field office staff told us they had become reluctant to refer suspect claims to HHS OIG because they expected that little or no action would be taken. According to results of an informal SSA survey, in February 1994, the San Francisco regional office had referred at least 600 claims involving suspected middleman fraud to the HHS OIG, and the Seattle regional office had referred between 200 and 300. These numbers represent referrals made since October 1992. The California claims were subject to selection for the CDRs being conducted currently on potentially fraudulent cases involving middlemen. The Washington claims will be examined by the intergovernmental task force.
Between 1990 and 1994, HHS OIG investigative resources declined about 17 percent—from 469 staff to 390. In 1994, the HHS Inspector General reported that a lack of resources—specifically, limited federal investigative and prosecutive resources—posed an “obstacle” to the pursuit of middleman fraud. At that time, the HHS OIG was also responsible for investigating fraud in the much larger Medicare and Medicaid programs, as well as in the SSI program. Furthermore, some threats allegedly made by middlemen on SSA field staff may have contributed to a lower number of referrals to the HHS OIG for investigation of middleman fraud.
Beginning March 31, 1995, SSA has had its own OIG solely dedicated to SSA programs. SSA is adding 50 positions in fiscal year 1996 to augment the staff who transferred from the HHS OIG.
section_title: Coordination Between SSA and State Medicaid Agencies Is Not Routine
paragraphs: One way for SSA to extend its resources would be to work more regularly with state Medicaid agencies. When one state shared information during its Medicaid fraud investigations, SSA eventually identified nearly 2,000 possibly fraudulent claims associated with illegal middleman activity. But coordination between SSA and state Medicaid agencies is not a regular practice.
At the federal level, HCFA, within HHS, funds and oversees the Medicaid program. Federal law requires that a single state agency be charged with administration of the Medicaid program. Each state’s own Medicaid agency is variously situated in departments such as health, welfare, or human services. The state Medicaid agency may contract with other state entities to conduct some program functions.
The state Medicaid agency is responsible for program integrity. In a case of health care provider abuse, the state Medicaid agency is authorized to take certain administrative actions. Where provider fraud is suspected, the state Medicaid agency in most states refers cases for investigation to Medicaid Fraud Control Units (MFCU). MFCUs investigate selected providers suspected of overbilling Medicaid for the services they provide to eligible patients or for billing for services that they never provided. States report the names of prosecuted or sanctioned providers to the HHS OIG so that the OIG can take appropriate action to exclude these providers from participation in other federal health programs, such as Medicare. In the course of their investigations of providers, it is possible for states to obtain information that could be useful to SSA, such as the lists of patients maintained by suspect providers, some of whom are associated with middlemen.
In California, for example, an investigation initiated by the state and assisted by the HHS OIG yielded information that, when passed on to SSA, led to SSA’s identification of 1,981 SSI recipients associated with potentially fraudulent claims involving middlemen. Routine coordination of efforts with state Medicaid agencies could enhance SSA’s ability to identify potentially fraudulent SSI claims. For example, state investigative information could be helpful to SSA in meeting the 1994 congressional requirement that SSA conduct at least 100,000 SSI CDRs each year for the next 3 years, beginning in 1996. SSA could use state investigative information to help it identify high-priority cases for these CDRs.
To date, however, coordination between SSA and state Medicaid agencies has been ad hoc. When SSA was part of HHS, according to SSA officials, SSA generally did not contact state Medicaid agencies on a regular basis because Medicaid fell under the administrative jurisdiction of HCFA. Consequently, SSA did not establish—and has not yet established since it became an independent agency in March 1995—formal coordination procedures for obtaining potentially helpful information from state Medicaid agencies.
section_title: SSA Needs a More Comprehensive Programwide Strategy for Keeping Ineligible Non-English-Speaking Applicants Off SSI
paragraphs: SSA has tried a few approaches for handling some of the individual factors that contribute to SSI’s vulnerability to fraud, but needs to develop and implement a more comprehensive, programwide strategy for ensuring that only eligible applicants receive SSI benefits. For example, one SSA approach for limiting the extent to which non-English-speaking applicants could use middlemen was to disseminate its definition of a qualified interpreter to all field staff. Furthermore, SSA disseminated a program circular in May 1995 to clarify procedures for conducting interviews with non-English-speaking claimants. In addition, SSA’s approach to the bilingual staffing shortage has been to encourage field offices to hire more staff, although, according to SSA, this has been difficult for field offices to do because of recent constraints on hiring. Moreover, SSA’s plan for tracking fraudulent middlemen may not be fully implemented for several years; its OIG needs more resources to perform investigations; and SSA does not routinely use state investigative information to help identify fraudulent SSI applications.
A more comprehensive, programwide strategy for ensuring that only eligible people receive SSI benefits could include, for example, requiring that SSA’s own bilingual staff or contractors conduct interviews with non-English-speaking applicants and exploring the use of videoconferencing technology, which would maximize the use of SSA bilingual staff, if SSA determines that the benefits outweigh the costs.
section_title: Some Initiatives Address Middleman Fraud
paragraphs: The Congress, SSA, and several states have initiated various efforts to prevent or detect fraudulent SSI claims involving middlemen. Some of the efforts, such as passage of new legislation, have been completed; others are in progress. A discussion of some of these initiatives follows. (See app. I for a detailed list of initiatives.)
subsections: section_title: Congressional Initiatives
paragraphs: The legislation that established SSA as an independent agency, the Social Security Independence and Program Improvements Act of 1994, contained provisions for expanding SSA’s authority to prevent, detect, and terminate fraudulent claims for SSI benefits. Some of the law’s provisions did the following: changed the federal crime of SSI fraud from a misdemeanor to a felony; gave SSA the authority to impose civil penalties against any person or organization determined to have knowingly caused a false statement to be made in connection with an SSI claim; and gave SSA the authority to request immigrant medical data and other information from INS and the Centers for Disease Control for use in eligibility determinations. The provisions of the law that relate to SSI reflect legislative recommendations that were made by the Subcommittee on Oversight and the Subcommittee on Human Resources, House Committee on Ways and Means, in May 1994. The Subcommittees also made several administrative recommendations to SSA.
section_title: SSA Initiatives
paragraphs: SSA established a task force in April 1993 to combat middleman fraud. In large part as a result of the work of the task force, SSA has initiated various efforts to detect and prevent middleman fraud. Because many of these initiatives are in the planning stages or the early stages of implementation, however, it is too soon to evaluate their effectiveness.
One effort under way, as mentioned earlier, is the development of a nationwide database to help SSA and DDS offices monitor middlemen. The database is expected to be useful in identifying reliable interpreters and in identifying and tracking middlemen whose activities are questionable. Because all SSA and DDS offices are expected to have access to the database, an office that encounters a new interpreter will be able to determine from the database if other offices have had experience with the same person.
A second task force initiative, which resulted largely from February 1994 hearings on middleman fraud, implements one of the provisions in the legislation that established SSA as an independent agency. As of March 1994, SSA requires that all non-SSA interpreters fill out a form on which they provide their name, address, and relationship to the applicant and sign a statement that they are providing an accurate translation. These forms are being maintained in each claimant’s file, providing a potentially valuable body of information. SSA officials said that these files may eventually be incorporated into the database.
Another task force effort has resulted in SSA plans to review possibly fraudulent cases involving middlemen for which benefits are already being paid. In California, SSA identified many potentially fraudulent cases as a result of an ad hoc cooperative venture between the state and SSA. (See following section on state initiatives.) SSA plans to conduct 600 CDRs in California. As of April 26, 1995, 386 CDRs had been completed in California, resulting in 207 initial benefit terminations. These terminations are subject to appeal, and thus far about 60 percent have been appealed. In Washington, potentially fraudulent cases were identified as a result of an intergovernmental task force effort. (See following section on state initiatives.) SSA has begun to do 460 reviews in Washington, but none have been completed yet.
SSA also reported that its ultimate goal is to dramatically reduce reliance on middlemen in developing the claims of non-English-speaking applicants. SSA is trying several approaches to reduce the use of middlemen as interpreters. First, SSA continues to encourage bilingual hiring in its field offices to improve service delivery to the non-English-speaking public. SSA reported that in fiscal year 1993, 266 of 533 permanent field office hires (50 percent) were bilingual; in fiscal year 1994, 481 of 1,099 such hires (44 percent) were bilingual.
In addition, in February 1995, SSA officials reported that a statement of work was being prepared for a pilot contract to test the feasibility of using contract interpreter services to supplement SSA’s own interpreter staff. But the funding for the pilot has been reduced to $100,000, so only a limited number of SSA offices will receive contract services under the pilot. SSA officials doubt that a national contract for interpreter services is feasible, given anticipated costs.
Furthermore, in 1994, SSA expanded upon efforts of at least 2 regional offices by asking all 10 regional offices to establish directories of bilingual employees who were available to help other field offices by interpreting during telephone interviews. Many of the 13 SSA field offices we visited expressed a need for more bilingual staff; only 1 reported having used a bilingual SSA employee from another field office to interpret by telephone.
Finally, individual field offices have also looked to external sources, such as local advocacy groups, professional translation and interpreter services, and community service centers, for interpreting assistance. At least two field offices have made arrangements with universities and institutes for students to earn credits or serve internships for performing interpreter services.
section_title: State Initiatives
paragraphs: Several states have been active in seeking more effective fraud prevention and detection approaches. Again, many of these initiatives are in the early stages of implementation, so it is too soon to evaluate their success.
One initiative involves the use of independent or state-certified interpreters at CEs, a practice currently employed in Pennsylvania and Minnesota. In California, if fraud is suspected or if there is reason to believe that the claimant’s interpreter is not objective or qualified, the state DDS pays for an independent interpreter for the CE or uses someone from a community assistance group or other reliable source. Massachusetts and Connecticut DDS offices use paid interpreters as much as possible and encourage CE providers to require positive identification from the person being examined.
In addition, California has initiated a pilot project to establish a fraud investigation unit in one of its DDS offices. With SSA approval and assistance, the state plans to hire and train investigators to pursue fraudulent SSI disability claims. Investigations will be based on suspected fraud referrals from DDS staff.
Also in California, an ad hoc cooperative venture between the state Medicaid agency and SSA yielded useful information. When the state requested assistance from the HHS OIG on some of their Medicaid fraud investigations, SSA had the opportunity to obtain the names of patients of providers who had been arrested or convicted of Medicaid fraud, as well as the names of clients of middlemen who used these medical providers. SSA then compared these names to those in their database of current SSI claimants, to flag claimants who might have been collecting benefits fraudulently. Since July 1992, 6,062 potentially fraudulent claimants have been identified in California, many as a result of the cooperation between the state, the HHS OIG, and SSA. Furthermore, during 1993 and 1994, California reported 22 arrests or convictions of providers, middlemen, and their assistants.
Finally, Washington State formed an intergovernmental task force in 1992 in one county to investigate middlemen and others suspected of fraud.Under the direction of the U.S. Attorney, the task force has identified 460 suspected fraudulent claims involving middlemen. In 1994, three middlemen, three SSI recipients, and several others were arrested or convicted.
section_title: Conclusions
paragraphs: SSA has awarded SSI benefits to unknown numbers of non-English-speaking immigrants who are actually ineligible for SSI benefits. These awards are very costly to the government, accounting in each case for thousands of dollars in improper payments over the years. Although individual SSA field offices have been creative in developing their own approaches to dealing with the problem, SSA’s programwide efforts to ensure that only people who are eligible for SSI benefits receive them have been limited. SSA’s responses to SSI fraud have included publishing guidance for SSA interviews. If the interviewer believes that the interpreter may be providing inaccurate information, the interview should be terminated until an interpreter who meets SSA criteria for a qualified interpreter can be provided. SSA also plans to improve communication with and outreach efforts to the non-English-speaking community, and it plans to develop a quality assurance program for interpretations.
A more effective programwide strategy for ensuring that only eligible people obtain SSI benefits would require consistent, programwide practices for obtaining more accurate applicant information, maintaining and sharing information on interpreters and middlemen among field offices, and using the work of other government agencies to help identify potentially fraudulent cases. A comprehensive strategy should consider cost-benefit analyses of SSA’s alternatives for addressing the problem, SSA’s limited resources, and applicants’ need for timely service. Such a strategy could involve, for example, SSA requiring that its own bilingual staff or contractors conduct interviews with non-English-speaking applicants and exploring the use of videoconferencing technology, which, as mentioned earlier, could take best advantage of SSA bilingual staff. These components of a programwide strategy would further prevent claimants from using middlemen to manipulate the system.
section_title: Recommendations
paragraphs: We recommend that the Commissioner of Social Security develop a more aggressive, programwide strategy for improving the quality of information obtained from applicants, maintaining and sharing data collected on interpreters and middlemen among field offices, and using information that results from the work of other government agencies—local, state, and federal—to pursue cases in which fraud is suspected.
Such a strategy should include developing improved ways to more effectively manage SSA’s resources to further facilitate communications with applicants, possibly by requiring that SSA bilingual staff or SSA contracted staff conduct the interviews and by exploring videoconferencing technology.
This strategy should also include instituting procedures for sharing, among field offices, the information SSA has already collected about interpreters and middlemen from its required forms and other sources, until the automated interpreter database is established, and establishing a mechanism to facilitate regular sharing of all state Medicaid agencies’ investigative results with SSA.
section_title: Agency Comments and Our Evaluation
paragraphs: SSA agreed with the intent of our recommendations and stated that it is exploring these recommendations as it continues its efforts to minimize fraud in cases involving middlemen. For example, SSA cited a pilot currently under way in California wherein state investigators are reviewing cases referred from DDS for possible prosecution under state and local laws.
SSA also suggested the following change to our report concerning whether SSA’s practices permit non-English-speaking applicants to use middlemen: “SSA officials explained that SSA is attempting to address the fraud problem within the framework of its efforts to provide all non-English-speaking claimants convenient, accessible, and timely service in an environment of limited bilingual staff and funding. Experience suggests that the vast majority of non-English-speaking claimants are not involved in fraudulent activity. Therefore, to meet customer service needs and save resources, SSA does allow the non-English-speaking claimant the option of providing his or her own interpreter as long as the interpreter agrees to provide an exact interpretation of the claimant’s response and can function as a capable interpreter. However, if, during the course of the interview, the interviewer believes that the interpreter is not acting in the claimant’s best interest or is not providing accurate information, the interview is terminated. The interview is then rescheduled for a later date when another interpreter can be provided by SSA.”
We believe that despite its staffing and funding constraints, concerns with claim processing times, and current efforts to address fraud, SSA can do more to reduce the SSI program’s vulnerability to fraudulent applications involving middlemen. Given that each person collecting illegal SSI benefits costs the program thousands of dollars a year, SSA must aggressively pursue any available opportunity such as those we have recommended to further minimize unwarranted outlays of federal monies so that it can increase the public’s confidence in this important program.
The agency also made other technical comments that we incorporated throughout the report as appropriate. (See app. II.)
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section_title: Initiatives for Addressing Middleman Fraud
subsections: section_title: Initiatives by the Congress (P.L. 103-296)
paragraphs: The federal crime of SSI fraud has been elevated from a misdemeanor to a felony.
SSA now has the authority to impose civil penalties against any person or organization determined to have knowingly caused a false statement to be made in connection with an SSI claim.
Third-party translators are now required to certify under oath the accuracy of the translation provided and the relationship between the translator and the SSI applicant or recipient.
SSA now has enhanced authority to redetermine eligibility and give less weight to evidence of disability in those cases where SSA has a reason to believe that fraud was involved and to expeditiously terminate benefits in those cases where there is insufficient reliable evidence of disability or other basis for eligibility.
SSA now has the authority to request medical data and other information from the Immigration and Naturalization Service and the Centers for Disease Control for use in disability determination.
The cognizant Office of Inspector General (OIG) is required to make SSI recipient identifying information available to SSA as soon as OIG has reason to believe that fraud is involved and an active investigation will not be compromised.
SSA is required to report annually to the House Committee on Ways and Means and the Senate Committee on Finance the extent to which it has used its authority to conduct reviews of SSI cases, including the extent to which these cases involved probable fraud.
section_title: Initiatives by the Social Security Administration
paragraphs: SSA plans to develop a nationwide database to help SSA and disability determination services (DDS) offices monitor middlemen.
SSA now requires that all non-SSA interpreters provide their name, address, and relationship to the claimant and certify that they are providing an accurate translation.
SSA has implemented plans to conduct reviews of suspected fraudulent claims of identified SSI recipients. About 400 continuing disability reviews have been completed in California, and 460 reviews are being started in Washington. Additional reviews will be started as resources permit.
Efforts to improve the availability of reliable interpreters include encouraging the field offices to hire more bilingual staff, testing the feasibility of contract interpreter services, developing alternative sources of community interpreters, and establishing regional directories of bilingual staff.
SSA has published new guidance that includes criteria for identifying qualified or reliable interpreters and terminating interviews with suspect middlemen.
SSA plans to develop a quality assurance program for interpretations, to develop a better procedure for processing fraud referrals, and to improve communication with and outreach efforts to the non-English-speaking community.
section_title: Initiatives by the States
paragraphs: DDS in California, Washington, Pennsylvania, Minnesota, Massachusetts, and Connecticut have begun to use independent or state-certified interpreters at consultative exams (CE).
California has instituted a pilot project, funded by SSA, that established an SSI fraud investigation unit in one of its DDS offices.
California shared information about some of its fraud investigations of medical providers with SSA, which has used the information to identify potentially fraudulent SSI claimants.
Washington has created an intergovernmental task force to investigate middlemen suspected of fraud.
Massachusetts and Connecticut DDS offices encourage CE medical providers to require positive identification from claimants.
The Texas DDS tries to use bilingual CE providers.
section_title: Comments From the Social Security Administration
section_title: GAO Contacts and Acknowledgments
subsections: section_title: GAO Contacts
section_title: Acknowledgments
paragraphs: In addition to those named above, the following individuals also made important contributions to this report: Elizabeth A. Olivarez, Clarence Tull, Zachary R. White, and Michael J. Ross, Evaluators; Eli Kuo, Intern;  Nancy L. Crothers and Jonathan M. Silverman, Communications Analysts; James P. Wright, Assistant Director (Study Design and Data Analysis); and Stephen R. Myerson, Assistant Director (Investigations).
section_title: Related GAO Products
paragraphs: Supplemental Security Income: Growth and Changes in Recipient Population Call for Reexamining Program (GAO/HEHS-95-137, July 7, 1995).
SSI Disability Issues (GAO/HEHS-95-154R, May 11, 1995).
Social Security: Federal Disability Programs Face Major Issues (GAO/T-HEHS-95-97, Mar. 2, 1995).
Welfare Reform: Implications of Proposals on Legal Immigrants’ Benefits (GAO/HEHS-95-58, Feb. 2, 1995).
Supplemental Security Income: Recent Growth in the Rolls Raises Fundamental Program Concerns (GAO/T-HEHS-95-67, Jan. 27, 1995).
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subsections: section_title: Address Correction Requested