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United States Government Accountability Office: 
GAO: 

Report to Congressional Requesters: 

November 2014: 

SSA Disability Benefits: 

Enhanced Policies and Management Focus Needed to Address Potential 
Physician-Assisted Fraud: 

GAO-15-19: 

GAO Highlights: 

Highlights of GAO-15-19, a report to congressional requesters. 

Why GAO Did This Study: 

SSA relies on medical evidence to determine whether the millions of 
new claimants each year qualify for disability benefits. This 
evidence—-and those who provide it-—have been the subject of intense 
scrutiny as questions have been raised about the potential for fraud 
schemes that include falsified medical evaluations. GAO was asked to 
study physician-assisted fraud in SSA's disability programs. 

GAO reviewed (1) how well SSA's policies and procedures are designed 
and implemented to detect and prevent physician-assisted fraud, and 
(2) the steps SSA is taking to improve its ability to prevent 
physician-assisted fraud. GAO reviewed relevant federal laws and 
regulations, visited 5 of the 54 DDS offices that were selected to 
obtain geographic and office structure variation, and analyzed DDS 
data to identify whether federally sanctioned physicians (as of the 
end of January 2014) may have submitted evidence on behalf of 
claimants. GAO also interviewed SSA officials, as well as private 
disability insurers and others knowledgeable about SSA's programs to 
identify key practices for fraud prevention. 

What GAO Found: 

The Social Security Administration (SSA) has policies and procedures 
in place for detecting and preventing fraud with regard to disability 
benefit claims. However, GAO identified a number of areas that could 
leave the agency vulnerable to physician-assisted fraud and other 
fraudulent claims: 

* SSA relies heavily on front-line staff in the offices of its 
disability determination services (DDS)—-which have responsibility for 
reviewing medical evidence—-to detect and prevent potential fraud. 
However, staff said it is difficult to detect suspicious patterns 
across claims, as directed by SSA policy, given the large number of 
claims and volume of medical information they review. Moreover, DDS 
offices generally assign claims randomly, so staff said it would only 
be by chance that they would review evidence from the same physician. 

* SSA and, in turn, DDS performance measures that focus on prompt 
processing can create a disincentive for front-line staff to report 
potential fraud because of the time it requires to develop a fraud 
referral. Four of the five DDS offices GAO visited count time that 
staff spend on documenting potential fraud and developing fraud 
referrals against their processing time. Some staff at these DDS 
offices said this creates a reluctance to report potential fraud. 

* offices GAO visited and was often limited. SSA requires all DDSs to 
provide training to newly hired staff that includes general 
information on how to identify potential fraud, but does not require 
additional training. The five DDS offices GAO visited varied in 
whether staff received refresher training and its content—-such as how 
to spot suspicious medical evidence from physicians-—and staff at all 
levels said they needed more training on these issues. 

* SSA has not fully evaluated the risk associated with accepting 
medical evidence from physicians who are barred from participating in 
federal health programs. Although information from these physicians is 
not necessarily fraudulent, it could be associated with questionable 
disability determinations. 

SSA has launched several initiatives to detect and prevent potential 
fraud, but their success is hampered by a lack of planning, data, and 
coordination. For instance, SSA is developing computer models that can 
draw from recent fraud cases to anticipate potentially fraudulent 
claims going forward. This effort has the potential to address 
vulnerabilities with existing fraud detection practices by, for 
example, helping to identify suspicious patterns of medical evidence. 
However, SSA has not yet articulated a plan for implementation, 
assigned responsibility for this initiative within the agency, or 
identified how the agency will obtain key pieces of data to identify 
physicians who are currently not tracked in existing claims' 
management systems. Furthermore, SSA is developing other initiatives, 
such as a centralized fraud prevention unit and analysis to detect 
patterns in disability appeals cases that could indicate fraud. 
However, these initiatives are still in the early stages of 
development and it is not clear how they will be coordinated or work 
with existing detection activities. 

What GAO Recommends: 

GAO recommends SSA identify ways to remove potential disincentives for 
detecting and referring potential fraud, enhance its training efforts, 
evaluate the threat of physician-assisted fraud, and ensure that new 
and existing fraud efforts are coordinated. SSA agreed with four of 
our five recommendations, partially agreed with one, and noted plans 
to address all of them. 

View [hyperlink, http://www.gao.gov/products/GAO-15-19]. For more 
information, contact Daniel Bertoni at (202) 512-7215 or 
bertonid@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

Despite Anti-Fraud Policies and Procedures, SSA Remains Vulnerable to 
Potential Physician-Assisted Fraud: 

SSA Has Launched Several Initiatives to Better Detect Fraud but Faces 
a Number of Implementation Challenges: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Objectives, Scope, and Methodology: 

Interviews and Site Visits: 

Analysis of Medical Provider Data: 

Identification of Key Practices for Implementing Fraud Analytics 
Systems: 

Appendix II: Comments from the Social Security Administration: 

Appendix III: GAO Contact and Staff Acknowledgments: 

Related GAO Products: 

Tables: 

Table 1: Overview of Disability Insurance and Supplemental Security 
Income Programs: 

Table 2: Sanctioned Physicians Who Submitted Medical Evidence, 
Calendar Years 2010-2014: 

Table 3: Key Practices for Agencies to Consider When Implementing 
Fraud Analytics Systems: 

Table 4: Key Characteristics of GAO Site Visit Locations: 

Table 5: Data Sources Used in GAO's Analysis: 

Figures: 

Figure 1: Social Security Administration's Disability Determination 
Process: 

Figure 2: Social Security Administration's Fraud Detection and 
Referral Process: 

Figure 3: Range of Fraud Allegations from State Disability 
Determination Services, 2013: 

Figure 4: Example of How Predictive Analytics Can Be Used to Detect 
Potential Fraud: 

Abbreviations: 

ALJ: Administrative Law Judge: 

CDI: Cooperative Disability Investigations: 

DDS: Disability Determination Services: 

DI: Disability Insurance: 

HHS: Department of Health and Human Services: 

LEIE: List of Excluded Individuals and Entities: 

ODAR: Office of Disability Adjudication and Review: 

OIG: Office of the Inspector General: 

SSA: Social Security Administration: 

SSI: Supplemental Security Income: 

[End of section] 

United States Government Accountability Office: 
GAO:
441 G St. N.W. 
Washington, DC 20548: 

November 10, 2014: 

The Honorable Orrin Hatch: 
Ranking Member: 
Committee on Finance: 
United States Senate: 

The Honorable Sam Johnson: 
Chairman: 
Subcommittee on Social Security: 
Committee on Ways and Means: 
House of Representatives: 

The Social Security Administration (SSA) provides cash benefits to 
millions of Americans with disabilities who are unable to work, with 
total payments estimated to exceed $200 billion in fiscal year 2015. 
To determine whether claimants qualify for disability compensation, 
federal law requires evidence of a medically determinable impairment, 
which SSA obtains from the claimant's medical providers or by paying 
for its own medical evaluations. This medical evidence--and those who 
either provide or review it--has been the subject of intense scrutiny 
as some alleged fraud schemes have recently been uncovered. 

These alleged schemes not only include physicians, but typically 
consist of other individuals who are knowledgeable about SSA's 
disability programs and eligibility criteria.[Footnote 1] For example, 
in August 2013, 75 individuals in Puerto Rico were arrested and 
indicted for Social Security fraud. It is alleged that a former SSA 
employee serving as a representative for the claimants colluded with 
several physicians to provide documentation of non-existent 
impairments in return for kickbacks from claimants who were granted 
benefits. While the full extent and nature of physician-assisted fraud 
is difficult to measure, each fraudulent claim allowed by SSA has the 
potential to cost the government several hundred thousand dollars over 
the life of the claimant and places an additional financial burden on 
these programs at a time when SSA estimates that its disability trust 
fund will be depleted and unable to pay full benefits to individuals 
starting in 2016. 

Given the potential harm that physician-assisted fraud can cause to 
SSA's disability programs, you asked us to study this topic. In this 
report, we examine (1) how well SSA's policies and procedures are 
designed and implemented to detect and prevent physician-assisted 
fraud,[Footnote 2] and (2) the steps SSA is taking to improve its 
ability to prevent physician-assisted fraud. 

To address these objectives, we reviewed relevant federal laws and 
regulations and SSA program documentation including policies, 
procedures, training manuals, and performance plans, as well as 
reports and testimonies from SSA and SSA's Office of the Inspector 
General (SSA OIG) on fraud detection and prevention efforts. We 
evaluated SSA's efforts against its own policies and procedures, 
federal internal control standards, and other promising fraud 
detection and prevention practices that include data analytics. In our 
previous work, we identified promising fraud analytics practices, 
[Footnote 3] which we validated with disability insurance companies to 
ensure they were relevant to our review. We also interviewed SSA 
officials across headquarters' components, SSA OIG officials, and 
national organizations that represent SSA managers and disability 
examiners. Additionally, we interviewed individuals from the private 
insurance industry and other organizations knowledgeable about fraud 
analytics and the disability determination process to identify key 
practices for fraud analytics and assessed whether SSA is 
incorporating these practices as it begins to develop its own 
analytics. 

To gain additional perspectives on how SSA policies are implemented 
and any challenges to detecting physician-assisted fraud, we conducted 
site visits to 5 of the 54 Disability Determinations Services (DDS) 
offices in Alabama, California, Illinois, Maryland, and West Virginia. 
We selected these sites to obtain variation in regional office and DDS 
operations (e.g., case management systems, office structure, and case 
processing). Given the key role that SSA OIG Cooperative Disability 
Investigations (CDI) units[Footnote 4] play in identifying potential 
fraud, we selected offices in states with and without a CDI presence. 
During our site visits, we interviewed DDS management, medical 
relations professionals, disability examiners, and medical 
consultants. Additionally, we interviewed officials in the 
corresponding regional offices, including those who oversee initial 
and appeals determinations, as well as CDI unit staff. We conducted 
additional interviews with the Michigan DDS which has its own fraud 
unit and the NY regional office which oversees two DDSs--New York and 
Puerto Rico--where recent instances of fraud allegedly occurred. 

Additionally, we conducted in-depth testing of data from two states to 
identify whether SSA is following its requirement not to allow certain 
sanctioned medical providers to conduct exams on behalf of the agency. 
We also sought to identify the extent to which sanctioned doctors may 
be providing medical evidence on behalf of claimants. We matched 
provider data from two of the states we visited--California and 
Illinois--with the Department of Health and Human Services OIG's List 
of Excluded Individuals and Entities. This list identifies federally-
sanctioned medical providers, and SSA regulations prohibit DDSs from 
using these providers to conduct exams on behalf of the agency. We 
selected California and Illinois because we were able to more readily 
obtain lists of vendors and because they use two different case 
management systems, allowing us to identify differences in what 
information is captured by DDSs. We obtained lists of providers as of 
February 2014 for California and April 2014 for Illinois and matched 
these against a list of providers who were sanctioned as of the end of 
January 2014. The results of our data matching are not generalizable 
to other states or to the wider population of disability claims. We 
conducted electronic testing and interviewed knowledgeable officials 
to assess the reliability of these data. We determined that they were 
sufficiently reliable for our purposes. See appendix I for a detailed 
description of our scope and methodology. 

We conducted this performance audit from July 2013 to November 2014 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

Background: 

SSA's Disability Programs: 

SSA administers two main programs under the Social Security Act that 
provide benefits to individuals with disabilities--Disability 
Insurance (DI) and Supplemental Security Income (SSI). Individuals are 
generally considered disabled if they are unable to do their previous 
work, and considering age, education and work experience, engage in 
any other kind of substantial gainful work and their disability has 
lasted or is expected to last at least 1 year or is expected to result 
in death.[Footnote 5] See table 1 for additional key features and 
requirements of the DI and SSI programs. 

Table 1: Overview of Disability Insurance and Supplemental Security 
Income Programs: 

Purpose: 
Disability Insurance (DI): Provides benefits to persons who 
become unable to work because of disability; 
Supplemental Security Income (SSI): Provides benefits for disabled, 
blind, or aged people who have low income and limited resources. 

Work requirement: 
Disability Insurance (DI): Requirement depends on age of claimant, but 
is generally 40 quarters of coverage[A]; 
Supplemental Security Income (SSI): No prior work requirement. 

Number of recipients (estimated fiscal year 2015): 
Disability Insurance (DI): 11 million; 
Supplemental Security Income (SSI): 8.5 million. 

Benefits paid (estimated fiscal year 2015): 
Disability Insurance (DI): $147 billion[B]; 
Supplemental Security Income (SSI): $60 billion[C]. 

Medical Benefits: 
Disability Insurance (DI): DI beneficiaries qualify for Medicare 
health benefits after 2 years; 
Supplemental Security Income (SSI): Most states automatically enroll 
SSI recipients in Medicaid, according to SSA. 

Source: GAO analysis of relevant federal laws and SSA data. GAO-15-19. 

[A] Generally, individuals need 40 work quarters (credits) to qualify, 
20 of which must have been earned in the 10 years prior to becoming 
disabled. Individuals may earn up to four work credits per year, and 
the amount of earnings needed for a credit is calculated using the 
national average wage index. In 2014, $1,200 is needed for each credit. 

[B] This includes both persons with disability and their family 
members who receive benefits. 

[C] This includes federal benefits and state supplementary payments 
per month. 

[End of table] 

SSA's process for determining medical eligibility for disability 
benefits is complex and can involve several state and federal offices. 
The determination process--which is the same for both DI and SSI 
claimants--involves an initial determination at a DDS office. SSA 
funds the 54 DDSs, which are operated by state agencies, to process 
disability claims in accordance with SSA policies and procedures. 
[Footnote 6] If a claim is denied, claimants have several 
opportunities for appeal within SSA, starting with a reconsideration 
at the state level; then a hearing before an administrative law judge 
(ALJ); and finally at the Appeals Council, which is SSA's final 
administrative appeals level. Claimants can generally submit new 
medical evidence throughout the disability determination process. 
Claimants must file any further action in federal court. Claims at all 
levels for which the claimant is determined to be eligible for DI or 
SSI, also called favorable claims, are forwarded to other SSA offices 
for payment. (See figure 1.) 

Figure 1: Social Security Administration's Disability Determination 
Process: 

[Refer to PDF for image: process illustration] 

Medical providers: Patient records, examinations, and medical opinions: 

1. Claimant applies for benefits: Application requires claimant's 
medical history and contact information for all the claimant's medical 
providers. 

2. SSA field office screens application: SSA field office staff 
determines if claimant's application meets SSA's non-medical 
eligibility requirements and forwards the application if the 
eligibility requirements are met. 

If claimant meets requirements: 

3. Initial determination: Staff at a state-run Disability 
Determination Services (DDS) office gather, develop, and review the 
claimant's medical and vocational evidence to make a disability 
determination. 

If determination is appealed: 

4. Reconsideration[A]: A different group of DDS staff examine previous 
and any new medical and vocational evidence to make a second 
disability determination. 

If reconsideration is appealed: 

5. ALJ holds hearing: Hearing office staff collects any new evidence 
for review by an Administrative Law Judge (ALJ) who may conduct a 
hearing before rendering a new decision. 

If decision is appealed: 

6. Appeals Council[B]: Administrative appeals judges can issue a 
decision after reviewing the claim, or return the claim to the ALJ 
level for a new decision. 

Source: GAO analysis of Social Security Administration (SSA) 
information. GAO-15-19. 

[A] In 1999, SSA eliminated the reconsideration step in 10 states 
(Alabama, Alaska, Colorado, Louisiana, Michigan, Missouri, New 
Hampshire, New York, Pennsylvania, and in the Los Angeles area of 
California) as part of the Prototype Initiative. In these states, 
claimants who wish to appeal their initial DDS determination must 
appeal for review before an ALJ. 

[B] If parties are not satisfied with the Appeals Council decision, 
they may pursue the matter further in federal district court. 

[End of figure] 

Development of Medical Evidence: 

Generally, DDSs are required to develop a complete medical history for 
each claimant for at least a 12-month period prior to the application. 
SSA guidance directs DDSs to request medical evidence records from all 
providers who treated or evaluated the individual for the alleged or 
documented impairment during this time period. For example, a DDS may 
request laboratory reports; X-rays; doctor's notes; and other 
information used in assessing the claimant's health and functioning 
from many types of providers, including physicians or psychologists, 
hospitals, or community health centers. According to SSA, DDSs 
generally pay providers for these records in accordance with required 
state fee schedules. 

In claims where the evidence gathered is insufficient to make a 
determination or where no evidence is present, the DDS may order its 
own tests or evaluations--called consultative examinations--from 
medical providers. SSA regulations specify the types of providers who 
can perform consultative exams and require DDSs to recruit, train, and 
oversee these providers in their states.[Footnote 7] State DDSs pay 
providers to conduct exams and set the rates of payments for these 
exams.[Footnote 8] SSA's regulations prohibit DDSs from purchasing 
consultative exams from medical providers who are excluded, suspended, 
or otherwise barred from participation in the Medicare or Medicaid 
programs, or any other federal or federally-assisted program, which 
includes providers on the List of Excluded Individuals and Entities 
maintained by the Department of Health and Human Services (HHS) Office 
of Inspector General (OIG).[Footnote 9] SSA regulations also prohibit 
the agency from purchasing exams from certain providers whose license 
to practice has been revoked by any state licensing authority. HHS is 
legally required to exclude from participating in federal health care 
programs individuals and entities convicted of certain criminal 
offenses, such as defrauding Medicare, Medicaid, or other federal or 
state health programs; patient abuse or neglect; and felony 
convictions related to controlled substances.[Footnote 10] This 
function is performed by the HHS OIG. The OIG also has discretion to 
exclude individuals and entities based on a number of other grounds--
both related and unrelated to programmatic fraud.[Footnote 11] SSA 
instructs DDSs to review the HHS list and verify medical licenses and 
credentials before using the services of any consultative exam 
provider. DDSs are also required to review the list for each existing 
exam provider at least annually. DDSs are not required to check the 
status of the claimant's treating physician or other medical providers 
that submit evidence since they are obtaining existing medical records 
and not paying for medical services. 

Fraud Identification and Referral Process: 

SSA has guidance on how examiners should document and report suspected 
fraud. According to SSA's policy, fraud generally occurs when an 
individual makes or causes to be made false statements of material 
facts or conceals such facts for use in determining rights to 
benefits, with the intent to defraud. SSA employees should gather 
enough information to either remove suspicion or determine that there 
is potential fraud. They are also expected to develop the referral 
with as much information as possible, including who allegedly 
committed fraud, how, when, and why. If they determine that potential 
fraud exists, they should refer it to the SSA OIG. For states with a 
CDI unit, cases can be referred directly to the CDI. SSA and the OIG 
jointly established the CDI Program, in conjunction with DDSs and 
state or local law enforcement agencies, to effectively pool resources 
and expertise and prevent fraud in SSA's disability programs. The 
Units investigate disability claims under DI and SSI programs that 
state disability examiners believe are suspicious.[Footnote 12] 

Referral processes can vary by DDS. For example, some DDSs may require 
management approval before referring a case to the SSA OIG. Once a 
case is referred to the SSA OIG, that office determines whether it 
will investigate the case.[Footnote 13] Investigations often happen in 
coordination with other federal, state, and local agencies. See figure 
2 for an overview of SSA's fraud referral process. 

Figure 2: Social Security Administration's Fraud Detection and 
Referral Process: 

[Refer to PDF for image: process illustration] 

1. Disability Determination Services (DDS) receives claim. 

2. DDS examiner evaluates claim's medical evidence; 
If claim ready: DDS makes determination on the basis of medical and 
other evidence; 
Potential fraud suspected: continue. 

3. DDS gathers additional information to evaluate the claim and 
determine whether to refer it to the SSA Office of the Inspector 
General (OIG). 

4. OIG evaluates case to decide if further investigation is warranted. 

5. OIG investigates, which can include interviews and surveillance of 
claimant[A]; 

If Fraud not substantiated: go to #6. 
If Fraud substantiated: go to #7. 

6. Results of OIG investigation shared with DDS for use in making 
determination: Return to #2. 

7. SSA considers sanctions, criminal prosecution, and other actions; 
Return to #6. 

Source: GAO analysis of Social Security Administration (SSA) policies. 
GAO-15-19. 

[A] OIG may work with local, state, and other federal entities to 
investigate fraud allegations. 

[End of figure] 

SSA's program operations manual outlines high risk factors that 
employees, such as DDS and field office staff, should consider when 
reviewing cases, including several related to medical evidence. Such 
risk factors include identifying patterns of similar medical histories 
across claims, conflicting medical evidence, and anomalies such as 
claimants providing medical evidence from physicians in a different 
geographic area without the appearance of a logical reason for doing 
so. 

Despite Anti-Fraud Policies and Procedures, SSA Remains Vulnerable to 
Potential Physician-Assisted Fraud: 

Staff Reported Difficulty Identifying Potential Fraud and Lack 
Sufficient Incentives and Training: 

SSA relies heavily on front-line staff in DDS offices--those who are 
responsible for reviewing medical evidence--to detect and prevent 
potential physician-assisted fraud.[Footnote 14] The employees in the 
five DDS offices we visited, however, said that they are not well-
positioned to identify signs of potential fraud, such as similar 
medical evidence across multiple claims. Further, the performance 
measures used by the agency and the DDSs may serve as a disincentive 
for front-line staff to spend additional time documenting and 
reporting fraud allegations, and limited training also reduces front-
line staff's ability to identify such fraud. 

Identifying Patterns of Potential Fraud: 

Although SSA relies on front-line staff as their first line of defense 
to detect potential fraud, it can be difficult for them to identify 
potential fraud in claims. Instead of systematically using data 
systems or analytics to detect patterns of potential fraud, SSA's 
guidance instructs front-line staff to identify suspicious patterns of 
medical evidence--such as boilerplate or similar language from the 
same physician across multiple claims--as well as other factors that 
may indicate potential fraud. However, SSA regional officials, DDS 
management, and front-line staff said that it is difficult to detect 
these patterns because staff may review claims originating anywhere in 
the state or across a large geographic area, leaving it in part to 
chance that staff would see evidence from a single physician on more 
than one claim. As a result, DDS staff stated that they must rely on 
coincidence--such as the receipt of consecutive claims with evidence 
from the same physician--to be able to identify a suspicious pattern. 
Additionally, single applications are generally seen by multiple staff 
in the course of development and determinations. DDS and SSA regional 
officials stated that, irrespective of how claims are distributed 
amongst staff, the volume of claims and associated medical evidence 
they review makes it difficult to detect patterns of potential fraud. 
Front-line staff are expected to review multiple claims every day, 
each of which may be supported by medical evidence from multiple 
physicians. One DDS director stated that the sheer number of 
physicians who submit medical evidence make it challenging to identify 
suspicious patterns from any one physician. 

Possible Disincentives to Identify and Report Potential Fraud: 

SSA and DDS performance measures incentivize processing claims quickly 
and may pose a barrier to front-line staff's willingness to develop 
referrals and report potential fraud. SSA assesses DDS performance, in 
part, based on the length of time it takes to process claims.[Footnote 
15] In turn, all five DDSs we visited assess front-line staff on the 
speed by which they process claims. According to SSA, disability 
applicants file at vulnerable times in their lives and the agency and 
DDS offices focus on making timely and fully considered objective 
decisions on applications and develop performance measures in support 
of this objective. Our previous work has found that there are positive 
aspects of aligning individual performance expectations with 
organizational goals.[Footnote 16] We have also noted the importance 
of balancing quality and timeliness goals, with the potential for 
unintended perverse incentives.[Footnote 17] When potential fraud is 
suspected, SSA policy states that staff should develop evidence to 
support their suspicions and prepare referral forms that explain the 
basis for their concern. During our site visits, some front-line staff 
stated that they do not report suspicious physicians or potential 
fraud because developing the evidence to report the allegation 
adversely affects their ability to process claims promptly. Only one 
DDS we visited lessened the potential disincentives to reporting 
suspected fraud by not counting the time spent developing allegations 
of fraud against the employees' claims processing time. This DDS also 
provided recognition to staff when their fraud allegation resulted in 
conviction or a denial of benefits. Front-line staff we met with at 
this DDS stated that this recognition incentivized them to be more 
vigilant about identifying and reporting suspicious claims. 

SSA's focus on timeliness may also create a disincentive for front-
line staff to report sources of questionable information in claims 
that they have denied. SSA guidance directs DDS staff to report all 
suspicious claims, even if the claim is denied.[Footnote 18] However, 
staff in three of the five DDSs we visited said they may not always 
report potentially fraudulent information to the OIG if there is 
already sufficient evidence to make a denial because of the additional 
time required to process the fraud referral. One DDS director stated 
that denied claims are typically not reported to the OIG because an 
investigation would be redundant and wasteful considering that it 
would produce the same result--a denied claim. Nevertheless, there is 
merit in reporting these denied claims with suspicious evidence 
because they could either be appealed or the claimant could reapply at 
a later date and there may not be any indication to the subsequent 
reviewer that suspicious evidence exists. Moreover, without these 
referrals of suspicious claims, SSA is missing key information that 
could help them identify patterns of potential physician-assisted 
fraud. 

DDS staff in some of the offices we visited also told us that they 
were reluctant to report potential fraud because of a perceived lack 
of communication from the OIG regarding the status or outcome of their 
fraud referrals. According to the OIG, the office communicates the 
status of investigations to DDS management approximately 1 month after 
the fraud referral is received. However, staff in four of the five 
DDSs we visited stated that the communication they receive from the 
OIG is inadequate. For example, some staff reported that when cases 
were denied for investigation, the OIG did not sufficiently explain 
the reason for the denial. In some instances, staff never received a 
response about the status of their referral. Some front-line staff we 
spoke to said that they would report more cases of potential fraud if 
they received better feedback on the outcome of their referrals. 

Lack of Training on How to Identify or Report Potential Fraud: 

Staff from four of the five DDSs we visited stated that the anti-fraud 
training they received was infrequent, insufficient, and that 
additional training was needed. As part of their new employee 
training, front-line staff receive a short segment of anti-fraud 
instruction. This training defines fraud and provides an overview of 
SSA's anti-fraud policies and procedures. However, subsequent anti-
fraud training is not mandatory and varies by state. Federal internal 
control standards state that management needs to identify appropriate 
knowledge and skills needed for various jobs, such as identifying and 
preventing potential fraud, and provide appropriate training.[Footnote 
19] SSA does not require DDS employees to receive training on fraud 
identification or reporting beyond their initial training courses and 
SSA officials stated that DDSs are primarily responsible for 
determining the training needs of their staff. We found that 
additional anti-fraud training at the five DDSs we visited often 
occurred infrequently or not at all. Without additional training, 
front-line staff may not have the skills and knowledge to identify and 
report potential fraud. For example, front-line staff at one DDS had 
not received any anti-fraud training since their initial basic 
training and stated that they did not know how to identify or report 
potential fraud. At another DDS, some staff indicated they had not 
received training in several years. 

Data we reviewed suggests that DDSs in states with CDI units are 
likely to receive more training on how to identify and report 
potential fraud, contributing to more referrals from these DDSs. 
According to OIG data, 28 of the 32 states and territories without a 
CDI unit did not refer any suspicious claims to the OIG in 2013 
compared to an average of 216 referrals from DDSs in states with a CDI 
unit, including the Commonwealth of Puerto Rico (see figure 3 for CDI 
unit and fraud referral information).[Footnote 20] Front-line staff in 
the two states we visited with CDI units--California and Illinois--
also noted the benefits of additional anti-fraud training, including a 
better understanding of the fraud referral process. Further, Illinois 
officials said that the number of suspicious claims referred by staff 
increased after receiving training from the CDI unit. Nonetheless, DDS 
staff in both states said that training was not provided regularly and 
that they would like to receive additional training that includes 
examples of fraud investigations--such as cases in which medical 
providers and others may have colluded to help claimants obtain 
benefits--and strategies to prevent similar events from occurring in 
the future. OIG officials stated that they are reluctant to provide 
additional training to states without established CDI units because 
they do not have the resources to investigate the expected increase in 
fraud referrals from those states.[Footnote 21] 

Figure 3: Range of Fraud Allegations from State Disability 
Determination Services, 2013: 

[Refer to PDF for image: illustrated U.S. map] 

No CDI unit and no referrals (28 total): 
Alabama: 
Alaska: 
Connecticut: 
Delaware: 
District of Columbia: 
Guam: 
Hawaii: 
Idaho: 
Indiana: 
Iowa: 
Maine: 
Maryland: 
Michigan: 
Minnesota: 
Montana: 
Nebraska: 
New Hampshire: 
New Mexico: 
North Carolina: 
North Dakota: 
Pennsylvania: 
Rhode Island: 
South Dakota: 
Vermont: 
Virgin Islands: 
West Virginia: 
Wisconsin: 
Wyoming: 

No CDI unit and at least 1 referral (4 total): 
Arkansas: 
Kansas: 
Nevada: 
New Jersey: 

Cooperative Disability Investigation (CDI) unit and at least 1 
referral (22 total): 
Arizona: 
California: 
Colorado: 
Florida: 
Georgia: 
Illinois: 
Kentucky: 
Louisiana: 
Massachusetts: 
Mississippi: 
Missouri: 
New York: 
Ohio: 
Oklahoma: 
Oregon: 
Puerto Rico: 
South Carolina: 
Tennessee: 
Texas: 
Utah: 
Virginia: 
Washington: 

Source: GAO analysis of Social Security Administration Office of the 
Inspector General data; National Atlas (base map). GAO-15-19. 

Note: The figure represents fraud allegations reported to the Social 
Security Administration (SSA) Office of Inspector General from 
Disability Determination Services in calendar year 2013. Fraud 
allegations reported by other SSA components were not included in the 
data. 

[End of figure] 

SSA Policies and Procedures Allow Some Sanctioned Physicians to 
Provide Medical Evidence: 

Potential vulnerabilities exist in how DDSs screen and use medical 
evidence from sanctioned physicians. SSA regulations prohibit DDSs 
from purchasing consultative exams from medical providers who are 
currently barred from participation in federal or federally-assisted 
programs.[Footnote 22] To comply with these regulations, SSA instructs 
DDSs to screen medical providers who conduct consultative exams 
against a list of sanctioned providers maintained by the Department of 
Health and Human Services Office of Inspector General.[Footnote 23] 
Regarding medical records, federal law generally requires SSA to 
review all available evidence and make every reasonable effort to 
obtain medical evidence from the claimant's treating physician and 
other treating health care providers.[Footnote 24] However, under the 
Social Security Act, the agency is required to disregard any evidence 
reviewed when there is reason to believe that fraud or "similar fault" 
is involved with the determination.[Footnote 25] The agency is also 
required to exclude from participation in SSA programs, 
representatives and health care providers convicted of violations of 
specific criminal offenses related to SSA programs.[Footnote 26] Such 
offenses include making false statements related to DI or SSI 
applications. SSA regulations set forth factors for how medical 
evidence should be considered and weighted by DDS staff when making a 
disability determination.[Footnote 27] DDSs that we visited do not, 
however, screen physicians who submit medical evidence on behalf of a 
claimant against the sanctioned list and therefore front-line staff do 
not know whether the medical evidence they are basing their disability 
determination on came from a sanctioned physician. While being on the 
sanctioned list does not mean that a physician submitted fraudulent 
evidence to SSA, it could be an indicator that the claim includes 
questionable evidence. 

After matching vendor files from California and Illinois against the 
sanctioned list, we found that neither state purchased consultative 
exams from sanctioned physicians since 2010.[Footnote 28] In the same 
time period, however, at least 37 sanctioned physicians in these 
states provided medical evidence to the agency on behalf of claimants 
and 22 of these physicians provided such evidence after they had been 
sanctioned, potentially affecting the validity of those claims (see 
table 2).[Footnote 29] Our results demonstrate that, in some 
instances, SSA is accepting medical evidence from potentially 
questionable and unreliable physicians.[Footnote 30] We identified 
sanctioned physicians who were convicted of health care fraud or other 
program-related crimes who submitted medical evidence on behalf of 
claimants. For example, one physician, who was placed on the 
sanctioned list in 2011 for smuggling over $1 million in foreign 
misbranded and unapproved drugs into the United States and 
administering them to his patients, submitted evidence for at least 33 
disability claimants in the past 2 years. Such information could be 
useful to front-line workers in that they would be able to better 
determine whether more scrutiny of the medical evidence may be 
warranted, potentially resulting in a reduced risk of fraud. Further, 
front-line staff said it would be helpful to have a list of suspicious 
physicians available when reviewing claims. One DDS created such a 
list that includes physicians who DDS staff identified as providing 
suspect evidence--such as a pattern of exaggerated medical findings--
in the past. However, frontline staff who we spoke with said they were 
unaware of this list. 

Table 2: Sanctioned Physicians Who Submitted Medical Evidence, 
Calendar Years 2010-2014: 

State Disability Determination Services (DDS): California; 
Sanctioned physicians submitting medical evidence after being placed 
on the sanctioned list: 19; 
Sanctioned physicians submitting medical evidence before being placed 
on the sanctioned list[A]: 7. 

State Disability Determination Services (DDS): Illinois; 
Sanctioned physicians submitting medical evidence after being placed 
on the sanctioned list: 3; 
Sanctioned physicians submitting medical evidence before being placed 
on the sanctioned list[A]: 8. 

Source: GAO analysis of state DDS vendor data and Department of Health 
and Human Services, Office of Inspector General's sanctioned provider 
list. GAO-15-19. 

Note: Total number of sanctioned physicians who submitted medical 
evidence could be an undercount. DDS vendor files may only collect 
information for the individual or entity they pay for the medical 
record - which may be a clinic, hospital or third-party company that 
manages medical records or payments on behalf of physicians - instead 
of the name of the individual physician who developed the medical 
record. In these instances, the vendor data would not allow us to 
determine if a sanctioned physician submitted the medical evidence 
used in a disability claim. Additionally, we did not attempt to 
determine whether identified physicians committed disability fraud. 

[A] California data are for providers who submitted evidence as of 
August 2014 and Illinois data are for providers who submitted evidence 
as of June 2014. 

[B] These physicians were not sanctioned at the time they submitted 
medical evidence to SSA on behalf of a claimant. 

[End of table] 

SSA faces barriers to identifying and addressing the potential risks 
associated with medical evidence submitted by sanctioned physicians. 
According to SSA officials, the agency has explored whether it would 
be beneficial to consider physicians' licensing status when making a 
disability determination. The agency identified several logistical 
barriers to checking licensure status for all physicians who submit 
medical evidence, and also cited complex policy implications that they 
believe could result in increased appeals and potentially disadvantage 
claimants, among other challenges. For example, SSA would have to 
determine when and what evidence from a physician to exclude and the 
type of sanctions to consider, among other things. The SSA OIG also 
reported in 2013 on hurdles regarding screening evidence against the 
sanctioned list.[Footnote 31] According to SSA's OIG, SSA and the DDSs 
request more than 15 million health records from over 500,000 
physicians every year. Further, the SSA OIG also reported that because 
the sanctioned list generally contains the names of individual 
physicians, a sanctioned physician who provides medical evidence on 
behalf of a claimant may not be detected by the DDS if they work for a 
hospital or clinic.[Footnote 32] We found similar limitations with the 
data that DDSs currently collect. For instance, SSA does not require 
DDSs to routinely and uniformly record the names and addresses of 
physicians who submit medical evidence on behalf of claimants. As a 
result, DDSs collect inconsistent and incomplete data on medical 
providers, which limits SSA's ability to identify sanctioned 
physicians. For example, hospitals or similar institutions that employ 
hundreds of individuals may have only one source recorded in DDS 
vendor files. 

Despite these barriers, as SSA moves forward on key information 
technology initiatives, the agency has an opportunity to assess 
several risk factors, including whether sanctioned physicians are 
providing medical evidence, and the likelihood that such evidence 
could be fraudulent. Federal internal control standards state that 
agencies should identify and analyze the relevant risks from external 
sources, such as potentially questionable evidence from sanctioned 
physicians.[Footnote 33] SSA is in the process of transferring state 
vendor information from 54 distinct DDS data systems into a National 
Vendor File that will include information on all medical providers 
whom the agency pays for medical evidence.[Footnote 34] Such a 
consolidation may present an opportunity for the agency to better 
assess the threat of sanctioned physicians submitting medical evidence 
on behalf of claimants and reduce the administrative cost of 
identifying such physicians on a DDS by DDS basis. Having national-
level data could help SSA better determine risk factors for potential 
fraud as well as what medical evidence should be subject to additional 
scrutiny. Additionally, consolidating vendor data gives the agency an 
opportunity to gain a better understanding of the inconsistencies in 
the information collected at the DDS level and determine whether it 
should implement more uniform data collection and policy requirements. 

SSA Has Launched Several Initiatives to Better Detect Fraud but Faces 
a Number of Implementation Challenges: 

SSA Is Developing a Fraud Analytics Model, but Lacks an Implementation 
Plan: 

Recognizing that it must do more to systematically detect potential 
fraud, SSA is in the early stages of exploring the use of computerized 
tools to enhance its efforts. Known as predictive analytics, these are 
automated systems and tools that can help identify patterns of 
potentially fraudulent claims--such as patterns of suspicious behavior 
involving physicians and claimants--before claims are paid. A system 
such as this would give SSA the ability to systematically check large 
numbers of claims for potential fraud in addition to using front-line 
staff to spot suspicious patterns in claims. Staff from SSA's Office 
of Information Security began this analytics effort in February 2014 
and piloted these capabilities in two stages. In the first stage, SSA 
developed its initial computer model and identified existing sources 
of data within the agency. SSA tested and refined its model by using 
recent cases of alleged fraud in Puerto Rico, New York, and West 
Virginia to determine whether it would have detected characteristics 
of potential fraud in those cases. SSA reported that it completed this 
stage in May 2014 and that its efforts were successful. In the second 
stage, SSA will explore purchasing a tool from a vendor and using 
analytics to spot suspicious claims in other locations. SSA will also 
explore purchasing data--such as arrest records--from an external 
vendor to integrate into its system that could help SSA to identify 
links between disability claims, physicians, and attorney 
representatives through social network analysis[Footnote 35] that may 
not be apparent from existing SSA data. For example, SSA staff said 
these data could identify individuals who are seemingly unconnected 
but who shared an address in the past. External data also proved to be 
helpful in the recent case of suspected fraud in New York, where 
investigators made use of local government data to determine that 
beneficiaries made false statements when applying for benefits. SSA 
told us that while it completed its second phase of testing, which 
consisted of a preliminary risk-scoring model for disability claims, 
significant work remains to be done before it has a working analytics 
system in place. See figure 4 for an illustration of how a predictive 
model would differ from SSA's current approach. 

Figure 4: Example of How Predictive Analytics Can Be Used to Detect 
Potential Fraud: 

[Refer to PDF for image: illustration] 

Under the current system: 

Examiners in 54 individual Disability Determination Services (DDS) 
offices review claims, each of which may include medical records from 
multiple physicians. 

Cases can originate anywhere in a large geographic area, making it 
less likely a single front-line employee will notice a suspicious 
pattern from any particular physician. 

Potential use of analytics: 

Cases from DDS offices would be routinely run through a fraud analysis 
system. 

Every claim gets compared to risk factors, including known instances 
of fraud involving physicians, to look for patterns and alert staff. 

Source: GAO analysis of Social Security Administration plans. GAO-15-
19. 

[End of figure] 

Side bar: 

Alleged New York City Disability Fraud Scheme: 
In early 2014, 130 disability beneficiaries and four middlemen were 
indicted for allegedly defrauding Social Security. The beneficiaries, 
many of whom were former firefighters and police officers, were 
supposedly coached by these middlemen on how to fail mental health 
exams, and many of the disability applications had nearly identical 
descriptions of mental ailments. In return for their assistance, the 
middlemen are reported to have received payments of up to $45,000 for 
helping to obtain unwarranted benefits. This investigation continues, 
but the OIG reports that the amount of benefits received by the 
beneficiaries named in the indictments is almost $30 million. 
Source: GAO review of publicly available OIG documents. 

[End of side bar] 

SSA's analytics efforts have potential, but we have concerns regarding 
the agency's ability and capacity to implement such a system on a 
large scale going forward. For example, SSA does not consistently 
collect some data that may aid in its analytics effort. As part of its 
analytics efforts, SSA plans to look for relationships between 
physicians who provide medical evidence and potentially fraudulent 
claims. However, as we noted earlier, SSA and DDS officials told us 
that existing data systems often do not identify individual 
physicians. Instead, the systems may capture the hospital or clinic 
that provided medical records, or in some cases, a third-party company 
that manages medical records or payments on behalf of physicians. An 
SSA official working on analysis efforts noted that SSA currently 
lacks the ability to distinguish between individual physicians and 
clinics or hospitals. Without the ability to consistently identify 
individual physicians, SSA's ability to detect potential physician-
assisted fraud may be hampered. SSA must also contend with obtaining 
physician data from a number of case management systems. For example, 
the agency is in the process of transitioning DDSs from five different 
legacy case management systems to a unified Disability Case Processing 
System that will be used by all DDSs.[Footnote 36] SSA officials 
stated that the National Vendor File that will be linked to this 
system has the ability to capture individual physician license 
numbers. This vendor file currently only collects the same information 
as the DDS's existing legacy systems, which may or may not include 
this information because SSA does not require DDSs to collect unique 
identifiers for physicians. Further, while SSA is also pursuing 
external data sources to perform social network analysis, its ability 
to fully make use of this information could be limited by its 
inability to readily identify the physicians involved in disability 
claims. 

Side bar: 

Alleged Puerto Rico Disability Fraud Scheme: 
In August 2013, 75 individuals in Puerto Rico were indicted for 
disability fraud. This included a claimant representative (and former 
Social Security employee), three physicians, and 71 claimants. The 
representative allegedly conspired with three doctors to fabricate and 
submit false medical evidence to support unwarranted disability claims 
for his clients. According to the Department of Justice (DOJ), these 
physicians received kickbacks of between $150 and $500 to submit false 
medical evidence to SSA, and the representative received a lump-sum 
payment. Although the investigation continues, 34 of the 75 
individuals charged have pled guilty as of March 2014. 
Source: GAO review of publicly available OIG and DOJ reports. 

[End of side bar] 

Moreover, SSA has yet to detail how it will first operationalize any 
analytics efforts into its ongoing business practices and then 
investigate potential leads generated. Officials we spoke with at the 
Centers for Medicare & Medicaid Services (CMS)--who implemented their 
own fraud analytics program in 2011--and several private disability 
insurers told us that analytics are helpful for determining which 
claims are at risk for potential fraud and where to focus 
investigative resources. However, they noted that organizations cannot 
rely on analytics alone to determine whether fraud is occurring and 
that considerable staff resources are often needed to develop leads 
that result from the initial analysis. For instance, officials at one 
private disability insurer said that analysts may spend half a day 
examining a claim before deciding whether additional investigation is 
warranted. This sentiment was shared by participants at a 2013 GAO 
forum on data analytics who noted that having knowledgeable staff was 
critical for interpreting the results of analytics and identifying 
investigative leads.[Footnote 37] However, we and the SSA OIG have 
previously reported on challenges facing SSA, including declining 
staff levels at DDSs and difficulty in meeting SSA performance 
goals.[Footnote 38] We also recommended that SSA develop a long-term 
plan to address service delivery challenges, including those related 
to human capital and information technology initiatives.[Footnote 39] 
The agency has noted the benefit of using data analytics to prevent 
fraud and has mentioned data analytics in its Strategic Plan, 2015 
budget request, and Information Resource Management Strategic Plan. 
However, these agency documents do not provide concrete steps or 
identify the needed resources to make this undertaking successful. 
Additionally, staff working on the analytics pilot told us that SSA 
has yet to determine which component of SSA will ultimately have 
responsibility for following up on leads. One analytics firm cautioned 
that analytics cannot just be a software tool, but must fit into a 
larger cultural change regarding fraud and how business is conducted. 
It added that an organization that jumps into analytics without a 
clear plan and goals risks failure. 

Side bar: 

Alleged West Virginia Disability Fraud Scheme: 
SSA is investigating claims stemming from West Virginia. According to 
a staff report from the Senate Committee on Homeland Security and 
Government Affairs, an attorney conspired with an SSA administrative 
law judge (ALJ) to allow disability benefits for undeserving 
claimants. As part of this alleged scheme, the ALJ's office would 
schedule exams with doctors favored by the attorney. The attorney is 
said to have provided pre-filled medical forms to these doctors, which 
often contained similar language. The ALJ was placed on administrative 
leave and later retired, and the attorney continues to practice 
disability law. 
Source: GAO review of SSA testimony and staff report from the Senate 
Committee on Homeland Security and Governmental Affairs. 

[End of side bar] 

Additionally, without more details on its plans, it is unclear whether 
SSA can adhere to key practices that organizations must use to 
successfully implement fraud analytics. We identified these practices 
in past work and by interviewing other organizations that have 
implemented analytics (see table 3).[Footnote 40] In its early 
efforts, SSA has so far followed some key practices. For example, SSA 
has publicized its efforts, including announcing its plans during a 
congressional hearing. SSA has also consulted with other 
organizations, such as CMS, which already have analytics in place. 
Agency officials identified other steps they have taken that align 
with these key practices, but when we requested additional details on 
how it will carry out these efforts, SSA did not yet have any concrete 
plans. 

Table 3: Key Practices for Agencies to Consider When Implementing 
Fraud Analytics Systems: 

Key practice: Utilizing a variety of data sources; 
Description: Using a number of sources for analytics, such as 
criminal, death, and corporate records, can improve results. 

Key practice: Social network analysis; 
Description: This is emerging as an important tool to combat organized 
fraud since it can be used to demonstrate linkages among individuals 
involved in fraud schemes. 

Key practice: Close and continuing collaboration; 
Description: Feedback from the end users of analytics systems (such as 
investigators) can improve analysis, help refine predictive models, 
and limit false positives. 

Key practice: Collaboration with external stakeholders; 
Description: Working with outside organizations, including other 
insurers and government health programs, can aid in the detection of 
fraudulent providers and leverages resources. 

Key practice: Publicizing the use of predictive analytics; 
Description: Advertising analytic technologies may deter providers 
from committing fraud. 

Key practice: Mining text data; 
Description: Using systems to search through the text in claims and 
related medical reports to detect instances of suspicious language or 
unwarranted similarities between claims. 

Source: GAO analysis of our prior work on key practices to detect and 
prevent fraud. GAO-15-19. 

[A] Social network analysis may or may not include the use of 
information from social media sites. Any use of such sites, including 
the use of information obtained from such sites, must be consistent 
with applicable federal laws and regulations. 

[End of table] 

The Effectiveness of Recent Fraud Detection Initiatives Could Be 
Hindered by SSA's Management Approach: 

In addition to predictive analytics, other SSA components are 
implementing several efforts that may have the potential to detect and 
prevent potential physician-assisted fraud. 

* SSA OIG Disability Fraud Pilot: The SSA OIG is piloting an effort to 
augment its CDI units and target organized fraud schemes, such as 
those that allegedly occurred in New York and Puerto Rico. OIG 
officials told us that this effort will differ from existing CDI 
efforts, which generally investigate potential fraud before SSA makes 
a disability determination and are focused on claimants. The fraud 
pilot will instead focus on third-party facilitators--including 
physicians and attorneys--and their involvement in systematic efforts 
to defraud SSA's disability programs. OIG officials noted that the 
pilot incorporates new performance measures that allow for prolonged 
investigations as opposed to the quicker investigations normally 
conducted by CDI units. The OIG began the pilot in the summer of 2013 
in four locations and will consider expanding the effort in fiscal 
year 2015 after evaluating the success of the pilot and the effect it 
has had on SSA disability programs. 

* Disability Fraud Prevention Units: SSA established a centralized 
fraud prevention unit based in New York City to identify instances of 
potential fraud and look for trends nationwide. Initially, this unit 
will utilize 20 disability examiners with experience in investigating 
claims associated with the New York City and Puerto Rico fraud cases. 
SSA recently established additional units in Kansas City and San 
Francisco. SSA expects that these units will provide ongoing 
investigative support to the OIG as well as analytical and 
programmatic support to federal and local prosecutors pursuing cases 
of potential fraud. 

* Office of Disability Adjudication Review (ODAR) data analysis 
efforts: ODAR--which is responsible for overseeing the claims appeals 
process--has an ongoing effort analyzing data from claims decided at 
the appeals level. ODAR officials told us that this effort was 
intended to provide better oversight of administrative law judges, as 
well as to identify errors in decisions to be better able to target 
training resources. ODAR is also using these data to look for 
irregularities--such as repeated instances of similar language from a 
physician--and identify potential fraud, referring those cases to the 
OIG. Additionally, ODAR is working with the OIG disability fraud pilot 
to provide data in support of their efforts. 

Although SSA officials indicated that several of these efforts will be 
under the purview of the recently reinstituted National Anti-Fraud 
Committee,[Footnote 41] the agency lacks detailed plans describing how 
these various efforts will be implemented or how they will relate to 
each other. In prior work, we have reported that clearly delineating 
activities and timelines, and defining problems and goals, are key 
elements of sound planning. Specifically, agencies should identify 
activities needed to complete projects and be able to describe how 
these activities are related to each other.[Footnote 42] However, SSA 
has yet to articulate how these efforts will relate to each other. For 
example, while the fraud analytics pilot, the OIG disability fraud 
pilot, the disability fraud prevention units, and ODAR's efforts all 
involve some analysis of disability claims data, SSA's plans do not 
address how these efforts will support each other or how it will avoid 
duplication across efforts. Additionally, SSA was unable to provide us 
with detailed information regarding the development of these 
initiatives or describe how they differed from each other. 

Competing priorities may compromise SSA's ability to follow through on 
plans to enhance fraud detection and maintain this focus. As stated 
earlier, SSA has not sufficiently balanced the need to quickly process 
claims and pay benefits with the need to ensure program integrity. 
Moreover, SSA officials told us that the role of the agency and DDSs 
is to help claimants navigate a complex application process and that 
searching out fraud--while a concern--does not align with SSA's core 
mission. In addition, employees at two of the DDSs we visited told us 
that SSA only began to emphasize the need to look for potential fraud 
after the announcement of alleged schemes; and they were concerned 
about the agency's ability to maintain a sustained focus in this area. 
One DDS director added that SSA needs to build fraud detection into 
its regular business operations in order to sustain it. The director 
added that SSA currently budgets only enough resources to its DDSs to 
maintain their current business practices. 

Conclusions: 

While the full extent and nature of physician-assisted fraud is 
difficult to measure, any occurrence has the potential to undermine 
confidence in SSA's ability to award benefits only to deserving 
individuals. The agency relies on front-line workers, including those 
who collect and assess claimants' medical records at DDS offices, to 
be the first line of defense against potential fraud. They are also 
expected to make timely and accurate disability determinations. In 
some instances, the agency's focus on making determinations quickly 
has been a disincentive to reporting suspicious physicians or 
potential fraud. Unless SSA and the DDSs work to remedy performance 
measures that primarily focus on and reward timeliness, possibly at 
the expense of delving into potentially problematic claims, the agency 
will remain vulnerable to potential fraud. Further, absent enhanced 
and consistent training, front-line staff may lack the expertise to 
identify and report potential fraud. 

SSA has some controls in place to help ensure that sanctioned 
physicians do not perform exams on behalf of the agency. However, the 
agency could be exposing itself to risk by using medical evidence from 
physicians who are sanctioned by either federal or state governments. 
While there are numerous reasons a physician can be sanctioned, 
without knowing whether such physicians have provided medical evidence 
and why they were sanctioned, SSA could be missing information needed 
to identify and flag for additional scrutiny potentially falsified 
medical evidence. 

Lastly, as the agency begins to shift its focus to better detection 
and prevention of potential fraud through analytics, it will be 
important to balance these new efforts with the existing workload 
demands on front-line staff. Furthermore, even though substantial 
resources and collaboration will be needed to fully implement a 
successful analytics system and follow up on resulting leads, SSA has 
not systematically identified the data and actions needed to implement 
and make them successful. Given the lack of details that the agency 
was able to provide on its plans, we have concerns about their 
potential success. Absent a coordinated and cohesive effort, SSA could 
undermine the success of its new initiatives and remain vulnerable to 
physician-assisted fraud in the future. 

Recommendations for Executive Action: 

We recommend that the Commissioner of the Social Security 
Administration take the following actions to improve the ability of 
the agency to detect and prevent potential physician-assisted fraud: 

1. To address potential disincentives for staff to detect and prevent 
physician-assisted fraud, SSA should review the standards used to 
assess DDS performance; and develop and distribute promising practices 
to incentivize staff to better balance the goal of processing claims 
promptly with the equally important goal of identifying and reporting 
evidence of potential fraud. 

2. To ensure that the agency captures complete information on 
suspicious claims, SSA should issue guidance to remind DDSs of its 
existing policy to report all claims with potentially fraudulent 
medical evidence to the SSA OIG, even if sufficient evidence exists to 
deny a claim. 

3. To help front-line staff identify potentially fraudulent activity, 
SSA should enhance its training efforts by ensuring it provides fraud-
related refresher training to all DDS employees on a regular basis. 
Such training should include the identification of suspicious medical 
evidence and providers, as well as the processes and procedures for 
reporting such information. To facilitate its efforts, the agency 
could coordinate with the SSA OIG and draw on the type of training 
provided by CDI units. 

4. To address the potential risks associated with medical evidence 
submitted by sanctioned physicians, SSA should evaluate the threat 
posed by this information and, if warranted, consider changes to its 
policies and procedures. 

5. To help ensure new initiatives that use analytics to identify 
potential fraud schemes are successful, SSA should develop an 
implementation plan that identifies both short-and long-term actions, 
including: 

* timeframes for implementation; 

* resources and staffing needs; 

* data requirements, e.g., the collection of unique medical provider 
information; 

* how technology improvement will be integrated into existing 
technology improvements such as the Disability Case Processing System 
and National Vendor File; and: 

* how different initiatives will interact and support each other. 

Agency Comments and Our Evaluation: 

We provided a draft of this product to the Social Security 
Administration for comment. In its written comments, reproduced in 
appendix II, SSA agreed with 4 of our 5 recommendations and partially 
agreed with one of them. SSA partially agreed with our recommendation 
to review its standards used to assess DDS performance; and develop 
and distribute promising practices to incentivize staff to better 
balance the goal of processing claims promptly with the equally 
important goal of identifying and reporting evidence of potential 
fraud. SSA did not specify why it did not agree fully, but did outline 
the critical role that field and DDS office staff play in identifying 
and detecting potential fraud. In our report, we acknowledge that 
these employees are the first line of defense against fraud. We also 
noted that based on our interviews, and review of agency and DDS 
performance standards, that there is a potential disincentive to 
report suspicious claims. If properly designed and managed, 
performance standards that include identifying and reporting 
suspicious claims could provide incentives to encourage staff to 
devote more time to program integrity issues while maintaining their 
ability to process claims in a timely manner. Such standards would 
also further demonstrate to DDS staff SSA management's commitment to 
preventing potential physician-assisted fraud in its disability 
programs. 

SSA agreed with the remainder of our recommendations and provided 
additional information about the actions it has taken in the past year 
to enhance its fraud detection and prevention efforts and steps they 
will take going forward. 

SSA also provided technical comments on our report, which we 
incorporated as appropriate. In these comments, the agency noted that 
our report implies that fraud schemes are more commonplace than they 
actually are. Our report states that the full extent and nature of 
physician-assisted fraud is difficult to measure and that even one 
instance of this type of fraud could result in a large number of 
beneficiaries improperly receiving benefits, as well as substantial 
costs to the government. SSA also commented that our report 
overemphasized the potential utility of the List of Excluded 
Individuals and Entities for identifying potential physician-assisted 
fraud. In our report, we noted key limitations and challenges to using 
this list. Nonetheless, we maintain that some physicians--an important 
component of the disability determination process--have been at least 
suspected of fraudulent activities by others and this is important 
information for SSA to consider. We believe SSA can improve staffs' 
ability to identify cases that deserve closer scrutiny by more fully 
assessing the potential threat posed by sanctioned physicians. Such an 
assessment would also help the agency identify actions that DDS 
offices could take to better track and screen for evidence from these 
providers. In the long-term it could also assist with the agency's new 
fraud analytics efforts. 

As agreed with your offices, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies to the 
Commissioner of Social Security and other interested parties. In 
addition, the report will be available at no charge on the GAO website 
at [hyperlink, http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-7215 or bertonid@gao.gov. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this report. GAO staff who made key contributions 
to this report are listed in appendix III. 

Signed by: 

Daniel Bertoni: 
Director, Education, Workforce, and Income Security: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

In conducting our review of potential physician-assisted fraud in the 
Social Security Administration's (SSA) disability programs, our 
objectives were to examine (1) SSA's policies and procedures for 
detecting and deterring physician assisted fraud, and (2) the steps 
SSA is taking to improve its ability to detect physician-assisted 
fraud. We reviewed relevant federal laws and regulations, as well as 
SSA program documentation including policies, procedures, training 
manuals, and performance plans, as well as reports and testimonies 
from SSA and the Office of the Inspector General (OIG) on fraud 
detection and prevention efforts. We evaluated SSA's efforts against 
its own policies and procedures, federal internal control standards, 
and other key fraud analytics practices to detect and prevent 
potential fraud. We also interviewed key officials in SSA and 
conducted site visits to five states where we interviewed Disability 
Determination Services (DDS) and SSA regional office staff. 
Additionally, we interviewed organizations that represent DDS 
management and front-line SSA employees, in addition to meeting with 
private disability insurers and other organizations involved in 
preventing fraud. We compared the medical provider vendor lists in two 
states to a list of federally sanctioned doctors. 

Interviews and Site Visits: 

To understand SSA's policies and efforts to improve fraud detection, 
we interviewed officials in a number of SSA components. These included: 

* The Office of the Deputy Commissioner, Operations, which is 
responsible for overseeing the initial disability determination 
process and state DDS offices; 

* The Office of Disability Adjudication and Review (ODAR), which is 
responsible for overseeing the disability appeals process; 

* The Office of the Chief Strategic Officer; 

* The Office of Information Security; and: 

* The Office of the Inspector General (OIG). 

To gain additional perspectives on how SSA policies are implemented 
and challenges regarding detecting physician-assisted fraud, we 
conducted site visits to a non-generalizable sample of five states. We 
chose these states in order to provide diversity in terms of their 
geographic location, whether the state had a single or multiple DDS 
locations, the presence of an OIG Cooperative Disability 
Investigations (CDI) unit, and the data system used by a state. During 
our site visits, we interviewed DDS management, medical relations 
professionals, disability examiners and supervisors, and medical 
consultants. When possible, we randomly selected examiners and 
consultants, who worked with the DDS for at least 1 year, to interview 
based on rosters provided by DDS management. In three of the states, 
we met with examiners individually. In the other two states, we met 
with examiners in a group setting because of challenges with 
scheduling individual interviews. In addition to providing information 
on SSA's policies and procedures, DDS officials and staff provided 
insights on SSA's newer fraud detection initiatives. Additionally, we 
spoke with regional SSA officials in each of the regions that 
correspond with our site selection. We also spoke with OIG CDI staff 
in each location where they were present. The information we obtained 
at our site visits is illustrative and not intended to reflect the 
experiences of DDSs in other states. See table 4 for key 
characteristics of our site visit locations. 

Table 4: Key Characteristics of GAO Site Visit Locations: 

DDS: Alabama; 
SSA regional office: Atlanta, GA; 
CDI unit: No[A]; 
DDS structure[B]: Decentralized. 

DDS: California; 
SSA regional office: San Francisco, CA; 
CDI unit: Yes; 
DDS structure[B]: Decentralized. 

DDS: Illinois; 
SSA regional office: Chicago, IL; 
CDI unit: Yes; 
DDS structure[B]: Centralized. 

DDS: Maryland; 
SSA regional office: Philadelphia, PA; 
CDI unit: No[A]; 
DDS structure[B]: Centralized. 

DDS: West Virginia; 
SSA regional office: Philadelphia, PA; 
CDI unit: No[A]; 
DDS structure[B]: Decentralized. 

Source: GAO review of SSA and OIG information. GAO-15-19. 

[A] SSA plans to start-up a CDI unit in this state. 

[B] Decentralized DDS structures are those that process claims through 
more than one office in a state. 

[End of table] 

We also interviewed officials from SSA's New York regional office to 
better understand how recent alleged fraud cases in New York and 
Puerto Rico--both within that SSA region--were uncovered, as well as 
changes made in response to these incidents. In addition, we 
interviewed officials at the Michigan DDS because it has a dedicated 
fraud unit. 

To supplement our site visits, we interviewed national organizations 
that represent DDS examiners, managers, and Administrative Law Judges, 
including: 

* Association of Administrative Law Judges: 

* National Council of Social Security Management Associations: 

* National Association of Disability Examiners: 

* National Council of Disability Determination Directors: 

To provide additional context, we interviewed a number of other 
federal agencies, private insurers, and other organizations that are 
familiar with the disability determination process, detecting fraud, 
or with implementing predictive analytics. These organizations 
included: 

* American Academy of Disability Evaluating Physicians (a professional 
organization serving physicians involved in disability management and 
evaluations): 

* Coalition Against Insurance Fraud (an anti-fraud alliance that 
includes public and private insurers): 

* Centers for Medicare and Medicaid Services: 

* Department of Health and Human Services, Office of Inspector General: 

* Elder Research Inc. (a consulting company focused on predictive 
analytics and data mining): 

* The Recovery Accountability and Transparency Board: 

* Unum (a private insurer that uses predictive analytics to identify 
potential fraud): 

Analysis of Medical Provider Data: 

We conducted data matching using information from California and 
Illinois to help determine the extent to which sanctioned medical 
providers submitted evidence in disability decisions. We attempted to 
find providers who appeared in both of these two data sources: 

1. The List of Excluded Individuals and Entities (LEIE): The list is 
maintained by the Department of Health and Human Services OIG, and 
lists individuals who are excluded from federal health care programs 
for a number of reasons, including health care fraud. 

2. State Vendor Files: Vendor files are maintained by each DDS and 
list medical providers who were reimbursed for providing medical 
evidence in support of disability claims. These vendors include 
claimants' treating physicians who are reimbursed for providing copies 
of medical records, and consultative exam providers, who conduct 
medical exams for the DDS under contract, among others. 

Table 5: Data Sources Used in GAO's Analysis: 

Data sources used: List of Excluded Individuals and Entities; 
Entity responsible: HHS OIG; 
Population covered: Federally sanctioned medical providers; 
Timeframe of data analyzed: As of the end of January 2014. 

Data sources used: California Vendor File; 
Entity responsible: CA DDS; 
Population covered: All individuals or entities paid for medical 
records by the CA DDS; 
Timeframe of data analyzed: As of February 2014. 

Data sources used: Illinois Vendor File; 
Entity responsible: IL DDS; 
Population covered: All individuals or entities paid for medical 
records by the IL DDS; 
Timeframe of data analyzed: As of April 2014. 

Source: GAO review of relevant data systems. GAO-15-19. 

[End of table] 

We conducted matching between each state vendor file and the LEIE on 
the basis of tax identification numbers--Social Security Numbers or 
Employee Identification Numbers. In instances when we found a match 
between both sources, we gave the DDSs (through SSA) summary 
information on the providers and obtained information on when they 
last submitted evidence or conducted exams in support of claims. The 
Illinois DDS provided us with additional information on our matches in 
June 2014 and the California DDS in August 2014. Providers can be 
sanctioned for a number of reasons not related to health care fraud; 
therefore, the results of our matching do not indicate that fraud 
occurred in either federal health care or disability programs. 
Additionally, the results of our data matching are not generalizable 
to other states or to the wider population of disability claims. 

There were several limitations in both the state vendor files and the 
HHS LEIE that could have affected the results of our matching, 
including: 

* DDS vendor data did not include all physicians who submitted medical 
evidence on behalf of claimants or individual physicians who performed 
consultative examinations on behalf of SSA. Since these files are used 
for payment purposes, DDSs only maintain tax identification numbers 
for vendors (e.g., physicians, clinics, or third-parties managing 
records on behalf of physicians) who they pay for records or services; 
not necessarily the individual physicians who see claimants. 

* According to the HHS OIG, the LEIE may not reflect all sanctioned 
medical providers, given limitations on OIG's authorities, appeals of 
exclusions, and occasional delays in referrals to the OIG. The SSA OIG 
also noted that sanctioned physicians may move on and off the list 
depending on the outcome of appeals and reinstatements. Therefore, a 
doctor providing medical evidence to SSA on behalf of a disability 
claimant may be on the exclusions list one quarter and off the next. 

As a result of these limitations, any results in matching are likely 
to be a lower bound. 

We conducted data reliability assessments on both states' vendor data 
and found these data sets to be sufficiently reliable for our 
analysis. We restricted these assessments to the specific variables 
and records that were pertinent to our analyses. We conducted 
interviews with SSA staff familiar with the data and requested 
additional information from the DDSs. We also assessed the 
completeness of the data, including frequency analysis of relevant 
fields, testing for population of variables, out of range values, and 
duplicate records. In both states, the data's unique identifiers that 
we used for matching were not populated for all records. We followed 
up with SSA and the DDSs to gain an understanding of why some fields 
were not populated. Because the vendor files are used for payment 
purposes, the DDSs only collect tax identification numbers for 
entities they pay for medical records or consultative examinations. We 
restricted our matching to vendor data that we determined had a 
legitimate tax identification number and eliminated duplicates in the 
data. We then asked the DDSs to verify the last date of payment for 
providers whom we matched to assess whether they were receiving 
payment while they were sanctioned. 

We conducted similar data reliability steps for the HHS LEIE, 
including electronic testing and interviews with the HHS OIG officials 
responsible for maintaining the list. We found these data to be 
sufficiently reliable for our analysis. 

Identification of Key Practices for Implementing Fraud Analytics 
Systems: 

We identified a number of key practices that organizations should 
consider when implementing analytics to uncover potential fraud in 
disability claims. These practices are based on our past work that 
examined the use of analytics to detect Medicare fraud.[Footnote 43] 
To validate these practices and determine their relevance for 
disability programs, we shared the list of practices with private 
sector entities that have experience implementing analytics for 
disability programs. We also asked these entities whether there were 
additional practices that should be added to our list. These entities 
generally agreed with the practices from our prior work and suggested 
that we add mining text data to our list because this capability is 
critical to identifying similar medical language across claims. 

We conducted this performance audit from July 2013 to November 2014 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings based on our audit objectives. 

[End of section] 

Appendix II: Comments from the Social Security Administration: 

Social Security: 
Office of the Commissioner: 
Social Security Administration: 
Baltimore, MD 21235-0001: 

October 23, 2014: 

Mr. Dan Bertoni: 
Director, Education Workforce, and Income Security Issues: 
United States Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548: 

Dear Mr. Bertoni, 

Thank you for the opportunity to review the draft report, "SSA 
Disability Benefits: Enhanced Policies and Management Focus Needed to 
Address Potential Physician-Assisted Fraud" (GAO-15-19). Please see 
our attached comments. 

If you have any questions, please contact me at (410) 966-9014. Your 
staff may contact Gary S. Hatcher, our Senior Advisor for Records 
Management and Audit Liaison Staff, at (410) 965-0680. 

Sincerely, 

Signed by: 

Katherine Thornton: 
Deputy Chief of Staff: 

Enclosure: 

Comments On The Government Accountability Office Draft Report, “SSA 
Disability Benefits: Enhanced Policies And Management Focus Needed To 
Address Potential Physician-Assisted Fraud” (GAO-15-19): 

Recommendation 1: 

Review the standards used to assess DDS Performance; and develop and 
distribute promising practices to incentivize staff to better balance 
the goal to process claims promptly with the equally important goal of 
identifying and reporting evidence of potential fraud. 

Response: 

We partially agree. Our field office and disability determination 
services (DDS) employees are our first and best line of defense 
against fraud. Our Office of the Inspector General (OIG) relies
heavily on their expertise – the majority of fraud referrals come from 
our front-line employees. In FY 2013, we made over 22,500 disability 
fraud referrals to OIG, of which OIG opened about 5,300 cases and, of 
those, referred over 100 to the United States Attorney's Office for 
criminal prosecution. 

Furthermore, OIG typically relies on Social Security and DDS employees 
to analyze and interpret disability case files. Following an OIG 
finding of fraud or similar fault, our employees coordinate with OIG 
to suspend or terminate benefits or impose administrative penalties. 

Our employees take their stewardship responsibilities seriously and 
continue to show their vigilance in detecting, preventing, and 
combating fraud. Our anti-fraud activities are a top priority for the 
agency, and we will continue to encourage our employees to report 
potential fraud and give them the tools that they need to be 
successful. 

Recommendation 2: 

Issue guidance to remind DDSs of its existing policy to report all 
claims with potentially fraudulent medical evidence to the SSA OIG, 
even if sufficient evidence exists to deny a claim. 

Response: 

We agree that information concerning potential fraud is important for 
identifying trends. Beginning the second quarter of FY 2015, we will 
research how to identify denial cases for this purpose. 

Recommendation 3: 

Enhance its training efforts by ensuring it provides fraud-related 
refresher training to all DDS employees on a regular basis. Such 
training should include the identification of suspicious medical 
evidence and providers, as well as the processes and procedures for 
reporting such information. To facilitate its efforts, the agency 
could coordinate with the SSA OIG and draw on the type of training 
provided by CDI units. 

Response: 

We agree. Social Security Administration (SSA) and DDS front-line 
employees remain our best line of defense against those seeking to 
cheat the system. In fact, we expanded our anti-fraud training to 
agency employees in FY 2014. In collaboration with the Office of the 
Inspector General (OIG), we developed a mandatory national anti-fraud 
interactive video teletraining (IVT)/video on demand (VOD) training 
program for all SSA and DDS employees. The training provided a general 
overview of our anti-fraud efforts for identifying and reporting fraud 
activity, and reminded employees of their stewardship responsibility 
to report suspected fraud, waste, and abuse. The IVT broadcast aired 
on September 17, and we released the VOD on September 22. Employees 
are required to complete the training by October 31. 

In addition, we also conducted targeted, component training and 
education in FY 2014. In FY 2014, our Office of Operations 
(Operations) initiated its Think Twice First (TTF) Campaign that 
focuses on key fraud awareness topics each month, emphasizing the 
importance for all Operations employees to be actively engaged in the 
agency's process for fraud detection, investigation, and prosecution. 
The campaign touches each employee in Operations, knowing that they 
are the “front-line” defense against fraud and must understand the 
importance of developing a suspicious item or issue to determine if 
fraud exists. 

Additionally, Operations issued a DDS Administrator Letter to all DDSs 
providing an overview of fraud reporting, investigation, and 
prosecution to reinforce the importance of our anti-fraud efforts. The 
letter included an overview of fraud procedures, a reminder of anti-
fraud responsibilities and policies, and links to available anti-fraud 
training tools. 

Our Office of Quality Review also conducted fraud training for its 
employees in 2014, and plans to conduct three additional classes in FY 
2015. 

Beginning the second quarter of FY 2015, we will continue to enhance 
training for all DDS employees. The training will include the 
significance for reporting fraud, as well as business procedures. We 
will also develop an on-going training strategy that incorporates 
recent OIG findings and trends to stay aware of shifting schemes to 
defraud the disability program. We will work with the OIG, Continuing 
Disability Investigation Units, and other experts to develop and 
deliver this training. We will communicate efforts to reinforce and 
provide feedback on the effectiveness of these referrals. 

Recommendation 4: 

To address the potential risks associated with medical evidence 
submitted by sanctioned physicians, SSA should evaluate the threat 
posed by this information and, if warranted, consider changes to its 
policies and procedures. 

Response: 

We agree. While we remain watchful for additional prospects, currently 
we believe the best opportunity to further evaluate the possible 
review of the license statuses of medical evidence providers is in 
conjunction with the implementation of the National Vendor File—part 
of the national Disability Case Processing System (DCPS), which is 
under development. We anticipate limited data for exploration prior to 
FY 2017. 

Recommendation 5: 

Develop an implementation plan that identifies both short-term and 
long-term actions, including: (1) timeframes for implementation; (2) 
resources and staffing needs; (3) data requirements, e.g., the 
collection of unique medical provider information; (4) how technology 
improvement will be integrated into existing technology improvements 
such as the Disability Case Processing System and National Vendor 
File; and (5) how different initiatives will interact and support each 
other. 

Response: 

We agree. Success is predicated on a thoughtful strategic plan and 
establishing the tactical steps needed to achieve that strategy. In FY 
2014, the Acting Commissioner of Social Security approved and signed a 
charter reinstituting our National Anti-Fraud Committee (NAFC),
co-chaired by the Inspector General (IG) and our Deputy Commissioner 
for Budget, Finance, Quality, and Management. The NAFC's mission is to 
support national and regional strategies to combat fraud, waste, and 
abuse. Throughout FY 2014, the NAFC monitored 11 different anti-fraud 
initiatives, and will continue monitoring our anti-fraud activities in 
FY 2015. 

In FY 2015, we will enhance our anti-fraud efforts and develop a 
comprehensive plan, which considers our resourcing and staffing 
levels, available technology, and the integration of all of our 
activities. 

[End of section] 

Appendix III: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Daniel Bertoni, (202) 512-7215 or bertonid@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above, Gretta L. Goodwin (Assistant 
Director), Nyree Ryder Tee (Analyst-in-Charge), Daniel Concepcion, 
Brian Schwartz, and Melinda Cordero made key contributions to this 
report. Additional contributors include: James Bennett, Sarah 
Cornetto, David Chrisinger, Alex Galuten, Sheila McCoy, Zachary Sivo, 
Almeta Spencer, Vanessa Taylor, and Walter Vance. 

[End of section] 

Related GAO Products: 

Highlights of a Forum: Data Analytics for Oversight and Law 
Enforcement. [hyperlink, http://www.gao.gov/products/GAO-13-680SP]. 
Washington, D.C.: July 15, 2013. 

Social Security Administration: Long-Term Strategy Needed to Address 
Key Management Challenges. [hyperlink, 
http://www.gao.gov/products/GAO-13-459]. Washington, D.C.: May 29, 
2013. 

Medicare Fraud Prevention: CMS Has Implemented a Predictive Analytics 
System, but Needs to Define Measures to Determine Its Effectiveness. 
[hyperlink, http://www.gao.gov/products/GAO-13-104]. Washington, D.C.: 
October 15, 2012. 

Social Security Disability: Collection of Medical Evidence Could Be 
Improved with Evaluations to Identify Promising Collection Practices. 
[hyperlink, http://www.gao.gov/products/GAO-09-149]. Washington, D.C.: 
December 17, 2008. 

Results-Oriented Cultures: Insights for U.S. Agencies from Other 
Countries' Performance Management Initiatives. [hyperlink, 
http://www.gao.gov/products/GAO-02-862]. Washington, D.C.: August 2, 
2002. 

Supplemental Security Income: Additional Actions Needed to Reduce 
Program Vulnerability to Fraud and Abuse. [hyperlink, 
http://www.gao.gov/products/GAO/HEHS-99-151]. Washington, D.C.: 
September 15, 1999. 

Supplemental Security Income: Action Needed on Long-Standing Problems 
Affecting Program Integrity. [hyperlink, 
http://www.gao.gov/products/GAO/HEHS-98-158]. Washington, D.C.: 
September 14, 1998. 

[End of section] 

Footnotes: 

[1] Several of the cases that allege physicians assisted claimants in 
fraudulently obtaining disability benefits are still under 
investigation, limiting our ability to report on the nature and 
outcome of these specific cases. 

[2] For the purposes of this report, we define physician-assisted 
fraud as any instance in which a physician colludes with a claimant or 
other interested parties to provide false medical evidence in support 
of a Social Security disability claim. This could include organized 
schemes where attorneys or third-party representatives funnel their 
clients to physicians with the intent of receiving false medical 
evidence in support of claims. We are not including instances where a 
claimant exaggerates an ailment to a physician in order to obtain a 
medical diagnosis. We define physicians as individuals such as 
doctors, psychologists, optometrists, podiatrists, speech language 
pathologists, chiropractors, physicians' assistants, and other medical 
sources, or entities such as clinics or hospitals that submit accepted 
medical evidence in a claim for SSA's Disability Insurance or 
Supplemental Security Income programs. 

[3] GAO, Medicare Fraud Prevention: CMS Has Implemented a Predictive 
Analytics System, but Needs to Define Measures to Determine Its 
Effectiveness. [hyperlink, http://www.gao.gov/products/GAO-13-104] 
(Washington, D.C.: Oct. 15, 2012). 

[4] SSA OIG's CDI units investigate disability claims that have been 
identified as suspicious by state disability examiners. The program 
currently consists of 27 units covering 23 states and the Commonwealth 
of Puerto Rico. 

[5] 42 U.S.C. §§ 423(d), 1382c(a). 

[6] There are 54 DDSs located in 50 states, the District of Columbia, 
Guam, Puerto Rico, and the Virgin Islands. 

[7] 20 C.F.R. §§ 404.1513, 404.1519g, 404.1519s, 416.913, 416.919g, 
416.919s. 

[8] Rates paid for consultative examinations may not exceed the 
highest rate paid by federal or other agencies in the state for the 
same or similar type services. 20 C.F.R. §§ 404.1624, 416.1024. 

[9] See 20 C.F.R. §§ 404.1503a, 416.903a. 

[10] 42 U.S.C. § 1320a-7(a). 

[11] Examples include misdemeanor convictions related to health care 
fraud; fraud in a program funded by any federal, state, or local 
government agency; suspension or revocation of medical license for 
reasons related to professional competence, professional performance, 
or financial integrity; defaulting on health education loans or 
scholarships; or engaging in unlawful kickback arrangements. 42 U.S.C. 
§ 1320a-7(b). 

[12] CDI units also receive fraud referrals from SSA's Office of 
Disability Adjudication and Review, private citizens, anonymous 
sources, and other law enforcement agencies. 

[13] In fiscal year 2013, the OIG reported that it received 141,088 
fraud referrals, with about 75,656 coming from SSA employees across 
components (e.g., field offices, DDSs, appeals). The OIG does not 
report on the number of allegations received from each component. The 
number of referrals that included physicians is not completely known 
because the OIG's data does not consistently capture the type of 
person suspected of fraud. 

[14] Throughout this report, we use the term front-line staff to mean 
examiners and medical consultants who review medical evidence to make 
disability determinations at the DDS level. We recognize that field 
office and other SSA staff also play a critical role in identifying 
potential fraud. However, our report focuses primarily on the DDS role 
because DDS staff are responsible for reviewing medical evidence. 

[15] SSA regulations set performance standards for the DDSs based on 
their initial processing time and the performance accuracy of claims. 
20 C.F.R. §§ 404.1641, 416.1041. 

[16] GAO, Results-Oriented Cultures: Insights for U.S. Agencies from 
Other Countries' Performance Management Initiatives, [hyperlink, 
http://www.gao.gov/products/GAO-02-862] (Washington, D.C.: Aug. 2, 
2002). 

[17] For examples of how performance measures can potentially create 
perverse incentives, see GAO, Federal Transit Programs: Federal 
Transit Administration Has Opportunities to Improve Performance 
Accountability, [hyperlink, http://www.gao.gov/products/GAO-11-54] 
(Washington, D.C.: Nov. 17, 2010) and GAO, Tax Administration: IRS 
Needs to Further Refine Its Tax Filing Season Performance Measures, 
[hyperlink, http://www.gao.gov/products/GAO-03-143] (Washington, D.C.: 
Nov. 22, 2002). 

[18] SSA guidance instructs front-line staff to refer all fraud or 
similar fault issues for investigation even when staff disregard the 
questionable evidence or make a determination based on other evidence. 
Staff should not initiate further development solely to resolve these 
potential issues, but should refer all questionable issues after the 
disability determination has been made. "Similar fault" is involved in 
situations in which an incorrect or incomplete statement material to 
the determination is knowingly made, or information that is material 
to the determination is knowingly concealed. 

[19] [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1]. 

[20] Our analysis is based on 2013 data, at which time there were 25 
CDI units in 21 states and Puerto Rico. 

[21] According to SSA, the agency is working toward opening CDI units 
in six additional states and the District of Columbia, bringing the 
total number of units to 32. One of these new units was opened in 
August 2014 in Detroit, Michigan. A second unit opened in Baltimore, 
Maryland in September 2014. In addition, SSA is expanding the capacity 
of several of the existing 25 units by increasing the number of law 
enforcement investigators in the units. 

[22] See 20 C.F.R. §§ 404.1503a, 416.903a. 

[23] The HHS OIG excludes individuals and entities from federal health 
care programs and maintains the list of excluded individuals and 
entities, also known as the sanctioned list. Physicians may be 
sanctioned for numerous reasons, including health care fraud or 
suspension of a medical license. In addition to reviewing the 
sanctioned list for physicians that conduct consultative exams, SSA 
policy requires DDSs to verify their medical providers' current 
licensure and credentials with the State Medical Board. Throughout 
this report, we generally use the term "sanctioned" to refer to 
individuals on the HHS list, or individuals who are prohibited from 
providing services in the SSI or DI programs under SSA regulations. 

[24] 42 U.S.C. §§ 423(d)(5)(B), 1382c(a)(3)(H)(i). 

[25] 42 U.S.C. §§ 405(u), 1383(e)(7). 

[26] 42 U.S.C. § 1320b-6. 

[27] 20 C.F.R. §§ 404.1527, 416.927. In particular, SSA will consider 
any factors brought to the agency's attention, or of which the agency 
is aware, which tend to support or contradict the medical opinion. 
Some of the other factors that the agency will consider in evaluating 
medical opinion evidence include: (1) the examining relationship; (2) 
treatment relationship; (3) supportability of the opinion with medical 
signs and laboratory findings; (4) consistency of the medical opinion 
with the record as a whole; and (5) whether the source is a specialist. 

[28] Vendor files are maintained by each DDS and lists the individuals 
or entities who were paid for conducting consultative examinations or 
providing medical evidence in support of disability claims. 

[29] There may have been sanctioned physicians who conducted 
consultative exams or submitted medical evidence to these DDSs on 
behalf of a claimant that we were not able to identify due to 
limitations of our analysis. We identified sanctioned physicians by 
their Social Security or tax employer identification number as 
recorded in the DDS vendor files. However, SSA and DDS staff told us 
that this personally identifiable information may not be captured in 
the vendor files if they work for clinics, hospitals, or other 
institutions. As a result, we may not have identified sanctioned 
physicians who work in these institutions, but DDS officials in 
California and Illinois stated that they match the names of all 
physicians who conduct consultative exams and work for institutions 
against the sanctioned list. 

[30] As noted earlier, SSA is statutorily obligated to consider all 
available evidence regardless of the provider's status, with some 
exceptions. 

[31] Social Security Administration, Office of the Inspector General, 
Quick Response Evaluation Report, Sanctioned Medical Providers and 
Medical Evidence of Record, A-01-13-23064 (Feb. 8, 2013). 

[32] Social Security Administration, Office of the Inspector General, 
Quick Response Evaluation Report, Sanctioned Medical Providers and 
Medical Evidence of Record, A-01-13-23064 (Feb. 8, 2013). 

[33] [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1]. 

[34] The National Vendor File is a data warehouse that stores medical 
and non-medical information from DDSs. As of July 2014, the file 
included data from 20 DDSs. 

[35] Social network analysis involves the use of public records and 
other data to demonstrate social linkages between individuals and 
entities to draw connections between parties potentially involved in 
fraud schemes. 

[36] The development of this system has been delayed and may not be 
operational as planned in fiscal year 2016. 

[37] GAO, Highlights of a Forum: Data Analytics For Oversight and Law 
Enforcement. [hyperlink, http://www.gao.gov/products/GAO-13-680SP] 
(Washington, D.C.: July 15, 2013). 

[38] For example, GAO, Social Security Administration: Long-term 
Strategy Needed to Address Key Management Challenges. [hyperlink, 
http://www.gao.gov/products/GAO-13-459] (Washington, D.C.: May 29, 
2013); SSA OIG, Fiscal Year 2013 Inspector General Statement on the 
Social Security Administration's Major Management and Performance 
Challenges. A-02-14-14056 (Baltimore, MD: Dec. 6, 2013). 

[39] [hyperlink, http://www.gao.gov/products/GAO-13-459]. 

[40] [hyperlink, http://www.gao.gov/products/GAO-13-104]. 

[41] According to SSA, the committee is co-chaired by the Deputy 
Commissioner for Budget, Finance, Quality, and Management, and the 
Inspector General. The committee will serve as a forum for senior 
executives to collaborate on anti-fraud efforts across the agency. The 
committee was originally formed in 1996, but met on an ad-hoc basis 
after 2003. It was reinstated in January 2014 and held its first 
meeting in March 2014. 

[42] GAO, VA Disability Compensation: Actions Needed to Address 
Hurdles Facing Program Modernization, [hyperlink, 
http://www.gao.gov/products/GAO-12-846] (Washington, D.C.: Sept. 10, 
2012). 

[43] GAO, Medicare Fraud Prevention: CMS Has Implemented a Predictive 
Analytics System, but Needs to Define Measures to Determine Its 
Effectiveness, [hyperlink, http://www.gao.gov/products/GAO-13-104] 
(Washington, D.C.: Oct. 15, 2012). 

[End of section] 

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