Supplemental Security Income:

Disability Program Vulnerable to Applicant Fraud When Middlemen Are Used

HEHS-95-116, Aug 31, 1995

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Pursuant to a congressional request, GAO reviewed fraudulent claims for disability benefits under the Supplemental Security Income (SSI) program, focusing on: (1) the extent of fraudulent applications submitted by non-English speaking immigrants using middlemen; (2) factors that contribute to SSI vulnerability to such fraudulent applications; and (3) government initiatives to combat such fraudulent activities.

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

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendation for Executive Action

    Recommendation: The Commissioner of Social Security should develop a more aggressive, programwide strategy for improving the quality of information obtained from applicants, maintaining and sharing data collected on interpreters and middlemen among field offices, and using information that results from the work of other local, state, and federal government agencies to pursue cases in which fraud is suspected. Such a strategy should include developing improved ways to more effectively manage SSA resources to further facilitate communications with applicants, possibly by requiring that SSA bilingual staff or SSA contracted staff conduct the interviews and by exploring videoconferencing technology. The strategy should also include instituting procedures for sharing, among field offices, the information SSA has already collected about interpreters and middlemen from its required forms and other sources, until the automated interpreter database is established, and establishing a mechanism to facilitate regular sharing of all state Medicaid agencies' investigative results with SSA.

    Agency Affected: Social Security Administration

    Status: Closed - Implemented

    Comments: SSA has taken some actions to address the middleman fraud problem. For example, it has established pilot task forces to investigate cases of disability fraud that are referred by DDS examiners. It also issued new procedures that all DDSs are to follow in cases where examiners suspect fraud or abuse. While these actions are a step in the right direction, they are not fully responsive to GAO's recommendation. For example, pilot task forces in 5 DDSs do not constitute an aggressive, agencywide strategy to address middlemen fraud. Also, SSA has yet to develop such information sharing capabilities as an automated third party database that field staff nationwide could use to learn about and track suspected middlemen. GAO is closing out this recommendation because continued complaints about middlemen fraud in particular and service provider fraud in general have resulted in a second congressional request on this topic.