Right-Wing Media Miss The Facts On Disability Fraud

››› ››› HANNAH GROCH-BEGLEY

Right-wing media misleadingly hyped a congressional hearing to falsely claim that disability fraud is leading to increased claims and depleting the Social Security Disability Trust Fund. However, testimony from a Social Security Administration official at the hearing revealed that fraud is not a major problem in the disability program and demographic changes explain increased disability claims.

House Oversight Committee Holds Hearing On Appeals Process In Disability Insurance

Associated Press: House Oversight Committee Holds Hearing On Appeals Process In Social Security Disability Program. The Associated Press reported that the House Oversight Committee held a hearing on Social Security Disability Benefits on June 27. The hearing focused on the role of administrative law judges (ALJs), who process appeals for disability claims that have been rejected twice:

The House oversight subcommittee on entitlements is scheduled to hold the first of several hearings on the disability program Thursday. The hearing will focus on the role of administrative law judges in awarding benefits.

Most Social Security disability claims are initially processed through a network of local Social Security Administration field offices and state agencies, usually Disability Determination Services, and most are rejected. If your claim is rejected, you can ask the field office or state agency to reconsider. If your claim is rejected again, you can appeal to an administrative law judge, who is employed by Social Security. [The Associated Press, 6/25/13]

Right-Wing Media Hype Claims Of Fraud In Disability Programs Following Hearing

Fox News' Patti Ann Browne: Hearing Revealed "Fraudulent Claims Threatened The Entire Social Security Program." Fox & Friends First co-host Patti Ann Browne reported on a June 27 House Oversight committee hearing by hyping disability fraud, claiming that "Social Security experts say $21 billion in false disability claims are doled out every year. Testifying on Capitol Hill yesterday, they said the fraudulent claims threaten the entire Social Security program." [Fox News, Fox & Friends First, 6/28/13]

Washington Free Beacon: "Fraudulent Disability Claims Threatening Social Security Program." In an article headlined "Fraudulent Disability Claims Threatening Social Security Program," the Washington Free Beacon claimed "Social Security experts testified Thursday that a recent surge in falsely awarded disability benefits threatens the viability of a program whose trust fund will be exhausted by 2016." The Free Beacon went on to focus on one judge's testimony at the hearing, who claimed that 15 percent of disability benefits were improperly awarded. [Washington Free Beacon, 6/27/13]

Fox Nation Hypes "$21b In False Disability Claims." Fox Nation promoted the Washington Free Beacon article to hype disability fraud with the headline "Report: $21b In False Disability Claims Handed Out Annually." The Fox Nation post also included the claim that "a recent surge in falsely awarded disability benefits threatens the viability of a program whose trust fund will be exhausted by 2016." 

Fox Nation post hyping disability fraud[Fox Nation, 6/27/13]

But Congressional Testimony Revealed Fraud Is Not A Widespread Problem

Associated Press: Testimony Revealed Disability Error Rate Was Less Than 10 Percent, And Most Errors Are Procedural. The Associated Press reported that Glenn Sklar, the Deputy Commissioner of Disability Adjudication and Review at the Social Security Administration, explained during the hearing that while there were errors in 22 percent of disability benefit cases decided in 2011, many of those errors were "procedural and did not necessarily result in incorrect decisions." He concluded that the "true wrong rate would be less than 10 percent." Sklar's prepared remarks also noted that the administration has reduced the hearings backlog, and improved the quality of decisions. [The Associated Press, 6/27/13; Glenn Sklar statement to House Committee on Oversight and Government Reform, 6/27/13]

Accuracy Rates Are High Across Disability Programs

National Council Of Disability Determination Directors: Net Accuracy Rate Is 97 Percent For Initial Disability Determination. According to testimony given by the President of the National Council of Disability Determination Directors to the House Ways and Means Committee in March 2013, the Social Security Administration automatically reviews half of all initial allowances and denials of disability benefits, and found that over the last 3 years the net accuracy rate has been 97 percent or better:

Both our allowance and denial determinations are very accurate. By statute, SSA reviews 50% of the allowances before the decisions are effectuated, and the DDS [Disability Determination Services] "PER" (pre-effectuation review) error rate has been under 3% for the past 5 years. SSA also performs a quality review sample of both allowances and denials, and the DDS net accuracy rate has been 97% or better over the last 3 years. [House Committee on Ways and Means Testimony, 3/20/13]

GAO Found That Error Rate In Improper Payments Of Social Security Disability Insurance Benefits Is Negligible. A FY2011 investigation by the Government Accountability Office found that improper payments of Social Security benefits that include Disability Insurance had an error rate of just 0.6 percent. [Government Accountability Office, 3/28/12]

SSA Acting Commissioner: 99 Percent Of Social Security Disability Payments Are Accurate. Then-deputy commissioner of the Social Security Administration Carolyn W. Colvin testified before the House Committee on Ways and Means in January 2012 that according to the administration's data, Social Security Disability Insurance payments "are highly accurate":

Overall, our SSDI payments are highly accurate. Our most recent data show that, in FY 2010, 99.3 percent of all SSDI payments were free of an overpayment, and 99.0 percent were free of an underpayment. While we are proud of our high accuracy rate for SSDI payments, we recognize that our SSI overpayment accuracy rate falls short of that high standard. To a large extent, inaccuracy is inherent in the complex program rules and the delays in receiving income data. SSI payments can change each month due to income and resource fluctuations and changes in living arrangements. Our overpayment accuracy rate, though improving, reflects that complexity. In the SSI program, 93.3 percent of all payments were free of an overpayment, and 97.6 percent of all payments were free of an underpayment, a significant improvement from FY 2008. [House Committee on Ways and Means Testimony, 1/24/12

Fmr. Social Security Commissioner Michael Astrue: Fraud Is Less Than 1 Percent Of SSI Payments. Former Bush Administration Social Security Commissioner Michael Astrue explained on MSNBC's All In with Chris Hayes that fraud constitutes less than 1 percent of the outlays of Supplemental Security Income, one of the federal benefit programs for individuals with disabilities. [MSNBC, All In with Chris Hayes4/5/13, via Mediaite]

Approval Rates For Disability Claims Have Declined At Every Level

Social Security Administration: Approval Rates For Disability Applicants Have Fallen At All Decision Levels. According to the most recent available data from the Social Security Administration, between 1999 and 2010 the award rate at all decision levels for disability claims fell from 56 percent to 34.8 percent. [Social Security Administration, July 2012]

Average Approval Rate By Appeal Judges Has Fallen Since 2009. The National Organization of Social Security Claimants' Representatives noted that the average approval rate by Administrative Law Judges (ALJs), who review appeals for disability claims that have been denied twice, has fallen since 2009:

Despite sensational media reports, the average ALJ approval rate for 2011 was 58 percent, down from 63% in 2009 and from 72.3% in 1994. In 2011, one ALJ had an approval rate as low as 12.7 percent. Furthermore, more than three-quarters of all decisions favoring the disability claimant are made by state agencies before ever reaching an ALJ. In all, ALJ decisions comprise less than 25 percent of all SSDI awards. [National Organization of Social Security Claimants' Representatives, accessed 6/28/13]

SSA: On Average The Majority Of Disability Claims Are Denied. The 2011 Annual Statistical Report on the Social Security Disability Insurance Program explained that on average, the majority of disability claims at all decision levels are denied:

The final award rate for disabled-worker applicants has varied over time, averaging nearly 45 percent for claims filed from 2001 through 2010. The percentage of applicants awarded benefits at the initial claims level averaged 28 percent over the same period and ranged from a high of 37 percent to a low of 26 percent. The percentage of applicants awarded at the reconsideration and hearing levels are averaging 3 percent and 13 percent, respectively. Denied disability claims have averaged nearly 53 percent. [Social Security Administration, July 2012]

Demographics Explain The Rise In Disability Claims

Former Social Security Commissioners: Social Security Actuaries Accurately Projected That Demographic Changes Would Fuel Growth In Disability Programs. Eight former commissioners of the Social Security Administration wrote an open letter in response to a story produced by NPR's Planet Money to express their "significant concerns" about the story's accuracy in commenting on the solvency of the Disability Insurance (DI) trust fund, noting that Social Security funds have been reallocated 11 times due to demographic changes:

[T]he series aired on NPR sensationalizes this growth, as well as the DI trust fund's projected shortfall. History tells a less dramatic story. Since Social Security was enacted, Congress has "reallocated" payroll tax revenues across the OASI and DI trust funds - about equally in both directions - some 11 times to account for demographic shifts. In 1994, the last time such reallocation occurred, SSA actuaries projected that similar action would next be required in 2016. They were right on target. [An Open Letter from Former Commissioners of the Social Security Administration, 4/4/13]

CBPP: "Changes In The Workforce Explain Most Of The Growth In The Disability Rolls." According to the Center on Budget and Policy Priorities (CBPP), "[c]hanges in the workforce explain most of the growth in the disability rolls." CBPP explained:

Several important factors have swelled the number of disabled workers substantially during the last few decades:

  • Baby boomers have aged into their high-disability years.  Aging takes a toll on many workers' bodies and minds long before retirement age.  People are roughly twice as likely to be disabled at age 50 as at age 40, and twice as likely to be disabled at age 60 as at age 50.  (See Figure 2.)  As the baby boomers -- the huge cohort of people born between 1946 and 1964 -- have grown older, the number of disability cases has risen substantially.
  • More women have qualified for disability benefits.  In general, workers with severe impairments can get disability benefits only if they have worked for at least one-fourth of their adult life and for five of the last ten years.  Until women joined the workforce in significantly greater numbers in the 1970s and 1980s, relatively few women met those tests; as recently as 1990, male disabled workers outnumbered women by nearly 2 to 1.  Now that more women have worked long enough to qualify for disability benefits, the ratio has fallen to 1.1 to 1.  This has been a large factor behind the increase in the number of DI beneficiaries.
  • Social Security's full retirement age rose from 65 to 66.  When disabled workers reach full retirement age, they begin receiving Social Security retirement benefits rather than disability benefits.  The increase in the retirement age has delayed that conversion for many workers.  In December 2011, more than 400,000 people between 65 and 66 --nearly 5 percent of all DI beneficiaries -- collected disabled-worker benefits; under the rules in place a decade ago, they would have been receiving retirement benefits instead. [Center on Budget and Policy Priorities, 8/9/12, emphasis original]

Need To Replenish Disability Trust Fund Is Not A Crisis

CBPP: Need To Replenish Disability Trust Fund Is "Neither A Surprise Nor A Crisis." The Center on Budget and Policy Priorities noted that while the DI trust fund does need to be replenished by 2016, in 1995, the Social Security trustees also predicted the shortfall and a modest reallocation from the retirement trust fund alleviated the problem:

The DI trust fund must be replenished by 2016 to avoid a cut in benefits, but that's neither a surprise nor a crisis. Presidents and Congresses often have reallocated taxes between Social Security's retirement and disability trust funds, in either direction.  In 1995, shortly after the last reallocation, the Social Security trustees predicted that it would keep the DI trust fund solvent until 2016 -- the same year the fund is now expected to need more resources.

Another modest reallocation from the retirement trust fund into the DI trust fund would advance the retirement fund's insolvency date, but by a mere two years, from 2035 to 2033. [Center on Budget and Policy Priorities, 6/28/13, emphasis original]

Economic Policy Institute: "The Depletion Of The DI Trust Fund Is No Big Deal." The Economic Policy Institute's Working Economics blog cited the National Academy of Social Insurance to note that "the depletion of the DI trust fund is no big deal" and that Congress periodically reallocates funds, and can do so again:

Much of the media coverage focuses on workers with seemingly minor impairments who apply after losing their jobs, giving the impression that DI is luring people out of the workforce and causing a drain on public resources. In a particularly misleading story, National Public Radio dubbed the disability program a "hidden, increasingly expensive safety net." But as a new report from the Center for American Progress points out, DI benefits are a modest lifeline for disabled workers, and the difficult and lengthy application process makes it highly unlikely that workers with real options will choose this route. Even among the more than half of applicants who are rejected, relatively few find jobs later, though the fact that some applicants who nearly qualify manage to engage in "substantial gainful activity" suggests that DI does have a modest dis-employment effect.

Does this mean there's nothing to worry about? Yes and no. As the National Academy of Social Insurance explains in a new brief, the depletion of the DI trust fund is no big deal. Congress has periodically reallocated funds from the Old Age and Survivors Insurance (OASI) fund to the DI fund, and should do so again. Because DI is a relatively small part of Social Security, this would have a small impact on OASI while allowing both programs to pay full benefits through 2033 (about three-fourths of scheduled benefits thereafter) even if nothing else is done to shore up the system's finances. [Economic Policy Institute, Working Economics, 5/30/13]

For more information on media deceptively portraying disability programs as wasteful and unsustainable, click here.

Media Matters intern Charlie Rafkin contributed research to this report.

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