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A Crackdown on Disability Fraud Highlights Program’s Troubles


A Crackdown on Disability Fraud Highlights Program’s Troubles

Photograph by David Job/Getty Images

Federal authorities arrested 68 people in Puerto Rico on Wednesday in a two-year probe into fraudulent disability claims, according to the inspector general for the U.S. Social Security Administration. Prosecutors charged three doctors and a former Social Security employee who they say helped people make false claims that they were too sick or injured to work. In exchange, the suspects allegedly got cuts of disability payments, ranging from $150 to $6,000. Dozens of people who received the payments were also charged.

The arrests follow a 2011 Wall Street Journal investigation into unusual disability claims in Puerto Rico, and the case highlights a growing problem for the federal government: ballooning payments under a program with notoriously squishy standards for what constitutes a disability.

Here’s a look at the increased number of federal disability payments, which topped $190 billion in 2011:

What’s driven this dramatic growth of payments, which now go to more than 14 million Americans? As NPR reported earlier this year in a deep look at the program, disability insurance has become a stealth safety net for people unable to find decent jobs:

Part of the rise in the number of people on disability is simply driven by the fact that the workforce is getting older, and older people tend to have more health problems. But disability has also become a de facto welfare program for people without a lot of education or job skills. … People who leave the workforce and go on disability qualify for Medicare, the government health care program that also covers the elderly. They also get disability payments from the government of about $13,000 a year. This isn’t great. But if your alternative is a minimum wage job that will pay you at most $15,000 a year, and probably does not include health insurance, disability may be a better option.

The system invites abuse, and the government knows it. “We designated federal disability programs as high risk, in part because the programs do not reflect a modern concept of disability,” a U.S. Government Accountability Office official said during congressional testimony last year. The criteria for getting disability are based more on whether you have a condition that could prevent you from working than whether you actually can’t work:

Officials we spoke with from an organization of vocational examiners expressed frustration with having seen young individuals who could work with minor accommodations being provided disability benefits likely throughout their working life, rather than receiving support to pursue work. … Minor accommodations can include a stool for sitting or devices to assist with vision impairments.

There are people with real disabilities who can’t work, and compassionate societies offer them help to get by. Others with legitimate ailments may be able to work, but they turn to disability payments because they have few job prospects. Still others, as the government alleges in the Puerto Rico case, are brazenly scamming a system with inadequate safeguards.

Prosecutors are seeking to recover about $3.8 million from those accused, and the crackdown may help deter others from trying to submit fraudulent claims. But fixing the troubled program will take a lot more than one big prosecution.

John_tozzi
Tozzi is a reporter for Bloomberg Businessweek in New York.

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