[Congressional Record Volume 140, Number 11 (Tuesday, February 8, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: February 8, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                 LET'S STOP DISABILITY INSURANCE FRAUD

  (Mr. SMITH of Michigan asked and was given permission to address the 
House for one minute and to revise and extend his remarks.)
  Mr. SMITH of Michigan. Mr. Speaker, Supplemental Security Income was 
designed to help the disabled who can no longer work and sustain their 
incomes. Unfortunately, some people have found that a court 
interpretation of a 1972 law allows them to take billions of dollars 
from U.S. taxpayers by having their children classified as disabled 
because they are slow learners or have behavioral problems. Several 
constituents brought this unfair situation to my attention. Over the 
last several months, I drafted a bill to stop this fraud by eliminating 
extra disability benefits for those under 16 years old, saving 
taxpayers $3.6 billion per year. Parents of these children would still 
be eligible for medical care through Medicaid, AFDC and other low 
income assistance programs, but they couldn't claim disability benefits 
of an additional $400 per child per month. I plan to introduce 
legislation this week and invite cosponsors.

                              {time}  1430

  The problem of disability abuse has come increasingly into the public 
spotlight, including this article in last Friday's Washington Post by 
Bob Woodward and Benjamin Weiser, that I will include as an extension 
of my remarks.
  My bill will protect the integrity of S.S.I. and save billions of 
dollars for hard working taxpayers.
  The article referred to follows:

                [From the Washington Post, Feb. 4, 1994]

  Costs Soar for Children's Disability Program: How 26 Words Cost the 
             Taxpayers Billions in New Entitlement Payments

                 (By Bob Woodward and Benjamin Weiser)

       Nora Cooke Porter, a pediatrician and lawyer, works on the 
     front lines of the nation's entitlement system. She can 
     barely contain her frustration as she flips through some of 
     the thousands of applications for a federal aid program for 
     disabled poor children that have passed through her 
     Harrisburg, Pa., office over the last two years.
       The files show, she says, that children who curse teachers, 
     fight with classmates, perform poorly in school or display 
     characteristics of routine rebellion are often diagnosed with 
     behavioral disorders and therefore qualify for the program's 
     cash benefits, which average $400 a month. Under a broad new 
     federal standard prompted by a 1990 Supreme Court ruling, 
     behavior that isn't ``age appropriate'' is considered a 
     disability.
       Porter feels her hands are tied by the new rules. She has 
     tried to block benefits to children who, in her medical 
     opinion, are not suffering from any disability. Her superiors 
     have overruled her, and she has written detailed rebuttals. 
     Last month, she was suspended without pay for her repeated 
     protests, and she believes her job as a disability-review 
     physician is in jeopardy.
       Months before her suspension, she agreed to be interviewed 
     because she believes that the children's disability program 
     is an example of an entitlement system gone haywire. She 
     hopes that her decision to speak out will drawn attention 
     from congressional or federal investigators.
       The age-appropriate standard is only the most recent flaw 
     in the program, according to Porter and others. They trace 
     the programs' problems to its origin: a vague, little-debated 
     26-word clause that was hastily inserted in a mammoth welfare 
     bill passed in 1972.
       Porter's criticisms are echoed by many others who work in 
     the program. They say they sympathize with the children, many 
     of whom are living in desperate poverty. But, they argue, the 
     program does little to help them with their real troubles, 
     especially since the majority of Children who now qualify 
     have mental disorders rather than physical ones.
       How to provide for the country's neediest--the old, the 
     young, the poor, the sick, the disabled, the disadvantaged--
     without bankrupting the Treasury has become one of the 
     central governing questions of our time.
       Earlier this week, The Washington Post published a series 
     of articles on the rising cost of Medicaid, the health 
     insurance program that is the government's largest 
     entitlement for the poor. This article examines the little-
     known children's disability program, another entitlement for 
     the poor, which is experiencing the same skyrocketing costs 
     as Medicaid.
       Last year, the children's disability program cost $3.6 
     billion. It was serving 770,000 at the end of December, a 
     number that none of its sponsors imagined possible when it 
     was enacted 20 years ago, they say. Because disability 
     recipients automatically qualify for Medicaid, the program's 
     rapid expansion also has led to hundreds of millions of 
     dollars in additional costs for that entitlement program.
       Children's disability is a component of a larger 
     entitlement program call Supplemental Security Income, or 
     SSI, which provides benefits to poor people who are elderly, 
     disabled or blind. By law, entitlement programs guarantee 
     government benefits to anyone who meets the qualifications 
     set out in legislation or in regulations. Federal spending 
     levels are mandatory, meaning they cannot be altered unless 
     the law is changed.

                            what can happen

       The history of the children's disability program 
     illustrates what can happen when a law is enacted without 
     much debate or study and then becomes subject to 
     interpretation by regulators, advocates and the Supreme 
     Court.
       The new age-appropriate standard that Porter criticizes was 
     written by federal regulators after the Supreme Court ruled 
     that the law required the government to use a broader 
     definition of disability in determining eligibility.
       Since the court ruling, the number of children receiving 
     benefits has more than doubled. The decision also led to 
     lump-sum back payments for some 150,000 children who had been 
     denied benefits under the old rules. These back payments--
     which averaged $15,000, with some as high as $75,000--have 
     cost the government $2 billion since 1991, plus at least 
     $287 million more in administration.
       In a survey of state disability determination directors 
     conducted last summer, more than half cited ``inappropriate 
     use of SSI funding'' as the most common concern in their 
     states. Parents or guardians are not required to use the 
     money for therapeutic or medical aid. They can spend the cash 
     payment as they please, as long as it benefits the child in 
     some way. That rule has been interpreted to allow the 
     purchase of a television set, a video game or a car.
       ``I really have to grapple with the idea that I'm allowing 
     that parent to use the money any way they want to, fairly 
     certain, given the history, that the child is not going to 
     benefit,'' said a psychologist in the Washington disability 
     determination office. ``And that happens to us . . . eight 
     times a day.''
       The lump-sum payments revealed what both supporters and 
     critics of the program see as the absurdity of federal 
     spending rules. Families receiving the back payments were 
     required to spend the money within six months so that their 
     sudden wealth would not make them ineligible for the income-
     based program.
       Last summer, a group of disability experts and officials 
     met in Washington to discuss the mission of the children's 
     disability program. According to a confidential memo about 
     the July 19 meeting, a congressional staff director 
     ``questioned exactly what we were trying to accomplish by 
     giving disabled children benefits.''
       The response: ``From a social policy perspective,'' the 
     memo said, ``it was interesting that no one really had a good 
     answer''--not the policy experts, nor the people who run the 
     program, nor even the people who oversee the legislation.

                          a consolation prize

       The children's disability program began in 1972 as a kind 
     of consolation prize.
       The Senate had just killed the Nixon administration's 
     proposal for a guaranteed minimum income for poor Americans. 
     As a compromise, Congress established SSI to provide aid for 
     the ``deserving poor'': the elderly, blind and disabled. 
     Initially, no money was set aside for children.
       Thomas C. Joe, a senior federal welfare official, inserted 
     the 26-word clause that expanded SSI to cover children. It 
     appeared in parenthesis, as follows: ``(or, in the case of a 
     child under the age of 18, if he suffers from any medically 
     determinable physical or mental impairment of comparable 
     severity).''
       Joe, 58, now head of a Washington social policy think tank, 
     said that expanding the program to cover disabled children 
     was part of his ``incremental strategy'' to assist as many 
     poor people as possible. It was a welfare program 
     disguised as disability assistance.
       There was no consideration of the financial or policy 
     consequences or of other ways to aid disabled children, 
     according to participants in drafting the original 
     legislation. Nor was there any public hearing that even 
     mentioned Joe's 26-word clause.
       Joe acknowledged with some humor that he tucked the 
     provision into the 697-page bill in order to sneak it 
     through. ``I was afraid that too many people were going to 
     discover this and it would be a big controversy,'' he said. 
     ``This is a good example of democracy not at work.'' he 
     added.
       The Senate Finance Committee chairman at the time, Russell 
     B. Long (D-La.), made a run at killing the provision. 
     ``Disabled children's needs for food, clothing and shelter 
     are usually no greater than the needs of non-disabled 
     children,'' his staff wrote in a Sept. 26, 1972, committee 
     report. It said disabled children needed health care and 
     rehabilitative services, not money, and noted that Medicaid 
     already covered poor children's health costs in 48 states.
       During the closed-door, marathon weekend House-Senate 
     conference in October 1972 to reconcile different versions of 
     the bill, hundreds of other welfare, Medicaid and Medicare 
     issues were being resolved, and SSI received little 
     attention.
       ``It wasn't thought of as a big deal,'' said Frank Crowley, 
     a now retired senior staffer who worked on the bill. ``It was 
     one of these annoying little details.''
       The 67-page report from the conference made no mention of 
     how the issue was settled. J. William Kelley, a House Ways 
     and Means Committee staffer at the time, has a copy of the 
     only existing conference paper about Senate amendment No. 
     564, which called for dropping Joe's provision. The single 
     sheet reads: ``CONFIDENTIAL. Summary: The House bill 
     authorizes payment to children under age 18. The Senate bill 
     does not.'' The line under ``Cost'' was left blank.
       When the conference report was presented to the House on 
     Oct. 17, 1972, Rep. Phillip Burton (D-Calif.) rose to praise 
     the new program. ``Thanks to Tom Joe, this is now a 
     reality,'' he said.

                          what is disability?

       Joe's amendment became law without anyone addressing the 
     obvious question: How do you define disability for a child?
       Previously, disability assistance had been premised on the 
     disabled person's inability to work. The purpose was to make 
     up for lost income. The bill creating SSI defined a disabled 
     adult as someone ``unable to engage in any substantial 
     gainful activity.''
       But children don't work, at least until they become 
     teenagers. ``It is ludicrous on its face to apply the same 
     standard to children,'' said Joseph Humphreys, a former 
     congressional staffer who worked on the 1972 bill. Humphreys 
     called the 26 words ``a punt by Congress'' that left 
     regulators to decide what to do.
       The meaning of Joe's 26 words--especially the phrase 
     ``comparable severity''--has been controversial ever since. 
     Even today, Joe said, he doesn't know exactly what the phrase 
     was supposed to mean.
       In writing regulations, the Social Security Administration, 
     which runs SSI, said an adult was eligible if his or her 
     disability appeared on a predetermined list of physical and 
     mental impairments. If it didn't, the adult could still 
     qualify by having a personal evaluation that determined that 
     he or she was unable to work.
       The regulations treated children differently. They had to 
     manifest one of the listed impairments, such as acute 
     leukemia, chronic epilepsy or serious mental retardation. 
     Because children generally don't hold jobs, individual 
     evaluations were not considered necessary.
       In the early 1980s, the Reagan administration moved to 
     slash the number of people on federal assistance programs, 
     including SSI. One of the thousands of people affected was 
     Brian Zebley, a 5-year-old retarded boy. His family filed a 
     lawsuit, charging that the government was illegally denying 
     benefits to Brian and other children.
       As the case wound its way through the federal courts, it 
     attracted a vigorous and passionate advocate--Jonathan Stein, 
     a legal services lawyer in Philadelphia. The legal 
     counterpart to Joe, Stein saw the courts as a way to extend 
     benefits to the poor. He and a colleague, Richard Weishaupf, 
     took Zebley's case all the way to the Supreme Court.
       Stein spotted the logical flaw in the administration's way 
     of determining eligibility: The ``comparable severity'' test 
     could not be applied to children unless the methods of 
     assessing disability in adults and children were 
     themselves comparable. Children deserved the same kind of 
     individual assessments that adults were receiving, Stein 
     argued.
       A Supreme Court case often carries the expectation that 
     large constitutional, moral or social issues will be 
     addressed. The Zebley case, however, was framed narrowly: Had 
     the government properly interpreted the law? In 1990, in 
     Sullivan v. Zebley, the Supreme Court ruled 7-2 in Zebley's 
     favor and ordered the Social Security Administration to give 
     children the same individual analysis as adults.
       To implement the high court's ruling, the agency asked a 
     panel to experts to settle the question: What is the work of 
     a child?
       The panel's answer, in the form of new regulations, is the 
     primary cause of Nora Porter's complaints. The new rules 
     defined a child as disabled if his impairments 
     ``substantially reduce'' his ability to ``grow, develop or 
     mature physically, mentally or emotionally and thus to engage 
     in age-appropriate activities of daily living.'' These 
     activities ranged from learning, communicating and performing 
     in school to interacting appropriately with peers and family 
     members.
       Social Security officials said the panel was seeking a 
     common-sense way of comparing children and adults. In 
     Porter's view, they failed. ``Age appropriate is a fictitious 
     standard,'' she said. ``It applies to the perfect child, and 
     any deviation from that allows someone to apply for and 
     likely be declared disabled.''
       James Perrin, a Harvard Medical School pediatrician who 
     helped develop the regulations, said Porter's criticism was 
     unrealistic and out of touch. He said physicians needs some 
     standard to assess a child's behavior. ``None of us can think 
     about children without raising the question of age-
     appropriate behavior,'' he said. ``There's no way of 
     approaching children and adolescents without thinking about 
     that.''

                       victory provides leverage

       Stein's legal victory gave him enormous leverage over the 
     children's disability program. According to federal and state 
     officials, he became the program's de facto supervisor.
       Stein regularly threatened to seek contempt-of-court 
     citations when he felt the Social Security Administration 
     wasn't implementing the rules fast enough. He also provided 
     the news media with information on how the agency's foot-
     dragging was costing hundreds of thousands of disabled 
     children money that the Supreme Court said they deserved.
       One of Stein's most significant accomplishments was getting 
     Social Security to review roughly 450,000 cases, dating to 
     1980, in which children had been denied benefits. This led to 
     the 150,000 lump-sum back payments.
       But not even Stein could do anything about the government's 
     requirement that the recipients spend the money within six 
     months to remain eligible for the program. Stein 
     unsuccessfully tried to create an exception for back payment 
     recipients, calling the rule ``Kafkaesque.''
       The rules legitimized and even encouraged shopping sprees. 
     In a case that both federal officials and program advocates 
     said was fairly typical, Beverly Smith of Greenville, Ky., 
     received a back payment in 1992 of $13,000 for her 11-year-
     old son, who is hyperactive and was deemed disabled under the 
     new rules. Smith, who earns about $8,000 a year sweeping up 
     in a local bank, said she was shocked to receive so much 
     money at once.
       She used the money to buy a car, a washer and dryer, a 
     refrigerator, a stove, a television, a $2,500 computer and 
     three jogging suits for her son, she said in a recent 
     interview. She also repaired her bathroom, leaky roof and 
     collapsed hallway floor.
       The computer, she said, has helped her son to sit still for 
     long periods of time for the first time in his life. The 
     stove had to be fitted with protective glass doors because 
     her son once started a fire in the kitchen.
       Smith now receives a regular monthly SSI check from the 
     government for $446, in addition to Medicaid benefits.
       In other cases disability money--both the back payments and 
     the monthly checks--has been spent on everything from medical 
     expenses not covered by Medicaid to family vacations. In some 
     cases, families have tried to avoid the spending sprees by 
     establishing trust funds for children, but such arrangements 
     are legally complex and prohibitively expensive.
       The Social Security Administration does require an 
     accounting from the person who is entrusted with the child's 
     check. But the agency does not have the resources to 
     scrutinize spending on a large scale. A guardian is suspended 
     only if an egregious misuse of the money is called to the 
     agency's attention.
       ``When you get into programs like this,'' said Louis D. 
     Enoff, a 30-year veteran of the Social Security 
     Administration and its acting director until July 1993, ``if 
     you write something that's very, very tight, then you have 
     great difficulty. . . . You're going to have to follow up 
     with a tremendous administrative detail to follow it through. 
     What are we going to do? Follow every penny and ask for check 
     stubs? And go see the evidence?''
       Enoff said he wasn't sure a purchase such as a car should 
     be allowed. ``Yeah, they may buy a new car, but it's not a 
     Mercedes or something,'' he said. ``That's probably 
     benefiting the kid as much as anything, because he needs 
     treatment and he gets better treatment. . . . If the child 
     has to go to the hospital once a week, there're taking a cab 
     now. So you pay for the car pretty quickly.'' He added. ``I 
     mean, I would not buy a car, maybe, if it was me.''
       Social Security officials said the evidence of abuse is 
     small. ``I believe that most people are honest people. . . . 
     who really care about their kids,'' said Barry Eigen, a 
     senior Social Security official. They're not trying to beat 
     somebody out of something. They need this.''


                        Fractured Administration

       Administration of the child disability program is divided 
     among state and federal offices in a vast, fractured system 
     where hardly anyone is responsible for seeing the big 
     picture.
       First, applicants visits federal Social Security offices, 
     where financial eligibility for the program is determined. 
     Then, the applications are sent to separate state offices, 
     such as the one where Porter works in Harrisburg. The state 
     offices determine medical eligibility. Finally, the cases 
     return to the Social Security offices, which make the monthly 
     payments and oversee the spending of the money.
       Doctors and examiners in the state offices make their 
     judgments on the basis of applications and medical 
     assessments. They almost never meet the children they are 
     evaluating or the parents who are spending the money. ``Our 
     work begins in the mailroom when we receive a file and ends 
     in the mailroom when we send it back with an allowance or 
     disallowance,'' said Myrtie Adkins, the Maryland office 
     director.
       Meanwhile, the Social Security officials who see the 
     applicants have no input on the disability determination. 
     ``We don't question the decision,'' said Ruby Burrell, head 
     of the Camp Springs, Md., Social Security office. ``We don't 
     even question if they are really disabled. It would be 
     improper to do that. . . . You meet the criteria, you get the 
     benefits.''
       Many recipients come from troubled families, where parents 
     or guardians may have their own addictions or pathologies.
       Karen Bolewicki, a senior examiner in Maryland for eight 
     years, said ``at least one-third'' of her cases involve 
     families in which a parent is a drug or alcohol abuser. And 
     Maryanne Bongiovani, a psychologist in Maryland for five 
     years with a PhD, said a quarter of the 4,000 children's 
     cases she has reviewed involve sexual abuse by a family 
     member.
       Kenneth R. Carroll, a psychologist with a PhD and a former 
     colleague of Porter's in Pennsylvania, said these troubled 
     family situations made him uncomfortable approving certain 
     applications. ``Many of the problems these children manifest 
     are largely traceable to parental neglect or abuse,'' said 
     Carroll. ``Behavioral and emotional problems or conduct 
     disorders that are directly attributable to inadequate 
     parenting are being called disabilities, and the parents are 
     receiving a cash award for having achieved the problem.''
       But Leslie Ellwood, a pediatrician with Virginia's office 
     of disability determination, said just because a disability 
     stems from poor parenting doesn't mean the children do not 
     deserve assistance. ``You don't want to visit the sins of the 
     parents on the child,'' Ellwood said.
       To address all these complicated questions, the government 
     has now written some 40,000 words to interpret Tom Joe's 
     original 26-word phrase. ``We're doing a lot here based on 
     one little statement,'' said Louis Enoff. ``And is this 
     really what was meant?''

                          ____________________