[Congressional Record Volume 160, Number 151 (Thursday, December 11, 2014)]
[Senate]
[Pages S6627-S6630]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. COBURN:
  S. 3003. A bill to protect the Social Security Disability Insurance 
program and provide other support for working disabled Americans, and 
for other purposes; to the Committee on Finance.
  Mr. COBURN. Mr. President, as a father, grandfather, and doctor, 
there are few issues that are more important to me than making sure 
Social Security benefits are protected for both current and future 
generations. While both the Social Security Disability Insurance 
program and the Social Security Insurance program will be exhausted 
during my kids' lifetime, the disability program's finances are 
particularly dire.
  Since 2005, the disability trust fund has paid out more in benefits 
each year than taxpayers pay back in. Last year alone the shortfall was 
$32 billion. As a result, the trust fund will run out of money by 2016, 
after which the Social Security Administration, the ``Agency,'' will 
only be able to pay 81 percent of disability benefits to the 11 million 
Americans currently dependent on them. This outcome is unacceptable.
  Faced with the impending insolvency of the disability program, 
politicians have debated the principal causes of the trust fund's 
rapidly expanding shortfall. Some argue the program does not need 
reform, believing that the increase in the disability rolls is due to 
factors beyond our control. Citing aging baby-boomers and the rise of 
women in the workplace, opponents of reform argue that dramatically 
rising disability spending was and is unavoidable.
  That is simply wrong. Since 1989, the percentage of working-age 
Americans receiving disability benefits has more than doubled, while 
the percentage of Americans reporting a work limitation has remained 
fairly stable. A paper published by the Center for American Progress 
and the Brookings Institution noted that even among middle-aged men, 
the fraction receiving disability benefits has risen by 45 percent 
since 1988.
  A significant driver of the program's increased cost is fraud, waste, 
and abuse. Over the past 4 years, the U.S. Senate Committee on Homeland 
Security and Governmental Affairs, the ``committee'', and the U.S. 
Senate Permanent Subcommittee on Investigations, the ``subcommittee'' 
have conducted several bipartisan investigations into aspects of the 
Agency's disability programs and uncovered significant problems with 
the program that Congress and the Agency need to correct.
  In 2012, the subcommittee looked at a random sample of 300 disability 
cases and found that one-quarter of the decisions made by the Agency 
were not supported by the medical record. Much of this was the result 
of the Agency's poor supervision of its 1,500 Administrative Law Judges 
``ALJs''. This was not just the subcommittee's judgment; the Agency 
agreed. After conducting its own study, SSA similarly found that 23 
percent of ALJ decisions nationally were not supported by the record.
  In 2013, the Committee issued a report showing how the disability 
programs could be gamed by attorneys, doctors, and ALJs. The report 
detailed how attorney Eric C. Conn, ALJ David

[[Page S6628]]

Daugherty, and several doctors conspired to manufacture fraudulent 
medical evidence to award benefits. Mr. Conn got rich and also paid a 
few doctors millions of dollars to sign fraudulent medical evidence, 
which Judge Daugherty then used to approve claims without a hearing. 
The result of their plan was millions in potentially fraudulent 
disability awards. Mr. Conn became the third highest-paid disability 
attorney in the country, and we found a number of large, unexplained 
cash deposits in Judge Daugherty's bank accounts that were not reported 
on his taxes or his public disclosures.
  Both reports highlighted how the Agency's push to reduce the hearings 
backlog came with significant costs: the Agency paid little regard to 
the quality of decisions being made by ALJs, and focused only on 
encouraging ALJs to decide as many cases as possible.
  The Agency's Office of Inspector General recently issued a report 
estimating that a group of high-approving judges granted at least $2 
billion in improper benefits. As a result, the Agency will pay out 
another $273 million in improper benefits each year.
  This is only a sample of the work the Committee and Subcommittee have 
done in the last few years, and it does not crack the surface of the 
excellent work done by the Agency's Office of Inspector General, 
including uncovering huge fraud schemes in New York and Puerto Rico.
  The program's antiquated, subjective, and ambiguous rules make it 
easier for lawyers, doctors and claimants to game the system.
  Changes in program criteria used to determine eligibility for 
benefits has made determinations less objective. Researchers at the 
National Bureau of Economic Research attributed 53 percent of growth 
for men and 38 percent of growth for women not to age, workforce 
participation, or economic factors, but to weakened eligibility 
criteria.
  Since changes by Congress in 1984, the Social Security Administration 
no longer makes benefit decisions based strictly on medical evidence, 
but instead determines whether vocational factors such as age, 
education, and skills prevent an individual from working ``any job in 
the national economy,'' a standard that should be hard to meet. But the 
number of applicants approved based on this standard has more than 
doubled.
  Eligibility criteria are not the only rules that can be gamed. Most 
recently, I examined how some claimant representatives systematically 
withhold medical evidence from the Agency to help their clients win 
benefits and engage in other misconduct to pad their pockets and clog 
the disability program.
  What I found is a program that offers backward incentives for 
everyone from the applicant and representatives to the beneficiaries. 
Because the program accepts applicants only after they quit their job, 
and provides them with rehabilitation services only after they start 
receiving benefits, applicants must leave their job and often go years 
before they receive services they need. Because beneficiaries will lose 
their benefits if they make too much money, there are discouraged from 
working to their abilities. Because the program rewards representatives 
only if they win, and awards greater fees the longer the case sits, 
representatives hide bad evidence, delay decisions, and provide poor 
representation to disabled Americans.
  For most Americans, disability benefits should not continue 
indefinitely for their lifetime. Yet only one-half of 1 percent of 
individuals on disability rolls leave because they have returned to 
work and earned over the amount allowable by the Agency.
  Additionally, scholars believe 23 percent of applicants are on the 
margin of program entry--that is, whether they are awarded benefits 
depends on who reviews their case. Accordingly, there is a relatively 
high percentage of beneficiaries that can work, but choose not to, 
either because they do not want to lose their benefits, both monetary 
and Medicare, or because they need supports that are not currently 
offered to them.
  Our Federal laws, including the Americans with Disabilities Act and 
dozens of Federal work programs, are designed to assist disabled 
Americans in leading integrated, self-sufficient lives. Yet we have 
failed to target and coordinate the resources they need before they 
have to leave their jobs. The Social Security Advisory Board, SSAB 
attributes Ticket to Work's low success rate to the fact that 
intervention ``comes too late in the process--after the individual's 
connection to employment has been severed and frequently after the 
individual has undergone a lengthy process of proving inability to 
work.''
  According to the SSAB, ``focusing all of the return-to-work efforts 
inside the structure of the disability program seems to be too late for 
many individuals. In order for the intervention to be effective, it 
needs to occur before the individual comes to SSA, before he applies 
for SSDI or SSI, and before the attachment to the workforce is lost.'' 
The SSAB has advocated for comprehensive front-end services, arguing 
they are ``a real chance to access tailored services that can enhance 
return to work efforts.''
  When the trust fund is exhausted in 2016, many Members of Congress 
will say we just need to move funds from the Social Security retirement 
program
  Let me be clear: this is not a solution; it is a Band-Aid, a 
temporary fix that takes money away from seniors and will eventually 
hurt taxpayers when both funds go broke in 2033.
  I hope there will be a rigorous debate in the next year about how we 
can better serve disabled Americans with a program that gives them the 
resources they need to work to the extent they are able and protects 
benefits for those who are forced to rely on them. The disability 
program is an important safety net, but it does not serve the disabled 
or the taxpayers to treat it like an early retirement program or long-
term unemployment.
  This is a conversation that will take place after I have left the 
Senate. Accordingly, after 4 years of research, investigations, and 
thoughtful meetings with other interested, engaged parties, today I am 
offering a bill I believe can be used as a blueprint to shore up the 
fund before its exhaustion in 2016, fix systemic problems with the 
program, and provide targeted resources for the millions of disabled 
Americans who want to work to the best of their abilities.
  The Protecting Social Security Disability Act of 2014 was drafted 
with three goals in mind: first, to make systemic changes to the 
program that preserve it for future generations; second, to ensure 
benefits are adequate and quickly available for those who need them by 
adding program integrity measures that root out fraud, waste and abuse; 
and third, to provide resources and incentives to those disabled 
Americans who want to work and have the ability to do so.
  Mr. President, I ask unanimous consent that the section-by-section 
summary of the bill be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

               II. Section-by-Section Summary of the Bill

     Title: To protect the Social Security Disability Insurance 
         program and provide other support for working disabled 
         Americans, and for other purposes.
     Short Title: Protecting Social Security Disability Act of 
         2014


 Title I--Ensuring the Long-Term Solvency of the Disability Insurance 
                               Trust Fund

     Sec. 101. Application of actuarial reduction for disabled 
         beneficiaries who attain early retirement age.
       Requires that disabled worker beneficiaries be converted to 
     retired worker status at the Earliest Eligibility Age.
       Any individuals who are categorized as Medical Improvement 
     Not Expected (see below) are exempt.
     Sec. 102. Reviews and time-limiting of disability benefits.
       Disability Classifications. Mandates that all beneficiaries 
     be classified as follows when they are admitted on to the 
     rolls:
       Medical Improvement Expected (MIE, improvement within 1-2 
     years);
       Medical Improvement Likely (MIL, improvement within 3-5 
     years);
       Medical Improvement Possible (MIP, improvement not likely 
     to be within 5 years, but improvement is possible); and
       Medical Improvement Not Expected (MINE, there is no known 
     effective treatment). Age may not be used as a factor to 
     categorize someone in the MINE category who otherwise would 
     not be.
       Continuing Disability Reviews.
       MILs and MIPs will have mandatory full medical continuing 
     disability reviews during

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     the 5th year and 7th year of benefits, respectively.
       Any individual may be subject to an earlier review if the 
     Commissioner of Social Security has reason to believe the 
     individual is not under a disability, but such a review 
     cannot be initiated on the basis of income earned under 
     Section 301 (below).
       Reviews under this paragraph are in addition to, and do not 
     substitute for, other reviews required by the Social Security 
     Act.
       The standard of review will be the same as conducted for an 
     initial determination, rather than the medical improvement 
     standard, except that any income the individual is now 
     earning under Section 301 (below) will not be considered.
       Time-limiting Disability Benefits for MIE Individuals.
       Benefits will be time-limited to 3 years for MIEs.
       MIEs may file a timely reapplication for benefits during 
     the last twelve to fourteen months of their benefit period.
       Notwithstanding the above, a reapplication may be deemed 
     timely if the individual can show good cause for failure to 
     submit during the period described above and it is submitted 
     no later than 6 months before the end of the termination 
     month applicable.
       There will be no waiting period for benefits/Medicare if an 
     individual's timely reapplication is approved.
       If an initial decision has not been made on a timely 
     reapplication when the individual's benefit term ends, the 
     individual's benefits will continue until an initial 
     determination is made.
       If an final decision has not been made on a timely 
     reapplication when the individual's benefit term ends, and 
     the individual requests a hearing to review an unfavorable 
     initial decision, the individual may request to have benefits 
     extended until a hearing decision is made. If the individual 
     is determined not to be disabled, any benefits paid after 
     benefit term has ceased will be considered overpayments.
       A previous award of benefits shall have no bearing on the 
     reapplication, and the continuing disability review rules do 
     not apply.
     Sec. 103. Adjustment of age criteria for social security 
         disability insurance medical-vocational guidelines.
       Age cannot be considered as a factor using the grids for 
     any individual aged less than the Normal Retirement Age minus 
     12 years. This means every time the Normal Retirement Age is 
     increased, so too will the age for disability purposes.
       SSA must consider the share and ages of individuals 
     currently participating in the labor force and the number and 
     types of jobs available in the current economy when 
     considering vocational factors.
       Starting in two years, and every year thereafter, SSA must 
     keep a current jobs list so examiners are considering the 
     current economy when determining whether an individual can 
     work any job in the national economy.
     Sec. 104. Mandatory collection of negotiated civil monetary 
         penalties.
       Mandates SSA collect the penalties negotiated by the 
     Inspector General in cases of fraud by beneficiaries.
     Sec. 105. Required electronic filing of wage withholding 
         returns.
       Requires that all W-2s be submitted electronically but 
     provides a hardship exemption for small businesses with 25 
     employees or less for the first five years, and then moving 
     to 5 employees or less after that.


  Title II--Program Integrity: Reforming Standards and Procedures for 
  Disability Hearings, Medical Evidence, and Claimant Representatives

     Sec. 201. Elimination of reconsideration review level for an 
         initial adverse determination of an application for 
         disability insurance benefits.
       Removes the reconsideration review in the remaining states 
     that still have it so cases can move quickly to a hearing 
     before an ALJ.
     Sec. 202. Deadline for submission of medical evidence; 
         exclusion of certain medical evidence.
       Closing the Record. Prevents SSA from considering evidence 
     submitted less than 5 days before a hearing with an ALJ and 
     provides a ``good cause'' standard for failing to meet that 
     deadline that is the same as used in federal court. In no 
     case can evidence be submitted if it was obtained after the 
     ALJ's decision or submitted 1 year after an ALJ's decision.
       Applicants, their representative, or a disability hearing 
     attorney (defined in section 203 below) may request that a 
     hearing be postponed to complete the record for no more than 
     30 days if it is made at least 7 days prior to the hearing 
     date and if the party shows good cause.
       Exclusion of Medical Evidence. Makes it clear that 
     claimants and their representatives must submit all known, 
     relevant medical evidence to SSA, whether the evidence is 
     favorable or unfavorable, and requires that claimants certify 
     to the ALJ at a hearing that they have done so. Evidence may 
     not be considered otherwise. There is an exception for 
     attorney-client privileged communications. It also provides 
     clear civil and criminal penalties for the failure to follow 
     these rules.
       Prohibits SSA from considering evidence furnished by a 
     physician who is not licensed, has been sanctioned, or is 
     under investigation for ethical misconduct.
     Sec. 203. Non-adversarial disability hearing attorneys.
       Creates a disability hearing attorney position to develop 
     the record, represent the government in hearings where the 
     claimant has representation, recommend on the record 
     decisions where clearly warranted, and to refer cases to the 
     Appeals Council if they disagree with the ALJ's grant of 
     benefits.
       Requires the Agency to properly vet and train the staff.
     Sec. 204. Procedural rules for hearings.
       Requires SSA to create and publish procedural rules for 
     hearings.
       Allows ALJs to impose certain fines and other sanctions for 
     failure to follow these rules.
     Sec. 205. Prohibits attorneys who have relinquished a license 
         to practice in the face of an ethics investigation from 
         serving as a claimant representative.
       Any representative seeking payment for their services has 
     an affirmative burden of certifying to SSA they meet the 
     rules.
       Attorneys must certify to SSA they have never been 
     disbarred or suspended from any court or relinquished a 
     license to practice in the face of a misconduct 
     investigation.
     Sec. 206. Applying judicial code of conduct to administrative 
         law judges.
       This makes ALJs subject to the Judicial Code of Conduct.
     Sec. 207. Evaluating medical evidence.
       Removes the controlling weight standard given to opinion 
     evidence provided by treating physicians.
       For any healthcare providers filling out a Residual 
     Functional Capacity form, the claimant has to provide them 
     with a Medical Consultant Acknowledgement Form (created by 
     SSA) that discloses how medical evidence will be used by SSA, 
     instructions on filling out RFC forms, and information on the 
     legal and ethical obligations of a practitioner providing 
     such an assessment. The practitioner must sign and certify 
     they read and understand the contents of the form and include 
     it with the RFC or the evidence cannot be considered by SSA. 
     This also provides penalties for forging the certification.
       Allows ALJs to request and use Symptom Validity Tests and 
     social media and requires SSA provide training on how to 
     weigh such evidence.
     Sec. 208. Reforming fees paid to attorneys and other claimant 
         representatives.
       Representatives must account for work performed on a case 
     even if there is a valid fee agreement.
       SSA can no longer reimburse representatives for travel 
     expenses.
       The IG must perform annual reviews of the highest-earning 
     claimant representatives that look for repetitive language in 
     their evidence, any licensing problems, and whether there is 
     a disproportionate number of the representatives' cases being 
     determined by a particular ALJ.
       Representatives cannot receive fees from the Equal Access 
     to Justice Act for: (1) hearings before an ALJ; and (2) if 
     they submitted new evidence after the hearing.
     Sec. 209. Strengthening the administrative law judge quality 
         review process.
       The Division of Quality shall conduct an annual review on a 
     sample of cases by ``outlier'' ALJs (those with 85% or higher 
     approvals and 700 or more cases that year) and report to SSA 
     on its findings.
       Any cases determined to be granted in error must have a 
     continuing disability review within six months.
     Sec. 210. Permitting data matching by the Inspector General 
         of the Social Security Administration.
       Exempts Inspectors General from the applicable Computer 
     Matching and Privacy Protection Act of 1988 restrictions, 
     which mandate cumbersome rules to approve agreements with 
     other agencies to share records for investigations.
     Sec. 211. Accounting for Social Security Program Integrity 
         Spending.
       Amounts made available for program integrity spending shall 
     be in a separate account within the federal budget and funded 
     in a separate account in the appropriations bill.
     Sec. 212. Use of the National Directory of New Hires.
       Mandates that SSA consult the National Directory of New 
     Hires when determining whether an individual is making above 
     the substantial gainful activity limits.


      Title III--Providing Support For Working, Disabled Americans

     Sec. 301. Encouraging work through the Work Incentive Benefit 
         System
       Removes Ticket to Work.
       Implements the Work Incentive Benefit Program created by 
     Dr. Jagadeesh Gokhale, member of the Social Security Advisory 
     Board. The program incentivizes disability beneficiaries to 
     go back to work to the extent they are able by allowing them 
     to keep more of what they earn while receiving diminished 
     benefits. The program is different from the Benefit Offset 
     National Demonstration (BOND) in that it uses a sliding scale 
     (similar to the Earned Income Tax Credit) to encourage 
     beneficiaries to maximize their earnings.

[[Page S6630]]

       Puts in place a reimbursement structure for state 
     vocational rehabilitation agencies that shares the savings 
     accrued when a beneficiary returns to work under the Work 
     Incentive Benefit Program and thus receives a lower benefit. 
     The share of these savings state VR agencies are entitled to 
     will increase based on the severity of the disability, to 
     ensure VR agencies are targeting those who need the most 
     help.
     Sec. 302. Early-intervention demonstration project and study. 
         Requires SSA to implement two projects to:
       Identify disability applicants who have not yet entered the 
     program but who are highly likely to be approved, yet who 
     would have some work capacity if given the appropriate 
     supports. Directs the Commissioner to provide targeted 
     vocational rehabilitation, as well as the possibility of 
     health benefits and cash stipends, to selected individuals 
     who voluntarily suspend their disability application in 
     exchange for these supports; and
       Study the feasibility of incentives for employers to 
     provide private disability insurance and other support 
     services by reimbursing a portion of payroll taxes when 
     employers can reduce their disability rates (voluntary 
     experience rating).
                                 ______