Social Security Administration
before the House Ways and Means Committee
Subcommittee on Social Security
February 26, 2014
Chairman Johnson, Ranking Member Becerra, and Members of the Subcommittee:
Thank you for this opportunity to continue discussing our anti-fraud efforts and our partnership with the Office of the Inspector General (OIG) to root out disability fraud wherever it may occur. I am Carolyn Colvin, the Acting Commissioner of Social Security (SSA).
At our last hearing on this topic, you asked us to review and report on our practices in light of the recent fraud cases in New York and Puerto Rico and to discuss with you any changes to those practices. Today, I will share with you the highlights of our review.1
Our Anti-Fraud Efforts
We are committed to preserving the public’s trust in our programs. We have no tolerance for fraud, and I reiterate to those who would defraud Social Security: We will find you; we will prosecute you; we will seek the maximum punishment allowable under the law; and we will fight to restore the money you’ve stolen to the American people. We have expended significant resources in our anti-fraud efforts and in support of the Inspector General, who is responsible for “provid[ing] leadership and coordination ... to prevent and detect fraud and abuse.”2 Our efforts are working: The indictments in the New York City and Puerto Rico fraud cases likely would not have occurred without the vigilance of our dedicated SSA and Disability Determination Service (DDS) employees.
It is regrettable that people will try to take advantage of our programs; however, that is the reality. Thus, we have developed expertise on fraud identification and referral through comprehensive training. All SSA field office and DDS employees receive extensive training on fraud detection. This training includes identifying fraud scenarios--including “middleman fraud” such as what allegedly occurred in Puerto Rico and New York City. Because of this training, our dedicated frontline DDS employees in New York City and Puerto Rico were able to identify suspicious patterns regarding certain disability claims, and we referred these cases to the OIG for investigation. In fiscal year (FY) 2013, we made over 22,500 disability fraud referrals to the OIG; the OIG opened about 5,300 cases based on these referrals. To date, the OIG has referred over 100 of these cases to United States Attorneys’ Offices for criminal prosecution.
We work closely with the OIG to support its anti-fraud activities. Each SSA regional office has a Regional Anti-Fraud Committee – chaired by an OIG Special Agent-in-Charge and the Regional Commissioner– that meets to discuss and promote anti-fraud initiatives. In addition, we have dedicated resources and staff, including experienced disability examiners and medical consultants, to support the OIG, law enforcement, and prosecutors with their investigation of possible fraud cases. For example, following the fraud referrals in Puerto Rico, our New York Regional Office established a unit responsible for helping the OIG and prosecutors analyze disability cases and identify other disability claims in Puerto Rico that potentially were connected to the alleged conspiracy. Our partnership with the OIG and others was instrumental in facilitating the indictments.
Our most successful collaboration with the OIG is the Cooperative Disability Investigation (CDI) program – our premier disability fraud investigation and prevention tool. Each CDI Unit consists of an OIG Special Agent who serves as the Team Leader, State DDS and SSA employees who are programmatic experts, and State or local law enforcement officers. CDI units investigate individual disability applications to identify applicants, beneficiaries, and third parties who participate in disability fraud. CDI units may present the results of these investigations to Federal or State prosecutors for criminal prosecution or civil action, as well as to the Office of the Counsel to the OIG for the imposition of civil monetary penalties. Currently, we have 25 CDI units. The New York CDI unit –established in 1998, and one of our first units established – played a critical role in investigating the New York City fraud conspiracy. In 2008, as a result of a number of investigations stemming from referrals by the alert DDS employees, the New York CDI unit identified the potential conspiracy involving third-party facilitators. That CDI unit worked closely with SSA’s New York regional office to uncover the vast, longstanding criminal conspiracy.
We have established procedures to handle cases if we have reason to believe that fraud was involved in obtaining benefits. Upon indictment, we immediately suspend benefit payments to indicted beneficiaries (or auxiliaries collecting on the beneficiaries’ earnings records). In New York City and Puerto Rico, we suspended benefit payments to over 170 disability beneficiaries and their auxiliaries. In addition, we will redetermine entitlement to disability benefits of individuals implicated in the fraud scheme and disregard the tainted medical evidence. In connection with the Puerto Rico case, we are redetermining approximately 7,400 disability applications. We expect to undertake a similar review of the New York cases as well.
Each of these activities played a critical role in support of the OIG’s fight against fraud and helped bring about the indictments of the conspirators. We know that we simply cannot prevent all fraud schemes any more than we can stop all crime in our communities. We can, however, deter and prosecute it. As these cases show, we tirelessly seek to find and bring to justice anyone who attempts to defraud Social Security. I am very proud of our employees for working cooperatively with the OIG to detect and refer the alleged fraud cases in Puerto Rico and New York City. While any level of fraud is unacceptable, the low level of disability fraud in our programs speaks to our efforts; the best available evidence shows that the level of actual disability fraud is below 1 percent.3
Our Planned Immediate Enhancements to Our Anti-Fraud Efforts
Fighting fraud is an ongoing and evolving process. We use fraud cases to identify ways to combat fraud more successfully, and continually strive to build upon our successful anti-fraud efforts. I want to share with you several activities that we will implement immediately or in the very near future.
Working with the OIG, we will expand the number of CDI units and expand the capacity of existing units. According to the OIG, CDI units have produced savings of more than $860 million over the last 3 years. We provide most of the funding for these units, and in collaboration with the OIG, we plan to expand the CDI program by seven additional units beginning in 2014. We anticipate these seven units will be fully operational in 2015, increasing the total number of units to 32 nationwide. We will also expand the capacity of existing CDI units by increasing the number of law enforcement investigators in a number of current units.
As I mentioned earlier, all SSA field office and DDS employees receive fraud detection training. They remain our first and best line of defense against those seeking to cheat the system. We will expand training to all SSA employees during FY 2014 with specific focus on lessons learned from Puerto Rico and New York City.
We are establishing a central, specialized fraud unit comprised of disability examiners dedicated to reviewing and acting on potential fraud cases. This unit will be located in the New York Program Service Center, where disability examiners have developed considerable expertise due to the New York City and Puerto Rico cases. These examiners will be our national experts in working disability fraud cases, and we plan to compile data from the cases that will help us to develop further analytical tools to identify potential fraud.
We are also establishing a National Anti-Fraud Committee, which will be co-chaired by the Inspector General and our Deputy Commissioner for Budget, Finance, Quality, and Management. Building off the model of our successful Regional Anti-Fraud Committees, the National Anti-Fraud Committee will lead and support enterprise-wide strategies to combat fraud, waste, and abuse. It will also collaborate with private insurers and other Federal agencies to learn new ways to combat complex and sophisticated fraud schemes.
In addition, we will expand our Fraud Prosecution project. For more than a decade, in partnership with the DOJ, we have placed a number of attorneys from our Office of General Counsel in several Federal districts to serve as fraud prosecutors. These Special Assistant United States Attorneys are dedicated to Social Security fraud cases and have increased the number of prosecutions. Since FY 2003, our fraud prosecutors have secured over $60 million in restitution and more than 1,000 convictions. We plan to hire or designate 12 additional attorneys to serve as Special Assistant U.S. Attorneys. We already have an attorney on the ground in Puerto Rico working with the U.S. Attorney.
There has been concern expressed that claimants withhold medical evidence that could be unfavorable to their claims. This withholding of evidence could result in improper findings of disability. We engaged with the Administrative Conference of the United States (ACUS) to review and analyze the Social Security Act and our regulations regarding the duty of candor and the submission of all evidence in disability claims. ACUS surveyed the requirements of other administrative tribunals, as well as the Federal Rules of Evidence, Federal Rules of Civil Procedure, and other applicable authority, regarding the duty of candor and submission of all evidence and then issued a report recommending certain improvements. After carefully studying the report and conducting internal analyses, on February 20, 2014, we published a Notice of Proposed Rulemaking that proposed to revise our regulations to require claimants to inform us about or to submit all medical evidence known to them that relates to their disability claim--both favorable and unfavorable. This requirement would be subject to two exceptions, which are for attorney-client privilege and attorney work product. We would also extend the protections afforded by these privileges to non-attorney representatives.
We are undertaking similar efforts with outside experts to update some of our policies in the disability determination process. While these efforts are primarily designed to improve the consistency of our disability determinations, they also may help deter fraud. For example, we have contracted with the Institute of Medicine (IOM) to conduct a comprehensive review of psychological testing including symptom validity testing; and determine the relevance of such testing to disability determinations in claims involving physical or mental impairments. In another ongoing project, ACUS is reviewing our rules and policy regarding how SSA adjudicators at all levels evaluate claimants’ symptoms in disability claims, and we anticipate recommendations from them on how we can improve consistency in disability determinations.
Lastly, with the FY 2014 appropriations, Congress provided us with funding to significantly increase the number of medical continuing disability reviews (CDR) that we are able to conduct. We estimate that the money spent on CDRs saves, on average, $9 per every dollar invested, including savings accruing to Medicare and Medicaid, yet we have a backlog of 1.3 million CDRs due to budgetary shortfalls. While the primary purpose of CDRs is to determine whether a beneficiary is no longer entitled to benefits because his or her condition has medically improved, our ability to significantly increase CDRs may allow us to detect increased numbers of potentially fraudulent or suspicious activities.
While we recognize the importance of combatting fraud wherever we can, we are only too aware that all of these enhancements require substantial resources. Without adequate, sustained funding, we will not be able to achieve all that we can in our anti-fraud activities. Due to budgetary constraints, we have been unable to replace nearly 11,000 employees who retired or left our agency for other reasons from FY 2011 through FY 2013. The New York DDS, which identified the New York City fraud conspiracy in 2008, now has approximately 22 percent less staff than it did then. We have fewer frontline employees standing as the first line of defense against fraud. While the FY 2014 appropriations may allow us to replace some of our staffing losses, we need your support in FY 2015 and beyond to ensure that we have adequate staffing and resources to continue and enhance our robust anti-fraud efforts. Please also understand that much of our work is complex and it takes time for us to train employees fully and for them to gain experience.
We fully appreciate that criminals continually look for an edge against potential victims. They are likely to devise more complex and sophisticated methods in their efforts to defraud Social Security. Consequently, in addition to what I have described above, we have begun a substantial effort to develop and use new logical analysis tools to support the OIG’s efforts to combat fraud. SSA has a long, successful history of developing online applications, electronic tools, and predictive models to efficiently process benefits claims, enhance decisional quality, and target limited resources toward those program integrity reviews most likely to return savings to the taxpayer.
In the anti-fraud arena, we are undertaking a special initiative to expand our use of data analytics to enhance our ability to detect possible fraud. We will apply logical analysis to determine common characteristics and patterns of fraud based on data from past allegations and known cases of fraud. We will apply these tools to look for potential fraud or other suspicious behavior when we review initial applications or existing data on beneficiaries. With these diagnostic tools, we anticipate increasing our ability to identify questionable patterns of activity in disability claims and prevent fraudulent applications from being processed. During the remainder of FY 2014, we will develop and begin testing some of these tools.
We have invited the OIG to participate in this initiative, as it possesses valuable information on actual fraud cases that will inform our development of analytics software. We will keep you apprised of our progress as we develop and pilot potential tools and applications.
Other Anti-Fraud Initiatives
Our anti-fraud efforts have not been limited to Social Security matters. In the past several years, we have worked with other Federal agencies and the Administration in developing legislative proposals designed to combat fraud in other programs. For example, we helped develop a legislative proposal for the President’s FY 2014 Budget that would eliminate the public’s ability to use the Freedom of Information Act (FOIA) to access our recent death records. The proposal would restrict immediate access to a deceased individual’s information on the Death Master File (DMF) to those users who legitimately need the information for fraud prevention purposes and delay the release of the DMF to all other users for three years after the individual’s death. This provision was designed to reduce opportunities for identity theft and to eliminate the ability of criminals to use our publicly available death records to file fraudulent tax returns. The Congress enacted a legislative provision similar to the one proposed in the President’s Budget in the Bipartisan Budget Act of 2013.
We are also working with other Federal agencies. The Bipartisan Budget Act of 2013 includes another Administration proposal to expand both the data we collect from correctional facilities about incarcerated individuals, and the entities with which we can share that information. We are working with the Department of the Treasury (Treasury) to develop the necessary agreement to send them our prisoner information, so they can incorporate it into their Do Not Pay initiative, thereby allowing other agencies to use it to help prevent and detect improper payments. We are also working to find the best ways to collect additional information, such as the actual or anticipated release date, and to get that information to the Do Not Pay portal. In addition, the Bipartisan Budget Act of 2013 also provided Prisoner Update Processing System (PUPS) access for the Internal Revenue Service.
Huntington, West Virginia Hearing Office
There has also been some Member interest relating to a former situation in our Huntington, West Virginia hearing office. Given the nature of certain ongoing investigations, we are limited in sharing information about the investigation in this report.4 As we are permitted, we are willing to privately brief the Committee in more detail, if requested.
We would emphasize, however, that we have taken significant actions to strengthen our hearings process. Over the last three years, we have implemented procedural changes, implemented new controls, implemented electronic system changes, implemented new management practices, improved data collection, and improved data analysis. While these improvements are paying off, we remain vigilant and continue to review national data for trends and fact patterns that suggest policy non-compliance or fraud.
In short, we have long been committed to combating fraud in our programs. Although there is a low level of fraud in our disability programs, no amount of fraud is tolerable. Fighting fraud is an ongoing and evolving process. Therefore, in collaboration with the OIG, we are continuing to enhance our anti-fraud efforts.
Alleged criminal conspiracies like those in Puerto Rico and New York City may mislead the public into overestimating the level of fraud in our disability programs. Hearings like these are a chance for us to correct these distortions and remind the public that we are keeping vigilant watch over these programs.
We appreciate this Committee’s assistance in these efforts and stand ready to work with Congress to maintain the public’s trust and confidence in our very important social insurance programs.
Rooting out a fraud is a team effort. We need people who suspect something to say something. If you suspect that someone is trying to cheat us, please contact OIG at 1-800-269-0271.
2 See Inspector General Act of 1978, Pub. L. 95-452, § 2.
3 See OIG, Overpayments in the Social Security Administration’s Disability Programs, Appendix A, pp. 6-7 (providing a point-in-time estimate of potential fraud cases out of a sample of over 1,500 cases).
4 For a general discussion of SSA’s improvements in its hearing process, and our specific actions resulting from the Huntington, West Virginia investigation, see Written Testimony of SSA Chief Administrative Law Judge Debra Bice before the Senate Committee on Homeland Security and Government Affairs Committee, Oct. 7, 2013. Also available at http://ssa.gov/legislation/testimony_100713.html.
Deputy Commissioner for Systems and Chief Information Officer
Social Security Administration
before the House Ways and Means Committee
Subcommittee on Social Security
February 26, 2014
Chairman Johnson, Ranking Member Becerra and Members of the Subcommittee:
Thank you for the opportunity to discuss the ways in which the Social Security Administration (SSA) uses information technology to administer its programs, detect and prevent improper payments, and support anti-fraud initiatives. I am Bill Zielinski, and I am the Chief Information Officer and Deputy Commissioner for Systems at SSA. I am responsible for delivering costeffective information technology (IT) services, and for protecting the information assets of Social Security.
Overview of Our IT operations and Online Services
SSA has many IT strengths. For example, we have a superb technical workforce and are experts at technical project management. We have designed and maintained a highly automated process for handling benefits claims and other work, including program integrity reviews. We have consolidated most of our agency’s IT so that we benefit from economies of scale. We excel at designing applications that focus on users. We also have developed a rigorous, annual process to assess and prioritize future IT investments, as we always have more IT needs than available or expected resources. All agency components actively engage in this process. As the CIO for the agency, I am committed to ensuring that our IT infrastructure and services are secure, scalable, and available.
We have a proud history of using IT to support our administration of the Social Security and Supplemental Security Income (SSI) programs, and to provide substantial support to the related Medicare, Medicaid, and other government programs. These programs are immense in scope: in FY 2013, we paid over $855 billion to more than 63 million Social Security beneficiaries and SSI recipients. To support our programs, our mainframe contains approximately 14 petabytes of data, and our open, client-server IT infrastructure maintains 13 petabytes. In FY 2013, this IT infrastructure supported the processing of an average daily volume of nearly 150 million individual transactions. For the year, our IT operations supported approximately: 1.6 billion automated Social Security number verifications; 251 million earnings items; 5 million retirement, survivor, and Medicare applications; 3 million initial disability claims; 2.6 million nonmedical redeterminations; 1.5 million continuing disability reviews, including approximately 429,000 full medical continuing disability reviews; and 17 million new and replacement Social Security card applications.
In addition to maintaining robust IT operations capable of supporting the large demands of our programs, we are committed to building online services for the public that are simple and easy to use. We have been successful in this regard. According to the most recently released American Customer Satisfaction Index (ASCI) E-Government Satisfaction Index, we have the three highest rated—and four of the top five—e-government websites in the Federal government. Moreover, these four online services (Extra Help with Medicare Prescription Drug Plan Costs, iClaim, Retirement Estimator, and our my Social Security portal) outperformed or tied Amazon, the highest scoring e-retail website.
Supporting Increased Productivity
Our strategic investments in online services and our core IT operations have increased our productivity and efficiency—allowing us to keep up with ever-increasing workloads. For example, we currently have about the same number of employees that we had in 2007, even though our workloads have increased dramatically. In FY 2014, we estimate that the number of retirement and survivor applications will be about 30 percent higher than in FY 2007. Over the same period, the volume of initial disability claims we received increased by nearly 20 percent.
Our easy-to-use online application for applying for disability, retirement, and Medicare— iClaim—is a huge success. Applicants file for benefits online at their own pace and on their own schedule. In FY 2013, over 1.27 million Disability Insurance (DI) claimants, or about 46 percent of DI claimants, filed online and over 1.25 million retirement claimants, or about 49 percent of retirement claimants, filed online. To compare, in FY 2008 (when we first introduced iClaim), only about 11 percent of DI claimants, and just over 15 percent of retirement claimants, applied online.
Similarly, my Social Security, is a personalized online portal that individuals can use beginning at age 18 and continuing throughout the time they receive Social Security benefits. Through this portal, individuals who register can view their Social Security Statement, view detailed information on benefits received (for up to 24 months), get a benefit verification letter, start or change direct deposit information, and change their address – all online. We will continue to expand the services provided in the my Social Security portal to enhance customer service. Currently, over 10 million people have established my Social Security accounts and used their accounts to access:
- Online Social Security Statement – 29.2 million times;
- MyDirect Deposit - 0.6 million times;
- MyChange of Address – 1 million times;
- Internet Benefit Verification Letter – 4.5 million times; and
- MyCheck Your Benefits – 20.6 million times.
Due in large part to these successful online services and our other IT initiatives, we are able to keep our administrative costs low – about 1.4 percent of the benefit payments we pay each year.
Quality Has Improved
Our efforts to improve processing times and increase productivity have not come at the expense of our quality. Quality is integral to all of our processes, including our disability claims process. For instance, we have developed and implemented the electronic Claims Analysis Tool (eCAT), a web-based application, to help State disability determination services (DDS) examiners apply policies correctly throughout the disability decision-making process. eCAT uses “intelligent pathing,” which prompts users to consider the appropriate questions based on the unique characteristics of each case. This documentation is particularly useful for future case review because it enables an independent reviewer to understand the examiner’s actions and conclusions throughout the development and adjudication of the claim. We fully implemented eCAT last year and made it mandatory for use in every DDS.
We are also piloting our Electronic Bench Book (eBB) application. eBB aids in documenting, analyzing, and adjudicating disability cases at the hearings level in accordance with the Social Security Act and our regulations. We expect that eBB will improve the accuracy and consistency of our disability decision process.
Another example of where we use IT to support our programs is our development of the Disability Case Processing System (DCPS). DCPS will replace the 54 different systems that support the DDSs with one national system based on state-of-the-art technology. This system will incorporate eCAT and other tools designed to improve quality and productivity. Additionally, DCPS will allow us to systematically implement policy changes in a faster way, and it will promote more consistency among the DDSs.
Applications that Support Payment Accuracy
We also develop applications that allow our employees to more efficiently gather information and identify improper payments. For example, in FY 2012, we implemented the Access to Financial Institutions (AFI) program nationally. This program allows our employees to automatically and electronically gather financial account information directly from financial institutions. Historically, having financial accounts in excess of the allowable resource limits is the leading cause of improper payments in the SSI program. Because AFI is more efficient than a paper-based process, we are able to verify financial account information—and thereby reduce improper payments—on more SSI claims and post-entitlement actions.
We also develop applications that allow beneficiaries to directly update their claim information—which results in more accurate benefit payments—without the need to contact a field office. For example, in FY 2008, we implemented the SSI Telephone Wage Reporting System (SSITWR), an automated toll-free number that makes it easy for SSI recipients to update the wage information on their records. Our studies indicate that wages submitted through SSITWR are highly accurate and we confirm their accuracy using our data exchanges. Based on the success of SSITWR we recently created a mobile wage reporting application.
Data Exchange and Electronic Verification Services
We have thousands of data exchange agreements with Federal, State, Local, and Foreign governmental entities. Data received from external exchange partners allows SSA to pay benefits accurately, efficiently and timely. Examples of data received are income, assets, incarceration status, medical evidence, and benefit payments received from other government programs.
By efficiently sharing data with other agencies and private organizations through our electronic verification services (where allowed by law), we help them to efficiently administer their programs and reduce the number of field office visits and 800 number calls to verify benefit information. This improves customer service and allows us to redirect our resources to our other critical program work.
SSA’s Use of Predictive Models to Support Program Integrity
We take seriously our responsibility to maintain the public’s trust through effective stewardship of program dollars and administrative resources. We use our IT operations and technical expertise in support of this critical strategic objective. Specifically, we use statistically valid predictive models that enhance key agency program integrity functions while ensuring that agency resources are used in the most cost effective and efficient manner possible. I will briefly summarize the predictive models we have used successfully to curb improper payments.
CDR Predictive Model
Beginning in FY 1993, SSA began developing a series of predictive models to ascertain the likelihood that a full medical continuing disability review (CDR) would result in a finding that a disability beneficiary has medically improved and is no longer eligible for benefits. Our predictive models for CDRs use a multitude of variables to provide an aggregate score that predicts the likelihood of medical improvement and cessation. Our use of the predictive models has allowed us to be extremely cost effective in prioritizing full medical CDRs with our limited resources. In FY 2013, we conducted approximately 429,000 full medical CDRs. We estimate that the money spent on CDRs saves, on average, $9 for every dollar invested, including savings accruing to Medicare and Medicaid.
SSI Redetermination Model
SSI redeterminations are reviews of all of the nonmedical factors of eligibility to determine whether a recipient is still eligible for SSI and still receiving the correct payment amount. All SSI recipients are subject to periodic redeterminations. Every year SSA schedules redeterminations for the cases most likely to have payment error. To do this, we use a statistically valid scoring model—the SSI Redetermination Model. This model, which we first implemented in the late 1970s, predicts the dollar amount of likely overpayments for every SSI recipient and, having such information in hand, ensures that we select SSI cases to be reviewed efficiently and in a highly cost effective way.
Like our other predictive models, we continually review and improve our SSI Redetermination Model; in FY 2011, we expanded the model to include SSI living arrangement information, which enhanced the effectiveness of the model in selecting the most productive SSI redeterminations. In FY 2013, we completed over 2.6 million SSI redeterminations; by targeting the highest priority cases, the SSI Redetermination Model helped us to recover or prevent $3.4 billion in SSI overpayments.
Pre-Effectuation Review (PER) Model
The law requires us to review at least fifty percent of all State Disability Determination Service (DDS) initial and reconsideration disability allowances, and a sufficient number of CDR continuances to ensure a high level of accuracy. In FY 2011 (the most recent year for which information is available), we reviewed over 500,000 allowances and 8,400 continuances. To ensure we target for review those cases with the highest risk of decisional error, we have developed and continue to improve our PER Model, which predicts the probability of error and dollar amount cost of erroneous DDS allowances. In FY 2011 alone, completed PER reviews resulted in preventing the release of $752 million in improper DI, SSI, Medicare and Medicaid program payments.
Continuing Disability Review Enforcement Operation Predictive Model
The Continuing Disability Review Enforcement Operation (CDREO) identifies DI beneficiaries who appear to have substantial earnings after disability onset, through an automated matching of our current DI beneficiaries with the Internal Revenue Service (IRS) reported earnings posted to our Master Earnings File. We recently developed a predictive model to identify which alerts are most cost effective. We implemented the model nationally in June 2013 after piloting the model in 2011 and 2012 by analyzing our CDREO alerts and prioritizing which alerts should be reviewed first.
Medicare Part D Subsidy Redetermination Model
SSA has primary responsibility for redetermining whether a beneficiary is eligible for a Medicare Part D Subsidy. To help us prioritize which cases to review, we have developed the Medicare Part D Subsidy Redetermination Model, which predicts those Medicare Part D cases most likely to have an incorrect subsidy amount. In FY 2013, the model identified the most productive 25 percent of Medicare Part D subsidy cases for redetermination; we estimate that these cases contain about 60 percent of all incorrect subsidy amounts.
This model helped us prioritize the roughly one million Medicare Part D subsidy cases for redetermination, which resulted in the correction of about $800 million in Medicare subsidy payments in FY 2012 alone.
Supplemental Security Record (SSR)/OCSE Wage Profiling Model
To help us prevent and detect SSI improper payments, we use the SSR/OCSE Wage Profiling model—a predictive model that uses data from a quarterly Office of Child Support Enforcement (OCSE) wage data match to determine which SSI recipients have received wages that are likely to result in significant SSI overpayments. From FY 2000 through FY 2013, the cases selected under this model have resulted in the recovery or prevention of $1 billion in SSI overpayments.
SSR/IRS 1099 Income Profiling Model
Similar to the SSR/OCSE model, the SSR/IRS 1099 Income Profiling Model uses data from SSA’s quarterly IRS 1099 data match to determine which SSI recipients have received unearned income that is most likely to result in significant SSI overpayments. From FY 2000-FY 2013, the cases selected under this model have resulted in the recovery or prevention of $740 million in SSI overpayments.
Representative Payee Misuse Models
The Representative Payee Misuse Models allow us to more effectively target reviews of representative payees to detect, deter, and prevent misuse of beneficiary funds by representative payees. Based on recommendations from a National Academy of Sciences study commissioned by Congress, we developed statistical models to identify cases that had the greatest likelihood of detecting beneficiary funds misuse. These models target both individual representative payees and representative payee organizations. The models are able to detect cohorts of cases with a misuse rate at about twenty times the overall rate occurring in the universe of all beneficiaries served by representative payees.
SSA’s Increasing Use of Big Data and Data Analytics
In addition to our successful predictive models, we are increasingly using data analytics to make our processes more efficient and more productive. Recently, i360gov.com recognized the efforts of our Office of Disability Adjudication and Review (ODAR) in using data analytics to operate “one of the largest administrative judicial systems in the world.”1 ODAR has developed extensive and rigorous data analytics capabilities that allow it to identify patterns and areas for further examination of policy compliance and consistency. As i360gov.com noted, ODAR uses an “analytic feedback process” to lead to better results in the appeals process:
ODAR now captures key claims data, visualizes the results, analyzes those results and delivers feedback to managers and appellate judges, so the organization can change the policy, system, or advise personnel to take corrective steps based on what the data uncovers. The ability to analyze large and complex data sets using case analysis tools, data visualization, clustering analysis and multiple variable models allows ODAR to efficiently tackle the complex challenges faced daily in adjudicating disability appeals. Overall, ODAR has gained more consistency and accuracy in the processing of all appeals, along with the ability to process more claims, more quickly as well.
Building upon our successes in using predictive models and data analytics, we are undertaking a special initiative to expand our use of data analytics to enhance our ability to detect and prevent disability fraud. Specifically, we will apply analytical tools that can determine common characteristics and patterns of fraud based on data from past allegations and known cases of fraud. We will apply these tools when reviewing initial applications or existing data on beneficiaries for potential fraud or other suspicious behavior. With these tools, we expect to be able to identify suspicious patterns of activity in disability claims and prevent fraudulent applications from being processed. During this fiscal year, we plan to pilot these analytic tools and demonstrate their value.
We already have been proactive in using data analytics to detect and prevent possible fraud on our my Social Security portal. While the detected level of potentially fraudulent activity on my Social Security is low, as our Acting Commissioner has stated repeatedly, “we have no tolerance for fraud.” In FY 2013, we created a new integrity review system and established a Fraud Analysis and Coordination Team (FACT) unit to analyze – using data analytics – suspicious behavior and potential fraud in our online services. The FACT unit takes necessary steps to mitigate any losses to SSA and to our customers.
Similarly, we are working with OIG on our data analytics projects to combat potential disability fraud. OIG’s participation is valuable due to their knowledge of actual fraud cases that will inform our development of analytics processes. We continue to assess the potential extent to which data analytics will help in the fight against fraud. We will keep you apprised of our progress as we develop and pilot potential tools and applications.
Need for Adequate, Sustained Funding
We have a long history of delivering results in administering our vital programs in an efficient, cost-effective manner. We have been successful, in large part, due to our highly trained employees who are dedicated to serving our customers and being good stewards of the Social Security and SSI programs, and because we have made significant and strategic investments in IT that have allowed us to keep up with ever-increasing workloads. However, as the agency’s CIO and Deputy Commissioner of Systems, I want to underscore the importance of receiving adequate, sustained resources to fund long-term strategic improvements to our IT infrastructure and the applications we use to administer our programs and to conduct program integrity and anti-fraud activities.
Adequate funding enables us to invest in tools and technology, which are vital for delivering quality service. Technology benefits our customers by providing more options to do business with us over the Internet or through self-service options. We must build upon the success of our online tools and my Social Security, which provides Internet users a secure way to do business with us. As we perfect these self-service options, we can add more business functions to them, which free our employees to focus on complex work and the customers who most need our help.
However, when our resources are significantly constrained, it may prove difficult for us to do anything more than maintain our current infrastructure or make marginal improvements. While the recent appropriations act helps, investments in IT require timely, adequate, multi-year funding. As I noted earlier, we have been recognized for our use of data analytics to administer one of the largest administrative judicial systems in the world. Our success in that regard was based in no small part on the infusion of resources from FY 2008 through FY 2010 when we received the full President’s Budget request for those years and additional resources from the Recovery Act in FY 2009 and FY 2010.
Thank you for this opportunity to update you on how we use our IT operations to help administer our programs and for program integrity. We have a successful history of using IT to leverage our limited resources. Over the past few years, limited resources have challenged us to maintain our high-quality service to all of our customers. We believe we can do more. With adequate and sustained funding, we can hire and retain a highly skilled workforce, invest in the technology that will help us work smarter and faster, and deliver a quality return on investment to the American people.
1 See Leaning In, http://www.i360gov.com/whitepapers/leaning-in-government-s-push-to-leverage-big-data/. (Last
visited February 19, 2014)