The Fraudulent Disability-Industrial Complex Discovered

Posted: Oct 10, 2013 12:01 AM

On Sunday, CBS’s 60 Minutes profiled Sen. Tom Coburn’s (R-OK) on-going investigation of fraud and abuse in the federal government’s two main disability programs: Social Security Disability Insurance and Supplemental Security Income (see Chris Edwards’ discussion here). Yesterday, the Senate Committee on Homeland Security & Governmental Affairs (Coburn is the ranking member) held a hearing on a particularly egregious example centered on the Social Security Administration’s Huntington, WV office.

The case is a perfect example of what is quickly becoming known as the “disability-industrial complex”: specialty law firms overwhelming the system with dubious disability claims, doctors vouching for applicants with dubious claims, and federal administrative law judges awarding disability benefits to individuals with dubious claims.

The committee produced a 160+ page report that is jaw-dropping from beginning to end. If you’re pressed for time, at least check out the “findings” on pages 4-7. In the Huntington case, it’s pretty clear that the three points of the triangle were all in cahoots. It’s also quite similar to a still unfolding disability scandal in Puerto Rico that I discussed in August. In both cases, the public is now aware of the scandals thanks to the Wall Street Journal’s Daniel Paletta’s excellent investigative reporting. That begs two questions, however: what other major disability scandals are sitting out there waiting for a curious reporter discover? And what other ticking time-bombs are Social Security Administration bureaucrats aware of but doing little to defuse?

For the record, I used to work for Sen. Coburn. Regardless of whether or not one agrees with Coburn’s positions or his approach, the guy genuinely cares about how taxpayer dollars are spent. Coburn’s staff is a rarity in that the bulk of their work revolves around saving rather than spending other people’s money. However, let’s not forget that fraud and abuse comes with government programs the same way that fries and a drink comes with a Happy Meal. So while reports and hearings that shed light on troubled federal programs are useful, the ultimate goal should be to terminate – not “fix” – them.

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