State Senate Ignores Millions of Dollars Disability Fraud in Tennessee


A bill that would make it a requirement for the state to cooperate in investigations of millions of dollars of disability fraud occurring within Tennessee was ignored this week by the Senate Judiciary Committee.

Disability fraud can involve exaggerating or faking an illness or disabilities, filing multiple applications, concealing work or other activities, all of which cost the state and the federal government millions of dollars every year.

Disability benefits, officially known as Supplemental Security Income, is available through the Social Security Administration (SSA) to individuals who cannot work because they have a medical condition expected to last at least one year or result in death.

In the fiscal year 1998, the SSA and Office of Inspector General jointly formed a Cooperative Disability Investigations (CDI) Program to work in conjunction with State Disability and Determination Services (DDS) and state or local law enforcement agencies to pool resources and expertise to detect and prevent fraud in the SSA’s disability programs.

Through a memorandum of understanding, the SSA assumes all fiscal responsibilities needed to fund and operate the participation of the state’s law enforcement in the CDI Program, including but not limited to salaries, overtime, insurance benefits, retirement benefits, paid leave and operating costs.

The primary mission of the CDI Program is to obtain evidence that can resolve issues of fraud before benefits are ever paid.

Tennessee participated in this CDI Program since 2001, but withdrew from the Program in 2016 during Governor Bill Haslam’s administration.

The SSA’s Office of the Inspection General publishes Performance Reports relative to the projected savings from the CDI Program. SSA savings projections are calculated using a variable method that considers the type of program involved and factors that account for nationwide denial or cessation rates.

Also reported are non-SSA savings, which include benefits provided by other government programs that were then withheld because of CDI investigations. The projections of non-SSA savings are either estimated or actual benefit amounts, as documented by the responsible agency for a five-year period.

In some years, the Performance Reports also contain information on recoveries, which includes restitution, fines, settlements and judgments against the person committing the disability fraud.

In several of the readily available Performance Reports, the projected savings specific to the investigations in Tennessee is detailed, along with more than thirty other states or territories.

Data obtained from the 14 semiannual reports to Congress from the SSA’s Office of the Inspector General dated from October 1, 2009, through September 30, 2016, when Tennessee was participating in the CDI Program was compared to that of the four reports from October 1, 2017, through September 30, 2018, after Tennessee ceased participation in the CDI Program

During the program participation period, in Tennessee alone there was an average of nearly 100 confirmations of fraud or cases denied due to the investigations.

The denials during that period averaged a projected $7.8 million per year in SSA savings.

But there were also savings in non-SSA programs, such as TennCare, that averaged another $5.9 million in projected annual savings.

Once Tennessee stopped participating in the SSA-funded program, the number of denials and dollars saved dropped by about 90 percent.

The cases denied in Tennessee then averaged just 10 per year, while the projected SSA savings from denials in Tennessee dropped to a projected $861,484 and the non-SSA savings to a projected $611,709.

Efforts to identify a state agency that would voluntarily enter a memorandum of understanding with the SSA for the CDI Program were unsuccessful.

In 2019, the sponsors of SB1300 / HB1172 Senator Mark Pody (R-Lebanon) and Representative Terri Lynn Weaver (R-Lancaster) decided to codify the requirement of participating in the SSA-funded CDI Program by creating a new division of state government, the Tennessee Office of Cooperative Disability Investigation, for a period of two years.

The division will be attached to the office of the governor, be separate and distinct from any other bureau or agency in the state and be comprised of state law enforcement officers working solely with the SSA.

HB1172 was heard last year in the House Departments & Agencies Subcommittee and recommended for passage on to the House State Committee.

The bill passed the House State Committee on June 4, after the legislature returned from a two-month COVID-19 recess, and then passed the House Government Operations Committee. The bill is now awaiting the House Calendar & Rules Committee to put it on a calendar for the House floor.

Meanwhile, SB1300 took a different path, with its first stop being in the Senate Government Operations Committee.

Two members of the SSA CDI Program were there to testify before the Committee. With one witness being a special agent in the Office of the Inspector General, he reported that since April 2000, in Tennessee there had been roughly 1,400 cases of fraud that resulted in projected savings of $100 million to the Social Security Trust Fund and another $64 million in projected savings to Medicare and TennCare.

As the bill was being discussed, Government Operations Committee member Senator Mike Bell (R-Riceville) said that when the bill gets to the Judiciary Committee he chairs, they would be hearing from two state offices that the SSA CDI Program operated under before. Those witnesses, Senator Bell said, would disagree with the cost savings to the state.

SB1300 passed the Senate Government Operations Committee by a vote of 7 to 2 in March prior to the COVID-19 recess. It was then placed on the calendar for the Senate Judiciary Committee for June 2, but then deferred to June 9.

While the House has taken up a great number of bills since returning to business on May 26, the Senate has held the position of only taking up bills that are COVID-19, time-sensitive or budgeted related. As such, there have been two calendars for Senate committee meetings to separate the bills into the two categories.

In what Chairman Bell said he believes and hopes is the Committee’s last meeting on June 9, the Senate Judiciary Committee had a hearing on the Governor’s appointment of The Honorable Kristi M. Davis to the Court of Appeals and took up SB2381 sponsored by Senator Bell.

The other 44 items on the Senate Judiciary Committee calendar, including SB1300, were not addressed.

In addition to being good stewardship of taxpayer dollars, Weaver told the Governor Operations Committee during her presentation of HB1172 that the bill is time-sensitive in as much as SSA has been trying to enter an agreement with Tennessee for the CDI Program since 2016, and their willingness to continue that effort is coming to an end.

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Laura Baigert is a senior reporter at The Tennessee Star.







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