Friday, May 20, 2011

Growing Concerns About CLASS Act Fraud

This morning’s Wall Street Journal notes that the Social Security Administration has embarked on an investigation of an administrative law judge in West Virginia, after yesterday’s front-page story in the Journal noted that this judge approved 99.7% of the Social Security disability claims he heard last year – and has approved every one of the 729 claims he has heard thus far this year.  The judge reportedly complained to one of his fellow judges that “some of these judges act like it’s their own damn money we’re giving away.”  The Journal story and subsequent investigation came on the same week in which Sen. Coburn’s office wrote to the Social Security Administration questioning taxpayer-funded disability benefits being paid to an “adult baby.”

Both these stories create serious concerns about benefits being paid through the CLASS Act, which will also rely on a system of eligibility determinations – and could be subject to similar types of questionable and abusive tactics as those described above.  Moreover, the financial incentives for abuse are actually HIGHER under the CLASS Act – while the average Social Security disability benefit was $1,068.90 during April 2011, the CLASS Act guarantees a cash benefit of at least $50 per day, or $1,500 per month.

According to the health care law, the Secretary of Health and Human Services must establish an eligibility assessment system for CLASS by January 1, 2012.  The Department has yet to explain how it will meet that deadline in a manner that ensures the program will not become a haven for fraudulent crooks – thus increasing the risk of a taxpayer-funded bailout.  Particularly given this week’s disconcerting stories about fraud within the Social Security disability system, many may hope that HHS focuses on the CLASS Act’s potential for fraud and abuse sooner rather than later.