I-5-1-15.Processing Cases Involving Potential Fraud, Similar Fault, and Abuse Issues
|Questions and Answers|
|Format of a CDI Report of Investigation|
Issued: June 15, 2001
This Temporary Instruction (TI) provides, in question and answer format, guidance on processing cases involving issues of potential fraud, similar fault, and abuse. The guidance provided focuses mainly on the identification, treatment, and resolution of issues concerning whether evidence should be disregarded because there is reason to believe that similar fault was involved in the providing of that evidence. The TI is part of an initiative of the Social Security Administration (SSA) to update and improve its procedures for dealing with fraud, similar fault, and abuse.
The terms “fraud,” “similar fault,” and “abuse” cover the full range of infractions that may occur in the benefit programs administered by SSA. This TI sometimes uses the phrase “fraud and abuse” to refer to the full range of infractions, including “similar fault.” The term “fraud” may also be used in this broad sense. Thus, we may speak of “anti-fraud activities” to reference the Agency's activities against “fraud,” “similar fault,” and “abuse,” including the abuse that can justify SSA's imposition of an administrative sanction involving nonpayment of benefits.
Since the inception of Social Security, SSA has taken its stewardship role very seriously and has always sought to prevent, detect, and respond appropriately to fraud, similar fault, and abuse in the benefit programs it administers. However, until recently, the Agency's anti-fraud efforts have depended largely on infrastructure systems and processes that were designed to strengthen SSA's overall program management and not solely to prevent or detect fraud and abuse (e.g., computer data matches, redeterminations, and continuing disability reviews (CDRs)).
Since 1995, when a separate SSA Office of the Inspector General (OIG) was created as a result of SSA becoming an independent agency, additional resources have become available for investigative activities targeted specifically at identifying and preventing fraud. Consequently, the Agency now has in place an expanded program for combating fraud and abuse.
Since 1997, SSA's strategic plan has included combating fraud and abuse in the Agency's strategic goals. Under the current plan, “Mastering the Challenge, Strategic Plan, 2000-2005,” one of SSA's five strategic goals is to “ensure the integrity of Social Security programs, with zero tolerance for fraud and abuse.” The strategic objectives the Agency has established to realize this goal include an objective to “[a]ggressively deter, identify and resolve fraud.”
SSA and its OIG have developed a comprehensive anti-fraud plan, and SSA has established a National Anti-Fraud Committee (NAFC) to oversee and support the Agency's anti-fraud activities. To coordinate anti-fraud activities regionally, SSA has established Regional Anti-Fraud Committees (RAFCs) that are co-chaired by SSA Regional Commissioners and the Special Agents in Charge (SACs) of OIG's field divisions. SSA has also established the national SSA Fraud Hotline. In addition, the Agency has undertaken some 40 Key Initiatives to detect and combat fraud on the part of claimants, representatives, medical and other providers, and State and Federal employees.
One of SSA's major anti-fraud initiatives is the Cooperative Disability Investigations (CDI) Program. Since Fiscal Year (FY) 1998, investigative units have become fully operational at twelve sites around the country — Atlanta, Baton Rouge, Chicago, Houston, Nashville, New York City, Newark, Oakland, Roanoke (VA), Salem (OR), St. Louis, and Tampa. Another unit is scheduled to begin operations within FY 2001 in Boston. The CDI units supplement and focus usual investigative activities carried out by the ten field divisions of OIG's Office of Investigations, and the development of fraud and abuse issues that SSA field offices (FOs) and State Disability Determination Services (DDSs) conduct.
SSA's Office of Disability (OD) and OIG's Office of Investigations jointly administer the CDI program. The CDI units rely on the combined skills and specialized knowledge of OIG law enforcement personnel (Special Agents), State or local law enforcement officials, and non-law enforcement personnel from the DDSs and SSA's Office of Operations.
Each CDI unit is headed up by a Special Agent of the OIG, and it is this Special Agent who, subject to oversight by OIG management, approves and authorizes release of the investigative reports submitted by these units. The Report of Investigation (ROI) that a CDI unit uses to convey the results of an investigation bears the image of a Special Agent's shield and includes language that identifies the report as property of the SSA OIG that may be used for official purposes only and may not be copied or reproduced without the permission of the OIG. The OIG Special Agent who heads up a CDI unit also has the lead for the unit in dealing with OHA, including any appearance the unit might be called on to make at a hearing before an ALJ.
Because of the role of the OIG Special Agents and OIG management in directing the investigative work of the CDI units, these units are correctly described as “OIG units,” the joint administration of the CDI program by OIG and OD notwithstanding. Like other investigative units in OIG's Office of Investigations, CDI units are subject to the Inspector General Act (IGA) of 1978, as amended, all regulations applicable to SSA's OIG, and the OIG Special Agent Handbook.
The OIG generally pursues an investigation only if it carries the potential for criminal prosecution. The IGA prohibits the OIG from engaging in program operating functions, including the determination of fraud or similar fault for administrative purposes. The OIG does not express opinions about whether benefits should be awarded or denied. However, CDI units and other OIG units may and do provide SSA with copies of their reports of investigations for any related administrative purposes that SSA may deem appropriate (such as an administrative finding of fraud or similar fault).
Law enforcement personnel assigned to CDI units, including the Special Agents of SSA's OIG, may engage in the full range of undercover, surveillance, and other investigative activities authorized by their respective offices (i.e., as the case may be, OIG's Office of Investigations or the State or local investigative office that has assigned an individual to the CDI unit). Non-law enforcement personnel assigned to the units (i.e., the personnel of DDSs and SSA's Office of Operations) are subject to all the rules and regulations applicable to SSA's administrative review process as established in 20 CFR Part 404, Subpart J, and Part 416, Subpart N.
The CDI units combat disability fraud in their respective areas by investigating issues of fraud and abuse in initial and continuing disability cases and by examining questionable practices by doctors, lawyers, interpreters, and other service providers who may be involved in the facilitation or promotion of disability fraud. The CDI units investigate issues of potential fraud or abuse that are referred to them primarily by the local DDS and at times by other sources. DDS personnel determine that an issue warrants referral through a two step process in which they initially identify a possible issue based on case characteristics associated with a high risk of fraud or similar fault and then determine, through a subsequent fact gathering and assessment step, that there is an issue of potential fraud, similar fault, or abuse that a CDI unit should consider as a subject for possible investigation. See Program Operation Manual System (POMS) sections DI 23025.010, DI 23025.015, and 23025.030; also see GN 02604.410B.
The CDI unit may advise the DDS that it believes an investigation is not warranted. If an investigation is conducted, the CDI unit reports the results of the investigation to the DDS to help substantiate or refute the original suspicions. The investigation and report are usually completed in time for the DDS adjudicative team to consider in its disability determination.
Like the Agency's other investigative activities, the investigations conducted by CDI units can have a wide variety of consequences. Investigations can result in the prosecution of criminal or civil actions by the Department of Justice (DOJ) under sections 206, 208, 1107, or 1632 of the Social Security Act (the Act), DOJ prosecution of criminal actions under various provisions of the United States Criminal Code, or prosecution of criminal actions by a State Attorney General under State law. Some investigations result in referrals to the Office of the Counsel to the Inspector General (OCIG) and proceedings by OIG to impose civil monetary penalties (CMPs) under sections 1129 and 1140 of the Act and the provisions of 20 CFR Part 498. And some result in the adjudication of fraud and abuse issues under the SSA administrative review process set forth in 20 CFR Part 404, Subpart J, and Part 416, Subpart N.
The specific matters at issue under the administrative review process concern the applicability of two additional mechanisms for combating fraud and abuse that the Act provides — the disregarding of certain evidence in the adjudication of claims for benefits and the imposition of administrative sanctions in the form of nonpayment of benefits. As in the past, adjudicators will also continue to decide the issue of whether a prior final determination or decision should be reopened under the rules of administrative finality because it was obtained by fraud or similar fault.
As amended by the Social Security Independence and Improvements Act of 1994 (Public Law No. 103-296), sections 205 and 1631 of the Act provide that, in initially deciding entitlement or eligibility in claims for benefits under title II and title XVI, and in redetermining the same, SSA “shall disregard any evidence if there is reason to believe that fraud or similar fault was involved in the providing of such evidence.” Social Security Ruling (SSR) 00-2p (65 FR 10140, February 25, 2000) sets forth the standards that SSA applies at all adjudicative levels in determining whether evidence should be disregarded because there is reason to believe that “similar fault” was involved in providing that evidence in a claim for benefits.
As amended by section 207 of the Foster Care Independence Act of 1999 (Public Law No. 106-169), the Act includes, in new section 1129A, provisions for the imposition by SSA of a penalty on any person who knowingly makes a statement that is false or misleading or omits a material fact for use in determining any right to or the amount of monthly benefits under title II or title XVI. The penalty is nonpayment for a specified period of months of any benefits that would otherwise be payable to the person under title II, and ineligibility for the same period of time for cash benefits under title XVI. SSA has published interim final regulations at 20 CFR §§ 404.459 and 416.1340 for implementing these administrative sanction provisions (65 FR 42283, July 10, 2000).
SSA's initiatives against fraud and abuse, in combination with the implementation of additional statutory provisions concerning same, have made SSA Field Offices (FOs) and State DDSs more aware of fraud and abuse issues and problems that occur in their local areas. Therefore, it is more likely now than in the past that fraud and abuse issues will be identified at the initial or the reconsideration steps of the administrative review process.
The existence of an OIG devoted to combating fraud and abuse in Social Security programs and operations increases the likelihood that identified issues of fraud and abuse will be properly developed and investigated before the filing of a request for a hearing before an Administrative Law Judge (ALJ). The increased variety of possible statutory penalties against fraud and abuse has the same effect, since fraud and abuse issues must be considered from additional perspectives. Under the Act as amended, where an issue of fraud or abuse is identified, the possible consequences to be assessed include prosecution of criminal or civil actions, the pursuit of CMPs by OIG, the imposition by SSA of an administrative sanction in the form of nonpayment of benefits, and the disregarding of evidence by adjudicators on the basis of fraud or similar fault.
As a result of the legislative changes discussed above and of the initiatives that SSA and its OIG have independently undertaken to strengthen the Agency's capacity to combat fraud and abuse, we expect adjudicators in the Office of Hearings and Appeals (OHA) to see an increase in the number of cases involving fraud and abuse issues that have been identified and investigated before a request for an ALJ hearing is filed. We do not expect that fraud and abuse cases will ever constitute a large part of the OHA workload. However, it is important that we process these cases correctly as they arise.
IV. Implementing Procedures
The attached questions and answers provide supplemental guidance for implementing SSA's policies and procedures in cases involving fraud and abuse issues. The guidance is to be used in conjunction with the published guidance available in SSR 00-2p and §§ 404.459 and 416.1340 of the regulations, and with the provisions on criminal violations of the Act and other Federal statutes in HALLEX I-1-3-1 through I-1-3-3. Adjudicators must also adhere to all applicable due process and confidentiality requirements in processing these cases.
This TI mainly concerns the processing of cases that involve, as one of the issues presented in a claim for benefits, the issue of whether evidence should be disregarded because there is reason to believe that “similar fault” was involved in the presentation of that evidence. In discussing the identification of these cases, the TI distinguishes the “similar fault” issue from “fraud” and “abuse” issues, and from the credibility issues typically presented in Social Security cases.
The TI also deals with the “abuse” that can lead to the sanction of nonpayment of benefits to a lesser extent, mainly to distinguish this infraction from “similar fault” and to explain that the issue of nonpayment of benefits may be decided by an ALJ only after it has previously been decided in an initial and a reconsidered determination. The TI also explains when and how ALJs refer cases so that consideration may be given to whether an initial determination on that issue should be made. (We plan to issue additional HALLEX guidance to provide information on the processing of administrative sanction cases that are before OHA for decision.) The TI deals with “fraud” mainly in the sense that it provides guidance on the question of whether the issue of fraud — as it may be decided in the context of the administrative review process described in 20 CFR Part 404, Subpart J, and Part 416, Subpart N — should be decided if the same result may be achieved by ruling on the issue of “similar fault.”
This TI provides guidance in an attachment of questions and answers. A first, “General” part of the attachment addresses questions that deal with background information and various basic issues (see Table of Contents). A second, “Procedural” part focuses on operating procedures at the ALJ and Appeals Council steps of the administrative review process.
Hearing office personnel should direct any questions to their Regional Office. Regional Office personnel should contact the Division of Field Practices and Procedures in the Office of the Chief Administrative Law Judge at (703) 605-8530. Headquarters personnel should contact the Office of Policy, Planning and Evaluation at (703) 605-8276.
1 — Questions and Answers
2 — Format of a CDI Report of Investigation
 In some cases, the previous adjudicator may have concluded after a preliminary assessment that there was no fraud or similar fault issue warranting further development or that the issue of disability could be decided without considering the suspicious evidence. Where a DDS adjudicator concluded that there was an issue of fraud or similar fault requiring development, but found that no fraud or similar fault occurred, the file will normally reflect that resolution of the issue simply through a Report of Contact and removal of the flag/alert that identified the case as a high risk for fraud or similar fault. A DDS adjudicator will have prepared a formal special determination to resolve the issue only in instances in which there is reason to believe that fraud or similar fault occurred. See POMS DI 23025.015C.3., DI 23025.020A, DI 23025.025C.3.b.