GAO Report On Representation Paid For By States And Localities

     From a report by the Government Accountability Office (GAO):

Little is known about the extent to which states are contracting with private organizations to help individuals who receive state or county assistance apply for federal disability programs. Representatives from these private organizations help individuals apply for Supplemental Security Income (SSI) and Disability Insurance (DI) from the Social Security Administration (SSA). Available evidence suggests that this practice — known as SSI/DI advocacy — accounts for a small proportion of federal disability claims. Using a variety of methods, including interviewing stakeholders, GAO identified 16 states with some type of SSI/DI advocacy contract in 2014. In addition, GAO analyzed a sample of 2010 claims nationwide and estimated that such contracts accounted for about 5 percent of initial disability claims with nonattorney representatives, or about 1 percent of all initial disability claims. Representatives working under contract to other third parties, such as private insurers and hospitals, accounted for an estimated 30 percent of initial disability claims with nonattorney representatives . 

Three selected sites represented different approaches to SSI/DI advocacy, but were similar in many respects. For example , Minnesota contracted with 55 nonprofit and for - profit organizations, while Hawaii and Westchester County, New York , each had a single contractor: a legal aid organization, and a for-profit company, respectively. At the same time, all three sites targeted recipients of similar state and county programs, such as General Assistance, and generally paid contractors only for approved disability claims, among other similarities.

SSA has controls to ensure representatives follow program rules and regulations, but these controls are not specific to those working under contract to states or other third parties and may not be sufficient to assess risks and prevent overpayments — known by SSA as fee violations. Specifically:

• Despite the growing involvement of different types of representatives in the initial disability determination process, SSA does not have readily available data on representatives, particularly those it does not pay directly. This hinders SSA’s ability to identify trends and assess risks, a key internal control. SSA’s existing data are limited and are not used to provide staff with routine information, such as the number of claims associated with a given representative. SSA has plans to combine data on representatives across systems, but these plans are still in development.

• SSA does not coordinate its direct payments to representatives with states or other third parties that might also pay representatives, a risk GAO identified in 2007. In cases involving SSI/DI advocacy contracts, a representative may be able to collect payments from both the state and from SSA, potentially resulting in an overpayment — a violation of SSA’s regulations.

     Why would states or localities pay people to represent Social Security or Supplemental Security Income (SSI) disability claimants? Because receipt of those benefits paid for by the federal government would reduce or eliminate the liability of those states or localities for various forms of benefits they are responsible for. The states and localities want to shift costs to the federal government.
     Overall, I don't think there is enough risk that there is anything bad going on with this form of representation to justify much effort to collect data on it or to try to coordinate payments with the states or localities involved, which is basically the point that Social Security made in responding to this GAO study.