Sen. Coburn Introduces Bill to Reform SSDI

In his final week on Capitol Hill, retiring Senator Tom Coburn (R-OK) introduced a bill with a wide-ranging set of measures to, in his words, protect and strengthen the Social Security Disability Insurance (SSDI) program. Coburn put on the table concrete reform proposals for consideration in the next Congress, advocating for reforms beyond simply restoring solvency to the dwindling DI trust fund:

When the trust fund is exhausted in 2016, many Members of Congress will say we just need to move funds from the Social Security retirement program. Let me be clear: this is not a solution; it is a Band-Aid, a temporary fix that takes money away from seniors and will eventually hurt taxpayers when both funds go broke in 2033.

Coburn proposed a broad mix of proposals, from long-discussed ideas to reform the disability determination process and upgrade SSA’s data sharing and processing systems, to new demonstration projects that help potential beneficiaries remain attached or return to the workforce. This effort is in line with attempts by other policymakers to elevate SSDI to the top of the agenda, notably the SSDI Solutions Initiative, recently launched by former Congressmen Jim McCrery and Earl Pomeroy with support from CRFB, to identify reforms to make the program work better for beneficiaries and those contributing to the system.

Some of the most important reforms proposed in the bill include:

Changes to the Eligibility Criteria

  • Requires SSDI beneficiaries to be converted to retired worker status at the earliest eligibility age (EEA), currently 62, facing the actuarial reduction that Social Security beneficiaries receive when they retire early with an exemption for beneficiaries for whom medical improvement is not expected
  • Limits consideration of age when determining eligibility for applicants 12 years younger than the normal retirement age, meaning that the age standard will rise as the retirement age increases
  • Requires SSA to maintain an updated list of jobs available in the economy to determine a claimant's capacity for work

Assigning benefits and reviews according to likelihood of recovery

  • Requires that SSA classify beneficiaries by the likelihood of medical improvement during the initial determination process
  • Grants time-limited benefits when medical improvement is expected in three years or less, though beneficiaries can reapply for benefits if they continue to suffer a disability at the end of the period
  • Mandates continuing disability reviews (CDRs) after five and seven years for beneficiaries with a possible or likely medical improvement

Promoting employment for individuals with disabilities

  • Encourages beneficiaries to return to work by replacing the Ticket to Work Program with a Generalized Benfit Offset, a work incentive program that gradually reduces benefits as claimants earn higher wages and shares the savings from this program with state vocational rehabilitation agencies that helped beneficiaries re-enter the workforce
  • Requires SSA to pilot interventions aimed at identifying and supporting people likely to apply for SSDI benefits early on with targeted vocational rehabilitation, medical supports, and even cash benefits to help them stay attached to the labor force
  • Asks SSA to study incentives for employers to offer private disability insurance, compensating their increased costs through tax advantages

Reforming the Determination and Adjudication Process

  • Eliminates the second step in the determination process, known as reconsideration, allowing claimants to appear before a judge directly after their application is denied at the initial level. This policy has been piloted in 10 states
  • Forces claimants and representatives to disclose all available medical evidence to judges, including unfavorable evidence to their case
  • Allows disability hearings attorneys to represent the government in non-adversarial hearings and refer cases to the next level of appeal, the Appeals Council, when they disagree with the judge’s decision
  • Reduces the importance currently given to opinion evidence by the claimant's treating physician during hearings and includes measures to penalize medical professionals from forging evidence
  • Eliminates the medical improvement review standard, which allows SSA to terminate benefits only if it can prove that beneficiaries have improved since their last review, regardless of their current ailments

Strengthening Program Integrity

  • Requires program integrity funds to undergo a separate appropriations process and be kept in a dedicated account, to avoid being channeled to other administrative processes
  • Strengthens quality reviews of judges, investigating judges with abnormally high award rates
  • Enhances collection of earnings data to help SSA determine when beneficiaries are earning above the allowed threshold
  • Reforms fees to attorneys and claimant representatives to accurately reflect their work in a case, rather than a percentage of benefits awarded, and eliminates travel reimbursements
  • Mandates that the Inspector General investigate the highest-earning representatives for signs of fraud or abuse
  • Forbids attorneys with a negative ethical record from representing claimants
  • Makes the Judicial Code of Conduct applicable for SSA judges and sets clear procedural rules for hearings
  • Makes collection of proven fraudulent payments mandatory by SSA’s Inspector General

Senator Coburn’s bill represents a thoughtful proposal and includes a number of provisions that could accompany a reallocation, interfund borrowing, or solvency plan to avoid the SSDI trust fund running out in 2016. Some proposals may be controversial, but deserve to be considered as Congress addresses the impending depletion of the DI trust fund.

In a statement accompanying the introduction of the bill, Coburn concluded:

This is a conversation that will take place after I have left the Senate. Accordingly, after four years of research, investigations, and thoughtful meetings with other interested, engaged parties, today I am offering a bill I believe can be used as a blueprint to shore up the fund before its exhaustion in 2016, fix systemic problems with the program, and provide targeted resources for the millions of disabled Americans who want to work to the best of their abilities.

The introduction of this bill marks the end of the Debt Doctor's long career promoting fiscal responsibility and highlighting other critical issues. His voice will be missed.