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Senator Coburn releases investigation on disability benefits fraud

(Washington, D.C.) – Monday Senator Tom Coburn, of Oklahoma, released the findings of a two-year investigation into a case study of abuses surrounding the approval process of Social Security Disability benefits. 

Senator Coburn said, “This report highlights the very problems Congress needs to focus on but too often ignores.  In just two years, the Social Security Disability Trust Fund could be depleted. “

The senator says millions of disabled Americans will face benefit cuts, while others could see an increase in their payroll taxes. 

Dr. Coburn says, “What is also outrageous, as this report details, is how well-healed and well-connected lawyers, doctors, and judges have gamed the system for their own benefit.  Every bogus claim made on behalf of someone who is not truly disabled robs taxpayers and denies or delays benefits for someone who is truly disabled. “

The investigation focused on the East Coast.

However, Senator Coburn says fraud happens across the country.  

Key findings of the report include:

• Daugherty Awarded More Than $2.5 Billion in Benefits in the Last Years of His Career. Judge Daugherty moved an unusually large number of disability cases through the agency and awarded an unusually high percentage of disability benefits. Over a nearly seven year period, from 2005 to his retirement in mid-2011, Judge Daugherty awarded disability benefits to 8,413 individuals, which translates into about 1,200 cases per year and an estimated total award of federal lifetime benefits exceeding $2.5 billion.

• Judge Provided “DB Lists” to Conn Law Firm. From at least June 2006 to July 2010, Judge Daugherty telephoned the Conn law firm each month and identified a list of Mr. Conn’s disability claimants to whom the judge planned to award benefits. Judge Daugherty also indicated, for each listed claimant, whether he needed a “physical” or “mental” opinion from a medical professional indicating the claimant was disabled. Over the four year period reviewed, from 2006 to 2010, the monthly list identified between 14 and 52 disability claimants each time for at least 1,823 claimants. Conn Law Firm personnel referred to the monthly list as the “DB List” for David B. Daugherty.

• Daugherty Relied on Conn’s Doctors to Generate Medical Evidence. After receiving the DB List, Mr. Conn’s office scheduled appointments for the identified claimants with certain doctors favored by the law firm. The Conn law firm provided several of those doctors with physical or mental residual functional capacity (“RFC”) forms in which the medical information was already filled out, and the doctors signed the forms without making any changes. Frequently, these pre-filled forms contained information that conflicted with other information in the claimant’s case file.

• Identical Medical Evidence Used for Multiple Claimants. A review of the RFC forms found that the Conn law firm supplied certain doctors with 15 pre-filled versions of the physical RFC form and five pre-filled versions of the mental RFC form for hundreds of claimants. In almost all cases, only the names and Social Security numbers on the forms differed. Of the forms reviewed, 97 described the claimants as having the exact same limitations and contained no unique medical or employment information specific to the claimant. Because each individual has different abilities and ailments, and the forms require a complex set of data, finding two RFCs exactly alike should have statistically been an extremely rare occurrence.

• Key Doctors Had Suspect Credentials. Of the doctors used by the Conn law firm to produce medical opinions for disability claimants, two had their medical license suspended or revoked in another state. Under SSA rules, a doctor with a suspended or revoked license could not be used by the Social Security Administration to review a disability case, but could still examine claimants at the request of a claimant or outside attorney.

• Judge Daugherty Wrote Questionable Decisions Relying on Mr. Conn’s Doctors. A review of 110 case files for disability claimants listed on the DB Lists found the vast majority to contain highly questionable decisions. In all 110 cases, Judge Daugherty’s decisions justified reversing the agency’s prior denial of disability benefits by relying solely on the medical forms provided by the doctors procured by the Conn law firm. All but two of the 110 cases used the agency’s Medical-Vocational grid guidelines to award benefits.

• Mr. Conn Obtained Millions in Attorney Fees Paid by SSA. From cases on the DB Lists alone, over the four year period from 2006 to 2010, the Social Security Administration paid Mr. Conn over $4.5 million in attorney fees.10 Social Security records show that, altogether in 2010, Mr. Conn was the third highest paid disability law firm in the country due to its receipt of over $3.9 million in attorney fees from the Social Security Administration. In 2009, Mr. Conn received a total of $3.5 million in attorney fees from the agency.

• Mr. Conn Paid Doctors Substantial Fees for Evaluations. The doctors used by Mr. Conn to evaluate his claimants were also paid substantial fees. A review of records found that, over the past six years, Mr. Conn paid five doctors almost $2 million to provide disability opinions for his claimants. Mr. Conn contracted with his claimants to repay the fees given to the doctors to perform their medical evaluations.

• Daugherty Bank Records Show $96,000 in Unexplained Cash Deposits. From 2003 to 2011, Judge Daugherty’s bank records contain regularly occurring cash deposits totaling $69,800, the source of which is unexplained in the judge’s financial disclosure forms. From 2007 to 2011, his daughter’s bank records list similar cash deposits totaling another $26,200. When asked about the $96,000 in cash deposits, Judge Daugherty refused to explain their origin or the source of the funds.

• SSA Whistleblower Targeted by Huntington Chief Judge Andrus and Eric Conn. Following the public disclosure of Mr. Conn’s relationship with Judge Daugherty, Huntington Chief ALJ Andrus worked with Mr. Conn to discredit and retaliate against an SSA employee suspected of leaking the information.

• Mr. Conn Destroyed Documents during an Investigation. After talking with SSA OIG investigators, Mr. Conn contracted with a local shredding company to destroy over 26,000 pounds of documents, the equivalent of 2.6 million sheets of paper. Former Conn law firm personnel asserted that he destroyed all hard copies of the DB Lists as well as computer hard drives in his office.

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