OIG Report On Outlier ALJs Issued

A new SSA Office of the Inspector General (OIG) report entitled "Administrative Law Judges with Both High Dispositions and High Allowance Rates" generated national news coverage, including a story in the Wall Street Journal.  The OIG report provides some new information, but limited specific details, about cases that were possibly handled improperly by outlier ALJs.  These ALJs are defined as having both 700 dispositions and allowance rates above 85 percent in any two years between 2007-13. During this period, 44 ALJs met this definition, which is approximately four percent of nationwide ALJs.

Based on a review sample of 275 claims from these outlier ALJs, the report states that 38 would have been denied or dismissed, if intercepted prior to disposition. The OIG then extrapolated those 38 claims to all the claims adjudicated by all the outlier ALJs to estimate "these ALJs improperly allowed disability benefits on approximately 24,900 cases, resulting in questionable cost of approximately $2 billion." As a frame of reference, monthly benefits to all SSDI recipients last month totaled $10.3 billion. Based on the OIG’s report, the total figure represents approximately 0.4 percent of the 6.6 million claims awarded during this time period, according to the Wall Street Journal.

While the report provided one example of how a claim was determined to be deficient, there were few specific details on errors, or specifics outlining how medical vocational decisions were deficient either through the adjudication itself or how the decision was written.

One category of data is clear: There has been a significant decline in judges with an allowance rate of 85 percent or higher. This figure falls from a high of 32 ALJs in 2009 to just seven in 2013. This trend was outlined by SSA Acting Commissioner Carolyn Colvin during hearing testimony earlier this year.

There was no analysis in the report for outlier judges on the other end of the performance and allowance rate spectrum, another potential area for study. Data from such a report could indicate how additional numbers of ALJs may not be practicing their duties in a manner that is consistent with the SSA’s policies and procedures and are denying too many claims.

This week’s OIG report is likely to factor into ongoing discussions about the future of the DI Trust Fund, which is drawing closer to its reserves exhaustion date in 2016.