H.R. 5260 — Introduced in House

I 113th CONGRESS 2d Session H. R. 5260 IN THE HOUSE OF REPRESENTATIVES July 30, 2014 Mr. Sam Johnson of Texas (for himself, Mrs. Black, Mr. Brady of Texas, Mr. Griffin of Arkansas, and Mr. Kelly of Pennsylvania) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Social Security Act to prevent disability fraud, and for other purposes. 1. Short title This Act may be cited as the Stop Disability Fraud Act of 2014. 2. Table of contents The table of contents for this Act is as follows: Sec. 1. Short title. Sec. 2. Table of contents. Title I—Combating Conspiracy Fraud Sec. 101. Expansion of cooperative disability investigations units. Sec. 102. Exclusion of certain medical sources of evidence. Sec. 103. Immediate suspension of claimant representatives upon certain convictions or disbarment. Sec. 104. New and stronger penalties. Sec. 105. Review of highest-earning claimant representatives. Title II—Strengthening Program Protections Sec. 201. Pre-effectuation and post-effectuation quality reviews of hearing dispositions. Sec. 202. Uniform qualification standards for disability determination decision makers. Sec. 203. Increased transparency. Sec. 204. Data exchange standardization. Title III—Modernizing Disability Programs Sec. 301. Updating of medical-vocational guidelines. Sec. 302. Research and demonstration projects. Sec. 303. Referrals to vocational rehabilitation or other public or private return-to-work service providers. Sec. 304. Online benefit assessment tools. Title IV—Other Program Improvements Sec. 401. Real property acquired by the Trust Funds. Sec. 402. Rules relating to distribution of death information furnished to or maintained by the Social Security Administration. Sec. 403. Reconsiderations of disability cessation determinations. I Combating Conspiracy Fraud 101. Expansion of cooperative disability investigations units Not later than October 1, 2016, the Commissioner of Social Security shall take any necessary actions to ensure that cooperative disability investigations units have been established that would cover each of the 50 States, the District of Columbia, Puerto Rico, Guam, the Northern Mariana Islands, the Virgin Islands, and American Samoa. 102. Exclusion of certain medical sources of evidence (a) In general Section 223(d)(5) of the Social Security Act (42 U.S.C. 423(d)(5)) is amended by adding at the end the following: (C) In making any determination with respect to whether an individual is under a disability or continues to be under a disability, the Commissioner of Social Security may not consider any evidence furnished by an unlicensed or sanctioned physician or health care practitioner. . (b) Effective date The amendment made by subsection (a) shall apply with respect to determinations of disability made on or after the date that is 1 year after the date of the enactment of this Act. 103. Immediate suspension of claimant representatives upon certain convictions or disbarment Section 206(a)(1) of the Social Security Act (42 U.S.C. 406(a)(1)) is amended— (1) in the third sentence, by striking disbarred or each place it appears; and (2) by inserting after the third sentence the following: Upon conviction of an individual for a felony or a crime of moral turpitude in a Federal or State Court or, in the case of an attorney, upon disbarment from any court or bar to which he or she was previously admitted to practice, the Commissioner may, after due notice, immediately disqualify or suspend the individual from appearing as a claimant representative before the Social Security Administration, pending an expedited hearing. 104. New and stronger penalties (a) Conspiracy To commit Social Security fraud (1) Amendment to title II Section 208(a) of the Social Security Act (42 U.S.C. 408(a)) is amended— (A) in paragraph (7)(C), by striking or at the end; (B) in paragraph (8), by adding or at the end; and (C) by inserting after paragraph (8) the following: (9) conspires to commit any offense described in any of paragraphs (1) through (8), . (2) Amendment to title VIII Section 811(a) of such Act (42 U.S.C. 1011(a)) is amended— (A) in paragraph (3), by striking or at the end; (B) in paragraph (4), by striking the comma and adding ; or at the end; and (C) by inserting after paragraph (4) the following: (5) conspires to commit any offense described in any of paragraphs (1) through (4), . (3) Amendment to title XVI Section 1632(a) of such Act (42 U.S.C. 1383a(a)) is amended— (A) in paragraph (3), by striking or at the end; (B) in paragraph (4), by adding or at the end; and (C) by inserting after paragraph (4) the following: (5) conspires to commit any offense described in any of paragraphs (1) through (4), . (b) Increased criminal penalties for certain individuals in positions of trust (1) Amendment to title II Section 208(a) of the Social Security Act (42 U.S.C. 408(a)), as amended by subsection (a), is further amended by striking the period at the end and inserting , except that in the case of a person who receives a fee or other income for services performed in connection with any determination with respect to benefits under this title (including a claimant representative, translator, or current or former employee of the Social Security Administration), or who is a physician or other health care provider who submits, or causes the submission of, medical or other evidence in connection with any such determination, such person shall be guilty of a felony and upon conviction thereof shall be fined under title 18, United States Code, or imprisoned for not more than ten years, or both.. (2) Amendment to title VIII Section 811(a) of such Act (42 U.S.C. 1011(a)), as amended by subsection (a), is further amended by striking the period at the end and inserting , except that in the case of a person who receives a fee or other income for services performed in connection with any determination with respect to benefits under this title (including a claimant representative, translator, or current or former employee of the Social Security Administration), or who is a physician or other health care provider who submits, or causes the submission of, medical or other evidence in connection with any such determination, such person shall be guilty of a felony and upon conviction thereof shall be fined under title 18, United States Code, or imprisoned for not more than ten years, or both.. (3) Amendment to title XVI Section 1632(a) of such Act (42 U.S.C. 1383a(a)), as amended by subsection (a), is further amended by striking the period at the end and inserting , except that in the case of a person who receives a fee or other income for services performed in connection with any determination with respect to benefits under this title (including a claimant representative, translator, or current or former employee of the Social Security Administration), or who is a physician or other health care provider who submits, or causes the submission of, medical or other evidence in connection with any such determination, such person shall be guilty of a felony and upon conviction thereof shall be fined under title 18, United States Code, or imprisoned for not more than ten years, or both.. (c) Increased civil monetary penalties for certain individuals in positions of trust Section 1129(a)(1) of the Social Security Act (42 U.S.C.1320a-8(a)(1)) is amended, in the matter following subparagraph (C), by inserting after withholding disclosure of such fact the following: , except that in the case of such a person who receives a fee or other income for services performed in connection with any such determination (including a claimant representative, translator, or current or former employee of the Social Security Administration) or who is a physician or other health care provider who submits, or causes the submission of, medical or other evidence in connection with any such determination, the amount of such penalty shall be not more than $7,500. (d) Establishment of sanctions for violations by claimant representatives (1) In general Section 206(a)(1) of the Social Security Act (42 U.S.C. 406(a)(1)) is amended by inserting after or who violates any provision of this section for which a penalty is prescribed. the following: The Commissioner of Social Security shall establish rules under which fines and other sanctions the Commissioner determines to be appropriate may be imposed for failure to comply with the Commissioner's rules and regulations. (2) Collection of fines Section 206(d)(3) of such Act (42 U.S.C. 406(d)(3)) is amended by inserting after under paragraph (1) the following: , and any fine imposed on the attorney under subsection (a)(1),. (e) Civil monetary penalty on claimant representatives Section 1129(a) of the Social Security Act (42 U.S.C. 1320a–8(a)) is amended by adding at the end the following: (4) Any person (including an organization, agency, or other entity) who, while acting as a claimant representative pursuant to section 206, knowingly charges, demands, receives, or collects for services rendered in excess of the maximum fee prescribed by the Commissioner of Social Security or allowed by a court in connection with proceedings before the court to which section 206(b)(1) is applicable, shall be subject to, in addition to any other penalties that may be prescribed by law, a civil monetary penalty of not more than $7,500 for each violation. Such person shall also be subject to an assessment, in lieu of damages sustained by the United States resulting from the improper payment, of not more than twice the amount of any payments so received. . (f) Inflation adjustment of certain civil monetary penalties Title XI of the Social Security Act (42 U.S.C. 1301 et seq.) is amended by inserting after section 1129B the following: 1129C. Civil monetary penalty inflation adjustment (a) Adjustment by regulation The Commissioner of Social Security shall, not later than 180 days after the date of enactment of the Stop Disability Fraud Act of 2014, and at least once every 4 years thereafter— (1) by regulation adjust the maximum amount of each civil monetary penalty by the inflation adjustment described under subsection (b); and (2) publish each such regulation in the Federal Register. (b) Amount of adjustment The inflation adjustment under subsection (a) shall be determined by increasing the maximum amount of each civil monetary penalty by the cost-of-living adjustment. Any increase determined under this subsection shall be rounded to the nearest— (1) multiple of $1,000 in the case of penalties greater than $1,000 but less than or equal to $10,000; and (2) multiple of $5,000 in the case of penalties greater than $10,000 but less than or equal to $100,000. (c) Definitions For purposes of this section— (1) the term civil monetary penalty means— (A) a penalty imposed by paragraph (1) or (3) of section 1129(a); and (B) a penalty imposed by paragraph (1) or (2) of section 1140(b). (2) the term cost-of-living adjustment means the percentage (if any) for each civil monetary penalty by which— (A) the Consumer Price Index for all Urban Consumers (CPI–U) for the month of June of the calendar year preceding the adjustment, exceeds (B) the CPI–U for the month of June of the calendar year in which the amount of such civil monetary penalty was last set or adjusted pursuant to law. (d) Application of increase Any increase under this Act in a civil monetary penalty shall apply only to violations which occur after the date the increase takes effect. . (g) Mandatory restitution in Social Security fraud cases (1) Amendments to title II Section 208(b) of the Social Security Act (42 U.S.C. 408(c)) is amended— (A) in paragraph (1), by striking may order and inserting shall order; (B) in paragraph (2), by striking 3663 and inserting 3663A; (C) by striking paragraph (3); and (D) by redesignating paragraphs (4) and (5) as paragraphs (3) and (4), respectively. (2) Amendments to title VIII Section 811(b) of such Act (42 U.S.C. 1011(b)) is amended— (A) in paragraph (1), by striking may order and inserting shall order; (B) in paragraph (2), by striking 3663 and inserting 3663A; (C) by striking paragraph (3); and (D) by redesignating paragraph (4) as paragraph (3). (3) Amendments to title XVI Section 1632(b) of such Act (42 U.S.C. 1383a(b)) is amended— (A) in paragraph (1), by striking may order and inserting shall order; (B) in paragraph (2), by striking 3663 and inserting 3663A; (C) by striking paragraph (3); and (D) by redesignating paragraph (4) as paragraph (3). (4) Effective date The amendments made by paragraphs (1), (2), and (3) shall apply with respect to violations occurring on or after the date of the enactment of this Act. (h) References to Social Security and Medicare in electronic communications (1) In general Section 1140(a)(1) of the Social Security Act (42 U.S.C. 1320b–10(a)(1)) is amended by inserting (including any Internet or other electronic communication) after or other communication. (2) Each communication treated as separate violation Section 1140(b) of such Act (42 U.S.C. 1320b–10(b)) is amended by inserting after the second sentence the following: In the case of any items referred to in subsection (a)(1) consisting of Internet or other electronic communications, each dissemination, viewing, or accessing of such a communication which contains one or more words, letters, symbols, or emblems in violation of subsection (a) shall represent a separate violation.. (i) No benefits payable to individuals for whom a civil monetary penalty is imposed for fraudulently concealing work activity Section 222(c)(5) of the Social Security Act (42 U.S.C. 422(c)(5)) is amended by inserting after conviction by a Federal court the following: , or the imposition of a civil monetary penalty under section 1129,. 105. Review of highest-earning claimant representatives Not later than 1 year after the date of the enactment of this Act and biennially thereafter, the Inspector General of the Social Security Administration shall conduct biennial reviews of the practices of a sample of the highest earning claimant representatives to ensure compliance with the policies of the Social Security Administration. II Strengthening Program Protections 201. Pre-effectuation and post-effectuation quality reviews of hearing dispositions (a) Amendments to title II Section 205(b) of the Social Security Act (42 U.S.C. 405(b)) is amended by adding at the end the following: (4) (A) The Commissioner of Social Security shall conduct pre-effectuation and post-effectuation quality reviews of hearing dispositions with respect to decisions in connection with applications for benefits under this title, in a sufficient number to ensure compliance with laws, regulations, and other guidance issued by the Commissioner of Social Security. (B) The Commissioner of Social Security shall annually submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report that includes— (i) the total number of cases selected for a quality review as described in paragraph (1); (ii) the number of such cases in which a decision is remanded; and (iii) the number of such cases in which a decision is modified or reversed. . (b) Amendment to title XVI Section 1633 of the Social Security Act (42 U.S.C. 1383b) is amended by adding at the end the following: (f) (1) The Commissioner of Social Security shall conduct pre-effectuation and post-effectuation quality reviews of hearing dispositions with respect to decisions in connection with applications for benefits under this title, in a sufficient number to ensure compliance with laws, regulations, and other guidance issued by the Commissioner of Social Security. (2) The Commissioner of Social Security shall annually submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report that includes— (A) the total number of cases selected for a quality review as described in paragraph (1); (B) the number of such cases in which a decision is remanded; and (C) the number of such cases in which a decision is modified or reversed. . 202. Uniform qualification standards for disability determination decision makers (a) In general Section 221(k)(1) of the Social Security Act (42 U.S.C. 421(k)(1)) is amended by inserting at the end before the period the following: , including standard qualifications for State and Federal decision makers and medical or vocational advisors involved in the disability determination process. (b) Effective date The regulations required to be issued as a result of the amendment made by paragraph (1) shall become final not later than 1 year after the date of the enactment of this Act. 203. Increased transparency Not later than 180 days after the date of the enactment of this Act and annually thereafter, the Commissioner of Social Security shall produce and make publicly available comprehensive program information to guide disability policy and procedures and to guide accuracy and consistency in decision making, including information relating to productivity, processing time, pending workloads, and decision outcomes with respect to each hearing officer, hearing office, and region and with respect to the disability insurance program as a whole. Such program information shall also include the same data, categorized by office, State, region, and the program as a whole, with respect to each of the following: initial disability determinations; reconsiderations; continuing disability reviews; and reconsiderations of continuing disability reviews. 204. Data exchange standardization (a) In general Section 704 of the Social Security Act (42 U.S.C. 904) is amended by adding at the end the following: (f) Data exchange standards for improved interoperability (1) Designation The Commissioner shall, in consultation with an interagency work group established by the Office of Management and Budget and considering State and other Federal government perspectives, designate data exchange standards to govern, under titles II, VIII, and XVI— (A) necessary categories of information that State agencies operating programs under State plans approved under this part are required under applicable Federal law to electronically exchange with another State agency; and (B) Federal reporting and data exchange required under applicable Federal law. (2) Requirements The data exchange standards required by paragraph (1) shall, to the extent practicable— (A) incorporate a widely accepted, non-proprietary, searchable, computer-readable format, such as the eXtensible Markup Language; (B) contain interoperable standards developed and maintained by intergovernmental partnerships, such as the National Information Exchange Model; (C) incorporate interoperable standards developed and maintained by Federal entities with authority over contracting and financial assistance; (D) be consistent with and implement applicable accounting principles; (E) be implemented in a manner that is cost-effective and improves program efficiency and effectiveness; and (F) be capable of being continually upgraded as necessary. (3) Rule of construction Nothing in this subsection shall be construed to require a change to existing data exchange standards found to be effective and efficient. . (b) Plan for public comment The Commissioner shall issue a plan for public comment on its website within 24 months after the date of the enactment of subsection (a). The plan shall— (1) identify federally required data exchanges, include specification and timing of exchanges to be standardized, and address the factors used in determining whether and when to standardize data exchanges; and (2) specify implementation options and describe future milestones for standardizing data for improved interoperability. III Modernizing Disability Programs 301. Updating of medical-vocational guidelines As soon as possible after the date of the enactment of this Act, the Commissioner of Social Security shall prescribe rules and regulations that update the medical-vocational guidelines, as set forth in appendix 2 to subpart P of part 404 of title 20, Code of Federal Regulations, used in disability determinations, including full consideration of new employment opportunities made possible by advances in treatment, rehabilitation, and technology. 302. Research and demonstration projects Section 1110 of the Social Security Act (42 U.S.C. 1310), as amended by section 202(b), is further amended by adding at the end the following: (e) Research and demonstration projects conducted pursuant to subsection (a)(1) shall include the following: (1) To be completed not later than the end of calendar year 2016, development of instruments to assess function that are rapid, reliable, and objective to inform the disability determination process. (2) To be completed not later than the end of calendar year 2016, studies of the availability and effects of more fully considering assistive devices and workplace accommodations in the disability determination process. (f) (1) Not later than June 9 of each year, the Commissioner shall submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate an annual interim report on the progress of any research, experimental, pilot, and demonstration projects conducted under this section, including, for each such project, project focus, project design, project timeframe (including specific start and end dates), past and estimated future costs, any evaluation progress, and any other related data and materials that the Commissioner may consider appropriate. (2) In the case of any research, experimental, pilot, or demonstration project conducted under this section that is not in effect as of the date of the enactment of the Stop Disability Fraud Act of 2014, such project may not be placed into effect until at least 90 days after the Commissioner submits to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a written report on the project, prepared for purposes of notification and information only and containing a full and complete description of the project, including project focus, project design, project timeframe (including specific start and end dates), estimated costs, and evaluation plan. (3) Each research, experimental, pilot, or demonstration project conducted under this section shall terminate not later than the end date specified in the reports described in paragraphs (1) and (2). . 303. Referrals to vocational rehabilitation or other public or private return-to-work service providers (a) Amendment to title II Section 222 of the Social Security Act (42 U.S.C. 422) is amended by inserting before subsection (c) the following: (a) Referral for Rehabilitation Services (1) The Commissioner of Social Security may make provision for the referral of individuals who are denied benefits under this title based on an adverse determination of disability to an appropriate public or private entity for employment services, vocational rehabilitation services, or other support services. . (b) Amendment to title XVI Section 1615 of such Act (42 U.S.C. 1382d) is amended by inserting after subsection (a) the following: (b) (1) In the case of any individual who has not attained age 65 and is denied benefits under this title based on an adverse determination of disability, the Commissioner of Social Security may make provision for referral of such individual to an appropriate public or private entity for employment services, vocational rehabilitation services, or other support services. . (c) Effective date The amendments made by subsections (a) and (b) shall apply with respect to applications for monthly insurance benefits filed on or after the date that is 180 days after the date of the enactment of this Act. 304. Online benefit assessment tools Not later than 1 year after the date of the enactment of this Act, the Commissioner of Social Security shall make publicly available through the website of the Social Security Administration on-line tools to allow all individuals eligible for benefits based on disability under titles II and XVI of the Social Security Act to assess the impact of earnings on the individual’s eligibility for, and amount of, benefits received through Federal and State benefit programs. IV Other Program Improvements 401. Real property acquired by the Trust Funds (a) In general Section 201(g) of the Social Security Act (42 U.S.C. 401(g)) is amended by adding at the end the following: (5) (A) Notwithstanding any other provision of law, for any real property acquired using funds derived from the Trust Funds— (i) the Managing Trustee shall record such property as an asset of the Trust Fund from which such funds were derived; (ii) any net proceeds from the disposition of such property sold at any time shall be deposited in such Trust Fund, to be invested by the Managing Trustee in the same manner and to the same extent as the other assets of such Trust Fund; and (iii) the use of such real property shall be restricted to purposes of carrying out the duties of the Commissioner as authorized by this Act and any other Federal law. . (b) Prohibition on use of Trust Funds for certain administrative costs Section 201(g)(5) of the Social Security Act (42 U.S.C. 401(g)(5)), as added by subsection (a), is further amended by adding at the end the following: (B) (i) Funds made available for expenditure pursuant to the authorization in this subsection may not be used for the operation and maintenance of real property in amounts that exceed the actual costs of such operation and maintenance, including any amounts for overhead, space and services, repair, replacement, or depreciation. (ii) For purposes of this subparagraph, funds made available for the replacement of the National Computer Center shall be deemed to be funds made available as described in clause (i). . (c) Annual report Section 201(c) of the Social Security Act (42 U.S.C. 401(c)) is amended by inserting after the second sentence in the matter following paragraph (5) the following: Such statement of assets shall include an estimate of the fair market value of all real property recorded as an asset of the Trust Funds at the end of the preceding fiscal year.. (d) Effective date The amendments made by subsection (a) shall apply with respect to real property acquired using funds solely derived from the Trust Funds and disposed of on, before, or after the date of enactment of this Act. 402. Rules relating to distribution of death information furnished to or maintained by the Social Security Administration (a) In general Section 205(r) of the Social Security Act (42 U.S.C. 405(r)) is amended— (1) in paragraph (2), by inserting , and to ensure completeness, timeliness, and accuracy of, after transmitting; (2) by striking paragraph (3) and inserting the following: (3) The Commissioner of Social Security shall, to the extent feasible, provide for the use of information regarding deceased individuals furnished to or maintained by the Commissioner, subject to such safeguards as the Commissioner of Social Security determines are necessary or appropriate to protect the information from unauthorized use or disclosure, to any Federal or State agency providing or administering Federally funded benefits to individuals, other than benefits under this Act, through a cooperative arrangement with such agency designed to ensure proper payment of those benefits with respect to such individuals if— (A) under such arrangement the agency provides reimbursement to the Commissioner of Social Security for the reasonable costs of carrying out such arrangement, including the reasonable costs associated with the collection and maintenance of information regarding deceased individuals furnished to the Commissioner pursuant to paragraph (1); and (B) such arrangement does not conflict with the duties of the Commissioner of Social Security under paragraph (1). ; and (3) in paragraph (4), by inserting or in benefit and pension plans for employees of the States or local governments after by the States. (b) Effective date The amendment made by subsection (a) shall take effect on the date that is 60 days after the date of the enactment of this section. 403. Reconsiderations of disability cessation determinations (a) In general Section 205(b)(2) of the Social Security Act (42 U.S.C. 405(b)(2)) is amended, in the matter following subparagraph (C)— (1) in the second sentence, by striking where the finding was originally made by the State agency, and shall be made by the Commissioner of Social Security where the finding was originally made by the Commissioner of Social Security and inserting regardless of whether the finding was originally made by the State agency or the Commissioner of Social Security; (2) in the third sentence, by striking which was originally made by such State agency; and (3) in the fourth sentence, by striking which was originally made by the Commissioner of Social Security. (b) Effective date The amendments made by subsection (a) shall apply with respect to determinations of disability made on or after the date that is 180 days after the date of the enactment of this Act.