Tighter Scrutiny Needed for Railroad Disability Claims, GAO Says
Posted at 5:19 p.m. on July 30, 2014
The Railroad Retirement Board, which administers the retirement and disability system for railroad workers and dates back to the 1930s, paid $276 million in disability benefits to nearly 13,000 beneficiaries in fiscal 2012. But the Government Accountability Office said this week that the RRB needs to tighten its scrutiny of disability claims.
The GAO report said “the procedures RRB uses to verify a claimant’s work and earnings and the severity and duration of physical or mental impairments are inadequate” to ensure that only truly disabled people collect benefits.
The GAO said in its investigation it interviewed one RRB district manager who said that “even when faced with obvious patterns of potentially fraudulent activity in the past, claims representatives had no mechanism by which to flag the issue and generally have not been encouraged to do so.”
The backdrop for this report: the scandal that played out starting in 2008 when the New York Times and federal prosecutors discovered that as many as 1,500 former Long Island Rail Road workers may have falsely claimed RRB benefits. If paid in full those benefits “could total more than $1 billion — exceeding the total amount of benefits paid to all claimants in fiscal year 2012….”
The Times reported in 2012 that “Prosecutors have said many of those who claimed they were too disabled to work nonetheless had robust hobbies, including biking, golf and tennis.”
The GAO report said 28 individuals in the LIRR scandal pled guilty and five were convicted in federal court, with about $400 million paid in restitution and forfeiture.
But the report said the RRB has made not made enough of an effort to “identify and prevent potential fraud program-wide even after the high-profile LIRR incident exposed fraud as a key program risk.”