US Healthcare leadership oxymoron 10: insurance companies' games cost Social Security
by Miki SaxonPost from Leadership Turn Image credit: Xurble
If it’s not doctors ripping off Medicare it’s disability insurers jacking up Social Security’s overhead in the name of increasing their profits.
According to the New York Times, “The Social Security system is choking on paperwork and spending millions of dollars a year screening dubious applications for disability benefits, according to lawsuits filed by whistle-blowers…The insurers are forcing many people who file disability claims with them to also apply to Social Security — even people who clearly do not qualify for the government program.”
The insurance companies use the simplest, tried-and-true approach around to ‘force’ the applications—threatening to or actually cutting off benefits.
How great is the cost?
“…it costs $1,180, on average, to process a single Social Security disability application to the first decision, usually a rejection. If the applicant persists through the first three levels — the initial review, a reconsideration and a hearing by an administrative law judge — the case will cost the system an average of $4,759″
Insurance companies refer 2.5 million disability applicants a year; considering just the basic processing cost that’s nearly three billion dollars. And since they insist on multiple appeals the cost is far higher. Plus, the extra load slows processing for the truly disabled.
Do the whistleblowers have a valid case? Seems likely since the expert witness for the plaintiffs is the former top administrator of the Social Security disability program Kenneth D. Nibali.
One way to stop this practice would be for Social Security to bill the insurance companies for processing costs on meritless claims.
A radical idea that would never get past the insurance lobby.
Think a bill-back would help? Have a better idea?
Your comments—priceless
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