Wall Street Journal Soon to Run Piece on Improper Denials of Disability Claims

March 09, 2015

That’s inevitable, since any fair-minded newspaper that ran a column on improper approvals would surely want to balance it out. For those who missed it, the Wall Street Journal had a column by George Mason economist Mark Warshawsky and his grad student Ross Marchand complaining about a limited number of administrative-law judges who approve disability appeals at a very high rate.

The piece referred back to data from 2008, which showed that 9 percent of Social Security administrative law judges had approval rates of more than 90 percent in a year when the overall approval rate was 70 percent. They conclude that these judges cost the disability program more than $23 billion due to wrongly approved claims.

Clearly there are judges who are too lenient and accept claims that probably should be denied, however there are also judges who are too harsh and reject claims that should probably be approved. In these cases, workers are being denied the insurance benefits for which they have paid.

The Social Security Administration (SSA) analyzed the approval patterns of 12 low-allowance judges over the period from 2010-2013. It found their approval rate increased from 21 to 24 percent over this four year period. During this period the overall approval rate had fallen from 67 to 56 percent, implying gaps of between 32 percentage points and 56 percentage points. Note that the gaps between the overall approval rate and the approval rate of the low-allowance judges is considerably larger than the gap between overall approval rate and the approval rate of the high-allowance judges highlighted in the Wall Street Journal column.

The takeaway is that there are clearly judges who error on the reject side as well as the approval side. It appears that SSA has taken steps to limit unwarranted approvals. It is not clear that measures have been taken to address the problem of judges wrongly denying appeals. We should not want to waste money on undeserving claims, but we also should not want to see workers who are genuinely disabled being denied the benefits for which they have paid. It is far from clear that at present the program errors more in awarding undeserving claims than in denying deserving ones.



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