Social Security Disability Tests Called Wasteful : Many Exams Held to Be Unneeded; High Doctor Fees for Lab Work Cited

The Social Security Administration may have wasted up to half of the $332 million it spent on medical examinations for disability applicants in the last two years because many exams were unnecessary and physicians ordered needless tests at “exorbitant” prices, congressional investigators charged Wednesday.

Rep. Ted Weiss (D-N. Y.), chairman of the House Government Operations intergovernmental relations subcommittee, accused the Social Security Administration of abusing the use of consultative medical examinations, in which a private physician is employed to examine patients and determine the severity of their disabilities.

“Congress intended Social Security officials and state disability examiners to rely on medical histories provided by claimants’ own doctors,” Weiss said at a hearing called to examine the problem.

High Cost of Exams

“Consultative examinations should only be used when the patient’s medical history is unreliable or unavailable,” Weiss continued. “Yet, consultative examinations are purchased by Social Security in 40% to 50% of claims at a cost to the federal government expected to be $203 million in fiscal year 1986.”

Furthermore, physicians who order diagnostic tests often charge “exorbitant” markups--as much as 500%--for laboratory work and pocket the difference, according to a subcommittee aide. States set a maximum amount that may be charged for a specific procedure, and doctors will bill the government for that amount “even when the lab charges the doctor considerably less,” said the aide, who did not wish to be identified.

He added: “Such profiteering is perfectly legal. But it’s immoral from the standpoint of medical ethics. Doctors shouldn’t be making huge profits on test results for destitute people. And the Social Security Administration shouldn’t allow it to happen. The agency is extremely zealous and vigorous about removing people from the disability rolls--but they’re extremely soft on the doctors doing the examinations that lead to their removal.”

The subcommittee released also a report on the subject conducted by the General Accounting Office, the investigative arm of Congress.

Reviews to Be Resumed

It was the latest development in the controversy that has surrounded the disability review program. Last week, the federal government announced that it will resume reviews of 2.6 million persons to determine if they should continue receiving monthly disability checks. The eligibility reviews were suspended in 1984 after complaints from Congress and the public that the Reagan Administration was arbitrarily removing recipients from the benefit rolls.

Patricia M. Owens, the Social Security Administration’s associate commissioner for disability, told the lawmakers Wednesday that in September the Social Security Administration notified its regional offices and the states that it intends to develop new initiatives to “provide additional means of identifying and reducing unnecessary (consultative examination) requests.”

Subcommittee investigators estimated that unnecessary tests were performed on 30% to 50% of all disability applicants, patients who asserted that they could not work because of physical or mental ailments, the aide said.

The GAO report, citing studies made in four states, said that 8% to 23% of consultative examinations “were either unnecessary or of a wrong type.” From 10% to 28% might not have been needed “had more effort been made to obtain evidence from claimants’ treating sources,” it said.

“We believe there is a potential for similar problems in other states, based on our discussions with . . . officials,” the GAO said.