President-Elect Trump announced the new Department of Government Efficiency (“DOGE”), headed by Elon Musk and Vivek Ramaswamy. Its mission is to give “advice and guidance” to the White House that “will help drive out massive waste and fraud that exists within the federal budget.”
Of course, we all want our government to be efficient, but we also want our government to provide critical social programs such as health care and protection of civil rights. History has taught us inevitably some will try to “game the system.”
However, controls to reduce fraud such as separation of duties, approval protocols, record keeping, review and oversight cost time and money, as do efforts to identify and hold abusers accountable. A complicating factor is some programs, such as health emergencies and disaster relief, require a quick response. If it is slowed down to reduce fraud, it may also result in increased harm to the intended beneficiaries.
It is impossible for government to serve the public without some fraud slipping through. By analogy, our criminal justice system accepts that standards of proof beyond a reasonable doubt will lead to some guilty people going free. However, that is preferable to wrongly convicting an innocent person. The challenge for DOGE is finding the right balance.
What is an Acceptable Level of Fraud?
In April 2024 the Government Accountability Office (“GAO”) reported annual fraud losses between $231 and $521 Billion for the period 2018 to 2022, ranging between 3 to 7 percent of Federal obligations. In healthcare, the fraud is often not caused by patients, but by people and entities who are exploiting them. The government may have overpaid Medicare providers by $25 billion in 2025, and the largest providers being accused of fraud and overbilling. In 2023 the GAO estimated overall pandemic unemployment insurance fraud at 11-15% totaling $100-135 Billion. On the far end of the continuum, the Pandemic Unemployment Assistance program relied on “self-verification” and had an improper payment rate of 35.9%.
The GAO report notes “While every federal program and operation is at risk of fraud, the level of risk can vary substantially,” and “it is not possible to eliminate fraud.” Accordingly, the acceptable level of fraud will vary from program to program depending on a number of factors, especially when the aid is health and/or time sensitive.
What is the Level of Disability Fraud?
Comparatively speaking, disability fraud is low. Former Social Security Administration Commissioner, Michael J. Astrue estimated that less than 1% of disability claims are fraudulent. There are no figures on how much of that comes from providers, as opposed to people falsely claiming a disability (“malingering”). However, many disabled “benefits” are related to things such as removing barriers and increasing access to public places, that have no direct financial benefit to the beneficiary. It seems unlikely many people would pretend to have a disability over a long period of time in order to improve disability access to the library for those who aren’t disabled.
Limits on Standards and Criteria in order to Protect the Disabled
We all support reducing fraud and waste, but there are limits so measures to address it don’t prevent the government from fulfilling legislative mandates. The ADA provides a “clear and comprehensive national mandate for the elimination discrimination against disabled individuals.” 42 U.S.C. § 12101(a)(1). Congress clarified in the ADA Amendment Act that “the primary object of attention in cases…should be whether entities…have complied with their obligations, and…the question of whether an individual’s impairment is a disability under the ADA should not demand extensive analysis.” 42 U.S.C. § 12101(b)(5). The ADA prohibits “utilizing standards, criteria, or methods of administration…that have the effect of discrimination on the basis of disability.” 42 U.S.C. § 12112(b).
There is a real risk in setting qualification standards to identify fraud that unintentionally disqualify people who are the intended beneficiaries. For example, some people with disabilities such as ADHD need additional time for exams. Unfortunately, similar to the Varsity Blues Scandal where students inflated exam scores to get into the college of their choice, it has been widely alleged some students are “faking” ADHD to get extra time. Further complicating a polarizing issue, the two most commonly used tests for malingering are no longer relied upon because their results are too subjective to justify a determination. These sensationalized articles seem to rely on anecdotal tales vs. studies, may overstate the issue and perpetuate misconceptions and discrimination against innocent disabled Americans.
Congress is not naïve and recognizes the broad scope of the ADA also creates the potential for attempted fraud. Good faith, well-meaning efforts to reduce fraud can violate the the ADA if they result in overprotective rules and exclusionary qualifications that unintentionally discriminate against the disabled.
What can DOGE do to Reduce Fraud?
As noted above. the acceptable level of fraud will vary from program to program depending on a number of factors, especially when the aid is health and/or time sensitive. DOGE has a delicate task determining the right policy balance between federal programs fulfilling their mandate and controlling waste and fraud. Controls should be robust without compromising the mission or innocent intended beneficiaries. Holding billion dollar entities who exploit the system accountable with fines and remedial action is an effective tool help reduce fraud, increase efficiency and encourage others to comply. Accountability for high profile individuals who falsely claim injury or disabilities to receive benefits will also help to deter abuse and increase public confidence in responsible government.
In conclusion, although there is room to significantly reduce fraud and waste, we will never completely eradicate it. However, raising qualification standards such that programs are inaccessible is punishing the victims. Let’s hope DOGE doesn’t throw out the baby with the bath water.
Copyright John Drinkwater 2024 All Rights Reserved Turn Up the Quiet TM
Disclaimer: This content is provided for general informational purposes only, and may not reflect the current law in all jurisdictions. No information contained in this post should be construed as legal advice nor is it intended to be a substitute for legal counsel on any subject matter. Readers should consult their own advisor for legal or other advice.