Disability Insurance
SSA Should Strengthen Its Efforts to Detect and Prevent Overpayments Gao ID: GAO-04-929 September 10, 2004The Social Security Administration's (SSA) Disability Insurance (DI) program is one of the nation's largest cash assistance programs for disabled workers. In fiscal year 2003, the DI program provided about $70 billion in financial assistance to approximately 7.5 million disabled workers, their spouses, and dependent children. This program has grown in recent years and is poised to grow further as the baby boom generation ages. The Senate Committee on Finance asked GAO to (1) determine the amount of overpayments in the DI program, particularly those attributable to earnings or work activity, and (2) identify any vulnerabilities in SSA's processes and policies for verifying earnings that may contribute to work-related overpayments.
Overpayment detections in the DI program increased from $772 million in fiscal year 1999 to about $990 million in 2003. The true extent of overpayments resulting from earnings that exceed agency guidelines is currently unknown. Based on available data from SSA, GAO found that about 31 percent of all DI overpayments are attributable to DI beneficiaries who worked and earned more than allowed. Moreover, GAO found that these overpayments contributed to mounting financial losses in the program. From 1999 to 2003, total overpayment debt increased from about $1.9 billion to nearly $3 billion. Three basic weaknesses impede SSA's ability to prevent and detect earnings-related overpayments. First, the agency lacks timely data on beneficiaries' earnings and work activity. Second, SSA uses inefficient processes to perform work continuing disability reviews (work CDRs). Third, the agency relies on potentially inaccurate management information to effectively monitor and oversee some parts of this workload. These weaknesses contributed to some work CDR cases GAO identified that were as much as 7 years old, resulting in potential and established overpayments as large as $105,000 per beneficiary. In addition, GAO found that SSA relies on potentially inaccurate management information to administer its work CDR workload. SSA is developing new automated systems that may potentially address some of these problems and could help the agency balance the important goals of encouraging individuals with disabilities return to work, while also ensuring program integrity. However, it is too early to determine how effective such systems will be.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-04-929, Disability Insurance: SSA Should Strengthen Its Efforts to Detect and Prevent Overpayments
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GAO:
September 2004:
Disability Insurance:
SSA Should Strengthen Its Efforts to Detect and Prevent Overpayments:
GAO-04-929:
GAO Highlights:
Highlights of GAO-04-929, a report to the Chairman, Committee on
Finance, U.S. Senate:
Why GAO Did This Study:
The Social Security Administration‘s (SSA) Disability Insurance (DI)
program is one of the nation‘s largest cash assistance programs for
disabled workers. In fiscal year 2003, the DI program provided about
$70 billion in financial assistance to approximately 7.5 million
disabled workers, their spouses, and dependent children. This program
has grown in recent years and is poised to grow further as the baby
boom generation ages. The Senate Committee on Finance asked GAO to (1)
determine the amount of overpayments in the DI program, particularly
those attributable to earnings or work activity, and (2) identify any
vulnerabilities in SSA‘s processes and policies for verifying earnings
that may contribute to work-related overpayments.
What GAO Found:
Overpayment detections in the DI program increased from $772 million in
fiscal year 1999 to about $990 million in 2003. The true extent of
overpayments resulting from earnings that exceed agency guidelines is
currently unknown. Based on available data from SSA, GAO found that
about 31 percent of all DI overpayments are attributable to DI
beneficiaries who worked and earned more than allowed. Moreover, GAO
found that these overpayments contributed to mounting financial losses
in the program. From 1999 to 2003, total overpayment debt increased
from about $1.9 billion to nearly $3 billion.
Three basic weaknesses impede SSA‘s ability to prevent and detect
earnings-related overpayments. First, the agency lacks timely data on
beneficiaries‘ earnings and work activity. Second, SSA uses inefficient
processes to perform work continuing disability reviews (work CDRs).
Third, the agency relies on potentially inaccurate management
information to effectively monitor and oversee some parts of this
workload. These weaknesses contributed to some work CDR cases GAO
identified that were as much as 7 years old, resulting in potential
and established overpayments as large as $105,000 per beneficiary. In
addition, GAO found that SSA relies on potentially inaccurate
management information to administer its work CDR workload. SSA is
developing new automated systems that may potentially address some of
these problems and could help the agency balance the important goals of
encouraging individuals with disabilities return to work, while also
ensuring program integrity. However, it is too early to determine how
effective such systems will be.
Total Overpayment Debt Is Increasing (1999–2003):
[See PDF for image]
[End of figure]
What GAO Recommends:
GAO is making recommendations to the Commissioner of Social Security
directing the agency to explore new tools and data sources that can be
used to more effectively detect and prevent earnings-related
overpayments. SSA agreed with GAO‘s recommendations and provided
information on several initiatives that are planned or underway to
address them, such as a new computer match using information from the
Office of Child Support Enforcement‘s National Directory of New Hires
to verify beneficiaries‘ earnings in a more timely manner.
www.gao.gov/cgi-bin/getrpt?GAO-04-929.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Robert E. Robertson at
(202) 512-7215 or robertsonr@gao.gov.
[End of section]
United States Government Accountability Office:
Report to the Chairman, Committee on Finance, U.S. Senate:
Contents:
Letter:
Results in Brief:
Background:
Overpayments in the DI Program Are Substantial and Have Increased in
Recent Years:
Lack of Timely Data on Beneficiary Earnings and Other Vulnerabilities
Impede SSA's Ability to Detect and Prevent DI Overpayments:
Conclusions:
Recommendations:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Comments from the Social Security Administration:
Appendix III: GAO Contacts and Staff Acknowledgment:
GAO Contacts:
Staff Acknowledgments:
Related GAO Products:
Figures:
Figure 1: Total DI Overpayment Detections Have Increased (1999-2003):
Figure 2: Total Overpayment Debt Is Increasing (1999-2003):
Abbreviations:
CDR: continuing disability review:
DDS: Disability Determination Service:
DI: Disability Insurance:
IRS: Internal Revenue Service:
NDNH: National Directory of New Hires:
OCO: Office of Central Operations:
OCSE: Office of Child Support Enforcement:
OIG: Office of Inspector General:
PSC: Program Service Center:
SSA: Social Security Administration:
SGA: substantial gainful activity:
SSI: Supplemental Security Income:
United States Government Accountability Office:
Washington, DC 20548:
September 10, 2004:
The Honorable Charles E. Grassley:
Chairman, Committee on Finance:
United States Senate:
Dear Mr. Chairman:
The Social Security Administration's (SSA) Disability Insurance (DI)
program is one of the nation's largest cash assistance programs for
disabled workers. In fiscal year 2003, the DI program provided about
$70 billion in financial assistance to approximately 7.5 million
disabled workers, their spouses, and dependent children. This program
has grown in recent years and is poised to grow further as the baby
boom generation ages. Given the concerns about the long-term solvency
of the DI trust fund, it is important for SSA to ensure that only truly
eligible individuals receive benefits.
SSA guidelines state that DI beneficiaries are permitted to earn up to
$810 per month in calendar year 2004--a level of earnings referred to
as substantial gainful activity (SGA)[Footnote 1]--for a limited period
of time without losing eligibility for benefits. After completing a 9-
month "trial work period," beneficiaries who earn more than SGA are
generally ineligible for future DI payments, and may be overpaid if SSA
does not stop their benefits in a timely manner. The potential of
having to repay a large overpayment may discourage some beneficiaries
from continuing to work, thus running contrary to SSA's goal of helping
such individuals become self-sufficient. SSA conducts continuing
disability reviews (CDR) of beneficiaries' earnings and work activity
to determine whether a claimant remains financially eligible for DI
benefits.[Footnote 2] The agency refers to these reviews as "work
CDRs." These reviews generally require SSA staff to perform several
steps to assess beneficiaries' continuing eligibility for benefits,
including mailing notices to beneficiaries requesting information about
their work activity, contacting the beneficiaries' employer(s) to
verify their monthly earnings, and assessing several variables that can
affect eligibility, including employer subsidies and work-related
expenses.
Given the importance of verifying DI beneficiaries' earnings to ensure
they receive the correct amount of benefits, the Senate Committee on
Finance asked us to (1) determine the amount of overpayments in the DI
program, particularly those attributable to earnings or work activity,
and (2) identify any vulnerabilities in SSA's processes and policies
for verifying earnings that may contribute to work-related
overpayments. To answer these questions, we used an approach similar to
the methodology in our prior reviews of SSA's Supplemental Security
Income (SSI) program[Footnote 3]. In particular, we reviewed DI
performance data, prior reports by SSA and its Office of Inspector
General (OIG), external research studies, and our prior reviews on the
program. We analyzed DI payment data over a 5-year period from 1999 to
2003 and examined between 5 and 7 work CDR cases from each of the SSA
field offices and program service centers we visited. In addition, we
randomly selected and reviewed 71 work CDR cases from one of SSA's
program service centers to determine if they were processed in
accordance with program guidelines. Finally, we conducted in-depth
interviews with 230 management and line staff from SSA's headquarters;
its regional offices in New York and San Francisco; 18 field offices in
6 states--California, Florida, Maryland, Massachusetts, New York, and
Virginia; and 3 out of 8 regional program service center[Footnote 4]s.
During our meetings, we (1) examined existing work CDR procedures; (2)
documented management and staff views on the effectiveness of SSA's
work CDR processes for detecting and preventing earnings-related
overpayments; and (3) discussed potential improvements to existing
program processes, systems, and policies. We assessed the reliability
of all databases used in our review, and found them to be sufficiently
reliable for the purposes of this report. See appendix I for details on
the scope and methodology of our review. We performed our work from
September 2003 through June 2004 in accordance with generally accepted
government auditing standards.
Results in Brief:
Overpayment detections in the DI program increased from about
$772 million in fiscal year 1999 to about $990 million in 2003. The
true extent of overpayments resulting from earnings that exceed agency
guidelines is currently unknown, but could be higher than available
data indicate. On the basis of data from a recent SSA study, we
estimate that about 31 percent of all DI overpayments are attributable
to DI beneficiaries who worked and earned more than SGA. Moreover, we
found that these overpayments contributed to mounting overpayment debt,
which increased from about $1.9 billion to nearly $3 billion during the
same period. Although SSA increased overpayment collections during this
time, our analysis shows that overpayment waivers (overpayments that
SSA decides not to collect) and write-offs (overpayments that SSA
determines cannot be collected) also increased. Thus, financial losses
are mounting, contributing to a widening gap between total overpayment
debt and annual overpayment collections.
Three basic weaknesses impede SSA's ability to prevent and detect
earnings-related overpayments: The agency (1) lacks timely data on
beneficiaries' earnings and work activity, (2) uses inefficient
processes to perform work CDRs, and (3) relies on potentially
inaccurate management information to manage a portion of its work CDR
workload. First, SSA's main source of earnings verification for the DI
program is derived from matching its own earnings database with
Internal Revenue Service (IRS) wage data, which is typically 12-18
months old when it is first available to SSA. The agency does not
currently have the authority to conduct computer matches with the
Office of Child Support Enforcement's National Directory of New Hires-
-a database with more timely wage information. Second, SSA uses
inefficient processes to perform work CDRs. In particular, the agency
lacks an effective screen to help identify cases most likely to result
in large overpayments. Nor does the agency have an automated alert
system that could notify field offices and program service centers
about cases at high-risk for overpayments. Finally, SSA relies on
potentially inaccurate management information to effectively
administer its CDR workload. In particular, its data may not accurately
reflect the age and disposition of its work CDR workload, or the time
it actually takes to process them. These vulnerabilities may contribute
to the "old" cases we identified in many SSA field offices, some of
which were as much as 7 years old, resulting in large individual
overpayments totaling between $28,000 and $105,000. Moreover, we found
that SSA has difficulty balancing competing workloads--particularly in
its field offices where staff resources are limited and staff have
numerous different duties--that may contribute to some of the old cases
we observed. SSA is developing new automated systems that could
potentially address some of these problems by helping the agency manage
its disability workload more efficiently, but it is too early to
determine if these initiatives will address the weaknesses we
identified.
Work CDRs can be complex and time-consuming for SSA staff to perform.
We recognize that ensuring program integrity while focusing on the
important goal of returning individuals with disabilities to work
presents additional challenges for SSA. However, there are several
areas where we believe SSA can make improvements. Accordingly, we are
recommending that the Commissioner of Social Security direct the agency
to explore new tools and more timely data sources that can be used to
more effectively detect and prevent earnings-related overpayments.
SSA agreed with our recommendations and provided information on several
initiatives that are planned or underway to address them.
Background:
The DI program was established in 1956 to provide monthly cash benefits
to individuals who were unable to work because of severe long-term
disability. In fiscal year 2003, SSA paid about $70 billion to 7.5
million disabled workers, their spouses, and dependents, with average
monthly cash benefits of about $723 per beneficiary.[Footnote 5] To be
eligible for benefits, individuals with disabilities must have a
specified number of recent work credits under Social Security when they
first became disabled. Individuals may also be able to qualify based on
the work record of a deceased, retired, or disabled parent, or a
deceased spouse. Benefits are financed by payroll taxes paid into the
Federal Disability Insurance Trust Fund by covered workers and their
employers, based on the worker's earnings history. To meet the
definition of disability under the DI program, an individual must have
a medically determinable physical or mental impairment that (1) has
lasted or is expected to last at least 1 year or to result in death and
(2) prevents the individual from engaging in substantial gainful
activity. Individuals are engaged in SGA if they have earnings above
$810 per month in calendar year 2004.[Footnote 6] Program guidelines
require DI beneficiaries to report their earnings to SSA in a timely
manner in order to ensure that they remain eligible for benefits.
SSA conducts work issue CDRs to determine if beneficiaries are working
above the SGA level.[Footnote 7] SSA initiates a work CDR only after
the beneficiary has completed a 9-month trial work period, during which
the beneficiary is allowed to earn more than the SGA level without
affecting their eligibility for benefits.[Footnote 8] The trial work
period is one of several provisions in the DI program intended to
encourage beneficiaries to return to work. The trial work period begins
with the first month a beneficiary is eligible for DI benefits. Once
the trial work period is completed, beneficiaries are generally
ineligible for future DI benefits unless their earnings fall below the
SGA level.[Footnote 9]
Work CDRs are triggered by several types of events, although most are
generated by SSA's Continuing Disability Review Enforcement Operation
(enforcement operation). This process involves periodic computer
matches between SSA's administrative data and IRS wage data. The
enforcement operation generates notices for cases that exceed specified
earnings thresholds,[Footnote 10] which are forwarded to 1 of 8 program
service centers for additional examination.[Footnote 11] The cases at
each program service center are then temporarily housed in a central
repository (called the computer output section) and are released to
"earnings reviewers" for development of work activities. Cases are
generally released for development on a first-in-first-out basis, based
on how long they have been in the central repository, and according to
staff workloads. After initial review, cases for which individuals may
require cessation of benefits are generally forwarded to a "disability
processing specialist" for additional development.[Footnote 12]
Work CDRs can also be triggered by other events. For example, SSA
requires beneficiaries to undergo periodic medical examinations to
assess whether they continue to be physically disabled.[Footnote 13]
During such reviews, Disability Determination Service staff sometimes
discover evidence that indicates the beneficiary may be working and
usually forwards the case to an SSA field office or program service
center for earnings/work development. Additional events that may
trigger a work CDR include reports from state vocational rehabilitation
agencies, other federal agencies, and anonymous tips. Finally, DI
beneficiaries may voluntarily report their earnings to SSA by visiting
an SSA field office, or calling the agency's toll free "800" number.
Several SSA components are involved in processing work CDRs. While most
are initially sent to SSA's program service centers as a result of the
enforcement operation, some cases are referred to any one of SSA's more
than 1,300 field offices for more in-depth development. Field offices
also tend to be the focal points for work CDRs generated by events
other than the enforcement operation. Work CDRs can entail labor-
intensive, time-consuming procedures such as reviewing folders,
performing in-person interviews, and contacting beneficiaries and their
employers to verify their monthly earnings. Staff are also required to
take into consideration several complex work incentive provisions when
calculating whether earnings exceed SGA.[Footnote 14] In addition,
staff--particularly in SSA field offices--are also required to balance
numerous competing workloads, including processing initial claims,
serving individuals who walk into the field office without an
appointment, meeting with beneficiaries who have requested an
appointment, and processing a "special disability workload."[Footnote
15]
Overpayments in the DI Program Are Substantial and Have Increased in
Recent Years:
DI overpayment detections increased from about $772 million to about
$990 million between fiscal years 1999 and 2003. These overpayments
included a substantial amount due to beneficiaries who worked and
earned more than SGA. Our analysis of available overpayment data shows
that, on average, beneficiaries with earnings over program guidelines
constitute about 31 percent of all DI overpayments. These overpayments
also contributed to mounting financial losses in the DI program. Total
overpayment debt increased from about $1.9 billion to nearly $3 billion
from fiscal years 1999 to 2003. SSA overpayment collections increased
from about $269 million to about $431 million during the same period.
However, our analysis shows that waivers and write-offs also increased
during this period.
Overpayments Due to Beneficiary Earnings above SGA May Be More
Prevalent than SSA Currently Detects:
Total DI overpayment detections increased from about $772 million to
about $990 million between fiscal year 1999 to 2003 (see fig. 1)
including a substantial proportion due to beneficiary
earnings.[Footnote 16] On the basis of data in a recent study from SSA,
we calculated that overpayments attributable to work and earnings
averaged about 31 percent of all DI overpayments annually between 1999
and 2002. We consulted SSA officials about our calculations to
determine if they were accurate. These officials agreed that the
estimate is generally accurate based on limited available data, but
likely understates the true extent of the problem. In particular, SSA
officials acknowledged that their study only examined beneficiaries who
had their benefits suspended or terminated following a work CDR; it did
not consider individuals who may have been overpaid but continued to
receive benefits. A beneficiary may be overpaid, but not placed in
suspended or terminated status because (1) SSA waived the overpayment,
(2) the case was still being processed, or (3) the individual became
unemployed and returned to the DI rolls. Our review identified several
such cases in numerous field offices. For example, one case we examined
involved a beneficiary who was selected for review by the enforcement
operation every year from 1998 to 2001. Other than notations on the
individual's account that the case was selected for review, there was
no evidence that a work CDR was ever conducted. In February 2003,
program service center staff transferred the case to a field office to
have the recipient's earnings reviewed. However, field office staff
were unable to contact the recipient and the case was transferred back
to the program service center in August 2003. As of March 2004, the
case was still being reviewed and waiting final SSA action. SSA
officials told us that this individual should have had an overpayment
listed for the time between December 1999 and September 2001. However,
at the time of our review, no overpayment had yet been established and,
therefore did not appear in SSA's overpayment detection data for those
years. Ultimately, we estimate that this case will likely result in a
$64,000 overpayment once it is fully developed and completed.
Figure 1: Total DI Overpayment Detections Have Increased (1999-2003):
[See PDF for image]
[End of figure]
Although SSA Has Improved Its Collection Efforts, Financial Losses Are
Mounting:
The increase in DI overpayments from 1999 to 2003 has contributed to
mounting financial losses in the program. Total DI overpayment
debt[Footnote 17] increased from about $1.9 billion in 1999 to nearly
$3 billion in 2003. During this same period, SSA's overpayment
collections increased from about $269 million to about $431 million.
Agency officials attributed the increase in collections in part to new
initiatives they have made use of. For example, SSA has conducted debt
management workshops to (1) develop new ideas on collecting the
agency's mounting outstanding debt and (2) identify and prioritize debt
that the agency should concentrate on collecting. In addition, SSA is
in the process of developing new collection tools, such as wage
garnishment to recoup overpayments, and has published final regulations
to implement this tool.[Footnote 18] However, these improvements
notwithstanding, the total overpayment debt is increasing. (See fig.
2.)
Figure 2: Total Overpayment Debt Is Increasing (1999-2003):
[See PDF for image]
[End of figure]
Increases in waivers and write-offs[Footnote 19] during this period
have also contributed, in part, to the DI program's growing overpayment
debt. SSA must waive collection of an overpayment if SSA determines
that the beneficiary was not at fault in causing the overpayment and
either the beneficiary would be financially unable to repay the
overpayment or recovery would be against equity and good conscience.
The agency may also write-off overpayments for various reasons,
including when the agency is unable to locate an individual for a
prolonged period of time. Waivers and write-offs increased from about
$222 million in 1999 to about $325 million in 2003. The increase in
waivers and write-offs is attributable, in part, to increases in total
program outlays during this period.[Footnote 20] Ultimately, our review
suggests that overpayments not only contribute to increasing
overpayment debt, but also may be a disincentive for individuals with
disabilities to return to work. In particular, the potential of having
to repay a large overpayment may discourage some beneficiaries from
continuing to work, thus running contrary to SSA's goal of helping such
individuals become self-sufficient.
Lack of Timely Data on Beneficiary Earnings and Other Vulnerabilities
Impede SSA's Ability to Detect and Prevent DI Overpayments:
SSA's ability to detect and prevent earnings-related overpayments is
hindered by a lack of timely wage data, inefficient processes for
conducting work CDRs, and potentially inaccurate management
information. First, the earnings data produced by the enforcement
operation are typically 12-18 months old when SSA first receives it,
thus making some overpayments inevitable. Second, SSA lacks the means
to systematically screen and identify beneficiaries most likely to
incur large overpayments. Moreover, even if such a screen existed, SSA
currently lacks an automated alert mechanism for notifying its field
office and program service center staff about such cases. Third, SSA
relies on management information data that may not accurately reflect
the age of work CDR cases--the time it actually takes to review and
complete them. Inaccurate management data can impede the agency's
ability to effectively monitor program activities and make corrections,
when necessary. These weaknesses may contribute to some cases becoming
old and resulting in large overpayments. We identified several cases in
which as much as 7 years had passed between the point at which the case
was initially selected for development and the time it was completed.
SSA Lacks Timely Data to Detect Overpayments:
SSA currently relies on outdated information to verify DI
beneficiaries' eligibility for benefits.[Footnote 21] The agency
conducts periodic matches between its earnings records and IRS wage
data to determine if beneficiaries have earnings above the SGA level.
The Continuing Disability Review Enforcement Operation (enforcement
operation) is generally conducted three times annually--a principal
match in May, and two supplemental matches in August, and February of
the following year. According to some SSA officials, earnings data from
the enforcement operation are generally about 12-18 months old by the
time the cases are selected for review and arrive in the program
service center. SSA officials told us that the age of the earnings data
impedes the agency's ability to effectively detect potential
overpayments in a timely manner. Moreover, because a substantial
proportion of all work CDRs in any given year are generated by these
enforcement matches, a large proportion of this workload is dependent
on outdated earnings information. Thus, some cases with potentially
large overpayments may not be detected for extended periods of time.
SSA lacks access to more timely sources of wage data for verifying DI
beneficiaries' earnings, such as the Office of Child Support
Enforcement's National Directory of New Hires (NDNH). This database
contains quarterly state wage and new hires data that could be used to
help evaluate beneficiaries' continuing eligibility for benefits more
quickly than the enforcement operation. While SSA currently uses this
database to periodically monitor the earnings of SSI recipients, it
lacks similar authority for the DI program. In particular, SSA
currently lacks the authority to conduct "batch file" computer
matches[Footnote 22] with the NDNH---similar to the types of matches it
routinely uses to verify SSI recipients' continuing eligibility for
benefits. Although the agency recently obtained "online access" to the
NDNH for the DI program, this type of access only allows SSA to obtain
wage data on case-by-case basis; it does not permit the agency to
systematically match all DI beneficiaries against the NDNH to identify
those with high levels of earnings--a potentially valuable, cost-
effective means of identifying beneficiaries who may be at risk for
large overpayments.
SSA Lacks an Effective Screening Mechanism to Identify Cases Most
Likely to Incur Large Overpayments:
The agency lacks the means to identify beneficiaries who are most
likely to incur large overpayments. SSA currently uses the enforcement
operation to select individuals with more than $4,860 in annual
earnings for a work CDR. While periodic computer matches with the NDNH
would help provide more timely, comprehensive earnings data to SSA,
some SSA officials told us that the agency would still need the ability
to systematically screen the cases to identify those at high-risk for
large overpayments. The agency currently uses a screen for its medical
CDR reviews, which helps the agency identify beneficiaries who are most
(or least) likely to have medically improved.[Footnote 23] This screen
helps SSA prioritize the use of limited staff resources by scheduling
beneficiaries who are identified as least likely to improve for less
frequent medical CDRs, and using forms that are periodically mailed to
them requesting information on their medical condition. While our prior
work has identified some problems with this screening
mechanism,[Footnote 24] in general SSA believes that, in many
instances, it helps the agency mitigate the need for costly, time-
consuming medical examinations that may not be necessary. However, the
agency does not currently have a similar tool for its work CDRs to
identify beneficiaries with high levels of earnings or other
characteristics that may contribute to large overpayments.
One program service center we visited is considering the use of a
screen that would give higher priority to developing cases for
beneficiaries with higher earnings, and thus the potential for larger
overpayments.[Footnote 25] Some SSA officials we interviewed told us
that such a screen would help the agency prioritize this workload and
make better use of limited resources, particularly in field offices
where staff are often constrained by several competing workloads, such
as processing initial claims. Further, one official in this program
service center told us some of the other program centers were
considering implementing this screen.
Even if a screen existed that would allow SSA to identify cases with
the greatest potential for large overpayments, the agency still lacks a
timely alert mechanism to notify field offices and program service
centers about such cases.[Footnote 26] According to some SSA officials,
such a mechanism, if created, could allow the agency to quickly notify
field offices and program service centers about cases that have been
identified as high-priority for work CDRs. SSA currently uses an alert
mechanism in its SSI program to rapidly notify field offices about
recipients with high levels of earnings or other factors that may
affect their eligibility for benefits. These alerts are generated
centrally from SSA's match with the NDNH and sent electronically to
field office staff, telling them which recipients should have their
cases reviewed. However, a similar alert system does not currently
exist in the DI program. Instead, SSA field offices rely on daily
workload management listings of potential work CDR cases that are
relayed via existing agency systems. These lists summarize the cases
that are awaiting review, including the "age" of the case. On the basis
of such lists obtained from several field offices, we found that half
of the cases were at least 117 days old. Moreover, cases that were
transferred from program service centers were generally older--some
were listed as being 999 days old. In addition, because the data field
for measuring the age of cases on the workload management lists only
holds a maximum of 3 characters, SSA officials told us that these cases
were likely older than indicated on the lists. In addition, we found
that these lists do not allow managers to identify cases with the
greatest potential for overpayments. As a result, staff generally
review cases as they are released by managers to be developed. While
some managers and staff we interviewed told us that they make a
concerted effort to review the oldest cases first, others told us that
they generally process the cases on a "first-in-first-out" basis, which
is not necessarily related to the age of the case.
Weaknesses in SSA's Management Information Hinder Its Ability to
Effectively Monitor Work CDR's:
Our review suggests that SSA relies on potentially inaccurate data to
manage its work CDR workload. In particular, our work shows that high-
level management information data on the age of work CDR cases may not
accurately reflect the true age of cases (i.e. the actual time it took
to complete these cases) and may result in cases being counted more
than once, thus distorting the information that SSA relies on to
measure the number of cases that are reviewed and completed. To test
the accuracy of high-level management data for this workload, we
conducted an in-depth examination of 71 randomly selected
cases[Footnote 27] that were "cleared" from SSA's Processing Center
Action Control System[Footnote 28] (the system) during a 1-week period
in April 2004. On the basis of our sample we estimate that, overall, 49
percent[Footnote 29] of these cases were improperly cleared from this
system. This means that the cases were listed as having been fully
reviewed and completed, when in fact they still required additional
development. Improperly cleared cases can have several negative impacts
according to SSA officials, including the potential for contributing to
large overpayments. For example, on the basis of our sample, we
estimate that 13 percent of the cases were improperly cleared from the
system because they were not fully developed and did not have a "diary"
attached to them--an automated notice that reminds staff to review the
case after a specified period of time. Such cases might not be selected
for review again until the next enforcement match--which could be as
much as 1 year--and result in overpayments if the beneficiary had
earnings that exceeded the SGA level. Most importantly, because they
did not have a diary, SSA did not have any way of monitoring these
cases or ensuring that they were properly completed. This weakness may
partially explain the type of old cases with large overpayments we
identified in several SSA field offices.
In addition to the cases without any diary, an estimated 37
percent[Footnote 30] of the cases were incorrectly shown as cleared
while still being developed in various locations such as field
offices.[Footnote 31] Although these cases had a diary--thus giving SSA
some level of internal control over them--our analysis shows they could
still result in management information that does not show the true age
of work CDR cases. More specifically, these types of cases would likely
result in management information that understates the true age of such
cases, and would distort the overall measurement of progress in
handling work CDR workloads. Such cases could also result in the double
counting of work CDRs. For example, if a single case was cleared in the
program center and subsequently developed and cleared in a field
office, it could be incorrectly listed as two separate work CDRs. SSA
officials also acknowledged that some of the cases we reviewed which
showed indications of being cleared multiple times could result in
their being counted as numerous separate work CDRs. Thus, existing
high-level management data may not accurately capture how many work
CDRs have actually been completed.
We also found that SSA does not currently have the capability to track
the disposition of work CDR cases. For example, the agency is unable to
systematically track how many work CDR cases involve overpayments.
Because it lacks sufficient management information data on this
workload, the agency also does not have performance goals for work CDRs
similar to measures it maintains for its medical CDR workloads, such as
the number of work CDRs that should be completed each year. Moreover,
given the problems we identified with potential double or multiple
counting of work CDR cases, it is unclear whether SSA could establish
meaningful performance goals at this time.
Identified Vulnerabilities Contribute to Some Large Overpayments:
The vulnerabilities we identified have likely contributed to old work
CDR cases and large earnings-related overpayments in the DI program. We
identified several examples of cases that took years to develop and
complete. Some of these cases were as much as 7 years old and involved
large overpayments. The following are examples of some of these cases:
* One case we observed was initially selected for review in 1997 by the
enforcement operation. Although the recipient's benefits should have
been discontinued in 1997 according to SSA officials, payments
continued until March 2000. Agency officials could not explain why no
action was taken on this case between 1997 and 2000. As a result, this
beneficiary incurred a $28,000 overpayment.
* Another case was selected for review each year from 1997 to 2001 by
the enforcement operation. However, there was no evidence in the file
that a work CDR was conducted until February 2004, and SSA officials
were unable to explain why no action was taken after several
consecutive enforcement matches. This beneficiary incurred an estimated
$105,000 overpayment between April 1997 and December 2003.
* Another case involved a beneficiary who had earnings well above SGA
in 1998 when they first became eligible for DI benefits. However, the
case only arrived in the field office for action in March 2003. SSA
discontinued the recipient's benefits in 2003, but SSA officials could
not explain why the case took 5 years to arrive at the field office for
action. As a result, the recipient incurred a $32,000 overpayment.
* An additional case we identified involved a beneficiary with earnings
well above SGA for several years and who incurred a prior earnings-
related overpayment. SSA subsequently waived the overpayment. However,
the recipient continued to work without reporting the earnings to SSA.
The agency eventually discontinued the individual's benefits in
September 2003. At the time of our review, SSA officials estimated that
the beneficiary had incurred a $102,000 overpayment.
Further compounding the vulnerabilities that contribute to aged cases
and large overpayments, our review suggests that SSA has difficulty
balancing competing workloads. In particular, SSA field office staff
are required to perform numerous duties, including processing initial
claims, serving individuals who walk into the field office without an
appointment, meeting with beneficiaries who have requested an
appointment, and processing the "special disability workload." Many
managers and staff we interviewed told us that work CDRs generally
receive lower priority than some of these other activities, such as
processing initial claims. In several offices we visited, we observed
lists of pending work CDRs, sometimes stored in file cabinets for
extended periods of time.
SSA is currently implementing a new automated system that may address
some of the vulnerabilities we identified. This system, called "eWork,"
is intended to simplify how SSA manages and processes its disability
cases. In particular, according to documentation provided by SSA, this
system will establish program controls for all work CDR cases and help
the agency identify higher priority cases. Once fully implemented,
eWork will combine data from several different SSA databases and will
automate the processing of numerous forms commonly used in developing
and documenting disability cases, according to SSA. One field office we
visited was piloting this system. Management and staff in this office
generally reported that the system was an improvement over existing
systems. In particular, officials reported that the system was useful
in helping them track the age of work CDR cases, especially older cases
that should potentially receive higher priority. Overall, SSA
management and line staff expressed confidence that this new system
will improve the agency's ability manage its disability cases,
including work CDRs. However, because the system is new and is not yet
fully implemented nationwide, we were unable to evaluate how effective
it may be for addressing some of the weaknesses we identified.
Conclusions:
We recognize that ensuring program integrity while focusing on the
important goal of returning individuals with disabilities to work
presents challenges for SSA. However, the weaknesses we identified in
SSA's existing work CDR processes continue to expose the program to
overpayments and abuse. In particular, SSA's reliance on outdated
earnings information has contributed to overpayments and forced staff
to investigate cases that are old and thus difficult and time-consuming
to process. Without the ability to conduct batch file computer matches
with the National Directory of New Hires, the agency will remain
vulnerable to large earnings-related overpayments. Similarly, the lack
of a screen to systematically identify beneficiaries more likely to
incur overpayments means that SSA cannot target cases that should
receive higher priority. Even if such a screen existed, SSA would not
be able to make the best use of it given the lack of an automated alert
system to notify field offices and program service centers about which
cases should be reviewed. Moreover, without accurate, reliable
management data on the age and status of work CDR cases, SSA will find
it difficult to effectively monitor this workload, identify areas that
require continued improvement, and develop meaningful work performance
measures.
In an environment of limited budgetary and staff resources, federal
agencies such as SSA will be required to take a more strategic approach
to servicing ever-increasing workloads. The magnitude of earnings-
related overpayments indicates that SSA should take additional steps to
strengthen DI program integrity. Moreover, the potential of having to
repay a large overpayment may discourage some beneficiaries from
continuing to work, thus working contrary to SSA's goal of helping
individuals become self-sufficient. Ultimately, without a concerted
effort to increase management focus on this key workload and to
reengineer existing processes, SSA's ability to ensure that trust fund
dollars are protected and reserved for those who are truly eligible
will continue to be compromised. The new automated system that SSA is
developing may help the agency address some of the weaknesses we
identified, but it is too early to determine how effective it will be.
A conscious management decision to use this system to improve DI
program integrity in conjunction with more accurate management
information will be required to help detect and prevent large
overpayments.
Recommendations:
To enhance SSA's ability to detect and prevent overpayments in the DI
program, we recommend that the Commissioner of Social Security take the
following actions to improve the agency's work CDR processes:
1. Initiate action to develop a data sharing agreement with the Office
of Child Support Enforcement to conduct batch-file periodic computer
matches with the National Directory of New Hires (NDNH). Such matches
would provide SSA with more timely data to help the agency
systematically identify DI beneficiaries who are most likely to incur
overpayments. Such a tool could also allow SSA to perform a one-time,
comprehensive match against all DI beneficiary records to identify
individuals who may be overpaid but have not yet been detected.
2. Consider developing an enhanced screening mechanism that would
enable the agency to more effectively identify DI beneficiaries who are
most likely to incur earnings-related overpayments. This would help the
agency make more efficient use of limited staff and budgetary
resources.
3. Study the potential for creating an alert system similar to that
used in the SSI program for alerting field offices about recipients at
high risk for earnings-related overpayments. Such a system would allow
SSA to notify field offices and program service centers about
beneficiaries the agency identifies as most likely to incur large
overpayments.
4. Consider ways to improve the accuracy and usefulness of existing
management information data. Improvements may include modifying how the
agency measures the age of work CDR cases to more accurately reflect
how long they are in process.
5. Once the eWork system is fully implemented, SSA should consider how
it could be used to help the agency create performance goals for its
work CDR workload.
Agency Comments and Our Evaluation:
We provided a draft of this report to SSA for review and comment. SSA
agreed with our recommendations and, in some instances, outlined
initial plans for their implementation.
SSA agreed with our first recommendation to develop a data-sharing
agreement with the Office of Child Support Enforcement to conduct
batch-file computer matches with the NDNH. The agency noted that it
pursued online access to the NDNH first because it was more cost
effective and expeditious. The agency also indicated that it is
developing a new computer matching agreement that supports SSA's use of
the NDNH in the DI program for purposes of identifying potential
overpayments. We encourage SSA to ensure that any new agreement will
provide for periodic, batch-file matches to verify beneficiaries'
earnings at regular, specified intervals.
SSA also agreed with our second recommendation to consider developing
an enhanced screening mechanism to help the agency more effectively
identify DI beneficiaries most likely to incur earnings-related
overpayments. In particular, SSA agreed that it should pursue a
screening system similar to that currently used for medical CDRs to
determine if there is an increased likelihood of earnings-related
overpayments based on particular diagnosis codes. It also noted that it
should study ways to improve the effectiveness of existing systems
(such as the Continuing Disability Review Enforcement Operation and the
Disability Control File) to help the agency focus on beneficiaries with
the greatest potential for overpayments. We agree that these are
positive steps and that the agency should consider how improvements to
such systems might be incorporated to emerging systems such as "eWork".
With respect to our third recommendation that SSA develop an alert
system similar to that currently used in the SSI program for alerting
staff to cases at risk for earnings-related overpayments, SSA agreed
and noted that an alert system such as the "S2" alert used for SSI wage
discrepancies could provide a useful model. The agency noted that such
an alert could reduce the amount of time in which a claimant would
continue to receive payments while work development is initiated.
Moreover, since these reports include the employer's name, address, and
a quarterly breakdown of the beneficiary's earnings, this detailed
information would provide SSA staff with more specific information than
is currently available. SSA also said that an alert system could also
be generated from the NDNH match proposed in our first recommendation.
We agree that an alert system would help identify potential
overpayments more quickly, particularly if it were generated from data
produced by periodic computer matches with the NDNH.
SSA agreed with our fourth recommendation to improve the accuracy and
usefulness of existing management information data. SSA said that it is
working on a plan to unify the manner in which it identifies and counts
work and medical CDRs. The agency believes that it will be able to more
accurately capture workload counts and employee time consistently,
regardless of where the work is performed. While we agree that efforts
to improve existing processes and systems are necessary, it is too
early to determine if the proposed modifications will address the
problems we identified with high level management information, such as
potential double-counting of work CDRs.
SSA also agreed with our fifth recommendation to consider how it could
use the eWork system to create performance goals for work CDRs once it
is fully implemented. The agency commented that such a measure would
give field offices and program service centers a better indication of
what is expected of them regarding processing this workload and would
help them balance the time needed to process competing workloads.
SSA's formal comments appear in appendix II. SSA also provided
additional technical comments that we have incorporated in the report
as appropriate.
Unless you publicly announce its contents earlier, we plan no further
distribution until 30 days after the date of this report. At that time,
we will send copies of this report to the House and Senate Committees
with oversight responsibility for the Social Security Administration.
We will also make copies available to other parties upon request. In
addition, the report will be available at no charge on GAO's Website at
http//:www.gao.gov. If you have any questions concerning this report,
please contact me at (202) 512-7215.
Sincerely yours,
Signed by:
Robert E. Robertson:
Director, Education, Workforce, and Income Security Issues:
[End of section]
Appendix I: Scope and Methodology:
This appendix provides additional details about our analysis of the
Disability Insurance (DI) program's work continuing disability review
(work CDR) process, including potential weaknesses in the Social
Security Administration's (SSA) existing procedures and policies. To
meet the objectives of the review, we examined DI performance data,
prior reports by SSA and its Office of Inspector General (OIG),
external research studies, and our prior reviews of the program. We
analyzed DI payment data over a 5-year period from 1999 to 2003, and
examined cases from 14 out of 18 SSA field offices we visited and 3
program service centers. In addition, we randomly selected and reviewed
71 cases with earnings to determine if they were reviewed and processed
in accordance with program guidelines. Finally, we conducted in-depth
interviews with 230 management and line staff from SSA's headquarters;
its regional offices in New York and San Francisco; 18 field offices in
6 states; and 3 out of 8 regional program service centers. During our
meetings, we (1) examined existing work CDR procedures; (2) documented
management and staff views on the effectiveness of SSA's work CDR
processes for detecting and preventing earnings-related overpayments;
and (3) discussed potential improvements to existing program processes,
systems, and policies.
We conducted independent audit work in six states (California, Florida,
Maryland, Massachusetts, New York, and Virginia) to examine SSA's
policies and procedures for conducting work CDRs, and to identify any
common weaknesses in SSA's work CDR processes. We selected locations
for field visits based on several criteria, including geographic
dispersion, states with an SSA program service center, states with
large numbers of DI beneficiaries, and states with large DI
expenditures. In total, we visited 18 field offices and interviewed 161
SSA field office managers and line staff responsible for the DI
program. We visited a mix of large offices in metropolitan areas as
well as smaller offices located in the suburbs. In addition, we visited
three program service centers in Richmond, California; Queens, New
York; and Baltimore, Maryland. These program centers were responsible
for the majority of all work CDRs identified by the enforcement
operation. Where appropriate, we also visited field offices or program
centers that were conducting special initiatives or piloting emerging
computer systems that could impact how SSA conducts work CDRs (such as
the "eWork" system).
During our meetings with SSA and OIG officials, we documented
management and staff views on the effectiveness of work CDR policies
and procedures and potential improvements to existing processes,
policies, and systems. In particular, we documented management and
staff views on (1) the timeliness of existing data sources to verify
beneficiary earnings, (2) the effectiveness of existing processes for
identifying individuals at high-risk for large overpayments, (3) the
effectiveness of existing computer systems for notifying staff
responsible for conducting work CDRs about cases that should be
reviewed, and (4) the accuracy of management information data used to
monitor work CDRs in one large program service center. To further
assess existing program processes and systems, at 10 offices and 3
service centers, we judgmentally selected between 5 and 7 pending or
completed work CDR cases. We generally looked at older cases in order
to understand where existing procedures may have weaknesses. We then
conducted in-depth reviews of these case files to identify potential
vulnerabilities in existing work CDR processes, policies, and systems.
As part of our study, we worked with SSA to draw a 1 percent sample of
all work CDR cases that were "cleared" from the agency's Processing
Center Action and Control System over a 1-week period in April 2004
(the "study population"). Our objective was to determine whether work
CDR cases were cleared in accordance with agency guidelines and to
assess the accuracy of high-level management data produced by this
system. This sample resulted in a total of 151 cleared cases. We then
randomly selected 71 of these 151 cases for review. As part of our
review, we discovered that there was a potential for cleared work CDR
cases to appear multiple times in SSA's Processing Center Action
Control System. On the basis of our discussion with knowledgeable SSA
officials, we determined it would be highly unlikely for cases to be
listed as "cleared" multiple times in a 1-week time period. Therefore,
we assumed that cases did not appear more than once in the 1-week time
period from which we drew our sample.
Because we followed a probability procedure based on random selections,
our sample is only one of a large number of samples that could have
been drawn. Since each sample could have provided different estimates,
we express our confidence in the precision of our particular sample's
results using 95 percent confidence intervals. A confidence interval is
an interval that would contain the actual population value for 95
percent of the samples we could have drawn. As a result, we are 95
percent confident that each of the confidence intervals in this report
will include the true values in the study population. For this file
review, the margin of error for each percentage estimate does not
exceed plus or minus 10 percentage points, unless otherwise noted. The
margin of error is the distance from each estimate to the upper or
lower boundaries of its 95 percent confidence interval.
To assess the reliability of the databases we used, reviewed reports
provided by SSA and its Office of Inspector General, which contained
recent assessments of these databases. We also interviewed
knowledgeable agency officials to further document the reliability of
these systems. In addition, we checked the data for internal logic,
consistency, and reasonableness. We determined that all the databases
were sufficiently reliable for purposes of our review.
[End of section]
Appendix II: Comments from the Social Security Administration:
SOCIAL SECURITY:
The Commissioner:
August 16, 2004:
Mr. Robert E. Robertson:
Director, Education, Workforce and Income Security Issues:
U.S. Government Accountability Office:
Room 5-T-57:
441 G Street, NW:
Washington, D.C. 20548:
Dear Mr. Robertson:
Thank you for the opportunity to review and comment on the draft report
"Disability Insurance: SSA Should Strengthen Efforts to Detect and
Prevent Overpayments" (GAO-04-929). Our comments on the report are
enclosed.
If you have any questions, please have your staff contact Candace
Skurnik, Director, Audit Management and Liaison Staff, at (410) 965-
4636.
Sincerely,
Signed by:
Jo Anne Barnhart:
Enclosures:
SOCIAL SECURITY ADMINISTRATION BALTIMORE MD 21235-0001:
COMMENTS ON THE GOVERNMENT ACCOUNTABILITY OFFICE (GAO) DRAFT REPORT
"DISABILITY INSURANCE: SSA SHOULD STRENGTHEN ITS EFFORTS TO DETECT AND
PREVENT OVERPAYMENTS" (GAO-04-929):
Thank you for the opportunity to review and comment on the GAO Draft
Report "Disability Insurance: SSA Should Strengthen Efforts to Detect
and Prevent Overpayments" (Audit No. 12003032). We agree that the
Agency needs to explore new tools and data sources that can be used to
more effectively detect and prevent earnings-related overpayments. We
have the following comments concerning information contained within the
body of the draft report:
The first sentence on page 3, the 2nd paragraph on page 7, and the
first paragraph on page 10 --All of these sections mention that
Disability Insurance (DI) overpayment waivers and write-offs increased
from FY 1999 to 2003, in addition to the increase in DI overpayments
detections and total available debt. Given the increase in DI
beneficiaries as well as benefit payments during that time period, this
should not be unexpected. For example, DI program outlays were $50,424
million in FY 1999 and $69,788 million in FY 2003, a $19,364 million or
38 percent increase. It would be logical to then assume that there
would be proportional increases in overpayments and overpayment
resolutions, including waivers under the Social Security Act and write-
offs under the Federal Claims Collection Standards.
There are several reasons for an overpayment waiver that are beyond
SSA's control, such as bankruptcy, Tax Refund Offset (TRO) waivers and
ALJ decisions instructing the Agency to waive overpayments. This
information should be included in the report to explain why some of the
waivers could have occurred.
Finally, the report does not make it clear that when some debt is
written off, the Agency's action is conditional such that, if the
debtor returns to the benefit rolls, the overpayment will be pursued.
When a debt is conditionally written off, it is also removed from the
Agency's accounts receivable balance. However, SSA continues recovery
efforts of qualified written-off debts via the Treasury Offset Program,
credit bureau reporting and mandatory cross program recovery. If these
efforts result in a collection or the individual becomes re-entitled to
benefits, SSA will reestablish the debt.
Page 7, footnote #15 - This should be changed to read, "This workload
is comprised of about 500,000 SSI recipients who at some point became
eligible for DI." Most estimates regarding the Special Disability
Workload show the number of affected recipients at slightly less, not
more than 500,000.
Page 9 - This section indicates that "SSA is studying the use of new
tools, such as wage garnishment to recoup overpayments, and has
published draft regulations to implement this tool." Our final
regulations on administrative wage garnishment (AWG) became effective
on January 22, 2004. See 68 Fed. Reg. 74177 (December 23, 2003).
Further, the Agency is fully engaged in the systems development of AWG,
which will be completed in December 2004. Also, the regulations for
federal salary offset are currently being drafted and a project scope
agreement is currently being developed for debt management for the non-
entitled debtors project. These debt-management tools, when fully
implemented, will allow SSA to aggressively recover overpayments from
debtors.
Page 10 - In the second sentence, the description of the statutory
requirements for waiver of collection of an overpayment is inaccurate.
We recommend the following revision: "SSA must waive collection of an
overpayment when the liable person was not at fault in causing the
overpayment and either the liable person would be financially unable to
repay the overpayment or recovery from that person would be against
equity and good conscience." See section 204(b) of the Social Security
Act.
Page 12, last paragraph - The report discusses a Program Service Center
(PSC) that is considering the use of a screen to prioritize developing
cases for beneficiaries with higher earnings and thus, the potential
larger overpayments. The report should reflect that the Agency is
currently developing a scoring mechanism that would improve
overpayment-related workloads in the PSCs and field offices.
Our responses to the specific recommendations are provided below.
Recommendation 1:
Initiate action to develop a data-sharing agreement with the Office of
Child Support Enforcement (OCSE) to conduct batch-file periodic
computer matches with the National Directory of New Hires (NDNH). Such
matches would provide SSA with more timely data to help the agency
systematically identify beneficiaries who are most likely to incur
overpayments. Such a tool would also allow SSA to perform a one-time
comprehensive match against all DI beneficiary records to identify
individuals who may be overpaid but have not yet been detected.
Response:
We agree. SSA currently has an agreement with GCSE to conduct computer
matches with the NDNH for SSI recipients. SSA implemented query access
to OCSE data (quarterly wages, new hire reports and UI data) for DIB
and Ticket to Work purposes this spring. Online access was done in
advance of the batch process because it was more cost effective and
expeditious. We are using the GCSE data in making determinations about
work and earnings for cost reimbursement claims from State Vocational
Rehabilitation agencies. We are also using the GCSE data in Ticket to
Work as supplemental work and earnings information in making
determinations on Employment Network requests for payment. Another
computer matching agreement that supports SSA's use of OCSE data in the
disability program for the purposes of identifying possible
overpayments has also been drafted.
Recommendation 2:
Consider developing an enhanced screening mechanism that would enable
the agency to more effectively identify DI beneficiaries who are most
likely to incur earnings-related overpayments. This would help the
Agency make more efficient use of limited staff and budgetary
resources.
Response:
We agree. As of fiscal year (FY) 2004, our Continuing Disability Review
Enforcement Operation (CDREO) is using earnings data posted to the
Disability Control File (DCF) along with those posted to the Master
Earnings File (MEF) to generate alerts. Through FY 2003, the CDREO
system used only the MEF earnings. Using the DCF allows the CDREO
system to identify, and not refer for staff review, cases in which
earnings in a year are significant, but determinations have already
been made on those earnings. We will continue to look for more
effective uses of these data systems.
We agree that the Agency should pursue a profiling system similar to
that currently used for medical CDRs. A match of earnings-related
overpayments and diagnosis codes could be reviewed to determine if
there is an increased likelihood of earnings-related overpayments based
on particular diagnosis codes. After analyzing the reviews, a
determination could be made to initiate the match on a recurring basis,
or to automate alerts on a routine basis.
We also feel it is very important to develop some type of profiling
software for integration into the CDREO. We have been working for some
time to implement systems changes to refine the selection criteria for
enforcement alerts. We agree that these changes could allow us to focus
our efforts on those cases with the highest potential for overpayments.
Identifying and working those cases first could reduce the number of
high overpayments.
Recommendation 3:
Study the potential for creating an alert system similar to that used
in the SSI program for alerting field offices about recipients at high
risk for earnings-related overpayments. Such a system would allow SSA
to notify field offices and program service centers about beneficiaries
the agency identifies as most likely to incur large overpayments.
Response:
We agree. The DCF was implemented in November 2002 and is now used to
control earnings-related actions. Effective with FY 2004, when the
CDREO system identifies significant earnings, it posts the pending
action to the DCF for control purposes. If there is no current work
activity development pending, the CDREO posts the pending action to the
DCF and generates an alert. The DCF controls these issues to
completion.
An alert system such as the "S2" alert used for Title XVI wage
discrepancies could alert field offices to claimants with earnings over
a predetermined amount --earnings that may be unreported by the
claimant, but are reported quarterly by employers. This alert could
reduce the period of time in which a claimant would continue to receive
payments while work development is initiated. Further, since these
reports include the employer's name, address, and EIN, and provide a
quarterly breakdown of the earnings, this detailed information would
provide our personnel with more specific information than is currently
available on the earnings record. It may be possible that an alert
system could also be generated from the NDNH match proposed in
Recommendation 1.
Recommendation 4:
Consider ways to improve the accuracy and usefulness of existing
management information data. Improvements may include modifying how the
agency measures the age of work CDR cases to more accurately reflect
how long they are in process.
Response:
We agree. We agree that currently there are few safeguards to prevent
double counting of work CDR cases. However, the Agency is currently
working on a plan to unify the method of identifying and counting work
and medical CDRs, the Social Security Unified Measurement System (SUMS)
Operational Data Store. Under SUMS, we will capture both workload
counts and employee time consistently, regardless of where the work is
performed. Existing component-specific work measurement systems will be
replaced by a unified system in which decisions to move workloads among
components are accommodated automatically.
In addition, we have made some improvements for providing information
on aged cases. The Management Information Systems Facility now contains
a'Pending' query screen that provides the CDR age in operations, rather
than age in location enabling users to select the truly oldest cases
first. This feature was initiated in August 2003 and is available to
field offices, PSCs, disability determination services or disability
quality branches.
Recommendation 5:
Once the eWork system is fully implemented, SSA should consider how it
could be used to help the agency create performance goals for its work
CDR workload.
Response:
We agree. After eWork has been rolled out nationally and sufficient
time has elapsed to allow users to become proficient in its use, we
will consider utilizing the data contained therein to create
performance goals for our work CDR workload. This would give the field
offices and PSCs a better indication of what is expected of them with
regard to processing work CDRs. It would also help them to balance the
time needed for this workload with the time needed for their other
numerous competing workloads.
[End of section]
Appendix III: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Daniel Bertoni, Assistant Director (202) 512-5988 Jeremy D. Cox,
Analyst-in-Charge (202) 512-5717:
Staff Acknowledgments:
In addition to those named above, Jeff Bernstein, Sue Bernstein,
Dan Schwimer, Salvatore F. Sorbello, Sidney Schwartz, and Shana Wallace
made important contributions to this report.
[End of section]
Related GAO Products:
Social Security Disability: Reviews of Beneficiaries' Disability Status
Require Continued Attention to Achieve Timeliness and Cost-
Effectiveness. GAO-03-662. Washington, D.C.: July 24, 2003.
High-Risk Series: An Update. GAO-03-119. Washington, D.C.:
January 2003.
SSA Disability: Enhanced Procedures and Guidance Could Improve Service
and Reduce Overpayments to Concurrent Beneficiaries. GAO-02-802.
Washington, D.C.: September 5, 2002.
Social Security Administration: Agency Must Position Itself Now to Meet
Profound Challenges. GAO-02-289T. Washington, D.C.: May 2, 2002.
Social Security Disability: Disappointing Results from SSA's Efforts to
Improve the Disability Claims Process Warrant Immediate Attention. GAO-
02-322. Washington, D.C.: February 27, 2002.
Social Security Administration: Status of Achieving Key Outcomes and
Addressing Major Management Challenges. GAO-01-778. Washington, D.C.:
June 15, 2001.
High-Risk Series: An Update. GAO-01-263. Washington, D.C.:
January 2001.
Major Management Challenges and Program Risks: Social Security
Administration. GAO-01-261. Washington, D.C.: January 2001.
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50R. Washington, D.C.: March 4, 1999.
Major Management Challenges and Program Risks: Social Security
Administration. GAO/OCG-99-20. Washington, D.C.: January 1999.
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30. Washington, D.C.: May 16, 1997.
High-Risk Series: An Overview. GAO/HR-97-1. Washington, D.C.: February
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FOOTNOTES
[1] The SGA level changes annually. For example, SGA in calendar year
2003 was $800 per month.
[2] SSA also conducts "medical" CDRs to evaluate whether a beneficiary
has medically improved to the point where they are able to work.
[3] We designated SSI a high-risk program in 1997 after several years
of reporting on specific instances of abuse and mismanagement,
increasing overpayments, and poor recovery of outstanding debt. SSA
subsequently made several changes to improve SSI program integrity. We
removed SSI from our high-risk list in 2003.
[4] The program service centers (PSC) are responsible for a variety of
activities, including work CDRs.
[5] Average benefit figure was reported for December 2003.
[6] SGA for blind beneficiaries is $1,350 per month.
[7] We use the term "work CDRs" to describe instances in which SSA
staff perform limited development of beneficiary earnings because they
determine that a full work CDR is not necessary (an activity that SSA
refers to as a "work CDR action"), as well as "full" work CDRs in which
a case is fully developed and staff fill out specific forms to receive
work credit for completing a work CDR.
[8] The trial work period allows beneficiaries to work for 9 months
(not necessarily consecutive) within a 60-month rolling period during
which they may earn any amount without affecting benefits.
[9] To provide additional incentives to encourage work, beneficiaries
who have completed their trial work period are entitled to a 36-month
extended period of eligibility during which they may receive benefits
for any month in which their earnings fall below SGA. Other work
incentive provisions allow SSA to deduct certain impairment-related
work expenses and employer subsidies from beneficiaries' earnings
determination. SSA staff must consider all these provisions when
assessing whether beneficiaries' earnings constitute SGA.
[10] SSA currently uses six times the SGA amount, or $4,860 as the
annual test level to screen out beneficiaries whose earnings amount
would not likely affect their DI benefits.
[11] Most cases (about 60 percent) are sent to the program center in
SSA's Office of Central Operations (OCO). OCO is responsible for
handling beneficiaries who are less than 55 years of age. According to
SSA officials, these beneficiaries tend to work more frequently and
have more employers than older beneficiaries, thus making the cases
more complicated to process. The remaining cases for beneficiaries
older than 55 are sent to one of the remaining 7 program service
centers.
[12] "Disability processing specialists" work in SSA's program service
centers and are responsible for determining if benefits should be
discontinued and whether an overpayment exists. "Earnings reviewers" in
the program centers are generally responsible for initial analysis of a
beneficiary's earnings; however, only disability processing
specialists have the authority to cease benefits. In SSA's field
offices, the claims representatives are responsible for the duties
performed by both the disability processing specialist and the earnings
reviewer.
[13] SSA contracts with state Disability Determination Services (DDS)
that are responsible for assessing whether an individual is medically
disabled (a "medical" CDR). During the course of a medical CDR, DDS
examiners sometimes find evidence that a beneficiary may be working.
Medical CDRs are costly to perform and such cases are typically
referred to an SSA field office or PSC for financial development before
additional medical development is performed.
[14] These provisions include tracking the 9-month "trial work period"
and an "extended period of eligibility," as well as calculating
"impairment related work expenses" and "employer subsidies."
[15] This workload is comprised of about 500,000 SSI recipients who at
some point became eligible for DI. However, the SSI administrative
systems failed to identify these cases. SSA is now focusing resources
on processing this workload.
[16] Overpayments may also be caused by other types of events,
including receipt of workers compensation benefits, being in prison
while receiving benefits, and medical improvement to the point where
the individual is no longer disabled.
[17] Total overpayment debt is comprised of existing debt carried
forward from prior years, and newly detected overpayments, net of
collections, waivers, and write-offs in each fiscal year.
[18] 68 Fed. Reg. 74117 (to be codified at 20 C.F.R. pt. 422 subpt.
E).
[19] According to SSA, some waivers are beyond the agency's control,
such as those attributable to bankruptcy, Tax Refund Offsets, and
Administrative Law Judge decisions instructing the agency to waive
overpayments. Moreover, some debt that is written-off may ultimately be
reestablished if the beneficiary returns to the DI rolls. In addition,
SSA continues recovery efforts of qualified written-off debts via the
Treasury Offset Program, credit bureau reporting, and mandatory cross-
program recovery.
[20] Total DI program outlays increased from about $50.4 billion in
fiscal year 1999 to about $70 billion in fiscal year 2003.
[21] Beneficiaries are required to report earnings to SSA that may
affect their eligibility for benefits, and SSA relies on beneficiaries
to report such information in a timely manner. However, our review
found that individuals sometimes do not report their earnings as
required.
[22] Batch file computer matches would allow SSA to periodically match
all DI beneficiaries against wage and new hires data in the NDNH, thus
helping the agency identify individuals with high levels of earnings
(those who may be likely to incur large overpayments).
[23] This mechanism involves the application of statistical formulas
that use data on beneficiary characteristics contained in SSA's
computerized records--such as age, impairment type, length of time on
the disability rolls, previous CDR activity and reported earnings--to
predict the likelihood of medical improvement and, therefore, benefit
cessation.
[24] GAO, Social Security Disability: Reviews of Beneficiaries'
Disability Status Require Continued Attention to Achieve Timeliness and
Cost-Effectiveness, GAO-03-662 (Washington, D.C.: July 24, 2003).
[25] According to SSA, the agency is currently developing a scoring
mechanism that would help the agency better manage overpayment-related
workloads in its program service centers and field offices.
[26] SSA's enforcement operation does generate alerts for cases that
should be reviewed. However, this alert is not as timely as the wage
alerts generated in the SSI program that notify staff about cases that
should be examined due to recipient earnings.
[27] We worked with SSA to select a 1 percent sample of cases that were
cleared from its Processing Center Action Control System over a 1-week
period in April 2004. This 1 percent sample included a total of 151
cases. We then randomly sampled 71 of these cases for review. For this
file review, the margin of error for all percentage estimates does not
exceed plus or minus 10 percentage points at the 95 percent confidence
level, unless otherwise noted.
[28] This system is used by SSA to produce management information in
its "Workload Status Report" used by the agency to track the
disposition of cases that are sent to the program service centers for
development as a result of the enforcement operation. According to SSA
officials, cases should only be listed as "cleared" in this system if
they have been fully developed and completed in accordance with agency
guidelines for processing work CDRs.
[29] The 95 percent confidence interval surrounding this estimate
ranges from 37 to 61 percent.
[30] The 95 percent confidence interval surrounding this estimate
ranges from 26 to 49 percent.
[31] We estimate that 28 percent of the cases were properly cleared
(the 95 percent confidence interval surrounding this estimate ranges
from 18 to 40 percent). In addition to the 49 percent that were
improperly cleared, an additional 14 percent had some other processing
problem, while 6 percent could not be completed on the basis of
available information, and 3 percent did not have any work issue
involved.
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