Disability Insurance:

SSA Should Strengthen Its Efforts to Detect and Prevent Overpayments

GAO-04-929: Published: Sep 10, 2004. Publicly Released: Oct 19, 2004.

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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.

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.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To enhance SSA's ability to detect and prevent overpayments in the DI program, the Commissioner of Social Security should 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.

    Agency Affected: Social Security Administration

    Status: Closed - Implemented

    Comments: SSA has made some improvements for providing information on aged cases. As of August 2003, 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 oldest cases first. However, the agency acknowledged that few safeguards existed to prevent double-counting of work Continuing Disability Review (CDR) cases. To address this issue, SSA developed a new computer system called the Social Security Unified Measurement System (SUMS) that captures workload counts and employee time more consistently.

    Recommendation: To enhance SSA's ability to detect and prevent overpayments in the DI program, the Commissioner of Social Security should 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.

    Agency Affected: Social Security Administration

    Status: Closed - Not Implemented

    Comments: When the Continuing Disability Review Enforcement Operation (CDREO) identifies disability beneficiaries with significant earnings, it signals to the Disability Control File (DCF) for work activity control purposes. If there is no current work activity development pending, the CDREO posts the pending action to the DCF and generates an alert to the relevant field office or program service center to process the Continuing Disability Review. The DCF then controls these issues to completion. However, this alert system does not identify individuals who may be most likely to incur a large overpayment. There is no prioritization or flagging of cases alerted to differentiate them. SSA does not create categories of cases by the size or the potential for a large overpayment.

    Recommendation: To enhance SSA's ability to detect and prevent overpayments in the DI program, the Commissioner of Social Security should 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.

    Agency Affected: Social Security Administration

    Status: Closed - Implemented

    Comments: In FY 2005, SSAs Continuing Disability Review Enforcement Operation (CDREO) was using earnings data posted to the Disability Control File (DCF) as well as those posted to the Master Earnings File (MEF) to generate alerts based upon a set of rules that identify cases based on specific characteristics. The additional use of the DCF allows the CDERO system to screen out cases where a beneficiary has significant earnings, but a determination has already been made on those earnings.

    Recommendation: To enhance SSA's ability to detect and prevent overpayments in the DI program, the Commissioner of Social Security should 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.

    Agency Affected: Social Security Administration

    Status: Closed - Implemented

    Comments: SSA has a signed agreement with HHS's Office of Child Support Enforcement Administration to use the National Directory of New Hires (NDNH) database for periodic computer matching. This data agreement is aimed at identifying possible earnings related overpayments in the DI program.

    Recommendation: To enhance SSA's ability to detect and prevent overpayments in the DI program, the Commissioner of Social Security, once the eWork system is fully implemented, should consider how it could be used to help the agency create performance goals for its work CDR workload.

    Agency Affected: Social Security Administration

    Status: Closed - Not Implemented

    Comments: SSA agrees that once eWork has been implemented on a national basis and sufficient time has elapsed to allow users to become proficient in its use, it should consider using the data in creating agency performance goals for its work CDR workloads.

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