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Jun 14, 2011

Congressional Panel Hearing About Overpayment Also Hears About Budget

From the prepared statements at today's hearing before the House Ways and Means Committee on overpayments at Social Security:
... Our hard-working, dedicated employees have done their utmost to maintain the level of service that the American people expect and deserve. ...  Inevitably though, as our workloads rose and our appropriated funds were less than our budget requests, our service delivery suffered. Despite a long string of increases in productivity, we could not keep up. Throughout most of the past decade, the amount of program integrity work we could handle dropped dramatically, even though we know that work saves the taxpayer about ten dollars for each dollar spent. The time a claimant waited for a disability hearing rose to an average of 800-900 days in many cities, and some claimants waited as long as 1,400 days. Waiting times for in-person and telephone service increased, as did the public’s and Congress’ frustration with us. ...

... For FY [fiscal year] 2009, SSA [Social Security Administration] reported improper payments totaling $8 billion, including underpayments and overpayments, the third-highest amount of improper payments in the year, behind the Department of Health and Human Services (DHHS) ($71.4 billion) and the Department of Labor ($17.5 billion). SSA’s Supplemental Security Income (SSI) program made $48.3 billion in total payments, including an estimated $4 billion in overpayments and an estimated $800 million in underpayments, resulting in a 10 percent improper payment rate; SSA projects it will reduce that rate to 9.2 percent in FY 2011 and to 8.7 percent by FY 2012. SSA’s Retirement, Survivors, and Disability Insurance (RSDI) program made $659.6 billion in total payments, including an estimated $2.5 billion in overpayments and an estimated $600 million in underpayments, for a 0.5 percent improper payment rate; SSA projects it will reduce that rate to 0.4 percent in FY 2011. Verification and local administration errors, such as a beneficiary’s unreported or undetected financial accounts and wages, cause the majority of SSA’s improper payments, according to the Agency. ...

In conclusion, the President has outlined an aggressive plan of action to reduce improper payments and improve payment accuracy throughout the Federal government. Thus far, agencies like SSA are working to improve their reporting of improper payments and identify overpayment and underpayment causes and solutions, even when budgets are limited and staff workloads are increasing.

... [W]e also found a limitation in SSA’s Recovery of Overpayments, Accounting and Reporting (ROAR) system. Used to track overpayments and collections, ROAR does not reflect debt due SSA past year 2049 so the total balance due the program is unknown, and likely larger than the agency is reporting....

The DDSs [Disability Determination Services] work in partnership with SSA to provide public service to individuals applying for disability benefits while also balancing stewardship commitments. ...The DDSs evaluate CDRs requiring medical review for SSA, ensuring that only those individuals who are eligible, continue to receive benefits. SSA estimates that every dollar spent on CDRs yields $10 in lifetime program savings. Unfortunately, budget constraints have forced a reduction in this integrity workload. The DDSs can also assist in curbing improper payments by identifying fraud in the disability application process. The detection and prevention of improper payments further enhances the integrity of the program. ...

DDS staffing is critical to the processing of all disability claims. Nationally, DDS examiner attrition fiscal year to date (FYTD) is 12.8%. SSA has imposed a hiring freeze on all DDSs due to funding limitations. The continued inability to hire in the DDSs will severely limit the ability to process initial and reconsideration cases and restrict any additional CDR work, resulting in significant backlogs nationally. ...

Eleven DDSs have an attrition rate for disability examiners over 20%.

Despite SSA’s enormous workloads and challenges, SSA’s FY 2011 appropriation for administrative funding through the Limitation on Administrative Expenses (LAE) account was below the FY 2010 enacted level and $275 million was rescinded from Carryover Information Technology (IT) funds. This funding level does not allow SSA to cover inflationary costs for fixed expenses, which has resulted in a hiring freeze, drastic reduction of overtime hours, and postponements of initiatives to improve efficiency – all of which will have major public service repercussions....

SSA already has an acute staff-to-workload imbalance and is over-extended in critical program areas as it struggles to keep up with rapidly increasing workloads and existing backlogs. Congress must give thoughtful consideration to future appropriations for SSA to ensure the preservation of this valued program. Properly funding SSA to process core workloads and invest in program integrity initiatives to improve payment accuracy will save taxpayer dollars and is fiscally prudent in reducing the federal budget and deficit.

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