From a recent report by Social Security's Office of Inspector General (OIG):
... In Fiscal Years (FY) 2015 and 2016, SSA [Social Security Administration] issued approximately 1.1 million claimant representatives’ direct-fee payments totaling approximately $2.6 billion. We identified 39,024 beneficiary claims where SSA may have collected an incorrect user fee. From this, we selected a random sample of 50 beneficiary claims for review. ...
SSA technicians applied an incorrect user fee for 26 (52 percent) of our 50 sampled beneficiary claims. Generally, this occurred because technicians’ authorization of claimant representative fee payments involved manual, complex, and error-prone postings to the electronic records. We estimate d SSA incorrectly applied user fees for 20,292 beneficiary claims, which resulted in SSA over-assessing $338,916 and under- assessing $603,133 to claimant representatives.
7 comments:
In the report, the comment is made that the costs assessed to representatives only covers 22% of the actual costs of administering the program. (P. 5 Chart) That is based on the idea that it really costs 6.3% of fees paid to issue fee checks to representatives. The problem is that this cost estimate is nonsense.
The stated cost, for example for 2016, the last year give, was $121,701.133.
For 2017, the actual administrative budge was $10,539,,000,000.
That would mean that administering representative fees, all by themselves, represented roughly 1% of all administrative expenses.
Not buying it.
I never understood why the cost of issuing a check would be a percentage of the amount. I doesn't cost any more to issue a check for $6,000 than a check for $6. Why not just calculate the actual cost of issuing these checks and charging a flat fee per check.
Or better yet, get rid of the fee altogether. It sounds like collecting the fee costs more that is being collected.
Rep fees should not be done by the agency. It should be done by the rep.
For those who say the Agency should not be involved, understand that the Agency only got involved in the first place because the Agency did not trust attorneys to charge what they considered fair fees.
They wanted to determine fees and they wanted control of the payment.
If the Agency really doesn't want to be involved, then do what every other insurance agency does when a case is settled. Send the entire amount to the legal representative and let them distribute in accordance with their agreement with the client, subject to local bar rules as they may or may not apply.
So using these numbers, let's have some fun with math --
Out of 1.1 million claims, OIG identified 39,024 in which SSA MAY have collected an incorrect user fee. 39,024/1.1m = 3.54% (approximately, since the 1.1m is an obvious rounded #).
They sampled 50, of which 26 had an incorrect fee, or 52%. So 52% of 3.54% = 1.84%.
In other words, SSA calculated 98.16% of claims correctly.
Of the 1.84% of incorrect claims, some were too high in the estimated amount of $338,916, and others were too low in the amount of $603,133. This results in a net difference of $264,217 in underassessment overall. Considering direct rep fee payments totaled approximately $2.6 billion, this results in a total estimated net error of 0.01%.
Not bad for government work.
Actually, that's pretty damn good. I'm actually impressed.
The errors are mostly made on:
1.) Cases where SSI pays their fee first and the PSC technicians can't be bothered to actually check what fee has already been deducted.
2.) The fee instructions in the PSC are incorrect because the technicians authorizing it don't consider that no fee should be paid until all representatives eligible for direct payment have a fee authorized. If they don't wait, the result is one representative having $93.00 deducted and the others not (or possible having $93 deducted from them). All the result of people not withdrawing when a new representative is appointed.
@10:51 AM
And when you say “the Agency,” you are referring to the law of the land as enacted by the Congress and President?
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