Oct 5, 2018

That's A Lot Of Payment Mistakes

     From a recent report by Social Security's Office of Inspector General:
When beneficiaries receive both DI [Disability Insurance] and WC/PDB [Workers Compensation/Public Disability Benefit], SSA [Social Security Administration] must reduce, or offset, their DI payments to ensure the combined amount of DI and WC/PDB does not exceed whichever is greater of (1) 80 percent of their average current earnings or (2) the total family benefits.
During DI claims processing, SSA staff should obtain WC/PDB information, verify WC/PDB payments, retain WC/PDB documents, and remind beneficiaries of their responsibility to report WC/PDB payments to SSA. SSA systems calculate DI payments based on WC/PDB information entered by SSA staff. Incomplete and inaccurate WC/PDB information can cause improper payments.
From 1 segment of the Master Beneficiary Record, we identified 4,558 beneficiaries awarded DI benefits in Calendar Year 2014 who indicated they had filed, or intended to file , for WC/PDB. From this population, we reviewed a random sample of 200 cases. ...
SSA did not always accurately determine WC/PDB offset during DI claims processing. Of the 200 cases in our review, SSA
  • did not obtain sufficient information for 60 beneficiaries’ WC/PDB claims and/or payments before it processed their DI claims ;
  • obtained sufficient WC/PDB information for 43 beneficiaries but did not accurately enter it into SSA’ s records ; and
  • did not retain the documents that supported the WC/PDB information entered for 6 beneficiaries.
Additionally, SSA did not always provide required printed reminders to beneficiaries of their responsibility to report changes to their WC/PDB payments to SSA.
The insufficient information and inaccurate records caused SSA to improperly pay 25 beneficiaries $26 6,929—$207,941 in underpayments and $58,988 in overpayments. Based on these results, we estimate 11,400 beneficiaries were under- and overpaid $121.7 million because SSA did not properly offset their DI benefits when it processed their DI claims.
SSA subsequently detected the improper payments in 15 of the 25 cases after it processed the DI claim. In one additional case, SSA detected some, but not all, of the improper payments. For the remaining nine cases, SSA did not detect the improper payments. Although SSA found many of the improper payments, the errors that occurred when it processed the D I claims still had negative effects, including SSA’ s inability to recover some of the resulting overpayments. ...
     I don't know what the solution is. The workers comp offset is too complicated but I don't know how to simplify it without increasing unfairness. More staff would help. If there was some way of making state workers comp agencies report workers comp payments in a standardized way that would help but I fear that would just shift the mistakes to the state agencies. Things get complicated when cases get settled.
     By the way, I doubt that OIG was even looking at subrogation cases. Subrogation is where a claimant gets workers comp but later settles a third party claim. Let's say the claimant was in an on the job automobile accident. They get workers comp but sue the driver of the other vehicle. If they get a settlement or jury award, they have to pay back their workers comp. That means they should be treated as if they never received workers comp. The problem is that frequently the subrogation isn't reported to Social Security. I'm betting that claimants are underpaid in most subrogation cases, usually by tens of thousands of dollars and sometimes by hundreds of thousands of dollars.

10 comments:

Anonymous said...

Well one good thing for SSA I guess is that in my state comp awards are becoming so miniscule they will hardly matter anymore.

Anonymous said...

I agree with 9:29.

The Feds need to take a serious look at the hollowing out of WC benefits in most states. The insurance industry and chamber of commerce hasve done an excellent job of eliminating injured workers' rights under state WC laws. In Michigan, where I practice, a Republican State Supreme Court has been systemically attacking WC benefits with multiple decisions since 1999.

This has resulted in my clients settling their WC claims for a fraction of what they should be worth, and then looking to the SSD system for monthly income. Essentially, the responsible for injured workers has been shifted from the employer to the Social Security Administration.

Congress should address this problem. Ensuring WC rights for all injured workers would remove or reduce claims injured works make on the SSD system.

Anonymous said...

Don't even get me started on RIB/DIB elections, Reverse Offset States, Lump Sum Settlement Calculation,

And the time to correct mistakes after they are pointed out can reach years.

Anonymous said...

The big Corps are literally dumping their workers compensation damage onto the federal system now. The quasi state agency that used to provide for some equity in the system was privatized years ago and is just another insurance carrier that denies claims. The good thing though if you are rich is the tax rate has gone down. The public school system has been practically destroyed, but the elites send their kids to private schools. When are we as responsible citizens going to wake up and realize that all of this only benefits a very small part of our population and most of us are getting hosed including the so called middle class. If drastic cuts are truly planned for social security it will be a human disaster of epic proportions in this country because it is literally the final lifeline and last stand for so much of our population including tons of white red state Trump voters

Anonymous said...

It took the better part of two years for the payment center to recalculate my client’s benefits when we challenged the offset calculation. It’s not a priority workload.

Anonymous said...

It is YOUR best interest that this be done correctly. Social Security is burning through the 4 trillion in IOU's they possess. If nothing is done SSA can pay 79% of what is owed in 15 years. That includes your attorney s fees! 19% of the U.S. population is under age 45. You do the math. There are not enough FICA payers to fund grandma's check and her medicare shortly. We need more immigrants, not fewer!

Anonymous said...

WE can spend unlimited amounts of money on the military and 16 trillion dollars on bailing out criminal Wall Street banking institutions but we can't fund a civilized disability and retirement system in the supposed greatest democracy in the world. I call pure, unadulterated, major bullshit on that one. However, I agree that the current Neanderthals are pretty much wrong on the immigration issue.

Anonymous said...

Some of the errors are actually due to the claimants. They may allege they get $200 a week and then not provide proof. Their disability claim comes back approved. SSA requests it but the claimant has to get it from worker's comp and it may take a while. So SSA clears the claim based on allegation and claimant may be underpaid or overpaid if his/her allegation is not correct. SSA could wait for verification but sometimes that takes quite a while and the disabled person would not be paid during the wait.

Anonymous said...

The only solutions I see suggested by the naysayers is for Congress to appropriate more money for better administration of the programs. The rest is repetitive drivel. More constructive solutions would be most welcome for your readers, who are on the frontline.

Anonymous said...

They still cannot properly calculate SSI offsets in at least 55% of the cases.