Federal Government Made $100B In Improper Payments To Unentitled Recipients

Government Made $100B In Improper Payments – Associated Press

By its own estimate, the government made about $100 billion in payments last year to people who may not have been entitled to receive them – tax credits to families that didn’t qualify, unemployment benefits to people who had jobs and medical payments for treatments that might not have been necessary.

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Congressional investigators say the figure could be even higher.

The Obama administration has reduced the amount of improper payments since they peaked in 2010. Still, estimates from federal agencies show that some are wasting big money at a time when Congress is squeezing agency budgets and looking to save more.

“Nobody knows exactly how much taxpayer money is wasted through improper payments, but the federal government’s own astounding estimate is more than half a trillion dollars over the past five years,” said Rep. John Mica, R-Fla. “The fact is, improper payments are staggeringly high in programs designed to help those most in need – children, seniors and low-income families.”

Mica chairs the House Oversight subcommittee on government operations. The subcommittee is holding a hearing on improper payments Wednesday afternoon.

Each year, federal agencies are required to estimate the amount of improper payments they issue. They include overpayments, underpayments, payments to the wrong recipient and payments that were made without proper documentation.

Some improper payments are the result of fraud, while others are unintentional, caused by clerical errors or mistakes in awarding benefits without proper verification.

In 2013, federal agencies made $97 billion in overpayments, according to agency estimates. Underpayments totaled $9 billion.

The amount of improper payments has steadily dropped since 2010, when it peaked at $121 billion.

The Obama administration has stepped up efforts to measure improper payments, identify the cause and develop plans to reduce them, said Beth Cobert, deputy director of the White House budget office. Agencies recovered more than $22 billion in overpayments last year.

“We have strengthened accountability and transparency, saving the American people money while improving the fiscal responsibility of federal programs,” Cobert said in a statement ahead of Wednesday’s hearing. “We are pleased with this progress, but know that we have more work to do in this area.”

However, a new report by the Government Accountability Office questions the accuracy of agency estimates, suggesting that the real tally could be higher. The GAO is the investigative arm of Congress.

“The federal government is unable to determine the full extent to which improper payments occur and reasonably assure that appropriate actions are taken to reduce them,” Beryl H. Davis, director of financial management at the GAO, said in prepared testimony for Wednesday’s hearing.

Davis said some agencies don’t develop estimates for programs that could be susceptible to improper payments. For example, the Health and Human Services Department says it cannot force states to help it develop estimates for the cash welfare program known as Temporary Assistance for Needy Families. The program is administered by the states.

The largest sources of improper payments are government health care programs, according to agency estimates. Medicare’s various health insurance programs for older Americans accounted for $50 billion in improper payments in the 2013 budget year, far exceeding any other program.

Most of the payments were deemed improper because they were issued without proper documentation, said Shantanu Agrawal, a deputy administrator for the Centers for Medicare & Medicaid Services. In some cases, the paperwork didn’t verify that services were medically necessary.

“Payments deemed `improper’ under these circumstances tend to be the result of documentation and coding errors made by the provider as opposed to payments made for inappropriate claims,” Agrawal said in prepared testimony for Wednesday’s hearing.

Among other programs with large amounts of improper payments:

- The earned income tax credit, which provides payments to the working poor in the form of tax refunds. Last year, improper payments totaled $14.5 billion. That’s 24 percent of all payments under the program.

The EITC is one of the largest anti-poverty programs in the U.S., providing $60.3 billion in payments last year. Eligibility depends on income and family size, making it complicated to apply for the credit – and difficult to enforce, said IRS Commissioner John Koskinen.

“EITC eligibility depends on items that the IRS cannot readily verify through third-party information reporting, including marital status and the relationship and residency of children,” Koskinen told a House committee in May. “In addition, the eligible population for the EITC shifts by approximately one-third each year, making it difficult for the IRS to use prior-year data to assist in validating compliance.”

- Medicaid, the government health care program for the poor. Last year, improper payments totaled $14.4 billion.

Medicaid, which is run jointly by the federal government and the states, has seen a steady decline in improper payments since 2010, when they peaked at $23 billion.

The program is expanding under President Barack Obama’s health law.

- Unemployment insurance, a joint federal-state program that provides temporary benefits to laid-off workers. Amount of improper payments last year: $6.2 billion, or 9 percent of all payments.

The Labor Department said most overpayments went to people who continued to get benefits after returning to work, or who didn’t meet state requirements to look for work while they were unemployed. Others were ineligible for benefits because they voluntarily quit their jobs or were fired.

- Supplemental Security Income, a disability program for the poor run by the Social Security Administration. Amount of improper payments: $4.3 billion, or 8 percent of all payments.

Social Security’s much larger retirement and disability programs issued $2.4 billion in improper payments, according to agency estimates. Those programs provided more than $770 billion in benefits, so improper payments accounted for less than 1 percent.

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Medicaid Made $14.4B In Improper Payments In 2013

Medicaid Made $14.4 Billion Improper Payments Last Year – Washington Free Beacon

The federal government paid out $14.4 billion in fraudulent reimbursements through Medicaid last year, according to the Government Accountability Office (GAO).

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………………………………….Medicare and Medicaid chief Marilyn Tavenner

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Sen. Orrin Hatch (R., Utah) highlighted a recent GAO report on the lack of oversight within Medicaid’s managed care organizations (MCOs) delivery system, which accounts for roughly $4 billion in waste each year.

“Today’s report is particularly troubling given Obamacare expands this broken program without substantial reforms to protect patients and taxpayers,” Hatch said in a statement Wednesday. “CMS is responsible for safeguarding the billions of dollars it receives from hard-working American taxpayers, and I strongly urge [CMS] Administrator [Marilyn] Tavenner to implement the changes recommended by GAO to improve CMS oversight of MCO payments.”

“This report underscores the need for Medicaid reform in order to ensure that scarce tax dollars are used properly,” he said.

Managed care organizations, in which Medicaid beneficiaries get the majority of their care through an organization under contract with their state, are especially vulnerable to fraud since neither federal nor state governments are “well positioned to identify improper payments,” the GAO said.

“The size and diversity of the Medicaid program make it particularly vulnerable to improper payments – including payments made for treatments or services that were not covered by program rules, that were not medically necessary, or that were billed for but never provided,” the report said.

Nearly 50 million people currently receive benefits through MCOs. While MCO payments are still overshadowed by fee-for-service payments (FFS) – the traditional method where health care providers are paid for each service – individuals receiving their care through MCOs are “growing at a faster rate.”

State officials told the GAO that they have “not begun to closely examine program integrity in Medicaid managed care.” While the Centers for Medicaid and Medicare Services (CMS) requires states to audit their payments according to their MCO contracts, states are not required to audit the “appropriateness of these payments.”

The GAO warned that the problem would worsen under Obamacare, which has expanded Medicaid programs in many states.

“Improving federal and state efforts to strengthen Medicaid managed care program integrity takes on greater urgency as states that choose to expand their Medicaid programs under the Patient Protection and Affordable Care Act are likely to do so with managed care arrangements, and will receive a 100 percent federal match for newly eligible individuals from 2014 through 2016,” the report said.

“Unless CMS takes a larger role in holding states accountable, and provides guidance and support to states to ensure adequate program integrity efforts in Medicaid managed care, the gap between state and federal efforts to monitor managed care program integrity will leave a growing portion of federal Medicaid dollars vulnerable to improper payments,” it said.

Overall, Medicaid covered 71.7 million Americans in fiscal year 2013, totaling $431.1 billion, an estimated $14.4 billion of which were improper payments.

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Former Missouri Dem Rep Pleads Guilty To Illegally Taking $58K In Disability Payments

Democratic Officeholder Fraudulently Took $58K In Federal Disability Payments – CNS

Raymond E. Salva, a former Democratic member of the Missouri House of Representatives, has pleaded guilty to illegally taking $58,816 in federal disability payments while he was working as a state legislator earning $30,000 a year, according to the Office of the Inspector General of the Social Security Administration.

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In a plea agreement reached on June 26, Salva agreed to pay $58,816 in restitution to the Social Security Administration (SSA) but he also still faces sentencing, which could include imprisonment of 10 years without parole and a fine up to $250,000.

When Salva was indicted back in November 2012, the acting U.S. attorney for the Western District of Missouri, David Ketchmark, said: “An elected official who is entrusted to make the law must also follow the law. This kind of deceit and illegal double-dipping from the public coffers is nothing less than theft. Today’s indictment alleges that, while purportedly serving the public, he was actually stealing from the taxpayers and betraying the trust of the voters.”

Salva was approved for Social Security disability payments in February 2000, claiming that he had suffered a neck injury in a farm accident. However, in 2002 Salva was elected to the Missouri House of Representatives and he served there as Democratic legislator (District 51) from 2003 through 2010, earning $30,000 a year in compensation. All the while, he received monthly disability payments from the SSA.

In May 2003, about five months after he started working as a state representative, the SSA conducted a review to find out whether Salva was still eligible for disability payments. “As part of that review, Salva completed a form in which he affirmed that he was not able to return to work and that he had not done any work since being disabled,” reads a press release from the SSA’s Office of the Inspector General (OIG).

Nearly two years went by and Salva continued to get the disability payments every month. Then, in December 2004, the SSA discovered earnings posted to Salva’s record and sent him a letter inquiring about his work activity. “Salva responded that he had conferred with an SSA representative, who told him that public service would not affect his disability benefits,” reads the statement from the OIG. “Salva admitted today [June 26,2013] that this statement was false and that he did not confer with an SSA representative who told him that working as a legislator was in some way exempted.”

Salva continued to receive disability payments in 2005, 2006, 2007, and through February 2008. At that point, the SSA sent a letter to Salva notifying him of the over-payments, and then sent another letter billing him for the nearly $59,000 in over-payment. Salva did not leave the Missouri house of Representatives until December 2010.

Salva appealed the SSA’s over-payment claim to an administrative law judge. And on Jan. 3, 2011, he completed a new application for Social Security disability. He subsequently withdrew that application in February 2011. In April of that year the administrative law judge found Salva “at fault in causing the overpayment,” states the OIG release.

In June of this year, Salva entered his plea agreement with the U.S. attorney’s office for the Western District of Missouri.

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$7.9B In Improper Social Security Payments Last Year… But The Sequester Will Destroy America

$7.9 Billion In Improper Social Security Payments In FY 2012 – CNS

The Social Security Administration (SSA) needs to focus on “program integrity,” a polite term for reducing fraud and payment errors, the agency’s inspector general told Congress last week.

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Reducing improper payments is one of the challenges facing the next SSA commissioner, Patrick O’Carroll, Jr., the agency’s inspector general, told the House Ways and Means Subcommittee on Social Security on April 26.

In fiscal year 2012, the Social Security Administration reported $4.7 billion in improper payments in the Supplemental Security Income (SSI) program, a 9.2 percent improper payment rate. (SSI is funded by general tax revenues, not payroll taxes. It helps elderly, blind, and/or disabled people who are poor.)

SSA reported $3.2 billion in the Old-Age, Survivors’ and Disability Insurance (OASDI) program, a 0.4 percent improper payment rate. (OASDI, funded by payroll taxes, is what people generally refer to as “Social Security.”)

That’s a total of $7.9 billion, and it includes some underpayments as well as overpayments.

“SSA’s improper payments largely consist of those erroneously made to ineligible individuals,” O’Carroll said.

“Improper benefit payments occur for many reasons.” Fraud is one reason, he said. This includes beneficiaries who do not tell the agency about changes in their income, resources or living arrangements, which would change the amount Social Security pays them. O’Carroll also mentioned recipients’ “poor understanding of reporting responsibilities,” and administrative errors.

“For many years, my office has encouraged SSA to balance service initiatives, such as processing new claims, with stewardship responsibilities, such as conducting timely work and medical (disability reviews) and SSI redeterminations, to ensure that individuals remain disabled and eligible, and cease payments to those who do not.”

Soaring disability claims are a particular concern for the Social Security Administration.

In his opening statement, subcommittee Chair Rep. Sam Johnson (R-Texas) said application for disability benefits, triggered by the recession and the weak recovery, have never been higher: “Since 2010, the average number of people filing for disability benefits is just over 249,000 a month,” Johnson said. “At the same time the average number of new jobs created is almost 148,000 each month.”

O’Carroll told the panel he would like to see SSA perform more work-related “continuing disability reviews,” or CDRs, to make sure people collecting disability aren’t working on the side.

SSA estimates that every dollar spent on medical CDRs yields about $9 in SSA program savings over 10 years. Reducing the complexity of Social Security’s disability programs could also streamline operations and reduce millions of dollars in payment errors each year, O’Carroll said.

SSA said it conducted 443,233 medical disability reviews in FY2012, up from 345,000 in FY2011, but the disability review backlog still stands at 1.2 million.

SSA has set a goal of conducting 435,000 medical disability reviews in FY2013, based on the current level of funding. Beneficiaries with a high likelihood of medical improvement undergo a medical review; Beneficiaries with a lower likelihood of medical improvement are mailed a questionnaire, which may or may not trigger a medical review.

Reexamination or “redetermination” of SSI retirement benefits also is effective in reducing overpayments in the SSI program, O’Carroll said. Because SSI is a means-tested program, any change in recipients’ income, living arrangements, or marital status can affect eligibility or payment amount.

SSA reported that it saves $5 for every $1 spent on SSI redeterminations. SSA completed more than 2.4 million redeterminations in FY2011 and 2.6 million in FY2012, and it plans to conduct more than 2.6 million in FY2013. Not every SSI recipient undergoes a redetermination every year; SSA uses a statistical scoring model to identify which cases it will examine.

O’Carroll said his office has encouraged SSA to use data matching with other governmental agencies to detect improper payments. He said SSA also should use more non-governmental databases in doing the redeterminations.

SSA paid more than $800 billion in SSI and OASDI benefits to more than 60 million Americans in FY2012. It estimates that over the next 20 years, another 80 million individuals will retire and file for Social Security benefits.

The hearing was called to discuss the challenges facing the next Social Security commissioner. Michael J. Astrue’s six-year term expired on Jan. 19, 2013, and his successor — once President Obama nominates one – must be confirmed by the Senate.

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Government Doled Out $10.3 Billion In Improper Unemployment Payments In 2012

Government Doled Out $10.3 Billion In Improper Unemployment Payments In 2012 – CNS

The Federal-State Unemployment Insurance program paid out $10.3 billion in benefits in 2012 to people who should not have received the money, according to the Department of Labor (DOL).

The data provided on the government website, paymentaccuracy.gov, shows those payments amount to 11.42 percent of all the unemployment insurance checks handed out – an increase from 11.36 percent in 2011 and in excess of the government’s “target” for overpayments of 9.66 percent.

The DOL states that most of the data reported on its paymentaccuracy website was for the federal government’s fiscal year, which runs from Sept. 30 to Oct. 1, but that some data may have come from calendar year tabulations, which is why the department “used the term fiscal reporting year to best describe the time period in which the most current information was reported.”

The data also show that improper unemployment insurance payments increased steadily between 2009 and 2012, from 10.3 percent to 12 percent, respectively.

That percentage dropped 0.6 percent between 2011 (12 percent) and 2012 (11.4 percent), according to the DOL, which consequently forecasts that improper payments will fall below 10 percent in 2013 and 2014.

As reported by CNSNews.com, statistics released by DOL show that of the $10.3 billion in improper payments, the states improperly paid more than $5 billion for the period July 1, 2011 to June 30, 2012. (See DOL spread sheet on states payments.xls)

The “program contents” portion of the website states that 70 percent of the $10.3 billion that was paid out in 2012 was done so through one of three scenarios: “individuals did not meet their active work search requirements, continued to claim UI benefits after they had returned to work, or were ineligible for benefits because they voluntarily quit their jobs or were discharged for misconduct.”

An estimated 2.85 percent of state and federal improper unemployment payments were the result of fraud, according to the DOL.

The government website states that unemployment “helps cushion the impact of economic downturns and brings economic stability to communities, states, and the nation by providing temporary income support for laid off workers.”

The website also promotes the government’s efforts to end this trend.

“The reduction of improper payments in the UI program is a top priority of the Department of Labor,” the website states.

And the government is spending more money to that end.

“In fiscal year 2012 the Department awarded $169.9 million in supplemental funding to 33 states for the prevention, detection, and recovery of improper UI benefit payments; improve state performance; address outdated Information Technology (IT) system infrastructures necessary to improve UI program integrity; and enable states to expand or implement Reemployment and Eligibility Assessment (REA) programs,” the website states.

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