	Background

Under the Railroad Retirement Act of 1974, RRB makes independent  determinations of railroad workers’ claimed T&P disability using the same  general criteria that SSA uses to administer its Disability Insurance (DI)  program—that is, the worker must have a medically determinable  physical or mental impairment that (1) has lasted (or is expected to last)  at least 1 year or is expected to result in death and (2) prevents them  from engaging in substantial gainful activity, defined as work activity that  involves significant physical or mental activities performed for pay or  profit. SSA staff review  about one-third of the cases that RRB has determined to be eligible for  T&P benefits for which Social Security benefits may potentially be paid. 1). In  fiscal year 2012, RRB completed 1,212 CDR activities. Figure 2 shows  RRB’s disability T&P claims determination process, including how this  process relates to the occupational disability claims process. Policies and Procedures for Awarding Total and Permanent Disability Benefits Are Not Adequate to Ensure Proper Payments

		Evidence Used to Establish Eligibility May Be Inadequate

The procedures RRB uses to verify a claimant’s work and earnings and  the severity and duration of physical or mental impairments are  inadequate to ensure that only eligible claimants qualify for T&P benefits. In addition, the Department of Health and Human  Services’ National Directory of New Hires (NDNH)—established in part to  help states enforce child support orders against noncustodial parents— contains quarterly state wage information which is also more recent than  the annual wage information included in the MEF. RRB Policies and Procedures Do Not Ensure Initial Claims Are Properly Reviewed

RRB policies and procedures do not require that all initial determinations  are reviewed by an independent person to ensure that there is sufficient  evidence to support the determination. At the determination level, RRB policy allows for some claims to be  approved without independent supervisory review. Consequently, in recent  years, about one-quarter to one-third of all T&P initial claims were  approved by the same claims examiner that reviewed the application (see  fig. RRB’s Management Strategy Does Not Ensure That Total and Permanent Disability Determinations Are Accurate and Does Not Adequately Address Potential Fraud

		Program Oversight Has Not Ensured the Quality of Disability Determinations

RRB’s T&P program oversight process does not evaluate the accuracy of  disability determinations or provide managers with regular feedback about  the effectiveness of the determination process. According to RRB’s  strategic plan and agency officials, RRB’s key program objectives are to  make accurate and timely determinations and payments, and to pay  accurate benefits to eligible claimants. Standards for Internal Control in the Federal  Government states that agency management should assess and  continually monitor program performance to provide reasonable  assurance that the agency is achieving its objectives. Without  similarly tracking and reporting on the accuracy of T&P disability  determinations in addition to measuring payment accuracy and  timeliness, RRB does not know whether it is paying benefits only to  eligible individuals and cannot observe trends over time. RRB Has Not Engaged in a Comprehensive Effort to Continuously Identify and Prevent Fraud System- wide

RRB has not engaged in a comprehensive effort to continuously identify  and prevent potential fraud program-wide even after the high-profile LIRR  incident exposed fraud as a key program risk. RRB hired an analyst to conduct  ongoing reviews of agency data to identify patterns that suggest potential  fraud, but the analyst’s work has thus far been focused on the  occupational disability program. However, claims  representatives in all four of the district offices that we contacted said they  had not received any training directly related to fraud awareness. Despite RRB’s efforts, claims  representatives in two of the four district offices we contacted said that it  was not their job to be on the lookout for potential fraud. In addition, the agency is further  at risk due to its policies that allow claims examiners to unilaterally  approve selected claims without independent supervisory review. Recommendations

To enhance RRB’s ability to prevent improper payments and deter fraud  in the T&P disability program, we recommend that the Railroad  Retirement Board Members direct RRB staff to:  1.  explore options to obtain more timely earnings data to ensure that  claimants are working within allowable program limits prior to being  awarded benefits;  2.  revise the agency’s policy concerning the supervisory review and  approval of determinations to ensure that all T&P cases are reviewed  by a second party;  3.  strengthen oversight of the T&P determination process by establishing  a regular quality assurance review of initial disability determinations to  assess the quality of medical evidence, determination accuracy, and  process areas in need of improvement;  4.  develop performance goals to track the accuracy of disability  5.  develop procedures to identify and address cases of potential fraud  before claims are approved, requiring annual training on these  procedures for all agency personnel, and regularly communicating  management’s commitment to these procedures and to the principle  that fraud awareness, identification, and prevention is the  responsibility of all staff. GAO-10-351R.
Why GAO Did This Study

In recent years, the U.S. Department of Justice has investigated and prosecuted railroad workers who were suspected of falsely claiming over $1 billion in disability benefits, raising concerns about RRB's disability claims process. GAO was asked to evaluate the integrity of RRB's disability program. This report examines (1) whether RRB's policies and procedures for processing claims were adequate to ensure that only eligible claimants receive T&P disability benefits; and (2) the extent to which RRB's management strategy ensures that approved claims are accurate and addresses program risks. To answer these questions, GAO reviewed T&P determination policies and procedures, interviewed RRB officials in headquarters and four district offices—selected for geographic dispersion—reviewed relevant federal laws and regulations, and reviewed a nongeneralizable random sample of 10 T&P cases that were approved in fiscal year 2012 to illustrate RRB's claims process.

What GAO Found

The Railroad Retirement Board's (RRB) policies and procedures for processing total and permanent (T&P) disability benefit claims do not adequately ensure that claimants meet program eligibility requirements. To find a railroad worker eligible for T&P benefits, RRB makes an independent determination of disability using the same general criteria that the Social Security Administration (SSA) uses to administer its Disability Insurance (DI) program—that is, a worker must have a medically determinable physical or mental impairment that (1) has lasted (or is expected to last) at least 1 year or is expected to result in death and (2) prevents them from engaging in substantial gainful activity, defined as work activity that involves significant physical or mental activities performed for pay or profit. RRB's policy states that, to establish eligibility for financial benefits, examiners should assess medical records for evidence that a claimant is too severely disabled to maintain gainful employment, and establish that a claimant's earnings fall below a certain threshold. However, the procedure for establishing if claimants meet the income threshold relies on SSA earnings data that can be up to 1 year old. Sources of more timely earnings information, such as the Department of Health and Human Services' National Directory of New Hires and The Work Number , exist and include both non-railroad and self-employment earnings, but RRB has not sufficiently explored the possibility of using them to help establish eligibility for T&P disability benefits. In addition, RRB lacks a policy to require independent supervisory review for all claims determinations. As a result, the procedures that claims examiners use to review a claim also allow them sole discretion to decide whether to approve it. Between 2008 and 2012, RRB data show that about one-quarter to one-third of T&P claims are considered and approved without independent supervisory review. According to generally accepted standards for internal controls in the federal government, essential tasks—such as establishing and determining that benefits should be awarded—should be performed by separate individuals to reduce the risk of fraud.
RRB's strategy for post-eligibility quality assurance review is inadequate to ensure that disability determinations for approved claims are accurate and does not address program risks due to potential fraud. While RRB checks the accuracy of payment amounts, and periodically reviews compliance with its policies, it does not evaluate the accuracy of disability determinations made or regularly monitor the effectiveness of the determination process. Similarly, performance goals for the disability program focus on measures of timeliness and do not track the accuracy of determinations made. The agency also has not engaged in a comprehensive effort to continuously identify fraud within the program, even after a high-profile incident exposed fraud as a key program risk. RRB has conducted some analyses to identify patterns in claims data that may suggest potential fraud, but the work has not led to new practices in the T&P program. Finally, while RRB officials stated that the agency has developed and provided some fraud awareness training, staff in all four of the district offices that GAO interviewed did not recall receiving this training, and some stated that it was not their responsibility to be alert for potential fraud, further limiting RRB's ability to ensure it is paying benefits only to eligible claimants.

What GAO Recommends

GAO recommends that RRB explore options for obtaining more timely earnings information; revise its policy concerning the supervisory review of disability claims; establish a regular quality assurance review of T&P disability decisions; develop a performance goal to track decision accuracy; and develop and implement fraud awareness policies, procedures, and annual training. RRB agreed with these recommendations.