	Background

SSA conducts periodic reviews called work continuing disability reviews  (work CDRs) to determine if beneficiaries are still eligible or are working  above the SGA level. Most DI Overpayments Are Work Related, and Their Recovery Can Take Decades

Medical and work-related overpayments in the DI program detected by  SSA grew from about $860 million in fiscal year 2001 to about $1.4 billion  in fiscal year 2010. Though the true extent of overpayments due to  earnings is currently unknown, our review suggests that most of them are  related to beneficiaries who work above SGA while receiving benefits. SSA  officials estimate that from fiscal years 2005 through 2009, about 72  percent of all projected DI overpayments were work-related, or to  beneficiaries who returned to work and were no longer eligible. Because the results of our case review are not generalizable,  the incidence of such occurrences is currently unknown and thus the  potential impact on total DI overpayments owed by ineligible beneficiaries  is not clear. DI beneficiaries may reenter and leave  the workforce based on their ability to perform SGA. In 49 of the 60 cases we randomly selected for review,  there was no indication in the file that the individual had reported his or  her earnings to SSA, and in 15 of the 60, SSA had detected two or more  separate periods of earnings which resulted in overpayments. Despite a substantial increase in DI debt  collections—$340 million to $839 million from fiscal year 2001 through  fiscal year 2010—outstanding DI debt grew from $2.5 billion to $5.4  billion during this time, including a $225 million increase in fiscal year  2010. SSA attributes 77 percent of the approximately $839 million of  debt collected in fiscal year 2010 to withholding of DI benefits. SSA Policy Does Not Require Supervisory Review of Repayment Plans

SSA does not require supervisory review of repayment plans prior to  approval, including those in which repayment periods exceed the  recommended 36 months. While SSA’s POMS require that staff  should seek full repayment within 36 months, SSA officials reported that  no supervisory approval is needed to exceed the 36 months. SSA officials told us they are often  unable to increase monthly payment amounts and thus shorten repayment  time frames because of a debtor’s limited income. In the course of analyzing repayment plans, we found that the ROAR  system cannot capture and track overpayment debt scheduled to be  collected beyond the year 2049. Since bringing this issue to their attention, SSA officials told us  that the agency has begun to study this ROAR system limitation and an  agency working group will recommend a course of action to correct the  problem. Lack of Timely Earnings Data and Inconsistent Processing of Work CDRs Allow Overpayments to Accrue

SSA conducts periodic computer matches with wage data from the  Internal Revenue Service to independently verify beneficiaries’ earnings. However, earnings data provided through the IRS match are often more  than a year old when SSA staff begin the work CDR prompted by the IRS  data. Yet 6 of these cases resulted in about $78,000 in total overpayments, even  though the beneficiary reported returning to work more than a year prior  to initiation of the work CDR. Several federal programs  and agencies currently use the NDNH to verify program eligibility, detect  and prevent potential fraud or abuse, and collect overpayments. However, the agency’s  experience with the NDNH in its SSI program suggests it may be more  cost-effective than indicated by SSA’s analysis. SSA Lacks Agency-Wide Performance Goals and a Consistent Approach for Processing Work CDRs

SSA does not have agency-wide performance goals or a consistent  approach for processing work CDRs across its processing centers. While SSA has established an agency-wide goal for processing  a certain number of medical CDRs in a fiscal year, and includes this goal in  the agency’s annual performance plan, SSA officials told us they have not  established similar goals for work CDRs. For example, SSA has set targets for 95  percent of IRS alerts on earnings generated in 2008 or earlier to have a  work CDR completed by September 24, 2010, and for processing centers to  complete development of cases within 270 days. We  also found that while SSA’s policies establish steps for work CDR  processing to be followed across all processing centers, processing times  across the four centers we visited varied widely once development was  initiated. More specifically, we found that processing times for the 60  cases we reviewed ranged from 82 to 992 days (with a median of 396 days)    and resulted in combined overpayments totaling more than $1 million. While these and other recent  initiatives represent promising steps, it is too early to assess what impact  they may have on the prevalence and size of DI overpayments.
Why GAO Did This Study

The Social Security Administration's (SSA) Disability Insurance (DI) program paid almost $123 billion in benefits in fiscal year 2010 to more than 10 million workers and dependents. The program has grown rapidly in recent years and is poised to grow further as the baby boom generation ages. GAO examined (1) what is known about the extent SSA makes work-related overpayments to, and recovers overpayments from, DI beneficiaries, and (2) SSA's policies and procedures for work continuing disability reviews (work CDRs) and potential DI program vulnerabilities that may contribute to overpayments to beneficiaries who have returned to work. To answer these questions, GAO reviewed work CDR policies and procedures, interviewed SSA headquarters and processing center officials, and visited 4 of 8 processing centers. We reviewed a random nongeneralizable sample of 60 CDR case files across those 4 centers to ensure we had a wide range of cases for our review (15 cases from each). These 4 centers received almost 80 percent of all work CDRs from SSA's Internal Revenue Service enforcement data match in fiscal year 2009.

What GAO Found

Disability Insurance overpayments detected by SSA increased from about $860 million in fiscal year 2001 to about $1.4 billion in fiscal year 2010, though the full extent of overpayments to beneficiaries who have returned to work and are no longer eligible is unknown. Overpayments may also go to beneficiaries who are no longer eligible due to medical improvement, but SSA estimates about 72 percent of all projected DI overpayments were work related during fiscal years 2005 through 2009. While the agency collected, or recovered, $839 million in overpayments in fiscal year 2010, monies still owed by beneficiaries grew by $225 million that same year, and total DI overpayment debt reached $5.4 billion. SSA does not have agency-wide performance goals for debt collection, for example, the percent of outstanding debt collected annually. And while SSA does have a policy for full repayment within three years, 19 of the 60 continuing disability review (work CDR) cases we reviewed had repayment plans exceeding three years. SSA officials told us lengthy repayment plans are often the result of an individual's limited income, but SSA does not review or approve repayment plans which exceed agency policy. During the course of our review, we 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. SSA officials acknowledged this issue, but are unable to determine the extent of the problem at this time. They told us they have a work group which will recommend action to correct the problem. But until this issue is addressed, SSA officials told us the agency can only track and report on overpayments scheduled to be repaid through 2049. The amount owed after that year is unreflected in current totals even as it annually increases. SSA has numerous policies and processes in place to perform work CDRs, though two key weaknesses have hindered SSA's ability to identify and review beneficiary earnings, which affect eligibility for DI benefits. First, SSA lacks timely earnings data on beneficiaries who return to work. In 49 of the 60 CDR cases we reviewed, there was no evidence in the file that the beneficiary reported returning to work, as required by the program. To identify these unreported earnings, SSA primarily relies on data matching with the Internal Revenue Service (IRS), then sends these matches to staff for a work CDR. However, the IRS data may be more than a year old when received by SSA, and SSA says it is not cost effective to gain access to and use other sources of earnings information, such as the National Directory of New Hires database. In addition, we found cases may wait up to 15 additional months before SSA staff begin work on the CDR. Second, SSA lacks formal, agency-wide performance goals for work CDRs. While it targets 270 days to develop a case, actual processing time taken ranged from 82 to 992 days (with a median of 396 days) in the 60 cases we reviewed, and overpayments which accrued as a result topped $1 million total. SSA officials reported several initiatives to more effectively prioritize work CDR cases, for example, those with the largest potential overpayment amounts, but these efforts are in the early stages and we could not yet assess their effectiveness. GAO has ongoing work on this issue and has no recommendations at this time.