National data identifying WC beneficiaries do not exist. SSA Faces Difficulties Administering Disability Payments Involving WC Benefits

The lack of a reliable source of information to identify WC beneficiaries complicates SSA’s administration of benefit payments under the DI and the SSI programs. Reliance on the Self- Reporting of WC Benefits Makes SSA Payments Vulnerable to Errors

SSA’s long-standing problems with administering the WC offset persist today. The most significant payment errors occurred because SSA relied on beneficiaries to file timely reports on the status of their WC benefits. In addition to reconsidering its benefit payments in these cases, SSA has taken other actions to improve its administration of the WC offset, including sending mailers to remind beneficiaries to report changes in their WC benefits. Like SSA, each of these programs is vulnerable to payment problems caused by an inability to reliably identify beneficiaries receiving WC benefits. Like SSA, HCFA primarily relies on its beneficiaries to report their WC benefits. Lack of WC Information Could Affect Other Program Operations

Other federal programs, including Food Stamps, Section 8 Rental Voucher and Certificate Programs, and child support enforcement, also need information about the receipt of WC benefits by their program applicants and participants to effectively administer their operations. Options for Improving Access to Workers’ Compensation Information

Because of the fragmented structure of WC programs and the lack of direct federal involvement in state WC programs, developing a reliable source of information to identify WC beneficiaries for federal agencies defies a simple solution. Benefit payers know to whom, when, how much, and why they are paying benefits. Social Security benefit amounts are based on a person’s average earnings. Analysis of Effects of WC Benefits on Medicare and Other Federal Agencies

To examine Medicare’s administration of the secondary payer provision in the Social Security Act relative to workers’ compensation, we reviewed pertinent regulations and procedures and met with HCFA policy and operations officials.
Why GAO Did This Study

This report discusses how workers' compensation (WC) benefits affect benefit programs run by the Social Security Administration (SSA) and other agencies. GAO (1) examines the effects of WC benefits on SSA programs, focusing on SSA's progress in administering the WC offset provision; (2) discusses other federal programs whose benefit payments are also affected by WC benefits; and (3) discusses ways to address federal benefit payment errors related to workers' compensation.

What GAO Found

GAO found that SSA's administration of the WC offset provision continues to be undermined by the lack of reliable information on WC benefits received by Social Security Disability Insurance (DI) beneficiaries which causes some beneficiaries to be overpaid and others to be underpaid. No national reporting system identifies WC beneficiaries. Instead, SSA largely relies on applicants and beneficiaries to report their receipt of WC benefits and any changes that occur in the benefit amounts--an approach that makes it very difficult for SSA to make accurate benefit payments. Other federal agencies also need WC information to make accurate benefit payments and face similar difficulties identifying WC beneficiaries. Like SSA, Medicare relies on its applicants and beneficiaries to self-report WC benefits and is vulnerable to payment errors when they do not. In addition, food stamp programs and Section 8 rental housing assistance consider WC benefits as income or assets, and an inability to obtain benefit information could affect the accuracy of benefit payments. There are ways to address the difficulty of reliably identifying WC beneficiaries. However, the fragmented structure of WC programs and the lack of federal involvement in state WC programs defy a simple solution.