These questionnaires gathered information on (1) the methods states use to identify and collect overpayments, (2) how recovery efforts are coordinated among the three programs, (3) the level of overpayments established and collected in fiscal year 1992, and (4) what factors hinder or help states’ abilities to recover overpayments. Successful Practices for Establishing Claims and Recovering Overpayments

States that had the most success in establishing claims and recovering overpayments used a much higher number of certain recovery practices and tools than other states. The practices and tools used for recovering overpayments were lower average caseloads for eligibility staff, greater portion of a state’s total staff working to recover overpayments, use of state income tax refund intercept, use of multiple approaches to collect overpayments, automated tracking and billing system with a full range of functions, and more of a state’s overpayment records in automated tracking and billing system. Potential for States to Improve Recovery Efforts

If all states had performed as high-performing states did in recovering AFDC, Food Stamp, and Medicaid overpayments in 1992, we estimate that an additional $262 million could have potentially been recovered. In contrast, the AFDC and Medicaid programs provide little guidance on best recovery practices to the states. Currently, only the Food Stamp Program allows states to intercept a federal income tax refund to recover overpayments from a former program client who is delinquent in repayment. USDA Comments and Our Evaluation

USDA concurred with our conclusion that more can be done to recover overpayments from current and former welfare clients. It agreed that, because some states establish claims for a greater percentage of their overpayments than others, they recover more overpayments.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed states' efforts to recover benefit overpayments in the Aid to Families with Dependent Children (AFDC), Food Stamp, and Medicaid programs, focusing on: (1) overpayments collected from current and former welfare clients in 1992; (2) factors that help or hinder effective state recovery practices; and (3) how the federal government can help states recover more overpayments.

What GAO Found

GAO found that: (1) the states with the highest recovery rates in fiscal year 1992 established claims for a greater portion of their overpayments; (2) successful practices to establish overpayments included using computer matching to identify potential overpayments, more timely efforts to verify overpayments and establish claims, and establishing overpayment claims on the more difficult collection cases; (3) states that used a broader array of recovery tools had greater collection rates than other states; (4) successful practices to recover overpayments included using lower average caseloads for eligibility staff, detailing more staff to recovery efforts, intercepting state income tax refunds, and using automated tracking and billing systems to recover overpayments; and (5) an additional $262 million could have been recovered in 1992 if all states had been as successful as the top performing states. GAO also found that: (1) two of the three federal agencies responsible for overseeing the programs do not help states identify the best recovery practices; and (2) eliminating client consent for temporary reductions in benefits due to administrative errors in the Food Stamp Program and intercepting federal income tax refunds to recover AFDC and Medicaid overpayments could increase overpayment recoveries by millions of dollars annually.