For example, SSA requires beneficiaries  to undergo periodic medical reviews called medical continuing disability  reviews, or medical CDRs, to assess whether they continue to have a  disabling impairment. The agency uses the ROAR  system to track DI overpayments and collections. Most DI Overpayments Are Work-Related, and Their Recovery Can Take Decades

		Nearly Three-Quarters of All DI Overpayments Are to Beneficiaries Who Have Returned to Work

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, and 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,  meaning the overpayments were to beneficiaries who returned to work  and were no longer eligible. Of the 60 cases, we found 54 in  which AERO increases in benefit amount occurred even while SSA  conducted a work CDR to determine if the beneficiary was still eligible for  benefits at all. 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 an 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 Policy Does Not Require Supervisory Review of Repayment Plans, although Some Last Decades

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. 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. 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 match. From the date of the  initial IRS alert to the date staff begin work on the CDR, cases that have  been identified by the IRS match and selected for a work CDR (but for  which no action has yet been taken to process the work CDR) are  categorized by SSA as “pending development.” In the 60 cases we  reviewed, the median time cases were pending development was 205  days, or about 7 months, and ranged from 2 to 466 days, or more than 15  months. The  agency’s actual experience with the NDNH in its SSI program suggests  its application in the DI program may be more cost-effective than  indicated by SSA’s analysis. SSA officials told us they are in the early stages of evaluating this  use and, as part of this effort, they said they may include an AERO alert  as one of several screening factors to identify cases at high risk for DI  overpayments. SSA Lacks Agencywide Performance Goals and a Consistent Approach for Processing Work CDRs

Similar to our findings about the lack of agencywide performance goals  for overpayment debt recovery, we also found that SSA does not have  agencywide performance goals or a consistent approach for processing  work CDRs across its processing centers. 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. Conclusions

Our review shows that while SSA has some initiatives to improve how it  performs work CDRs, existing policies and processes impede its ability to  more effectively detect, prevent, and recover overpayments. Recommendations

To enhance SSA’s ability to recover debt and to improve the detection  and, where possible, prevention of overpayments in the DI program, we  recommend that the Commissioner of Social Security  1.  develop and adopt agencywide performance goals, for the recovery of  DI overpayment debt, such as the percent of outstanding debt  collected annually. SSA disagreed with our second recommendation to require supervisory  review and approval of DI repayment plans which exceed SSA’s targeted  36 months. SSA agreed with our fourth recommendation to explore options for  obtaining more timely earnings information for DI program beneficiaries  who may be working, and thus more likely to incur 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 is poised to grow further as the baby boom generation ages. GAO examined (1) what is known about the extent to which SSA makes overpayments to, and recovers overpayments from, DI beneficiaries who exceed program earnings guidelines, and (2) potential DI program vulnerabilities that may contribute to overpayments to beneficiaries who have returned to work. To answer these questions, GAO reviewed work continuing disability review (work CDR) policies and procedures, interviewed SSA headquarters and processing center officials, visited 4 of 8 processing centers, and reviewed a random nongeneralizable sample of 60 CDR case files across those 4 centers (15 from each).

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. 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 cumulative DI overpayment debt reached $5.4 billion. SSA does not have agencywide performance goals for debt collection-- for example, the percent of outstanding debt collected annually. And while SSA has a policy for full repayment within 3 years, 19 of the 60 work CDR cases GAO reviewed had repayment plans exceeding 3 years. SSA officials said that 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 the review, GAO 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 GAO they have a work group which will recommend action to correct the problem. But until this issue is addressed, SSA officials said that 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 officials reported that the agency has ongoing initiatives to enhance debt collection. 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 GAO reviewed, there was no evidence in the file that the beneficiary reported his or her earnings, as required by program guidelines. To identify unreported work and 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, GAO found that cases may wait up to 15 additional months before SSA staff begin work on the CDRs. Second, SSA lacks formal, agencywide performance goals for work CDRs. While it targets 270 days to complete a case, actual processing time ranged from 82 to 992 days (with a median of 396 days) in the 60 cases GAO 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 GAO could not yet assess their effectiveness as part of this review.

What GAO Recommends

GAO recommends that SSA develop and adopt agencywide performance goals for recovering DI overpayments and processing work CDRs, require supervisory review of certain repayment plans, address a system limitation which precludes an accurate record of debt owed SSA, and explore options for obtaining more timely earnings information. SSA agreed with four of five recommendations. It disagreed with the need for supervisory review of repayment plans while acknowledging the need for more related guidance to its staff.