SSA Made $72 Billion in Improper Payments, With $23 Billion Still Uncollected

Tackling Improper Payments: SSA Struggles to Recoup Over $72 Billion

Introduction:
The Social Security Administration (SSA) has been plagued by improper payments, with a recent report from the SSA’s Office of the Inspector General (OIG) revealing that nearly $72 billion worth of payments were made in error over a span of seven years. These improper payments, which can be overpayments or underpayments, pose a significant challenge for the agency, with almost a third of the funds still uncollected. In this article, we will delve into the causes of these improper payments, the efforts made by the SSA to rectify the situation, and the potential implications for beneficiaries.

The Challenge of Improper Payments:
The SSA issues over $1 trillion in benefit payments annually, making even the slightest error in the payment process a costly mistake. From fiscal years 2015 through 2022, the SSA made approximately $71.8 billion in improper payments, most of which were overpayments. These overpayments result in additional work for SSA employees and impose burdens on beneficiaries who receive these payments. Moreover, the agency still had a staggering $23 billion in uncollected overpayment balances at the end of fiscal year 2023.

Efforts to Remedy the Situation:
Recognizing the gravity of the improper payments issue, the SSA has taken steps to address the problem. The agency is developing an information exchange to access wage data from payroll processors, aiming to reduce payment errors. Additionally, the SSA initiated a comprehensive review of its overpayment procedures, systems, and communications in October. However, the OIG report emphasizes that more needs to be done to prevent improper payments from occurring in the first place. Better access to data, increased automation, systems modernization, and policy or legislative changes are crucial in reducing the administrative and productivity costs incurred to correct these errors.

Legislative Concerns and Senatorial Action:
Lawmakers have raised concerns about the SSA’s improper payment issue, particularly the financial hardships faced by beneficiaries when recovering overpayments. Senators Maggie Hassan and Bill Cassidy wrote a letter to the SSA’s acting commissioner, urging the agency to take additional action to reduce overpayments and prevent undue harm to vulnerable Social Security recipients. While acknowledging the constraints faced by the SSA, such as low staffing levels and high turnover, the senators emphasized the need for prioritizing efforts to correct the improper payments issue.

SSA’s Updates and Policy Changes:
In response to the improper payments problem, the SSA announced several updates in March. One significant change was the modification of the repayment process for overpaid beneficiaries. Previously, the agency would deduct 100 percent of a beneficiary’s monthly benefits until the overpaid amount was recovered. However, the new system limits deductions to just 10 percent of monthly benefits. The SSA also made it easier for overpaid beneficiaries to request a waiver of repayment in cases where they cannot afford to repay the overpaid amount. Additionally, the repayment period was extended from 36 to 60 months, providing individuals with more time to repay the overpayments.

Broader Scope of the Issue:
The issue of improper payments extends beyond the SSA, as revealed by a report from the U.S. Government Accountability Office. In fiscal year 2023, the federal government made a staggering $236 billion in improper payments, with Medicare, Medicaid, Pandemic Unemployment Assistance, the Earned Income Tax Credit, and Paycheck Protection Program Loan forgiveness accounting for approximately $186 billion of the total. Medicare and Medicaid alone had over $50 billion each in improper payments, indicating the need for comprehensive measures to address this widespread problem.

Conclusion:
The SSA’s struggle with improper payments highlights the challenges faced by the agency in ensuring accurate and timely benefit payments. While the SSA has made efforts to rectify the situation, there is still much work to be done. Preventing improper payments from occurring in the first place through better access to data, increased automation, and systems modernization is crucial. Legislative action and policy changes are also necessary to reduce the burden on beneficiaries and protect vulnerable recipients. Ultimately, addressing the improper payments issue is not limited to the SSA alone but requires a broader approach to tackle this systemic problem across various government programs.