oversight

Veterans' Benefits: VA Needs Death Information From Social Security to Avoid Erroneous Payments

Published by the Government Accountability Office on 1990-07-27.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                 C’nited   States   General   Accouuting   Office
                 Report to the Chairman, Committee on
                 Veterans’ Affairs, U.S. Senate



July 1990
                 VETERANS’
                 BENEFITS
                 VA Needs Death
                 Information From
                 Social Security to
                 Avoid Erroneous
                 Payments




GAO/HRD-90-110                                                      .,
                                                                    ,”
GAO
                   United States
                   General Accounting Office
                   Washington, D.C. 20548

                   Human Resources Division

                   B-238840
                   July 27, 1990

                   The Honorable Alan Cranston
                   Chairman, Committee on
                     Veterans’ Affairs
                   United States Senate

                   Dear Mr. Chairman:

                   This report responds to your July 17, 1989, request that we (1) deter-
                   mine whether the Department of Veterans Affairs (VA) makes substan-
                   tial erroneous payments to the accounts of deceased beneficiaries under
                   its compensation and pension programs and (2) propose appropriate
                   remedies to resolve any problems that we detect in the payment system.

                   VA provides more than $14.7 billion in disability compensation and pen-
                   sion benefits each year. More than 2.8 million veterans and nearly 1 mil-
                   lion surviving spouses and other dependents receive these benefits,
                   When a beneficiary dies, payments should be terminated promptly.
                   However, if surviving relatives or other knowledgeable persons do not
                   report beneficiary deaths to VA in a timely manner, substantial erro-
                   neous payments can result.


                   VA is making substantial compensation and pension payments on behalf
Results in Brief   of deceased veterans. This happens because VA relies primarily on volun-
                   tary reporting of veteran deaths by relatives and others who may not
                   report the death or may be slow in doing so.

                   In responding to your request, we matched VA benefit payment files with
                   death information maintained by the Social Security Administration
                   (sA). SSA, an agency within the Department of Health and Human Ser-
                   vices (HHS), is the repository for death information that HHS obtains
                   under requirements of the Social Security Act. We found that in April
                    1989, VA paid compensation or pension benefits for 1,212 veterans
                   whom SSA records reported had died at least 4 months earlier. About 100
                   had been dead 10 years or more. The potential erroneous annual pay-
                   ments were $5.7 million. We were unable to determine with certainty,
                   however, whether payments were continuing for any “survivors” who
                   had died, because of the way VA records survivors’ names and social
                   security numbers (SSNS) in its benefit payment file.

                   In administering its programs, SSA receives voluntarily reported death
                   information from numerous sources and purchases death certificate
                                            .

                   Page 1                            GAO/HRD~llO   VA Needs S!3A Death Information
                      B23S840




                      information from the states. Federal agencies offering benefit programs,
                      such as VA, are authorized to obtain this information. By using SSA death
                      information VA could identify beneficiaries who are reported as
                      deceased. VA does not currently obtain this or any equivalent informa-
                      tion on a routine basis.

                      VA pays compensation and pension benefits to about 227,000 benefi-
                      ciaries who do not have SSNS on file with VA. This precludes VA from
                      matching these beneficiaries’ payment records with SSA death informa-
                      tion. Although other federal programs, including some VA programs,
                      require SSNS as a condition of eligibility, VA is not authorized to require
                      SSNS for either its compensation or protected pension programs. Legisla-
                      tion is needed to remedy this problem.


                      To document VA'S policies and procedures for obtaining information on
Scope and             beneficiary deaths, we interviewed officials at VA headquarters and two
Methodology           regional offices and reviewed claims processing manuals. We inter-
                      viewed VA and %+Aofficials to determine (1) why VA had not obtained SSA
                      death information and (2) what actions would be needed to grant VA
                      access to this information.

                      We obtained VA'S payment records for compensation and pension bene-
                      fits as of April 24, 1989, to match with SA’S death information as of
                      December 1988. Using SSNS as the primary identifiers, we performed two
                      matches. We matched VA'S payment records first against SSA'S volunta-
                      rily reported death information, and second against death certificate
                      information purchased from the states. To verify VA beneficiary deaths
                      identified in our first match, we compared the reported deaths with SSA
                      Master Beneficiary Record (MBR) information. Deaths recorded in the
                      MBR are generally independently confirmed by SSA.

                      We made our review between August 1989 and April 1990 in accordance
                      with generally accepted government auditing standards, with the fol-
                      lowing exception, which was beyond the scope of this review. We did
                      not assess SA’S internal controls over its computer data bases.


                      By matching VA'S benefit payment file with SSAdeath information, we
Results of Matching   identified 1,212 veterans who were reported dead as of December 1988.
VA and SSA Data       VA paid benefits to their accounts, however, in April 1989. Using SSA
                      information, we were able to verify 652 of these deaths. Although the



                       Page2                             GAO/HRIMO-110VANeedsSSADeathInformatio~
    remaining 560 were included in SSA'S death file we could not confirm
    them. Additional VA follow-up would be required.

    Our match consisted of two parts. First, we matched VA'S payment
    records for compensation and pension benefits as of April 24, 1989, with
    SSA’Sdeath file as of December 1988, which contains information on
    over 39 million deaths. We found 1,065 veterans that SSAinformation
    showed were deceased but for whom VA benefit payments were contin-
    uing. Erroneous payments to these veterans’ accounts could amount to
    $5.1 million annually.

    To verify veteran deaths, we compared the 1,065 cases with SSA'S MBR
    data, although we realized that not all veterans would be eligible for SSA
    benefits and, thus, not included in the MBR. The MBR, however, contains
    beneficiary death information, which is generally independently varied
    by ,%A. If the MBR showed a beneficiary’s SSAbenefits were terminated
    due to death, we considered these confirmed deaths. We were able to
    confirm that 505 veterans were deceased.

    Second, we matched the VA payment file previously discussed with an
    SSAfile containing information from about 450,000 death certificates
    purchased from the states. This file is unrestricted in that it is available
    to other federal agencies.] Through this match, we identified an addi-
    tional 147 deceased veterans to whose accounts VA benefit payments
    continued. We estimate the erroneous annual payments to these
    accounts are $638,000.

    At our request, VA investigated some of the cases identified in our match.
    It verified substantial payments on behalf of veterans whom SSA data
    identified as having been deceased for a number of years. For example:

l SSArecords showed that a veteran died in August 1984. The death was
  not reported in the VA benefit payment file. VA records showed that
  direct deposits of $30,369 had been made to the veteran’s bank account
  since August 1984. After verifying the date of death, VA ended benefit
  payments and established a $30,000 overpayment. VA is further investi-
  gating this case.
. Another veteran died in September 1983, .%Arecords showed, but VA
  continued to make direct deposit payments to the dead veterans’s

    ‘SSA also maintains a file containing information from about 900,000 death certificates purchased
    from the states under agreements that preclude releasing the information to other federal agencies
    without the prior permission of the states. We did not match VA’s payment file with this information.



    Page3                                          GAO/HUD-00110VANeedsSSADeathInformation
                        B238840




                        account. VA verified the date of death and ended benefit payments as of
                        September 1, 1989. Total erroneous payments to the account were
                        $13,797. VAis considering further action.
                      . SSArecords showed that a veteran died on August.8, 1986. The VA ben-
                        efit payment file showed no report of death, and payments had been
                        continuously sent to the veteran’s last known address, located above a
                        cab company. Representatives of the cab company told VA that the vet-
                        eran had died about August 1986. VA determined that the veteran’s
                        sister had been cashing the checks since that time and ended payments.
                        VA estimated erroneous payments were $2,755 as of December 1989.



                        VA officials told us they have unsuccessfully negotiated with SSA over
VA Has Not Obtained     the past several years to gain access to available death information.
SSA’s Death             When we discussed this matter with ssi\officials, they maintained that
Information             VA has expressed reluctance to comply with SA'S requirement to inde-
                        pendently verify reported deaths before taking any action that may
                        adversely affect a person’s benefits. VA officials maintain, however, that
                        such verification is required under its due-process regulations before
                        benefits can be terminated.

                        Notwithstanding this apparent misunderstanding between VA and SSA,
                        we did not identify any reasons to further delay VA from obtaining SSA
                        information. Accordingly, we met with VA officials to discuss this matter.
                        As a result of this meeting, the Acting Chief Benefits Director sent a
                        letter on February 26, 1990, to the SSA Commissioner formally
                        requesting the information.

                         VA and SSAofficials met on June 6, 1990, to negotiate an agreement for
                         transfer of SSAdata to VA. VA officials told us that the meeting resulted in
                         a draft agreement, which has been sent back to SSA for approval. The
                         agencies agreed that (1) ssAwil1 provide its voluntarily reported death
                         information as soon as VA is ready for it and its unrestricted state death
                         certificate data as soon as programming problems are resolved and (2)
                         VA will contact the states who have restricted their death certificate datz
                         and request that the data be made available for use by VA. VA expects to
                         begin matching during the first quarter of calendar year 199 1.

                         VA officials also told us that once the SSAdata are available, matching
                         with SSA data and verifying the results can be accomplished at a nominal
                         cost. Likewise, SSA officials said the cost of providing the data to VA
                         would be nominal.
                                             .


                         Page 4                             GAO/IUUMO-110 VA Needs SSA DeathImfomatior
                                        B-238840




                                        We analyzed VA'S payment file for compensation and pension benefits, to
VA Does Not Have                        determine whether all beneficiaries were identified by SSNS.This is an
Social Security                         essential element to allow matching of VA'S payment file with SSA’Sdeath
Numbers for All                         information. We found that in 1989, VA paid over $1 billion in benefits to
                                        about 227,000 veterans and survivors that were not identified by SSNS
Beneficiaries                           (about 6 percent of all VA beneficiaries). As shown in table 1, VA paid
                                        compensation rather than pension benefits to most of these
                                        beneficiaries.

Table 1: VA Payments to Beneficiaries
Not Identified by SSNs                                                                                      Estimated
                                        VA .program
                                               -                                     Beneficiaries     1989 payments
                                        Compensation                                       167,201        $857,891,904
                                        Pension                                             60.208         144.791.328
                                        Total                                              227,409      $1.002.683,2~2


                                        Without SSNS, matching VA benefit payment files with SSA’Sdeath files is
                                        incomplete because beneficiary records without SsNs will not be
                                        included. Therefore, it is possible that VA will continue to make erro-
                                        neous benefit payments unless all beneficiaries are required to provide
                                        SNS to VA. The administration proposed legislation to give VA the
                                        authority to require beneficiaries to provide SSNS as a prerequisite for
                                        eligibility for benefits. The legislation was introduced in the Senate on
                                        June 1, 1989 (S. 11 lo), and in the House on June 14, 1989 (H.R. 2644).
                                        At the time of our review, the legislation was pending.


                                        SSAhas information that VA could use to identify potentially erroneous
Conclusions                             payments to deceased beneficiaries. SSAand VA need to establish a mech-
                                        anism to exchange this information because there is no apparent reason
                                        to further delay VA'S obtaining it. A sizeable number of VA beneficiaries,
                                        however, do not have SSNSon file with VA, preventing VA from matching
                                        their records with available SSA death information.


                                         GAO  recommends that the Secretary (1) finalize arrangements to obtain
Recommendations to                       access to and periodic updates of SSA’Sdeath file and unrestricted death
the Secretary of                         certificate file, (2) match the files with VA'S benefit payment files, (3)
Veterans Affairs                         carry out appropriate independent verification of matches, and (4) take
                                         prompt action to end erroneous payments.




                                         Page 6                            GAO/HRMO-110 VA Needs !%A Death Information
                    El-238840




                    We recommend that the Secretary direct the Commissioner of !%A to pro-
Recommendation to   vide VA recurring access to SA’S death file and unrestricted death certifi-
the Secretary of    cate file.
Health and Human
Services

                    To facilitate more complete and effective computer matching between
Recommendation to   VA'S benefit payment files and SSA'S death file, the Congress should
the Congress        authorize VA to require SSNS of all veterans and their survivors as a con-
                    dition of eligibility for VA compensation and pension benefits.


                    GAO requested written comments    on a draft of this report from VA and
Agency Comments     HHS. VA and HHS provided written  comments, which are summarized
                    below and presented in full in appendixes I and II.

                    VA concurred with all our recommendations and said it has initiated
                    action to acquire SSA'S death information. VA anticipates beginning to
                    match SA death data and VA payment data during the first quarter of
                    1991, and said it will verify each case where a match occurs to deter-
                    mine whether action to stop payments is warranted.

                    VA noted that our report did not recognize that the VA Inspector General
                    had obtained death information from SSAand was working with the v~
                    Benefits Administration to do some matching. We were aware that
                    during our review the Inspector General obtained some of SSA'S death
                    information and was performing some matching. Officials in the
                    Inspector General’s Office told us, however, that this was a one-time
                    effort rather than a routine occurrence as we are recommending in our
                    report.

                    HHS acknowledged that ss~ is working with VA to develop a memorandun
                    of understanding regarding the exchange of death data. SSA expects the
                    memorandum of understanding to be completed in 60 days.




                    Page6                              GAO/HlUHO-llOVANeeds!%SADeathInfomatic
IS238840




We are sending copies of this report to appropriate congressional com-
mittees; the Secretaries of VA and HHS; the Director, Office of Manage-
ment and Budget; and other interested parties.

This report was prepared under the direction of Joseph F. Delfico,
Director, Income Security Issues, who may be reached on (202) 275-
6193. Other major contributors are listed in appendix III.

Sincerely yours,



z;currcrRLz-
Lawrence H. Thompson
Assistant Comptroller General




Page 7                            GAO/HRD90110 VA Needs !%A Death Information
Contents


Letter                                                                                                1

Appendix I                                                                                        10
Comments From the
Department of
Veterans Affairs
Appendix II                                                                                       12
Comments From the
Department of Health
and Human Services
Appendix III                                                                                      14
Major Contributors to
This Report
Table                   Table 1: VA Payments to Beneficiaries Not Identified by                       5
                            SSNs




                        Abbreviations

                        HHS       Department of Health and Human Services
                        MBR       Master Beneficiary Record
                        SSA       Social Security Administration
                        SN        social security number
                        VA        Department of Veterans Affairs


                        Page 8                           GAO/HR.WO-110 VA Needs SA Death Informatin
Page 9   GAO/HRD9@llO VA Needs S!3A Death Information
Appendix I

Comments From the Department of
Veterans Affairs


                                           THE SECRETARY   OF VETERANS    AFFAIRS
                                                       WASHINGTON




                                                 JUN 11990


                 Mr. Joseph F. Delfico
                 Director,   Income Security     Issues
                 U. S. General Accounting       Office
                 Washington,    DC 20548
                 Dear   Mr.     Delfico:
                       I am responding    to your draft report,    m          I              :   v
                 9
                 Pavmoata (GAO/ERD-90-llO),        dated April 30, 1990. GAlIs        recognityon
                 of some of VA's attempts           to secure death information           from the
                 Social Security    Administration      (SSA) is appreciated.
                      I concur with each of         GAO's recommendations    in this report.
                 The Department has initiated         action  to acquire   death information
                 from the SSA. Our detailed         comments are enclosed.
                                                              Sincerely      yours,




                                                              Secretary

             I   Enclosure
                 EDJ/jev




                              Page 10                            GA0/HRD9@110 VA Needs SSA Death Informatio
            Appendix I
            Comments From the Department         of
            Veterans Affairs




                                                                                               Enclosure
  DEPARTMENTOF VETERANSAFFAIRS COMMENTS  ON THE MAY 30, 1990,
        GAO DRAFT REPORT, VETERANS' BENEFITS: VA NEEDS
  INFORMATION FROMSOCIAL SECURITY TO AVOID ERRONEOUSPAYMENTS
                       (GAO/HRD-90-110)

GAO   recommends that         I
       --     Complete arrangements to obtain  access to and periodic
              updates  of SSAls death file    and unrestricted   death
              certificate         file.
     We concur with the recommendation.  We have arranged a meeting
with Social Security on June 6, 1990 to negotiate an agreement that
will permit the transfer  of SSA data to us.

       --     Match the       files       with        VA’s   payment      files.
     We concur with the recommendation.    We anticipate commencing
the match during the first  quarter of calendar year 1991.

       --     Carry     out       appropriate,     independent  verification  of
              matches and         take prompt action to end erroneous payments.
       We concur with the recommendation.                         After     completing          the match
between VA benefit files and SSA death files,     we will verify each
case where a match has occurred.  Upon verification      of the death,
we will     take prompt action to stop any erroneous                                 payments and to
resolve     any overpayment that would develop.

      As a general Comment,     it should be noted that the report does
not recognize     that the Office of Inspector        General (OIG) has
already    successfully     negotiated   death information    from SSA.
Furthermore, the OIG has had this information      since September 1989.
      The OIG and the Veterans Benefits Administration      (VBA) are
working together on a match of the SSA death information   with VBA's
Compensation and Pension file.     Currently, VBA is performing the
field verification work as their part of the joint effort.     The OIG
expects to have a report finalized   by the end of this fiscal year.
       The OIG performed the first  death match in 1981 using a
privately   owned death file. As a result of that audit, the OIG
recommended that VBA perform such a match on a recurring basis to
discover erroneous payments in a more timely fashion.



                                             .

             Page 11                                          GAO/HRD-90-110       VA Needs   SSADeath   Information
Appendix II

Comments From the Department of Health and
Human Services


                 DEPARTMENT       OF HEALTH & HUMAN   SERVICES                  Ottxe   at lns~eclor   General


                                                                                Washmgtan       DC     20201


                                                  Juy 29 19s




              Mr. Joseph F. Delfico
              Director,     Income Security     Issues
              United States General
                 Accounting     Office
              Washington,      D.C.    20548
              Dear Mr.      Delfico:
              Enclosed are the Department's        comments on your draft    report,
              "Veterans'     Benefits:   VA Needs Death Information     From Social
              Security     to Avoid Erroneous Payments.@* The comments represent
              the tentative     position  of the Department and are subject       to
              reevaluation     when the final   version  of this report    is received.
              The Department appreciates   the opportunity            to comment on this
              draft report  before its publication.




                                                      Richard P. Kusserow
                                                      Inspector General
              Enclosure




                  Page 12                                  GAO/HBD-So-110VA NeedsSSADeathInformatitr
         Appendix II
         Comments From the Department   of Health
         and Human Services




     COMMENTS  OF THE DEPARTMENTOF HEALTH AND HUNANSERVICES ON
       TliE GENERALACCOUNTINGOFFICE'S DRAFT REPORT. *VETERANS'
           BENEFITS: VA NEEDS DEATH INFORMATIONFROMSOCIAL
        SECURITY TO AVOID ERRONEOUSPAYMENTS fGAO/HRD-90-110)

Recommendation
--     That the Secretary direct the Commissioner of Social
       Security to provide the Department of Veterans' Affairs         (VA)
       recurring   access to the Social Security Administration's
        (SSA) death file  and unrestricted death certificate     file.
peoartment    Comment
SSA and the VA are currently      developing a Memorandum of
Understanding     (MOU) regarding the exchange of death data.   SSA
expects the MOU to be completed within 60 days, and SSA will be
prepared to sign the agreement at that time.      It is expected that
the VA will take another 30 days to obtain approval for
signature.     The VA has indicated that it wants SSA to provide
restricted    data also.
As indicated  in the General Accounting Office draft report, SSA
receives death information   from different   sources, including
State vital statistics   agencies, under the provisions    of section
205(r) of the Social Security Act.      Most States have entered into
an agreement with the Secretary of Health and Human Services to
provide death data to SSA.
These States are considered either unrestricted      (those that do
not restrict   further disclosure of the information     provided) and
restricted   States (those that do not permit further disclosure
without the express consent of the State).      Thus, before SSA
could disclose to the VA death information    received from a
restricted   State, that State would have to consent to the
disclosure.
There is the possibility     that the disclosed     information could
contain data on individuals       who are alleged to be deceased, but
who in fact are not.     This is because SSA records do sometimes
contain temporarily    unverified    death information.
When death information      is received,       it is compared to SSA's
Master Beneficiary      Record.     If a match is not found, the death
allegation    is noted in the NUMIDENT file and later verified.
When verification     takes place,      it is occasionally      found that the
alleged decedent is still       living.       Therefore,    because SSA death
data may contain such unverified           information,     the VA will need to
agree to independently      verify the disclosed         information   before
taking any action.




          Page 13                                   GAO/HRMO-110   VA Needs SSA Death Information
Appendix III                                                                                           -

Major Contributors to This Report


Human Resources         James F. Walsh, Assistant Director, (202) 233-5281
Division,               Neil N. Miller, Assignment Manager
                        Frank M. Guido, Evaluator
Washington, D.C.

                        Richard G. Halter, Regional Management Representative
Philadelphia Regional   Richard W. Meehl, Evaluator-in-Charge
Office                  Carolyn B. Alessi, Evaluator




 (105704)                Page 14                          GAO/HRD9@110   VA Needs SSA Death   Informatil