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
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)