oversight

Food Stamp Program: Relatively Few Improper Benefits Provided to Individuals in Long-Term Care Facilities

Published by the Government Accountability Office on 1999-06-04.

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

                  United States General Accounting Office

GAO               Report to the Chairman, Subcommittee
                  on Department Operations, Oversight,
                  Nutrition, and Forestry, Committee on
                  Agriculture, House of Representatives

June 1999
                  FOOD STAMP
                  PROGRAM
                  Relatively Few
                  Improper Benefits
                  Provided to Individuals
                  in Long-Term Care
                  Facilities




GAO/RCED-99-151
      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      Resources, Community, and
      Economic Development Division

      B-282480

      June 4, 1999

      The Honorable Bob Goodlatte
      Chairman, Subcommittee on Department Operations,
        Oversight, Nutrition, and Forestry
      Committee on Agriculture
      House of Representatives

      Dear Mr. Chairman:

      In 1997 and 1998, we reported that the U. S. Department of Agriculture
      (USDA), through its Food Stamp Program, potentially paid millions of
      dollars in food stamp overpayments to families that included ineligible
      individuals such as prisoners and deceased individuals as members of
      their households. In 1998, we also reported that thousands of individuals
      were potentially improperly counted in food stamp households in at least
      two states at the same time.1

      In response to these reports, you asked that we examine the extent to
      which individuals residing in long-term care facilities are improperly
      included as members of food stamp households. The Food Stamp
      Program’s regulations prohibit individuals who are residing in long-term
      care facilities from participating in the program because they receive
      meals from the care facility.

      Specifically, we determined for seven states (1) how many individuals
      were included as members of food stamp households while they were
      residing in long-term care facilities and the estimated value of the
      overpayments to those households and (2) whether computer matching is
      a practical means for identifying such overpayments.

      To identify individuals counted as members of households receiving food
      stamps while they were residing in long-term care facilities, we conducted
      a computer match using calendar year 1997 information.2 Our computer
      match compared the food stamp rolls of seven states (California, Florida,
      Kansas, Illinois, New York, North Carolina, and Texas) against Medicaid


      1
       Food Stamps: Substantial Overpayments Result From Prisoners Counted as Household Members
      (GAO/RCED-97-54, Mar. 10, 1997) and Food Stamp Overpayments: Thousands of Deceased Individuals
      Are Being Counted as Household Members (GAO/RCED-98-53, Feb. 11, 1998) and Food Stamp
      Overpayments: Households in Different States Collect Benefits for the Same Individuals
      (GAO/RCED-98-228, Aug. 6, 1998).
      2
       Calendar year 1997 was the latest year for which information on food stamps and long-term care were
      available.



      Page 1                                                   GAO/RCED-99-151 Food Stamp Program
                   B-282480




                   records of individuals residing in long-term care facilities. These seven
                   states accounted for about 42 percent of the nation’s participants in the
                   Food Stamp Program. See appendix I for more details on our scope and
                   methodology.


                   In the seven states we reviewed, we identified about 4,500 individuals who
Results in Brief   were potentially improperly included as members in households receiving
                   food stamps while residing in long-term care facilities. These households
                   could have received an estimated $500,000 in food stamp overpayments
                   during calendar year 1997. These potential overpayments represented a
                   very small percentage of the $8.5 billion in benefits distributed in the seven
                   states during fiscal year 1997. We are providing the states our computer
                   match results for their use in eliminating or recovering the overpayments.

                   In view of the relatively small amount of potential food stamp
                   overpayments made to households that included residents of long-term
                   care facilities compared to the cost of computer matching, routine
                   computer matching may not be practical for all the states included in our
                   review. None of the seven states we visited were using computer matching
                   to identify such overpayments. Officials in California and Kansas, which
                   had the smallest amount of potentially improper benefits—in one case less
                   than $25,000 and in another about $1,800—said that computer matching for
                   these types of overpayments would not be practical or cost-effective to
                   them. Officials in the remaining five states said they would assess the
                   potential benefits of computer matching, either as a tool for routinely
                   identifying overpayments or as a means for periodically evaluating the
                   effectiveness of procedures used to prevent such overpayments.


                   The Food Stamp Program is designed to promote the general welfare and
Background         to safeguard the health and well-being of the nation’s population by raising
                   the nutritional levels of low-income individuals. Recipients use their food
                   stamp benefits to purchase allowable food products from authorized retail
                   food merchants. USDA’s Food and Nutrition Service (FNS) manages the
                   program through agreements with state agencies. FNS approves the states’
                   plans to operate the program and ensures that states administer the
                   program in accordance with regulations. The federal government pays all
                   of the costs for benefits and one-half of the administrative costs for each
                   state. In fiscal year 1998, FNS provided about $17 billion in benefits to
                   about 20 million recipients.




                   Page 2                                      GAO/RCED-99-151 Food Stamp Program
B-282480




Food stamps are issued to households, which can consist of an individual,
a family, or another group that lives together and customarily purchases
and prepares food in common. Households applying for benefits must
provide a Social Security number for each member. The value of the food
stamp benefits for a household is determined by the number of eligible
household members and their income, adjusted for costs such as shelter
and utilities. Therefore, a household’s monthly food stamp allotment could
increase or decrease as household membership changes. The average
monthly benefit for elderly single-person households in 1997 was about
$47 nationally.

Eligibility workers in service centers work directly with applicants or their
designees to certify household eligibility and determine the amount of
benefits at the time of the application. Food stamps can be certified for up
to a 2-year period. Households that receive food stamps are required to
report changes in household membership, such as the loss or the addition
of a member, to the administering state or local agency. Food stamp
regulations prohibit individuals who are residing in long-term care
facilities from participating in the program because they receive their
meals from the care facility.

Medicaid paid about $42 billion for long-term care for about 1.8 million
individuals during fiscal year 1997. The Health Care Financing
Administration (HCFA), within the U.S. Department of Health and Human
Services, administers the Medicaid Program. Medicaid is a grant-in-aid
medical assistance program financed through joint federal and state
funding and administered by each state according to an approved state
plan. Under this plan, a state reimburses providers of medical assistance,
for such aid as long-term care in nursing facilities and mental institutions,
for eligible individuals. As with the Food Stamp Program, eligibility for
Medicaid benefits is generally determined by caseworkers at the local
level. Long-term care assistance is also provided to other eligible
individuals through the Department of Veterans Affairs (VA).3




3
 In the same seven states, we also conducted a computer match comparing food stamp rolls with
individuals residing in long-term care facilities funded by the VA. We found less than $25,000 in
potential overpayments for all seven states. Appendix II contains the results of this computer match.



Page 3                                                     GAO/RCED-99-151 Food Stamp Program
                                            B-282480




                                            For calendar year 1997, we found about 4,500 individuals who resided in
Ineligible Individuals                      long-term care facilities at the same time they were being counted as a
in Long-Term Care                           member of households participating in the Food Stamp Program in seven
Facilities Are                              states. We estimate that improper food stamp benefits provided to
                                            households for these long-term care residents could have amounted to
Participating in the                        about $500,000. The number of individuals and the associated dollar loss
Food Stamp Program                          to the Food Stamp Program are very small portions of the totals for the
                                            program in the seven states. (See app. II for more details.)

                                            Table 1 shows the results of our computer match of food stamp rolls in
                                            seven states against records of individuals whose long-term care was being
                                            funded by Medicaid. The table identifies the number of individuals,
                                            months of improper food stamp payments, and the estimated amount of
                                            food stamp overpayments we found in our review.

Table 1: Extent of Ineligible Individuals
and Overpayments in Seven States,                                                      Number of      Total months of
Calendar Year 1997                                                                     potentially            possibly
                                                                                        ineligible           improper                Potential
                                            States                                    individuals        participation          overpayments
                                            Californiaa                                       195                    524                $24,628
                                            Florida                                           627                  1,007                 47,329
                                            Illinois                                          645                  1,435                 67,445
                                            Kansas                                             28                     38                   1,786
                                            New York                                        1,134                  3,486                163,842
                                            North Carolina                                    831                  1,843                 86,621
                                            Texas                                           1,058                  2,238                105,186
                                            Total                                           4,518                 10,571              $496,837
                                            a
                                             The low number of individuals and estimated overpayments in California may partly be attributed
                                            to the state’s “cash out” policy, under which the state provides a cash supplement in lieu of food
                                            stamps to Supplemental Security Income recipients.

                                            Source: GAO’s analysis of states’ data.



                                            Individuals identified in our match were generally improperly included as
                                            household members for a relatively short period of time—an average of
                                            about 2.3 months. Also, many of these individuals were in single-person
                                            households.

                                            By way of perspective, the 4,518 individuals whom we found improperly
                                            counted as members of food stamp households represented less than 0.04
                                            percent of the total 12.8 million people participating in the Food Stamp




                                            Page 4                                                   GAO/RCED-99-151 Food Stamp Program
                       B-282480




                       Program in the seven states. The $496,837 in potential overpayments for
                       these individuals represented less than 0.01 percent of the $8.5 billion of
                       food stamp benefits distributed by the seven states in 1997.


                       In view of the very small potential food stamp overpayments made to
States Have Not Used   households that included residents of long-term care facilities, routine
Routine Computer       computer matching would not be practical for all the states included in
Matching               our review. However, periodic computer matching by the states could be a
                       useful tool for evaluating the effectiveness of the procedures states use to
                       prevent food stamp overpayments and ensuring the integrity of their data.

                       While none of the states we reviewed used computer matching to identify
                       such improper payments, officials in all the states told us that the states
                       had procedures in place that were designed to prevent overpayments. In
                       every state, eligibility workers, including both food stamp and Medicaid
                       workers, routinely examined all sources of assistance when applicants
                       applied for benefits. As a result, when applicants applied for long-term
                       care Medicaid benefits, workers were supposed to determine if the
                       applicants were receiving food stamp assistance and take appropriate
                       action. Nevertheless, as our computer match revealed, these procedures
                       were not fail-safe.

                       Officials’ views on the benefits of using computer matching to ensure the
                       effectiveness of their procedures varied. Officials from California and
                       Kansas questioned the value of periodic computer matching in their
                       particular states because of the small number of matches. Officials in the
                       remaining five states reserved judgment until they further assessed
                       whether computer matching would complement their current procedures,
                       either as a means of routinely identifying overpayments or as a means of
                       periodically checking the effectiveness of their procedures. For example,
                       Florida officials said that computer matching might be cost-effective in
                       identifying the Supplemental Security Income recipients who enter
                       long-term care facilities without food stamp or Medicaid caseworkers
                       knowing.


                       We provided a draft of this report to the U.S. Department of Agriculture
Agency Comments        and the Food and Nutrition Service for their review and comment. We met
                       with and obtained comments from Food and Nutrition Service officials,
                       including the Directors of the Grants Management Division and Program
                       Accountability Division. These officials said that the report was accurate.



                       Page 5                                      GAO/RCED-99-151 Food Stamp Program
B-282480




They also provided comments to clarify technical information presented in
the report. We incorporated these changes in the report, where
appropriate.

We also provided to the seven states included in our review sections of the
draft report pertaining to them for their review and comment. Officials in
those states were in general agreement with the information contained in
the report. A New York official suggested that the report should
characterize the overpayments as possible or potential and that some of
the benefits authorized may not have been actually used. We agree and
revised the report, as appropriate. An Illinois official said that some of the
potential overpayments resulted from errors in the Medicaid data rather
than in the food stamp data. We agree that some of the potential
overpayments may have resulted from errors in the Medicaid data.
However, the extent to which overpayments result from such errors is
unknown. The states provided other comments to clarify technical data,
and we revised the report, as appropriate.


We conducted our review from May 1998 through May 1999 in accordance
with generally accepted government auditing standards.

As arranged with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report for 15 days from the
date of this report. At that time, we will make copies available to
congressional committees with responsibility for appropriations and
legislative matters for USDA and to the Honorable Daniel Glickman,
Secretary of Agriculture. We will also make copies available to others on
request.




Page 6                                      GAO/RCED-99-151 Food Stamp Program
B-282480




Please contact me at (202) 512-5138 if you or your staff have any questions
concerning this report. Major contributors to this report are listed in
appendix III.

Sincerely yours,




Lawrence J. Dyckman
Director, Food and
  Agriculture Issues




Page 7                                     GAO/RCED-99-151 Food Stamp Program
Contents



Letter                                                                                          1


Appendix I                                                                                     10
Objectives, Scope,
and Methodology
Appendix II                                                                                    13
Results of Matching
Food Stamp
Participation Data
With Long-Term Care
Data in Selected
States
Appendix III                                                                                   14
Major Contributors to
This Report
Tables                  Table 1: Extent of Ineligible Individuals and Overpayments in           4
                          Seven States, Calendar Year 1997
                        Table II.1: 1997 Food Stamp Program Recipients and Medicaid            13
                          Long-Term Care Residents
                        Table II.2: 1997 Food Stamp Program Recipients and Department          13
                          of Veterans Affairs Long-Term Care Residents




                        Abbreviations

                        FNS       Food and Nutrition Service
                        GAO       General Accounting Office
                        HCFA      Health Care Financing Administration
                        SSN       Social Security Number
                        USDA      U.S. Department of Agriculture
                        VA        Department of Veterans Affairs


                        Page 8                                  GAO/RCED-99-151 Food Stamp Program
Page 9   GAO/RCED-99-151 Food Stamp Program
Appendix I

Objectives, Scope, and Methodology


              To determine how many individuals were included as members of food
              stamp households while they were residing in long-term care facilities and
              the estimated value of the overpayments to those households, we
              conducted a computer match of the food stamp rolls for calendar year
              1997 (the latest data available) against Medicaid long-term care
              information for each of the seven states we selected for our review. We
              selected five states with the largest benefit issuance in the food stamp
              program—California, Florida, Illinois, New York, and Texas—and
              judgmentally selected two additional states—North Carolina and Kansas
              because they are in the mid-range to low-range category of Food Stamp
              Program participants.

              Kansas, Florida, Illinois, New York, North Carolina, and Texas state
              agencies provided us with computer files containing information on all
              individuals who received food stamps during any part of calendar year
              1997. The data provided personal identifiers, including name, Social
              Security Number (SSN), date of birth, gender, and the months in which
              food stamp benefits had been issued to the household of which each
              individual was a member.

              California maintains a database of eligibility information at the state level
              while issuance data are maintained at the county level. For California, we
              determined that eligibility was predictive of participation. We matched
              calendar year state eligibility information against calendar year Orange
              County, California, issuance information and found that over 74 percent of
              the eligible individuals participated. Our match of calendar year 1997 was
              similar to a match we did for calendar year 1996 when we found that over
              75 percent of the eligible individuals participated in Orange County.

              Kansas, Illinois, North Carolina, and Texas state agencies provided us with
              computer files containing information on all individuals who resided in
              long-term care facilities during calendar year 1997 and whose care was
              funded by Medicaid. New York provided similar information for fiscal year
              1997. We obtained calendar year 1997 Medicaid long-term care information
              for California and Florida from the Health Care Financing Administration’s
              Medicaid Statistical Information System. For all states, the data we
              obtained provided personal identifiers, including name, SSN, date of birth,
              gender, and specific time period(s) that the individual resided in a
              long-term care facility.

              We matched the SSNs of Medicaid long-term care residents with the SSNs of
              members of food stamp households. For each resident identified as a



              Page 10                                     GAO/RCED-99-151 Food Stamp Program
Appendix I
Objectives, Scope, and Methodology




member of a food stamp household, we determined whether the month(s)
in which food stamp issuance occurred overlapped the period(s) the
individual resided in a long-term care facility. We estimated the dollar
value of the improperly issued food stamp benefits by applying the
national average monthly issuance for elderly single-person households
from 1997 to each month in which the ineligible participation occurred.

Food stamp benefits are calculated for households, not for individuals. As
such, it is difficult to determine the exact value of overpayments issued to
a long-term care resident included in a household, unless he or she is the
only member of the household. Even then, the amount will vary from
individual to individual, on the basis of such factors as income and the
cost of shelter. Our estimates of overpayments were conservative in that
we assumed that most long-term care residents are elderly. Therefore, we
relied on the national average monthly benefit of $47 provided to elderly
single-person households.

Notification and processing time frames allow 10 days for the food stamp
client to report household changes and 10 days for the state agency to take
action. Therefore, we did not consider any month in which an individual
entered a long-term care facility to be an instance of overlap, and we did
not consider the following month to be an instance of overlap if the
individual entered a long-term care facility on or after the tenth day of the
month. In addition, we excluded the month in which the individual was
discharged from the long-term care facility unless the individual was
discharged on the last day of the month.

Because of the quality control program operated by the Food and
Nutrition Service and the states’ ongoing quality assurance efforts, we
accepted their computerized food stamp data as reliable. To provide
additional confidence in the data’s accuracy, we visited each state;
discussed the results of the match with state food stamp program
representatives; and reviewed food stamp and Medicaid information for a
limited number of matched individuals.

To obtain information on whether computer matching offers a practical
means of identifying overpayments for persons residing in long-term care
facilities, we shared our match results with state food stamp program
officials and discussed the results with them. We also discussed whether
the states had previously used computer matching of food stamp program
participants and long-term care residents. Finally, we discussed with state




Page 11                                    GAO/RCED-99-151 Food Stamp Program
Appendix I
Objectives, Scope, and Methodology




officials, the procedures, in place, designed to prevent food stamp benefits
to residents of long-term care facilities.

The Department of Veterans Affairs (VA) also provides long-term care for
eligible individuals. VA funds care in its own facilities as well as in
community-owned facilities. To determine if individuals being counted as
members of food stamp households were residing in VA-funded long-term
care facilities, we obtained similar information from VA that we had
obtained for Medicaid-funded long-term care residents. VA provided
information for the seven selected states, and we compared this
information with the food stamp information from those states. We
determined how many individuals were included as members of food
stamp households at the same time they were residing in VA long-term care
facilities and the estimated value of the benefits that were improperly
issued to those households. We used the same methodology described
earlier in this section.




Page 12                                    GAO/RCED-99-151 Food Stamp Program
Appendix II

Results of Matching Food Stamp
Participation Data With Long-Term Care
Data in Selected States
Table II.1: 1997 Food Stamp Program
Recipients and Medicaid Long-Term                                              Medicaid
Care Residents                                                                long-term
                                                          Food stamp                care       Results                           Estimated
                                      State                 recipients         residents         Persons            Months      dollar value
                                      California             3,654,573          101,311                195              524          $24,628
                                      Florida                1,738,555            67,046               627            1,007           47,329
                                      Illinois               1,217,756            84,579               645            1,435           67,445
                                      Kansas                   226,096            17,465                 28               38            1,786
                                      New York               2,329,448          145,628              1,134            3,486          163,842
                                      North Carolina           863,423            51,933               831            1,843           86,621
                                      Texas                  2,810,617            56,248             1,058            2,238          105,186
                                      Total                12,840,468           524,210              4,518           10,571        $ 496,837

Table II.2: 1997 Food Stamp Program
Recipients and Department of                                                         VA
Veterans Affairs Long-Term Care                                               long-term
                                                          Food stamp                care       Results                           Estimated
Residents
                                      State                 recipients         residents         Persons            Months      dollar value
                                      Californa              3,654,573             4,592               122              220          $10,340
                                      Florida                1,738,555             2,362                 12               15                705
                                      Illinois               1,217,756             2,143                 43               66            3,102
                                      Kansas                   226,096                845                 9               17                799
                                      New York               2,329,448             3,168                 17               32            1,504
                                      North Carolina           863,423                970                15               28            1,316
                                      Texas                  2,810,617             3,223                 48               81            3,807
                                      Total                12,840,468             17,303               266              459          $21,573
                                      Note: Our computer match of food stamp rolls in the seven states against the lists of individuals
                                      residing in facilities funded by VA did not, as shown in table 2, find a significant number of food
                                      stamp recipients who were receiving improper benefits.




                                      Page 13                                                    GAO/RCED-99-151 Food Stamp Program
Appendix III

Major Contributors to This Report


               Ron E. Wood, Assistant Director
               John Schaefer, Project Leader
               Leo G. Acosta
               Oliver Easterwood
               Donald Ficklin
               Jerry D. Hall
               Alan R. Kasdan




(150289)       Page 14                           GAO/RCED-99-151 Food Stamp Program
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