When you are dealing with an enterprise as large as the federal government, mistakes in payments are bound to happen, but at what point does a preventable mistake become negligence?
We’ll drawn that line at 6 feet under.
While there is no official aggregation of improper payments to the deceased, we know that billions in federal payments have gone to the dead. Former Senator and Pursuit founder, Tom Coburn issued a report entitled Federal Programs to Die for: American Tax Dollars Sent Six Feet Under. The report highlighted more than $1 billion in payments to over 250,000 deceased beneficiaries in a 10-year period. These improper payments continue, with a slew of reports finding billions paid to farmers, hundred of millions to federal retirees, and millions in Medicaid payments who had already passed.
What is the root cause of this negligence? Part of it is clerical and the other is bureaucratic buck passing.
Let’s start with the bureaucracy.
The Social Security Administration (SSA) holds the most comprehensive information on who has died in what has to be the most ominous sounding document in the federal government – the Death Master File. SSA gathers death records from several sources, including other federal agencies, surviving family members, financial institutions, funeral homes, and an electronic reporting system that 43 states participate in. The Death Master File is cross-referenced to ensure the federal government is not sending benefit payments to the deceased.
SSA actually has two versions of this file – the “full” Death Master File and the “public” Death Master File. The latter file does not include the death data that SSA receives from states and contains about 10 percent fewer records than the full version. But as the SSA relies more and more on electronic submissions from states, the gap will continue to grow. SSA will only share the full file with some agencies (the Office of Personnel Management, Department of Defense (DoD), Centers for Medicare & Medicaid Services (CMS), the VA, and the IRS). The other agencies, including major benefit paying organizations such as the Department of Agriculture and FEMA, are stuck with the incomplete version.
Why have two files?
The SSA is miffed at handling the death data in the first place. Despite maintaining the Death Master File since 1983, SSA is reluctant to do anything beyond the basics. They have been compelled by Congress to share the “public” file with other federal agencies, but contend that verification of death records or providing it to other agencies would violate the Anti-Deficiency Act. They won’t verify any records that come in unless the person was receiving Social Security payments. Because the SSA is funded via payroll tax, they deem it inappropriate to perform any activities outside their mission. Womp womp.
While Congress did pass the Federal Improper Payments Coordination Act of 2015 which included a provision for SSA to share the Death Master File, SSA says that an amendment to the Social Security Act is needed for them to share the full file with other agencies.
Fortunately, there is a bipartisan, bicameral bill sponsored by Senators Carper (D-DE) and Kennedy (R-LA) and Reps. Bustos (D-IL) and Gianforte (R-MT) that would do just that. The Stopping Improper Payments to Deceased People Act would amend the Social Security Act to allow for the sharing of the full Death Master File with other agencies.
The bill would also require SSA to come up with a plan for ensuring the accuracy and completeness of the death data it maintains…which takes us to the next problem.
The oldest known person in the world is 115. Yet, a 2015 report found that 6.5 million people over the age of 112 were listed as alive in SSA’s records and that 70,000 of these were actively reporting wages to SSA.
While that’s a standout, several oversight reports this year found benefit payments paid out due to inaccuracies with the Death Master File. Some of it is self-inflicted. In 2012, the SSA Office of Inspector General (OIG) provided SSA a list of 10,764 deceased beneficiaries with discrepancies in their death dates. In a follow up audit this year, 9,500 (88 percent) had still not been corrected six years later.
A 2009 audit found SSA provided $40 million in payments to 6,000 deceased beneficiaries. A 2013 audit found $31 million paid to 2,475 deceased beneficiaries. Last year, another audit found 1,281 deceased beneficiaries, including 56 that had been identified in prior audits, received benefits after their death, costing $20 million.
Some more reports from just this past year found the following:
- SSA issued $2.3 million in payments to beneficiaries that other agencies had already determined were deceased
- Ohio paid $93 million in Medicaid payments to the deceased. Wisconsin paid $589,000 in Medicaid dollars to deceased beneficiaries.
- Not all of Connecticut’s death records made it to SSA, resulting in $1.9 million in improper payments to the deceased.
This is a snapshot of the massive problems with improper payments in the federal government – which have totaled $1.4 trillion since 2003. In 2017 alone, the federal government made $141 billion in improper payments, which is more than the amount of federal loans and Pell grants awarded combined.
Dr. Coburn’s words from 2011 ring even more true today. “At this point in our nation’s history, it is of the utmost importance that every tax dollar spent by the government be put to good use. This means spending within our means on the living, not outside our means on the dead.”
Stopping our tax dollars from going six feet under would be a a great start.