Senator says better use of the Results Act could reduce improper payments

Fraud, waste and abuse of Medicare, Medicaid and Social Security benefits could be reduced if federal agencies effectively used the 1993 Government Performance and Results Act, Sen. Fred Thompson, R-Tenn., said Wednesday at a Finance Committee hearing. During the hearing, which focused on improper payments at the Health and Human Services Department and the Social Security Administration, legislators questioned the agencies' procedures for identifying payment errors. Witness testimony revealed that an estimated $790 million a year is paid to prisoners, fugitives, dead people, deportees and other ineligible recipients from 12 benefit programs at HHS and SSA. "Very few agencies attempt to even report on this," Thompson said. "Only a handful are reporting or estimating these instances of fraud." A December General Accounting Office report said limited agency oversight and unclear governmentwide guidance on reporting and disclosing overpayments contribute to the waste. GAO also blamed agencies' outdated information systems for errors in government payments. SSA Inspector General James Huse testified that his agency began looking at improper payments in 1995. In 1996, SSA estimated that $48.8 million was erroneously paid to prisoners and pressed Congress for legislation that would make it easier to exchange information with prison authorities. In 1999, Congress passed a law removing the need for computer-matching agreements between SSA and prison authorities and, according to Huse, in fiscal 2000, payments to more than 69,000 prisoners were suspended. "We entered into agreements with the U.S. Marshals Service and the FBI to expand our service to fugitive information," Huse told the Committee. Last year, SSA made a similar agreement with the National Crime Information Center. To get access to state fugitive information, SSA sought out partnerships with the states, Huse said. Currently, 12 states and two major cities have agreed to work with SSA. "One out of every four dollars in SSA's budget is dedicated to stewardship," testified Fritz Streckewald, SSA's acting assistant deputy commissioner for disability and income security programs. Michael McMullan, acting deputy administrator for the Health Care Financing Administration, which oversees Medicare, testified that the biggest challenge for her agency is identifying fugitives and prisoners. "We estimate that improper Medicare benefit payments made during fiscal 2000 totaled $11.9 billion," McMullan testified. A recent HHS inspector general's report showed that the agency has reduced Medicare overpayments by nearly 50 percent over the past five years. While Sen. Max Baucus, D-Mont., asked if more money and better computer systems would help agencies address the overpayment issue, Thompson continued to stress the importance of using the Results Act to reduce improper payments. The Results Act requires agencies to prepare annual performance plans that set out goals federal managers will have to meet in the next fiscal year. "Social Security's accuracy rate in 1999 was 94.3," Thompson said. "And the goal for 2001 was 94.7. The problem with SSA is that it sets extremely low goals for itself." Committee Chairman Chuck Grassley, R-Iowa, asked HCFA and SSA to report their progress to him on a quarterly basis, and said, if needed, he would address it through legislation. "If it can be done administratively, I'd like to do that because it takes forever to get a bill passed," Grassley said.