February 18, 1999

Human Resources Subcommittee Marks Up H.R. 631, the SSI Fraud Prevention Act of 1999

On February 10, the House Committee on Ways and Means, Subcommittee on Human Resources marked up and approved by voice vote H.R. 631, the SSI Fraud Prevention Act of 1999. The full Ways and Means Committee has not yet announced when it will consider the bill.

Below are descriptions of the provisions in H.R. 631 as reported by the Subcommittee.

Primary Liability of Representative Payees for Overpayment to Deceased Recipients

Would make a representative payee primarily liable for an SSI or OASDI overpayment caused by a payment made to a beneficiary who has died. Also would require SSA to establish an overpayment control record under the representative payee's Social Security number. Would be effective upon enactment.

Requirement To Provide State Prisoner Information to Federal and Federally Assisted Benefit Programs

Would require the Commissioner to provide, on a reimbursable basis, information obtained under agreements with institutions for reporting prisoners to Federal or federally assisted cash, food, or medical assistance program. Would be effective upon enactment.

Recovery of Overpayments of SSI Benefits from Lump Sum SSI Benefit Payments

Would require the Commissioner to recover SSI overpayments from SSI lump-sum amounts by withholding 50 percent of the lump-sum or the amount of the overpayment, whichever is less. Would apply to amounts of overpayments that are outstanding on or after the date of enactment.

Rules Relating to Collection of Overpayments from Individuals Convicted of Crimes

Would prohibit SSI/DI eligibility based on disability for 10 years if ex-fugitive or ex-prisoner knowingly fails to notify SSA at time of (re)application that he or she had received benefits erroneously while in prison or knowingly fails to comply with scheduled repayment of overpayment. The Commissioner would determine whether individual "knowingly failed" to notify or comply and would take into account the individual's mental or linguistic limitations if any. Also would eliminate waivers of recovery of overpayments caused by imprisonment and require SSA to continue collection efforts while prisoners are in jail. Would be effective upon enactment.

Additional Debt Collection Practices

Would extend to the SSI program all of the debt collection authorities currently available for the collection of overpayments under the Social Security program, such as referring debtors to credit bureaus, using private collection agencies and charging interest on outstanding debts. Would apply to amounts of overpayments that are outstanding on or after the date of enactment.

Treatment of Assets Held in Trust Under the SSI Program

Would include in the countable resources of an individual for SSI purposes, the assets of any trust containing property transferred from the individual or spouse to the extent that the assets could be used for the benefit of either. Would exclude certain trusts (e.g., those established by will, or certain trusts that would repay the State the cost of services provided the beneficiary upon his or her death). Would apply to trusts established on or after January 1, 2000.

Disposal of Resources for Less Than Fair Market Value Under the SSI Program

Would provide a penalty under the SSI program for the transfer of assets at less than fair market value. The penalty would be a loss of benefits for a number of months equal to the number of months obtained by dividing the uncompensated value of disposed-of resources by the Federal benefit rate. Would apply to transfers of resources made on or after the date of enactment

Loss of Benefits As Penalty for Fraud

Would add a new penalty of nonpayment of SSI and OASDI benefits for individuals found to have made a statement or representation of material fact for use in determining eligibility to disability benefits that the individual knew, or should have known, was false or misleading or omitted a material fact, or made such a statement with knowing disregard for the truth. The period of nonpayment would be 6 months for the first violation, 12 months for the second, and 24 months for the third violation. Would require the Commissioner to consult with OIG before imposing penalty. Also would require SSA to publish regulations prescribing process for imposing penalties. Would be effective upon enactment.

Exclusion of Attorneys and Physicians Convicted of Violations from Participation in Social Security Disability Programs

Would bar doctors and attorneys from SSI/DI disability programs if they are found to have helped commit fraud. Bar would be for 5 years, 10 years, and permanent exclusion for the first, second, and third offenses respectively. Would be effective with respect to violations and convictions occurring on or after the date of enactment.

Annual Reviews by State Disability Determination Services of Professionals Conducting Consultative Examinations

Would require annual evaluation of doctors who conduct consultative exams for analysis of the thoroughness of the examinations and patterns of abuse. The findings would be required to be reported to the SSA OIG. First annual evaluations would be required to be completed by 12/31/99.

Computer Matches With Medicare and Medicaid Institutionalization Data

Would require the Commissioner to conduct periodic matches with Medicare and Medicaid data held by the Secretary of HHS, and would permit the Commissioner to substitute information from the matches for the physician's certification otherwise required in order to maintain the full benefit level of an individual whose institutionalization is expected to last fewer than 3 months. Would be effective upon enactment.

Access to Information Held by Financial Institutions

Would provide that the Commissioner may require SSI applicants and beneficiaries to provide authorization for SSA to obtain any and all financial records from any and all financial institutions. These authorizations would remain in effect, unless revoked in writing. Commissioner need not furnish to the financial institution copies of the authorizations or written certification of compliance with the provisions of the Right to Financial Privacy Act. Would be effective upon enactment.

State Data Exchanges

Would deem the SSA's data privacy standards to meet all State standards for purposes of sharing data. Would be effective upon enactment.

Study on Possible Measures To Improve Fraud Prevention

Would require the Commissioner in consultation with OIG and the Attorney General to undertake study to identify possible measures to reduce fraud and improve processing of beneficiaries' reported changes of income. Also requires a report to Congress on legislative and administrative recommendations in these areas. Report would be due 1 year after date of enactment.

Annual Report on Amounts Necessary To Combat Fraud

Would require SSA to include in its annual budget an itemization of the amount of funds required to support efforts to combat fraud by applicants and beneficiaries. Would apply with respect to budgets for fiscal years after FY 1999. Would be first included in annual budget prepared for fiscal years after fiscal year 1999.

Provision of Reduced SSI Benefits to Certain Individuals Who Provided Service to the Armed Forces of the United States in the Philippines During World War II After They Move Back to the Philippines

Would continue SSI benefits for certain individuals residing in the Philippines at 75 percent of the amount that they otherwise would receive in the United States if they are in the United States and eligible for SSI on both January 1, 1990, and the date of enactment. Individuals who would be eligible for benefits while they reside in the Philippines are individuals who, before August 15, 1945, served in the military forces of the Philippine Commonwealth or