Number:  112-17
Date:  August 3, 2012

The Senate Passes S. 1409
The Improper Payments Elimination and
Recovery Improvement Act of 2012

On August 1, 2012, the Senate passed S. 1409, the Improper Payments Elimination and Recovery Improvement Act of 2012, by unanimous consent.  The bill would require agencies to identify and stop erroneous payments to contractors and program beneficiaries.

Following are descriptions of provisions of interest to SSA:

Improving the Determination of Improper Payments by Federal Agencies

  • Would require OMB to:
    • Annually identify high-priority Federal programs for greater levels of oversight and review based on dollar value or rate of improper payments, or whether there is a higher risk of improper payments;
    • Provide guidance to agencies for improving estimates of improper payments; and,
    • In conjunction with agencies identified as having a high-risk program, establish annual targets and semi-annual or quarterly actions, for reducing improper payments.

  • Would require agencies with a high-risk program to report to their Inspector General annually and make such reports available to the public.

Do Not Pay Initiative 

  • Would establish the Do Not Pay Initiative including use of certain databases (including the Death Master File) and other databases designated by OMB.

  • Would require OMB to:
    • Consider any database that substantially assists in preventing improper payments and provide public notices and an opportunity for comment before requiring use of such database;
    • Submit an annual report to Congress evaluating whether the Do Not Pay Initiative has reduced improper payments and provide the frequency of corrections/identification of incorrect information;
    • Provide Congress with a plan for inclusion of other databases, agency access to the Initiative, and the multilateral data use agreements described in this bill within 60 days of enactment; and,
    • Establish a working system for prepayment and preaward reviews that includes the Initiative within 90 days of enactment.

  • Would also require OMB to consult with stakeholders, States, and the Social Security Administration to establish a plan for improving the quality and timeliness of death data maintained by SSA.  Such plan would be required to include recommended actions by the agencies that would:
    • Increase the quality and frequency of access to the Death Master File and other death data;
    • Achieve a goal of at least daily access as appropriate;
    • Provide for all States and other data providers to use improved and electronic means for providing data;
    • Identify improved methods by agencies for determining ineligible payments due to the death of a recipient through proactive verification means; and,
    • Address improper payments made by agencies to deceased individuals as part of Federal retirement programs.

  • Would require a report to Congress no later than 120 days after enactment.  This report would include recommended legislation.

  • Would amend the Privacy Act to allow for data use agreements between and among multiple Federal agencies.  Would require OMB, in consultation with SSA and other relevant agencies, to issue guidance for agencies regarding implementing these agreements, including standards for:
    • Reimbursement of costs;
    • Retention and timely destruction of records in accordance with the Privacy Act; and,
    • Prohibitions on duplication and redisclosure of records.

  • Would also require OMB to review the procedures of the Data Integrity Boards, establish, and clarify rules regarding what constitutes a data use agreement under this section.

  • Would require each agency to review all payments and awards for all programs no later than June 1, 2013

  • Would acknowledge that current law may require agencies to make awards or payments regardless of whether the recipient is on the Do Not Pay Initiative.

  • Would require the Attorney General, within one year of enactment, to submit to Congress recommendations for increasing the use of, access to, and technical feasibility of using Federal, State, and local conviction and incarceration databases to identify and prevent improper payments.

Improving the Recovery of Improper Payments

  • Would require OMB to determine current and historical rates and amounts of improper payments recovery, including a list of agency recovery audit contract programs and specific information of amounts and payments recovered by
    recovery audit contractors.  Would also require OMB to determine targets for recovering improper payments, including specific information on amounts and payments recovered by recovery audit contractors.