Social Security Administration disbursed $125.2 million in benefits to deceased beneficiaries

This week's Golden Horseshoe goes to the Social Security Administration, which paid $125.2 million to more than 2,500 deceased beneficiaries because agency employees failed to add death dates to its records, according to a final audit report by the agency's Office of Inspector General.

The internal watchdog performed the audit to determine if the SSA was checking its files of deceased against death records maintained by the Centers for Medicare & Medicaid Services.

"We identified 3,084 current beneficiaries whose personally identifiable information matched that of a deceased individual in the CMS death data," the IG report states. 

The OIG provided SSA the beneficiaries' death information in February 2020. As of July 2021, SSA staff had "terminated payments to 2,679 beneficiaries and determined it had issued $125.2 million in payments after the beneficiaries' deaths," the auditors reported. "Identification and correction of these discrepancies prevented $33.9 million in additional improper payments over a 12-month period." 

SSA staff had also "determined 142 of the beneficiaries were alive, and CMS death information was erroneous," according to the audit report.

Conducting a random sampling of 50 cases to determine why SSA continued to pay out benefits to thousands after they died, the OIG found agency staff failed to add the deaths to their records even after receiving a death alert in a majority of the cases.

"We found SSA had previously received death information for 42 beneficiaries from CMS and/or states but did not add the death information to its records or terminate the beneficiaries' payments," the OIG reported. "In 12 of the 50 cases we reviewed, SSA received the beneficiaries' death information, and SSA systems sent death alerts to the beneficiaries' servicing field offices for verification. However, for unknown reasons, SSA employees cleared the death alerts without posting the death information to SSA records." 

SSA employees were also found to have recorded erroneous deaths in beneficiary records, possibly hampering efforts to recover improper posthumous payments.

"We identified 49 instances where it appeared SSA input erroneous, post-2018 dates of death in the beneficiaries' records," according to the report. "This could prevent SSA from attempting to recover payments issued after the beneficiaries’ deaths."

In 22 of the 49 cases, "SSA employees input erroneous dates of death because of confusing instructions in SSA policy," the audit found. 

"Specifically," the report explained, "SSA instructs employees who resolve death alerts to '... consider the person deceased using the date on the alert if we did not receive a response to the come-in letter after 45 days.' SSA death alerts contain three different dates — the beneficiary's date of birth, the alleged date of death, and the date SSA's system generated the alert. In one case, an SSA employee input the beneficiary's date of birth as the date of death. In the other 21 cases, SSA employees input March 9, 2020, the date SSA systems generated the beneficiaries' CMS death alerts, as the beneficiaries' date of death instead of the date of death provided by CMS."

In 27 other cases the OIG said it could not "determine why SSA employees input post-2018 dates of death in SSA records" even though the beneficiaries died years before. 

One egregious example of SSA employees' incompetence involved a retirement beneficiary who died in June 2017. A month later CMS sent a death alert. An employee cleared the alert in August of 2017 without posting the death to agency records.

The OIG provided SSA a copy of that beneficiary's obituary and funeral home information in February 2020, but "on March 24, 2020, an SSA employee cleared the beneficiary's death alert but again did not post the death information to SSA records," the auditors reported. "In December 2020, we provided SSA another copy of the beneficiary's obituary and funeral home information. SSA determined it issued $36,086 in payments after the beneficiary's death before it terminated the payments in March 2021." 

The Social Security Administration doesn't require its employees to document their justification for clearing death alerts, the report showed.

Numerous other issues were detailed, including an SSA system implemented in 2015 which sometimes failed to generate death alerts to the correct field officers for verification and payment termination.