[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
                          USE OF TECHNOLOGY TO 
                     IMPROVE THE ADMINISTRATION OF 
                SSI'S FINANCIAL ELIGIBILITY REQUIREMENTS 

=======================================================================

                                HEARING

                               before the

                    SUBCOMMITTEE ON HUMAN RESOURCES

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 25, 2012

                               __________

                          Serial No. 112-HR15

                               __________

         Printed for the use of the Committee on Ways and Means


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                      COMMITTEE ON WAYS AND MEANS

                     DAVE CAMP, Michigan, Chairman

WALLY HERGER, California             SANDER M. LEVIN, Michigan
SAM JOHNSON, Texas                   CHARLES B. RANGEL, New York
KEVIN BRADY, Texas                   FORTNEY PETE STARK, California
PAUL RYAN, Wisconsin                 JIM MCDERMOTT, Washington
DEVIN NUNES, California              JOHN LEWIS, Georgia
PATRICK J. TIBERI, Ohio              RICHARD E. NEAL, Massachusetts
GEOFF DAVIS, Kentucky                XAVIER BECERRA, California
DAVID G. REICHERT, Washington        LLOYD DOGGETT, Texas
CHARLES W. BOUSTANY, JR., Louisiana  MIKE THOMPSON, California
PETER J. ROSKAM, Illinois            JOHN B. LARSON, Connecticut
JIM GERLACH, Pennsylvania            EARL BLUMENAUER, Oregon
TOM PRICE, Georgia                   RON KIND, Wisconsin
VERN BUCHANAN, Florida               BILL PASCRELL, JR., New Jersey
ADRIAN SMITH, Nebraska               SHELLEY BERKLEY, Nevada
AARON SCHOCK, Illinois               JOSEPH CROWLEY, New York
LYNN JENKINS, Kansas
ERIK PAULSEN, Minnesota
KENNY MARCHANT, Texas
RICK BERG, North Dakota
DIANE BLACK, Tennessee
TOM REED, New York

                   Jennifer Safavian, Staff Director

                  Janice Mays, Minority Chief Counsel

                                 ______

                    SUBCOMMITTEE ON HUMAN RESOURCES

                    GEOFF DAVIS, Kentucky, Chairman

ERIK PAULSEN, Minnesota              LLOYD DOGGETT, Texas, Ranking
RICK BERG, North Dakota              JIM MCDERMOTT, Washington
TOM REED, New York                   JOHN LEWIS, Georgia
TOM PRICE, Georgia                   JOSEPH CROWLEY, New York
DIANE BLACK, Tennessee
CHARLES W. BOUSTANY, JR., Louisiana

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Ways and Means are also published 
in electronic form. The printed hearing record remains the official 
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current publication process and should diminish as the process is 
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                            C O N T E N T S

                               __________

                                                                   Page

Advisory of July 25, 2012, announcing the hearing................     2

                               WITNESSES

Carolyn W. Colvin, Deputy Commissioner, Social Security 
  Administration.................................................     7
Patrick P. O'Carroll, Jr., Inspector General, Social Security 
  Administration.................................................    42
Paul F. Soczynski, Director of Government Services, Accuity 
  Solutions......................................................    50
Marty Ford, Director, Public Policy Office, The Arc of the United 
  States.........................................................    57
Douglas J. Besharov, Professor, School of Public Policy, 
  University of Maryland.........................................    66

                       SUBMISSIONS FOR THE RECORD

Carolyn Colvin, statement........................................    95


                          USE OF TECHNOLOGY TO
                     IMPROVE THE ADMINISTRATION OF
                SSI'S FINANCIAL ELIGIBILITY REQUIREMENTS

                              ----------                              


                        WEDNESDAY, JULY 25, 2012

             U.S. House of Representatives,
                       Committee on Ways and Means,
                           Subcommittee on Human Resources,
                                                    Washington, DC.

    The Subcommittee met, pursuant to notice, at 3:03 p.m., in 
Room 1100, Longworth House Office Building, Hon. Geoff Davis 
[Chairman of the Subcommittee] presiding.
    [The advisory announcing the hearing follows:]

ADVISORY

FROM THE 
COMMITTEE
 ON WAYS 
AND 
MEANS

                    SUBCOMMITTEE ON HUMAN RESOURCES

                                                CONTACT: (202) 225-1721
FOR IMMEDIATE RELEASE
Wednesday, July 25, 2012
HR-15

               Chairman Davis Announces a Hearing on the

            Use of Technology to Improve the Administration

              of SSI's Financial Eligibility Requirements

    Congressman Geoff Davis (R-KY), Chairman of the Subcommittee on 
Human Resources of the Committee on Ways and Means, announced today 
that the Subcommittee will hold a hearing on the use of technology to 
improve the administration of the Supplemental Security Income (SSI) 
program's financial eligibility requirements. The hearing will take 
place on Wednesday, July 25, 2012 in 1100 Longworth House Office 
Building, beginning at 3:00 p.m.
      
    In view of the limited time available to hear witnesses, oral 
testimony at this hearing will be from invited witnesses only. However, 
any individual or organization not scheduled for an oral appearance may 
submit a written statement for consideration by the Committee and for 
inclusion in the printed record of the hearing.
      

BACKGROUND:

      
    The Supplemental Security Income (SSI) program is the Nation's 
largest Federal means-tested cash assistance program and is 
administered by the Social Security Administration (SSA). Unlike the 
Social Security Disability and Retirement programs, which require 
sufficient past employment covered by Social Security payroll taxes for 
eligibility, the SSI program pays benefits to disabled and elderly 
individuals who currently have limited income and assets, regardless of 
prior work history, using general revenue funds.
      
    In 2012, the SSI program provides monthly cash payments up to $698 
per individual or $1,048 per couple, which typically includes 
eligibility for Medicaid to cover health expenses. In December 2011, 
SSI provided cash assistance to more than 8.1 million children, adults, 
and aged individuals at an annual cost of over $49.5 billion, not 
including Medicaid expenses. According to the SSA actuaries, the SSI 
program is expected to grow by 1 million recipients in the next decade, 
with the largest growth coming among those over the age of 65.
      
    Since the program was created in 1972, SSI has applied financial 
eligibility requirements to all recipients, primarily in the form of 
monthly income and asset tests designed to ensure that individuals do 
not have significant current income or assets on which they should 
depend before turning to the program for support. For income, an 
individual's actual monthly benefit is determined by taking the Federal 
SSI benefit and subtracting countable wages and other income received 
during a month (generally up to $1,481 per month for an individual with 
income only from wages). If countable income is not reported in a 
timely manner, it can cause an overpayment that is typically recovered 
from an individual's future benefits. Separately, a recipient's assets 
must remain below $2,000 for an individual or $3,000 for a couple to 
maintain eligibility. Like income, certain items are countable, such as 
cash, liquid assets in a bank account, or property that can be sold; 
other assets are not counted, such as the value of a primary residence, 
car, or burial plot.
      
    The administration of these financial eligibility requirements can 
be difficult and error-prone if done manually and based on recipient-
reported data. For fiscal year 2011, the SSI program had a 9.1 percent 
error rate, representing $4.6 billion in improper payments. To address 
this longstanding issue, SSA continues to look for ways to use 
technology to reduce error rates. This includes automated processing 
such as its Access to Financial Institutions (AFI) project, which 
attempts to confirm asset data reported by recipients with actual 
financial institution records. Through this and other automation 
efforts, SSA is expected to achieve significant program savings and has 
already reduced the SSI error rate by 17 percent in the last 2 years, 
even as overall benefit outlays have increased.
      
    In announcing the hearing, Chairman Geoff Davis (R-KY) stated, 
``The SSI program provides important financial support for low-income 
families with disabled children, disabled adults, and aged individuals. 
Especially in a restricted financial environment, we need to ensure SSA 
is using technology to its fullest to administer these benefits in an 
automated, reliable, and efficient manner. This hearing will review 
what progress SSA has been making on that front, which is essential to 
targeting limited taxpayer resources to those with the most financial 
need.''
      

FOCUS OF THE HEARING:

      
    The hearing will review SSI financial eligibility requirements and 
the use of technology to improve their administration.
      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Please Note: Any person(s) and/or organization(s) wishing to submit 
for the hearing record must follow the appropriate link on the hearing 
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From the Committee homepage, http://waysandmeans.house.gov, select 
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submit all requested information. ATTACH your submission as a Word 
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Police will refuse sealed-package deliveries to all House Office 
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please call (202) 225-1721 or (202) 225-3625.
      

FORMATTING REQUIREMENTS:

      
    The Committee relies on electronic submissions for printing the 
official hearing record. As always, submissions will be included in the 
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    1. All submissions and supplementary materials must be provided in 
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or organizations on whose behalf the witness appears. A supplemental 
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    The Committee seeks to make its facilities accessible to persons 
with disabilities. If you are in need of special accommodations, please 
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noted above.

    Note: All Committee advisories and news releases are available on 
the World Wide Web at http://www.waysandmeans.house.gov.

                                 

                       * * * CHANGE IN TIME * * *

ADVISORY

FROM THE 
COMMITTEE
 ON WAYS 
AND 
MEANS

                    SUBCOMMITTEE ON HUMAN RESOURCES

                                                CONTACT: (202) 225-1721
FOR IMMEDIATE RELEASE
Wednesday, July 25, 2012
HR-15

                   Change in Time for Hearing on the

            Use of Technology to Improve the Administration

              of SSI's Financial Eligibility Requirements

    Congressman Geoff Davis (R-KY), Chairman of the Subcommittee on 
Human Resources of the Committee on Ways and Means, today announced 
that the Subcommittee hearing on the use of technology to improve the 
administration of the Supplemental Security Income (SSI) program's 
financial eligibility requirements, previously scheduled for 3:00 p.m. 
on Wednesday, July 25, 2012, in 1100 Longworth House Office Building, 
will now be held at 2:00 p.m.
      
    All other details for the hearing remain the same. (See 
Subcommittee on Human Resources Advisory No. HR-15, dated July 25, 
2012.)

                                 

    Chairman DAVIS. Good afternoon. Thank you to our witnesses, 
staff members, and visitors for your patience. Unfortunately, 
we don't control the whip's schedule for votes. I appreciate 
your forbearance in the unanticipated delay.
    In today's hearing we are going to review how technology is 
being used to improve the administration of the Supplemental 
Security Income, or SSI, program. As the Nation's largest 
Federal means-tested cash assistance program, SSI is sometimes 
called ``the other welfare.'' Last month SSI provided checks to 
more than 8.1 million disabled and aging individuals. For 
example, that is almost twice as many people as collect welfare 
checks under the TANF program.
    Unlike other Social Security programs which require prior 
work and payroll tax payments, SSI pays monthly checks to 
disabled and elderly individuals with limited income and assets 
regardless of whether they have worked in the past. Since SSI 
was created in 1972, it has had complex eligibility rules 
designed to ensure that recipients do not have significant 
income or assets on which they should depend before turning to 
SSI for support. How these financial eligibility requirements 
are working and how their administration can be improved are 
the subjects of today's hearing.
    It is worth noting that in contrast to other means-tested 
programs like food stamps, SSI has continued to enforce these 
financial eligibility standards in recent years, which has 
helped to keep SSI's growth in check. The administration of 
SSI's financial eligibility requirements can be difficult, 
prone to error, and extremely time-consuming, draining 
administrative resources, especially if done manually and using 
recipient-reported data.
    In 2011, SSI had annual payments totaling almost $50 
billion, not including the cost of Medicaid benefits typically 
provided to SSI recipients. It also had a 9.1 percent error 
rate, representing a staggering $4.6 billion in improper 
payments. As I have described in previous hearings, we can and 
should expect more from government. We should expect it to 
administer benefits using 21st century technology, not from the 
era before the personal computer existed.
    We have made significant progress in the past year and a 
half enacting into law our data standards provision to jump-
start a process for defining these standards. And I am very 
grateful for the true bipartisanship in which Members of the 
Republican and Democratic Caucus worked together to give the 
tools to repair these broken processes and bring some private-
sector business practices into government.
    I believe that SSA can and should significantly contribute 
to this process. What is more, I believe SSA will also greatly 
benefit from this effort, and it will improve how they 
administer all their workloads, including SSI. This is all part 
of a larger goal of leveraging technology to prevent improper 
payments of all kinds.
    Today we will hear about how SSA has expanded nationwide 
the Access to Financial Institutions Project, AFI, along with 
other efforts to better use technology. These efforts have 
shown that while difficult, income and asset tests can be 
administered in a timely and cost-effective manner, improving 
program efficiency and reducing cost to taxpayers. That is an 
important lesson not just for SSI, but across all means-tested 
Federal programs.
    For example, other programs, like food stamps, have 
recently waived these same sorts of complex eligibility rules, 
especially asset tests, to speed eligibility determination and 
expand benefit payouts. As a result, today one in seven 
Americans is eligible for food stamps, at a cost of over $70 
billion in 2011. That is triple the level of food stamp 
spending in 2002, when the asset test was consistently applied.
    In a time of failed stimulus, out-of-control spending, and 
a struggling economy, we can't continue on the current fiscal 
path. Efficient enforcement of programs--or efficient 
enforcement of income and asset tests across means-tested 
programs will make it possible for limited taxpayer resources 
to be targeted to those with the greatest financial need. In 
this, we hope the SSI program can actually show the way.
    We look forward to all the testimony today and to working 
to improve how this program serves disabled and elderly 
individuals who depend on it, as well as ensuring all means-
tested programs efficiently and effectively use tax dollars.
    With that, I would like to yield to my friend from Texas, 
the Ranking Member Mr. Doggett, to make an opening statement.
    Mr. DOGGETT. Thank you very much, Mr. Chairman.
    We have worked together on this Subcommittee to ensure 
safety-net programs effectively collect and use the information 
to determine eligibility. Because Supplemental Security Income 
provides modest benefits to aid individuals with disabilities, 
seniors, disabled children, our most vulnerable neighbors, it 
is critical that the Social Security Administration uses the 
most up-to-date technology to fully administer the benefits in 
the most efficient manner and ensure that only those 
individuals entitled to this important benefit receive it.
    But our goal of improving the integrity of SSI as well as 
other programs is severely threatened by the Republican 
Appropriations Committee, which would cut about a billion 
dollars from the Social Security Administration. This comes 
after cuts in each of the last 2 years for Social Security, and 
this includes moneys that are essential for combating waste, 
fraud, and abuse. I believe that this cut means that there will 
be fewer SSI redeterminations, and there will be less available 
for other program integrity measures.
    Every dollar that is invested in SSI eligibility and 
disability reviews has produced between $6 and $9 in program 
savings. Cutting funding threatens the integrity of these 
programs.
    Ensuring an effective SSI program is important to over 8 
million senior and disabled Americans who receive important 
assistance from the program. These benefits are not overly 
generous, with the maximum SSI payment providing less than $700 
a month for an individual, which reaches less than 75 percent 
of the poverty level. But even at these low levels, this 
assistance is a vital lifeline for those who have little other 
source of income.
    In my home State of Texas, over 600,000 of our neighbors 
are helped by SSI, including about 55,000 in Bexar County and 
17,000 in Travis County. One of these people is a 37-year-old 
woman who has Angelman syndrome, which includes cerebral palsy, 
seizures, and profound cognitive impairments. She lives in a 
group home with other adult women and comes home to stay with 
her mother 3 days a week. Her mother says, in these words: 
``Without the option of community living, she would be at home. 
I would be unable to care for her and would be unable to work. 
We would be destitute. Her only other option would be a State 
institution, which is unthinkable.''
    As we review current efforts to verify SSI eligibility, we 
should also consider steps to help SSI recipients comply with 
program requirements, especially when they attempt to go to 
work. We could take a major step in that direction by 
increasing the value of work for SSI recipients. The amount of 
wages that an SSI recipient can earn before losing some of 
their benefits has not been increased since this program was 
first started in 1974, at a time when gas was 50 cents a gallon 
and the median household income was about $11,000 a year. There 
is a real need to make a change there. If this earnings 
exclusion had kept pace with inflation over the last four 
decades, it would be well over $300 a month now instead of a 
mere $65 a month. Raising the current threshold would not only 
promote and reward work, but it would also reduce SSI 
overpayments to individuals earning very small amounts from 
employment.
    Another step that we should take is to continue an expiring 
program that helps SSI beneficiaries navigate program rules 
when they attempt to go to work. Since 2000, the Work 
Incentives Planning and Assistance program has served nearly 
half a million SSI and SSDI recipients who are working or 
attempting to work, but the program is now expiring, and 
Congress, as with so many other areas, has failed to act.
    I recently joined Congressman Becerra in introducing 
legislation to extend this program and a related one so that we 
help SSI recipients understand and comply when they move into 
work. This extension would be funded by the Social Security 
Administration's basic administration allocation, so taxpayers 
won't be out another dime to do it. We really need for the 
House to act on it.
    I look forward to hearing our witnesses' views on these and 
other issues and continuing to work with you, Mr. Chairman. 
Thank you.
    Chairman DAVIS. Thank you, Mr. Doggett.
    I would like to remind our witnesses to limit your oral 
testimony to 5 minutes; however, without objection, all the 
written testimony will be included as part of the permanent 
record.
    On our panel this afternoon, we will be hearing from Ms. 
Carolyn Colvin, Deputy Commissioner of the Social Security 
Administration; the Honorable Patrick P. O'Carroll, Jr., 
Inspector General of the Social Security Administration; Mr. 
Paul Soczynski, Director of Government Services, Accuity 
Solutions; Ms. Marty Ford, Director of Public Policy, The Arc 
of the United States; and Mr. Douglas Besharov, Professor, 
School of Public Policy, the University of Maryland.
    Ms. Colvin, please proceed with your testimony.

                STATEMENT OF CAROLYN W. COLVIN, 
      DEPUTY COMMISSIONER, SOCIAL SECURITY ADMINISTRATION

    Ms. COLVIN. Chairman Davis, Ranking Member Doggett, and 
Members of the Subcommittee, thank you for inviting me here to 
discuss how we use technology to improve the administration of 
the Supplemental Security Income program, or SSI. I am Social 
Security's Deputy Commissioner and the Administration's 
accountable official for improper payments.
    SSI is the safety net in the Social Security Act that 
guarantees a minimum income to individuals of limited means who 
are aged, blind, or disabled. In addition to a monthly benefit, 
SSI eligibility provides recipients in many States with access 
to Medicaid. We have administered SSI since the early 
seventies, when Congress created the program to replace a 
patchwork of State-run income-maintenance programs.
    SSI turns 40 this year, and while we now use sophisticated 
technology to help us administer the program, the design of the 
program itself has remained largely unchanged. I would like to 
share with you today some of our best practices and the lessons 
we have learned over the last four decades.
    While SSI has never been simple, over the years Congress 
and the courts have added many new rules which in turn have 
made SSI harder to manage. Nearly every change in an SSI 
beneficiary's life, from moving to a new apartment to a spouse 
picking up an extra shift at work, can affect the benefit. Due 
to the structure of the program, some improper payments are 
inevitable; however, we continuously look for ways to improve.
    Our primary key to success is to regularly review our 
beneficiaries' records. These reviews, which we call 
redeterminations, help to detect changes and to ensure that our 
information is current. We save $6 in benefits for every dollar 
we spend, and our redetermination process is highly effective. 
When we complete more redeterminations, our payment accuracy 
rate goes up.
    Another key to our success is our use of data analytics. We 
do not have the resources to review every case, so we use 
predictive models to help prioritize our program integrity 
workload. This modeling focuses our review on the cases with 
the greatest return on investment. In 2010, our predictive 
model for redeterminations helped us save $1.2 billion more 
than what a random selection would have saved.
    We have also learned how important technology is to helping 
us stay afloat amid staffing losses and growing workloads. 
While the SSI program requires the expertise of our trained 
employees, we successfully automated routine tasks, freeing our 
employees to focus on more difficult issues.
    Verifying the resources of SSI beneficiaries is an 
important, but error-prone element of eligibility. Through our 
partnership with Accuity Solutions, we have developed a 
creative approach, the Access to Financial Institutions, or 
AFI, Project. AFI allows us to electronically verify bank 
account balances as well as discover undisclosed accounts. It 
is a significant improvement over the paper-based process it 
replaced and has been successful in helping ensure that we only 
pay the right people the right amount.
    Technology can also make it easier for our beneficiaries to 
comply with program rules. One example is our SSI Telephone 
Wage Reporting System. This system allows individuals to update 
their wage amounts over the phone and correct their SSI 
payments before they are overpaid. This application has an 
additional simplification feature in that our records are 
directly updated with little or no employee intervention. We 
are now developing similar wage-reporting applications for the 
Internet and smartphone users.
    The last best practice that I want to highlight addresses 
the importance of sharing data across government. We have 
learned that data matches are critical to detect when 
beneficiaries have not reported changes to us timely. 
Electronic data matches have improved our program-integrity 
efforts. We have numerous computer matches with Federal, State, 
and local organizations, and we are constantly looking for 
cost-effective ways to obtain new data that will improve our 
payment accuracy.
    Our successes are largely dependent on sustained, adequate 
funding. I urge you to support the President's fiscal year 2013 
budget request for SSA because we have proven that we deliver. 
Through the hard work of our employees and technological 
advancements, we have increased productivity by an average of 
about 4 percent in each of the last 5 years.
    In closing, we continue to look for ways to simplify the 
SSI program. As we consider changes, we are also mindful of the 
need to balance benefit adequacy, benefit equity, and program 
integrity. We look forward to working with the Subcommittee on 
these important issues.
    I am happy to answer any questions. Thank you.
    Chairman DAVIS. Thank you very much, Ms. Colvin.
    [The prepared statement of Ms. Colvin follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Chairman DAVIS. Mr. O'Carroll, you are recognized for 5 
minutes.

            STATEMENT OF PATRICK P. O'CARROLL, JR., 
       INSPECTOR GENERAL, SOCIAL SECURITY ADMINISTRATION

    Mr. O'CARROLL. Good afternoon, Chairman Davis, Ranking 
Member Doggett, and Members of the Subcommittee. Thank you for 
the invitation to testify today.
    For many years my office has recommended that SSA consider 
all available tools and methods to ensure the right person 
receives the right payment at the right time. As technology 
advances, data matches and electronic records are emerging as 
effective tools to improve payment accuracy in Federal programs 
like SSI.
    Financial and other nonmedical factors can affect SSI 
eligibility, such as earnings and income, resources and assets, 
living arrangements, and presence in the United States.
    SSA's Access to Financial Institutions Project, or AFI, is 
a data-matching initiative we recommended years ago that helps 
the agency prevent commonplace SSI payment errors. AFI allows 
the agency to receive data directly from financial 
institutions, rather than relying on recipients to report 
assets that may reduce or eliminate the benefits. Self-
reporting, or the lack thereof, is a leading cause of payment 
errors. AFI is now in place in all 50 States, and the agency 
anticipates $900 million in lifetime program savings for each 
year it uses AFI.
    My office has also recommended that SSA expand its use of 
electronic databases to verify real property and assets. Last 
year we estimated that SSA has made improper payments of more 
than $2 billion because SSI recipients did not self-report 
property ownership to SSA. In recent months, SSA used a real 
property database in its stewardship reviews. The agency 
reported the records database was an effective tool, and that 
SSA would use the database in all SSI reviews in fiscal year 
2013.
    SSA is also working to collect transactional-level data 
from foreign ATMs. This data can identify ineligible recipients 
because they were outside of the United States for more than a 
month. We recommended this approach in a 2008 audit, which 
estimated $225 million in overpayments to 40,000 recipients 
outside of the United States. We are working on a review of 
SSA's progress in addressing this issue.
    We have also made other data-matching recommendations to 
SSA to identify marital status, workers' compensation, and 
vehicle ownership. We in OIG use data matches in our work as 
well, but the Computer Matching and Privacy Protection Act 
requires formal computer-matching agreements that can take 
years to complete. This prolonged process can delay or derail 
time-sensitive audit and investigative projects.
    In 2010, the Department of Health and Human Services 
obtained a legislative exemption for data matches designed to 
identify fraud, waste, or abuse. We are pursuing a similar 
exemption, which could serve as a vital tool in our 
organization as we combat fraud in SSA's programs.
    This office also continues to encourage the agency to seek 
funding to support key improper payment-prevention tools. For 
example, SSA has reported that it saves $7 for every dollar 
spent on redeterminations, which are periodic reviews of an SSI 
recipient's eligibility.
    In conclusion, it is critical that the agency makes certain 
that all SSI payments are correct and timely. SSI recipients 
depend on these payments for basic needs. But it is equally 
important to protect the integrity of taxpayer dollars through 
data matches, electronic records, and traditional reviews. I 
applaud Chairman Davis' proposal to expand data-matching across 
the Federal Government. For now my office will continue to work 
with your Subcommittee and SSA to ensure SSI program integrity 
and increase taxpayer savings.
    Thank you again for the invitation to testify, and I will 
be happy to answer any questions.
    Chairman DAVIS. I appreciate that, Mr. O'Carroll.
    [The prepared statement of Mr. O'Carroll follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Chairman DAVIS. I still remember that meeting in January of 
last year that was quite eye-opening on the complexities the 
agency faced with data-matching. You put a little Irish on the 
spin of the whole thing for us. We appreciate that moving 
forward, as Ranking Member Doggett and I began down that path, 
with data standardization. Thank you.
    Mr. Soczynski, you are recognized for 5 minutes.

                STATEMENT OF PAUL F. SOCZYNSKI, 
       DIRECTOR OF GOVERNMENT SERVICES, ACCUITY SOLUTIONS

    Mr. SOCZYNSKI. Thank you.
    Good afternoon. My name is Paul Soczynski. I am the Senior 
Director of Government Services for Accuity, Inc. Chairman 
Davis, and Ranking Member Doggett and Members, we are grateful 
for the opportunity to provide our views on technology and how 
they might be used to improve public benefit programs.
    Since 1911, Accuity has been the official registrar of the 
American Bankers Association U.S. Routing and Transit Codes, a 
role that requires us to assign and maintain ABA routing codes 
to every deposit-taking financial institution in the United 
States. In our role as ABA registrar, Accuity is required to 
maintain up-to-date information on the 117,000 financial 
institution locations across the United States. As such, we 
have earned a unique reputation as the trusted source of 
information about and for the banking industry.
    As you have heard, Accuity currently manages a technology 
solution to facilitate the eligibility process for the SSI 
program. In September 2003, Accuity was awarded a contract to 
develop and implement a pilot proof-of-concept program designed 
to automate the then-existing manual financial asset 
verification eligibility component of the SSI benefit program. 
We designed the asset verification system to include three main 
components: number one, a secure automated gateway between SSA 
field offices and the U.S. financial banking institutions; 
number two, a comprehensive and accurate database of registered 
participating financial institutions; and number three, a Web-
based and direct-transmission Web service technology platform 
with sophisticated message-routing logic designed to speed the 
process and mechanism and optimize the detection of undisclosed 
financial assets.
    Following several years of the pilot, for all SSA field 
offices in New York, New Jersey, and California, a national 
rollout did occur. It commenced in July of 2010, and all 50 
States are now operational as of June 2011. Leveraging our 
longstanding position in the banking industry and our unique 
trusted relationships in the financial institutions across the 
country, Accuity has successfully recruited and registered to 
participate in the automated solution in 95 percent of the 
financial institution locations nationally.
    Accuity's asset verification system has successfully 
processed millions of automated financial asset-verification 
requests and responses utilizing our comprehensive database of 
financial institutions. Instead of mailing a paper request form 
to a general financial institution address indicated by the SSI 
applicant, the request is now sent and received instantaneously 
through Accuity's asset verification system. By ensuring the 
account balance search for each financial institution is 
inclusive of an institution's entire branch network and not 
just a single location, the canvassing and search of financial 
assets goes beyond local and State borders to include regional 
and national searches regardless of where the applicant process 
takes place or where the applicant resides.
    The system automatically routes alternative multiple 
requests to financial institutions based on geographic logic 
and account detection probability parameters. The search 
algorithm, refined over many years, ensures the additional 
financial institutions that are canvassed for possible 
undetected financial assets. This added step creates stronger 
program integrity by improving the detection of undisclosed 
application assets instead of relying solely on the bank 
account information provided by the applicant.
    Accuity has successfully coordinated and implemented direct 
transmission automation with the largest financial institutions 
in the country. This direct, end-to-end technology reduces the 
need for human intervention in a high-volume environment, 
resulting in optimized efficiency, reduced costs, and high-
speed response turnaround times, thus accelerating the overall 
determination process for program beneficiaries.
    Accuity has been pleased to partner with SSA in proving the 
value of technology and serving beneficiaries, while preventing 
fraud and abuse. Based on the success of the asset-verification 
technology, Congress passed section 1940 of the Social Security 
Act. This amendment to the Act requires States to implement a 
comparable electronic solution for the aged, blind, and 
disabled Medicaid population. While the legislation included 
the requirement for all States to have this implemented by 
2013, States have been slow to implement the solution. We are 
hopeful after initial implementations in various States, that 
will become a different reality.
    We appreciate the opportunity to inform the Subcommittee 
about how we worked developing and implementing a new 
technology to provide greater efficiency to taxpayer-funded 
programs. I would be pleased to provide additional information 
regarding Accuity's asset verification system, and I look 
forward to answering your questions today. Thank you.
    Chairman DAVIS. Thank you very much, Mr. Soczynski.
    [The prepared statement of Mr. Soczynski follows:]

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    Chairman DAVIS. Ms. Ford, you are recognized for 5 minutes.

              STATEMENT OF MARTY FORD, DIRECTOR, 
       PUBLIC POLICY OFFICE, THE ARC OF THE UNITED STATES

    Ms. FORD. Chairman Davis, Ranking Member Doggett, and 
Members of the Subcommittee, thank you for the opportunity to 
testify on the use of technology to improve the administration 
of the SSI financial eligibility requirements.
    As you know, SSI benefits, along with related Medicaid 
benefits, are the means of survival for over 8 million people 
with severe disabilities. SSI benefits help people meet their 
basic needs for food and housing, secure medical care, and pay 
for medications not covered by Medicaid. SSI also plays a 
critical role in helping people with severe disabilities live 
in the community rather than in institutions. We applaud SSA's 
continued work in improving its technology infrastructure to 
improve services to claimants and beneficiaries even during 
these challenging economic times.
    SSA has recognized that the SSI program rules are 
challenging even for administrators of the program. The program 
is many times more difficult for SSI beneficiaries to 
understand and follow. Beneficiaries are under tremendous 
financial stress when they apply for SSI and while they are 
using benefits. SSI pays only about 75 percent of the Federal 
poverty level for an individual. Beneficiaries often experience 
food insecurity, possible homelessness, and personal and family 
crisis due to economic hardship. For some, the disability 
itself adds its own pressures and makes navigating the 
complexity of the SSI program extremely difficult.
    The CCD Social Security Task Force generally supports SSA's 
efforts to use technology to improve the program so long as the 
improvements do not infringe on claimants' rights. We have 
always supported SSA's work in conducting continuing disability 
reviews and redeterminations to ensure continued integrity of 
the SSI and Social Security disability programs.
    We recognize that technology can improve the 
Administration's efforts in these areas; however, many SSI 
applicants and beneficiaries lack electronic access to SSA or 
may not be able to understand or navigate electronic 
communications. For example, a recent study by the Department 
of Commerce found that in 46 percent of households headed by a 
person with a disability, there was no computer at home, 
compared to 20 percent of homes where the head of household had 
no disability. Sadly, our fast-growing electronic world is 
creating new barriers for people unable to cognitively or 
financially keep pace.
    The complexity of the SSI program and the requirements for 
reporting and maintaining compliance with the rules, combined 
with the push for increased use of technology, will place 
increased pressures on those SSI beneficiaries who are unable 
to navigate in an electronic world. For these reasons we 
believe that SSA must exercise caution to ensure that 
beneficiaries are protected. This will require an increased 
commitment on the part of the Administration and the Congress 
to recognize the increasing difficulties for these 
beneficiaries and find solutions for them.
    Improvements to the process will save time for both 
beneficiaries and SSA, improve accuracy and timeliness, and 
hopefully assist beneficiaries who are exploring opportunities 
to work. We have some very specific recommendations.
    Most importantly, SSA requires adequate administrative 
resources to effectively administer the program, including its 
financial eligibility requirements. We urge Congress to provide 
SSA with adequate resources at the level requested by the 
President.
    Additionally, SSA needs to develop a better earnings 
reporting and recording system, including providing an option 
for online wage reporting, for those recipients who can use it, 
that allows the agency to promptly adjust benefit payments to 
help reduce overpayments and remove barriers for people who 
want to work.
    SSA should also consider using its continuing disability 
review enforcement model to help prevent overpayments before 
they happen.
    SSA also needs to enhance the use and operation of its 
toll-free 800 number.
    We support continuation of the WIPA and PABSS programs that 
have already been commented on. That is very important for 
those people who want to work.
    Congress should raise the SSI asset limit and income 
disregards and index them annually for inflation. While the SSI 
program has numerous work incentives built in to encourage 
people to work, the extremely low disregards mean that many SSI 
beneficiaries' earnings trigger an overpayment for even 
relatively modest amounts of work. Nearly half of beneficiaries 
who work earn less than $200 per month. Increasing the 
disregards would help beneficiaries and at the same time reduce 
SSA's administrative workload.
    I will end here and am open to any questions that you have. 
Thank you.
    Chairman DAVIS. Thank you very much, Ms. Ford.
    [The prepared statement of Ms. Ford follows:]

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    Chairman DAVIS. Mr. Besharov, you are recognized for 5 
minutes.

         STATEMENT OF DOUGLAS J. BESHAROV, PROFESSOR, 
        SCHOOL OF PUBLIC POLICY, UNIVERSITY OF MARYLAND

    Mr. BESHAROV. Chairman Davis, Ranking Member Doggett, other 
Members of the Committee, it is a pleasure to be back.
    It was a great pleasure listening to the other speakers 
because it is rare that we have this kind of agreement about 
the need to move forward, and I was really impressed when I 
read about the bipartisan work of this Committee on the data-
matching and the modernization of means-testing programs.
    I think I am here a little bit from another world, but let 
me tell you why I think it is all connected and why I think it 
is so important. In the other means-tested programs that I 
watch, whether it is food stamps, WIC, TANF, and so forth, the 
process of eligibility determination has become so expensive, 
and so much of that cost is on the States, that the States 
look--that the Federal Government helps the States to do 
everything they can to do less eligibility checking. So, for 
example, we have 1-year certifications of income in food 
stamps. So, for example, we don't have asset tests in food 
stamps anymore. Maybe a little bit of it is ideological, but 
the main reason is because it is too expensive to do those 
things in the modern world, the modern world where data 
processing and data searching are the low-cost answer.
    My question is why should both liberals and conservatives 
want better eligibility determinations? And I want to spend a 
few minutes on that because I think that is the crux of this 
discussion.
    It is not that everyone gets more payments under disability 
or everyone gets more payments under food stamps. It is a very 
haphazard process, and there is great unfairness. The technical 
term is horizontal inequity. That is to say, if I am lucky 
enough to be with a caseworker who says, ``Oh, let us forget 
about this income,'' or if I am lucky enough to be with a 
caseworker who says, ``Well, you deserve it even though you 
don't formally fall into the rules.'' That is just unfair. And 
the thing about automated systems is it becomes less possible 
for there to be that kind of unfairness. I think that is very 
important.
    The second thing--and I am struck by this--is the 
possibility to do serious reform of the system as a whole and 
especially its disincentives to work. I was struck by the 
comments of my colleagues and also Mr. Doggett about the 
earnings limitations, the set-asides. Let me mention a few 
things about that and talk for the 2 minutes I have left about 
the U.K.
    These programs are all interconnected. About 36 percent of 
SSI households also receive food stamps. If SSI goes down $1, 
food stamps go up, I think, 33 cents, if I remember my math on 
this. If SSI goes up, food stamps go down. And this has to be 
done by hand. I was going to say across Committee 
jurisdictions, but it is really across agencies at the State 
and local level. We are in the 21st century. We shouldn't have 
to do it that way.
    The U.K. has a process of making real-time eligibility 
determinations. And it is striking only when you think about 
U.S. Government actions, because, of course, when you use a 
credit card to buy something, it is real time. And so the idea 
that we can't match what is happening in the U.K. is striking.
    What the U.K. has been able to do (because it had a process 
of systematizing eligibility across programs), is to deal with 
the work disincentives embedded in these programs, whether it 
is the income set-aside, whether it is an earnings disregard, 
and whether it is the effect of food stamps.
    As you probably know, depending on the family, and 
depending on the income, marginal tax rates in this country for 
means-tested programs can be over 100 percent, which is you 
earn 1 more dollar, and you owe the government more than $1. In 
the U.K., they have been able--and it started under the Labor 
government, not just the Conservative/Liberal Democrat 
coalition--to reduce the maximum marginal tax rate to 65 
percent. Many of us wish it was not that high. But I think this 
is the promise of modern technology.
    I hope that this Committee will be able to pursue this 
topic this year and in the years to come. Thank you very much.
    Chairman DAVIS. Thank you, Mr. Besharov.
    [The prepared statement of Mr. Besharov follows:]

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    Chairman DAVIS. The trend in some means-tested programs 
like food stamps has been to waive complex eligibility rules, 
especially asset tests, in order to speed eligibility 
determination and expand benefit receipt. In the manufacturing 
world that I grew up in, in business, we call that expediting, 
where you step aside from established processes and rules, and 
in the long run you can actually create more cost. And thus, 
the more you process, the higher your cost per item until it 
completely flips the cost structure upside down on what we call 
customer service or the equivalent of a banking transaction.
    States, especially when spending Federal, not State, 
dollars, seem less interested in making the administrative 
effort needed to effectively verify income and asset levels, 
thus suggesting they need a stake in this game as well. But as 
a result, today one in seven Americans is eligible for food 
stamps at a cost of over $70 billion in 2011, three times what 
it was in 2002 when the asset test was more consistently 
applied.
    Listening to all of your testimony today, it appears 
technology solutions exist to overcome these administrative 
barriers, or islands of excellence in various parts of 
government and out in the State, but not connected in an 
integrated manner yet. For asset verification under AFI, banks 
are responding in an average of 7 days, with more than a 
quarter reporting back in 24 hours, which is a big step 
forward. Meanwhile, the United Kingdom is moving to a system 
with real-time wage data.
    Mr. Soczynski or Mr. Besharov, are any of the issues and 
solutions we have talked about today unique to the SSI program 
versus other programs? Go ahead, Mr. Soczynski.
    Mr. SOCZYNSKI. No, actually they are not. And I think that 
is the applicability of the Medicaid solution in similar 
environments. The connection between the government agency and 
the financial institutions to share that account balance 
information is applicable and transferable to other such 
programs.
    Chairman DAVIS. Mr. Besharov.
    Mr. BESHAROV. I think that is right. I agree. The one thing 
I would add to that is something that you mentioned, Mr. Davis, 
and that is the fact that States share in the cost of 
eligibility and administration, but not in the cost of the 
actual program. That is a formula to encourage cutting back on 
eligibility determination. Not only does the State save money 
that way, but easier eligibility brings more money into the 
State.
    One thing I would like to also mention, since these rules 
are different across programs, TANF to food stamps to 
disability, and other programs as well, (housing), you 
incentivize States to game the system. Many people wonder why 
the TANF program hasn't grown in this time of economic 
difficulty. There are many reasons; who is affected, 
unemployment rates, and so forth. But I think one very big 
reason is States pay all of TANF costs. They pay none of food 
stamps cost. And so why should we be surprised if the food 
stamp caseload has gone up and the TANF caseload has not? And 
the same for the disability caseload. So these incentives that 
are built into the system create distortions that we should all 
be uncomfortable with.
    Chairman DAVIS. Ms. Colvin and/or Mr. O'Carroll, in your 
interactions with other agencies, do you see the same types of 
issues? In fact, have any other agencies approached you, or 
have you shared your experience with others in terms of trying 
to streamline the integration of processes?
    Ms. COLVIN. I have found that there is a very strong 
interest among other agencies. Let me speak first to the State 
level, though, because I came out of the State. I administered 
all of the means-tested programs at the State level.
    The States are very interested in innovation and 
creativity. They are interested in automation. For them it has 
been a big resource issue. Unlike at the Federal level, where 
you have one agency administering the program, many of these 
programs are administered at the local level in addition to the 
State.
    But at the Federal level, we have a Benefits Processing 
Work Group. We have presented AFI to them. They are very 
interested. I think the standardization of data that you are 
proposing will be helpful.
    But we have been working with most of the benefit-paying 
agencies like VA and CMS and the Office of Child Support 
Enforcement. And there is a very strong interest, and we are 
continuing to work with them in that regard.
    Chairman DAVIS. Mr. O'Carroll.
    Mr. O'CARROLL. Mr. Chairman, I agree that working with the 
other departments and other agencies on this is very important, 
and woven into this are the matching agreements between all the 
agencies.
    We can't compare data with other agencies that are doing 
the same type of work that we are doing, trying to identify 
income and wages and other information. We can't do that 
without a matching agreement. It takes years, and usually by 
the time we get the agreement, the issue is over. So anything 
you can do to help us in terms of getting access to data 
without computer-matching agreements between Federal agencies 
to identify improper payments will be very helpful.
    Chairman DAVIS. Thank you very much.
    Mr. Doggett, you are recognized for 5 minutes.
    Mr. DOGGETT. Thank you, Mr. Chairman, and thanks to all of 
our witnesses.
    Commissioner, let me ask you, I referenced in my opening 
statement this proposal that has been approved in an 
Appropriations Subcommittee to cut the billion dollars from 
what the President proposed for the Social Security 
Administration. What is the impact of that on your efforts to 
reduce waste, fraud and abuse, and on all of your program 
integrity activities?
    Ms. COLVIN. Let me just summarize what the impact is going 
to be for us. There is going to be a severe impact within the 
agency. I don't have the specifics under the proposal, but it 
should be recognized that we had significant cuts in 2011 and 
2012. As you know, we have had to close offices and reduce 
office hours. We have had a hiring freeze on. We have lost 
about 7,000 employees over the 2 years, and we are making other 
draconian cuts. We would have similar experiences under this 
bill.
    There is also going to be a significant reduction in our 
program integrity dollars. We have indicated that we already 
see a return of $9 for every $1 with our continuing disability 
reviews, and $6 saved for every $1 spent with our 
redeterminations. The bill significantly reduces the amount of 
funding that would be available for that work, reducing it from 
$756 million in fiscal year 2012 to $272 million in 2013. So 
that is going to be a significant reduction in our ability to 
do program integrity work.
    But more importantly, the service to the public is going to 
take longer. It is not going to be the quality that we have 
been able to provide in the past. I don't have at this time 
specifics relative to this proposal, but you can conclude that 
the impacts will be very similar, if not even worse.
    Mr. DOGGETT. We had the Social Security Commissioner 
himself at the Social Security Subcommittee the other day 
talking about the impact this would have on disability 
determinations; for example, where we have big backlogs and 
delays already that the Social Security Administration had been 
working to try to reduce, that now, without adequate resources, 
there will not be the quality of service.
    You actually have already, as you mentioned, had to close 
some offices. And we can foresee more of that type of thing if 
you don't have the money to deliver the service. And this is 
coming from some of the same type of people that are always 
talking about waste, fraud and abuse, and yet the resources 
needed to ensure we don't have waste, fraud and abuse are being 
denied to the Administration, which I think is a very 
significant shortcoming.
    Thank you for your testimony.
    Ms. Ford, I would like to ask you about another program 
that I mentioned in my opening statement, and that is the Work 
Incentives Planning and Assistance program that is about to 
expire. Would you review the type of assistance it provides and 
comment on if it is not renewed, what the effect will be on 
those who rely on it.
    Ms. FORD. Yes, thank you.
    The grants from the WIPA, or Work Incentives Planning and 
Assistance, go to local nonprofit and other agencies to support 
outreach, education, and benefits-planning services for people 
who are using SSI or the disability benefits under Title II 
about work incentives and supports for finding, maintaining, 
and advancing in employment. So this is all aimed at assisting 
people in getting work, staying at work, or even increasing 
their work effort or advancing in their employment.
    Beneficiaries are informed about what will happen with 
their employment and what kind of medical coverage they can 
get. It addresses the concerns that beneficiaries have, their 
fears about whether they will lose the protections that they 
have in terms of medical coverage. It is basics benefits 
counseling: what will happen if you work; what will happen if 
you attempt work, are not able to continue, and have to come 
back into the program; or if you are able to be successful and 
continue on into the work world. It was designed to provide 
that one-on-one assistance to people who want to try to leave 
the rolls.
    Mr. DOGGETT. Those are individuals that may not always be 
the first choice of an employer to take a job, and individuals 
that may be taking their first job or have had difficulty 
getting a job who really need that assistance. It is good for 
the employer and the individual employee.
    Ms. FORD. Correct, yes.
    Mr. DOGGETT. Thank you very much.
    Ms. FORD. I agree.
    Chairman DAVIS. I thank the gentleman.
    The chair now recognizes Mr. Paulsen form Minnesota for 5 
minutes.
    Mr. PAULSEN. Thank you, Mr. Chairman.
    Let me ask Mr. O'Carroll a question, because in your 
testimony you mentioned that SSA should conduct certain 
redeterminations and limited issue reviews when it discovers 
changes in circumstances that might affect an SSI recipient's 
eligibility or benefit amount.
    Are there any other ways that SSA can help determine if an 
SSI beneficiary has additional income or resources besides the 
beneficiary just simply telling SSA this information and then 
SSA trusting that self-reported information?
    Mr. O'CARROLL. Mr. Paulsen, a very good point. Since it is 
self-reported, a lot of times SSA isn't finding out about it, 
and needs to use other forms of data matches and indicators.
    Some of the things that we have been looking at or we 
recommend that SSA be doing is, one, taking a look at its own 
records; taking a look at the master earnings file, comparing 
that against recipients to see if they are showing any income 
and taking a look at the earnings suspense file to see if there 
are any earnings that are being reported there.
    But then the other major thing SSA could be doing is 
dealing with the IRS, getting 1099 information from IRS, which 
would show that people are getting access to pensions, other 
forms of wages, gambling income, that type of information. So 
that is very important. And then also matching data with the 
States.
    So it keeps coming back to all the government agencies need 
to be talking to each other and comparing this type of 
information.
    Mr. PAULSEN. Good.
    And then the Unemployment Insurance program is also a 
program that is under this Subcommittee's jurisdiction. It has 
a 12 percent error rate, with more than $13 billion in improper 
payments that went out last year. So in that program the 
largest source of error involves individuals going back to work 
without then reporting that they are going back to work, and 
then continuing to actually receive benefits. That is a 
situation that is a little bit similar to the SSI overpayment 
discussion.
    Mr. Soczynski, is there any potential in your system to 
help identify wages?
    Mr. SOCZYNSKI. Not specifically in our system. The 
information that is provided by the banking industry is account 
balance information. However, Accuity and one of our partners, 
Early Warning, is involved in a research project with the 
Department of Labor at this point attempting to find easier 
ways to find out if someone has gone back to work while still 
claiming unemployment benefits faster than is reported through 
the current data-generation system now.
    That pilot should be kicking off shortly. It will involve 
three States participating in that: Maryland, Illinois, and 
Missouri. And we expect that by the end of the year, we will 
have some information on whether or not--not necessarily 
through our AFI program, but through an identification of other 
databases--if we can identify people back to work sooner than 
they are going in to claim that they are no longer needing 
unemployment benefits.
    Mr. PAULSEN. Mr. Besharov, maybe you can answer. Are there 
other programs that you see that need timely and accurate wage 
information? Do you have any other thoughts? How should they 
get it in the future?
    Mr. BESHAROV. Well, I think, first of all, it would help to 
have one fundamental reform, which is what Chairman Davis said, 
which is have the States have some skin in the payment process, 
not just the administration process. That would focus some 
attention and deal, I think, with some of the issues about 
encouraging modern information technology. We need the States 
to want the system to work better. And it is not just audits 
that will do it. They have to feel that it costs them money to 
have inaccurate systems.
    It is the case across many of these means-tested programs--
food stamps come to mind. You mentioned UI. WIC is another 
program. About 53 percent of all newborns receive WIC benefits. 
And this is supposed to be a program for just those who are 
nutritionally needy. At some point it would be good to have 
better evidence and better information about student loans, 
student grants. It goes across the board where you see we have 
given up the process of enforcing the rules, and we are now 
having to catch up for almost 40 years of inaction. We started 
thinking people would just tell us when their income changed.
    And I just want to mention this before closing. People 
don't believe this, but there was a President who said, we 
don't need any of this recordkeeping. People should just tell 
us what they need, and we will send them a check. The 
President's name was Richard Nixon. It was the last time we 
talked about a benefit that had no double-checking of actual 
wage information, and it is time for us to double-check as best 
we can across all means-tested programs.
    Mr. PAULSEN. Thank you, Mr. Chairman. I yield back.
    Chairman DAVIS. I thank the gentleman.
    The chair now recognizes the distinguished chair of the 
Republican Policy Committee, the gentleman from Georgia, Mr. 
Price.
    Mr. PRICE. Thank you, Mr. Chairman. I appreciate that.
    This is an interesting panel. I don't envy any of you who 
have the responsibility for administering this. I think 40 
years is probably the accurate timeframe for when we put in 
place a program that is extremely, extremely difficult to make 
work on a day-to-day basis.
    Ms. Colvin, you referred to that in your opening comments, 
and I want to commend you for that.
    Our hearing is entitled ``The Use of Technology to Improve 
the Administration of SSI's Financial Eligibility 
Requirements.'' I think if you break that down, what that means 
is that we all want to make certain that those who should be 
receiving benefits are receiving benefits for which they are 
eligible, and those who shouldn't don't. That is the unanimity 
that I think you talked about.
    So if I step back from this and would ask you, challenge 
you to step back, if the slate is clean, what are the one or 
two things that you think are imperative to making a system 
work that allows us to utilize the technology of today to 
assist in the administration of SSI's financial eligibility 
requirements? If you wipe the slate clean--
    Ms. Colvin, any thoughts about that, if you were not 
encumbered by the current system?
    Ms. COLVIN. Well, I think that having standard definitions 
of what is income and are resources would be important. The 
complexity of being able to each month look at someone's 
circumstances, whether or not they have had income that month 
or if their resources have changed, is very, very complex. We 
have to look at whether or not they received benefits from 
someone else who may have contributed to their care. So it is 
the whole complexity of the program.
    We have in the past presented ideas to simplify the 
program, but I think the automation that we are using which 
allows us to be able to do this without having to do it 
manually, where we can do data exchanges--we have 1,500 data 
exchanges with local and State government, we have many with 
our Federal agencies so we can compete--that has helped us.
    But it is the complexity of the program. If we could find 
some way to simplify so we do not have to look at these changes 
every single month. Many times we are looking at it 
retroactively. For instance, if we give the correct check to 
someone for SSI, we give it to them at the beginning of the 
month, but they may get income during the month, and then that 
makes them overpaid. So it is the complexity of the program. We 
need to find a way to simplify it.
    I would be very happy to provide some ideas for the record, 
but I am not certain I can come up with any off the top of my 
head right here.
    Mr. PRICE. Mr. O'Carroll, one or two silver bullets?
    Mr. O'CARROLL. Well, the first one, as my esteemed 
colleague just brought up, is reducing the complexity of it. 
With the alerts and these matches where we are either using 
third-party databases or other government information, it still 
requires that the claim rep at SSA, when they get that 
information, develop it, talk to the person, and find out what 
the truth is. And that is a whole other step that is needed. So 
no matter what we are doing in terms of data-matching, it still 
comes down to human intervention in that interview. And that is 
part of the issue of complexity.
    Mr. PRICE. Mr. Soczynski, one silver bullet.
    Mr. SOCZYNSKI. One silver bullet. Well, thinking that I had 
the opportunity to listen to a few ahead of me, but clean 
slate, back to the future? You know, we have silos. We have so 
many disparate databases in so many places that trying to pull 
all that together into a big interface, you know, that is the 
future. That is the Star Wars of the technology is to really 
find a way to reduce the multiple places the information is 
filed State by State, agency by agency, and try to get it all 
connected, because the data is all there. It is a way of just 
having it available for the right person to use at the right 
time.
    Mr. PRICE. Ms. Ford, do you agree?
    Ms. FORD. In addition to what Commissioner Colvin had said, 
I would say updating the income and asset levels to reasonable 
amounts, at least to the level they would have been were they 
indexed to inflation since the beginning. We are spending----
    Mr. PRICE. I don't know if that is a clean slate item, but 
I appreciate that perspective. I am running out of time, but I 
want to get Mr. Besharov up, if I may.
    Ms. FORD. My main point is we are spending an enormous 
amount of administrative resources to chase nickels and dimes.
    Mr. PRICE. Sure. Absolutely.
    Mr. Besharov.
    Mr. BESHAROV. I lead a program on comparing what we do to 
other countries. The social democracies of Europe and Asia are 
a little bit complexifying the program to simplify it. So they 
have a category called ``temporary disability.'' And the thing 
about temporary disability, it is easier to get people on, but 
it is easier to get them off.
    The other thing they have is they have partial disability. 
And so it is easier for them to help someone find a job because 
they don't have these earnings penalties. Some people are just 
partially disabled. We need room for that in the system in a 
way so that the rehabilitative side of the program, which we 
haven't talked about, has some way to play out.
    So that would be my blank slate.
    Mr. PRICE. Thank you, Mr. Chairman.
    Chairman DAVIS. I think the gentleman.
    And the chair now recognizes the distinguished gentleman 
from Georgia, Mr. Lewis, for 5 minutes.
    Mr. LEWIS. Thank you very much, Mr. Chairman. Again, thank 
you for holding this hearing. I want to thank all of the 
witnesses for being here.
    Director Ford, what can Congress do to help SSA and the 
disability community to give support to disabled recipients so 
that they can return to work when they are able to do so? I 
guess this is in keeping with the line of questions that my 
good friend from Georgia Dr. Price raised.
    Ms. FORD. Well, I think that making it easier to go back to 
work, increasing those income and asset limits so that you are 
not hitting against those complexities in the program every 
time you earn just a little bit of money. Those complexities 
frighten people. Hitting overpayments every time you earn even 
a little bit of money is very difficult.
    And being creative, we need to look at making it easier for 
people to work. The SSI program does have work incentives in 
it. It needs to make it simpler, though, so that people are not 
frightened when something happens.
    We do already have a way, through the section 1619 program, 
for people to maintain their eligibility for Medicaid so that 
they don't lose that support system. And very often people who 
have very severe disabilities need to maintain their long-term 
services coverage (or their long-term care coverage) through 
the Medicaid program. That is very, very important. We are 
talking about people with very severe disabilities here. So 
that is very important.
    Simplification of work incentives is critical, because 
otherwise it becomes too complex. We are talking about a 
program that is already very, very complex. And for people who 
are eligible for both Title II and Title XVI, the complexities 
become almost too great to surmount. The rules are very 
different.
    Mr. LEWIS. Thank you.
    Commissioner, the SSI program rules are very complicated. 
You probably know that better than anyone. They are very 
complicated. Apart from new technology are there ways to 
simplify the rules to make the SSI program less burdensome to 
administer and easier for a recipient to understand? How can 
you make it simple?
    Ms. COLVIN. I don't have an immediate response to that 
because it is so complex. We would be very happy to work with 
you on ideas that might be worth exploring. But each time a 
change is made, probably for a good reason, it makes the 
program even more complex. So if you just were to roll out all 
of the changes that have been added on to the program over the 
last 40 years, each one of those makes it more and more 
complex. When you have to look at someone's income and 
resources every single month, and regardless of how small that 
change is, it impacts or may impact their benefit, it becomes 
very difficult.
    Mr. LEWIS. You don't have a way in this new age of 
technology to just push a button?
    Ms. COLVIN. No, we don't have that. We do, as I said, have 
a lot of data exchanges, so we are able to get information 
about wages from IRS or the Administration for Children and 
Families, new hire directory, and some of the other pensions 
that they receive, et cetera. But, for instance, if someone's 
living situation changes, they have to report that. There is no 
button that we can push. And once they report it, we then have 
to verify it. So it is a very complex process.
    Even with the reports that we get, for instance, like AFI, 
which is considered a third-party report, we have to verify 
that. We can't just accept that. So it is a very complex 
program.
    Mr. LEWIS. Anyone else have any suggestion, or 
recommendation, or some magic, I guess you call it a silver 
bullet?
    Yes, Director Ford.
    Ms. FORD. I would mention that in my testimony we did 
comment on Social Security's proposal for a work incentive 
simplification project (WISP) which is aimed at Title II, but 
might be able to help those people who are concurrent 
beneficiaries of Title XVI and Title II who want to try to 
work. WISP is one initiative that we would support moving 
forward on.
    Mr. BESHAROV. If I could, just to give a plug again for 
what this Committee has been doing. I sat in on a planning 
session at the Labor Department, and somebody asked the 
question, why was it so difficult and so expensive to do 
research on workforce development programs? And the head 
researcher from the Labor Department said, ``Because for each 
contract, the contractor has to spend $1 million collecting the 
data from the States.'' And someone said, ``Well, doesn't data 
come to you, the Department of Labor?'' ``No,'' says the 
Department of Labor, ``and when it comes, we can't use it 
because it is all in different kinds of pieces.''
    So it sounds so unromantic, but I think the work that this 
Committee is doing on data simplification, data similarities, 
and codification is the first essential step to much more data-
sharing electronically. It is very important. It seems so 
mundane, but it is tremendously important.
    Mr. LEWIS. Thank you.
    Thank you, Mr. Chairman.
    Chairman DAVIS. I thank the gentleman.
    Ultimately, if we are going to address the deficit and 
spending issues, it is going to be by fixing the engine and not 
external or symptomatic changes. We are hopeful. These 
technologies exist today all around us. It is a question of 
removing the statutory barriers, which the Inspector General 
and I have talked about in the past and others. But I 
appreciate the conversation so far.
    With that, we recognize Mr. Berg from North Dakota for 5 
minutes.
    Mr. BERG. Thank you, Mr. Chairman. I thank the panelists. I 
appreciate the passion that is coming out and what we are doing 
here, which really does seem mundane and boring, but can have 
pretty dramatic effects.
    As you know, the pressure to reduce error rates is 
critical. And the return, the payback is pretty dramatic. 
Obviously, the challenge is if we can prevent an overpayment 
from happening, that is a lot easier than trying to recoup 
money after that money has gone out, for people trying to 
understand why that error was made and for people trying to 
correct that whole process.
    So I guess just really on the big picture, Mr. O'Carroll, I 
would like you to tell us what the most common SSI issues are 
that result in overpayment, and are they preventable?
    Mr. O'CARROLL. Mr. Berg, as I was saying in earlier 
testimony, the biggest issue is the self-reporting of SSI 
recipients. When you are talking about your assets, what is 
your income, what your property is, all those are the biggest 
issues. SSI is a means-tested program, and you have to trust 
the person is giving you the right information. I think what we 
are talking about today is finding ways to verify that 
information the person has given and if any of the 
circumstances have changed.
    Mr. BERG. So how would you prevent that? I am assuming that 
when it relates to property, that is probably a big issue that 
could have a wide variation of opinions on what the value is or 
if there is value. What jumps out and says, this is where it is 
really hard to determine?
    Mr. O'CARROLL. Well, the biggest part of determining 
eligibility is the redeterminations that we have been talking 
about. When those indicators come up, that is the point when 
you have to bring in the recipient and speak to them and find 
out whether or not they have the resources. And unfortunately, 
one of the big issues with the resources of SSA is that we need 
a balance there between stewardship and service. And what we 
are saying is we need to have more resources put toward 
stewardship. So when you get those indicators, you are bringing 
the people in, you are checking to see if their circumstances 
have changed.
    And I think that is one of the issues that we would like 
this Committee to help with is for SSA to be given an integrity 
fund or a fund that is earmarked just for stewardship work 
where, when resources are limited, that there will always be 
the resources there to do the redeterminations, the continuing 
disability reviews, the cooperative disability investigations 
that we do, that is probably the best prevention, Mr. Berg.
    Mr. BERG. Thank you.
    I yield back, Mr. Chairman.
    Chairman DAVIS. I thank the gentleman.
    The chair now recognizes Mr. Reed from New York for 5 
minutes.
    Mr. REED. Thank you, Mr. Chairman.
    And thank you to the witnesses for your testimony today.
    Ms. Colvin, I wanted to follow up on some prior testimony 
from the change in priorities that we have received from the 
Commissioner in prior hearings that I see in this area at SSA. 
And there was some direct testimony from the Commissioner about 
the fact that he was processing incoming eligibility cases over 
the post-entitlement checking and making sure that overpayments 
are getting looked at and corrected. Has that been the case in 
your experience in the agency; has that priority shift 
occurred?
    Ms. COLVIN. I don't think there is a priority shift. We try 
to balance both of the workloads, both our program integrity 
and our direct service. If you have someone who walks into an 
office, you have to serve them. Or if someone calls you on the 
telephone, you have to serve them. And then that work is not 
finished. You have to take action as a result of that call or 
that visit. So certainly that moves to the front of the pile, 
but I think clearly we have tried to balance that.
    Now, we do all of the redeterminations and the CDRs for 
which we are funded, and we are certainly doing other kinds of 
things like our Centenarian Project and other kinds of projects 
that we try to use to identify any overpayments or anyone who 
is getting a benefit who should not. So I would say it is a 
continuous effort to balance the workload.
    Mr. REED. So when the Commissioner came and testified to us 
in previous hearings that there was a conscious decision on his 
part to switch the priority to incoming eligibility claims at 
the expense of post-entitlement work, the Commissioner's 
testimony was inaccurate?
    Ms. COLVIN. Now, I can't speak to that because I am not 
aware of that testimony, so I am certainly not going to 
contradict what he would say. But I am responsible for the 
program integrity initiative in the agency, and I have not seen 
that getting shifted. We have been pushing that as we always 
have.
    Mr. REED. So from your experience at the agency, that 
priority shift has not occurred?
    Ms. COLVIN. I would say since I have been there, there is 
still a focus on program integrity work.
    Mr. REED. Wait. But that didn't answer the question. Was 
there a shift--there is always a focus on everything you do?
    Ms. COLVIN. I can't speak to whether or not there has been 
a shift. I don't know what timeframe that testimony was given. 
I would be very happy to provide you an answer for the record. 
But I am not aware that there has been a shift of not doing 
program integrity work and instead doing----
    Mr. REED. Incoming eligibility determination.
    Ms. COLVIN. Right, right.
    Mr. REED. That is fair.
    And then I was going to ask, one of the issues I see here 
is that the qualification for the benefits changes, as we point 
out, as you pointed out, are midmonth many a times, and as the 
individual is eligible for the benefits, things change. Has 
there been any exploration of technology? I know there is some 
testimony, Mr. Besharov, from you, in the U.K. there is 
realtime reporting wage technology that is out there that the 
U.K. is relying on. Is there anything in the agency's point of 
view, Ms. Colvin, warranting to get to that realtime data?
    Ms. COLVIN. Thank you for that question. Yes, we have the 
SSI telephone wage reporting where an individual can call in 
and report any change in their wages during the month. Right 
now it is a telephone call. We are moving that application to 
both mobile phone services as well as Internet services. We 
want to make it as easy for people to be able to report changes 
as possible. We think that will go a long way.
    Mr. REED. Now, that is self-reporting from the individual. 
I understand in the U.K.--and I will move over here to Mr. 
Besharov--the U.K. realtime data, that is different?
    Mr. BESHAROV. That comes from the employer. And so as soon 
as there is a change, the employer sends the information to Her 
Majesty's Revenue and Customs.
    Mr. REED. My understanding, I mean, I had four small 
businesses before I came to Congress, and I was doing my weekly 
deposits, I was doing my payroll, and right there you have it 
all listed. You have your Social Security number. Is there a 
roadblock between the IRS and that reporting data, that instant 
wage, weekly deposits that are occurring, not getting over to 
SSA to simply check what is happening during that midstream?
    Ms. COLVIN. Right now the wage reporting from the IRS is 
yearly. We have had proposals in to do it quarterly, but there 
has been concern about the impact on small businesses.
    Mr. REED. Now, what impact on small businesses? They are 
already reporting the data from a majority of the cases.
    Ms. COLVIN. Well, they would have to report it more 
frequently to the IRS to be able to report it to us. We get a 
yearly report. It is usually about 18 months, I think, by the 
time we get it, so the information is old when we get it. And 
we do, in fact, then go back and make changes as a result of 
that, but you have already incurred overpayments.
    We are entering into a contract with--and I don't remember 
the name of it now--that would allow us to have a contract with 
large----
    Mr. REED. Ms. Colvin, if I could reclaim my time. Because 
that is not my understanding of the process of how it works. 
And when I sign those payroll statements, and when I deposit 
it, is that an accurate statement that the wage reporting 
information is only prepared at the end of the year for the 
IRS?
    Ms. COLVIN. I said we only get it at the end of the year.
    Mr. REED. You only get it. But if you got it earlier--well, 
my understanding is the IRS does get that information earlier. 
It gets it on a weekly basis with the deposits. So if you got 
that information earlier, would that help you with this issue?
    Ms. COLVIN. Absolutely.
    Mr. REED. And would you advocate for that?
    Ms. COLVIN. I would advocate for getting it sooner, 
absolutely. And as I was mentioning, we are entering into an 
agreement with an organization called The Work Number, which is 
a large payroll provider for employers that will, in fact, make 
information available to us more immediately. These are your 
large employers like Walmart and some of the other kinds of 
businesses.
    So we are just beginning to look at that. We think that 
will also help us to get the wage data sooner than we currently 
are able to get it. But anything that would allow us to get 
that information sooner would, in fact, allow us to reduce the 
overpayments.
    Mr. REED. And you would be supportive of that?
    Ms. COLVIN. Yes.
    Mr. REED. Okay. Thank you.
    Chairman DAVIS. The gentleman's time has expired.
    And the chair now recognizes Mrs. Black from Tennessee for 
5 minutes.
    Mrs. BLACK. Thank you, Mr. Chairman.
    And I want to thank the panel for being here today. It has 
been very instructive. And I want to follow through on what my 
colleague was just talking about.
    Mr. Besharov, I want to go to you and talk a little bit. If 
you can ferret out a little bit more, in looking at best 
practices--and I think that is something we always should be 
doing is looking at how somebody else is doing, and do they 
have a better widget or a better way of doing it than what we 
do--can you ferret out a little bit more for me on what the 
U.K. is doing that we would like to model? What would be a good 
thing?
    Mr. BESHAROV. Thank you.
    I think first and foremost they have identified that people 
who are labeled as disabled have different levels of 
disability, and with social help many of them can work. And I 
think that is an important social idea.
    I had lunch this afternoon with the senior assistant to 
Iain Duncan Smith, who I think you had here a few weeks ago at 
a hearing. They have just conducted the next phase of their 
review. Seventy percent of the disability recipients in the 
U.K. were found to be either not disabled or only partially 
disabled. And the idea is not to throw them off, but to help 
them.
    So I think one thing we can learn from this is that our 
system, which was created a long time ago--part of our 
disability system we inherited as we tried to create something 
from the States--if we looked at this and compared it to what 
other countries are doing, I think we would decide, number one, 
that there are things called temporary disabilities, and the 
advantage of a temporary disability is that people don't have 
to wait a year or more to get on benefits because we are not 
worried that it is a permanent decision. The decision can be 
reviewed a year or 6 months later. It is much easier to review 
a decision when an initial decision was only temporary. It is 
easier to turn that decision around.
    Second, there are different levels of disability, and it is 
not just a question of allowing people to work, but giving them 
a little bit of a nudge. We think your disability is such and 
such; we think you can earn a certain amount. And if we look at 
other countries, what we see is the incentives that they create 
on top of those rules can often be very powerful.
    A person who goes to work in the Netherlands from a partial 
disability, designated having a partial disability, is able to 
earn more than the amount the disability payment would have 
been. Now, we say, well, that is just going to cost us money, 
but it turns out that that moves so many more people into work, 
that the government ends up saving money.
    We should be able to ask these questions, and the only way 
you could ask them and answer them is to have modern data 
systems and have a system that understands that it is not just 
asking people if they want to work. We have to encourage them a 
little, and we have to give them the financial incentives if 
they take a job that we will respect the fact that they took a 
job.
    Mrs. BLACK. So looking at the analysis and the data from 
the U.K., can we then assume from that that they have less 
people who stay consistently on their SSI? Do they have people 
moving in and out of the program and, therefore, a total number 
that is less than what we have here in the United States? Is 
that an assumption we can jump to or not?
    Mr. BESHAROV. I don't know enough about the program, but I 
wouldn't jump to that conclusion. If we look at other countries 
like the Netherlands, which had a much larger problem, we know 
that when these rules are imposed, the total number of disabled 
goes down. But in this country it really would depend on what 
the error rates are and whether the incentives would help 
people who are only partly disabled.
    I know this is only anecdote, and there are experts around 
the table, but I come from the welfare world, and I can tell 
you what I am told. If someone spends 6 months, a year, or 2 
years getting on a disability program, and then the first thing 
that happens is they get a letter saying, well, why don't you 
go look for a job--am I right about that? And so what I am told 
is there is a certain, wait a minute, now, I am not going to 
mess up what I waited so long to get.
    So I think part of the problem is the structure of the 
program which creates such a high hurdle to get in that it is 
difficult to get out.
    Mrs. BLACK. I know my time is going to run out here. The 
other question that I would have--and each of the panel 
members, this would be something for you as well. I know you 
are not going to have time to answer it. You may be able to do 
that followup in writing for me--but in just breaking down 
silos, which silos would you need to break down to have a 
system that you feel would be working together, where you would 
have the right hand knowing what the left hand is doing?
    I think that my colleague had already rooted that out in, 
Ms. Colvin, you getting information more quickly. So there is a 
silo there that needs to be broken down so that it can--and you 
all have been doing a good job, and in reading this notebook I 
want to commend you on that, but we still have a ways to go.
    So thank you so much, Mr. Chairman, and I yield back the 
remainder of my time.
    Chairman DAVIS. I thank the gentlewoman. I want to thank 
all of you on the panel for your thoughtful perspectives on 
these issues. We appreciate you investing the time to come in 
and talk about the experience in SSI that can be transferable 
to other means-tested programs.
    If any Members have additional questions, they will get 
them to you directly. We would ask that you submit them. They 
will send them to you in writing. If you would submit your 
answers also to us for the record so they can be inserted for 
all to see, we would appreciate that.
    Chairman DAVIS. Thank you again for being here, and this 
hearing is adjourned.
    [Whereupon, at 4:21 p.m., the Subcommittee was adjourned.]
    [Submissions for the Record follow:]

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