Food Stamp Program: Relatively Few Improper Benefits Provided to
Individuals in Long-Term Care Facilities (Letter Report, 06/04/1999,
GAO/RCED-99-151).

In the seven states it reviewed, GAO identified about 4,500 people
living in long-term care facilities who were potentially improperly
included as members of households receiving food stamps. These
households could have received an estimated $500,000 in food stamp
overpayments during 1997. These potential overpayments represented a
very small percentage of the $8.5 billion in benefits paid in the seven
states that year. In view of the relatively small number of potential
food stamp overpayments involving residents of long-term care
facilities, GAO concludes that computer matching may not be practical
for the seven states included in its review.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-99-151
     TITLE:  Food Stamp Program: Relatively Few Improper Benefits
	     Provided to Individuals in Long-Term Care Facilities
      DATE:  06/04/1999
   SUBJECT:  Food relief programs
	     State-administered programs
	     Overpayments
	     Internal controls
	     Computer matching
	     Families
	     Program abuses
	     Extended care facilities
	     Federal/state relations
	     Eligibility determinations
IDENTIFIER:  California
	     Florida
	     Kansas
	     Illinois
	     New York
	     North Carolina
	     Texas
	     Food Stamp Program
	     Medicaid Program

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    United States General Accounting Office GAO                Report
    to the Chairman, Subcommittee on Department Operations, Oversight,
    Nutrition, and Forestry, Committee on Agriculture, House of
    Representatives June 1999          FOOD STAMP PROGRAM Relatively
    Few Improper Benefits Provided to Individuals in Long-Term Care
    Facilities GAO/RCED-99-151 GAO    United States General Accounting
    Office Washington, D.C. 20548 Resources, Community, and Economic
    Development Division B-282480 June 4, 1999 The Honorable Bob
    Goodlatte Chairman, Subcommittee on Department Operations,
    Oversight, Nutrition, and Forestry Committee on Agriculture House
    of Representatives Dear Mr. Chairman: In 1997 and 1998, we
    reported that the U. S. Department of Agriculture (USDA), through
    its Food Stamp Program, potentially paid millions of dollars in
    food stamp overpayments to families that included ineligible
    individuals such as prisoners and deceased individuals as members
    of their households. In 1998, we also reported that thousands of
    individuals were potentially improperly counted in food stamp
    households in at least two states at the same time.1 In response
    to these reports, you asked that we examine the extent to which
    individuals residing in long-term care facilities are improperly
    included as members of food stamp households. The Food Stamp
    Program's regulations prohibit individuals who are residing in
    long-term care facilities from participating in the program
    because they receive meals from the care facility. Specifically,
    we determined for seven states (1) how many individuals were
    included as members of food stamp households while they were
    residing in long-term care facilities and the estimated value of
    the overpayments to those households and (2) whether computer
    matching is a practical means for identifying such overpayments.
    To identify individuals counted as members of households receiving
    food stamps while they were residing in long-term care facilities,
    we conducted a computer match using calendar year 1997
    information.2 Our computer match compared the food stamp rolls of
    seven states (California, Florida, Kansas, Illinois, New York,
    North Carolina, and Texas) against Medicaid 1Food Stamps:
    Substantial Overpayments Result From Prisoners Counted as
    Household Members (GAO/RCED-97-54, Mar. 10, 1997) and Food Stamp
    Overpayments: Thousands of Deceased Individuals Are Being Counted
    as Household Members (GAO/RCED-98-53, Feb. 11, 1998) and Food
    Stamp Overpayments: Households in Different States Collect
    Benefits for the Same Individuals (GAO/RCED-98-228, Aug. 6, 1998).
    2Calendar year 1997 was the latest year for which information on
    food stamps and long-term care were available. Page 1
    GAO/RCED-99-151 Food Stamp Program B-282480 records of individuals
    residing in long-term care facilities. These seven states
    accounted for about 42 percent of the nation's participants in the
    Food Stamp Program. See appendix I for more details on our scope
    and methodology. Results in Brief    In the seven states we
    reviewed, we identified about 4,500 individuals who were
    potentially improperly included as members in households receiving
    food stamps while residing in long-term care facilities. These
    households could have received an estimated $500,000 in food stamp
    overpayments during calendar year 1997. These potential
    overpayments represented a very small percentage of the $8.5
    billion in benefits distributed in the seven states during fiscal
    year 1997. We are providing the states our computer match results
    for their use in eliminating or recovering the overpayments. In
    view of the relatively small amount of potential food stamp
    overpayments made to households that included residents of long-
    term care facilities compared to the cost of computer matching,
    routine computer matching may not be practical for all the states
    included in our review. None of the seven states we visited were
    using computer matching to identify such overpayments. Officials
    in California and Kansas, which had the smallest amount of
    potentially improper benefits-in one case less than $25,000 and in
    another about $1,800-said that computer matching for these types
    of overpayments would not be practical or cost-effective to them.
    Officials in the remaining five states said they would assess the
    potential benefits of computer matching, either as a tool for
    routinely identifying overpayments or as a means for periodically
    evaluating the effectiveness of procedures used to prevent such
    overpayments. Background          The Food Stamp Program is
    designed to promote the general welfare and to safeguard the
    health and well-being of the nation's population by raising the
    nutritional levels of low-income individuals. Recipients use their
    food stamp benefits to purchase allowable food products from
    authorized retail food merchants. USDA's Food and Nutrition
    Service (FNS) manages the program through agreements with state
    agencies. FNS approves the states' plans to operate the program
    and ensures that states administer the program in accordance with
    regulations. The federal government pays all of the costs for
    benefits and one-half of the administrative costs for each state.
    In fiscal year 1998, FNS provided about $17 billion in benefits to
    about 20 million recipients. Page 2
    GAO/RCED-99-151 Food Stamp Program B-282480 Food stamps are issued
    to households, which can consist of an individual, a family, or
    another group that lives together and customarily purchases and
    prepares food in common. Households applying for benefits must
    provide a Social Security number for each member. The value of the
    food stamp benefits for a household is determined by the number of
    eligible household members and their income, adjusted for costs
    such as shelter and utilities. Therefore, a household's monthly
    food stamp allotment could increase or decrease as household
    membership changes. The average monthly benefit for elderly
    single-person households in 1997 was about $47 nationally.
    Eligibility workers in service centers work directly with
    applicants or their designees to certify household eligibility and
    determine the amount of benefits at the time of the application.
    Food stamps can be certified for up to a 2-year period. Households
    that receive food stamps are required to report changes in
    household membership, such as the loss or the addition of a
    member, to the administering state or local agency. Food stamp
    regulations prohibit individuals who are residing in long-term
    care facilities from participating in the program because they
    receive their meals from the care facility. Medicaid paid about
    $42 billion for long-term care for about 1.8 million individuals
    during fiscal year 1997. The Health Care Financing Administration
    (HCFA), within the U.S. Department of Health and Human Services,
    administers the Medicaid Program. Medicaid is a grant-in-aid
    medical assistance program financed through joint federal and
    state funding and administered by each state according to an
    approved state plan. Under this plan, a state reimburses providers
    of medical assistance, for such aid as long-term care in nursing
    facilities and mental institutions, for eligible individuals. As
    with the Food Stamp Program, eligibility for Medicaid benefits is
    generally determined by caseworkers at the local level. Long-term
    care assistance is also provided to other eligible individuals
    through the Department of Veterans Affairs (VA).3 3In the same
    seven states, we also conducted a computer match comparing food
    stamp rolls with individuals residing in long-term care facilities
    funded by the VA. We found less than $25,000 in potential
    overpayments for all seven states. Appendix II contains the
    results of this computer match. Page 3
    GAO/RCED-99-151 Food Stamp Program B-282480 Ineligible Individuals
    For calendar year 1997, we found about 4,500 individuals who
    resided in in Long-Term Care                            long-term
    care facilities at the same time they were being counted as a
    member of households participating in the Food Stamp Program in
    seven Facilities Are                               states. We
    estimate that improper food stamp benefits provided to
    Participating in the                         households for these
    long-term care residents could have amounted to about $500,000.
    The number of individuals and the associated dollar loss Food
    Stamp Program                           to the Food Stamp Program
    are very small portions of the totals for the program in the seven
    states. (See app. II for more details.) Table 1 shows the results
    of our computer match of food stamp rolls in seven states against
    records of individuals whose long-term care was being funded by
    Medicaid. The table identifies the number of individuals, months
    of improper food stamp payments, and the estimated amount of food
    stamp overpayments we found in our review. Table 1: Extent of
    Ineligible Individuals and Overpayments in Seven States,
    Number of       Total months of Calendar Year 1997
    potentially              possibly ineligible             improper
    Potential States                                     individuals
    participation         overpayments Californiaa
    195                     524                $24,628 Florida
    627                   1,007                 47,329 Illinois
    645                   1,435                 67,445 Kansas
    28                      38                   1,786 New York
    1,134                   3,486                163,842 North
    Carolina                                    831
    1,843                 86,621 Texas
    1,058                   2,238                105,186 Total
    4,518                 10,571               $496,837 aThe low
    number of individuals and estimated overpayments in California may
    partly be attributed to the state's "cash out" policy, under which
    the state provides a cash supplement in lieu of food stamps to
    Supplemental Security Income recipients. Source: GAO's analysis of
    states' data. Individuals identified in our match were generally
    improperly included as household members for a relatively short
    period of time-an average of about 2.3 months. Also, many of these
    individuals were in single-person households. By way of
    perspective, the 4,518 individuals whom we found improperly
    counted as members of food stamp households represented less than
    0.04 percent of the total 12.8 million people participating in the
    Food Stamp Page 4
    GAO/RCED-99-151 Food Stamp Program B-282480 Program in the seven
    states. The $496,837 in potential overpayments for these
    individuals represented less than 0.01 percent of the $8.5 billion
    of food stamp benefits distributed by the seven states in 1997.
    States Have Not Used    In view of the very small potential food
    stamp overpayments made to Routine Computer        households that
    included residents of long-term care facilities, routine computer
    matching would not be practical for all the states included in
    Matching                our review. However, periodic computer
    matching by the states could be a useful tool for evaluating the
    effectiveness of the procedures states use to prevent food stamp
    overpayments and ensuring the integrity of their data. While none
    of the states we reviewed used computer matching to identify such
    improper payments, officials in all the states told us that the
    states had procedures in place that were designed to prevent
    overpayments. In every state, eligibility workers, including both
    food stamp and Medicaid workers, routinely examined all sources of
    assistance when applicants applied for benefits. As a result, when
    applicants applied for long-term care Medicaid benefits, workers
    were supposed to determine if the applicants were receiving food
    stamp assistance and take appropriate action. Nevertheless, as our
    computer match revealed, these procedures were not fail-safe.
    Officials' views on the benefits of using computer matching to
    ensure the effectiveness of their procedures varied. Officials
    from California and Kansas questioned the value of periodic
    computer matching in their particular states because of the small
    number of matches. Officials in the remaining five states reserved
    judgment until they further assessed whether computer matching
    would complement their current procedures, either as a means of
    routinely identifying overpayments or as a means of periodically
    checking the effectiveness of their procedures. For example,
    Florida officials said that computer matching might be cost-
    effective in identifying the Supplemental Security Income
    recipients who enter long-term care facilities without food stamp
    or Medicaid caseworkers knowing. Agency Comments         We
    provided a draft of this report to the U.S. Department of
    Agriculture and the Food and Nutrition Service for their review
    and comment. We met with and obtained comments from Food and
    Nutrition Service officials, including the Directors of the Grants
    Management Division and Program Accountability Division. These
    officials said that the report was accurate. Page 5
    GAO/RCED-99-151 Food Stamp Program B-282480 They also provided
    comments to clarify technical information presented in the report.
    We incorporated these changes in the report, where appropriate. We
    also provided to the seven states included in our review sections
    of the draft report pertaining to them for their review and
    comment. Officials in those states were in general agreement with
    the information contained in the report. A New York official
    suggested that the report should characterize the overpayments as
    possible or potential and that some of the benefits authorized may
    not have been actually used. We agree and revised the report, as
    appropriate. An Illinois official said that some of the potential
    overpayments resulted from errors in the Medicaid data rather than
    in the food stamp data. We agree that some of the potential
    overpayments may have resulted from errors in the Medicaid data.
    However, the extent to which overpayments result from such errors
    is unknown. The states provided other comments to clarify
    technical data, and we revised the report, as appropriate. We
    conducted our review from May 1998 through May 1999 in accordance
    with generally accepted government auditing standards. As arranged
    with your office, unless you publicly announce its contents
    earlier, we plan no further distribution of this report for 15
    days from the date of this report. At that time, we will make
    copies available to congressional committees with responsibility
    for appropriations and legislative matters for USDA and to the
    Honorable Daniel Glickman, Secretary of Agriculture. We will also
    make copies available to others on request. Page 6
    GAO/RCED-99-151 Food Stamp Program B-282480 Please contact me at
    (202) 512-5138 if you or your staff have any questions concerning
    this report. Major contributors to this report are listed in
    appendix III. Sincerely yours, Lawrence J. Dyckman Director, Food
    and Agriculture Issues Page 7
    GAO/RCED-99-151 Food Stamp Program Contents Letter
    1 Appendix I
    10 Objectives, Scope, and Methodology Appendix II
    13 Results of Matching Food Stamp Participation Data With Long-
    Term Care Data in Selected States Appendix III
    14 Major Contributors to This Report Tables
    Table 1: Extent of Ineligible Individuals and Overpayments in
    4 Seven States, Calendar Year 1997 Table II.1: 1997 Food Stamp
    Program Recipients and Medicaid                    13 Long-Term
    Care Residents Table II.2: 1997 Food Stamp Program Recipients and
    Department                  13 of Veterans Affairs Long-Term Care
    Residents Abbreviations FNS           Food and Nutrition Service
    GAO           General Accounting Office HCFA          Health Care
    Financing Administration SSN           Social Security Number USDA
    U.S. Department of Agriculture VA            Department of
    Veterans Affairs Page 8
    GAO/RCED-99-151 Food Stamp Program Page 9       GAO/RCED-99-151
    Food Stamp Program Appendix I Objectives, Scope, and Methodology
    To determine how many individuals were included as members of food
    stamp households while they were residing in long-term care
    facilities and the estimated value of the overpayments to those
    households, we conducted a computer match of the food stamp rolls
    for calendar year 1997 (the latest data available) against
    Medicaid long-term care information for each of the seven states
    we selected for our review. We selected five states with the
    largest benefit issuance in the food stamp program-California,
    Florida, Illinois, New York, and Texas-and judgmentally selected
    two additional states-North Carolina and Kansas because they are
    in the mid-range to low-range category of Food Stamp Program
    participants. Kansas, Florida, Illinois, New York, North Carolina,
    and Texas state agencies provided us with computer files
    containing information on all individuals who received food stamps
    during any part of calendar year 1997. The data provided personal
    identifiers, including name, Social Security Number (SSN), date of
    birth, gender, and the months in which food stamp benefits had
    been issued to the household of which each individual was a
    member. California maintains a database of eligibility information
    at the state level while issuance data are maintained at the
    county level. For California, we determined that eligibility was
    predictive of participation. We matched calendar year state
    eligibility information against calendar year Orange County,
    California, issuance information and found that over 74 percent of
    the eligible individuals participated. Our match of calendar year
    1997 was similar to a match we did for calendar year 1996 when we
    found that over 75 percent of the eligible individuals
    participated in Orange County. Kansas, Illinois, North Carolina,
    and Texas state agencies provided us with computer files
    containing information on all individuals who resided in long-term
    care facilities during calendar year 1997 and whose care was
    funded by Medicaid. New York provided similar information for
    fiscal year 1997. We obtained calendar year 1997 Medicaid long-
    term care information for California and Florida from the Health
    Care Financing Administration's Medicaid Statistical Information
    System. For all states, the data we obtained provided personal
    identifiers, including name, SSN, date of birth, gender, and
    specific time period(s) that the individual resided in a long-term
    care facility. We matched the SSNs of Medicaid long-term care
    residents with the SSNs of members of food stamp households. For
    each resident identified as a Page 10
    GAO/RCED-99-151 Food Stamp Program Appendix I Objectives, Scope,
    and Methodology member of a food stamp household, we determined
    whether the month(s) in which food stamp issuance occurred
    overlapped the period(s) the individual resided in a long-term
    care facility. We estimated the dollar value of the improperly
    issued food stamp benefits by applying the national average
    monthly issuance for elderly single-person households from 1997 to
    each month in which the ineligible participation occurred. Food
    stamp benefits are calculated for households, not for individuals.
    As such, it is difficult to determine the exact value of
    overpayments issued to a long-term care resident included in a
    household, unless he or she is the only member of the household.
    Even then, the amount will vary from individual to individual, on
    the basis of such factors as income and the cost of shelter. Our
    estimates of overpayments were conservative in that we assumed
    that most long-term care residents are elderly. Therefore, we
    relied on the national average monthly benefit of $47 provided to
    elderly single-person households. Notification and processing time
    frames allow 10 days for the food stamp client to report household
    changes and 10 days for the state agency to take action.
    Therefore, we did not consider any month in which an individual
    entered a long-term care facility to be an instance of overlap,
    and we did not consider the following month to be an instance of
    overlap if the individual entered a long-term care facility on or
    after the tenth day of the month. In addition, we excluded the
    month in which the individual was discharged from the long-term
    care facility unless the individual was discharged on the last day
    of the month. Because of the quality control program operated by
    the Food and Nutrition Service and the states' ongoing quality
    assurance efforts, we accepted their computerized food stamp data
    as reliable. To provide additional confidence in the data's
    accuracy, we visited each state; discussed the results of the
    match with state food stamp program representatives; and reviewed
    food stamp and Medicaid information for a limited number of
    matched individuals. To obtain information on whether computer
    matching offers a practical means of identifying overpayments for
    persons residing in long-term care facilities, we shared our match
    results with state food stamp program officials and discussed the
    results with them. We also discussed whether the states had
    previously used computer matching of food stamp program
    participants and long-term care residents. Finally, we discussed
    with state Page 11                                     GAO/RCED-
    99-151 Food Stamp Program Appendix I Objectives, Scope, and
    Methodology officials, the procedures, in place, designed to
    prevent food stamp benefits to residents of long-term care
    facilities. The Department of Veterans Affairs (VA) also provides
    long-term care for eligible individuals. VA funds care in its own
    facilities as well as in community-owned facilities. To determine
    if individuals being counted as members of food stamp households
    were residing in VA-funded long-term care facilities, we obtained
    similar information from VA that we had obtained for Medicaid-
    funded long-term care residents. VA provided information for the
    seven selected states, and we compared this information with the
    food stamp information from those states. We determined how many
    individuals were included as members of food stamp households at
    the same time they were residing in VA long-term care facilities
    and the estimated value of the benefits that were improperly
    issued to those households. We used the same methodology described
    earlier in this section. Page 12
    GAO/RCED-99-151 Food Stamp Program Appendix II Results of Matching
    Food Stamp Participation Data With Long-Term Care Data in Selected
    States Table II.1: 1997 Food Stamp Program Recipients and Medicaid
    Long-Term                                               Medicaid
    Care Residents
    long-term        Results Food stamp                 care
    Estimated State                 recipients        residents
    Persons            Months dollar value California
    3,654,573          101,311                195              524
    $24,628 Florida                1,738,555            67,046
    627            1,007           47,329 Illinois
    1,217,756            84,579               645            1,435
    67,445 Kansas                   226,096            17,465
    28              38            1,786 New York
    2,329,448          145,628              1,134            3,486
    163,842 North Carolina           863,423            51,933
    831            1,843           86,621 Texas
    2,810,617            56,248             1,058            2,238
    105,186 Total                12,840,468           524,210
    4,518           10,571        $ 496,837 Table II.2: 1997 Food
    Stamp Program Recipients and Department of
    VA Veterans Affairs Long-Term Care
    long-term        Results Residents
    Food stamp                 care
    Estimated State                 recipients        residents
    Persons            Months dollar value Californa
    3,654,573             4,592               122              220
    $10,340 Florida                1,738,555             2,362
    12              15                 705 Illinois
    1,217,756             2,143                  43              66
    3,102 Kansas                   226,096                845
    9               17                 799 New York
    2,329,448             3,168                  17              32
    1,504 North Carolina           863,423                970
    15              28            1,316 Texas
    2,810,617             3,223                  48              81
    3,807 Total                12,840,468             17,303
    266              459          $21,573 Note: Our computer match of
    food stamp rolls in the seven states against the lists of
    individuals residing in facilities funded by VA did not, as shown
    in table 2, find a significant number of food stamp recipients who
    were receiving improper benefits. Page 13
    GAO/RCED-99-151 Food Stamp Program Appendix III Major Contributors
    to This Report Ron E. Wood, Assistant Director John Schaefer,
    Project Leader Leo G. Acosta Oliver Easterwood Donald Ficklin
    Jerry D. Hall Alan R. Kasdan (150289)         Page 14
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