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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