- The Washington Times - Wednesday, October 3, 2007

The Social Security Administration is resisting proposed rule changes aimed at fixing long-standing errors that have resulted in tens of millions of dollars in erroneous overpayments to beneficiaries.

More than 44,000 people have received approximately $140 million in extra, undeserved payments because of clerical and other errors by the Social Security Administration (SSA), according to estimates by the agency’s inspector general.

The SSA has continued making overpayments even after learning of errors because of an internal rule known as “administrative finality.”

Under the policy, the SSA cannot reduce benefits for disability and other beneficiaries after four years except in cases of fraud, even if they learn that incorrect calculations are responsible for the overpayments.

“We believe that when SSA discovers errors in the payments to beneficiaries, the agency should correct them rather than continuing the errors in future benefit payments,” Patrick P. O’Carroll Jr., inspector general for the SSA, wrote in a report sent to Congress and SSA officials last week.

Mr. O’Carroll’s audit reviewed a sample population out of more than 77,000 beneficiaries in SSA’s Old Age, Survivors and Disability Insurance program whose files contained administrative finality documents as of June 2005.

Estimates show that overall costs of the program are expected to rise from $546.2 billion in 2006 to $949.6 billion by 2015.

Social Security officials are resisting Mr. O’Carroll’s recommendation to change the administrative finality rules, citing unforeseen administrative costs and fears that any policy changes could shake public confidence in the agency.

“Correcting a record more than four years in the past could cause an undue hardship to beneficiaries, as well as create extensive public relations issues for the agency,” SSA Chief of Staff Larry W. Dye said in a written response to Mr. O’Carroll.

Mr. Dye said that “four years is a reasonable time limit for us to identify and correct any error in our records.”

He noted that by changing the administrative finality rule, SSA “would incur significant operational costs.”

“The rules also benefit the agency in that it is protected from the administrative difficulties associated with having to accommodate every request to change decisions on claims for benefits, regardless of how far in the past the decision took place, unless our regulations or the law provide an exception,” Mr. Dye wrote.

Mr. O’Carroll disagreed. “Public confidence in the programs may be diminished when some individuals are paid additional benefits, while others are not,” he wrote in his report. “In light of the millions of trust fund dollars that could be saved, we encourage the agency to reconsider our recommendation.”

A spokeswoman for the SSA said yesterday that the agency had no comment on the report other than statements included in Mr. Dye’s written reply.

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