6
Program Policies and Practices

This chapter addresses the second specific item in the committee’s charge: “learn whether the representative payment policies are practical and appropriate.” After a brief discussion of a systems perspective of the program, there are five major sections that correspond to stages in the representative payee appointment process: establishing the need for a representative payee, selection of payees, training and support for payees, monitoring and accountability, and termination and transitions. The final major section of the chapter considers state laws and programs that are relevant to the Representative Payee Program, and we end with observations about the variation in the management of local offices.

A SYSTEMS PERSPECTIVE

The Representative Payee Program involves a complex interactive system of people, policies, and procedures. As such, the performance of the program is best viewed as the outcome of many interactions among Social Security Administration (SSA) staff, payees, beneficiaries, and, on occasion, other people, such as beneficiaries’ family members and legal guardians and conservators (who are not payees). We therefore adopted a systems perspective in our assessment of program policies and practices by examining each step in the process in terms of the (1) interactions that occur, (2)



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Improving the Social Security Representative Payee Program: Serving Beneficiaries and Minimizing Misuse 6 Program Policies and Practices This chapter addresses the second specific item in the committee’s charge: “learn whether the representative payment policies are practical and appropriate.” After a brief discussion of a systems perspective of the program, there are five major sections that correspond to stages in the representative payee appointment process: establishing the need for a representative payee, selection of payees, training and support for payees, monitoring and accountability, and termination and transitions. The final major section of the chapter considers state laws and programs that are relevant to the Representative Payee Program, and we end with observations about the variation in the management of local offices. A SYSTEMS PERSPECTIVE The Representative Payee Program involves a complex interactive system of people, policies, and procedures. As such, the performance of the program is best viewed as the outcome of many interactions among Social Security Administration (SSA) staff, payees, beneficiaries, and, on occasion, other people, such as beneficiaries’ family members and legal guardians and conservators (who are not payees). We therefore adopted a systems perspective in our assessment of program policies and practices by examining each step in the process in terms of the (1) interactions that occur, (2)

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Improving the Social Security Representative Payee Program: Serving Beneficiaries and Minimizing Misuse the factors that influence those interactions, and (3) the effect on service to beneficiaries. The Representative Payee Program is dynamic, and it is influenced by a complicated environment of policies and interactions between the beneficiaries and their representative payees. The amount of the Social Security benefit and the circumstances of the beneficiaries (e.g., health status, living situation, availability of additional beneficiary income or resources) may also affect the relationship between beneficiaries and representative payees. Figure 6-1 depicts a systems view of the program, in which many factors, interactions, and policies influence the implementation and the outcome of each stage. In Figure 6-1 these factors are shown to the left of the process schematic. To understand the complexity of the system, consider the first stage of the process, establishing a beneficiary’s need for a representative payee. Program policies, promulgated publicly through the SSA’s Program Operations Manual System (POMS), establishes protocol and guides SSA claims representatives through the determination process. In addition to the formal policies, however, the effectiveness of claims representatives is also influenced by their training and experience and by the impact of SSA management policy on their motivation and performance (e.g., rewards for productivity, effectiveness). Beneficiary characteristics are critical as well (e.g., lucidity, cognitive ability, institutionalization, mental disability status, health), and input from a beneficiary’s family can come into play. The determination made by the Disability Determination Service office can influence a claims representative’s determination of need. Even a state court’s assignment of a legal guardian or conservator for the beneficiary must be a consideration for a claims representative. Overall, a wide variety of factors both internal and external to SSA affect the determination of need of a representative, and similarly complex scenarios occur with all the other stages of the program. The rest of this chapter evaluates SSA policies and practices for each stage of the process using data from the committee’s survey, the site visits, and SSA administrative data. The conclusions and recommendations are included in the section for each stage of the process. ESTABLISHING THE NEED FOR A REPRESENTATIVE PAYEE Process for Determining Need The SSA has broad responsibility and discretionary authority to determine whether to pay benefits directly to the beneficiary or to pay a representative payee on the beneficiary’s behalf (42 U.S.C. §§ 405(j), 1007, & 1383(a)(2)). The law and regulations specify that a payee should be appointed for

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Improving the Social Security Representative Payee Program: Serving Beneficiaries and Minimizing Misuse FIGURE 6-1 Systemic View of the SSA Representative Payee Process.

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Improving the Social Security Representative Payee Program: Serving Beneficiaries and Minimizing Misuse beneficiaries under the age of 18, beneficiaries whom state courts find are lacking capacity, and beneficiaries determined by SSA to need a payee. In assessing a beneficiary’s capability to manage or direct the management of benefit payments, federal regulations stipulate that court determinations, medical evidence, and any other helpful information may be considered. SSA’s operating policies in the POMS emphasize the principle that adult beneficiaries are deemed capable unless there is evidence to the contrary. These policies require SSA to consider the beneficiary’s ability to meet daily needs and manage money. In this section we discuss the effectiveness of this flexible system of protocols to evaluate the need for a representative payee, particularly the extent to which payees are appointed for beneficiaries who are able to manage their own payments and the types of conditions that lead SSA to determine there is a need for a payee. Accuracy of Need Determinations In the committee’s field office site visits, some staff said that some beneficiaries with payees do not need them. This situation can result from either a prior temporary need for assistance that is no longer applicable, for example, due to a beneficiary’s short-term convalescence or mental incapacity, or because the initial determination of need may simply have been incorrect. The POMS provides a set of questions for a claims representative to use as a guide in determining a beneficiary’s capability of managing his or her financial benefits. The POMS further states that if there is no legal determination or medical evidence to establish the lack of capability, then SSA staff must document the need for a payee through the use of lay evidence (POMS GN 00502.030). Estimates based on our survey of beneficiaries who are 18 years or older suggest that the problem of incorrectly appointing a payee is relatively minor. The survey showed that beneficiaries and payees agreed the beneficiaries could manage their payments on their own in only 4.4 percent (0.7)1 of cases (see Table 6-1). The percentage of beneficiaries who agreed with their payees that they could manage their own funds was higher for beneficiaries who were 18-64 years old, who were parents of payees, who 1 For all estimates in this chapter, the number in parentheses following the estimate is the standard error of the estimate. As a general rule, users can approximate a 95-percent confidence interval for the estimate by adding and subtracting two standard errors to the estimate. When two estimates have confidence intervals that overlap, the two estimates are not statistically different at the .05 level of significance.

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Improving the Social Security Representative Payee Program: Serving Beneficiaries and Minimizing Misuse TABLE 6-1 Representative and Beneficiary Agreement on Ability of Beneficiary to Manage Own Benefits, for Beneficiaries 18 Years or Older Beneficiary or Payee N Percent (SE)a Number of Beneficiaries (SE) Beneficiary           All beneficiaries 1,402 4.4 (0.8) 78,800 (13,900) 18 to 64 years old 1,037 4.9 (0.9) 71,600 (13,100) 65 years or older 365 2.2 (1.3) 7,100 (4,400) Payee           Parent of beneficiary 295 3.0 (1.1) 25,100 (9,600) Child of beneficiary 162 9.0 (3.4) 19,900 (8,300) Other relative 268 4.6 (1.8) 23,700 (9,100) Nonrelative 548 7.6 (1.1) 10,100 (1,400) Lives with beneficiary 651 2.0 (0.8) 23,000 (9,200) Lives separately from beneficiary 751 8.6 (2.0) 55,700 (13,100) Individual with one to four beneficiaries 1,170 4.7 (0.8) 78,600 (13,900) Individual with five or more beneficiaries 98 0.3 (0.3) 100 (100) Organization 147 0   0   aFor all estimates in this chapter, the number in parentheses following the estimate is the standard error of the estimate. As a general rule, users can approximate a 95-percent confidence interval for the estimate by adding and subtracting two standard errors to the estimate. When two estimates have confidence intervals that overlap, the two estimates are not statistically different at the .05 level of significance. SOURCE: Data from the national survey of representative payees and beneficiaries conducted for the National Academies Committee on Social Security Representative Payees (2006). were unrelated to their payees, and who did not live with their payees (see Table 6-1). At the same time, 8.3 percent (0.7) of payees would like to talk to SSA about their beneficiaries’ managing their own funds. Although the prevalence of what may be erroneous payee assignment is relatively low, there was broad interest among field office staff in establishing a more effective relationship between the Disability Determination Service offices and the SSA field offices. At issue were perceived disparities between the assessments by SSA claims representatives of the need for payees and the evaluations of the Disability Determination Service offices of disability and how that evaluation related to the need for a payee. The committee agrees with many field staff that a joint determination process may lead to better assessments. We also agree with what we heard from many in the field that there is also a need to check with other community agencies and reporting authorities about the credibility of potential payees. Occasionally, there are beneficiaries who are assigned a temporary

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Improving the Social Security Representative Payee Program: Serving Beneficiaries and Minimizing Misuse payee, or who are temporarily put into direct payment status despite needing a payee, e.g., because no payee can be identified or the payee has died or been terminated. These situations should be closely monitored or consideration should be given to setting up a process to regularly evaluate the continuation of the payee status and beneficiary capability. Another potential error in the process involves undetected need: the situation in which a beneficiary without a payee needs one. However, the scope of our study did not include beneficiaries without payees assigned to them, and thus we cannot estimate the number of beneficiaries in need of a payee but currently lacking one. CONCLUSION A small fraction of beneficiaries aged 18 or older are potentially capable of managing their own payments. This is an acceptable level of accuracy in determining beneficiary need for a representative payee, given the complexity of the determination task and the size of the system. SELECTION Recruitment Selecting appropriate payees is a critical factor in meeting beneficiaries’ needs to manage their SSA payments. The committee’s site visits to SSA field offices indicated that current definitions and policies in the POMS adequately describe desirable characteristics of a payee. However, inconsistencies were reported in the criteria used for payee selection. For instance, one staff member reported augmenting minimal requirements in POMS with criteria that focus on the personal relationship between a payee candidate and the beneficiary. Other “additional” characteristics reported by staff as selection criteria are shown in Box 6-1. Some staff also attempt to tailor payee selection to the specific needs and situation of a beneficiary, such as the beneficiary’s living arrangements or evidence of beneficiary alcohol or substance abuse. Many of these factors appear in the POMS preference lists for minor beneficiaries, adult beneficiaries without substance abuse problems, and adult beneficiaries with substance abuse problems (see below). The lists are tailored to specific beneficiary types and establish (but do not require) a recommended priority for selecting a payee. With regard to recruitment of payees, it appears that different claims representatives emphasize different factors in the POMS preferences lists and use them as requirements rather than preferences. It is also worth noting that some claims representatives used an intangible criterion—intuition, a “gut feeling”—in the selection of a payee.

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Improving the Social Security Representative Payee Program: Serving Beneficiaries and Minimizing Misuse BOX 6-1 Criteria for Identifying Payee Candidates as Reported by SSA Field Staff Is financially capable Understands that the primary job is to see that the money is spent for the beneficiary’s needs Can manage his or her money Has enough financial savvy to know how to keep beneficiary funds separate from own funds Knows how to manage money Has a close relationship with beneficiary Has frequent contact with the beneficiary Is most likely a family member (e.g., parent, spouse, other) Shows concern for the beneficiary Possesses an in-depth knowledge of the beneficiary Knows the beneficiary—at least first and last name, perhaps also date of birth Lives with the beneficiary Lives very close to the beneficiary Can check in on the beneficiary once a day Knows what is going on with the beneficiary Has no or very few risk factors for potential to misuse funds Should not be a felon—but if it happened twenty years ago, it is probably okay now Is gainfully employed or has his or her own sources of income Has no criminal record Is not a fugitive felon Is not owed money by the beneficiary Has a stable employment record Has a high school or equivalency diploma Has had no encounter with law enforcement Has no record of alcohol or drug abuse The meeting between an SSA staff person and a payee candidate affords an important opportunity for the staff person to interact with the payee candidate and observe physical and nonverbal cues (e.g., nervousness, cognitive ability, coherence, physical condition, potential drug or alcohol use, sincerity). Especially among the seasoned veteran staff, the personal interview provided them with a sense of whether or not a specific candidate would be appropriate as a particular beneficiary’s payee. The survey defined payees who were related to their beneficiaries as blood relatives, relatives by marriage or marriage-like partnerships, and

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Improving the Social Security Representative Payee Program: Serving Beneficiaries and Minimizing Misuse close friends. The vast majority of beneficiaries were related to their payees, 94.7 percent (0.1). The selection process is likely to be relatively easy when beneficiaries know related persons who are willing to serve as payees. However, for adult beneficiaries who did not have related persons available to act as their payees—4.7 percent (0.1) or 214,300 (4,400) beneficiaries—the payee identification and selection process can be more challenging. Among adult beneficiaries with unrelated payees, almost one-half did not personally ask someone to be their payees, 43.9 percent (2.5); their payees were obtained through other means. Families were not involved in the selection decision for nearly one-half of adult beneficiaries with nonrelative payees, 43.5 percent (2.6). SSA was responsible for identifying and recruiting the payees for about one in six adult beneficiaries with unrelated payees, 14.8 percent (2.6). For nearly two-thirds of beneficiaries with unrelated payees, the payees had volunteered to serve them. Thus, SSA had to recruit and secure payees for more than one-third of beneficiaries with nonrelative payees, 35.2 percent (2.4). These results give rise to concern about the amount of time needed by SSA staff to identify appropriate payees as well as the need for tighter links to organizations that offer volunteer payees to serve beneficiaries with challenging circumstances (such as the absence of a relative to act as payee). To handle the more difficult cases of finding appropriate payees, SSA field offices are required by the Social Security Act (Section 205(j)(3)(G)) to keep a list of local payee sources. In addition, the POMS (GN 00502.100) encourage field offices to develop ongoing, cooperative relationships with community social service providers who can often provide payee contacts. However, the committee’s site visits suggest that staff resources for carrying out these required and recommended activities are severely limited: we found no such lists of payee sources in the field offices, and there appeared to be few strong community relationships with social service providers. Another source of support for the selection process comes from non-governmental agencies and organizations that train and monitor volunteer payees. Such services have been or are currently being provided by national nonprofit organizations as well as local community organizations. For example, the AARP Foundation began a volunteer representative payee trainee program in 1981; in 2004, approximately 5,000 beneficiaries were served nationally by this program (AARP, 2005). However, an organization must be willing to contribute funds as well as staff to coordinate a volunteer payee program, and many local community and national organizations cannot support such activities in perpetuity. SSA investment in promoting such programs may improve the supply of volunteer or community payees, particularly for handling difficult cases. SSA staff appear to be tailoring the payee selection to the specific needs and situation of a beneficiary, which is ultimately advantageous to

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Improving the Social Security Representative Payee Program: Serving Beneficiaries and Minimizing Misuse beneficiaries. Although flexibility is appropriately part of the payee selection process, there is significant variation in how local staff apply criteria to select payees, both within and between field offices. For example, the recommended preferences provided by POMS are often used as requirements. Although such efforts to improve the selection of payees can be considered laudatory, they also suggest a need to standardize the payee selection process. SSA policy requires the maintenance of a source of payee volunteers and community organizations with payee volunteer programs to address situations in which payee candidates are not readily available for a given beneficiary in need. However, in some local offices such volunteer pools were limited or did not exist, and staff resources for developing them were insufficient. The lack of resources for ensuring the development and maintenance of payee volunteer pools severely hampers the program in some offices. RECOMMENDATION 6.1 To help mitigate shortages of payees, the Social Security Administration should create a program to identify, train, certify, and maintain a pool of voluntary, temporary payees that are available on an as-needed basis. If such a program is authorized, the Social Security Administration should work with and obtain help from the courts and volunteer organizations in designing it. Recruitment of Payees for At-Risk Beneficiaries At-risk beneficiaries are those with precarious health, behavioral, or living situations. Such beneficiaries include but are not limited to those who are homeless, have alcohol or substance abuse problems, are mentally unstable, or have chronic health conditions that require special living or treatment arrangements. SSA staff expressed concern with recruiting payees for such at-risk beneficiaries, noting that the needs of these beneficiaries far exceed the fiduciary service that could be provided by an individual payee or by SSA. Staff told the committee that at-risk beneficiaries deserve special payee arrangements that currently do not exist in the system. For instance, homeless beneficiaries have daily needs of food and shelter, yet their benefits are either insufficient, unavailable, or are not being used for those needs. Mentally ill beneficiaries are often left to fend for themselves in the community and would benefit from an organizational assisted living arrangement, yet affordable choices are not always available to them. A third example concerns substance abusers. These beneficiaries often seek to maximize their cash allocations from payees—to the detriment of basic needs—in support of their addiction. The POMS provides detailed guidelines for the selection of a payee

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Improving the Social Security Representative Payee Program: Serving Beneficiaries and Minimizing Misuse for certain classes of at-risk beneficiaries, such as known alcohol- and substance-abusing beneficiaries (POMS GN 00502.105). Select the best payee available from this list of preferred applicants: a community-based nonprofit social service agency bonded and licensed (if required) by the State; a Federal, State or local government agency whose mission is to carry out income maintenance, social service, or health care-related activities; a State or local government agency with fiduciary responsibilities; a designee of an agency (other than of a Federal agency) referred to above, if appropriate; or a family member. When none of the preferred payees above are available, select the best payee available from this list of alternate sources: a legal guardian with custody who shows strong concern for the beneficiary’s well-being; a relative or friend with custody who shows strong concern for the beneficiary’s well-being; a public or nonprofit agency or institution with custody; a private, for-profit institution with custody and is licensed under State law; or anyone not listed above who is qualified and able to act as payee, and who is willing to do so; an organization that charges a fee for its service. A representative payee’s responsibilities for these and other at-risk beneficiaries require special training and professionalism that transcends the current model of a “suitable representative payee,” as well as the guidance provided by the POMS. SSA staff reported that finding payees for at-risk beneficiaries tends to be the most challenging selection task. Such payees tend to be nonrelative friends or acquaintances, and payee tenure tends to be short in comparison with the tenure of payees for other beneficiary types. Finding appropriate payees for at-risk beneficiaries is perceived as a significant challenge, and at-risk beneficiaries are believed to be at higher risk for payees’ misuse of funds. The use of payees from volunteer groups or for emergency situations was discussed in some of the committee’s site visits. As mentioned above, SSA staff are sometimes unable to identify suitable payees despite their charge to maintain a pool of such candidates. Staff reported to us that sometimes a less-than-optimal candidate is selected simply because there is no other choice, and the beneficiary’s needs for a payee are urgent. For such situations, the staff suggested the development of a pool of trained, willing payees that could be tapped as needed for emergency or other temporary situations. Some field office staff said that they believe that at-risk beneficiaries are better served by fee-for-service payees who are professionals and may be better acquainted with the payee system and rules. Yet these types of payees are at the end of the POMS list of “preferred” payees for substance-abusing beneficiaries who need payees. Staff noted that although small group institutions that provide high-quality care are often better suited than indi-

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Improving the Social Security Representative Payee Program: Serving Beneficiaries and Minimizing Misuse viduals to serve at-risk beneficiaries who suffer from substance or alcohol abuse or have mental disabilities, the bonding requirement can be too high a burden for these small commercial payees. Finally, the changing demographics of the United States are worth mentioning here. The number of beneficiaries with mental illness, mental retardation, and developmental disabilities; the homeless; and persons in the end stages of HIV/AIDS will continue to increase in the coming years (see Teaster, 2003). Thus, the problem of identifying payees for at-risk beneficiaries can be expected to increase and worsen if the current system is not changed. CONCLUSION It is difficult to find appropriate payees for at-risk beneficiaries. Fee-for-service payees may be better for at-risk beneficiaries because they are professionals and may be licensed and are better equipped to deal with situations posed by at-risk beneficiaries. RECOMMENDATION 6.2 Congress should authorize the Social Security Administration to expand the fee-for-service part of the program to include appropriate small organizations and individuals who are willing to serve as payees for at-risk beneficiaries: people with mental illness, alcohol or substance abuse problems, severe disabilities, and those who are homeless. Suitability Once a representative payee candidate is identified, SSA must determine the person’s suitability to serve as a payee. The process of determining suitability involves completion of an application by the candidate; verification of candidate’s identity; assessment of the candidate’s exclusion factors (see below); and in most but not all cases, a personal interview with an SSA field office staff person. SSA policy (in the POMS) provides explicit guidance on those who should be prohibited from selection as payees (POMS GN 00502.132): fugitive felons, representatives or health care providers who have committed Social Security fraud, and individuals having an unsatisfied felony warrant (or in jurisdictions

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Improving the Social Security Representative Payee Program: Serving Beneficiaries and Minimizing Misuse RECOMMENDATION 6.12 The Social Security Administration should store data from the annual accounting forms in an electronic database suitable for analysis. RECOMMENDATION 6.13 The Social Security Administration should provide the option for payees to complete the annual accounting form online. Review of Ad Hoc Complaints A second monitoring strategy in the program is the review of ad hoc complaints of potential misuse by field office staff. Typically, misuse complaints are lodged against a payee by the beneficiary or nonpayee relatives or friends of the beneficiary. A claims representative is charged with investigating such complaints. The initial inquiry typically leads to a complex array of facts, events, assertions, and interactions among the accuser, the payee, and the beneficiary (see below). However, as discussed in Chapter 4, the claims representative has little incentive to pursue a formal investigation. The amount of time, analysis, and paperwork that is required to establish misuse, coupled with a malleable definition of misuse, leads claims representatives to avoid the difficult task of documenting misuse. The usual approach is for the claims representative to determine whether or not the beneficiary should have a new payee, and if so, to “deselect” the current payee and identify and appoint a new one. Although most cases of formal misuse do arise from complaints, the vast majority of complaints do not result in a formal finding of misuse. Rather, they usually result in the replacement of a payee (see Chapter 4). Thus, potential and likely misuers are not held accountable, and they can—and frequently are—appointed again as a payee to the original beneficiary or to another beneficiary. We illustrate this scenario with a situation we found many times in our site visits: custody changes for minors with parents who do not live together. Claims representatives reported that they devote a substantial amount of their time to sorting out child custody issues. Each time a custody change occurs, they must verify the child’s residence through administrative data, such as school records. Shared custody situations lend themselves to conflicts between parents (or other custody sharers). One claims representative reported that a parent continued receiving the child’s benefit checks even though the child had moved to the other parent’s residence. Another reported finding that in checking a parent’s claim for a resident child, an approved claim had already been filed by the other parent who was receiving the child’s checks as the payee which constitutes misuse. It is clear that shared custodial beneficiary situations may facilitate or mask misuse and require continuous and careful monitoring by SSA staff. The difficulty of defining misuse in specific complaint situations was

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Improving the Social Security Representative Payee Program: Serving Beneficiaries and Minimizing Misuse reported repeatedly in the site visits. Explicit definitions and guidelines appear in the Social Security Act and the POMS (see discussion in Chapter 5). In response to a committee question, SSA stated: The (SSA) technicians need to use information contained in the POMS and use their own judgment and expertise to resolve the problems or issues presented to them in each particular case. It would be impossible to cover by written instruction every conceivable situation the field will run into given the size and diversity of this population. Site-visit reports note that as a result of this difficulty, field staff tend to deselect and replace payees instead of a formal finding of misuse, and the standards used to determine misuse are inconsistent across local offices and staff. For instance, some claims representatives included as misuse instances in which a payee did not know whether or not the beneficiary’s needs were being met, regardless of how the funds were being spent. Others included as misuse the practice of a payee taking a small fee from the beneficiary payments, although SSA allows this in specific circumstances (e.g., court approved fees to conservators), or a failure by a payee to respond to contact attempts by SSA. CONCLUSION Factors such as lack of incentives for staff to investigate misuse, perceived vagueness in the definition of misuse, and the complexity of interpersonal relationships between beneficiaries and their payees often lead claims representatives to find a more suitable payee rather than to formally determine misuse. CONCLUSION Frequently changing custodial arrangements for beneficiaries who are children involve complicated situations that may facilitate payee misuse. RECOMMENDATION 6.14 The Social Security Administration should establish mandatory protocols for payee replacement when misuse is suspected.7 When misuse or suspected misuse is the reason for a change of payee, staff should provide full documentation. The use of phrases such as “more suitable payee found” should not be allowed as formal documentation. 7 Consistent, of course, with the OBRA Amendments, 42 U.S.C. § 405(j)(2)(E), 1631(a)(2)(B)(x)-(xii), which provides payees and “any individual who is dissatisfied with a determination by the Commissioner of Social Security to certify payment of such individual’s benefit to a representative payee … or with the designation of a particular person to serve as representative payee” with the right to [an ALJ hearing and to judicial review of the Commissioner’s final decision].” Such hearings are apparently rarely requested, however.

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Improving the Social Security Representative Payee Program: Serving Beneficiaries and Minimizing Misuse The Representative Payee System The RPS is a database system used to enter and maintain information about representative payees and the beneficiaries they serve. The RPS is mandated by statute and requires SSA to establish and maintain a centralized file, readily retrievable by SSA offices, which contains the names of payees who have had their status revoked by reason of misuse of funds or because of a program violation. The RPS is thus a critical part of the system to administer the payee program, and it is heavily used by SSA offices to document payee relationships and evaluate potential payees for service. However, our attempts to use the RPS as a research tool and information from field office staff during our site visits indicate that the system could be greatly improved to more effectively facilitate SSA’s mission, both for monitoring individual payees and for agency-level studies of the program. We note that SSA is in the very early planning stages for a revision to the RPS. Thus, our discussion in this section is based on our study of the current system. A critical problem with the RPS is that it does not contain entries for all payees: SSA estimates that several thousand active payees are not included in the system (Appendix B). In some, but not all cases, the omissions are due to a systematic barrier. In particular, payees without a Social Security number (SSN) (e.g., undocumented alien parents, foreign nationals) cannot be registered in the system. This situation provides an opening for field staff to avoid entering other cases because of the difficulties encountered with the RPS, something that was observed during site visits. SSA acknowledged this problem (Appendix B): There are a significant number of cases missing from the RPS. Bypassing the payees is of great concern because it prevents SSA from affording protections as designed. Because some rep payee applications cannot be taken in (undocumented alien parent payee without an SSN), we had to have processes in place so these cases could be processed outside of the RPS, a situation which also allows abuses to occur. A second significant problem is the difficulty of using the RPS to record information on payees at time of application. The process for doing so is laborious, in part due to the outdated interface design for the RPS. Essentially, users are required to navigate through irrelevant screens on their way to a target screen and then to back out of screens to pursue a new query; this is cumbersome and illogical to users. Moreover, the office workload does not allow much time for each visit with a potential payee so inefficiencies in the system discourage complete and detailed data entry. Because specific RPS conventions for entering data fail to facilitate efficient and accurate data entry, field staff are often uncertain about what

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Improving the Social Security Representative Payee Program: Serving Beneficiaries and Minimizing Misuse additional information to provide and the amount of detail to enter into the system. For example, the RPS does not require entry for many important variables even though policy dictates that they be recorded. If the claims representative does not do forced entry of the variables—using a mutually exclusive and exhaustive set of response options—there will be missing data that can hamper later investigations about a payee’s service. There are also many instances in which critical data are entered as free text, which make it difficult to achieve consistency across offices and staff and relatively easy to forget to record important information or omit important details. For example, as discussed above and in Chapter 4, “more suitable payee” is frequently entered as the reason for terminating a relationship and choosing a new payee. This phrase communicates very little to the next staff person who may need to evaluate the terminated payee. Since a lot is known about payees and the reason for their terminations, it would be possible to create forced choices—a checklist—for many data elements that would provide more meaningful and simpler response options for users. The current situation enables “office shopping” by some payees because problematic histories are difficult to uncover. Furthermore, although the RPS has automatic edit checks for some entries, without forced entry and closed-ended responses for critical variables, effective data checks cannot be implemented. A third problem related to the outmoded design of the RPS is that the system is not being effectively used by all offices, and some of its features are not used by any of the offices. For example, some field staff do not enter enough notes to describe situations observed during interactions with beneficiaries and payees. Such notes are not enforced by the software, yet they could alert staff to repeat issues and complaints or provide valuable background for new payee selections or a change in payee. It also appears that staff training on the RPS would be valuable: for example, some staff believe that they must reenter a name and SSN, although the system does not require this. Updating the RPS is a fourth important problem. Updates are entered on an ad hoc basis by field staff in response to notification from a payee or beneficiary that circumstances have changed. When the committee attempted to use the RPS to understand the circumstances surrounding misuse cases, current information about a payee’s employment, financial circumstances, or family living arrangements was repeatedly absent. Although payees are responsible for reporting updates, there is no formal system to ensure that this occurs. This is another factor that reduces the currency and quality of payee and beneficiary data. Ideally, the RPS should also be updated with information on the annual accounting forms to establish which payees submit annual accounting forms and which do not. This is a critical

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Improving the Social Security Representative Payee Program: Serving Beneficiaries and Minimizing Misuse linkage because the failure to submit the form can be used to monitor payee performance and to investigate potential violations and misuse. CONCLUSION The Representative Payee System is a badly flawed tool for case-by-case field use to evaluate prospective representative payees and to investigate problems with payees. Office-to-office autonomy regarding procedures for making entries into the Representative Payee System and a cumbersome and inefficient interface create an environment that encourages inconsistencies in the amount and quality of information available in the database. In addition, data quality concerns and incompleteness compromise the potential for the Representative Payee System to be used for research and analysis with aggregate data, such as summarizing characteristics of the payee population, investigating factors associated with misuse, and drawing samples for monitoring payees. RECOMMENDATION 6.15 The Social Security Administration should redesign the Representative Payee System. The committee suggests that SSA consider the following changes to the RPS: inclusion of all payees into the system; creation of data elements in the system with respect to a payee who is identified as a potential or suspected misuser; addition of data elements in the system for various types of violations by payees; addition of data elements in the system for relevant results of investigations by the Office of the Inspector General; inclusion of the Employer Identification Numbers of all organizational payees in the system; addition of a lump-sum indicator and amount to enable the local field office to better monitor how such money is spent for a specific beneficiary; easy access and use by all field office staff; streamlined linkage to annual accounting form data; and an easy-to-use interface that has undergone usability testing. The committee suggests that SSA require entry of important data elements—standardized values that ensure consistency of responses across offices and support institutional analysis of the full population or special populations of payees. A new RPS should undergo usability testing to ensure that it effectively supports office staff in entering and updating the

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Improving the Social Security Representative Payee Program: Serving Beneficiaries and Minimizing Misuse system. These improvements could be logical considerations under SSA’s currently planned revision of the RPS. RECOMMENDATION 6.16 The Social Security Administration should implement a process that regularly updates information in the Representative Payee System, both by field office staff and through the annual accounting form. The Social Security Administration should also implement a quality control program that periodically checks the integrity of the information in the Representative Payee System. TERMINATIONS AND TRANSITIONS There are many reasons that a payee might cease to serve a particular beneficiary, including: The beneficiary requests a change in payee. The payee requests termination. Payee misuse is determined. SSA identifies a more suitable payee. The beneficiary no longer needs a payee (e.g., an emancipated minor, a minor aging into adulthood, or a beneficiary’s recovery from a period of incapacitation). There is a change in custody for the beneficiary. The representative payee or beneficiary dies. When there is a transition from one payee to another, the selection of a new payee is required to be conducted with the same level of scrutiny as an initial selection of a payee (POMS GN 00504.100). Also, when there is a transition, POMS (GN 00605.360) states that a final accounting of beneficiary funds must be conducted. In addition to voluntary transitions from one payee to another, SSA has the authority to terminate any payee who is not performing according to the standards outlined in the representative payee brochure. Changes in payees, for whatever reason, are not a common occurrence. In the committee’s survey, more than three-fourths of payees, 79.9 percent (1.2), had never experienced a termination of their tenure. An estimated 15.0 percent (1.0) of payees reported it happened once, and 3.3 percent (0.6) reported two terminations. Only 1.8 percent (0.9) reported being terminated more than twice. The committee investigated the reasons for the terminations reported in our survey. On the whole, the reasons reflected understandable, logical circumstances for ending the payee appointment. More than one-half, 55.8 percent (2.6), occurred because of a change in beneficiary eligibility (the

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Improving the Social Security Representative Payee Program: Serving Beneficiaries and Minimizing Misuse beneficiary died or otherwise became ineligible for benefits). Among payees associated with an organization, 60.4 percent (6.5) were terminated because the beneficiary had been discharged or was no longer receiving services. A smaller fraction of payees initiated their own termination because they did not wish to continue being a payee, 10.4 percent (1.3), or because they could not meet the beneficiary’s needs, 6.5 percent (1.1). About the same percentage of payees were terminated at the beneficiary’s request, 10.9 percent (1.7). In a small number of cases for current payees who had previously been terminated, SSA initiated a termination, 3.6 percent (0.9). As discussed above, the committee found that when an ad hoc complaint of misuse was filed, a formal investigation was regularly bypassed and replaced with deselection of the payee under suspicion and appointment of a more suitable one. To explore the prevalence and circumstances surrounding this practice, the committee investigated reasons that payees were terminated, using a 1-percent sample of just under 143,000 records drawn randomly from the RPS. We note again the 58 percent of the terminations noted in the RPS carry the notation “more suitable payee found.” The next most common reason for termination was “other,” in 24 percent of cases. Unfortunately, neither of these reasons provides any useful interpretive information that can be used in the specific case or for statistical analysis. The only other common reason cited was “benefit ceased,” 6.5 percent. Payees who are terminated due to suspicions of misuse but without a formal investigation and finding, remain available for appointment to another beneficiary or to continue serving as the payee to other beneficiaries. We also note that the committee found that when misuse was suspected and a more suitable payee found, a final accounting was not always conducted as required (POMS GN 00605.360). CONCLUSION Whenever suspected cases of misuse are not subjected to a formal investigation but handled by use of the phrase “more suitable payee found,” potential misusers are not held accountable for their actions; this approach may actually promote reentry to payee status (for some other beneficiary) and consequently future misuse. CONCLUSION Lack of the required final accounting for terminations may cover up misuse, especially in cases in which a “more suitable payee” was found. RECOMMENDATION 6.17 The Social Security Administration should revise the current regulations that require a final accounting whenever a payee is terminated to ensure, so far as practicable, that all funds are accounted for.

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Improving the Social Security Representative Payee Program: Serving Beneficiaries and Minimizing Misuse STATE-RELATED ISSUES State policies substantially influence the administration of the Representative Payee Program across the United States. The variations in state-specific program implementation are due to such policies as: State courts allow fees to be paid to guardians who also administer SSA funds as representative payees. State courts have oversight over guardians and conservators who also are payees and impose bonding, training, and accountability requirements that are generally greater than SSA has for those who serve only as payees. Mandatory provisions for providers of assisted living or boarding homes to be the representative payee for those who reside in those homes. Former residents of state mental health institutions are housed in boarding houses where the owner/administrator of the facility is also acting as the payee. Over the past few decades there has been an increase in the monitoring and oversight that state courts exercise over guardianships and conservatorships, through both legislation and court rules. On an individual level, the amount of increased scrutiny depends on the specific court and its resources. State-appointed guardians who are also payees, in general, must report all of their financial activity to the court. Although there may be greater oversight of payees by state courts than by SSA, SSA still has responsibility to beneficiaries to ensure that there is no misuse of Social Security benefits. Nevertheless, the committee’s study suggested that payees were deferring to state courts for guidance and authority on how to spend and report financial information for their beneficiaries, including stipulations on how the guardians were to be paid from beneficiaries’ funds that included Social Security benefits (see Chapter 5). Fees have been authorized on the basis of the time spent on guardianship services, as well as time spent filing lawsuits, filing taxes, and other services. Guardians reported that as long as there was “approval” by the state court that would be acceptable to SSA. Yet there is no place on the annual accounting form (or any other required payee paperwork) to show what has been filed with the state court or the court’s acceptance of the filing. There is currently no “deemed status” between SSA and state courts that would lead SSA to accept the reports filed with a court in lieu of the SSA annual accounting form.

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Improving the Social Security Representative Payee Program: Serving Beneficiaries and Minimizing Misuse CONCLUSION Funds from both the Old Age, Survivors, and Disability Insurance (OASDI) Program and from the Supplement Security Income (SSI) Program are used to pay fees for representative payee services without regard for legislative limitations because of the way in which the Social Security Administration defers to state court oversight of guardianship and conservatorship financial reporting. State legislatures, special court task forces, and state courts themselves have been under pressure to improve their guardianship and conservatorship oversight. Requirements for training and monitoring of guardians have increased. Some states require guardians to be certified (a national certification has been developed); others require guardians to complete a course of study. States and individual courts may monitor both the financial reports and the people on a regular basis. CONCLUSION State court guardianship and conservatorship programs operate totally independently from the Social Security Administration Representative Payee Program even though the program requires any beneficiary who has a guardian or conservator to also have a payee appointed by the Social Security Administration. There is no coordination between the Social Security Administration and state courts for the training of guardians, conservators, and payees or regarding filing annual reports. RECOMMENDATION 6.18 The Social Security Administration should track state laws that require conservators or legal guardians of beneficiaries who need representative payees to undergo court monitoring and mandated training. In such states, the Social Security Administration should give preference to designating the guardians or conservators as the payees and seek to integrate or coordinate its payee training materials with the state-mandated training. As noted above, although a guardian may also be a representative payee, there is no required communication between the state courts and SSA. Such communication is likely to improve mutual understanding and coordination between the states and the payee program: see earlier discussion, “Dual Roles and Fees for Payees,” and Recommendation 6.7. There is one state that required its providers of assisted living or board-and-care to become the representative payee for residents of the home whether the beneficiary is in the home for a short time, as in an emergency placement, or on a long-term basis. The provider, owner, or administrator then applies to SSA to become the payee as a condition of having the resident placed in the home. The committee is concerned as to whether a state

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Improving the Social Security Representative Payee Program: Serving Beneficiaries and Minimizing Misuse should be conducting the “selection of payee” rather than an SSA claims representative. The payee in these cases is also a creditor and the provider of all services. This situation is one that the committee recommends be reconsidered by SSA. A second type of state variation is the availability of state funds for additional services for certain classes of beneficiaries based on their medical or social needs. Although some states have very specific guidelines for providers of board and care (in assisted living facilities, group homes, etc.) that afford financial protections to beneficiaries, others do not. In some states the availability of additional resources from Medicaid or state funds to providers of board-and-care homes does not appear to lead to extra monitoring to ensure compliance with proper financial management. Rather, in some cases there is a cash amount provided to the facilities owner or administrator for services to a particular or multiple beneficiaries without any indication as to how or to whom the funds were to be accounted. If such funds are commingled with SSA funds, there are opportunities for misuse or inadequate fiscal accounting. Another difference identified in state policy is the manner in which states or local jurisdictions allow for the development of board-and-care facilities. In one state it appeared that the state did not regulate such facilities and the services that are provided are entirely up to the providers. The committee also observed the use of additional community services for large numbers of beneficiaries who were taken to day care facilities for several hours each day where they were provided meals, at the same time that the providers claimed to be providing “board-and-care.” Differences in state policy, guardianship, social services programs, etc. all may contribute to differences in the states’ ability to monitor actual and potential misuse of SSA (and other) funds. The role of the state and that of SSA in ensuring that beneficiaries receive the services that their SSA benefits are supposed to cover needs to be further studied. Policies and procedures need to be put in place to prevent opportunities for misuses or inadequate fiscal accounting. State policies—such as the licensure of board-and-care facilities, the availability of state funds for additional services, and the ways that states monitor those providers that receive additional financial support—are essential to the accountability of SSA funds. That accountability in turn is essential to ensure that benefit funds meet the appropriate needs of the beneficiaries. An aggregation of all state laws, regulations, policies, and practices that may affect the use of beneficiaries’ funds would enable the development and sharing of best practices between the states and SSA. RECOMMENDATION 6.19 The Social Security Administration should begin an outreach program with state agencies to compile the

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Improving the Social Security Representative Payee Program: Serving Beneficiaries and Minimizing Misuse laws and practices and study the differences in various states’ regulation of assisted living, foster care, and other group homes. The committee suggests that SSA learn about promising techniques and approaches to monitoring and regulating state activities that affect the Representative Payee Program; ensure that states do not unduly dictate the designation of the owners or administrators of group homes as representative payees; and ensure that organizational payees do not receive federal benefits for state-remunerated activities. VARIATION OF LOCAL OFFICE MANAGEMENT Throughout this chapter and report we note information gathered from our visits to local SSA offices. As we note above, we were impressed with the dedication and energy that staff exhibited as they tried their best to make the payee program work for beneficiaries. We also note, however, that local management plays a vital role in how the program operates, and we observed significant differences in how local offices were managed. The variations were significant: different practices, different attention to the rules, different interpretation of policies, and most importantly, different allocation of resources to the payee program. The committee did not plan to formally evaluate office differences and the affect of local management on the payee program. But we would be remiss if we did not mention these differences. It is possible that the Representative Payee Program is affected less by formal written policies and procedures and more by leadership, management, systems, and staff differences.