Zombie Budget: Payments to the Deceased | Citizens Against Government Waste

Zombie Budget: Payments to the Deceased

The WasteWatcher

Halloween is around the corner, which means that in the coming weeks it will be more important than ever to be on the lookout for signs of the zombie apocalypse. Should those signs start to appear, any possible advantage for the living over the undead will be of the utmost importance. Tragically, the zombies have a head start in gathering resources for any impending battle, and their chief financial backer appears to be the federal government. Because when it comes to giving money to dead people, the government is in a class of its own, and while it might be tempting to forgive the feds for their confusion – the latest rash of imbursements for the dead involves federal employees, who are sometimes difficult to distinguish from zombies – taxpayers surely deserve better.

On September 14, 2011, Office of Personnel Management (OPM) Inspector General Patrick E. McFarland released a scathing report on the federal government’s Civil Service Retirement and Disability Fund (CSRDF). Since 2006, the CSRDF, which sends retirement and disability checks to qualified former federal employees, has handed out an average $120 million annually to dead people, and the problem is getting worse.

Despite attempts by OPM to keep its finger on the pulse of annuitants through automated check reclamation and improved death reporting, payments to the deceased have increased 70 percent since 2006. Many of those payments have been in error for a very long time, such as those to a dead federal employee’s son which “exceeded $515,000 and [were] reported to OPM when the son, who fraudulently received the payments, died,” 37 years after his father had passed on. As the retirement-age proportion of America’s population increases, many more federal employees will qualify for payments from CSRDF, and many more fraudulent payments will slip through the cracks unless strong preventive action is taken.

OPM may be the most recent agency to grab headlines for zombie payments, but it is far from the only offender. Medicare, Medicaid, Social Security, and agencies such as the Department of Agriculture (USDA) are also suckers for stiffs. An October, 2010 report by Sen. Tom Coburn (R-Okla.) highlighted the extent of the problem, stating that “Since 2000, the known cost of … payments to over 250,000 deceased individuals has topped $1 billion.” Those payments include $92 million in Medicare funds for medical supplies prescribed by dead doctors and $8.2 million in supplies for dead patients, $18 million in stimulus funds for 71,688 dead people, and $700,000 in prescription drug or controlled substance claims through Medicaid by dead doctors or patients.

At USDA, which distributes roughly $20 billion to farmers each year for various programs, payments go to individuals, corporations, partnerships, and estates. According to the Government Accountability Office (GAO), “Under certain conditions, estates may receive payments for the first 2 years after an individual’s death,” and from then on, “USDA must determine that the estate is not being kept open for payments.” But USDA does a poor job of performing such checks. GAO found that USDA “did not conduct any eligibility determinations for 73, or 40 percent, of the 181 estates GAO reviewed.”

Improper payments by federal agencies are no surprise to taxpayer watchdogs. For example, GAO estimated in March, 2011 that $48 billion in improper payments were made by Medicare in 2010 alone, along with another $22.5 billion by Medicaid. In January 2010, the National Health Care Anti-Fraud Association estimated that Medicare had lost $100 billion to scams and identity theft in 2009. Payments to corpses, though, rank among the most egregious oversights

The time is long overdue to start holding department and agency managers and heads accountable for their mistakes. As the OPM IG report suggests, annual performance criteria for reaching specific error reduction targets should be implemented immediately. The consequences for failure should be real and significant, as they already are for taxpayers.

  -- Luke Gelber

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