Number:        116-14   
Date:             February 6, 2020

The House Passes S. 375,
the “Payment Integrity Information Act of 2019”

On February 5, 2020, the House passed S.375, the Payment Integrity Information Act of 2019. The Senate previously passed the bill on July 16, 2019. This bill would change government-wide improper payment reporting requirements by repealing and replacing the Improper Payments Information Act of 2002 (IPIA), the Improper Payments Elimination and Recovery Act of 2010 (IPERA), the Improper Payments Elimination and Recovery Act of 2012 (IPERIA), and the Fraud Reduction and Data Analytics Act of 2015 (FRDAA). Under the bill, government-wide improper payment reporting requirements would include requirements carried forward unchanged from current law (including some that stem from Office of Management and Budget (OMB) guidance), modified current-law requirements, and new requirements. This bulletin describes only those that are new or modified from current law.

S. 375 includes the following provisions of interest to SSA:

Compliance

  • Would add additional requirements necessary for an Inspector General (IG) to find an agency “in compliance” regarding improper payments. 1.
    • Agencies would be required to have demonstrated improvements and developed a plan to meet their reduction targets.
    • Agencies would be required to take new factors into consideration during their risk assessment reviews,2 including:
      • Similarities to other programs or activities that have reported improper payment estimates or have been deemed susceptible to significant improper payments;
      • The accuracy and reliability of previously reported improper payment estimates, audits, or other indicators of improper payments;
      • Whether the program or activity lacks information or data systems to confirm eligibility or provide other program integrity needs; and
      • The risk of fraud (as assessed by the agency under the Government Accountability Office’s Standards for Internal Control in the Federal Government).
    • Agencies would be required to report annually on the risk assessments they perform on their programs. Such reports would include:
      • A listing of all programs and activities with certain outlays that may be susceptible to significant improper payments, and the date such programs were most recently accessed for risk; and
      • A listing of any programs or activities for which an agency makes substantial changes to the methodology of its risk assessment reviews.
    • If an agency has a program identified as requiring a risk assessment, would require the head of such agency to meet annually with OMB to report on actions taken and planned to prevent improper payments.

Agencies’ Improper Payment Reporting Responsibilities

  • Would require agencies to include in their reports on actions to reduce improper payments3 a description of how the level of planned or completed actions to address the causes of improper payments matches the level of improper payments, including a breakdown by category of improper payment and specific timelines for completion of those actions.

OMB’s Improper Payment Reporting Responsibilities

  • Would require OMB to include in its report on government-wide improper payments 4 a government-wide estimate of improper payments.
  • Would require OMB to submit its report to the Comptroller General, in addition to the Senate Committee on Homeland Security and Government Affairs and the House Committee on Oversight and Reform.

Inspector Generals’ Agency Compliance Reporting Responsibilities

  • Would require the Council of the Inspectors General on Integrity and Efficiency (CIGIE) to publish IGs’ agency compliance determination reports 5 on a public website.
  • Within 180 days of enactment, would require OMB, in consultation with CIGIE, to develop and promulgate guidance for compliance determination reports. Such guidance would require that the compliance determination reports’ format is consistent, and that IGs:
    • Evaluate and take into account the adequacy of agency risk assessments, improper payment estimates methodology, and agency action plans to address the causes of improper payments;
    • Take into account whether the agency has correctly identified the causes of improper payments and whether the agency’s actions to address those causes are adequate and effective;
    • Evaluate the adequacy of agency action plans on how the agency addresses the causes of improper payments; and
    • Include an evaluation of the agency’s efforts to prevent and reduce improper payments and any recommendations for actions to further improve prevention and reduction in the report.
  • Within 180 days of enactment, would require CIGIE to develop and promulgate guidance that specifies procedures for compliance determinations. Such guidance would describe procedures for IGs to make consistent compliance determinations, and to evaluate:
    • Whether the agency’s risk assessment methodology, accuracy of the rate estimates, and corrective action plans are compliant with improper payment laws;
    • Whether the IG’s audits, examinations, and legal actions indicate a higher risk of, or actual, improper payment than the agencies included in their risk assessments;
    • Whether the agency’s sampling and estimation plan used is appropriate given program characteristics;
    • Whether the agency’s corrective action plans are adequate and focused on the true causes of improper payments, including whether the correction action plans are reducing improper payments, effectively implemented, and prioritized within the agency;
    • The adequacy of agency action plans to address the causes of improper payments;
    • Agency efforts to prevent and reduce improper payments and any recommendations for further improvement; and
    • Whether an agency has published an annual financial statement.

Agencies’ Noncompliance Reporting Responsibilities

  • Would modify the reporting requirement for agencies whose IGs have found them to be out of compliance:
    • Would require OMB to submit its report to the Comptroller General, in addition to the Senate Committee on Homeland Security and Government Affairs and the House Committee on Oversight and Reform.o For agencies out of compliance for 3 years, agencies would be required to submit their noncompliance reports 6to the agency’s authorizing and appropriations committees and to the Comptroller General.
    • For agencies out of compliance for 4 or more years, agencies would be required to include a timeline for when a noncompliant program will achieve compliance, based on the other information provided in the noncompliance report7. Such report would be required to be submitted to the agency’s authorizing and appropriations committees.
  • Would require each agency to submit to the agency’s authorizing and appropriations committees and the Comptroller General a list of each of the agency’s noncompliant programs or activities, and the agency’s planned actions to bring the programs into compliance.

Do Not Pay Initiative 8

  • Would allow agencies, in consultation with OMB, to waive certain Privacy Act of 1974 computer matching agreement requirements for those agreements related to Do Not Pay.
  • Within 120 days of enactment, would require OMB, in conjunction with SSA, States, and other stakeholders, to conduct a study and update the plan 9 for improving the quality, accuracy, and timeliness of SSA’s death data, including State death information.
  • Would require the Department of Veterans Affairs and the Office of Personnel Management to establish a procedure to report deaths to other Federal agencies.

Financial and Administrative Controls Report

  • For fiscal years 2019 and 2020, would require agencies to include in their annual financial statements a report on their implementation of financial and administrative controls, fraud risks and vulnerabilities, and strategies to curb fraud.10

Establishment of Interagency Improper Payment Working Group

  • Within 90 days of enactment, would establish an interagency working group focused on identifying activities that would improve payment integrity of Federal programs, including:
    • Improving State-administered Federal programs to determine eligibility processes and data-sharing practices;
    • Best practices for detecting, preventing, and responding to improper payments, including those that are a result of fraud;
    • Sharing and developing data analytics techniques to prevent and identify improper payments; and
    • Other activities that would improve payment integrity of Federal programs.
  • The working group would be required to:
    • Be composed of:
      • The director of OMB;
      • 1 representative from each agency required to have a Chief Financial Officer11 (including SSA); and
      • Any other agency representatives, as determined appropriate by OMB;
    • Have no fewer than 4 meetings per year; and
    • Submit a report within 240 days of enactment that includes:
      • A plan containing tangible solutions to prevent and reduce improper payments; and
      • A plan for State agencies to work with Federal agencies to regularly review lists of beneficiaries of State-managed Federal programs for duplicate enrollment between States, including how the Do Not Pay Business Center and Treasury’s data analytics initiative could aid in the detection of duplicate enrollment.

Effective Date

  • Would be effective upon enactment, except as otherwise noted.

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1As otherwise currently defined under IPERA.

2As currently required by IPIA.

3As currently required by IPIA.

4As currently required by IPERA.

5As currently required by IPERA.

6As currently required by IPERA.

7As currently required by IPERA.

8As required under IPERIA. We note that this section would not amend section 205(r) of the Social Security Act; therefore, we would still be prohibited from sharing our full file of death information with Do Not Pay. Do Not Pay would continue to receive non-State death information.

9As currently required by IPERIA.

10As was required for the first three years after enactment of FDRAA.

11As required by 31 U.S.C. 901(b)(1) and (2).