Social Security Administration: Preliminary Observations on the Death Master File
Published: 2013-05-08T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: As the steward of taxpayer dollars, the federal government is accountable for safeguarding against improper payments--those that should not have been made or that were made in an incorrect amount. One tool federal agencies can use to do this is the DMF, which is a file containing records of deceased individuals who are SSNholders. Through data matching, federal benefit-paying agencies can use the DMF to alert them of deceased benefit recipients. However, the SSA Office of Inspector General and others have identified inaccuracies in the DMF, including deceased individuals who were not listed in the file. Such inaccuracies could adversely affect its usefulness to federal agencies.
This testimony addresses preliminary observations on (1) SSA's process for handling death reports for inclusion in the DMF, and (2) federal agency access to the DMF. In addressing these objectives, we interviewed SSA officials regarding how the agency obtains death reports and maintains the DMF; reviewed applicable federal laws, SSA procedures, and reports; interviewed representatives of organizations that report deaths to SSA; and interviewed officials at other federal agencies that use the DMF.
section_title: What GAO Found
paragraphs: The Social Security Administration's (SSA) procedures for handling and verifying death reports may allow for erroneous death information in the Death Master File (DMF) because SSA does not verify certain death reports or record others. SSA officials said, in keeping with its mission, the agency is primarily focused on ensuring that it does not make benefit payments to deceased Social Security program beneficiaries. As a result, it only verifies death reports received for individuals who are current program beneficiaries, and even then, only for those reports received from sources it considers to be less accurate. For example, SSA officials consider death reports from states that have pre-verified decedents' name and SSN to be highly accurate, so SSA does not verify that the subjects of these reports are actually deceased. It would, however, verify a report received from a source such as a post office. SSA verifies no death reports for individuals who are not beneficiaries, regardless of source. Because there are a number of death reports that SSA does not verify, the agency risks including incorrect death information in the DMF, such as including living individuals in the file or not including deceased individuals. Specifically, for death reports that are not verified, SSA would not know with certainty if the individuals are correctly reported as dead. SSA also does not record some deaths because incorrect or incomplete information included in death reports generally prevents SSA from matching decedents to SSA records. For example, if SSA is unable to match a death report to data in its records such as name and Social Security Number (SSN), it generally does not follow up to correct the non-match and does not record the death.
A number of federal agencies access the DMF for the purpose of matching it against data in their files, but the conditions of access depend on a variety of legal and other factors. Currently SSA shares a full version of the DMF with six federal agencies that it has determined meet legal requirements for accessing the file, which include being an agency that pays federal benefits. By law, SSA can require reimbursement for the cost of sharing the data, however various factors affect what the agencies actually pay. The Department of Veterans Affairs and the Office of Personnel Management pay nothing to receive the file, whereas the Department of Defense annually pays more than $40,000. A number of other federal agencies--including several that administer programs that pay benefits-- purchase a partial version of the DMF that is publicly available through the Department of Commerce's National Technical Information Service (NTIS). NTIS reimburses SSA for receipt of the file. The partial DMF does not include statereported data and, according to SSA officials, has about 10 percent fewer records than the full DMF (roughly 87 million, compared to 98 million). Thus, agencies accessing this version of the file, such as the Department of Labor's Energy Employees Occupational Illness Compensation Program, may be missing deceased program participants. If agencies want access to the full DMF, they must formally request it. SSA makes determinations about their eligibility on a case-by-case basis. SSA officials said they were not aware of written standards or guidelines to follow in making these determinations.
section_title: What GAO Recommends
paragraphs: The work is ongoing and GAO has no recommendations at this time. GAO plans to issue its final report later in 2013.

section_title: Letter
paragraphs: I am pleased to discuss the Social Security Administration’s (SSA) death  information, which is currently maintained for approximately 98 million  deceased individuals who are Social Security Number (SSN) holders.  Federal benefit-paying agencies generally can access the information in  this file and match it against data in their files to alert them to deceased  benefit recipients, and therefore help reduce improper benefit payments.  As the steward of taxpayer dollars, the federal government must guard  against improper payments. Yet for fiscal year 2012, the Office of  Management and Budget reported federal agency improper payment  estimates totaling almost $108 billion. Over the past decade, we have  issued numerous reports and testimonies highlighting the dangers of  improper payments, including adverse effects on program integrity or  economic hardship for beneficiaries who have to repay overpayments.  We have also illustrated efforts agencies can take to help reduce these  payments. For example, data matching allows benefit-paying agencies to  compare information from different sources to confirm initial or continuing  eligibility of participants or identify improper payments that have been  made. Agencies can use SSA’s death information to help ensure they are  not paying benefits to deceased individuals. However, the SSA Inspector  General and others have identified inaccuracies in this file, commonly  referred to as the Death Master File (DMF), such as deceased individuals  not listed in the DMF. Such inaccuracies could adversely affect the DMF’s  usefulness in helping agencies combat improper payments.
In my remarks today I will describe our preliminary observations on (1)  SSA’s process for handling death reports for inclusion in the DMF, and (2)  federal agency access to the DMF. To address these objectives, we  interviewed SSA officials regarding how SSA obtains death reports and  maintains the DMF, and reviewed applicable federal laws and SSA  procedures, as well as relevant reports and evaluations. We also  interviewed representatives of organizations that provide death reports to  SSA. We analyzed the DMF to identify specific types of errors. Finally, we  interviewed officials at other federal agencies that use the DMF about  how they obtain and use it. This work is being conducted in accordance  with generally accepted government auditing standards.
subsections: section_title: Background
paragraphs: SSA historically has compiled death information about SSN-holders in  order to ensure it does not pay Social Security benefits to deceased  individuals and to establish benefits for survivors. When SSA receives a  report of death—which could include name, date of birth, date of death,  and SSN—it matches that information against corresponding information  in its database of all SSN-holders, known as the Numerical Index File  (Numident). SSA then marks the appropriate Numident record with a  death indicator. This death information was not publicly available until  1980 when, in response to Freedom of Information Act requests, SSA  began to extract Numident records that had a death indicator into a  separate file it called the DMF.
According to SSA officials, SSA received about 7 million death reports in  2012 from a variety of sources. These sources include family members,  funeral directors, post offices, financial institutions, other federal   agencies, and state vital records agencies (states). To get death reports  from the states, SSA has established formal agreements that set forth a  payment structure for the states’ death reports and limit SSA’s ability to  share this information. However, the Social Security Act requires SSA to  share death information, including data reported by the states, with  federal agencies to ensure proper payment of benefits to individuals. The  act also prohibits SSA from sharing state-reported death information for  any other purposes. As a result, SSA maintains two versions of the DMF.  The “full DMF,” which contains all death records, is available to federal  benefit-paying agencies. The “partial DMF,” which excludes state- reported death information, is available publicly to any interested party.  Following the Social Security Act, SSA removes the state-reported  records from the full DMF and provides the partial DMF to the Department  of Commerce’s National Technical Information Service (NTIS), which  reimburses SSA for the cost of providing the file and sells it through a  subscription service.
section_title: SSA’s Procedures May Allow for Erroneous Death Information in the DMF
paragraphs: Our work to date has identified ways in which SSA’s procedures for  compiling and verifying death reports may affect the accuracy of death  reports in the DMF. To guide how to handle death reports, SSA has  determined accuracy levels for each of the sources based on its past  experience. Of all the sources of death reports that SSA receives, SSA  considers those submitted by states through Electronic Death  Registration Systems (EDRS) to be the most accurate. As part of these  systems, states generally verify the names and SSNs from death reports   with SSA’s databases before submitting them. As of March 2013, 35  states submit their death reports using EDRS. SSA considers reports  from funeral directors and family members of decedents the next most  accurate. Finally, SSA considers reports from the remaining sources to be  less accurate. According to SSA officials, SSA does not collect data on  the number of death reports submitted by each source. However, officials  told us that if SSA receives multiple death reports for the same individual,  the Numident record is updated to reflect only the source SSA considers  to be the most accurate. For example, if SSA first receives a death report  from a family member and subsequently receives an electronic report  from a state about the same individual, the original report is overridden  and SSA records only the state as the source of the death report.
Whether SSA verifies death reports depends upon (1) whether the  decedent is receiving Social Security benefits, and (2) the source of the  report. Verification includes confirming the date of death and decedent’s  SSN to ensure that the person identified in the death report is the person  who has died. According to SSA officials, the agency only verifies death  reports for individuals currently receiving Social Security program benefits  because it is essential to its mission to stop payments to deceased  beneficiaries. Even then, SSA verifies only those reports from sources it  considers to be less accurate, such as financial institutions and other  federal agencies. Therefore, death reports for non-beneficiaries are not  verified (see table 1). SSA officials said they do not maintain data on the  number of death reports they verify annually or how long such  verifications take.
The following scenarios illustrate SSA’s approach to verification:
SSA receives a death report from a funeral director and determines  the decedent is currently receiving Social Security benefits. Because  the report was received from a source considered highly accurate,  SSA takes no further steps to verify the death. The death is recorded  in the decedent’s Numident record and subsequently the DMF.
SSA receives a death report from a post office based on a returned  Social Security benefit check noting the addressee is deceased.  Because the decedent is a current SSA beneficiary and the report  came from a source considered less accurate, it is turned over to an  SSA field office to verify. Field office staff attempt to contact either the  family of the decedent or some other source that is likely to have first- hand knowledge of the death to confirm the decedent’s identity and  date of death. Once this is completed, the death is recorded in the  decedent’s Numident record and the DMF.
Veterans Affairs submits a death report to SSA. SSA determines the  decedent is not receiving Social Security benefits. SSA does not verify  the death before recording it in the Numident record and subsequently  the DMF.
Because there are a number of death reports that SSA does not verify,  the agency risks having erroneous death information in the DMF, such as  including living individuals in the file or not including deceased individuals.  Specifically, for death reports that are not verified, SSA would not know  with certainty if the individuals reported as dead are, in fact, the ones who  are dead. SSA acknowledges these limitations and does not guarantee  the accuracy of the file.
Other SSA practices may prevent deaths from being included in the DMF  or lead to other errors. For example, if SSA cannot match a death report  to a corresponding Numident record because of differences in name, date  of birth, or gender, it generally will not take actions to resolve the non- match. As a result, these deaths would not be included in the DMF. In  addition, analysis we performed on existing DMF records identified  potentially erroneous information. Specifically, we identified:
130 records where the date of death was recorded to occur before the
1,295 records where the recorded age at death was between 111 and
1,791 records where the recorded death preceded 1936, the year  SSNs were first issued, although the decedents had SSNs assigned  to them.
SSA officials said some of these anomalies were likely associated with  records added prior to the mid-1970s that were manually processed. For  example, SSA staff could have keyed in a date of birth that occurred after  a date of death. In addition, they told us SSA is taking steps toward  identifying or preventing these types of potential errors. These include  implementing an edit check to catch records showing a date of birth after  date of death, and undertaking a review of cases in which persons appear  to be unreasonably old and still receiving benefits to determine if they are  dead or if their birth date was entered incorrectly.
Finally, there are other situations in which deaths would not be included in  the DMF. For example, decedents who were never assigned an SSN  cannot be matched to the Numident. In addition, some deaths may not  be reported to SSA, because, for example, identity cannot be established  or a body is never found. However, it was beyond the scope of our review  to determine the extent to which such gaps occurred.
section_title: Agencies’ Access to the DMF Depends on a Variety of Factors
paragraphs: A number of federal agencies access the DMF, but the conditions of  access vary widely due to legal and administrative factors. Federal  agencies’ access to the full DMF depends on various legal requirements,  including (1) whether they pay federal benefits and (2) whether their  proposed use of the DMF is consistent with uses outlined in the Social  Security Act. Currently, SSA shares the full DMF with six federal benefit- paying agencies which have requested access and which it has  determined meet the relevant legal requirements:
Centers for Medicare & Medicaid Services
Department of Defense (Defense Manpower Data Center)
Department of Veterans Affairs
Internal Revenue Service
Office of Personnel Management
Railroad Retirement Board  To address administrative conditions of access, these agencies have  established information exchange agreements to receive the full DMF. As  a part of these agreements, SSA and the agencies agree on what the  agency will pay for receiving the data, among other things. SSA has  statutory authority to require reimbursement to cover the reasonable cost  of sharing the data, and the amount varies by agency. According to SSA  officials, although the cost is generally related to the volume of data SSA  provides, other factors may affect what agencies pay. For example, the  Department of Veterans Affairs does not reimburse SSA for the DMF  because it is statutorily exempted from doing so. The Office of  Personnel Management similarly does not reimburse SSA because it  provides other data to SSA, and the agencies have agreed that the  expenses involved in the exchanges are reciprocal. In contrast, the  Defense Manpower Data Center pays over $40,000 annually for monthly  updates, while CMS officials told us it pays about $10,000 per year for  weekly updates.
A number of other federal agencies purchase only the partial DMF that is  publicly available from NTIS. Several of these pay federal benefits,  including the Department of Labor’s Energy Employees Occupational  Illness Compensation Program, which provides compensation and health  benefits to eligible Department of Energy workers and certain survivors.  In addition, the Department of Agriculture’s Farm Service Agency  administers several programs that pay benefits to farmers. Other  agencies include, for example, the Department of Homeland Security, the  Department of Justice, and the Department of the Treasury office that  administers the Do Not Pay Initiative. According to SSA officials, the  partial DMF has about 10 percent fewer records than the full DMF due to  the removal of state-reported deaths. As more states submit records via  EDRS, SSA officials expect this difference to grow over time. As a  result, any benefit-paying agency relying on the partial DMF to help  identify deceased program participants may be missing death records for  some of its beneficiaries because it has access to only about 87 million of  the 98 million records in the full DMF.
Although SSA officials make the determination about which agencies are  eligible to receive the full DMF, they told us agencies must first formally  request it. In response to agencies’ requests, SSA makes determinations  about agencies’ statutory eligibility on a case-by-case basis. However,  SSA officials said they were not aware of written standards or guidelines  to follow in determining which federal agencies meet statutory  requirements. SSA officials said that Offices of Inspectors General at  benefit-paying agencies would likely be eligible to receive the full DMF for  the purpose of ensuring proper payments of benefits. In contrast, SSA  officials said that the agency has determined that the Department of the  Treasury would not be eligible to receive the full DMF for the purposes of  administering the Do Not Pay Initiative. Even though this initiative is  designed to help agencies prevent improper payments, SSA officials  explained that under the Do Not Pay Initiative, Treasury would share state  death information with agencies that do not pay benefits, which would put  SSA in violation of the Social Security Act and its agreements with the  states.
In summary, SSA’s death information can serve as a helpful tool in  preventing improper payments, but can only do so if it is accurate and  accessible to federal agencies that need it. As we continue our work, we  will explore these and other issues in more detail and look forward to  providing a final product later in 2013.
Chairman Carper, Ranking Member Coburn, and Members of the  Committee, this completes my prepared statement. I would be pleased to  respond to any questions that you may have at this time.
section_title: Contacts and Staff Acknowledgments
paragraphs: For further information about this testimony, please contact me at (202)  512-7215 or bertonid@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this testimony. Other key contributors to the testimony include Keira  Dembowski, Holly Dye, Joel Marus, Sara Pelton and Lori Rectanus.
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