Under the Railroad Retirement Act of 1974, RRB makes independent determinations of railroad workers’ claimed T&P disability using the same general criteria that SSA uses to administer its Disability Insurance (DI) program—that is, the worker must have a medically determinable physical or mental impairment that (1) has lasted (or is expected to last) at least 1 year or is expected to result in death and (2) prevents them from engaging in substantial gainful activity, defined as work activity that involves significant physical or mental activities performed for pay or profit. Railroad workers determined to be eligible for benefits under the T&P program are not expected to be able to return to the workforce. The eligibility criteria for the T&P disability program differ from those of the RRB’s occupational disability program.for benefits under the occupational disability program may be able return to the workforce, but generally may not return to their original occupation. T&P disability benefits are payable to employees with at least 10 years (120 months) of creditable railroad service or to employees with 5 years (60 months) of creditable railroad service after 1995. SSA staff review about one-third of the cases that RRB has determined to be eligible for T&P benefits for which Social Security benefits may potentially be paid. In fiscal year 2012, RRB made 1,254 initial determinations under T&P standards. Of these initial determinations, 977 were approved for benefits. Workers determined to be eligible Claims representatives—staff located in RRB’s 53 field offices—assemble applications, and collect individuals’ employment and medical information needed to support the claim. Once assembled, claims representatives send the files to RRB headquarters for processing, and program eligibility determination. Claims examiners—staff located in RRB headquarters— review the case file documentation and periodically order additional medical examinations to determine whether a railroad worker is eligible for T&P benefits. RRB uses the same definition of disability and evaluates T&P claims using the same criteria SSA uses for the DI program. For example, RRB determines whether the claimant’s impairment is medically disabling. If the claims examiner determines that a claimant has an impairment that meets or equals SSA’s Listing of Impairments (which describes medical conditions that SSA has determined are severe enough to keep the claimant from performing any type of work), the examiner will find that the claimant is disabled. If the claimant’s impairment is not found medically disabling, RRB then determines whether the claimant is able to do his or her past work, or potentially any other work. Together, RRB and SSA coordinate the financing of T&P disability benefits, which totaled almost $276 million in fiscal year 2012. Doing so involves computing the amount of Social Security payroll taxes that would have been collected by certain Social Security Trust Funds if railroad employment had been covered directly by Social Security, as well as the amount of additional benefits which Social Security would have paid to railroad retirement beneficiaries during the same fiscal year. When benefits exceed payroll taxes, the difference, including interest and administrative expenses, is transferred from the Social Security Trust If taxes Funds to the RRB’s Social Security Equivalent Benefit Account.exceed benefit reimbursements, a transfer is made in favor of the Social Security Trust Funds. However, since 1959, such transfers have favored RRB. In the last month of fiscal year 2012, Social Security trust funds financed about 79 percent of total T&P disability benefits (see fig. 1). Once the T&P disability benefit has been awarded, RRB uses continuing disability reviews (CDRs) to determine whether beneficiaries remain eligible for benefits. These reviews can include a determination of whether an individual’s medical condition has improved to the point where he or she is no longer considered disabled, is capable of performing work (whether or not that work involves railroad employment) or whether the individual continues to earn income below allowable program limits. In fiscal year 2012, RRB completed 1,212 CDR activities. The T&P disability program is linked to RRB’s occupational disability program, in that claimants use the same application and medical evidence to apply for benefits under both programs. Figure 2 shows RRB’s disability T&P claims determination process, including how this process relates to the occupational disability claims process. In response to the LIRR fraud incident, RRB implemented a five point- plan to increase its oversight of LIRR employees who file for occupational disability benefits or who are currently receiving occupational disability benefits. Under the five point-plan, RRB: 1. orders its own medical exams for all LIRR claimants to supplement medical evidence provided, 2. conducts continuing disability reviews for all LIRR occupational disability annuitants age 54.5 and younger (as of October 21, 2008), 3. exercises greater oversight of its Westbury field office in Long Island through biweekly phone calls and quarterly visits, 4. collects and plans to analyze data for LIRR claims to detect any unusual patterns, such as impairments and treating physicians that appear more frequently, and 5. collects data on the extent to which LIRR management employees are applying for benefits under the program. In March 2013, RRB reported that a review of 519 occupational disability applications for LIRR employees being handled under the plan resulted in 496 of the applications being granted—an approval rate of about 96 percent. According to the RRB OIG, the approval rate of LIRR occupational disability applicants remains essentially unchanged from when the LIRR fraud incident was made public and is indicative of systemic problems within the program. The procedures RRB uses to verify a claimant’s work and earnings and the severity and duration of physical or mental impairments are inadequate to ensure that only eligible claimants qualify for T&P benefits. Standards for Internal Control in the Federal Government states that agencies should ensure that all transactions and other significant events are clearly documented. This would include determinations that claimants are entitled to benefits under the RRA. Such documentation could facilitate tracing these actions from initiation through completion of the Therefore, current and complete information final claim determination.about a claimant’s work and earnings history and alleged impairment is critical to establishing not only whether claimants are eligible for benefits, but also the correct benefit amount to be paid. Earnings File (MEF).contained within the MEF are for the last complete calendar year, and as a result, the data that RRB uses to determine eligibility may lag behind actual earnings by up to 12 months. However, the most recent earnings information Although RRB requires that claims examiners perform a detailed query of reported earnings in the MEF at the time of their initial determination, our review of case files showed that some determinations were based on data that were as much as 10 months old. Three of the 10 case files we reviewed also did not include sufficient information to allow us to determine what additional steps, if any, were taken to verify that earnings in the year the claims were filed did not exceed program limits. In one of the case files, the claims examiner appeared to rely solely on the claimant’s statement that there were no current earnings and in two others, the claimant provided no information on current year earnings. In discussing this issue, RRB officials noted that claims examiners routinely perform an electronic query of the MEF before a claim is approved for payment but may neglect to subsequently include a printout of the query in the case file. Regardless of this explanation, the absence of this documentation made it difficult to confirm that such queries were performed. As a result, without complete documentation of all evidence used to arrive at the initial determination, RRB lacks the ability to provide reasonable assurance that these determinations are being made in accordance with RRB policies and comply with relevant regulations. Although more current information on work and earnings are available, RRB has not explored these sources of information for T&P claims. According to RRB, its annual match of current RRB beneficiaries against the MEF, which helps target cases for CDRs, could help flag earnings that may go undetected prior to an initial claim being awarded. However, RRB has not reviewed this information to determine if the time lag for reported earnings has resulted in the award of ineligible claims or potential overpayments. In addition, the Department of Health and Human Services’ National Directory of New Hires (NDNH)—established in part to help states enforce child support orders against noncustodial parents— contains quarterly state wage information which is also more recent than the annual wage information included in the MEF. The NDNH also includes data from state directories of new hires, state records of unemployment insurance benefits paid, and federal agency payroll data, all of which can be used to help establish a more recent picture of a claimant’s work and earnings. Access to the NDNH is limited by statute. Although RRB does not have specific legal authority to access it, RRB has considered obtaining access to the NDNH for the purpose of fraud prevention in its unemployment and sickness benefit programs, but abandoned the effort, citing cost as a key reason for not pursuing it further. In May 2011, the agency revisited the issue in the wake of the LIRR fraud incident. Specifically, in May 2011, RRB studied the feasibility of using the NDNH to monitor the earnings level of individuals who are already receiving disability benefits. RRB concluded that it would not provide significant benefits due to costs associated with accessing the database and redesigning its processes; the need for legislation to grant RRB access; and potentially higher workloads, but did not quantify the potential financial benefits. Furthermore, the study did not address whether it would be cost-effective to use the NDNH to obtain more current information about the earnings of people who apply for benefits.