The full PDF in which this article appears can be found in BIFOCAL Vol. 42, Issue 3.
Almost four million older adults and adults with disabilities have representative payees appointed by the Social Security Administration (SSA) to manage their Social Security or SSI payments. How does SSA determine if a payee is needed? How do SSA staff select a payee? How do they choose an individual versus an organizational payee? What are the considerations in long-term care residential facilities serving as the payee? What about guardians serving as payee? How and to what extent does SSA maintain consistency in payee determinations?
In 2018, the Social Security Advisory Board (SSAB) charged researchers at Virginia Tech and the ABA Commission on Law and Aging to conduct an independent study focusing on these compelling questions. The study team addressed SSA processes for selection of payees for adults. The underlying assumption was that a better understanding of selection practices ultimately could lead to process improvements, as well as a reduction in the potential for misuse and abuse of beneficiary funds while maintaining beneficiary rights.
Background: The SSA Payee Selection Process
Representative payees manage SSA beneficiary funds to cover basic expenses such as food, clothing, shelter, and medical care. Payees are "fiduciaries" - agents appointed to make financial decisions on behalf of another person and must act with high standards of trust and accountability. Therefore, appropriate SSA processes that manage the vast number of payees are critical.
SSA payee management includes three related functions: (1) determining if a payee is needed, (2) selecting the most suitable payee in the beneficiary's best interest, and (3) overseeing payees to prevent or address misuse of funds. These functions are largely performed by staff and management working in over 1,200 SSA field offices. In carrying out these functions, staff must balance beneficiary financial decision-making rights with their protection. Field office staff make complex decisions in the context of limited time and resources.
A beneficiary, someone who knows the beneficiary, a state disability determination service, or an administrative law judge may indicate that the beneficiary needs help in managing Social Security or SSI payments. An employee at a local Social Security field office examines evidence to determine whether the beneficiary can manage his or her funds and receive payment directly, or whether a payee should be appointed. If a payee is necessary, the SSA employee selects a payee to manage the funds in the beneficiary's best interest. Generally, the payee is a family member or friend or could be someone else, including a court-appointed guardian. When there is no such individual available and suitable, SSA staff seeks a qualified organization to serve.
Organizational payees include social service agencies, institutions, state or local government agencies, or financial institutions that manage funds for persons who are unable to do so. An institutional payee is a facility that provides care and treatment for beneficiaries residing there (e.g., nursing homes, hospitals, assisted living, group homes). Fee-for-service payees are organizations authorized by SSA to collect a fee for providing payee services from a beneficiary's monthly Social Security or SSI payment.
The primary source of information for SSA field office staff is the SSA Program Operations Manual SystemThe POMS provides detailed guidance for staff in deciding whether a payee is necessary and in selecting the most suitable payee. It includes a preferred payee "order of preference" chart for selecting individual and organizational payees. Using POMS guidance, SSA staff must make critical determinations to protectbeneficiary needs and rights.
Research on Payee Selection for Adults
In September 2020, Virginia Tech and ABA Commission researchers released a study onconducted for SSAB. The study used a two-phased mixed methods approach for gathering data.
The research team conducted face-to-face interviews with 10 members of SSA field office management and 63 employees in eight field offices across the country. Based on emergent themes from these interviews, the team developed a survey with input from leadership of the National Council of Social Security Management Associations (NCSSMA) as well as SSA staff and SSAB Board members. In 2019, NCSSMA sent the survey to over 3,000 members nationwide and received 584 responses.
The interviews and survey formed the basis of the landmark report - the first such intensive examination of payee selection processes ever produced. The full study includes findings on SSA processes as well as on basic factors affecting beneficiary rights. The 35 recommendations cover key changes in SSA policy and guidance; administration of the program; forms and technology; and training and research, including the highlights below.
Beneficiary Capability and Payee Selection
Field office staff constantly walk a fine line, seeking to balance the harm to beneficiaries' self-determination in controlling their funds with the potential for harm from mismanagement or loss of funds without a payee.
Meeting with Beneficiary<\/u>. An important element in determining capability is meeting with the beneficiary, either face-to-face or remotely. One-third of field office managers surveyed said that such a meeting does not occur for beneficiary residents of long-term care facilities. Direct resident contact would offer important evidence needed to make informed decisions. The COVID-19 pandemic has demonstrated ways of communicating with facility residents virtually - methods that could be supported by SSA.
Supported Decision-making<\/u>. Decision supports and supported decision-making allow beneficiaries to make their own decisions with help from people they trust as well as help from practical, technological, and community options. According to the POMS, a capability determination rests on whether a beneficiary can manage or direct the management of benefits. Thus, the person may be able to make decisions about managing benefits but needs someone to help in understanding the choices and in implementing the decisions. More specific SSA guidance and training of SSA staff may reduce unnecessary payee appointments.
External Evidence of Capability.<\/u> According to SSA guidance, field office staff must presume that a beneficiary is capable of managing his or her benefits, but when capability is in question, staff should examine both lay and medical evidence. The study revealed problems with external evidence that interfere with capability determination efficiency and clarity. For example, the interviews and survey findings show that delays or failure of physicians to return the medical form on beneficiary capability reduces the timeliness of selection decisions and staff consideration of medical information that bears on capability. Moreover, physicians in practice tend to use the form to report diagnoses rather than identify specific functional findings such as examples of abilities, limitations, and supports for managing financial
Casework Quality and Staff Workload
Training<\/u>. The study recommended that SSA consistently conduct and update staff training on payee selection. Staff and managers reported that live (remote or in-person) training would improve quality. New staff members rely heavily on mentors, who must be thoroughly up-to-date on SSA requirements and have sufficient time allocated for guidance.
Case Review<\/u>. The research found that frequently there is no review of staff payee selections. Over half of managers surveyed said that such review rarely or never occurs. Combined with workload pressure, this omission opens the door for inconsistencies that could unfairly affect beneficiaries. A protocol for consistent review of payee cases would strengthen casework quality and protect beneficiary rights by providing a second set of eyes on each case determination.
Documentation<\/u>. The SSA electronic Representative Payee System (eRPS) requires that employees document payee selection and the reasons behind it. Over time, different staff members may be faced with handling the same case and must be thoroughly informed about the circumstances -- including factors such as payee proximity, family conflict, beneficiary preferences, substance abuse, and criminal history. Thorough, consistent documentation is essential.
Field Office Staff Workload.<\/u> Interviews revealed that constant time pressure on SSA field office staff can adversely affect investigation and documentation. Over three-quarters of surveyed field office managers emphasized that staff workload has increased to the point that it negatively impacts payee selection. Potential solutions include increasing field office staffing, assessing the potential for specialization (especially in large offices), upgrading the payee system software, providing additional guidance in the time-consuming process of making payee changes, and in some cases, increasing the number and quality of organizational payees.<\/u>
Guardians as Payees
Guardians are high on the POMS preference list for payee selection because the court has already approved them as a fiduciary. Our interviews revealed that some SSA staff select guardians as payees without additional inquiry. One in three managers surveyed said that guardians are always selected as payees. Encouraging additional field office scrutiny of guardians may help in selecting payees who will best meet beneficiary needs.
Additionally, national studies have highlighted that, while state courts with guardianship jurisdiction and the SSA payee program serve essentially the same population, there is very little coordination or information sharing between the twoBetter information sharing could help to address misuse and abuse of payee benefits.
Organizational Payees; Institutional Payees
Adequacy of Organizations in Serving Beneficiaries<\/u>. SSA staff interviews and management survey responses were mixed in their views as to whether organizational payees offer beneficiaries greater access to resources than do individual payees - and whether the organizations have enough employees to adequately serve adult beneficiaries. Study findings suggest that SSA establish criteria for adequate organizational payee staffing and responsibilities. It noted that non-profit social service agencies providing other services to beneficiaries -- such as mental health counseling, housing assistance, and supported financial decision-making -- may offer greater beneficiary resources than other organizational payees that are not providing such services.
Fee-for-Service (FFS) Organizations<\/u>. Most staff interviewed considered FFS organizations a last resort, since they are paid from beneficiary funds. While SSA employees found some local FFS organizations helpful, they described others that were not fulfilling duties and were in fact simply "conduit payees" doing no more than transferring the funds to the beneficiary - which SSA should identify and prohibit.
Institutional Payees<\/u>. Facility payees such as nursing homes present a conflict of interest in that they are providing beneficiaries with services for payment. The study suggests that SSA needs more tools to determine whether facility selection is in the beneficiary's best interest. Additionally, some interviewees said that beneficiaries and family members should receive more information on facility payee services and that facility payees need outreach and training about their duties from SSA staff involved in the process.
Nearly half of managers surveyed said facilities require that they be designated as their clients' payees. This requirement raises concerns that facilities may be overriding what should be an SSA staff determination of suitability and beneficiary needs. SSA should prohibit selection of facilities with such requirements.
The research team discovered inconsistencies in how payees are selected. While SSA staff need flexibility and a certain amount of discretion in selection, certain inconsistencies may result in unfair practices and could create hardships for the beneficiary. For example, the research team found evidence of selection inconsistencies in meeting with the beneficiary and payee, and in determining whether someone with a history of substance abuse or a criminal history may serve as a payee. Such issues could be addressed by increasing staff guidance and conducting remote or in-person training.
The study highlights practical approaches to improve representative payee appointment and selection in the current SSA program - including short-term, mid-term, and long-term recommendations. Some of the suggested changes have a high fiscal impact (e.g., increased field office staffing for payee selection), while for others, the cost is minimal (changes in forms). Taken together, the recommendations aim to create efficiencies in payee selection for SSA staff, improve the performance of payees, and protect beneficiary rights.
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