Social Security's Improper Payment Exchange Is Overdue, Lawmakers Say

House Ways and Means Committee Chairman Jason Lee, R-Mo., called on the Social Security Administration Monday to immediately implement the "Payroll Information Exchange," or PIE, as it's eight years overdue.

The Bipartisan Budget Act of 2015 authorized the SSA to create the exchange, which is designed to reduce improper payments.

In a letter to Acting SSA Commissioner Kilolo Kijakazi, Smith and two of his colleagues said SSA needs to implement the PIE program immediately. They told Kijakazi to also inform the committee, by Aug. 14, what steps SSA is taking to complete the task and to explain why SSA has delayed taking action.

The PIE program, the lawmakers explained, "will establish data exchanges with payroll data providers to reduce improper payments, improve administration of the DI and SSI benefit programs, and alleviate monthly reporting burdens for beneficiaries."

In 2021, the SSA published a notice in the Federal Register that it planned to implement the PIE.

"However, no regulations have been published and the agency now claims a notice of proposed rulemaking should not be expected until January 2024 — more than eight years after the program was authorized," the lawmakers wrote to Kijakazi.

According to the lawmakers, in fiscal year 2021, Social Security's combined Disability Insurance and Old-Age and Survivors Insurance programs made roughly $2.5 billion in improper payments, nearly $2 billion of which were overpayments.

In FY 2021, Supplemental Security Insurance (SSI) made more than $4 billion in overpayments, the lawmakers state.

"As you are well aware, the Social Security Administration (SSA) is the steward of the federal government's largest expenditure of taxpayer dollars, responsible for managing over $1 trillion in payments to roughly 70 million beneficiaries annually. With a program this size, getting even a small number of payments wrong, whether overpaying or underpaying, can result in billions of dollars of improper payments," the lawmakers wrote.

"Resolving an improper payment once it's occurred not only adds to the SSA's workloads, but more importantly, can be unduly burdensome for a beneficiary. It is therefore imperative that the SSA fully utilize the authorities granted by Congress to limit improper payments before they occur."

PIE Concerns

Mary Johnson, Social Security and Medicare policy analyst for The Senior Citizens League, told ThinkAdvisor Monday in an email that while the Senior Citizens League "strongly advocates for measures to reduce fraud, waste and improper payments, measures and initiatives such as this [PIE] require Administrative funding, which DOES NOT come out of the Social Security Trust Fund — it comes out of the general federal budget which is subject to congressional negotiations."

The question "is whether this ADMINISTRATIVE [PIE] program was ever funded in the first place," Johnson said. "I suspect there may have been an issue with that funding. What we do know is that the Social Security Administration's funding has been repeatedly curtailed in recent years and that has severely impacted customer service."

In 2015, Johnson added, "there was also considerable concern over privacy issues with this [PIE] program."