Identification Number:
GN 00506 TN 20
Intended Audience:See Transmittal Sheet
Originating Office:ORDP OISP
Title:Payment for Representative Payee Services
Type:POMS Transmittals
Program:All Programs
Link To Reference:
 

PROGRAM OPERATIONS MANUAL SYSTEM
Part GN – General
Chapter 005 – Selection of Representative Payee
Subchapter 06 – Payment for Representative Payee Services
Transmittal No. 20, 10/04/2022

Audience

PSC: CA, CCE, CS, ICDS, IES, ISRA, RECONR, SCPS, TSA, TST;
OCO-OEIO: BET, CCRE, CR, CRS, CTE, FCR, PETL, RECONR;
OCO-ODO: CCE, CR, CST, CTE, CTE TE, DSE;
FO/TSC: CS, CS TII, CS TXVI, CSR, CTE, DRT, FR, OA, OS, RR, TA, TSC-CSR;

Originating Component

OISP

Effective Date

Upon Receipt

Background

We are updating three POMS sections on fee-for-service (FFS) payees to clarify our rules on when a payee must obtain our authorization to charge a fee for payee services, when a payee collects fees from other sources, and how to certify that a payee meets the requirements to charge a fee.

Summary of Changes

GN 00506.001 Fee for Service - Overview

We are updating Section B in this POMS to:

  • emphasize the requirement that SSA must authorize any fees collected from the beneficiary;

  • clarify compensation from other sources do not require SSA's authorization; and

  • ensure the beneficiary's needs are met prior to a payee collecting a fee.

GN 00506.220 When Fees for Service Cannot Be Collected

We added a bullet to the list in section A to clarify that a payee may not collect a fee if the monthly benefit amount does not cover that month’s expenses. We also updated the Exception language in section A to include language that a payee can receive funds for providing representative payee services from a source other than the beneficiary.

We also updated the examples in section B to explain how a payee reduces the fee amount that it charges the beneficiary when it collects a partial fee from another source.

 

GN 00506.420 Fee-for-Service Certification Process

We updated the language in section A to clarify the FFS certification process applies to both state and local government agencies and community-based, non-profit social service payee organizations.

We updated the language in section B to clarify the servicing FO is responsible for certifying the continuing eligibility of each FFS payee in years where there is no site review.

We re-worded the language in section C.1 to clarify additional steps technicians must take if the payee is a non-governmental organization.

We updated the language in section C.2.b to plain language.

GN 00506.001 Fee-for-Service - Overview

CITATIONS:

Sections 205(j)(4) and 1631(a)(2)(D) of the Social Security Act;

A. Introduction

Section 5105 of the Omnibus Budget Reconciliation Act of 1990 (OBRA), Pub. L. No. 101-508, included a provision permitting qualified organizations to collect a fee. This fee is collected from the beneficiary and is used for expenses (including overhead) incurred by the organization in providing services performed as the beneficiary's representative payee. This provision was effective from July 1, 1991 until July 1, 1994.

Section 201 of the Social Security Independence and Program Improvements Act of 1994 (SSIPIA), Pub. L. No. 103-296, extended the authority for qualified organizations to collect fees for representative payee services beyond July 1, 1994. It also changed the definition of “qualified organization” and increased the allowable fee amount in certain circumstances, effective December 1, 1994.

Effective September 1, 2004, section 104 of the Social Security Protection Act of 2004 (SSPA), Pub. L. No. 108-203, requires fee-for-service (FFS) representative payees to forfeit its fees for any month during which they are found to have misused all or part of a beneficiary's benefits. In addition, effective April 1, 2005, section 102 of the SSPA requires non-governmental fee for service representative payees to be bonded and to be licensed in each state in which they serve as representative payees, provided that licensing is available in the state.

B. Policy - General

Before an organization begins collecting a fee from a beneficiary, SSA must authorize it in writing. We must authorize any fee collected from the beneficiary, including fees taken from the beneficiary’s Social Security benefit as well as fees taken from some other source of funds belonging to the beneficiary.

Note: 

Some payees receive payment for payee services from sources other than the beneficiary, such as from a third-party payer (e.g. a state program). Payees do not need to obtain approval from SSA to receive fees from a third party for services provided to a beneficiary because these funds do not belong to the beneficiary (see GN 00506.220A).

The payee may choose to collect a lesser fee or none at all. The payee must ensure that the beneficiary's needs are met before it collects a fee from the beneficiary. In months where the beneficiary does not have enough funds to cover living expenses, the payee cannot collect a fee. The organization will not lose FFS status, as long as it continues to meet all the requirements listed in GN 00506.001C.

C. Policy - Qualification Requirements

To qualify as a FFS organization, the payee must be either:

  • a state or local government agency, OR

  • a community based, non-profit social service agency, that is bonded and licensed by each state in which it serves as a representative payee (if licensing is available).

Additionally, the organization must:

  • regularly provide representative payee services to at least five beneficiaries, AND

  • demonstrate that it is not a creditor of the beneficiary. Refer to GN 00502.135 when the representative payee is a creditor.

D. Procedure

1. Role of the Servicing Field Office

The FO serving the organization's address is responsible for:

  • furnishing information to interested organizations on how to apply to collect fees for payee services;

  • assisting the organization with all steps of the FFS application process, explaining what documents are required, and explaining the FFS responsibilities and compliance procedures;

  • approving or denying applications to collect fees;

  • issuing decision notices to applicant organizations;

  • entering the Fee for Service data in the Fee for Service screen on eRPS, in accordance with MS 07414.008;

  • notifying affected beneficiaries that fees may be collected and the amounts of the fees;

  • notifying organizations about which beneficiaries can be charged the DAA higher fee based on their secondary diagnosis;

  • ensuring continued suitability and continued eligibility to collect fees (for example, annual certification and quick response checks).

    NOTE: Your regional office may re-direct some of these work assignments to cadre teams.

2. Role of Non-Servicing Field Office, PSC, or TSC

Components not serving the organization's address are responsible for:

  • referring inquiries from interested organizations to the servicing FO using current routing procedures; and

  • notifying the organization that the request was transferred to the servicing field office of jurisdiction.

3. Role of the Organization

The organization is responsible for:

  • furnishing SSA with all evidence needed in a timely manner so that a determination can be made as to whether the organization is qualified to collect a fee;

  • adhering to SSA guidelines when collecting fees; and

  • producing documentation of the fees collected upon request from SSA.

E. References

GN 00506.100, Criteria for Receiving Fees for Services

GN 00506.220, When Fees for Service Cannot Be Collected

GN 00602.110, Reimbursements for Payee Services

GN 00502.020A.4., DAA Condition

http://www.socialsecurity.gov/payee/fee_fact_sheet.htm, Fee for Service Fact Sheet

GN 00506.220 When Fees for Service Cannot Be Collected

A. Policy

A fee cannot be collected from a beneficiary if any of the following apply:

  • No payment is due for that month, or

  • The organization was determined to have misused the beneficiary’s funds in the month, or

  • The organization is receiving compensation, including court/guardianship fees, for performing any representative payee services for the individual from another source (that equals or exceeds the payee’s allowable fee), or

  • The payee did not perform payee services for the month, or

  • The payee serves fewer than five beneficiaries, or

  • The monthly benefit amount does not cover the beneficiary's living expenses for that month.

NOTE: If a retroactive payment is received for a month in the past, (and no benefits were received in that month) the payee can collect the fee for that month as long as it meets all the requirements outlined in GN 00506.130 B.1.

EXCEPTION: A payee can collect a fee from a source other than the beneficiary, such as a third-party payer. Fees that the payee collects from sources other than the beneficiary do not require our authorization. If the fee collected from a source other than the beneficiary equals or exceeds the allowable fee amount in GN 00506.200, the payee may not collect any additional fee from the beneficiary for providing payee services. If a payee collects a fee from another source in addition to Social Security, the total fee collected cannot exceed the amount authorized by SSA. Allowing the payee to collect a portion of the fees from another source is favorable to the beneficiary since it will be less money taken from their benefits.

B. Examples

1. Payee dropped below the five-beneficiary minimum

A beneficiary received a retroactive check in January 2021. This check covered past due benefits for the months of April through December 2020. Catholic Charities has performed payee services since April 2020. In June 2020, Catholic Charities dropped below the five-beneficiary minimum. Therefore, it cannot collect any fees for the months of June through December 2020. It could collect a fee for April and May 2020.

2. Partial fees collected from another source

A fee-for-service payee collects $23 per month in fees from a state agency as payment for payee services in that month for each beneficiary it serves.

Due to the payment, the payee must reduce the fee it charges its beneficiaries by $23 for each beneficiary. For example, a beneficiary with a DAA Condition receives $400 per month. Since the payee can only collect the lesser of 10% of the combined Title II and Title XVI monthly payment or the amount listed in GN 00506.220, the maximum total fee that the payee may collect is $40 (i.e., 10% of $400 is $40). Accordingly, in this instance, the payee may collect a fee from the beneficiary of $17 ($40 minus $23 equals $17).

3. Beneficiary incarcerated

An SSI beneficiary was arrested and incarcerated on July 4, 2021. She spent 30 days in the county jail, and then on August 5 she was sentenced to six months and transferred to the state penitentiary. In addition to SSI, the beneficiary receives a monthly private pension. The payee did not report the incarceration until October 15, 2021. The payee continued to act as such, and paid the beneficiary’s bills. The payee thought she (the payee) could still charge a fee from the beneficiary, because she alleged she continued to write out monthly checks to the landlord and the utility companies to keep the beneficiary’s apartment while she was in jail. In this instance, the payee must refund the fees collected for the months of incarceration since benefits were not due for these months.

GN 00506.420 Fee-for-Service Certification Process

A. Background on Fee-for-Service Payees

The servicing field office (FO) authorizes qualified representative payee organizations to collect a fee from the beneficiary. State and local government agencies and community-based, nonprofit social service payee organizations must meet specific requirements (see GN 00506.001C) in order to be authorized to collect a fee, and must continue to satisfy those requirements to remain eligible to collect a fee. SSA will verify that organizational payees continue to meet the requirements as part of our monitoring program.

B. Policy for certifying Fee-for-Service Payees

The servicing FO is responsible for annually certifying the continuing eligibility of each Fee-for-Service (FFS) payee in years where there is no site review. Generally, the Regional Offices (RO) will create a list of organizations to be certified and forward that list to the Area Director Offices (ADO) and/or the servicing FOs.

C. Procedure for certifying Fee-for-Service Payees

1. What to verify?

To certify a FFS payee, technicians must verify the FFS payee organization continues to provide payee services to five or more beneficiaries (see GN 00506.100B.3.a). Additionally, if the payee is a non[-governmental organization, technicians must verify that the payee:

  • Continues to meet all the FFS community-based criteria (see GN 00506.100B.2.a);

  • Continues to be bonded and licensed (provided that licensing is available in the State) (see GN 00506.100B.2.c); and

  • Continues to be tax-exempt under section 501(c) of the Internal Revenue Code.

If any independent audit has been performed since the previous certification, the payee must provide the audit results.

2. How to verify continued eligibility

Continued eligibility to collect a fee for payee services is verified in two ways:

a. Periodic Review

Protection and Advocacy agencies (P&A) conduct all representative payee reviews on behalf of SSA, per GN 00605.635B. The Representative Payee Monitoring Tool (RPMT) automatically lists when an FFS payee is due for its three-year review.

The P&A gathers information from FFS payees regarding certification, per the operational P&A business process document (BPD). Based on the information provided to SSA by the P&As, the RO must determine whether the organization can continue to collect a fee, per GN 00605.677B.8.

b. Annual Certification

For the remaining payees not selected for a review during the current year, the FO will query eRPS to verify that they actively serve as payee for at least five beneficiaries, and for non-governmental organizations, that they still meet the community-based criteria in GN 00506.100B.2. Contact the payee by mail or telephone requesting copies of the current bonding, licensing agreement, proof of section 501(c) tax-exempt status, and audit forms. If the contact is by phone, document the file using the Fee-for-Service Information screen in eRPS (see MS 07414.008).

 

File a copy of all of the certification documentation in the FO precedent file.

NOTE: Request a copy of the entire bond/insurance contract, if it is not already in the precedent file. If a copy of the contract is already in the precedent file, and the contract has not changed, a declaration page is sufficient. Be certain to verify that bond/insurance coverage includes all of the officers and/or owners and employees. Contact the licensing board or bonding agent if necessary to resolve discrepancies or concerns.

3. Documenting the FFS certification in eRPS

On the FFS screen in eRPS, enter any updated information, the date of last certification, and the diary date for next certification.

4. Examples of documenting the FFS certification in eRPS

a. Example 1

A site review was conducted on 03/15/18. The payee serves 124 beneficiaries and is bonded for $250,000 through 01/15/19 with Aetna Insurance. Enter 03/18 as date of last site visit and date of last certification. Enter 01/19 as date for the next certification and 03/21 as the diary date for next site visit. Complete all other applicable items on the Fee-for-Service Information screen in eRPS (see MS 07414.008).

b. Example 2

A payee had continued certification verified on 02/12/18. The payee serves 16 beneficiaries, and the FO received a copy of the operating license from the State of Hawaii, which expires on 06/01/21. Enter 02/18 as date of last certification and 02/19 as date of next certification.

5. Notice requesting information for the annual certification

Use the notice provided in NL 00703.946.

The notice can be reproduced locally or incorporate it into the Document Processing System (DPS).

When the annual certification is complete, submit copies of the below documents to the regional representative payee coordinator and make sure that copies are in the FO precedent file:

  • site review forms (if a triennial review was completed this year);

  • bond/insurance contract;

  • license, provided that licensing is available in the state;

  • proof of tax-exempt status, and;

  • eRPS Fee-for-Service Information screens.

D. References

  • GN 00506.001C. Fee for Services-Qualification Requirements

  • GN 00506.110B.5. Reviewing Evidence in a Fee for Services Request

  • GN 00506.170B. Establishing Information on Fees for Service Organizations and the Beneficiaries They Serve


GN 00506 TN 20 - Payment for Representative Payee Services - 10/04/2022