Effective Dates: 12/11/2020 - Present

Identification Number:
GN 02604 TN 39
Intended Audience:See Transmittal Sheet
Originating Office:ORDP OISP
Title:Penalties
Type:POMS Transmittals
Program:All Programs
Link To Reference:
 

PROGRAM OPERATIONS MANUAL SYSTEM
Part GN – General
Chapter 026 – Posteligibility
Subchapter 04 – Penalties
Transmittal No. 39, 12/11/2020

Audience

PSC: BA, CA, CS, DS, ICDS, IES, ILPDS, IPDS, ISRA, PETE, RECONR, SCPS, TSA, TST;
OCO-OEIO: BIES, BTE, CR, FCR, PETL, RECOVR;
OCO-ODO: BTE, CR, CST, CTE, CTE TE, PAS, PETE, PETL, RCOVTA, RECOVR;
FO/TSC: CS, CS TII, CS TXVI, CSR, CTE, FR, OA, OS, RR, TA, TSC-CSR;

Originating Component

OISP

Effective Date

Upon Receipt

Background

This is a Quick Action Transmittal. These revisions do not change or introduce new policy or procedure.

Summary of Changes

GN 02604.430 Administrative Sanction Determination

B.1 - Revised the second bullet to read "A Cooperative Disability Investigation (CDI) unit conducted the OIG investigation and the investigation involves medical allegations; and"

GN 02604.430 Administrative Sanction Determination

Citations:

Social Security Act, as amended in 2004 (P.L. 108-203), §1129A [42 U.S.C. 1320a–8a]; Regulations 20 CFR 404.459 and 416.1340

A. Determining when to impose an administrative sanction

When the Office of Inspector General (OIG) returns a case to the field office (FO) after completing its fraud investigation, the OIG may include factors in the closing memorandum that were relevant to the Office of the Counsel for Investigations and Enforcement's (OCIE) determination that the case did not warrant civil monetary penalty (CMP) action. The FO employee (claims specialist (CS) or claims technical expert (CTE)) reviews the categories to determine what action to take. For a list of the categories, see GN 02604.420D.

NOTE: Effective June 3, 2019, the Office of Counsel to the Inspector General (OCIG) transferred the CMP program to the OCIE. FO staff may continue contacting the attorney on call via e-mail (OCIG.Attorney.on.Call@ssa.gov) to obtain information that will assist SSA in making sanction determinations.

B. Postponing sanction determinations

Postponing sanction determinations:

  • •

    ensures we have all information relevant to the determination; and

  • •

    avoids reopening determinations based on new and material evidence if a medical decision is reversed on appeal.

1. When to postpone sanction determinations

  • •

    The individual has elected Statutory Benefit Continuation (SBC) during a continuing disability review (CDR) appeal; or

  • •

    A Cooperative Disability Investigation (CDI) unit conducted the OIG investigation and the investigation involves medical allegations; and

  • •

    A final medical decision (through Appeals Council) is pending or the appeal period has not expired.

Annotate the Remarks section of the AS Tool with: "Postponing sanction determination per GN 02604.430B."

IMPORTANT: Prepare the sanction determination only after SSA has rendered a final medical decision or the appeal period has expired. Tickle the case to ensure there is no further delay completing the determination.

2. When not to postpone sanction determinations

If the OIG allegation was for false statements on a prior claim but the individual has a new claim pending, do not postpone the determination.

3. Examples of when to postpone and not postpone sanction determinations

Example 1: Mr. Smith receives SSI. During a June 2017 redetermination (RZ), he makes false statements about his living arrangement by concealing the fact that his wife lives with him. The FO refers the case to the OIG. In September 2017, Mr. Smith is medically ceased on a CDR. He files an appeal and does not elect SBC payments. In April 2018, the OIG returns his case to the FO for a sanction determination. The medical appeal is still pending.

Do not postpone the sanction determination. The facts regarding the false statements are non-medical and there are no SBC payments. Therefore, it is unlikely the medical determination will be relevant to the sanction determination.

Example 2: Same facts as Example 1, except Mr. Smith elects SBC in his appeal.

Postpone the sanction determination until SBC payments end. While the false statements are non-medical in nature, the SBC payments must terminate before we can impose the sanction.

Example 3: The CDI unit conducted a fraud investigation because the Disability Determination Services (DDS) suspected Mrs. Jones of exaggerating her medical conditions on her initial claim filed 04/15/17. When the OIG returned the case to SSA, Mrs. Jones still had a hearing pending on her 04/15/17 claim.

Postpone the sanction determination until the appeal period expires on the hearing decision. The ALJ hearing decision might contain additional information relevant to the sanction determination.

Example 4: Same facts as Example 3, except Mrs. Jones does not appeal her 04/15/17 claim. Instead, she files a new application 06/05/18 that is still pending.

Do not postpone the sanction determination because she made the false statements on a closed claim where the appeal period has expired.

C. Documenting the sanction determination

1. What actions to take when documenting a sanction determination

  • •

    Prepare all administrative sanction determinations as formal determinations.

  • •

    Include all relevant information to document the decision on whether to impose or not impose a sanction per GN 02604.415A.

  • •

    Use the preferred method, Form SSA-553-OP1 (Special Determination). Complete the SSA-553-OP1 using the fillable template located in the inForm Library. You may also use the RPOC/DROC screens to complete a sanction determination. Follow the instructions for documenting the determination per GN 01010.360B.2. IMPORTANT: Lock the DROC screen(s) upon careful review and completion to ensure its availability for historical purposes.

  • •

    Fax the OIG closing memorandum along with the prescribed language into the non-disability repository for evidentiary documents (NDRED).

See Also

GN 01010.365 Formal and Informal Determinations

MS 03508.007 Report Of Contact (RPOC)

MS 04422.010 Report of Contact (DROC)

2. When a sanction case does not include an OIG closing memorandum

If a Category 2 case or a combination of Category 2 and Category 3 case is in the AS Tool and the OIG does not include the closing memorandum, but the case has sufficient information (per GN 02604.415A.1) to support that an administrative sanction is appropriate, then process the case without the memorandum. Update the Remarks section of the AS Tool with the following language: "The OIG did not transmit a closing memorandum with this case. This case is a Category___ and has sufficient information as outlined in GN 02604.415A.1 for us to consider imposing an administrative sanction."

3. What to include in the SSA-553-OP1

Record information in a sanction determination using this format:

a. Issue

Briefly state the specific issue. Include:

  • •

    pertinent sections of the Act;

  • •

    purpose of the determination;

  • •

    name and SSN of the individual, claimant, beneficiary, or recipient, and representative payee (if applicable);

  • •

    the false or misleading statement and/or material information the person failed to report; and

  • •

    the timeframe of the allegation(s)

b. Facts

Provide a concise and chronological list of relevant facts. Include:

  • •

    affected program (Title II and/or Title XVI);

  • •

    type of case (i.e., Category 1, Category 2, Category 3 or a combination of Category 2 and Category 3);

  • •

    the SSA, DDS, or OIG office that identified and referred the case;

  • •

    a description of conflicting statements that appeared to be potentially fraudulent (these may be included in the claims file or the report of investigation (ROI));

  • •

    SSA reports that document any overpayment resulting from the allegation(s);

  • •

    SSA records that document a prior determination of fraud or similar fault;

  • •

    FO actions (summarize all reports of contact, contracts, etc.);

  • •

    any other supporting evidence that supports the individual acted knowingly or had knowledge of material information per GN 02604.410A.3;

  • •

    if applicable, whether the CDI unit included an ROI in Section F of the electronic disability folder (eView) or in CFUI;

  • •

    whether the OIG included the closing memorandum; and

  • •

    if applicable, whether the case met the postponed sanction determination criteria per GN 02604.430B.

c. Determination

Provide a clearly stated conclusion based on listed facts. Include:

  • •

    a description of how you evaluated the allegations or evidence accepted, and how you resolved conflicting allegations (if applicable);

  • •

    an explanation of how you decided to impose an administrative sanction rather than some other penalty or no penalty at all;

  • •

    any other actions required due to the administrative sanction (e.g., potential representative payee change); and

  • •

    the level of occurrence and sanction period. EXAMPLE: "This is the individual's 2nd occurrence; sanction period is 12 months."

d. Authority

Cite the authority for the finding that supports the agency's decision to withhold a person's current or future Title II benefits and/or Title XVI payments. The following authorities may apply:

  • •

    Social Security Act, as amended in 2004 (P.L. 108-203) §1129A [42 U.S.C. 1320a-8a]

  • •

  • •

    Regulations 20 CFR 404.459 and 416.1340

e. Signature

The authorized individual completing the determination must sign and date it and include his/her official title. NOTE: The authorized individual's PIN serves as the electronic signature for the RPOC.

  • •

    Determination Made By: Input the name and title of the SSA employee (CS or higher-level staff) who made the sanction determination, as well as the date of the determination.

  • •

    Approved By: Input the name and title of the SSA employee (CTE or higher-level staff) who approved the sanction determination, as well as the approval date (IMPORTANT: Do not list the approving official's name on his or her behalf unless the official is a Regional Sanctions Coordinator (RSC). All approving officials must annotate concurrence in the Remarks section of the AS Tool).

D. Examples of how to document sanction determinations

In this section, see examples of sanction determinations when we decide to impose a sanction and not to impose a sanction. These are examples of how to document a sanction determination, not when to sanction a case.

EXAMPLE 1: decision to impose a sanction

Issue:

Did John Doe Jones (SSN 000-00-0000), willfully and knowingly provide false or misleading information to SSA by denying work activity, concealing earnings and concealing a marriage, which could create an overpayment from April 2014 through May 2016?

Per 20 CFR 416.1340, the purpose of this determination is to address whether SSA should impose an administrative sanction against John Doe Jones based on concealing earnings, marriage, and work activity.

Facts:

  1. 1. 

    FO XXX referred this Title XVI case to the OIG for potential sanction.

  2. 2. 

    This case includes a Category 2 CMP factor.

  3. 3. 

    Unscheduled redetermination (RZ) initiated 06/01/2016 when John Doe Jones visited FO XXX for a benefit verification letter.

  4. 4. 

    During the RZ interview, two years of earnings present on new hire query despite SSI records showing the recipient was not currently working and hadn't worked since 2011.

  5. 5. 

    Employer, ABC Staffing, Inc. (EIN # XX-XXXXXXX), listed on the new hire query, has never been included on John Doe Jones' detailed earnings query.

  6. 6. 

    Claimant was evasive and defensive when asked about working for ABC Staffing.

  7. 7. 

    Contact made with ABC Staffing and employer provided verification of earnings on L4201 dated XX/XX/XXXX.

  8. 8. 

    Medical continuing disability review (CDR) initiated per the OIG's request 07/01/16. Medical continuance issued 09/10/16.

  9. 9. 

    Additional allegation referred to the OIG by DDS for uncooperative and evasive behavior during consultative exams.

  10. 10. 

    Concealment of marital status revealed during medical consultative exam, which is being addressed in the current RZ; marriage date 03/06/14.

  11. 11. 

    John Doe Jones and employer made multiple attempts to revise original report of wages. All reports are inconsistent.

  12. 12. 

    ROI confirmed marriage date.

  13. 13. 

    OIG included the closing memorandum.

Determination:

John Doe Jones made conflicting statements on multiple occasions in multiple field offices regarding work activity and marital status. All statements appear potentially fraudulent. No evidence shows that Mr. Jones did not understand what he was reporting. Therefore, it is determined he knowingly made these false and misleading statements. Decision to impose an administrative sanction based on ongoing concealment, evasiveness, manipulation of information, and conflicting statements made to SSA and authorities with the intention to defraud the programs in place. Overpayment for $18,962.97 created by false claims and concealment of information. This is Mr. Jones' second occurrence. The sanction period is 12 months.

Authority:

Social Security Act, as amended in 2004 (P.L. 108-203), §1129A [42 U.S.C. 1320a–8a]; Regulations 20 CFR 404.459 and 416.1340

Signature:

Determination Made By: (Name), Claims Specialist, Date: XX/XX/XXXX

Approved By: (Name), Claims Technical Expert, Date: XX/XX/XXXX

EXAMPLE 2: decision not impose a sanction

Issue:

Did Jane Doe Jones (000-00-0000), representative payee for Supplemental Security Income (SSI) recipient Frank Doe Jones (000-00-0000), willfully and knowingly withhold information about his incarceration from Social Security and continue to receive his benefits from July 2014 through November 2017, totaling $30,003.00?

Per 20 CFR 416.1340, the purpose of this determination is to address whether SSA should impose an administrative sanctions against Jane Doe Jones based on her failure to report changes that affect Frank Doe Jones' SSI eligibility and payment.

Facts:

  1. 1. 

    FO XXX referred this Title XVI case to OIG.

  2. 2. 

    This case includes a combination of Category 2 and 3 CMP factors.

  3. 3. 

    SSA did not receive a PUPS alert for Frank Doe Jones.

  4. 4. 

    Jane Doe Jones has been Frank Doe Jones' payee since 08/14/2006.

  5. 5. 

    Frank Doe Jones was previously overpaid $14,499.00 due to incarceration from 09/2009-11/2011. SSA collected the overpayment in full.

  6. 6. 

    Payee provided a personal bank statement, from 02/22/2018-03/20/2018 showing a balance of $31,686.47. It appears to be a joint account. Frank Doe Jones' SSI benefits were being deposited into the same account. The account title is in Frank Doe Jones' name only; $30,003.00 was returned to SSA on 05/14/2018.

  7. 7. 

    The Claims File User (CFUI) document 09/08/2014 from Jane Doe Jones dated 07/19/2014 requesting SSA to stop Frank's checks due to his incarceration. His release date unknown.

  8. 8. 

    CFUI 12/22/2014 scanned document received from Frank Doe Jones. In the document, he states that he was incarcerated and requests that SSA stop his checks.

  9. 9. 

    SSA received a letter from Frank Doe Jones from jail 12/16/2014, scanned to CFUI 01/01/2015. Letter requested that SSA stop his SSI benefits.

  10. 10. 

    Representative payee completed representative payee accounting forms. Payee stated that there were no conserved funds 09/01/2014-08/31/2016 and only $812 is being saved for 09/01/2016-08/31/2017. There was no mention of Frank’s incarceration on the accounting forms.

  11. 11. 

    Payee accounting forms indicates that the only money that has been saved was $812. However, claimant's bank account statement has $31,686.47.

  12. 12. 

    OIG closing memorandum not included; followed guidance per GN 02604.430C.2.

Determination:

SSA imposes a sanction when a person makes (or causes to be made) a statement or representation of a material fact for use in determining any initial or continuing right to, or the amount of, monthly insurance benefits under Title II or benefits or payments under Title XVI, if:

  • •

    The statement or representation is false, misleading or omits a material fact which makes it false or misleading; and

  • •

    He or she knows or should know the statement or representation is false, misleading, or omits a fact that the person knows or should know is material and knows or should know that the omission of the fact makes the statement misleading, or the person makes such a statement or representation with a knowing disregard for the truth.

After reviewing the evidence in file and the reasonable inferences that can be drawn, there is insufficient evidence that Jane Doe Jones or Frank Doe Jones knowingly omitted facts that were material for Frank Doe Jones' SSI benefits. Both parties reported the incarceration to the agency. No administrative sanctions imposed. Advised payee to change direct deposit to an account with an acceptable account title. Also, advised payee that, in the future, use the remarks section of the rep payee accounting form to report any changes that would affect Mr. Jones' eligibility for benefits, or the payment amount.

Authority:

Section 201 of the Social Security Protection Act of 2004 (P.L. 108-203) broadened the range of actions that cause a sanction to include failure to report an event that is material to the eligibility or benefit amount if the person knows or should know that failure to report is misleading.

Signature:

Determination Made By: (Name), Claims Specialist, Date: XX/XX/XXXX

Approved By: (Name), Regional Sanctions Coordinator, Date: XX/XX/XXXX

E. Preparing administrative sanction notices

1. What actions to take when preparing notices for Category 2 cases

  • •

    prepare the appropriate notice(s);

  • •

    send copies of the notice(s) to the CTE or other designated employee for review;

  • •

    send the administrative sanction notice(s) and saves the notice(s) to the electronic folder only after the CTE completes his or her review;

  • •

    prepare separate notices for Title II and Title XVI benefits in concurrent cases; and

  • •

    update the AS Tool accordingly.

2. What actions to take when preparing notices for Category 3 cases and cases with a combination of Category 2 and Category 3

  • •

    prepare the appropriate notice(s);

  • •

    send copies of the notice(s) to the RSC for review;

  • •

    send the administrative sanction notice(s) and saves the notice(s) to the electronic folder only after the RSC completes his or her review; and

  • •

    update the AS Tool accordingly.

For more information, see:

GN 02604.420 Monitoring the Development of Potential Administrative Sanctions Cases

GN 02604.435 Imposing the Administrative Sanction

GN 02604.440 Suspense Actions for Administrative Sanctions Cases

GN 02604.455 Title XVI Supplemental Security Income Notices

GN 02604.460 Title II Social Security Notices

F. Regional Sanctions Coordinator (RSC) review

RSCs must review administrative sanction determinations for Category 3 cases and cases with a combination of Category 2 and Category 3 for accuracy (e.g., sanction period, proper person sanctioned).

The CS must forward the administrative sanction determination, draft notice(s), and copies of supporting documentation to the respective RSC. The CS does not take any further action until the RSC responds to the request for review. In addition, RSCs will review Category 2 only cases that have a “special situation” that could make an administrative sanction inappropriate (for example, cases with insufficient information).

NOTE: The RSC may deem a special situation case as sanctionable.

1. Send notices

If the RSC concurs with the determination, documentation, review period and notice(s), the Administrative Sanctions Tool (AS Tool) will send the FO an e-mail alert informing the FO that the case review is complete. The CS may then add the sanction determination to the electronic folder, release the notice(s) and update the AS Tool accordingly.

2. Delay further actions

If the RSC does not concur with the sanction period, sanctioned individual, or the rationale for the determination to impose the sanction, the RSC will contact the FO to discuss and resolve any issues. After the FO and RSC resolve the issues, the FO will receive an e-mail alert that the case review is complete.

3. No sanction cases

If the RSC concurs with the determination not to impose sanctions, the FO will receive an e-mail alert that the case review is complete. The CS may then add the sanction determination to the electronic folder and update the AS Tool accordingly.

 

GN 02604 TN 39 - Penalties - 12/11/2020