UIPL14-05_Change1.pdf

ETA Advisory File Text

CLASSIFICATION UI Performs CORRESPONDENCE SYMBOL OWS DPM EMPLOYMENT AND TRAINING ADMINISTRATION ADVISORY SYSTEM U.S. DEPARTMENT OF LABOR Washington D.C. 20210 DATE October 12 2005 RESCISSIONS None EXPIRATION DATE Continuing ADVISORY UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 14-05 CHANGE 1 TO STATE WORKFORCE AGENCIES FROM CHERYL ATKINSON s s Administrator Office of Workforce Security SUBJECT Performance Criterion for the Overpayment Detection Measure Clarification of Appeals Timeliness Measures and Implementation of Tax Quality Measure Corrective Action Plans CAPs 1. Purpose . To inform State Workforce Agencies SWAs of the measurement method and the Acceptable Level of Performance ALP for the detection of overpayments measure to clarify the methods for measuring the average age of pending lower and higher authority appeals and to clarify the implementation schedule for Tax Quality Measure CAPs. 2. References . Unemployment Insurance Program Letter UIPL 14-05 Changes to UI Performs dated February 18 2005 and ET Handbook No. 401 3 rd Edition Change 13 Changes to Form 9055 Appeals Case Aging dated Apri l 18 2005. 3. Background . UIPL 14-05 described changes to the UI Performs performance management system some of which required additional data collection analysis and policy decisions before full definitions and ALPs could be determined. The measures of overpayment detection and the average age of pending appeals were among those for which ALPs were deferred. 4. Average Age of Pending Appeals. Subsequent to the issuance of UIPL 14-05 the Department of Labor DOL received authority to collect data on the age - 2 - of pending lower and higher authority appeals. Instructions for the data collection were issued in Handbook 401 Change 13 dated April 18 2005. That instruction limits the data collection to single-claimant appeals. To assure consistency among the advisories the descriptions of Core Measures No. 8 Average Age of Pending Lower Authority Appeals and No. 9 Average Age of Pending Higher Authority Appeals in attachment C to UIPL 14-05 are being modified to make clear that the measures apply to single-claimant appeals and that the reported data include the median age of all pending single-claimant appeals. The modified pages are attached to this advisory and should be used to replace the original pages. ALP criteria are not yet established. 5. Detection of Overpayments . UIPL 14-05 defines the new Core Measure Detection of Overpayments as the percent of detectable recoverable overpayments established for recovery. Because the measure was new DOL deferred setting a performance level criterion until data for the measure could be assessed. The full definition and the ALP for the measure are presented here. a. The Measure . The measure is a ratio of the 3-year moving average of overpaid dollars a state actually established for recovery as a percent of the 3-year moving average of estimated detectable and recoverable overpayments. The numerator is the 3-year average amount of actual overpaid dollars that are established for recovery as reported on the ETA 227 report Overpayment Detection and Recovery Activities also known as Benefit Payment Control BPC activities . Penalty dollars are excluded. The numerator is subject to measurement variability. The denominator is a sample-based estimate of operational overpayments obtained from three years of Benefit Accuracy Measurement BAM data. The denominator is subject to both sampling and measurement variability. The data collection period of the numerator BPC data begins and ends six months after the denominator BAM data to allow sufficient time to detect and establish overpayments identified through the wage-benefit crossmatch. b. Acceptable Level of Performance . The ALP for the Overpayment Detection Core Measure is 50 percent. This is a minimum performance - 3 - level that all states are expected to meet it is not a goal. States are encouraged to set overpayment detection goals that exceed this level. The ALP will apply to a 3-year average of performance so that the denominator estimated operational overpayments will be based on a larger BAM sample thus reducing sampling variability and improving the precision of individual state estimates. The 3-year time period al so minimizes the effect of differences between the time that overpayments are actually detected and established and the occurrence of errors estimated by BAM and it reduces the measurement variability in BPC overpayment establishment data. National performance has averaged near 56 percent for the last 3 years and two-thirds of the states have attained performance levels exceeding 50 percent. c. Upper Limit . For monitoring purposes DOL has established an upper limit of 95 percent. States cannot generally detect and establish more than 80 -90 of estimated overpayments. When a higher ratio occurs the cause is likely but not certainly the result of inaccurate BPC reporti ng and or less-than-thorough BAM investigations that result in inaccurate low estimates. However a state may establish overpayments in categories that are excluded from the operational rate such as work search issues and Employment Service registration issues. Because these are excluded from the denominator BAM estimates but are included in the numerator BPC establishments the detection ratio can be higher than expected. d. Corrective Actions . The cycle of the UI Performs management system requires planning ahead and the implementation of the changes in the measures must be done in a systematic way so that the state partners know in advance what is expected of them. Because implementation began in 2005 the three year criteria for the overpayment detection measure will not be effective until 2008. The performance period includes BPC data from April 2005 through March 2008 and BAM data from October 2004 through September 2007. DOL will expect any state with performance falling below 50 percent to submit a CAP as part of its Stat e Quality Service Plan SQSP for Fiscal Year FY 2009. In the inter im DOL will expect any state reporting an overpayment detection rate below 50 to explain the reasons for the low performance in the Narrative section of the SQSP. Because the measure is based on a 3-year average poor performance in an early year will remain in the calculation and continue to depress the ratio even as performance improves. To recognize improved performance a - 4 - state whose performance in the most recent performance year meets or exceeds the ALP will not be expected to address performance of the overpayment detection measure in the SQSP for the next fiscal year. DOL will expect any state reporting an overpayment detection rate above 95 to explain the reasons for the very high performance in the Narrative section of the SQSP. If the high performance is the result of a failure to properly administer BAM or BPC activities then the state also must submit in the SQSP a CAP designed to produce valid data for the Overpayment Detection Measure. A CAP is required because the administration of BAM and BPC has a direct bearing on this Core Measure. 6. Tax Quality Measure . As discussed in UIPL 14-05 states are expected to complete CAPs for the Tax Quality Core Measure if either of two 2 conditions exist Four 4 or more functions fail the Tax Performance System TPS review in a calendar year CY or One 1 function fails the TPS review in three 3 consecutive years. This advisory clarifies the implementation dates for Tax Quality Measure CAPs. a. Failure of four or more functions DOL expects any state failing four or more tax functions during the CY 2005 TPS review to produce a CAP for its FY 2007 SQSP. b. Failure of 1 function in three consecutive years As with the overpayment detection measure DOL will expect any state failing the same tax quality function in three consecutive years to submit a CAP as part of its SQSP beginning with the SQSP for FY 2009. The three-year period began with CY 2005. In the interim states will address failing the same tax quality function in three consecutive years in the Narrative section of the SQSP. 7. Action . a. Distribute this document to all appropriate SWA staff. b. In UIPL 14-05 replace Core Measures No. 7 Detection of Overpayments No. 8 Average Age of Pending Lower Authority Appeals and No. 9 Average Age of Pending Higher Authority Appeals in Attachment C with the attached Core Measures pages. - 5 - 8. Inquiries . Direct inquiries to your regional office. 9. Attachments . A. Core Measures Attachment C to UIPL 14-05 No. 7 Overpayment Detection B. Core Measures Attachment C to UIPL 14-05 No. 8 Average Age of Pending Lower Authority Appeals C. Core Measures Attachment C to UIPL 14-05 No. 9 Average Age of Pending Higher Authority Appeals Attachment C Core Measures 7. Detection of Overpayments Measure Percent of estimated detectable recoverable overpayments dollars established for recovery. Change This measure is new in UI Performs. Data Source Benefit Accuracy Measurement BAM and ETA 227 Benefit Payment Control BPC reports. Computation and Criterion The measure is a ratio of overpaid dollars a state actually established for recovery as a percent of the estimated amount of detectable recoverable overpayments. The numerator is the amount of actual overpaid dollars that are established for recovery as reported on the ETA 227 report. The denominator is a sample-based estimate of Operational Overpayments obtained from the BAM data. The denominator is subject to sampling and measurement variability. The ALP for the Detection of Overpayments Core Measure is 50 using a 3-year average of the measure. The upper limit of performance is 95 . Reporting Categories None. Reporting Frequency Quarterly. - 7 - Revised September 2005 Details for the Computation of the Detection of Overpayments Measure The amount of overpayments actually established through state BPC operations as a percent of the amount that the BAM program estimates states can detect and establish for recovery through BPC operations. Overpayments Established BPC UI Payment Accuracy Measure X 100 Estimated Overpayments BAM The data collection period of the numerator BPC data begins and ends six months after the denominator BAM data to allow sufficient time to detect and establish overpayments identified through the wage-benefit crossmatch and appeals reversals. BAM Operational Overpayment Rate Definition The BAM estimate is an operational overpayment rate. The operational rate includes those overpayments that are generally agreed to contain overpayment errors that the states can be reasonably expected to detect and establish for recovery. Certain categories of overpayments are excluded from this rate work search issues Employment Service registration issues base period wage issues and certain miscellaneous causes. The BAM operational overpayment rate includes UI benefits that BAM determined were overpaid and meet the following criteria Key Week Action BAM b errisu table data element ei2 The code that specifies the type of overpayment error that the BAM investigation identifies for the compensated week of unemployment referred to in BAM as the key week . 10 Fraud overpayment voided offset 11 Nonfraud recoverable overpayment voided offset - 7a - Error Cause b errisu table data element ei3 BAM assigns each payment error a cause code. The following causes are included in the BAM operational overpayment rate a In the Benefit Year unreported or errors in reporting recording earnings or days hours of work affecting the Key Week due to 100 Unreported concealed earnings or days hours of work 110 Earnings or days hours of work incorrectly estimated reported recorded or deducted 120 Errors in reporting or unreported Severance Pay 130 Errors in reporting or unreported Vacation Pay 140 Errors in reporting or unreported Social Security or Pension Benefits 150 Other causes related to reporting or recording of earnings or days hours of work b Separation Issues due to 300 Voluntary Quits 310 Discharges 320 Other causes related to separation issues c Eligibility Issues due to 400 Ability to work 410 Availability for work 430 Refusal of suitable work 440 Self-employment 450 Illegal alien status 470 Other causes related to eligibility issues 480 Identity theft d Dependents Allowances incorrect due to 500 Dependents information incorrectly reported recorded or allowance incorrectly calculated 510 Other causes related to dependents allowances - 7b - The following overpayment errors are excluded from the BAM operational overpayment rate Key Week Action BAM b errisu table data element ei2 12 Nonfraud nonrecoverable overpayment or official action taken to adjust future benefits by decreasing weekly benefit amount WBA maximum benefit amount MBA dependents allowance DA or remaining balance RB 13 BAM determines payment was too large although payment is technically proper due to finality rules 14 BAM determines payment was too large except for formal warning rule that prohibits official action. Payment technically proper due to law rules requiring formal warnings for unacceptable work search efforts 15 BAM determines payment was too large although payment technically proper due to rules other than finality or formal warning rule 16 Overpayment established or WBA MBA DA or RB decreased which was later officially reversed revised adjusted or modified and BAM disagrees with official action e.g. Appeals unit reverses BAM determination and BAM disagrees The following causes are excluded from the BAM operational overpayment rate Error Cause b errisu table data element ei3 a In the Base Period errors in reporting recording earnings or weeks days or hours of work affecting the key week due to 200 Earnings or weeks days hours of work incorrectly estimated reported or recorded 210 One or more base period employers not reported by claimant 220 Other causes related to errors in reporting or recording earnings or weeks days hours of work for base period b Eligibility Issues due to - 7c - 420 Active work search 460 Job Service registration c Other Causes due to 600 Benefits paid during a period of disqualification even though a stop-pay order was in effect 610 Redetermination at deputy level or reversal appeal or higher authority 620 Back pay award 630 All other causes Estimated Amount Overpaid and Weighting BAM records the total whole dollar amount of the overpayment error for the compensated week of unemployment key week as determined by the BAM investigation. Dollars that affect weeks other than the key week are excluded. This information is coded in Dollar Amount of Key Week Error b errisu table data element ei1 . This amount is multiplied by a weight to estimate the amount that the overpayment error represents in the population. The weight is equal to the number of weeks of unemployment compensation paid during the week that the BAM sample was selected b comparison table data element cm2 divided by the number of completed BAM sample cases for that week. For example if the state issued 5 000 UI payments during the week and BAM sampled and investigated 10 payments each completed case would carry a weight of 500 5 000 10 . The weighted amounts overpaid are summed for the 52 weekly samples and divided by the weighted amount of UI benefits paid to the claimants in the sample b master table data element f13 . This ratio is then multiplied by the amount of UI benefits paid in the population of UI weeks paid from which the samples were selected b comparison table data element cm4 . The result is the estimated UI overpayments that states should be able to detect and establish for recovery through BPC. Amount of Overpayments Established The amount of UI overpayments established through BPC is reported on the ETA 227 report line 110 columns 4 UI 5 UCFE UCX excluding penalty assessed for fraud reported on line 109 columns 4 5. - 7d - Attachment C Core Measures 8. Average Age of Pending Lower Authority Appeals Measure The mean and median of all pending single-claimant Lower Authority Appeals. Change This measure is new in UI Performs. It takes the age of all pending single-claimant appeals into account and allows prediction of and planning for future performance. Data Source Universe of pending single-claimant Lower Authority Appeals ETA 9055. Computation and Criterion At the close of business on the last day of each month access the universe of pending single-claimant Lower Authority Appeals. Determine actual age of each pending single- claimant Lower Authority Appeal by counting days elapsed from the date of filing to the date of count. Sum actual age in days of all pending single-claimant Lower Authority Appeals and divide by the total number of pending Lower Authority Appeals to arrive at the average age. Determine the median age of all pending single-claimant lower authority appeals using the following formula. If all of the pending appeals cases lower or higher authority are ranked from the lowest to the highest age the median is the age of the case at the midpoint of the ranked cases. If there is an odd number of cases n the median is the age of the n 1 2 th case. If there is an even number of cases n the median is the value midway between the age of the n 2 th case and the n 2 1 th case. The criterion will be determined after twelve months of data have been recorded. Reporting Report the average age and median age as determined by the above computations. Reporting Categories None. Reporting Frequency Monthly - 8 - Revised September 2005 Attachment C Core Measures 9. Average Age of Pending Higher Authority Appeals. Measure The mean and median of all pending single-claimant Higher Authority Appeals. Change This measure is new in UI Performs. It takes the age of all single-claimant pending appeals into account and allows prediction of and planning for future performance. Data Source Universe of pending single-claimant Higher Authority Appeals ETA 9055. Computation and Criterion At the close of business on the last day of each month access the universe of pending single-claimant Higher Authority Appeals. Determine actual age of each pending single- claimant Higher Authority Appeal by counting days elapsed from the date of filing to the date of count. Sum actual age in days of all pending single-claimant Higher Authority Appeals and divide by the total number of pending single-claimant Higher Authority Appeals to arrive at the average age. Determine the median age of all pending single-claimant higher authority appeals using the following formula. If all of the pending appeals cases lower or higher authority are ranked from the lowest to the highest age the median is the age of the case at the midpoint of the ranked cases. If there is an odd number of cases n the median is the age of the n 1 2 th case. If there is an even number of cases n the median is the value midway between the age of the n 2 th case and the n 2 1 th case. The criterion will be determined after twelve months of data have been recorded. Reporting Report the average age and median age as determined by the above computations. Reporting Categories None. Reporting Frequency Monthly - 9 - Revised September 2005