H.R. 1533: PIIA Reform Act

H.R. 1533, the PIIA Reform Act, would create a new federal official the bill calls the Director of Improper Payment Mitigation — nicknamed the "Overpayment Czar" — inside the Office of Federal Financial Management. The Czar would be appointed and removable by the head of the Office of Management and Budget, help agencies spot and prevent improper payments and fraud, and send the Controller an annual report proposing fixes.

The bill widens the net for which programs get extra scrutiny. Any new federal program that pays out more than $100 million in its first year, or is expected to top $100 million in any of its first three years while still in its first four years of operation, would automatically count as "susceptible to significant improper payments." Programs with unresolved Inspector General recommendations get swept in too. An agency head can still exempt a program, but only after a review concludes it isn't actually at risk.

The enforcement is the sharp end. An agency that stays noncompliant for one year would see its highest-level administrative account cut by 5% in that year's final sequestration report; two or more years pushes the cut to 10%. Agencies would also file annual reports for ten straight years on their internal controls, fraud-risk practices, and progress on the 11 leading practices from a 2015 GAO fraud-risk framework.

States get new obligations as well. Starting one year after the bill becomes law, states running TANF, Medicaid, SNAP, Federal-State unemployment compensation, and WIC would have to use payment-integrity tools published by OMB and report every September 30 on how those tools performed. A state that skips the required tools would owe the Treasury an amount equal to the total overpayment in that program. The bill also makes the federal "Do Not Pay" system permanent — removing its three-year sunset — and expands it from screening for payments to deceased individuals to all of the system's authorized uses.