No pulse, no pay: How the 'Do Not Pay' list will work

Vice President Joe Biden has announced the creation of a comprehensive federal Do Not Pay List of contractors and individuals ineligible to receive payments from the government.

The goal of the Do Not Pay List is to reduce improper payments to dead people, debarred contractors, individuals found guilty of federal tax fraud, fugitives and felons, Biden said during a White House briefing. Federal improper payments totaled $110 billion in fiscal 2009, including $180 million paid to 20,000 deceased Americans and $230 million to fugitives or incarcerated felons.

The Do Not Pay List will be distributed to all federal agencies to review and to check against their pre-payment procedures, Biden said.

“We are making sure payments are not going to the deceased, and payments are no longer going to suspended contractors,” Biden said. “There will be no IRS payments to defrauders, and no benefits for excluded parties.”

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The White House issued the memorandum today directing that the list be established.

The list will provide “a single source through which all agencies can check the status of a potential contractor or individual,” White House budget director Peter Orszag wrote in a blog entry today. “Too often, an agency does not check all the different databases the government has or finds it difficult to do so. This denies agencies essential information they need to determine, for example, if an individual is alive or dead or if a contractor had been debarred.”

Biden and Orszag also said that new software fraud-fighting tools are being used to audit federal spending data and search for discrepancies. The software tools were first applied for risk management of economic stimulus law spending by the Recovery Accountability and Transparency Board, and now will be applied more broadly, initially for the Medicare and Medicaid programs, Orszag said.

Medicare and Medicaid together accounted for $65 billion of the improper payments, including $47 billion for Medicare.

An OMB source said today that the Centers for Medicare and Medicaid Services is applying the anti-fraud software tool from the recovery board in a pilot application. If successful, there will be a competitive bidding process to select a contractor to provide that tool or similar tools, the source said. The name of the software vendor was not immediately available today.