HB 1658 (2012, passed House) welfare fraud

posted Apr 7, 2012, 9:18 AM by Bill Duncan   [ updated Apr 7, 2012, 9:23 AM ]
Docket



AN ACT establishing an income and identity verification system for public assistance recipients; relative to the department of health and human services payment of residential care services; and relative to implementation of the Sean William Corey pilot program.

SPONSORS: Rep. Kurk, Hills 7

COMMITTEE: Finance

AMENDED ANALYSIS

This bill:

I. Establishes an income and identity verification system for public assistance recipients.

II. Makes funds available to the department of health and human services for payment of certain residential care providers.

III. Directs the department of health and human services to implement the Sean William Corey pilot program, a previously enacted program to provide home health aide services for medically fragile children.

Report on welfare fraud in NH gets hard look

Conflicting views:
Speaker O’Brien sees big problem; Family Services director not so sure.

By GARRY RAYNO

State House Bureau

CONCORD — State Health and Human Services officials said Friday that they do many of the same database searches as a company reporting that the state Medicaid and Food Stamp program is vulnerable to fraud.

House Speaker William O’Brien of Mont Vernon said Thursday that the results of the cross checking by Lexis-Nexis were eye opening and could save state taxpayers millions of dollars.

O’Brien is proposing legislation requiring the Department of Health and Human Services to do similar searches for welfare fraud.

But Terry Smith, director of the Division of Family Services, said his agency does third party verification of client information for Medicaid, food stamps and other program including field visits to landlords, federal and New Hampshire and Social Security databases.

The data Lexis-Nexis found that might suggest fraud are not necessarily actual fraud, Smith said. “We have asked them if they have statistics on the validity of their findings and they said ‘No,’” he said.

The agency also asked for the sample cases the company ran so they could be checked by the department and again the company said no, Smith said. “We are stuck. We can’t see if it would be a fiscally prudent purchase.”

He said O’Brien’s bill “is an exciting opportunity to have a brand new way of checking na­tional data bases and our hope is it is cost effective for us.”

The study checked the records of 24,355 people who receive food stamps, a wholly federally funded program, and the records of 86,386 people on the Medicaid program, which provides health care for the poor and disabled and is state and federally funded.

O’Brien quoted from the study, noting that over 9 percent of those receiving food stamps have an out-of-state primary address and more than 5,500 of those on Medicaid have an out-of-state primary address.

He said 56 dead people were listed on a Medicaid search, including a woman who died in November 1983 and over 2,800 people with assets over $400,000 were discovered, including a woman who owns property valued at $1.2 million.

“What this report confirms is that the problem is fairly widespread and also that the taxpayers are paying a lot of money for people who should not be collecting welfare,” O’Brien said. He noted that not all the cases constitute welfare fraud, but if a small fraction do, that is still millions of taxpayer dollars that could be saved.

“More importantly, if we put proper controls in place, those who hope to commit welfare fraud will know that New Hampshire is not the place to try it,” O’Brien said.

Smith defended the state’s methods designed to ensure people on state social service programs are eligible.

He said data from the report are questionable.

Having a car registered out of state does not mean a person is ineligible for New Hampshire benefits, Smith said. For example, a person moves to New Hampshire after just having registered a car in another state. That person is not going to register the car in New Hampshire until the registration expires, he said.

Smith said federal regulations for the Food Stamp program say if a person moves out of state for a period and returns to New Hampshire, the person is still eligible to receive food stamps as long as they don’t collect from two states at the same time.

Medicaid benefits cannot be used for out-of-state health care providers unless a specific provider has been approved by the department, Smith said. “How can you have fraud if you can’t spend your benefits?” he asked.

He said an independent division reviews the eligibility information and cases for accuracy. After the independent division’s review, the information is reviewed by federal officials “to be sure we are honest.”

“Our error rate is 4.75 percent, and of that, 1.88 percent is client cost,” Smith said. He said clients are supposed to inform the division if they change addresses or jobs within 10 days, but many do not.

He said intentional fraud is a fraction of 1 percent.

Through the report, Smith noted, the agency was able to certify two clients and looked into both cases. “In both cases we had it correct,” he said.

Improvements could be made to find people’s assets, Smith said. If there were a national database of banking information, he noted, welfare programs would know if someone was hiding assets.

“But that doesn’t exist and banks won’t share that information appropriately,” Smith said. “We saved $2.5 million last year because workers taking applications smelled something funny and referred the case to our fraud people.”

House Bill 1658 has already passed the House and is now before the Senate.

Under O’Brien’s proposal, a person on the Temporary Assistance to Needy Family program and someone applying to the program would have their information cross-checked against federal databases such as Social Security, Internal Revenue Service, Citizen and Immigration Services and Veterans Administration, and state agencies like the Department of Employment Security, Department of Corrections and housing and licensing.
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