The House Study Committee on Welfare Fraud had its second meeting this morning, and heard from witnesses who talked about how using modern computer data technology can identify cases of fraud in the state’s assistance programs for the needy. Reducing fraud can help the state save money, or in the case of provider fraud, help protect those using a welfare program from being scammed.
The hearing opened with a video of a WSB TV news broadcast showing how healthcare providers who have been disallowed from continued participation in Medicaid because of fraud or other malpractice simply move to a new location, and start business again under a new name, perhaps in a different state. In the past fraud like this has been difficult to detect. Yet, according to Trey Harrison of the data firm Lexis Nexis, the private sector has developed the tools necessary to identify situations like this, including a complete database of healthcare providers in all states that includes information on any sanctions applied, different practice names, and other information that can prevent the problems cited in the news report from occurring.
Saying the stolen identities are a bigger problem than most people realized, comprehensive databases from companies like Lexis Nexis can help identify cases of fraud early in the processs, saving money. While in some cases you have an individual attempting to scam the system, in others an identity is stolen and used to apply for benefits. A comprehensive database can help identify this as well.
A second witness, Andrew Brown of the Foundation for Government Accountability, highlighted a program his organization developed called Stop the Scam. This program is designed to perform periodic checks on people applying for or receiving welfare benefits. According to Brown, around 10% of those receiving benefits are ineligible, or are receiving too much in benefits. He estimated that identifying and stopping this fraud could save between $60 and $115 million annually in Georgia.
These anti-fraud programs were originally developed for use by banks, insurance companies, and other private sector entities, but are just starting to be used by state and local governments to prevent misuse of their programs. Of course, the services provided by these third parties aren’t free. One of the things Committee Chairman David Clark of Buford and the other members will have to determine is whether the expense of trying to fight fraud will be less than the abuse it prevents.
The committee will have a third meeting in November before it presents its findings. If indeed the savings from using third parties to identify fraud is greater than the cost, the savings could be used to fund other needs in government, or to provide more assistance to those who really need it.