Questions from Chairman Connolly to Parker Gilkesson, Center for Law and Social Policy (March 31, 2022)
Summary
Questions from Chairman Gerald E. Connolly, Subcommittee on Government Operations, to Parker Gilkesson, Senior Policy Analyst at the Center for Law and Social Policy, for the March 31, 2022 hearing "Follow the Money: Tackling Improper Payments," with written answers. The first question asks whether states prioritize preventing fraud and improper payments, and the answer says states are looking for fraud in the wrong places. A question on Medicare and Medicaid improper payments draws an answer citing a 2020 Estimated Payment Error Rate Measurement (PERM) rate of 21.36 percent. The answer on SNAP states that in FY 2019 only 0.1 percent of SNAP issuances were overpayments based on IPVs, and the answer on TANF cites approximately 800,000 total families in fiscal year 2021.
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“Questions from Chairman Connolly to Parker Gilkesson, Center for Law and Social Policy (March 31, 2022).”
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Questions from Chairman Gerald E. Connolly
Subcommittee on Government Operations
Parker Gilkesson, Senior Policy Analyst
Center for Law and Social Policy
March 31, 2022, Hearing: “Follow the Money: Tackling Improper Payments”
1.
The decentralization of certain federally-funded, state-administered programs can
make it difficult for federal agencies to prevent improper payments. Do states
prioritize the prevention of fraud and improper payments in these federally funded programs? In
your experience as a caseworker in North Carolina, were you more incentivized to distribute
benefits quickly or to prevent fraud and
improper payments?
a. I would like to strongly reject the suggestion from the hearing that states do not care
about preventing improper payments or fraud. As a previous caseworker for the state of
North Carolina, I know all too well how “program integrity” and fraud allegations affect
the lives of recipients and caseworkers. Eligibility workers are often better trained to
look for fraud than they are to provide trauma-informed care or to refer families to other
assistance to address the many challenges of living in poverty. It was clear that, based
on mandates coming from the federal government prioritizing fraud prevention and
program integrity, the state cared far more about catching people getting more than they
were supposed to than about caseworkers’ ability to care for people and meet their
needs. While empathetic care takes more time and effort, workers were rewarded only
for their timeliness and accuracy. Failure to recognize an overpayment, even if only
once, could cost someone their job.
Despite the rarity of fraud, legislators and state agencies DO prioritize fraud prevention–so
much so that there are millions of dollars in grants and targeted funding for fraud
prevention and “program integrity.” It isn’t that fraud prevention and program integrity
aren’t prioritized, it’s that states are looking for fraud in the wrong places. As the hearing
made clear, the biggest sources of improper payments are international crime rings and
unscrupulous providers, but states and counties focus on people experiencing poverty.
State fraud units are notorious for privacy invasion and over-policing of public benefits
recipients. People have reported home raids, threats to take their children away without
cooperation, and even threats with the presence of guns.. These instances are so pervasive
that people receiving public benefits often live under a cloud of fear.
Federal and state government have to recognize that calling for “more fraud provisions”
without specifying the types of measures that are needed and highlighting the need to
ensure that measures do not act as barriers to access for those in need perpetuates
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stereotypes and invites abuses.
2. Though the federal government must prioritize program integrity, it also needs to
deliver services to the public in an equitable fashion. What populations should
policymakers consider when designing online applications or implementing antifraud controls like
identity verification? How can the federal government ensure
that individuals with limited access to technology can still access public benefits?
a. During the pandemic there have been multiple populations of folks who have struggled to
access life necessities based on their limited access to technology. Multiple state advocates
have also reported that folks who struggle to access online applications were having
difficult times getting through on the busy phone lines to apply—causing some states to
begin seeing declines in public benefits applications throughout different times of the
pandemic. When I was a caseworker for the state of NC, there were multiple clients that I
had, who liked to come into the office to apply because they could hand in their
verifications, application information, and other documents directly to a caseworker
without fear of their information being lost in the mail or at the front desk. When offices
were closed, I am sure that folks similar to my old clients suffered because they couldn’t
have the direct contact with caseworkers. From my experience, different populations that
the federal government should consider when designing online applications are:
i. People with disabilities
ii. The aging population
iii. People experiencing extreme poverty and homelessness (particularly ones who did
not have an address or phone to be contacted at)
iv. Youth (particularly opportunity youth or those who have aged out of the foster care
system)
v. People in rural areas that don’t have access to internet services
b. Online applications should be mobile friendly as individuals with low incomes are more
likely to have internet access on a phone than on a computer. They should also be
available in multiple languages, and tested by actual users (both customers and
caseworkers) prior to launch. Online applications should also never be the only way to
access benefits; customers should also be able to apply in person, by phone or mail,
whatever meets their needs. Congress should also explore ways to reduce duplication of
effort, such as by allowing people eligible for SNAP benefits to be deemed eligible for
Medicaid or other benefits.
3. In fiscal year 2021, Medicare made over $40 billion in improper payments that
resulted in monetary loss to the federal government. For Medicaid, that figure
topped $98 billion. What are the primary root causes of overpayments in
Medicare and Medicaid? Are overpayments in these programs more often
attributable to beneficiaries or to health care providers?
a. Medicaid and Medicare provide access to critical health services for about 136 million
people—more than 4 in 10 people in the US. While steps should be taken to reduce
improper payments, impeding access should be off the table. Beneficiaries of these
programs are not responsible for the vast majority of improper payments, and limiting their
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access to the health care they need would do nothing to solve the problem but instead
cause them harm. Most improper payments in Medicaid are due to lack of documentation
or mistakes made by the state agency, providers, or reporting systems. Provider fraud,
such as billing for services that are never delivered, describing services as more complex
than the ones actually provided, and therefore billing them at a higher rate than earned, and
knowingly ordering medically unnecessary items or services, is less common. Beneficiary
fraud is extremely rare.
According to the Center on Budget and Policy Priorities, the Centers for Medicare &
Medicaid Services (CMS) released its 2020 Estimated Payment Error Rate Measurement
(PERM) rate — which measures “improper” payments in Medicaid and the Children’s
Health Insurance Program (CHIP). The overall PERM rate reported was 21.36 percent.
While it’s higher than last year’s 14.9 percent, that’s mostly because CMS measured
eligibility payment errors for more states, not because errors increased.
Therefore, it is imperative that policymakers don’t use numbers reported from 2020 to
justify increased fraud provisions and unnecessary administrative burden on recipients and
caseworkers by imposing more required verifications or paperwork. imposing additional,
burdensome verification and paperwork requirements or to distract from the
larger problem of eligible people losing coverage and access to care. Also, finding an
improper payment doesn’t mean the payment was made to an ineligible person or for a
service that shouldn’t have been provided. Often, providers don’t follow the proper federal
and state procedures when billing for services, which can also cause an improper payment.
People need healthcare and preventative and early treatment are essential. Finding new
ways to deny people access to essential benefits is not going to lessen the number of
improper payments. Finding ways to simplify the application process would lessen
administrative burden which in turn would lessen mistakes or errors that cause improper
payments.
4. In March, 2022, you published a paper on program integrity in the Supplemental
Nutrition Assistance Program (SNAP), which emphasizes that “SNAP fraud is
quite rare.” You are also an expert in Temporary Assistance for Needy Families
and Medicaid. To what extent has your research identified fraud in the federal
programs it examines?
a. Yes, SNAP fraud is quite rare. Political and media discussions frequently lump all forms of
SNAP errors or violations as “fraud,” but this is inaccurate and misleading. The SNAP
error rate calculated by the Food and Nutrition Service (FNS), the federal agency within
the U.S. Department of Agriculture that administers SNAP, includes both overpayments,
which is when people receive more SNAP benefits than they should have received, and
underpayments, which is when people receive less than they should have
received. Overpayments may be caused by agency errors, unintentional mistakes by
recipients, or by intentional reporting of false information by recipients. Only the last of
these—which is the least common—can be considered fraud. In FY 2019, only 0.1 percent
of SNAP issuances were overpayments based on IPVs—just a dime for every $100 of
SNAP benefits. And just 0.9 percent were overpayments of any sort, including household
and agency errors. According to testimony before the U.S. House Committee on Oversight
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and Government Reform, "the overwhelming majority of SNAP errors that do occur result
from mistakes by recipients, eligibility workers, data entry clerks, or computer
programmers, not dishonesty or fraud by recipients.”
b. TANF cash assistance is a relatively small program, serving approximately 800,000 total
families in fiscal year 2021. The maximum benefit for a family of 3 in the median state is
$492 a month. In order to receive this money, applicants must typically attend multiple
interviews or orientations, and must document their hours of work or participation in
another required activity. There simply is no opportunity for large scale fraud in the TANF
program; in fact the federal government estimates that less than a quarter of the families
with low-incomes who are eligible for TANF actually receive any cash assistance.
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