Enhance Fraud Prevention in Public Assistance Programs

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On September 20, 2013, Governor Scott Walker directed the Department of Health Services to evaluate and implement six strategies that will strengthen fraud prevention in the state's public assistance programs. Implementation of some of the Governor's recommendations for enhancing verification requirements for public assistance programs may require a waiver from USDA Food & Nutrition Service (FNS) and the Center for Medicare & Medicaid Services (CMS).

The Department has accepted the Governor's recommendations and will move forward with evaluating and implementing these fraud prevention measures where possible with changes to Administrative Code. For any measures that require statutory changes or amendments to existing waivers with the federal government, the Department will partner with legislators and the federal government to make these changes.  The Department will provide an update quarterly about its progress in implementing the Governor's recommendations in the Department's Quarterly Report to the Joint Committee on Finance.

Verifying Public Assistance Program Applicant and Member Information

Individuals and families applying for the state's health care and nutrition public assistance programs are required to provide proof of certain information so their local agency case worker can determine if they are eligible for the programs.  It is mandatory for case workers to verify some information that the applicant provides and other information is verified only if the local agency case worker determines the information is questionable.  Information is considered to be questionable if there are inconsistencies in the statements provided by the applicant or the worker has information from another source that is inconsistent with the information provided by the applicant. Information must be verified at application, at review, when a person is added or deleted, or when a change in verified information is reported, like a change in employment.

Applicants and members are frequently able to self-report their self-employment information because limitations in what verification of self-employment income and assets that local agency caseworkers can request based on current laws, regulations, technology, guidelines and waivers from the FNS and CMS. In some instances the information that is self-reported is not entirely accurate.  As a result, Governor Walker is directing the Department to strengthen fraud prevention in the state's public assistance programs.

Proposed Strategies for Enhancing Verification Requirements

Strategy One: Pilot a front-end verification project at Milwaukee Enrollment Services (MilES) to review all applications in which an applicant indicates a household member is self-employed to determine if any additional proof is needed before the case is fully processed.

Strategy Two: Develop an Error Prone Profile module for the the Department's public assistance eligibility determination, CARES, that will identify at the time of application cases that need further verification or additional investigation before the case can be fully processed.  Wisconsin's SeniorCare Program has an Error Prone Profile established that has been successful in flagging cases that need additional review.

Strategy Three: Require all BadgerCare Plus and FoodShare members and applicants who indicate they have self-employment income to submit their tax returns for income verification or sign IRS form 4506-T (PDF, 84 KB) that will give the Department permission to request a transcript of the individual or family's tax return to verify the income the individual or family reported to the IRS. Current program guidelines do not require self-employed applicants or members to submit a tax return for a business if it has been established for less than six months.  Implementing this option would require self-employed applicants or members to submit tax returns at application, renewal or when there has been a significant change in circumstances, regardless of how long the business has been established.

Strategy Four: Study and evaluate creating additional data exchanges to maximize that information that individuals provide to all State agencies. The Department would evaluate connecting the Department's public assistance eligibility determination system, CARES, to databases maintained by the Register of Deeds, Department of Revenue, Department of Workforce Development, Department of Veterans Affairs, Department of Transportation, Department of Financial Institutions, Department of Administration, and the Department of Natural Resources.

Strategy Five: Evaluate creating a Recipient Fraud and Abuse Prevention Task Force to include the Department of Health Services, Department of Children and Families, Wisconsin Department of Justice and other state, federal and local representatives.  The structure of this task force would be similar to the Health Care Fraud Task Force that is convened by the United States Attorneys and the Nursing Home Fraud and Abuse Task Force.

Strategy Six: Require an asset test - property, liquid assets and vehicles - for FoodShare applicants and members. The Department will not be able to require the asset test for BadgerCare Plus members because under federal rules related to the Affordable Care Act, states cannot test the assets of non-elderly, non-disabled Medicaid members.

Department of Health Services Office of the Inspector General

Last Revised: December 14, 2014