State Survey Analysis Report

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APPENDIX 19. MAINTAINING DATA ON FRAUDULENT PAYMENTS

19. Does your agency maintain data on fraudulent payments in the program as a subset of your improper payments data?

* Minnesota’s response is separated from the table due to a lengthy response:

The Minnesota Department of Human Services’ Program Assessment and Integrity Division, in cooperation with county agencies, is responsible for preventing and reducing recipient fraud in most of the State’s cash, child care, health care and Food Support programs.

The work falls into three broad categories:

• An intensely focused, “front-end” process to identify fraud early and prevent overpayments by denying, stopping or reducing benefits to ineligible applicants and recipients

• Traditional criminal investigative procedures for addressing welfare fraud, as a crime of theft, through theState’s civil or criminal justice systems.
• A collections program that uses various means to recover money from recipients who were ineligible for benefits

Front-end process

The Fraud Prevention Investigation Program, Minnesota’s front-end program, is a nationally recognized model for quickly resolving issues of questionable eligibility for public assistance. Through this investigative process, eligibility workers refer potentially fraudulent applications and open cases to trained investigators. Currently, 52 of the 87 counties in Minnesota participate in the FPI program. In 2004, they:

• Completed more than 8,000 investigations; in 45 percent of them, benefits were stopped or reduced
• Found and corrected information discrepancies in 70 percent of the investigations; this aspect of fraud investigations contributes to fewer errors found during State and federal quality control reviews
• Identified more than $13.5 million in cost-avoidance (not paying benefits to ineligible applicants and recipients) and overpayments
• Saved or collected $4.91 for every $1 spent in the program in administrative costs
• Identified more than 400 recipients in the program who committed fraud and were disqualified from public assistance.

Criminal investigations

When investigations find that individuals did not provide complete or accurate information to receive public assistance, the counties and Minnesota Department of Human Services take actions to prevent them from participating in public assistance programs. Some welfare fraud cases rise to the felony theft level and require involvement of the criminal justice system. In 2004:

• Investigators completed more than 2,000 criminal investigations; in 59 percent of them, investigators proved benefits had been illegally obtained and, at a minimum, overpayments were assessed
• Investigators disqualified recipients in 490 instances from programs
• Recipients, in 89 cases prior to trial, admitted guilt and agreed to restitution, with sentencing deferred.

Welfare fraud cases that go to trial may receive publicity which raises awareness of the possibility of detection and helps deter fraud.
Both these methods are very effective in the prevention and deterrence of fraud in the welfare programs.

While no report is required, one is produced on a monthly basis with the results of the fraud referrals and findings received from the counties. This information is shared within the Department and with other county partners to assist in improving performance.

Same for the front end/ Fraud Prevention Investigation (FPI) Program. While no report is required, we do compile statistics and issue county agencies an annual program evaluation report. By State statute, the administrative costs of funding the FPI program must be cost neutral to the State. Here is the statute reference: http://www.revisor.leg. State.mn.us/stats/256/983.html

Appendix 20 >>