State and federal welfare programs are plagued with fraud and abuse, endangering the safety nets created to help the neediest among us. Their sheer size makes them vulnerable, and it is up to the states to ensure these programs and taxpayer dollars are thoroughly protected. Fortunately, there is an easy way, says a report released today by the Foundation for Government Accountability (FGA).
The report, “Stop the Scam,” identified a number of issues with Medicaid, food stamps, and other welfare programs around the country. Many states simply weren’t conducting the proper eligibility verification processes, and many others neglected to verify that beneficiaries remained eligible.
Here are five crazy instances of scams, fraud, and waste revealed by a number of state and federal audits:
1) Illinois was paying more than $12 million in Medicaid payments for dead people.
The payments were discovered in a follow-up audit, after an original audit found that 34 percent of randomly selected files contained eligibility errors.
2) Pennsylvania gave welfare to millionaire lottery winners.
Ten months into an integrity initiative, the state found more than 160,000 ineligible individuals were receiving benefits.
3) 100% of reviewed cases in Nebraska’s Health Insurance Premium Payment program were missing documents.
When auditors dug deeper, they found 75 percent of the cases had received incorrect payments, with several cases of apparent fraud.
4) Chicago man uses 3,000 food stamp cards to steal $1 million.
Wael Ghosheh would purchase massive amounts of candy and energy drinks at members-only wholesale stores using multiple LINK cards, later selling the goods to local businesses. His fraud was only noticed when he began using multiple cards in single transactions for bulk purchases.
5) Fraudsters in Minnesota lied about more than $70,000 in new incomes.
The state’s legislature conducted an audit and found that the state had not adequately verified eligibility, often not even checking income at all, finding nearly 17 percent of individual ineligible for the welfare they were receiving.
“Our polling confirms voters are tired of welfare scams, and they believe these fraudsters are robbing limited resources from folks in honest need of temporary help. States have a responsibility to ensure taxpayer dollars are being properly managed, and kept out of the hands of dishonest criminals,” said FGA CEO Tarren Bragdon.
“Welfare scammers threaten the long-term stability of our safety net programs. Kids like Jacob Chalkey were put at severe risk until Illinois prioritized the truly vulnerable over the fraudsters. It’s time every state does the same.”
To combat this costly and immoral welfare fraud, FGA advocates a proven, 3-step Stop the Scam solution:
1. Better screening at the front door. Verification tools using cutting-edge data-matching technology cross checks dozens of state and federal databases to ensure eligibility.
2. Periodic checkups. Regular screening of individuals already enrolled in welfare programs to ensure they remain eligible for the benefits they are receiving.
3. Public prosecution and oversight. Publicly prosecuting those who knowingly scam the system to recover lost funds from fraudsters and discourage future scams.
Illinois and Pennsylvania instituted proactive audit reforms with bipartisan support, and together they have saved hundreds of millions of dollars. Pennsylvania discovered thousands of ineligible individuals receiving benefits, removing 160,000 individuals in just the first 10 months of the audit, saving $300 million. Illinois quickly followed suit and removed 300,000 individuals in the first year, 400,000 more in the second, with expected taxpayer saving of $350 million per year in Medicaid alone.
Read the FGA report, which includes a best-practices verification checklist and top line results from FGA’s nation-wide poll, here. You can also download the full report below.