Program Review and Investigations Committee




<MeetMDY1> August 11, 2005


The<MeetNo2> August 11, 2005 meeting of the Program Review and Investigations Committee was held at<MeetTime> 10:00 AM, in<Room> Room 131 of the Capitol Annex. Representative Tommy Thompson, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Ernie Harris, Co-Chair; Representative Tommy Thompson, Co-Chair; Senators Charlie Borders, Brett Guthrie, Vernie McGaha, R. J. Palmer II, Joey Pendleton, and Katie Stine; Representatives Adrian K. Arnold, Sheldon E. Baugh, Dwight D. Butler, Charlie Hoffman, Rick G. Nelson, Ruth Ann Palumbo, and Susan Westrom.


Guests:  Vickie Bourne, Acting Executive Director, Office of Transportation Delivery, Transportation Cabinet; Tom Emberton Jr., Commissioner, Department for Community Based Services, Cabinet for Health and Family Services; Kelly Jackson, Director, Division of Family Support, Department for Community Based Services, Cabinet for Health and Family Services; Jason Moseley, Director, Policy and Program Development, Department for Community Based Services, Cabinet for Health and Family Services, and Robert J. Benvenuti III, Inspector General, Cabinet for Health and Family Services.


LRC Staff:  Greg Hager, Committee Staff Administrator; Kara Daniel; Rick Graycarek; Tom Hewlett; Margaret Hurst; Van Knowles; Erin McNees; Nadezda Nikolova; Cindy Upton; John Foster; and Susan Spoonamore, Committee Assistant.


Minutes of the July 14, 2005 meeting were approved, without objection, by voice vote upon motion made by Rep. Arnold and seconded by Sen. Palmer.


Tom Hewlett, Program Review staff, presented  a follow-up summary of the report Human Service Transportation Delivery: System Faces Quality, Coordination, and Utilization Challenges. He noted that the report had been adopted by the Committee on May 13, 2004.


Mr. Hewlett stated that the Human Service Transportation Delivery (HSTD) program was established in 1998 in an effort to control fraud and abuse, restrain growth of Medicaid nonemergency transportation costs, and coordinate trips among social service agencies. 


Mr. Hewlett said that staff found that the rate of cost growth had been restrained and fraud and abuse was much less evident.


Mr. Hewlett stated that the report recommended placing a greater emphasis on the task of independently monitoring and enforcing the quality of transportation services delivered to program recipients. He stated that the report also suggested redesigning the survey of riders to obtain valid and objective results, minimizing reliance on complaint data collected and reported by brokers, and developing procedures to check indicators of program quality independently and on a random basis. He said that a survey of recipients, conducted by Program Review staff during the course of writing the report, indicated a high satisfaction rate with the transportation system, but steps were needed to ensure that recipients were better informed of their rights under the program, and that brokers were not limiting transportation services unnecessarily.


Mr. Hewlett explained that the report provided recommendations for improving the coordination of transportation services. He stated that staff found that the provider fee structure did not always encourage efficiency. The report recommended that the cabinet examine the rate structure for transportation providers with the goals that the rates be uniform, simple, adequate, and provide incentives for efficient grouping of trips. The report also recommended that the cabinet periodically conduct a survey of the transportation providers; and, should the Cabinet decide to alter the freedom of choice rule, it should be predicated on maintaining or improving the current level of quality in the HSTD program.


Mr. Hewlett stated that the Adult Day Care (ADC) and Supports for Community Living (SCL) programs comprise a disproportionate and increasing share of nonemergency transportation riders. He said that ADC recipients accounted for less than 1 percent of the eligible population, but they comprised 29 percent of trips and  28 percent of total costs.  He stated that the monthly cost to transport a SCL client was approximately $552 in 2002. He stated that officials instituted a process to adjust capitated rates to help brokers deal with the financial impact. The provision is not in statutes but is included in brokers’ contracts.

Mr. Hewlett stated that the report recommended that the agencies should examine the usage data by service providers who also provided transportation services, and determine whether transportation providers that also provided Medicaid services contributed to overutilization of transportation services. In addition, the report recommended that officials examine the distribution of HSTD service regions across the state, and whether cost-control measures used in other states would be practical for Kentucky.


Rep. Baugh asked if there would have been more of a difference in the satisfaction rate if more recipients had been aware of the complaint process.


Mr. Hewlett stated that recipients were generally satisfied with the service, but one-fourth of those surveyed did not know about their right to file a complaint.


Rep. Baugh asked if the survey questionnaire encouraged recipients to file a complaint.


Mr. Hewlett stated that the survey was done to learn of clients’ perceptions of the HSTD program, and was not intended to encourage the recipients to file complaints.


Rep. Baugh asked what method was used to determine which counties would be included in a particular region, and how was the price established for each region.


Mr. Hewlett stated that he would defer that question to the agency for a response.  He stated that several changes had recently been implemented regarding the make-up of the regions.


Sen. Stine asked what steps had been taken to avoid inflation of costs for the entities who are operating transportation services and care services.


Mr. Hewlett stated it was his understanding that the agency had put a cap on the total amount that could be paid to certain providers, and the agency is asking for more detailed information justifying the trips.


Sen. McGaha asked how many of the regional brokers were also providers.


Mr. Hewlett stated he would like for the agency to respond to that question because new contracts had just been negotiated with new brokers.


Sen. McGaha asked if staff did any comparisons to determine if there were differences in recipient satisfaction depending on whether the regional broker was also a provider or not.


Mr. Hewlett stated that in some areas where the brokers also provided transportation services, staff did get feedback from providers that they thought some of the brokers were keeping some of the best trips for themselves.


Vickie Bourne, Acting Executive Director, Office of Transportation Delivery, Transportation Cabinet, presented an update on the HSTD program. She stated that the program is a coordinated partnership between the Department of Medicaid Services, Department of Workforce Development and Department of the Blind, and the Office of Transportation Delivery’s Public Transportation programs to transport eligible recipients to covered services.


Ms. Bourne stated before June 1998, Medicaid recipients were being transported in limousines, and the state was paying transportation providers who charged the state with 5,000 miles for driving a city block. She said that recipients were being transported for non-covered services such as shopping. She stated that  costs were increasing at a rapid pace, as high as 33 percent increase per year.  She also stated that the program did not provide oversight regarding payments to providers, nor safety to the recipients, and that the program did not have a complaint line.

Ms. Bourne stated that the Office of Transportation Delivery (OTD) has eliminated the majority of fraud and abuse of the system. She said the OTD now monitors mileage, trip information, and eligibility. She said that a Peer Review for clients who were deemed to be nonambulatory or who were confused was now in place. Ms. Bourne added that for the past five years there had been no growth in the budget, and that no increase was expected for the Fiscal Year 2006. She said that OTD now requires a yearly inspection on all vehicles, including spot checks during the year. She also stated that drivers are tested for drugs and alcohol, and transportation providers are paid once a month, sometimes twice a month. 

Ms. Bourne stated that 1 million trips were provided by OTD in 1997, and in 2005 OTD provided 2.5 million trips.

Ms. Bourne explained that Medicaid conducted actuarial studies in 1996, 2001 and 2004, and that Federal Medicaid Review/Audits were conducted in 2003 and 2005. She stated that in 2003, the National Transit Cooperative Research Board recommended that if 10 states would follow Kentucky’s lead in the HSTD Program, the nation would save $100 million dollars in Medicaid a year.

 Ms. Bourne stated that OTD had implemented six out of the ten recommendations contained in the report. She stated that OTD was still working to implement Recommendations: 2.1, 3.2, 3.1 and 3.3.

Ms. Bourne stated that per Recommendation 4.2, OTD had consolidated regions to help adjust the administrative costs. She said that Region 3 was consolidated with Region 5 and is now referred to as Region 5; and Regions 9, 11, 15 and 16 were consolidated with Region 13, now referred to as Region 13.

She stated that Recommendation 4.3 suggested that OTD consult with other states to discuss cost control measures that would complement Kentucky’s capitated system. Ms. Bourne stated that Kentucky is now one of the models in the nation for the HSTD program. She stated that OTD is working with the states of Illinois and Louisiana to help get their services up and running. The Center for Medicaid and Medicare Services (CMS) is recommending other states to Kentucky for assistance in getting similar programs underway in their areas.

Ms. Bourne concluded that Kentucky’s program is one of 17 comprehensive HSTD programs in the nation. She stated that the OTD is working to bring in new partners and to continue with the implementation of the report’s recommendations.


Rep. Baugh asked if mileage and population were included in the criteria used by providers in determining the price charged per trip.


Ms. Bourne stated that the rate was determined by the costs of fuel, insurance costs, the population in the area, the geographical layout, and the labor force in the area.


Rep. Baugh asked that if Region 5 started out with lower rates than other regions, would it not encourage financial disaster for some of the providers in that region.


Ms. Bourne stated that they relied upon an actuarial study to determine what the rate was going to be in that area.  The cap rate is set by using the utilization rate and the costs to provide services for that particular region. She stated that the rates for Region 5 are in the process of being reviewed to see if the rates can be set to be more uniform with the other regions across the state.


Rep. Baugh asked if he understood correctly that negotiations were being held with the broker, which meant that the broker could be providing less to the provider.


Ms. Bourne stated that some brokers would have a negative balance at the end of the month because OTD requires them to pay a certain amount to the providers. She stated that OTD monitors the number of trips going to the broker, the number of trips going to the provider, and the distribution of trips and costs. She stated that the amount fluctuates from month to month for both the broker and the provider.


Rep. Baugh stated that he was concerned about providers facing the high costs of gasoline.


Ms. Bourne stated that the providers have to find a way to coordinate more trips in order to address the issue of rising fuel costs.


Sen. McGaha asked how many brokers were also providers in the new 10-region system.


Ms. Bourne stated that there are only two pure brokers who do not provide transportation service of some magnitude.


Sen. McGaha asked Ms. Bourne to provide staff with a map indicating which regions have single providers or multiple providers.


Ms. Bourne stated that she would do that, and she would also include the number of trips per provider.


Sen. Harris asked if doctors could provide notification to the brokers by email.


Ms. Bourne stated that HIPA prohibits the transmission of certain information through email.


Sen. Harris asked if OTD paid $1.00 per mile.


Ms. Bourne stated that the per mile rate varies by the program. She said that the rate for Department of Workforce Development clients is $1.00 per mile, and the rate for clients of the Department for the Blind is 34 cents per mile.  Each region pays a different rate for 02, 04, 07 and 08 categories of riders.


Sen. Harris asked if could be lower than $1.00 per mile.


Ms. Bourne stated that in some areas is could be as high as $1.30 per mile.  She said that lift equipped vehicles and escort services would push the rate higher.


Sen. Harris asked how often the rate was adjusted based on current fuel prices.


Ms. Bourne stated that the rates are reviewed quarterly.


Rep. Butler asked how complaints were processed.


Ms. Bourne stated that all complaints received through the 800 number are recorded, and each complaint is investigated.


Rep. Butler asked if there were problems investigating complaints that were not specific or clear.


Ms. Bourne stated that each complaint is handled on a case-by-case basis.


Rep. Thompson asked if users of the Adult Day Care and Supports for Community Living  programs still accounted for a disproportionate share of riders and costs.


Ms. Bourne stated that the costs associated with ADC and SCL users were still about the same as indicated in the report.


Rep. Thompson asked if OTD had been able to gather valid and reliable data to determine what was causing the utilization rates of ADC and SCL users.


Ms. Bourne stated that per the recommendations contained in the report, a cap rate for all regions had been imposed, which had helped to hold down the costs.


Tom Hewlett, Program Review staff, presented a summary of the report Improving Fiscal Accountability and Effectiveness of Services in the Kentucky Transitional Assistance Program (K-TAP), that was adopted June 10, 2004. He stated that K-TAP was the welfare to work program. As of  December 2003, the program served approximately 32,000 families, providing an average payment of approximately $228 per month. 

Mr. Hewlett explained that K-TAP began as a response to the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996, which changed the underlying assumption of welfare. He stated that under the previous program, Aid to Families with Dependent Children, anyone who met the eligibility requirement was entitled to receive benefits. He explained that the new system to aid the poor was called TANF, Temporary Assistance to Needy Families. He said that under TANF, welfare became a temporary program and recipients were eligible for no more than 60 months of benefits. He said that work and training, which could lead to work and self-sufficiency, were required. He said that TANF funds are provided to the states in a block grant each year,  which did not expire at the end of the fiscal year, but could be drawn upon in future years with some limitation. He said that states are also required to contribute funding to the program referred to as a “maintenance of effort” amount. 

Mr. Hewlett stated that K-TAP enrollment had decreased dramatically from 1997 to 2003, but funding had remained flat. He said that K-TAP officials stated that as caseloads decreased, the remaining clients tended to be those with more barriers to employment who required more extensive intervention, and ended up being more costly per case to deal with.  He said that the federal government provides the largest amount of the total funding, but Kentucky’s contribution is not insignificant.  He said that from FY 1997 to FY 2003, Kentucky allocated over $500 million in state maintenance of effort funding.  He said that the state’s share of funding is established by federal law.  He said that the MOE amount is based on the amount that the state spent for AFDC and related programs in 1994.  He stated that the amount is adjusted by the number of recipients actively participating in a qualifying activity. He explained that if the state met its participation rate, it would be required to fund 75 percent of the 1994 amount. For Kentucky that amount would be $67.4 million. He said if the state failed to meet its participation rate, then the state would be required to fund at 80 percent of the 1994 level ($71.9 million).  He said that as a reward to the states who reduce the number of welfare recipients, TANF legislation also authorized a reduction in the participation requirements based on the reduction in caseload in the state. The greater the reduction in caseload, the lower the participation rate the state is required to meet. He said that Kentucky has met its participation rate in every year, so it has only been required to fund at the 75 percent level. He stated that the report noted that Kentucky had continued to spend at the 80 percent level:  $4.5 million more per year than required by federal regulations. 

Mr. Hewlett  stated that the most recent funding for K-TAP for FY 2004 and FY 2005 showed that the program had continued to expend the full 80 percent MOE.  He said however, that the program had not expended the full amount of federal funds for the same time period.  He said that program officials explained that the unexpended federal funds had been transferred to the Child Care Development Fund, which pays for child care for parents leaving K-TAP who remain below 165 percent of the federal poverty level.

Mr. Hewlett stated that federal regulations allowed funding for other programs related the broad goals of TANF to be included in the calculation of the MOE amount. He said that concerns were expressed that K-TAP might not be including all qualifying expenditures when calculating the state’s allowable expenditures under TANF. He said that Recommendations 2.1, 2.2 and 2.3 were concerned with providing the General Assembly adequate information on the required spending amount, the inclusion of all pertinent spending in the calculation of K-TAP expenditures, and the use of prior year unobligated federal funds.

Mr. Hewlett stated that the report also noted some internal control weaknesses in the K-TAP program. He said that the fraud control unit had been disbanded, and the agency’s quality control unit was sampling too few cases to draw statistically valid conclusions for all regions. He explained that Recommendation 2.4 called for a cost- benefit analysis to review the feasibility of reinstating the fraud control unit. Recommendation 2.5 called for altering the quality control program to audit a representative sample of cases for each of the cabinet’s 16 service regions so that valid comparison of regional deficiency rates could be made. He stated that program officials have indicated that Recommendations 2.4 and 2.5 had been implemented.

He stated that the TANF legislation requires recipients to engage in work or training that could be expected to lead to work and self-sufficiency. He said that the Kentucky Works Program (KWP) is a part of the K-TAP program. He said that the KWP has many components all intended to transition clients to self-sufficiency.

Mr. Hewlett explained that because K-TAP is a time-limited program, it is important to move clients rapidly from their initial entry into the program on into some form of work or training.  He stated that the report estimated the time it took to get clients into the Kentucky Works Program after they were enrolled in K-TAP.  He noted that some regions took longer than others to enroll clients.  In general, the slowest regions were large metropolitan areas with high caseloads.

Mr. Hewlett stated that another aspect of K-TAP is the Family Alternatives Diversion (FAD) program for applicants identified as having a short-term need such as housing, basic utilities, car purchase or repair, child care and employment-related expenses. He stated that FAD is intended to keep families off K-TAP. He said that staff examined the amounts paid to FAD recipients by reviewing payments to new clients for a three year period, starting after the FAD program began and looking at the total payments to clients from that time through February 2004. 

Mr. Hewlett stated that in order to evaluate the potential abuse of FAD, staff looked at the service pattern for each client. He said that for the majority of clients, FAD did appear to work as intended. He stated, however,  that there were clients who returned for FAD or K-TAP at least two or more times, and the number of FAD recipients returning to FAD peaked at about 13 months, close to the 12-month waiting period to reapply. He said that this information suggested that the clients returned as soon as their waiting period was over.

Mr. Hewlett stated that the Department for Community Based Services (DCBS) had made policy changes that should minimize the chances of fraud and abuse in FAD by limiting FAD payments to $1,300, limiting clients to no more than two FAD payments in a lifetime, extending the waiting period between FAD payments to 24 months, and restricting direct payments to recipients. He stated that the report also recommended restricting participation in the FAD program to clients who had not already received K-TAP benefits. He said that the report recommended that the K-TAP program improve aspects of their data systems and conduct an evaluation of the subsidized employment program. 


Tom Emberton Jr., Commissioner; Jason Moseley, Director for Policy and Program Development; and Kelly Jackson, Director for Division of Family Support; Department for Community Based Services, Cabinet for Health and Family Services, appeared before the committee to present the Cabinet’s updated response to the report.


Mr. Moseley addressed the Recommendations as follows:

Recommendation 2.1:  Mr. Moseley stated that Kentucky was meeting the participation requirements so that the MOE could be funded at 75 percent.  He explained that TANF was in the process of being reauthorized and therefore, there was no way of knowing what the funding outcome would be. 

He stated that if DCBS had to reduce the MOE funding from 80 percent to 75 percent, it would be a goal of DCBS to leave the cash benefits as they are. He said that if the MOE funding had to be reduced, then DCBS would have to look elsewhere for federal funding to make up that difference for cash benefits. If that happened, then it could result in reducing services for K-TAP and other supportive programs in order to offset the transfer of funds into cash benefits.


Recommendation 2.2:  Mr. Moseley stated that DCBS had looked at state spending outside K-TAP to see if any spending could be used toward the state’s maintenance of effort for TANF. He stated that DCBS found only a small number of programs that were strictly funded through state general fund dollars. He explained that funding for some of those programs was often inconsistent, which could create a problem for meeting the MOE funding obligation.


Recommendation 2.3:  Mr. Moseley stated that DCBS had discussed the possibility of accessing unobligated federal funds to offset the cost of spending at the 80 percent maintenance of effort during previous fiscal years. He stated that the current amount of federal funds carried over from previous years was $51 million. He said that over the next biennium, $25 million was obligated to K-TAP. He said that the remaining $26 million was being held to provide for the continuation of K-TAP programs and benefits while transitioning into changes in the TANF program.


Recommendation 2.5:  Mr. Moseley stated that changes had been made to the auditing process. He stated that child-only cases had been removed before taking an audit sample, which  helped to give a more accurate view of participation.  He stated that each region was being auditing every year, and the number of cases audited from each region was proportionate to the caseload.  He stated that DCBS had also developed an on-line process so that regional and central office staff would have on-line access to the results of the field office audits.  He said that the two new additional levels of review would ensure that proper procedures and policy were being followed.  Additionally, the reviews would    aid in recognizing where clarifications and additional training are needed.


Recommendation 3.1:  Mr. Moseley stated that the department reviews the number of individuals who participate in each program on a monthly basis, and provides that information to the Health and Welfare Committee.  He stated that the monthly reviews help the department to watch trends and participation, and helps to evaluate the effectiveness of the program.  He stated that beginning September 1, 2003, community service was restricted to be used as a sole activity for 12 months. He stated that the restriction would help reduce the potential for abuse by those who would spend all 60 months of eligibility in community service.

Mr. Moseley stated that community service may be the only qualifying activity available in some parts of the state. He stated that community service can help as a starting point for those clients with little or no work skills, which could enable them to move into another qualifying activity.

Mr. Moseley stated that DCBS has entered into a partnership with the Office of Employment and Training for their wage subsidy program. He stated that the contract would include providing employment services and operation of the wage subsidy program.  He said that the program had been very successful for the past three years.  He stated that from 2003 to 2005, placements in the wage subsidy program had almost tripled from 72 placements to 215 placements.


Recommendation 3.2:  Mr. Moseley stated that DCBS had reviewed the lag time between the time a recipient entered the K-TAP program and when that recipient began a KWP activity.  He stated that DCBS found that there were a lot of recipients who were allowed the maximum of 24 months before suspending benefits. He stated that as of August 1, 2005, the amount had been reduced to 6 months. He said that if a recipient failed to participate in some type of a qualifying activity for three or more months, their benefits would be suspended.

He stated that some regions had fewer employment/educational opportunities, resulting in a waiting list to participate in an activity.  He stated that recipients could still participate in community service until the next available opening in a qualifying benefit.

Mr. Moseley explained that mental or physical, learning disabilities, substance abuse or physical abuse were additional reasons for a delay in entering clients into a qualifying work activity.

Mr. Moseley stated that monthly reports are generated to monitor the timeliness of assessment, placement, and tracking.


Recommendation 3.3:  Mr. Moseley stated that the FAD program was modified to limit receipt of FAD to twice in a lifetime, limit receipt to no more than once every 24 months; reduced the maximum amount available from $1500 to $1300; eliminate issuance of checks directly to clients, and enhance security through on-system supervisory approval.


Recommendation 3.4:  Mr. Moseley stated that DCBS is proposing additional changes to the Kentucky Automated Management Eligibility System so that tracking of subsidized employment hours can be more beneficial in providing additional information to the department. He stated that the department is working with the Office of Employment and Training and the Office of Information Technology to create a separate component for subsidized employment, and that the new component would show up as a separate placement and allow tracking of placement even after K-TAP is discontinued.  Mr. Moseley stated that subsidy placements have almost tripled over the past 3 years.

Mr. Moseley stated that changes were made to the Warren County program on July 1, 2004. The changes limit the use of wage supplementation codes to only those counties in the Barren River region. As of July 30, 2004, all components improperly using that code were closed.


Rep. Arnold asked if a recipient was still required to enter into a qualifying activity within 60 months.


Mr. Moseley stated that the recipient has a 60-month lifetime benefit. The recipient has to begin participating in a qualifying activity within 6 months of entering the program. 


Rep. Arnold asked if benefits would be denied if a recipient refused to participate in any of the programs.


Mr. Moseley stated that if an applicant refused to participate, benefits would be denied immediately. An could reapply, but would still be subject to the same 6-month requirement. 


Rep. Arnold asked what child-only cases consisted of.


Kelley Jackson, Director, Division of Family Support, Department for Community Based Services, Cabinet for Health and Family Services, stated that child-only cases were when no adults were included in the benefit grant. 


Rep. Arnold asked if recipients were given treatment for substance abuse.


Mr. Moseley stated that the department does offer a treatment program.  If the recipient participated in the treatment program, the department would recognize that participation as a qualifying activity at the state level. 


Rep. Westrom asked what happened to a person who went through the job training only to find out that there were no job opportunities available.


Ms. Kelly stated that there were some exemptions to the 60-month requirement if there were no job opportunities. She stated that even the exemptions are time-limited.  She stated that the department does work with the recipient over the 60-month period, and in those areas of high unemployment, the department contracts with the Office of Employment and Training to help with relocation and placement.


Rep. Westrom asked if the relocation program was effective.  She also asked if the department had any numbers showing the success of transitioning from one place to another.


Ms. Kelley stated that she would provide Rep. Westrom with that information.


Robert J. Benvenuti III, Inspector General, Cabinet for Health and Family Services, addressed Recommendation 2.4. He stated that the cabinet had recently started a program called Determining Eligibility Through Extensive Review (DETER). He stated that DETER investigators are located in DCBS offices to handle questionable applications. There are three DETER investigators in Kenton County with plans to add one additional investigator to the staff.  Within the next 30 days, the cabinet plans to hire an investigator for the Owensboro office, and by the end of 2005, the cabinet will hire two additional investigators. He stated that the cabinet is working to develop ongoing intelligence methodology for tracking DETER complaints and investigative outcomes.  He stated that the information received from the investigators will be used to aid DCBS staff  in anti-fraud training and fraud prevention.


Mr. Benvenuti stated that as of July 31, 2005, 164 referrals had been received by the DETER unit. He stated that to date, approximately $114,000 had been cost avoided through DETER’s investigative actions.


He stated that the information gathered by DETER investigators was being used to make anti-fraud recommendations to the DCBS, and was creating a greater awareness of fraud and abuse issues by DCBS staff.


He stated that the DETER investigators would continue to analyzing public assistance participation and complaints to determine where best to locate investigators. He stated that once DETER is established in the eastern and western regions of the state, then the Office of the Inspector General would begin the process of establishing DETER in other parts of the state within the DCBS field offices. He stated that his office would continue to identify program operations that are at risk for abuse, and enforce recommendations regarding fraud and abuse.


Sen. Harris asked if there was a hotline for suspected fraud and abuse.


Mr. Benvenuti stated that the statutes require the cabinet have a hot-line for fraud and abuse.  He stated that the number of calls had increased by 20 percent from the previous year.


Sen. Harris asked how many phone calls had been placed over the hotline.


Mr. Benvenuti stated that the hot-line had received approximately 5,200 phone calls.


Sen. Harris asked if the OIG had any numbers on how many suspected cases of fraud and abuse existed.


Mr. Benvenuti stated that it would be difficult to come up with an accurate figure.  He stated that there was significant fraud in Medicaid, both on the recipient side and on the provider side, and the OIG was investigating both. He stated that the cabinet was working with the Social Security Administration with the goal of securing funding for specialized unit.


Rep. Thompson asked what would happen to a recipient who was receiving welfare and it was discovered that the applicant was employed.


Mr. Benvenuti stated if a recipient was found to be employed, benefits would be lowered or terminated. 


Rep. Thompson asked what two programs would the OIG most likely pursue for investigating fraud.


Mr. Benvenuti stated that it would be hard to pinpoint just one or two programs.  A fraudulent application could affect only one program, while the applicant would still be eligible for another program.  


Mr. Benvenuti stated that the OIG is close to doubling the special investigative staff, and eight new investigators should be starting work within the next 30 days.


Rep. Thompson recognized Nadezda Nikolova as the newest staff member of the Program Review staff.


Meeting adjourned at 11:45 a.m.