Improper payments plague the Government. A recent GSA report describes over $115B in payments were paid to individuals who were not due the money in FY11. This ranges from tax credits, entitlements, and grants. Purisolve has developed an approach to more effectively reduce improper payments to help restore fiscal integrity to the Government.
We use a three-pronged strategy for managing improper payment reduction.
We first identify where improper payments are occurring. Our firm can identify the root causes of improper payments, and uncover areas where people are either fraudulently receiving unwarranted money, or simply receiving money incorrectly. We also analyze legislation, policies, and regulations to identify loopholes that perpetuate improper payments.
We seek to determine ways to prevent improper payments. Policies and programs must be implemented to ensure that the money is not provided to the ineligible recipient in the first place. There are a number of tools we use for improper payment prevention:
Education – This can help better inform improper recipients about eligibility and voluntary compliance.
Communication – Communicating common misconceptions can help to avoid unintentional improper payment receipts. Communication of penalties due to fraudulent activity or improperly receiving payments should be clear.
Up-front automation/filters – Prior to issuing a payment, appropriate filters, rules, and validations must be implemented to avoid sending erroneous payments. This may include accessing cross-agency information, gathering recipient documentation, other data source checks, etc. to validate eligibility criteria using automation.
Once the money has “gone out the door”, the difficult challenge of recovering it ensues. We recommend a “case treatment” solution that includes varying degrees of enforcement. This includes “light” treatments such as soft notices for recovery ranging to face-to-face criminal probes. Advanced analytics should be used to identify varying levels of egregiousness of schemes for determining the appropriate treatment. For recovery efforts that are “honest mistakes” the recovery tactics would be less sever. In addition, cross-agency data sharing should support recovery efforts. This may include IRS data, SSA data, etc.
As part of our program method, we implement key performance indicators to track the recovery efforts. This includes gauging the most effective means of preventing and recovering the payments and continually improving the process to continually reduce the improper payment problem.
Purisolve has performed this improper payment method within the IRS, and has improved revenues by $1B per year.