1. The Council of State Governments – Innovations Award July 20, 2012 – Atlantic City, NJ Gary D. Alexander Secretary, PA Department of Public Welfare

2. Agenda About Pennsylvania’s Department of Public Welfare The Case for Change Program Integrity (PI) Initiative 2012 Program Integrity Priorities PI Process Improvements, Technology Initiatives, and Organizational Changes Program Integrity Results Transferability Questions and Discussion Enterprise Program Integrity – Gary D. Alexander, Secretary, PA Department of Public WelfarePage – 2

3. About Pennsylvania’s Department of Public Welfare Page – 3 One in every 4.6 Pennsylvanians receives some form of welfare assistance 1 Unduplicated number of persons receiving assistance that includes DPW assistance programs plus the Children’s Health Insurance Program (CHIP) as of May 2012. Pennsylvania’s 2010 Census Population: 12.7 million Pennsylvanians receiving assistance: 1 2.75 million Enterprise Program Integrity – Gary D. Alexander, Secretary, PA Department of Public Welfare

4. Page – 4Enterprise Program Integrity – Gary D. Alexander, Secretary, PA Department of Public Welfare About Pennsylvania’s Department of Public Welfare

5. The Case for Change Page – 5 Challenges Pennsylvania Faced: Legislative mandate to reduce fraud, waste, and abuse Auditor General issued audits of benefit programs that highlighted fraud, waste, and abuse Significant budget cuts; forced to do more with less Increased pressure from internal and external stakeholders to improve transparency and accountability Enterprise Program Integrity – Gary D. Alexander, Secretary, PA Department of Public Welfare

6. Page – 6 Program Integrity Initiative July 2011 to October 2011 Enterprise Program Integrity – Gary D. Alexander, Secretary, PA Department of Public Welfare

7. Page – 7 Program Integrity Initiative July 2011 to October 2011 As-IsGap AnalysisTo-Be Enterprise Program Integrity – Gary D. Alexander, Secretary, PA Department of Public Welfare

8. Program Integrity Initiative July 2011 to October 2011 Page – 8 Sustainable Person- Centered Integrated Fiscally Responsible Accountable Guiding Principles Program Integrity Objectives Performance Outcomes Increase consistency in collecting, sharing, and analyzing useful information across multiple program offices to proactively minimize the potential for fraud, waste, and abuse and support effective decision making. Operate the most cost-effective welfare program possible by proactively evaluating, delivering, and paying for the highest quality services based on best value and verified need. Hold providers, recipients, retailers, and employees accountable for understanding and complying with stated program requirements. Improved data integrity Increased efficiencies Improved predictability Reduced non-compliance Increased transparency Improved payment accuracy Improved return on investment Reduced inappropriate services Increased rate consistency Improved recovery efforts Reduced service excess Enterprise Program Integrity – Gary D. Alexander, Secretary, PA Department of Public Welfare

9. 2012 Program Integrity Priorities Page – 9 Increase overpayment referrals and recoveries Improve quality control processes Strengthen application intake controls Streamline fraud referral processes Enhance provider accountability Focus program integrity performance measures to drive decision making Implement information technology solutions that target front-end detection Enterprise Program Integrity – Gary D. Alexander, Secretary, PA Department of Public Welfare

10. PI Process Improvements November 2011 to Present Page – 10 Prevention-Based Enhanced overpayment identification process Risk-based case review process Standardized criteria for evaluating provider applicants Provider and recipient overlap Standardized process for vehicle Special Allowance requests Enterprise Program Integrity – Gary D. Alexander, Secretary, PA Department of Public Welfare

11. Page – 11 Detection-Based Backlogged case review Risk-based quality control process State and Federal benefit data match Provider audits Audits/monitoring of Office of Children, Youth, and Families funding Centralized fraud referrals Reviewing One-Time Issuances Streamlined overpayment referral process EBT card reviews Enterprise Program Integrity – Gary D. Alexander, Secretary, PA Department of Public Welfare PI Process Improvements November 2011 to Present

12. PI Technology Initiatives June 2012 to Present Page – 12 Enhanced use of data exchanges Prioritized alerts and automated data exchange hits Centralized scanning and imaging (COMPASS) Increased accessibility (COMPASS) Repository of Abuse and Fraud Tracking System (RAFTS) Real-time fraud scoring engine Strengthening One-Time Issuance and sanction rules Executive Dashboard (PI performance measures) Front-end/pre-payment data analytics and fraud detection Enterprise Program Integrity – Gary D. Alexander, Secretary, PA Department of Public Welfare

13. PI Organizational Changes November 2011 to Present Page – 13 Program Integrity Office Program Integrity Units in County Assistance Offices (CAOs) Collaboration with the Office of Inspector General (OIG):  Overpayment referrals and recoveries  Application investigations  Fraud investigation program  SNAP trafficking  Enhancing OIG content in caseworker training  Reestablished OIG role in CAOs Enterprise Program Integrity – Gary D. Alexander, Secretary, PA Department of Public Welfare

14. Program Integrity Results Page – 14 Backlogged Case Review:  385,958 backlogged cases  88% reviewed in SFY 12 resulting in 30% case closures State and Federal Benefit Data Match:  6,609 potential matches  34% proved to be unknown income  $3,584,868 amassed in cost avoidance with potential to increase through overpayment recoveries EBT Card Reviews:  1,123 cases identified with non-continuous, out-of-state electronic benefit transactions  58% of identified cases have been closed  $927,107 amassed in cost avoidance Enterprise Program Integrity – Gary D. Alexander, Secretary, PA Department of Public Welfare

15. Page – 15 Provider and Recipient Overlap:  2,700 cases identified with provider/recipient overlaps  Child care payments not identified as income OIG Recipient Cost Recoveries and Avoidance:  $38,840,063 costs recovered in SFY 12  $72,929,360 costs avoided in SFY 12 Bureau of Program Integrity (BPI) Provider Cost Recoveries and Avoidance:  $15,375,974 costs recovered in SFY 12  $34,356,000 costs avoided in SFY 12 (Managed Care Organization recoveries and recipient restrictions) Enterprise Program Integrity – Gary D. Alexander, Secretary, PA Department of Public Welfare Program Integrity Results

16. Page – 16 Medical Assistance (MA) Recipient Overpayments and Recoveries:  153 MA overpayments referred to OIG  $230,450 ($1,506 per referral) in overpayments referred Third Party Liability (TPL) Cost Recoveries, Savings, and Avoidance:  $148,208,641 costs recovered (casualty, health insurance, and estate recoveries)  $101,527,166 costs saved through the HIPP program  $338,166,235 costs avoided through health insurance utilization Bureau of Finance and Operations Audits:  $1,070,560 costs recovered through provider audits  $12,300,000 costs avoided through provider audits Enterprise Program Integrity – Gary D. Alexander, Secretary, PA Department of Public Welfare Program Integrity Results

17. Transferability Page – 17 Program integrity framework is designed to support unique needs Encompasses organization, process, technology, policy, and performance measures Supports tactical (short-term) and strategic (long-term) planning and execution Driven by environment-specific risks – tailored approach recognizing that one size does not fit all Extensible to support program office, department, or state level Enterprise Program Integrity – Gary D. Alexander, Secretary, PA Department of Public Welfare

18. The Council of State Governments – Innovations Award July 20, 2012 – Atlantic City, NJ Gary D. Alexander Secretary, PA Department of Public Welfare