Legislature(1995 - 1996)
03/21/1996 03:07 PM House HES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 451 - PROHIBIT DUPLICATE PUBLIC ASSISTANCE Number 1292 DENNIS DeWITT, Legislative Assistant to Representative Eldon Mulder, said "The intent is to allow a pilot project on electronic fingerprinting in the Anchorage area to determine whether or not we can find a useful and determining duplicate application and as we move along with legislation that will limit the length of time on welfare - life time limits on welfare recipients can help build a data base so that we can track those folks over time in a very efficient way." As indicated in previous testimony, Connecticut, Massachusetts, Arizona and Washington state are looking at electronic fingerprinting, while New York, California and Pennsylvania have already established the program and it appears to be working well in terms of detecting and deterring fraud. Mr. DeWitt commented the fiscal notes provided by the Department of Health & Social Services appeared to be extremely inclusive. The sponsor concurred that $47,000 for the fingerprint equipment operator is reasonable. The proposal from North American MORPHO Systems, Inc. who is the contractor for the equipment, had been received and provides for three units in the Anchorage office at an approximate cost of $115,000 to $120,000. The sponsor felt that $200,000 plus was somewhat excessive for the development of a pilot project given that several other states have already implemented the program. Mr. DeWitt said they would like to have the opportunity to discuss the fiscal notes with the Finance Committee chairman, who chairs the subcommittee on Health, Education & Social Services. He felt through discussions in the Finance Committee, they would be able to come up with more reasonable costs. CO-CHAIR BUNDE viewed this legislation as twofold, and asked Mr. DeWitt to correct him if he was wrong. One is to be proactive so when the time comes that we actually have a nationwide time limit on welfare, people will not be drifting from state to state duplicating benefits. The other benefit deals with fraud within the state of Alaska. He asked Mr. DeWitt to estimate the amount of fraud currently going on within the state in terms of numbers of people and dollar amounts involved. Number 1425 MR. DeWITT said that Co-Chair Bunde was correct on the two intents. However, they have not been able to come up with a handle on the number; it's difficult to tell, but they don't believe there is a great deal of fraud. He added that one of the purposes of the pilot project is to establish how much fraud there is. Other states have found it rewarding in terms of a reduction in applications as well as detected fraud. Based on the reviews completed of the other programs, there was some initial reluctance to register for benefits, but the notion that there is a deterrent effect to eligible and legitimate applicants was not found to be true. CO-CHAIR BUNDE asked the same question regarding fraud of Mr. Lomas, but limited it to the Anchorage area because that was where the pilot project would take place. Number 1512 CURT LOMAS, Program Officer, Welfare Reform Program, Division of Public Assistance, Department of Health & Social Services, responded that he did not have fraud data with him at the hearing for Anchorage, specifically. Based on the department's quality control activity, which is a federally mandated monitoring activity that generates statistically reliable results, statewide over the last four years, the error rate for AFDC payments paid in error as a result of wilful misrepresentation on the part of the clients, was 0.85 percent. Again statewide, that calculates to roughly $102,000 a year out of a $120 million program, which is what was being looked at. Assuming the activity is proportional, randomly distributed around the state, Anchorage has approximately 40 percent of the caseload, which would be in the neighborhood of $40,000 per year. Number 1581 REPRESENTATIVE CAREN ROBINSON said the focus of the fingerprinting program is trying to identify people attempting to get duplicate benefits. She asked Mr. Lomas if he had any statistics available on duplicate benefits fraud. MR. LOMAS said based on quality control records for as far back as available, the department has never had a case where they found an error on the basis of duplicate identity. The only case anyone is aware of, is the case Mr. Nordlund referred to in his testimony at a prior hearing, where the fraud was detected by the department before any benefits were issued. That client is now serving time for welfare fraud. Number 1620 REPRESENTATIVE ROBINSON asked Mr. Lomas how he envisioned this type of pilot program would assist the division in fraud cases. MR. LOMAS responded the department's fiscal notes reflected no impact on the cost of the AFDC program, based on their belief that it wouldn't make a difference. Particularly, given that the design set out in the project specified in the bill would operate in only one office in Anchorage, the likelihood of someone receiving benefits under two identities seemed to be so small as to be none. Number 1677 REPRESENTATIVE BRICE asked if Sections 1 and 2 of the legislation were currently not in law? MR. DeWITT said while there are a number of tangential laws which deal with the issue of fraud, there is no specific prohibition in either the AFDC program statute or the General Relief program statute that precluded duplicate enrollment. REPRESENTATIVE BRICE inquired if the department had an individual in jail who shouldn't be there. MR. DeWITT didn't think that was the case. He said there is an ability, through a lot of other tangential laws, to get to the issue. Number 1732 CO-CHAIR BUNDE conjectured that a person might be a little more careful in completing their application for benefits if they were required to go through the fingerprinting process. He asked if there was any research available from states that have implemented fingerprinting, to indicate whether or not the reject level of applicants was reduced. MR. DeWITT said he didn't have that information available and couldn't respond to the question. Number 1779 REPRESENTATIVE ROBINSON asked if Mr. Lomas was aware of any research related to Co-Chair Bunde's question. MR. LOMAS replied that according to the federal AFDC agency, there is only one state conducting this kind of activity in the AFDC program; other states conducting the activity are doing it only with their state General Relief programs. He added the only place it is happening with AFDC program is in LA County, California and the demonstration results have not been released, but they are a matter of great controversy. The information he received indicated the quantitative result that had been detected, that went through objective measurement, was that they had discovered 11 individuals who attempted to obtain assistance under a duplicate identification. Mr. Lomas said he hadn't seen the report because it hadn't been released yet. He felt it was fair to say there isn't a good set of data that indicates whether this generates real results or not. CO-CHAIR TOOHEY asked if there was anyone else who would like to testify. Hearing none, public testimony was closed. Number 1884 REPRESENTATIVE DAVIS asked Mr. Lomas if the department thought there was a problem with fraud in this area? MR. LOMAS replied no. He said the department recognizes there is fraud, but they do not feel this particular kind of fraud is significant relative to the other kinds of fraud that occur where people may not be providing accurate information. The department is well focused on it and has a lot of activity in that area. Number 1919 REPRESENTATIVE ROBINSON said the fiscal note indicates an expense of about a half million dollars in the first year and inquired if the sponsor felt this was the best use of money to stop fraud in the state. She asked how the department would use the money if they were trying to increase fraud cases. Also, she wondered if the sponsor had looked at other alternatives. MR. DeWITT said the sponsor has been focused on this approach. The bulk of the projected cost is for developing a Request for Proposal and following the federal guidelines for requesting a waiver and reporting on a waiver. He added that it may be more economical to limit the project to the General Relief program. If that's the desire, he feels the reduced cost would be worth the investigation into the fraud. He also believed the price placed on this project is certainly all inclusive and a pretty significant estimate for reviewing and creating the program. CO-CHAIR TOOHEY pointed out the bill is headed for the Finance Committee next, where the costs can better be addressed. Her personal feeing was this legislation was not yet needed. The department has an incredible record for keeping people honest and has won an award yearly for having no payment errors. REPRESENTATIVE ROBINSON expressed her desire to table the bill in this committee based on the lack of statistical data indicating that it is needed at this time and the large fiscal note. Number 2078 REPRESENTATIVE ROBINSON made a motion to table HB 451. CO-CHAIR TOOHEY asked for a roll call vote. Voting in favor of the motion were Representatives Rokeberg, Brice, Robinson and Bunde. Voting against the motion were Representatives Vezey, Davis and Toohey.
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