MDHHS Efforts Save MI Taxpayers $127 Million

Detroit, Mich. Oct. 23, 2014 – Effective stewardship of taxpayer dollars is a key goal of the Michigan Department of Health and Human Services (MDHHS). Recent initiatives have saved taxpayers $127 million and underscore the success of MDHHS efforts to tackle fraud and to ensure that public assistance goes to Michigan families, children and individuals with the greatest need, MDHHS announced today.

The MDHHS Office of Inspector General’s (OIG) fiscal year 2013 Annual Report shows that last year alone the unit determined $116 million of fraud, cost savings and established program disqualifications. The OIG saved $9 million by finding assistance recipients who were incarcerated and $2 million by matching big lottery winners with recipients.

“The OIG has done an outstanding job protecting taxpayer interests and helping to us to make sure dollars intended to go to those truly in need are secured for them,” said MDHHS Director Maura Corrigan. “The OIG’s investigations over the last three years have saved taxpayers $282.6 million.”

Through the Jail Match program, OIG investigations determine whether someone is incarcerated. Anyone who is imprisoned is removed from the household and benefits are discontinued.

The OIG is extremely effective and efficient. For every hour spent on an investigation, $286 of fraud was identified and, for every dollar spent on fraud prevention, $22 were saved due to cost avoidance.

Specific successes highlighted in the OIG annual report include:

• 9,063 recipient fraud investigative dispositions completed.
• 24,965 fraud prevention investigations completed to make sure taxpayer dollars aren’t paid to people who aren’t eligible for assistance, a 32-percent increase over fiscal year 2012.
• $76.6 million in cost avoidance in fraud prevention investigations completed, a 10 percent increase over FY2012.
• $14.7 million in cost savings from intentional program violations.
• $20.3 million of recipient fraud identified.
• 337 investigations completed by the special investigations agents unit, a 50-percent increase over fiscal year 2012.
• $3.9 million of provider, contractor and employee fraud identified.
• 1,820 benefit trafficking investigations resulting in $2.4 million receivables, a 71-percent increase from fiscal year 2012.

The second report shows the ongoing success of the Lottery Match program. This is the second report to be released on this program since the Legislature mandated that all lottery winners must be matched against those receiving various types of public assistance in Michigan.

In 2013, 7,216 Michigan Lottery winners of $1,000 or more were matched and identified as living in households that were receiving some sort of assistance. These 7,216 lottery winners accounted for nearly $44 million in lottery proceeds and averaged $6,056 per case.

“These winnings add up,” said Corrigan. “While federal regulations prevent us from being able to discontinue certain types of benefits, we were able to close food assistance and Medicaid benefits for 810 recipients, saving taxpayers nearly $2 million.”

Corrigan said MDHHS is working closely with the Legislature and the federal government to seek changes to policy and law that would allow for MDHHS to cease paying benefits to lottery winners collecting other types of public assistance.

“It does not sit well with taxpayers when someone who has won millions of dollars continues to collect assistance because of federal loopholes that do not count these winnings as assets,” Corrigan said.

She added that one of the biggest benefits of the Lottery Match program is that MDHHS now has the ability to systematically track these winnings and can document the scope of the problem and the potential payoff from federal reforms.

Find the full OIG Annual Report here.

Find the Fiscal Year 2013 Lottery Match Report here.