Are all public assistance program recipients eligible?
Iowa doesn't know.
Every dollar lost to waste, fraud, or abuse is a dollar that cannot go to fund services for those with genuine and urgent needs.
Legislators need to protect resources for those who qualify by:
- Making verification easier for recipients and the Department of Human Service workers
- Start using the National Accuracy Clearinghouse
- Regularly removing ineligible individuals
Medicaid spending is the second-largest expenditure in the Iowa budget, behind only K-12 school funding. Nearly one in five Iowans receive Medicaid benefits. Considering that this piece of the budget accounts for such a large portion of Iowa’s tax revenue, accuracy should be of the utmost importance. Unfortunately, while the error rate for Iowa Medicaid is unknown, the error rate of the administration of the Supplemental Nutrition Assistance Program (SNAP) shines a light on just how high that error rate may be.
On July 30, 2019, the U.S. Department of Agriculture (USDA) fined the State of Iowa $1.79 million due to a high error rate in the disbursement of SNAP benefits. In Fiscal Year 2018, Iowa’s SNAP error rate was over 10 percent, with overpayment occurring nearly nine percent of the time and underpayment occurring over one percent of the time. This puts Iowa’s SNAP overpayment rate at fifth highest in country, fourth if Washington, D.C., is excluded, and Iowa’s overall error rate was sixth highest in the country.
Current federal administrative rule requires that all states participate in the National Accuracy Clearinghouse for SNAP benefits by December 2021 per the 2018 Farm Bill. The National Accuracy Clearinghouse is a databank that is capable of flagging individuals who may be receiving benefits in multiple states. The software program that allows states to comply with this administrative rule is also capable of verifying identity, employment information, and assets at the click of a button.
USDA rule only mandates the use of the National Accuracy Clearinghouse for SNAP benefits, but the software may also be used to automate checks for those receiving Medicaid. This is a logical extension of an extremely useful tool that would help reduce the unrealistic workload on DHS workers and help reduce human error, as well as reduce the hassle of providing paperwork as often by most individuals receiving public assistance. Verification checks could also increase in frequency with the reduction of workload on DHS workers, creating greater real-time accuracy than the present system allows.
Presently, all verification checks at the Iowa Department of Human Services (DHS) are performed manually. This means that workers at DHS are required to contact 10-12 individuals daily to check all recipients annually. If DHS were to use the National Accuracy Clearinghouse software, workers would only need to contact individuals flagged by the system. If trends in other states are used as a guide, roughly 15 percent of public assistance recipients would be flagged for a verification check. Further, individuals utilizing public assistance would be required to submit documentation much less frequently, easing the burden on those following the law. To clarify, if an individual is flagged, benefits are NOT automatically terminated; it is simply a prompt to DHS to follow up with the individual because there is a discrepancy in their file.
As stated, Iowa has been fined by the federal government for the state’s large SNAP error rate. This is largely due to human error—human error that could be greatly reduced by the utilization of software that streamlines public assistance verification and puts the state in compliance with federal rule. The benefits of this software could be extended to all state-delivered public assistance to help reduce fraud while also reducing the heavy workload on DHS employees responsible for verifying eligibility. Simply put, this is a commonsense reform that would help ensure the integrity of Iowa’s public assistance programs while helping with the delivery of resources to those in need.