Date Requested: February 13, 2015
Time Requested: 03:01 PM
Agency: Health and Human Resources, Department of
CBD Number: Version: Bill Number: Resolution Number:
3011 Introduced HB2729
CBD Subject: Human Services


FUND(S):

0403; 8722; 8817

Sources of Revenue:

General Fund,Other Fund Federal

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


    This bill requires the establishment of an income eligibility verification system, a computerized system designed to find and root out welfare fraud. The bill addresses the receipt of benefits from the Department of Health and Human Resources. The bill requires applicants to provide a social security number. The bill requires the system be used when an applicant first makes a benefit request and quarterly thereafter. The bill requires notice. The bill requires investigations. The bill permits an applicant to respond. The bill requires a toll-free, state-wide call center to be established and requires reports.
    The estimated cost of this legislation to the Department is $4,961,805 ($3,336,109 state funds and $1,625,696 federal funds) for FY2016 and $2,313,935 ($1,323,794 state funds and $990,141 federal funds) upon implementation.
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2015
Increase/Decrease
(use"-")
2016
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 4,961,805 2,313,935
Personal Services 0 2,037,154 2,037,154
Current Expenses 0 2,811,001 276,781
Repairs and Alterations 0 0 0
Assets 0 113,650 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0


Explanation of above estimates (including long-range effect):


    The proposed legislation requires the Department to establish an income eligibility verification system for benefits to prevent fraud, waste and abuse in the welfare system. Currently, the Department's Office of Inspector General, Investigations and Fraud Management Unit has a small front end fraud investigation team that, if expanded, would investigate discrepancies. The front end fraud unit currently consists of six investigators who cover Kanawha, Boone, Putnam, Cabell, Mercer and McDowell Counties and one supervisor, but the number of staff is inadequate to cover the entire state. To broaden the reach of the unit, a significant number of new positions must be created so that the investigators work together with the eligibility determination staff prior to approving benefits. Pursuant to §9-5-24 (g), the Department shall investigate the circumstances of the discrepancy in order to determine eligibility of the applicant or recipient; it is anticipated that the OIG will need an additional 30 Investigator I FTE's (average salary and benefits is $40,225) and 5 Health and Human Resources Specialist Senior FTE's (average salary and benefits is $50,073) to expand the program from 6 counties to 42. Some investigators would cover more than one county office. In addition, one Administrative Services Assistant would be required to process reports, track activity, and manage other office functions (average salary and benefits is $40,143). Total personnel services costs for the OIG is estimated at $1,497,245. Current expense to accommodate OIG travel, training, and office supplies is estimated at $90,000 per year ($2,500 x 36 FTE's). Rent and utilities for the new OIG staff is estimated at $81,022 per year. There is a onetime cost of $41,400 in FY 2016 for the purchase of computer equipment ($1,150 per FTE x 36) for OIG staff.
    Pursuant to §9-5-24 (j) it is anticipated that the Department's Bureau for Children and Families (BCF) will establish a single statewide toll-free telephone and call center to resolve discrepancies with the applicant or recipient that may arise as a result of the income eligibility verification system and make determinations regarding eligibility pursuant to the proposed legislation. In order to accomplish this, BCF anticipates the need for 15 additional Economic Service Worker positions. The Department's average salary and benefits for an Economic Service worker is $35,994; total estimated personnel cost for these 15 FTE's is $539,910. There are one time equipment purchases for the hotline staff, totaling $72,250, which include the following: phone equipment and supplies ($7,500), phone service set up fees ($2,500), computers and equipment ($17,250), and pods/chairs ($45,000). Yearly current expense of $105,759 for the hotline includes rent and utilities for the additional staff, estimated at $33,759 per year and a monthly phone bill for approximately $72,000 per year ($6,000 x 12 months).
    Estimated cost related to required system changes to the Department's RAPIDS system (eligibility system) to accommodate requirements of the proposed legislation total $2,534,220. This estimate is based on data from the Department's contractor for the RAPIDS system indicating an approximate 18,772 hours of programming time @ $135 = $2,534,220.
    



Memorandum


    The Department currently maintains a computerized system that meets many of the provisions set forth in the bill. The current RAPIDS system utilizes multiple data exchanges to verify earned and unearned income, social security numbers, fleeing felons, vital statistics, and citizenship for various different programs available through the Department. The current system alerts workers to discrepancies and allows for notices, investigations, and corrective actions when deemed necessary.
    Currently, federal partners of several of Department programs require and/or limit the information source from which we gather and verify information. Each program has its own policies and requirements; the extensive list of data bases proposed in this legislation could potentially be in violation of current federal regulations related to eligibility determination.
    The statement "Home visits shall be scheduled as frequently as required by the circumstances of the applicant" is vague and cannot be quantified as written.
    It is anticipated that through this legislation savings in the form of identifying duplication of assistance and detecting fraud would occur. However, there is no data available to determine the extent of these savings to Medicaid.
    



    Person submitting Fiscal Note: Karen L. Bowling
    Email Address: karen.l.bowling@wv.gov