“Waste, fraud and abuse” has become the mantra of politicians trying either to denigrate government or avoid making hard decisions about raising taxes or eliminating programs. And, sometimes, it seems overstated. But then a serious effort is made to detect it, like the just-released audit of the New York State Health Insurance Program, and we learn that, if anything, it was understated. More such audits are needed of more programs at the state and local level.
This particular audit was conducted by a private firm hired by the state after a long effort by Buffalo-area Assemblyman Sam Hoyt. And it found that 27,000 people had received health insurance under the taxpayer-funded NYSHIP who were not entitled because they weren’t really “dependents” of government workers, as claimed. In some cases they were dead, and the employees either forgot to or didn’t know they had to notify anyone. In others, there was actual fraud, as when the employee knowingly continued listing an ex-spouse, former step-child, or adult child as a dependent. In one extreme example, the audit found 85 employees with between seven and 12 “dependents” apiece, all receiving benefits they didn’t deserve.
The firm conducting the audit knew what it was doing and what to expect, having done similar audits of AT & T , Boeing and other large corporations. It found plenty of waste, fraud and abuse in the private sector and, given the lack of profit motive in the public sector, figured it would find even more there. For the $4.3 million contract, the company guaranteed the state savings of three times that amount, or $13 million. And the audit has already turned up an estimated $25 million in savings, with the dependents of another 45,000 employees to be verified for eligibility. So the eventual savings could be significantly more.
One of the best things about an effort like this is that it saves government money without depriving people of benefits they are entitled to. And public employees should welcome it because it will reduce public resentment about their cushy benefits.
If private companies are willing to guarantee savings, it would be crazy for the state, local governments and school districts not to use them for audits of all sorts of programs. That includes the $51 billion Medicaid program in New York state. A few years ago The New York Times estimated the waste, fraud and abuse in that program at 10 percent, mostly on the part of providers, not recipients. Why not hire some company to find it and save some real money?