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REFERENCE TITLE: eligibility verification; public programs |
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State of Arizona House of Representatives Fifty-third Legislature First Regular Session 2017
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HB 2298 |
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Introduced by Representative Kern
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AN ACT
Amending title 46, Arizona Revised Statutes, by adding chapter 9; relating to fraud in public programs.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 46, Arizona Revised Statutes, is amended by adding chapter 9, to read:
CHAPTER 9
FRAUD PREVENTION
ARTICLE 1. GENERAL PROVISIONS
46-1001. Definitions
In this article, unless the context otherwise requires:
1. "Department" means the department of economic security.
2. "Identity information" means an applicant or recipient's full name, aliases, date of birth, address, social security number and other related information.
46-1002. Enhanced eligibility verification system
A. The department shall establish a computerized income, asset and identity eligibility verification system in order to verify eligibility, eliminate the duplication of assistance and deter waste, fraud and abuse within each respective assistance program administered by the department.
B. The department shall contract with a third‑party vendor for the purposes of developing a system to verify applicant income, asset and identity information to prevent fraud, misrepresentation and inadequate documentation when determining an applicant's eligibility for assistance before the distribution of benefits, periodically between eligibility redeterminations and during eligibility redeterminations and reviews. The department may also contract with a vendor to provide information to facilitate recipient eligibility reviews conducted by the department.
C. The contract with a third-party vendor must:
1. Require that the vendor, in partnership with the department, establish annualized savings realized from the implementation of the eligibility verification system and savings must exceed the total yearly cost to this state for implementing the verification system.
2. Have a payment structure that is based on a per applicant rate and may include a performance bonus for achieving above a predetermined rate of success of identifying waste, fraud and abuse.
D. To avoid any conflict of interest, when the department enters into a contract with a third-party vendor, that primary vendor may not currently and is not allowed to bid on or be awarded a state contract to run enrollment services.
E. This section does not preclude the department from continuing to conduct additional eligibility verification processes that are currently in practice.
46-1003. Verification of identity and asset information
A. Notwithstanding any other provision of this title, all applications for benefits shall be processed within the minimum period of time required by federal law. Before awarding assistance, and on a quarterly basis thereafter, the department shall verify identity information of each respective applicant and recipient of assistance from the department against all of the following:
1. Earned and unearned income information maintained by the internal revenue service.
2. Employer weekly, monthly or quarterly reports of income and unemployment insurance payment information maintained by the industrial commission of Arizona.
3. Earned income information maintained by the United States social security administration.
4. Immigration status information maintained by the United States citizenship and immigration services.
5. Death register information maintained by the United States social security administration.
6. Prisoner information maintained by the United States social security administration.
7. Public housing and section 8 housing assistance payment information maintained by the United States department of housing and urban development.
8. National fleeing felon information maintained by the federal bureau of investigation.
9. Wage reporting and similar information maintained by states contiguous to this state.
10. Beneficiary records and earnings information maintained by the United States social security administration in its beneficiary and earnings data exchange database.
11. Earnings and pension information maintained by the United States social security administration in its beneficiary earnings exchange record system database.
12. Employment information maintained by this state.
13. Employment information maintained by the United States department of health and human services in its national directory of new hires database.
14. Supplemental security income information maintained by the United States social security administration in its state data exchange database.
15. Veterans' benefits information maintained by the United States department of health and human services, in coordination with the Arizona department of health services and the Arizona department of veterans' services, in the federal public assistance reporting information system database.
16. Child care services information maintained by the department.
17. Utility payments information maintained by this state under any low income home energy assistance program.
18. Emergency utility payment information maintained by this state or local governments.
19. A database of all persons who currently hold a license, permit or certificate from any state agency, the cost of which exceeds five hundred dollars.
20. Income and employment information maintained by the department of economic security and the United States department of health and human services' office of child support enforcement.
21. Earnings and pension information maintained by the Arizona state retirement system and the public safety personnel retirement system.
22. Any existing real‑time database of persons currently receiving benefits in other states, such as the national accuracy clearinghouse.
23. A database that is substantially similar to the database established pursuant to section 46‑1002.
B. Before awarding assistance, and on a quarterly basis, the department shall match identity information of each respective applicant and recipient of assistance from the department against, at a minimum, the following public records:
1. A nationwide public records data source of physical asset ownership, including real property, automobiles, watercraft, aircraft and luxury vehicles or any other vehicle owned by the applicant or recipient of assistance.
2. A nationwide public records data source of incarcerated individuals.
3. A nationwide best‑address and driver license data source to verify that the individuals are residents of this state.
4. A comprehensive public records database that identifies potential identity fraud or identity theft and that can closely associate name, social security number, date of birth, telephone and address information.
5. National and local financial institutions, in order to locate undisclosed depository accounts or verify account balances of disclosed accounts.
6. Outstanding default or arrest warrant information maintained by the criminal history systems board, the criminal justice information system and the warrant management system.
7. A database that is substantially similar to the database established pursuant to section 46‑1002.
46-1004. Enhanced identity authentication process
Before awarding assistance, applicants for benefits shall complete a computerized identity authentication process that confirms the applicant owns the identity presented in the application. The department shall review the respective applicant's or recipient's identity ownership using the following procedures:
1. Provide a knowledge‑based quiz consisting of financial or personal questions. The quiz shall attempt to accommodate non‑banked or under‑banked applicants who do not have an established credit history.
2. Require that the quiz for applications be available for submission through all channels, including online, in person and by telephone.
46-1005. Identity information discrepancies; department action
A. If a discrepancy results from an applicant's or recipient's identity information and one or more of the databases or information tools listed under this article, the department shall review the respective applicant's or recipient's case using the following procedures:
1. If the information discovered does not result in the department finding a discrepancy or change in an applicant's or recipient's circumstances that may affect eligibility, the department shall take no further action.
2. If the information discovered results in the Department finding a discrepancy or change in an applicant's or recipient's circumstances that may affect eligibility, the department shall promptly redetermine eligibility after receiving the information.
3. If the information discovered results in the department finding a discrepancy or change in an applicant's or recipient's circumstances that may affect eligibility, the applicant or recipient shall be given an opportunity to explain the discrepancy. Self‑declarations by applicants or recipients may not be accepted as verification of categorical and financial eligibility during eligibility evaluations, reviews and redeterminations.
B. The department shall provide written notice to the applicant or recipient, which shall describe in sufficient detail the circumstances of the discrepancy or change, the manner in which the applicant or recipient may respond and the consequences of failing to take action. The applicant or recipient must respond within ten business days or the minimum required by state or federal law in an attempt to resolve the discrepancy or change. The recipient's or applicant's explanation must be in writing. After receiving the explanation, the department may request additional documentation if it determines that there is risk of fraud, misrepresentation or inadequate documentation.
C. If the applicant or recipient does not respond to the notice, the department shall deny or discontinue assistance for failure to cooperate, in which case the department shall provide notice of intent to deny or discontinue assistance. Eligibility for assistance may not be established or reestablished until the discrepancy or change has been resolved.
D. If an applicant or recipient disagrees with the findings of the match between the applicant's or recipient's identity information and one or more databases or information tools listed under this article, the department shall reinvestigate the matter. If the department finds that there has been an error, the department shall take immediate action to correct it and no further action shall be taken. If, after an investigation, the department determines that there is no error, the department shall determine the effect on the applicant's or recipient's case and take appropriate action. The department shall give written notice of its action to the applicant or recipient.
E. If the applicant or recipient agrees with the findings of the match between the applicant's or recipient's identity information and one or more databases or information tools listed under this article, the department shall determine the effect on the applicant's or recipient's case and take appropriate action. The department shall give written notice of its action to the applicant or recipient. The department may not discontinue assistance on finding a discrepancy or change in circumstances between an applicant's or recipient's identity information and one or more databases or information tools listed under this article until the applicant or recipient has been given notice of the discrepancy and the opportunity to respond as required by this section.
F. The department shall adopt rules necessary to implement this article.
46-1006. Referrals for fraud, misrepresentation or inadequate documentation
A. After reviewing changes or discrepancies that may affect program eligibility, the department shall:
1. Refer suspected cases of fraud to the attorney general for investigation and possible criminal prosecution, recovery of improper payments and collection of civil penalties.
2. Refer suspected cases of identity fraud to the attorney general for criminal prosecution.
3. Refer suspected cases of fraud, misrepresentation or inadequate documentation to appropriate agencies, divisions or departments for review of eligibility discrepancies in other state public programs, including cases in which an individual is determined to be no longer eligible for the original program.
B. In cases of fraud substantiated by the department, on conviction this state shall review all legal options to remove recipients from other public programs and to garnish wages or state income tax refunds until this state recovers an amount equal to the amount of benefits fraudulently received.
46-1007. Report
On or before July 1, 2019 and each year thereafter, the department shall provide a written report to the president of the senate, the speaker of the house of representatives and the governor and shall provide a copy to the secretary of state detailing the effectiveness and general findings of the eligibility verification system, including the number of cases reviewed, the number of case closures, the number of referrals for criminal prosecution, recovery of improper payment and collection of civil penalties and the outcomes of any cases referred to the attorney general and the savings that have resulted from the system.
Sec. 2. Effective date
This act is effective from and after December 31, 2018.