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Governor Wolf Announces Record $690 Million in Human Services’ Recoveries and Cost Avoidance

October 24, 2017

Harrisburg, PA– The Wolf Administration today announced $690 million in program integrity cost avoidance and recoveries in fiscal year 2016-17 at the Department of Human Services (DHS) – a $42 million increase from fiscal year 2015-16. Of the $690 million, $328 million are state dollars; the remainder is federal.

“My administration is focused on cost-savings, but also avoiding costs that can save money and time,” Gov. Wolf said. “The tremendous savings announced by DHS are indicative of the department’s concentrated efforts to improve how they work, streamlining processes, and truly putting a finer point on government that works.

“This is just another example of how the executive branch is taking the lead on controlling costs and saving money for taxpayers.”’

The $690 million in cost avoidance and recoveries represents a 6.5 percent increase over fiscal year 2015-16.

“The department is committed to making sure taxpayer dollars are going where they are meant to go – to serving older Pennsylvanians, children, and individuals with a disability, and protecting the well-being of our most vulnerable populations,” said DHS Acting Secretary Teresa Miller. “Our program integrity activities are safeguarding the money spent on delivering quality, essential care while demonstrating accountability.”

This increase can be attributed to:

  • Concentrated efforts by DHS’ Health Insurance Premium Program (HIPP) staff on increasing the number of enrollments each month, which allowed the program to surpass its FY 2016-17 goal of $90 million by $7 million. This represents an increase of $10 million in cost avoidance over last fiscal year. HIPP is a program for Medical Assistance beneficiaries who are employed by an employer that offers health insurance. HIPP staff determine whether it is more cost effective for DHS to pay the employer-sponsored insurance premium than to enroll the beneficiary in the HealthChoices program.
  • Streamlining of selected processes in order to expedite resolution of outstanding Third- Party Liability (TPL) casualty and estate recoveries, resulting in $12.8 million more in recoveries over last year. One component of the streamlining is a GOTIME initiative to implement a web portal for DHS customers. The web portal will greatly improve customer service, while freeing staff time to process cases, and again, ultimately increase recoveries. This resulted in a $10.6 million savings in 2016-17.
  • Increased use of data analytics to help to identify patterns of fraud, waste, and abuse.

DHS continues to modernize its program integrity efforts by undertaking a significant process improvement initiative that includes mapping and evaluating internal operations related both to estate and casualty recoveries and to fraud, waste, and abuse efforts. Through this initiative, we hope to:

  • Identify additional opportunities for streamlining operational processes;
  • Identify opportunities for automation;
  • Develop a plan for targeted redirection of fraud, waste, and abuse from the fee-for-service to the managed care delivery system; and
  • Restructure the bureau to better meet future business needs.

“The record amount of money DHS was able to reclaim or avoid is a result of identifying opportunities and making operational changes. That is government that works,” said Miller. “A commonsense example is from the TPL casualty and estate recoveries. At times DHS received an estate or casualty recovery check for just a portion of the amount owed. Historically, those checks were stored and not cashed while we tried to recover the balance of the claim. The checks would become outdated before we could cash them and we’d have to start the process all over again. Now we cash the checks and send a letter informing the beneficiary that we’ve accepted the partial payment and what amount they still owe us.”

For more information, visit www.dhs.pa.gov.

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