Industry News
Washington State shares NDNH crossmatch experience
April 18, 2006
Until recently, unemployment insurance claimants could fraudulently collect benefits in one state while working in another with little probability of getting caught. State workforce agencies didn't have the means to identify the fraud, and some claimants took advantage of this weak point in the system. However, with the deployment of the National Directory of New Hires (NDNH)—a national database of wage and employment information—states are gaining access to a new checkpoint that can help identify these fraud schemes.
Washington is one of six states—along with Utah, Florida, Connecticut, Texas and Virginia—that participated with the U.S. Department of Labor's (DOL) Employment and Training Administration (ETA) and the U.S. Department of Health and Human Services (HHS) to design and plan the implementation of a crossmatch that compares UI benefit claim files with NDNH data.
At the National UI Integrity Conference in Chicago May 1–3, representatives from the Washington Employment Security Department (WESD) shared their experience using the NDNH in conjunction with On Point Technology's Barts application to help identify UI fraud and overpayments.
Funding for access to NDNH data is provided by the DOL, which also provided Washington funding to gain programming access to the NDNH and to deploy a case management system in their existing Barts application. The Connect:Direct link, which is required to run the system, was provided by Washington's Department of Social and Health Services (one entity in every state has access to the NDNH).
On Point Technology added NDNH case management to Barts, which it licenses to WESD to help the agency detect unreported wages and earnings issues, and the system went live March 15, 2006. WESD requests records for multiple units, so it has a series of flags to indicate which unit requested which match. Since Washington was already running the Social Security numbers that were selected for Benefit Accuracy Measurement (BAM) against their State Directory of New Hires (SDNH), the next step involved including those numbers in the NDNH crossmatch.
The results so far have been nothing short of dramatic. For the period starting October 1, 2005, and ending March 1, 2006:
- WESD sent 80,000 requests for data, which resulted in 14,807 matches
- Out-of-state overpayments identified amounted to $18.4 million, of which WESD was in direct contact with $5 million and collected $800,000
For the period starting April 1, 2005, and ending March 1, 2006:
- WESD closed 9,482 wage match cases, 7,309 SDNH cases and 5,751 NDNH cases, all run through Barts with an interface to the agency's GUIDE/UI benefits system
- WESD detected $7,682,761 in wage crossmatches, $2,016,143 in SDNH cases, and $711,230 in NDNH cases
- WESD closed 4,004 wage crossmatch fraud cases, 1,256 SDNH fraud cases and 603 NDNH fraud cases
- WESD closed 4,127 wage crossmatch non-fraud cases, 4,981 SDNH non-fraud cases and 686 NDNH non-fraud cases
In summary, from April 2005 through March 2006, 6,885 cases were closed: 1,351 wage crossmatch, 1,072 SDNH and 4,462 NDNH. Fraud cases resulted in the identification of average overpayments as follows: $1,595 in wage crossmatch cases, $975 in NDNH cases and $926 in SDNH cases. Non-fraud cases resulted in the identification of average overpayments as follows: $3,223 in wage crossmatch cases, $179 in NDNH cases and $171 in SDNH cases.
The NDNH crossmatch is proving to be an effective tool because it can catch fraud in its early stages and prevent the thefts from growing. The ability to act sooner on these cases keeps money in the UI fund that would otherwise have gone out as an overpayment.
This article contains data from a presentation made by Byron Zarp from the Washington Department of Employment Security at the 2006 National Unemployment Insurance Integrity Professional Development Conference.