Industry News
Is a corrective action plan in your agency's future?
May 25, 2006
At this year's National Unemployment Insurance Integrity Conference, held last month in Chicago, Andrew Spisak, Mathematician-Statistician for the Employment Training Administration branch of the U.S. Department of Labor (DOL), gave an insightful presentation on UI Overpayment Detection Measure. Overpayment Detection Measure is calculated based on figures from two areas, Benefit Payment Control (BPC) and Benefit Accuracy Measurement (BAM).
The BPC figure represents the amount of UI benefit overpayments a state actually establishes for collection and the BAM figure, referred to as Operational Overpayment Rate, is composed of those overpayments states can be reasonably expected to detect and establish for recovery through regular program operations. These overpayments include both fraud and non-fraud. Nationwide, in FY 2005 the Operational Overpayment Rate was 5 percent, representing approximately $1.6 billion in UI benefit overpayments. The breakdown of UI Overpayments by Cause is as follows:
- Benefit Year Earnings: 52.3%
- Separation Issues: 26%
- Able & Available: 10.3%
- Other Issues: 7.2%
- Other Eligibility Issues: 4.2%
As part of his presentation, Spisak discussed the importance of state workforce agencies achieving an Acceptable Level of Performance (ALP) of overpayment collecting due to the fact that, beginning with FY 2009, the DOL will be monitoring state performance levels. Any state not meeting the 50 percent performance level will have to submit a Corrective Action Plan (CAP) as part of its State Quality Service Plan (SQSP).
Even though the program begins with FY 2009, the figures used will be based on average performance over a three-year period. This means your state's BPC performance in 2006 makes a difference. Any state reporting an overpayment detection rate below 50 percent will be required to discuss the reason for not meeting the goal in the narrative section of the SQSP. Because poor performance in an early performance year will remain in the calculation and continue to depress the ratio even as performance improves, a state whose performance in the most recent performance year meets or exceeds the ALP will not be expected to address performance of the overpayment detection measure in the SQSP for the following fiscal year.
On the other end of the spectrum, the DOL established an upper limit of 95 percent for the Overpayment Detection Measure. Any state reporting an overpayment detection ratio above 95 percent will be required to discuss the reasons for its high detection rate in the narrative section of the SQSP. If a state's high detection rate is due to its failure to properly administer BAM or BPC activities, the state will be required to submit a CAP designed to produce valid data for the Overpayment Detection Measure. Currently, half of the states in the US have Overpayment Detection rates less than 50 percent or greater than 95 percent.
Curious to see where your state ranks? State performance rankings are available online.
Anyone interested in viewing Spisak's full presentation can find it at www.naswa.org, under the National Conferences link.