Florida’s Benefit Recovery (BR) Unit on Track for a $125 Million Benefit

“I would like to thank you and your team for your diligence and expertise with this project. I believe with your teams recommendations we are headed in the right direction in becoming a world class organization. I am grateful to have had the opportunity to work with such an excellent group of individuals within your team.” -Sheri M. Lynn, Director, Florida Benefit Recovery, Department of Children and Families.

Assessed Florida’s Benefits Recover Operation

Through a three-month project, TSG helped the State of Florida, Office of Program Integrity, Benefit Recovery Unit (BR) find the key changes that will allow it to dramatically improve operations.

Interviewed the staff in offices throughout the state – we talked to the people that really know BR operations: those making the claim investigations, supervisors, clerks and accountants. Florida is a large state with many rural and urban offices. So we made sure that we covered offices facing the language and culture issues from all over Florida. We found (as we always do) that the rank-in-file know the issues and had great ideas for solving them.

Documented Procedures

We found that BR processes and procedures had last been formally documented when the new system was launched 6 years earlier. In response, we worked with staff to develop process maps of the key processes. Working with the staff, we found many instances of delays, handoffs, and errors. We observed that although BR built and installed a new system only 6 years ago, the processes were still mostly manual—that the system was only a place to record things, not a decision support system.

Reviewed the performance and operations of the Private Collection Agency – we reviewed the performance over the past five years. We found many areas for possible improvement. Again, we found that the vendor personnel had made many great ideas for improvement: ideas that had never surfaced to the right level where decisions could be made. We also went back to the contract first penned 6 years ago to discover that the actual operations were no longer in line with the contract. Also, we found many forms of rough handoff, including the finding that the vendor was reentering large amounts of data because the BR system was delivering key data as a PDF report instead of as fielded data that the vendor system could just read.

Assessed systems – We documented the high level architecture, making note of key issues. We found that although BR had recently invested in an electronic archival system, it still lacks document management, workflow and many systems tools needed to support claim investigations.

Assessed operations of the fraud prosecution operation within the Attorney General’s office – unlike some other states, fraud investigation and prosecution is separated from claims investigation. We found that this separation generated rough handoffs and added costs.

Reviewed the Numbers.

Developed and analyzed a database of all the transactions to review activities – we found that BR had only the most basic numbers to track their operations. To get a better view, we extracted all the transactions over the past five years—a database of nearly a million line items. With this we were able to give BR leadership its first glance into the high number of adjustments—60% of all transactions corrected errors or otherwise adjusted claims for reasons that have nothing to do with collecting. We had heard the rumor that there was a large backlog of un-worked claims—we were able to put numbers to the problem, learning that BR had 15 months of referrals that had never been worked.

Reviewed the budget and employment history – BR had an intuition about many aspects of staffing management, but no hard data. We determined historic staff turnover. We also computed for the first time the true impact of telecommuting—which includes 20% of the workforce, but BR had no information on whether it was working out.

Found the Best Practices Nationwide

Interviewed the leadership of five of the most respected state Benefits Recovery operations – using federal reports as well as other national studies, we determined the states most respected for having top BR operations. We met personally with various levels of management in the other states. We collected hard data, interviewed key personnel and documented the best practices in benefits recovery.

Interviewed Federal Representatives

Talked with regional and national representatives of FNS, CMS and the other relevant programs to identify the key issues at the leading edge of BR management. In addition, they were able to point Florida to the states that have already demonstrated best BR practices.

Designed a plan to transform Florida’s Benefits Recovery operation

Quick-start to stop the bleeding – Florida will start by investigate backlog. This includes reinvestigating cancelled referrals and re-investigating referrals for companion claims. The total from this one-time effort will be at least $10 to $15 million. In addition, BR faces 20% automatic staffing reduction at year-end, after losing 20% last year. Our quick-start program also identifies a few simple steps that will allow BR to reduce the work required. The crux of these is eliminating non-value added work steps like 100% inspection and unnecessary transfers between regions. This will allow BR to lose27 more people in July—without affecting performance.

Prioritization – BR will start to prioritize referrals (something we helped them copy from Texas). Under this approach, BR will first assess the likely claim size, then work those over $500 first. This will raise the average claim by $700 and increase collections by $10 to $15 million annually.

Improve collection effectiveness – We identified 13 different improvements to collections. This included tools available in other states, such as garnishments and collecting from state employees.Many of these tools are longer-term and require legislative or regulatory approval—but all are “real”. These will add $8 to $10 million to collections annually.

Improve Capture of Claim Opportunities

We found several types of claim opportunities that represent large amounts: post-partum and transitional Medicaid, recover of SSI assets and tapping into lump sum payments. While these are “cost avoidance” and not included in the benefits cases, they will amount to $6 to $10 million annually. In addition, we laid out a plan for using what BR learns as a key input into eligibility management “upstream”. This could amount to many tens of millions annually.

The Plan is Low Cost

The cost for implementing the changes leading to this benefit are minimal. While new system elements will help, these can be implemented in a few years – using ad-hoc solutions to start benefit realization and “proveout” the benefits before investing heavily.

Alternatively, BR could restructure the relationship with its Private Collection Agency to shift more of the investment off the state budget. In this way, the state can achieve the benefit while shifting much of the risk to a private partner. We also helped BR lay out a method for “transitional outsourcing” to allow the state to recover outsourced operations later.