The Conversation: The fingerprint fraud - Regs run amok: An occasional series
From the very start, the sales pitch promised too much.
Flanked by prosecutors, then-Gov. Arnold Schwarzenegger declared that fraud was rampant in California's home health program for low-income elderly and disabled – and that requiring caregivers and clients to put their fingerprints on time sheets would help stop the abuse.
I'm all for rooting out whatever cheating there is in the In-Home Supportive Services program, particularly in these tough budget times. But the fingerprint fetish isn't how to do it; by now, it's clear that the prints would be of such poor quality that they would be useless.
It's another case of government regulations that don't make a whole lot of sense. A growing number of state lawmakers agree that there are many unnecessary rules that need to be weeded out. They not only get in the way of businesses, but in instances like this, they can also be a burden on individuals.
Here's the different twist: It looks like the Legislature is about to do a complete U-turn and get rid of the requirement before it fully takes effect – and before any of the $8.2 million it set aside for fingerprinting is spent.
"There has been no evidence of any widespread fraud in IHSS, and even if there was, there's no evidence that fingerprinting recipients and providers would address that fraud," says state Sen. Noreen Evans, D-Santa Rosa, author of a bill that would repeal the fingerprinting requirement.
IHSS is designed to help keep Californians in their own homes and out of expensive nursing homes and other institutions by paying someone to help with cooking, bathing, housecleaning and other support services. It has been the state's fastest growing social services program, its cost nearly tripling. In 2010-11, the state is spending more than $1.2 billion and using $3.3 billion in federal money on top of that. The budget on the table would give the program $1.37 billion in state funds in 2011-12.
With so much money sloshing around, critics say the program is susceptible to wrongdoing, especially since clients are allowed to hire and supervise their own caregivers. The recipients typically earn less than $1,000 a month; more than 40 percent of caregivers are family members. Examples of cheating include clients faking or exaggerating their physical ailments, then splitting the wages with caregivers. Caregivers have claimed extra hours, forged time sheets or even sought payment after a client is dead.
Every dollar that is misused conceivably could have gone to someone in real need. "Anything we can do to improve the program's integrity is a positive," says Michael Weston, deputy director of the state Department of Social Services.
Out of about 448,000 recipients and 405,000 caregivers statewide last year, there were fewer than 2,500 complaints and 200 criminal investigations, according to state figures. Advocates say that shows that fraud doesn't happen very often, in less than 2 percent of cases.
"We believe it's very, very low," says Karen Keeslar, executive director of the California Association of Public Authorities for IHSS, which represents the local agencies that train and oversee caregivers.
Cutting fraud and costs
Sacramento County is among the most aggressive going after fraud. District Attorney Jan Scully's office says that since starting in July 2009, a task force it leads has filed more than 120 criminal cases targeting close to $1 million in IHSS fraud.
One of the most effective detection tools has nothing to do with fingerprints. It is the grunt work of cross-checking the list of caregivers and recipients with jail inmate rosters and death reports. Investigators have slashed how long it takes to discover that fraud, saving the county tens of thousands of dollars.
The anti-fraud focus helps explain why Sacramento is one of the few counties significantly reducing its IHSS costs. In the first three months of this year, the county spent about $70 million – $6 million less than in the first three months of 2009, before the task force began work.
County supervisors want that trend to continue. Of the $2.2 million they restored to the district attorney's budget this month, they directed that $200,000 go to the anti-fraud unit.
In the summer of 2009, Schwarzenegger was in search of similar savings as he looked at the exploding statewide costs of IHSS. He demanded anti-fraud measures as part of the price for a budget deal.
Schwarzenegger repeated claims that there was 25 percent fraud in the program, though he offered no proof and the number was quickly debunked. His administration later estimated that the crackdown would save about 10 percent of the state's costs, or $162 million a year. The nonpartisan Legislative Analyst's Office, however, pegged the savings at no more than $40 million a year.
Nevertheless, the Legislature approved a package that included fingerprinting, background checks and other measures to weed out criminals among caregivers and to make sure that only those in need receive services.
Evans, who was then in the Assembly, says she voted for the fingerprinting mandate "very reluctantly" to pass a budget. "I thought it was bad policy" that treated participants in the program like criminals, she says.
The anti-fraud push was a pretext for legislators who want to gut the program, says Jovan Agee, political director for United Domestic Workers, one of three unions that represent caregivers. Most Republicans oppose the program. During the anti-fraud campaign, the union says, there have been cases of harassment and intimidation, particularly during unannounced home visits by investigators.
Soon enough, it became clear that the time sheet fingerprinting mandate was problematic. There's a reason why law enforcement professionals have to be trained to properly take fingerprints so that they are clear enough to be scanned or compared.
To expect clients and caregivers to routinely do that on their own – to roll their fingers on an ink pad and produce a usable impression on paper – was absurd. And what would it prove, anyway? If they were in cahoots, they could still fudge the hours worked.
Cindy Besemer, Sacramento County's chief deputy district attorney, says diplomatically that there "certainly have been problems" with how to utilize those fingerprints for "effective fraud protection."
Weston says that it's premature to talk about how effective the time sheet fingerprints might be. While the requirement remains on the books, his department will move toward statewide implementation by January 2013.
'A waste of money'
The repeal of time sheet fingerprinting is part of Senate Bill 930, which was approved on a 23-16 party-line vote by the Senate last month and is scheduled to be heard in the Assembly Human Services Committee on Tuesday.
Evans' bill would also repeal a requirement that recipients provide their fingerprints to county workers at the time they're assessed for the program. That's supposed to prevent an unscrupulous person from creating multiple accounts.
For that fingerprinting, DSS tested high-tech, mobile machines, used by the U.S. military in Iraq, that can scan a print, take a photo and send the images to state databases. But legislators balked at buying 1,000 of the gizmos at $5,000 a pop. The $42 million for that initiative was excised from the budget.
While some of the anti-fraud measures imposed in recent years have helped, the fingerprinting requirements are "a waste of money and a waste of local government efforts," Keeslar says. Her group, she says, is "dedicated to get them off the books."
SB 930 is also supported by disability rights groups, the California State Association of Counties, the caregiver unions and others.
In March, legislators approved and Gov. Jerry Brown signed what will probably turn out to be a far more effective deterrent to fraud. It requires recipients to get a certification from a doctor or other health care professional that they need IHSS services to live independently. That safeguard is expected to cut the caseload by nearly 37,000 people and save $120 million a year.
I'd be willing to bet that will be much, much more than any savings from fraud prevented by fingerprinting.