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Friday, May 4, 2012

O’Brien’s welfare reform proposal faces skepticism in Senate

CONCORD – State Senate budget writers voiced skepticism Thursday about House Speaker William O’Brien’s aggressive plan to crack down on welfare fraud.

State human service officials questioned the actual savings that would come from hiring a private company to analyze every welfare applicant against a series of databases to detect wrongdoing.

Advocates for the poor warned that with the rate of false positives on such database “hits” running as high as one-third, thousands seeking public aid could be wrongfully turned down or end up at the local welfare office.

State Rep. Neal Kurk, R-Weare, was the prime sponsor of the original bill, HB 1858, and the person O’Brien planted his fraud program onto. Kurk agreed that the savings from the plan may be questionable and suggested that it should undergo a cost-benefit analysis.

The Senate Finance Committee will not make a recommendation on the measure until next week, but all signs are that the initiative will be slowed down, if not completely derailed for this session, by being converted into a study committee.

“Fraud rings a big bell with me; it’s a big deal,” said Sen. Jack Barnes, R-Raymond, who came up with the study committee concept. “I think it needs more than a week’s time to come up with this.”

Two months ago, Senate GOP leaders had publicly embraced O’Brien’s program, which emerged after Health and Human Services Commissioner Nick Toumpas, at O’Brien’s request, agreed to have Lexis-Nexis perform a no-cost rudimentary examination of the 150,000 who get Medicaid insurance or Food Stamps.

O’Brien called the results “eye-opening,” noting that 2 percent of those on federal Food Stamps or Medicaid programs had a non-New Hampshire driver’s license, that 56 people getting Medicaid were dead, and that one woman on welfare owned a $1.2 million property and another man owned a Cadillac Escalade.

“These individuals take what should be a safety net and turn it into a trampoline,” said House Finance Committee Chairman Kenneth Weyler, R-Kingston.

Senate President Peter Bragdon, R-Milford, was quick to point out that this dramatic analysis has not yet been confirmed.

“What if it turns out the 56 reported to be dead aren’t?” Bragdon asked rhetorically.

Vice Chairman and Sen. Robert Odell, R-Lempster, wasn’t happy to learn from Weyler that Lexis-Nexis officials said it could take as long as two weeks to go through all the databases for each applicant.

“If someone is actually looking for food stamps and other benefits and there is a delay, doesn’t it then mean they just go to the town welfare office?” Odell asked.

Jennifer Jones, general counsel for the Division of Family Assistance, said federal law requires states to do routine audits of applicants, and New Hampshire already has the highest fraud conviction rate in New England.

“These databases or hits are only a starting point,” Jones said. “We’ve got resources that would be utilized to track this down, to what end, to what effectiveness. We don’t know the cost and, frankly, we don’t know the benefit.”

In 2011, state welfare authorities had 2,553 fraud referrals that resulted in 1,962 investigations.

The cases produced 48 convictions, and 34 other cases were referred to county attorneys for local prosecution. Many of these probes ended in violations that weren’t criminal but put future benefits in jeopardy.

O’Brien maintains that if only 5 percent of reported fraud cases are real, the state would save millions a year, since the Temporary Assistance to Needy Families program alone spends $70 million annually.

The bill would spend some of those savings to cover a $3.9 million lawsuit the state lost to raise rates paid to residential care providers.

Retired Nashua District Court Judge Philip Howorth was there for one of the providers, the Pine Haven Boys Center in Suncook.

Sen. Lou D’Allesandro, D-Manchester, proposed to eliminate the welfare fraud and pay this judgment of the Supreme Court.

“New Hampshire has a habit for paying its bills,” D’Allesandro said. “If we don’t pay this, we create a chasm between trustworthiness and the taxpayer.”

Senate Finance Chairman Charles Morse, R-Salem, said lawmakers should have been brought in on negotiations to settle this case and there is no money lying around to pay this.

“We’ve given now up to $660 million to the Department of Health and Human Services in its budget,” Morse said. “Somebody else is going to have to be cut to produce this money.”

Kevin Landrigan can reached at 321-7040 or; also check out Kevin Landrigan (@KLandrigan) on Twitter and don’t forget The Telegraph’s new, interactive live feed at