Every year millions of dollars are squandered in Alaska through fraud, waste and abuse. The State of Alaska Department of Law has stated that if national trends hold true for Alaska, then the State’s Medicaid program alone will lose millions of dollars annually. Alaska needs to enhance and upgrade its fraud prevention program to help prevent, detect, and eliminate fraud, waste, and abuse.
Many governmental entities around the country have instituted fraud, waste, and abuse hot lines to facilitate the reporting such activities. To increase effectiveness, some programs have even incorporated cash incentives. Several federal agencies have established programs that pay cash rewards for reporting wasteful activities, and numerous states and municipalities have also established similar programs. Baltimore approved a policy that includes cash incentives for city employees, contractors, vendors and city residents for reporting activity or conduct that costs the city money or resources. Their incentive amounts to 10 percent of all monies recovered with no cap.
While the State of Alaska currently operates multiple hot lines for reporting different types of fraud, a single highly publicized and easy to remember phone number (e.g. 1-800-FraudAK) should be established to make reporting as easy as possible. Such a FWA reporting hot line combined with cash incentives for reporting would be far more effective in combating fraud, waste and abuse in Alaska.
Back in 2005, Senator Kevin Meyer introduced legislation to establish a fraud, waste and abuse hot line for Alaska. This bill should be reintroduced and modified to allow anyone to call the hot line, not just state employees. Incorporating cash incentives for reporting fraud should also be included to ensure that the program really works. This legislation should also mandate that all government entities, including school districts, implement FWA programs that include monetary incentives.
Alaska should also adopt a False Claims Act. The federal False Claims Act is perhaps the single most important tool U.S. taxpayers have to recover money stolen through fraud by U.S. government contractors every year. This law allows citizens with evidence of fraud against government contracts and programs to sue, on behalf of the government, in order to recover the stolen funds. In compensation for their efforts, a citizen whistle blower may be awarded a portion of the funds recovered, typically between 15 and 25 per cent. Under this Act, the U.S. Government has recovered $26.4 billion since January 2009.
In 2005, the Congress passed financial incentives for states to pass false claims acts that are modeled after the federal False Claims Act. Twenty-nine states and the District of Columbia have enacted their own False Claims Acts. Under the Deficit Reduction Act, states that enact a False Claims Act closely modeled on the federal version of the law receive a larger state share of FCA Medicaid awards from the Federal Government. Alaska does not have a False Claims Act. According to the non-profit organization Taxpayers Against Fraud, Alaska would have recovered an additional $167,000 from just five Medicaid fraud cases if the State had a qualifying False Claims Act at the time they were settled. Taxpayers Against Fraud has produced a model state False Claims Act statute.
Currently in Alaska there is a Workers’ Compensation Fraud Hot line, an Insurance Fraud Hot line, and a Permanent Fund Dividend Fraud Hot line. The Department of Law also has a hot line to report Medicaid Fraud. The Department of Health & Social Services has an email address for reporting instances of fraud by individuals applying for or receiving the Alaska Temporary Assistance, Food Stamps, Medicaid, and Adult Public Assistance.
It is time for Alaska to consolidate all these FWA hot lines into a single hot line and provide monetary incentives to ensure its success and reward state employees and watchful Alaskans. In these tight budgetary times, it is vital that the state not waste a single dollar. The state owes it to all Alaskans that their monies are not wasted. We cannot afford to waste money nor waste time. So let’s do this now.