By: Curtis Briggs and Melissa Royal

Recently, we heard from a state that received 1.25 million unemployment insurance (UI) claims during the pandemic. Of those, all but 150,000 were suspected of being fraudulent. If you’re doing the math, that’s 88%.

Results like these highlight the dilemma that UI programs face with COVID-19. Under pressure to respond in a crisis — and bound by federal rules to ensure timely payments — they must prioritize relief over fact-finding and adjudication. This “pay-first-ask-questions-later” approach has helped countless people in a time of need. But it’s also exposed UI programs to considerable fraud, including identity theft, overpayments, fake companies, and cyber-theft. The limitations of legacy technology and manual processes have only compounded the problem.

So what can states do to better protect program integrity? And what lessons from UI can be applied to means-tested benefits programs?

1. Make better use of technology

For states with 40-year-old mainframes, or even early-2000s systems, COVID-19 revealed the need for new tools in the toolbox.

Fighting fraud is more complex today. To determine if people are who they say they are, UI programs need to cross-match against numerous agencies — e.g., Department of Corrections, DMV, Child Welfare — and private records. With many more moving pieces, and individualized systems that all need to talk to each other, UI programs need more sophisticated fraud controls — and an ability to enrich their data sets and analyze them further.

States today are throwing various tools at the problem, including many new to UI, but there isn’t one silver bullet. Meanwhile, fraudsters continue to find ways past new barriers. The solution? A modernized system that can interface with multiple resources securely to validate information. Better algorithms to preemptively flag threats. Analytics to help states act on the immense amount of data they have. And proper training to fully understand the data and put tools to best use.

Few companies today have the bandwidth to do all this. Maximus does. We know no one wants to spend $50 million to modernize, only to do it again in 10 years. From sizing up ROI and aligning needs to coordinating vendors and solutions, we can show you a way forward.

2. Reengineer and streamline processes

For UI programs, opening up pandemic benefits to gig workers and the self-employed was a giant curveball. UI systems weren’t programmed for this expansion of coverage. And UI staffs weren’t prepared to determine eligibility for this new population, especially without the cross-matching that employer data normally provides. With an influx of claims, greater public visibility, and an increased reliance on self-documentation, rampant fraud was practically inevitable.

The underlying problem is that UI processes, rules, and program infrastructure are still catching up to new workforce models and trends. But this presents an opportunity. By forming smart partnerships with solutions providers, states can begin reengineering to meet today’s trends and get on a path to continuous process improvement. These enhancements could make it easier for claimants and employers to submit information, for staff to detect fraud upfront rather than try to recover funds after the fact, and for programs to adapt to new legislation.

3. Select partners who can do more robust tasks

In terms of UI staffing, the pandemic presented a perfect storm of challenges. An unprecedented volume of claims to address. Historically low staff levels due to the previously thriving economy. And programs reliant on merit-based employees who weren’t used to working with outside partners.

Accustomed to training entry-level staffers for a couple years before elevating them to the next adjudication level, many UI programs wondered how a contractor could get up to speed fast enough to add value.

What they found instead is that partners like Maximus can quickly identify necessary skill sets, provide a way around state roadblocks like budgets and hiring freezes, and provide the right talent with the right incentives to make an immediate impact. That’s enabled programs to smoothly scale up or down in response to caseloads and offload even complex tasks like adjudication to partners under the oversight of state staff.

Preparing for the future, whatever it brings

The benefits of a new, more modern approach to program integrity are obvious. But how do you get there? There are 50 states, each doing UI a bit differently, making it hard to simply replicate another state’s success. At Maximus, we can help you get a handle on the people, processes, and technologies you’ll need through:

• A needs/gap assessment. By drilling down into your workflow and business processes, we see where the gaps are. That drives our strategy and technology recommendations, giving you a future road map to take to state leadership.
• A bigger picture view. We’ve supported UI programs in 18 states during COVID. The more we work across states, the more we see the bigger picture — who’s filing, what policies work, what the data means. All of which leads to better decisions.
• The right people. Our extensive project management resources enable us to plan, procure, and implement all aspects of your solution. In addition, our top-notch train-the-trainer model has given us a workforce that we can quickly bring up to speed to make you as efficient and flexible as possible.
• An understanding of program culture, politics, and leadership. We know how to work within an established culture, navigate your current political landscape, interpret federal guidelines and map them against state policy, and bridge gaps that often exist within government staffs — for example, between those setting business requirements and those in IT implementing them.

While UI programs may be some of the most complex, the same modernization principles apply to any benefits program grappling with integrity issues. If you want to improve effectiveness, better balance claimant needs with fraud prevention, and ready yourself for the next pandemic or recession, the time to act is now.