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Agencies must erase payment errors to cut inefficiencies

Nov. 27, 2011 - 03:18PM   |  
By DAVE DANTUS   |   Comments

Amid a pressure cooker of increased scrutiny, political wrangling and budget cuts, federal agencies face a stiff challenge to pare down huge amounts of improper payments being made in connection with the delivery of citizen benefits. To succeed, agencies must first assess whether they have the infrastructure in place to support their operations.

Agencies must take a new approach or re-evaluate their progress against goals to reduce improper payments and implement realistic benchmarks. Regardless of what path they take, one thing's for certain: They must identify and automate error-laden processes to root out what's causing the problems.

In a time when more citizens are tapping into government resources and when waste, fraud and abuse are more prevalent, citizen benefit programs are being strained on several fronts. It's imperative for agencies to become more efficient.

Overtures have become warnings: President Obama has identified areas that need improvement with the Improper Payment Elimination and Recovery Act, which mandates agencies that manage benefit programs remove nearly $50 billion in improper payments by 2012. To emphasize the enormity: Billions of taxpayer dollars a year are being squandered.

For example, according to data on the government's website, the Social Security Administration in 2011 made $9 billion in improper payments through two benefits programs. Medicaid and three Medicare programs paid out nearly $65 billion improperly. In total, the government made $116 billion in improper payments last year. Imagine how many private and publicly traded companies would shut down if they committed errors of this magnitude. Echoing the sentiment of former federal chief information officer Vivek Kundra, I believe agencies can drive better performance by following successful private-sector best practices. For example, health care insurers, providers and pharmacy benefits managers are updating their technology to optimize the way they manage claims and improve patient outcomes.

By implementing advanced technology to support how they manage, direct and control funds for citizen benefits within crucial assistance programs, agencies can take significant steps forward. Making even incremental improvements with improper payments will have immediate effects.

With the agencies that manage citizen benefit programs overtaxed and, in many cases, understaffed, correcting these problems is easier said than done. Combine this concern with the fact that the policies governing these programs are changing at a faster pace than the systems can keep up with, and you have a confluence of negative effects. But I've found that when low-risk projects are undertaken with due diligence, information technology and business executives are often surprised by the results.

Providing ongoing services efficiently and effectively requires many things acting in concert. To ensure success, there are some elements that must be part of their plans. Mandatory on everyone's list:

Reduce risk and costs of operations. Agencies can integrate legacy systems better by using advanced predictive analytics and business process management technology. This helps them more efficiently deliver services and mitigate risk.

Increase visibility into payments. Consistently enforce process standards while accommodating the specific needs of each program. Streamline processes by maintaining an audit trail along with the rules and processes being applied.

Break down silos. Eliminate information and organizational silos with fully automated processes that extend across disparate systems, organizations and channels.

Be able to adapt to changing laws, policies and procedures. Eliminate time-consuming, costly manual interventions and workarounds with dynamic case management that adjusts a process automatically to account for new information and criteria.

Government agencies owe it to citizens to get more serious about what's at stake. This is not a short-term problem; there are plenty of Band-Aid fixes, but more comprehensive solutions are warranted.

Dave Dantus is director of Public Sector Industry Solutions for Pegasystems.

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