Florida, the state with the highest per capita identity theft complaints, is experimenting with a new way to weed out potential fraudsters in its public assistance programs. If the federal government concludes that the program meets a civil rights review, then the model could spread to other states soon.
Florida is working with LexisNexis, a private company known for its digital archives of newspaper articles and legal documents, to pilot an automatic online identity authentication system for three types of public assistance: Medicaid, Temporary Assistance for Needy Families (TANF) and the Supplemental Nutrition Assistance Program (SNAP).
The Florida Department of Children and Families (DCF) currently receives 90 percent of public assistance applications online, which entails a manual review of applicants' self-reported information across multiple databases and a follow-up phone call. The LexisNexis model functions more like online financial services in the private sector, where software verifies a person's identity based on a few items of personal information.
LexisNexis, which won the three-year, $2.9 million contract from Florida, uses a database it's compiled of 500 million unique American identities to vet applicants. The company cross references a range of biographical information, including social security numbers, residential addresses, incarceration records and death certificates. The screening is automatic and based on four multiple choice questions (randomly selected from a pool of 35 possible questions). If a person fails the test, he or she can apply again through the manual online process, by mail or in person.
"What we're trying to determine is that the person does exist, that it's not a made-up identity and that they're who they say they are," said Susan Vitale, deputy secretary for DCF.
Last year, Florida recorded 69,795 identity theft complaints, equal to 361.3 complaints per 100,000 state residents, according to a February report from the Federal Trade Commission. About 1.6 percent of nationwide identity theft complaints, the report said, involved government benefits applications.
So far, the Florida pilot program is on pace to save the state of Florida close to $80 million, which is $50 million more than originally projected. If successful, the pilot would mark an important turning point for the detection of waste, fraud and abuse within public assistance. Rather than recouping money from someone already exploiting the system, this would stop it "upfront, at the door and not [let] them in," Vitale said. "That is a very big paradigm shift."
The pilot started in seven counties in Central Florida in March, and will go statewide in June. Florida had to request a waiver from the U.S. Department of Agriculture (USDA) to use the automatic online software to screen for identity theft in federal food stamp applications. Federal evaluators are monitoring the pilot to make sure that protected groups under civil rights law, such as minorities, the disabled and people with limited English skills, are not intimidated or discouraged by the automatic online screening. Florida is required to report back to the USDA on the pilot's impact on protected groups through customer surveys, the tracking of complaints, community feedback and changes to the total number of SNAP participation.
Identity fraud in public assistance is "certainly something that you would want to prevent [and] to the extent that you can make online applications more secure, it's a good thing," said Elizabeth Lower-Basch, a policy coordinator and senior analyst with the Center for Law and Social Policy. "You just need to make sure that it doesn't create burdens for people."
Because the LexisNexis identity screening technology is so new in the world of public assistance, policymakers aren't sure how it will impact participation rates just yet. Many of the factors that determine whether someone participates in public assistance are related to state economic conditions and the profile of the applicant, such as a person's age, gender, level of income and education.
But governments can also affect someone's likelihood of seeking public assistance. Past studies of SNAP by Mathematica Policy Research have demonstrated that people enter SNAP at higher rates if state governments perform outreach, expand their eligibility definitions or ease income reporting requirements. Last year, Gov. Andrew Cuomo singled out fingerprinting in his State of the State address as a screening method that he believes discourages participation in New York City's food stamps program. (Mayor Michael Bloomberg defended the program, arguing it's the best way to cut down on fraud.) Whatever the reason, analysis from the Food Research and Action Center suggests that many families living in poverty in urban areas qualify for food stamps, but don't take advantage of the benefits.
Vitale insists that Florida's program won't hamper people trying to access benefits. "The idea here is to detect the fraud upfront," she said, "but it is not to prevent people from applying." For her part, Vitale suggested the convenience of applying online and the prospect of shorter processing times might increase participation.
If Florida's experiment appears to reduce fraud without turning away people who are actually eligible, then other states might copy the program. Vitale said she's heard from state officials in Wisconsin, Michigan, Texas and Pennsylvania that are all interested getting the same waiver to try out identity authentication. "We're happy to lead the way," she said, "and hope that other states will follow."