Shunning PARIS

A system designed to reduce improper public assistance payments has already saved millions of tax dollars, but a majority of states don't use it.

by / April 16, 2002
When a computer system is able to reduce tax expenditures by millions of dollars and generate as much as $27 in savings for every dollar spent on expenses, you would think state officials would be scrambling to use it. But that's not the case with the Public Assistance Reporting Information System, better known as PARIS, a four-year-old system designed to reduce improper payments in public assistance programs.

So far, only 16 states are using PARIS to identify individuals or families who may be receiving benefit payments from TANF (Temporary Assistance for Needy Families), Medicaid or Food Stamps in more than one state, according to a report by the General Accounting Office (GAO).

In February 2001, PARIS identified almost 33,000 instances in which improper payments were potentially made to individuals who appeared to reside in more than one state. Just under half of the potential improper payments involved Medicaid benefits; the rest involved some combination of TANF, Medicaid and Food Stamps. So far, four states and the District of Columbia have collected data on the benefits of the interstate matching system and have documented $16 million in savings.

According to the GAO, their analysis suggests PARIS could help other states save program funds by identifying and preventing future improper payments. Among the 34 states not participating when the GAO released its report in September were California, Texas, Michigan and Ohio, all of which account for a significant portion of welfare expenditures.

Lack of Information
Each year, the United States spends approximately $230 billion on public assistance, Medicaid and Food Stamps. Millions are lost annually when individuals and families receive duplicate benefit payments from more than one state. Part of the problem has been the lack of information sharing between federal agencies that run the welfare programs and states that administer them.

In 1997, the Department of Heath and Human Services started PARIS so states could share eligibility information and identify improper payment benefits. PARIS works by comparing states' benefit recipient lists with one another using individual social security numbers, as well as name and address information. Computers at the Defense Manpower Data Center search for matches and any hits are forwarded to the appropriate state, where staff can take steps to verify the information and decide whether to cut off benefits.

Few states have taken the time to compare the program's costs to the benefits, but studies of its benefits clearly indicate that computer matching saves tax dollars. For example, Pennsylvania estimated that PARIS uncovered more than $2.8 million in savings in its TANF, Medicaid and Food Stamp programs. Maryland said that it saved $7.8 million in the Medicaid program during the first year PARIS was in operation. Kansas estimated that PARIS produced a savings-to-cost ratio of about 27 to 1.

According to the GAO, if states used data from all three public assistance programs in their matching activities (not all do), the net savings could outweigh the costs of PARIS. On average, the savings-to-cost ratio would be 5 to 1. Based on data provided by the three states, approximately 20 percent of match hits end up valid. In addition to the savings generated by participation in PARIS, states also gain from the program's internal controls that help ensure public assistance payments are only made to or on behalf of people who are eligible for them.

Limited Use
Even with the success so far, PARIS has been limited in its effectiveness. Most notably, only one-third of the states participate, leaving a large portion of the public assistance population not covered by the matching system. Second, PARIS has been hampered by coordination and communication problems among its participants. Third, some participating states give PARIS low priority, resulting in many duplicate payments left unresolved. Finally, the system suffers from the fact that it can't prevent duplicate payments from occurring, but can only identify and stop those that have already started.

States that aren't participating in PARIS have given a number of reasons why they haven't joined. Some said they have more pressing matters, others said information about the program hasn't reached the right people. In addition, some states have avoided PARIS because bordering states don't participate or because there hasn't been any data on potential savings. Many of these reasons point to a lack of effort on the part of federal agencies to promote PARIS. In fact, the Administration for Children and Families, which is the lead agency in the project, has not officially recognized PARIS and devotes few resources to it.

As for communications problems, participating states expressed frustration with attempts to contact other states to resolve matches, while other states submitted data that was incorrect or not up to date, creating problems with incompatible data. Another problem has to do with uncertainties concerning responsibilities for collecting overpayments from individuals.

More problematic has been the lack of management attention to PARIS in some participating states. GAO found evidence that at least three participating states were not making attempts to resolve problems with improper payments that had been identified by PARIS. The problem was particularly acute in the Medicaid program where some administrators made it clear they were focusing on getting people on Medicaid rolls rather than removing recipients who are no longer eligible.

Possible Solutions
To improve the effectiveness of PARIS, the GAO has recommended that Health and Human Services Secretary Tommy G. Thompson provide better guidance to participating states, including efforts to improve communication and coordination and to reach out to nonparticipating states and encourage them to become involved in PARIS. At a minimum, states should provide their TANF and Medicaid recipient data for other states to match, even if they decide not to participate.

Some specific recommendations call for the creation of a clearinghouse to share best practices information among all states so they can improve their procedures, such as comparisons of match filtering systems. HHS should also take the lead in helping participating states develop a more formal set of guidelines for coordinating and communicating with one another once a match has been identified. The federal agency should also become more active in encouraging nonparticipating states to join the PARIS program, while coordinating with the U.S. Department of Agriculture and its Food Stamp program to encourage better participation at the federal level. Currently, there are no statutes requiring states to track Food Stamp payments across state lines.