The Partnership Fund for Program Integrity Innovation March 2012

1. The Partnership Fund forProgram Integrity InnovationMarch 2012

2. What is the Partnership Fund for Program Integrity Innovation? • Premise: That individuals on the front lines of service delivery, including state and local governments, community organizations and other stakeholders have good ideas about how to reduce improper payments, improve efficiency and deliver better service to the public • Purpose: To incentivize stakeholders to identify new innovations both within programs and beyond traditional program and jurisdictional bounds • Incentives: Funding for pilot projects and evaluations that test innovations to streamline administration and/or strengthen program integrity • Scope: Federal assistance programs that have a substantial State role • Funding: $32.5 million appropriation

3. Collaborative Forum

4. Partnership Fund Pilots: Growing Return on Investment

5. Improper Payments

6. Background • Improper payments occur when: • Funds go to the wrong recipient • The right recipient receives the incorrect amount of funds (including overpayments and underpayments) • Documentation is not available to support a payment • The recipient uses funds in an improper manner • Not all improper payments are fraud • Not all improper payments represent a loss to the government

7. Background Landscape • Payment errors have been steadily increasing since FY 2004 when Federal agencies first began measuring and reporting payment errors. The increase is the result of: • More programs measuring errors • More thorough measurement methodologies • Increases in total Federal outlays Statistics • FY 2011 improper payments were approximately $115 billion • Represents a decrease in error rate from 5.3% to 4.69% • The Medicare, Medicaid, EITC and Unemployment Insurance programs each had over $10 billion in improper payments

8. Government-Wide Goals • On track to meet or exceed two bold POTUS goals • Prevent $50 B in improper payments in 2010-2012 • Error rate decrease from 5.3% (FY 2010) to 4.7% (FY 2011) • $18 billion avoided in FY 2011 • Over $20 billion in FYs 2010 and 2011 combined • Recapture $2 B in contractor overpayments in 2010-2012 • Recaptured over $1.2 billion in FY 2011 (an increase of over 80% from FY 2010) • In total, recaptured $1.9 billion in FYs 2010 and 2011 combined 8

9. Administration Actions • Executive Order (November 2009) • Senior accountable officials • Public dashboard (paymentaccuracy.gov) • Increased focus on forensics, audits, incentives • Payment Recapture Audits Presidential Memo (March 2010) • Double our performance on recoveries of payment errors to contractors • Leverage specialized auditors paid based on what they recover • “Do Not Pay” Presidential Memo (June 2010) • Create a Federal "Do Not Pay List” to tackle the problem of paying dead, tax delinquent, debarred, etc.

10. Administration Actions • Improper Payments Elimination and Recovery Act (IPERA; July 2010) • Signed bi-partisan law that requires more aggressive action on payment errors, including expansion of payment recapture efforts beyond contractors • Administration targets for FY ’12: prevent $50 billion government-wide, cut Medicare error rate in half

11. Improper Payment Amounts(FYs 2004-2011; $ in billions)

12. Improper Payment Rates(FYs 2004-2011)

13. Percentage Distribution of Improper Payments(FY 2011)