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THE IMPROPER PAYMENT ICEBERG

How the New Mexico Department of Workforce Solutions is Using Big Data to Identify Misinformation and Save Money. THE IMPROPER PAYMENT ICEBERG. 5% = Serious Schemes. Work Search Requirements Benefit Year Earnings Separation Issues. 95% = Smaller Issues. NEW MEXICO’S ENTRANCE TO NUDGING.

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THE IMPROPER PAYMENT ICEBERG

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  1. How the New Mexico Department of Workforce Solutions is Using Big Data to Identify Misinformation and Save Money

  2. THE IMPROPER PAYMENT ICEBERG 5% = Serious Schemes • Work Search Requirements • Benefit Year Earnings • Separation Issues 95% = Smaller Issues

  3. NEW MEXICO’S ENTRANCE TO NUDGING • New Mexico had high levels of improper payments in 2014. • Developed our Improper Payment Prevention Initiative (IPPI) program in conjunction with Deloitte Consulting LLP. Predictive Analytics Behavioral Science

  4. THE CONSIDERATIONS Do not impact staff time Enhance Program Integrity Customer Experience Do not take benefits from eligible claimants

  5. IMPROPER PAYMENT PREVENTION INITIATIVE • All claimants receive a risk assessment rating (RAR) scored between 1 and 100 based on their characteristics and actions. • If a claimant has a high enough RAR, they are either placed in a control group or they receive a pop-up message. • The RAR is used to prioritize audits. • Analysts regularly look at a number of metrics to decide if messages or rankings are working correctly.

  6. INPUTS TO RAR SCORE

  7. QUICK EXPLANATION OF CLAIMS PROCESS • First week is the initial unemployment insurance claim. • Every following week of joblessness, the claimant must go on to the website and file a continuing claim to receive benefits. • They must certify that they are able and willing to work, and that they aren’t earning any income. • They must also answer some questions about applying for a new job. • If they meet all of the required criteria they will receive their benefits.

  8. PREVENTING INCORRECT DATA BEFORE IT HAPPENS • Since we know if a claimant is more likely to incorrectly report data, we can try and prevent that from happening. • We use techniques from behavioral economics to nudge claimants away from incorrectly reporting. • Sometimes this is merely educating them, sometimes it is an appeal to their conscience, and sometimes it is a reminder of our penalties. • This lets us decrease bad reporting without penalizing innocent claimants.

  9. CONTINUED CLAIMS MESSAGING POP-UP

  10. RESULTS OF DIFFERENT CONTINUED CLAIMS MESSAGES

  11. WHICH MESSAGES WORK BEST? • Messages with too much Legalese don’t work very well. • Neither do messages that sound like a slogan. • Clear messages that explain what can happen if the claimant incorrectly reports seem to work the best.

  12. Successful Message Example {$ClaimantFirstName}: Unemployment Insurance fraud is a serious offense.  Penalties for fraud include: •    Repayment of overpaid benefits plus penalty•    Inability to draw benefits for up to one year•    Loss of income, including liens, garnished wages, or          other collections actions

  13. EFFECT ON IMPROPER PAYMENTS https://oui.doleta.gov/unemploy/bam

  14. EFFECT ON IMPROPER PAYMENTS https://oui.doleta.gov/unemploy/bam

  15. EFFECT ON IMPROPER PAYMENTS CONTINUED • For the most recent year of national data, New Mexico had the sixth lowest rate of improper payments at 4.903%. • This is a 25% reduction in rate since 2014.

  16. COST SAVINGS • In 2014, New Mexico had an estimated $58.7 million in improper payments. • By 2018, the estimate of improper payments had dropped to $7.3 million. • This is a savings of $51.4 million. An 87% decrease.

  17. WORKING SMARTER NOT HARDER • To maximize the time of our investigators, we optimized their work queue to prioritize higher risk items earlier.

  18. HOW WE’VE DONE • As of yesterday, we have had more than 650,000 claims using our treatments. • Claimants are more likely to report earnings when they receive the treatment than our control, with a statistically significant effect. • This significant effect occurs over the whole time we’ve been running our treatment, as well as in our most recent quarter.

  19. WHERE WE’VE GONE NOW • Adapted system to work for worker misclassification as well. • Intend to similar techniques to analyze our call center staff to improve their outcomes as well as plan for increased staffing needs. • We continue to evaluate our IPPI system quarterly with meetings about our messaging.

  20. Contact Information The New Mexico Department of Workforce Solutions www.dws.state.nm.us Twitter (twitter.com/NMDWS) NMDWS official YouTube channel (youtube.com/user/nmdws) Instagram (Instagram.com/NMDWS)

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