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Identity Authentication Key to Reducing $45.1 Billion in Government Improper Payments, According to Economic Crime Institute and LexisNexis
Crackdown on mistakes, fraud could save taxpayers billions per year
DAYTON, OH, February 24, 2005 - Researchers at the Economic Crime Institute of Utica College and LexisNexis today released a white paper detailing possible solutions to the mounting problem of improper payments in government entitlement programs. The paper focuses on the application of identity authentication systems that have proven effective in stopping fraud in the private sector
President Bush has made addressing improper payments a focus of his administration. The Improper Payments Information Act of 2002 requires 40 to 45 of the largest federal programs, accounting for about half of government entitlement outlays, to monitor and report the amount of improper payments made each year. This year’s report found that $45.1 billion in improper payments were made in fiscal year 2004, about 92 percent of which were overpayments.
Medicare reported the biggest problem. This one program accounted for $21.7 billion in improper payments. The Earned Income Tax Credit was second, with between $8.7 billion and $10.6 billion in incorrect payments.
"The federal government has done an excellent job getting its arms around the scope of the improper payments challenge," said Norm Willox, LexisNexis’ Chief Officer for Privacy, Industry and Regulatory Affairs. "What’s now needed is a national commitment to implementing identity authentication-based solutions. This will reduce improper payments and ensure that the right people continue to get the money they deserve."
"This white paper includes the results of three pilot programs conducted for government agencies by LexisNexis," said Dr. Gary Gordon, co-author of the white paper and executive director of Utica College. "The results of the pilot tests provide promise for ferreting out improper payments on a large scale where identity fraud problems and eligibility guidelines that lack identity authentication criteria are a cause."
The white paper provides five key recommendations for curbing improper payments through identity authentication:
- Gain commitment from the Administration to lead a comprehensive federal and state effort to reduce improper payments significantly.
- Apply proven risk assessment methods and best practices from the private sector to improper payments in the government sector.
- Develop identity authentication systems that include eligibility assessment capabilities.
- Establish a national improper payment research agenda.
- Establish more sophisticated information sharing systems that incorporate the use of technologies such as distributed networks, while enhancing policies on privacy and information ownership.
The report, which is available at http://ecii.edu/pub_whitepapers.html, is the fourth in a series of white papers dealing with issues arising from identity fraud. LexisNexis provides identity authentication products and services to governments, financial institutions and corporations.
Economic Crime Institute of Utica College
Utica College, a world leader in economic crime prevention education, provides fully accredited bachelor’s and master’s degree programs in economic crime investigation and management (www.economiccrimedegrees.com). In conjunction with key personnel at the Department of Homeland Security, Utica College has established a four-course graduate risk assessment certificate that is offered inside DHS for its staff only. The Economic Crime Institute of Utica College drives leading-edge thinking on economic crime issues faced by business and government, through educational programs, policy guidance, research, and solutions. The Institute, founded in 1988, is a forum for the exchange of ideas, solutions, and technology for managing the risk of economic crime and fraud (www.ecii.edu).
About LexisNexis
In the United States, LexisNexis (www.lexisnexis.com) offers an extensive range of products and customized tools that address job-specific and organization-wide information needs, driving productivity and confident decision-making. For more than 30 years, LexisNexis® has been a pioneer in secure data sharing, information policy, and personal privacy. Through its risk management flagship products, Accurint®, Banko®, PeopleWise® and RiskWise®, LexisNexis helps to locate people and assets, authenticate identity, enable commerce, conduct background screening, and support national security initiatives. Customers include almost every Federal Government agency, the top 100 law firms, and Fortune 500 companies in the fields of national security, financial services, collection and recovery, insurance, telecommunications, e-commerce and retail.
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