Fraud continues to be a problem for many state workforce agencies. Unemployment claims surged after the onset of the COVID-19 pandemic. This rise in claims also saw a sharp increase in the number of fraudulent payments. The U.S. Department of Labor recently announced its distribution of $500 million to assist states with combating unemployment insurance (UI) fraud and equity challenges.
State workforce agencies have difficulty identifying and tracking fraudulent claims for two reasons: antiquated legacy systems and out-of-date workflow processes. Many state workforce agencies experienced crashed websites, long-phone lines, and delayed service to claimants due to their system's inability to handle the number of claims. Further, with many agencies transitioning to remote environments, workflow processes needed to be updated to engage with new technology. By improving these two critical areas, state workforce agencies can better position themselves to prevent fraud cases and provide better service to their claimants.
Modernize Systems Through Continuous Improvement
"The pandemic underscored the need for modernization of the 53 different systems that administer unemployment insurance benefits in the United States, and it exposes significant vulnerabilities in state technology to criminals looking for an opportunity," said U.S. Secretary of Labor Marty Walk in a statement. Up until the last couple of years, many state workforce agencies embraced a model of "rip-and-replace" when updating their unemployment insurance systems. This unproductive model did not allow agencies to update their systems as new technology became available. Further, as it may take a few years to replace and implement a system, by the time the "new" system works, it may only offer a few years of technological efficiency before it is outdated.
Continuous upgrades should be the model for state workforce agencies moving forward. By partnering with a vendor that allows for continuous upgrades, new and improved features can help your staff be more productive and efficient. Further, an unemployment insurance system that embraces continuous improvements can help cut down on the cost of ownership and open more funds for critical business objectives. A modernized solution provides agencies with the resources they need to combat UI fraud, but it only represents one-half of the problem.
Engage New Technology in Workflows
With a modernized platform, agencies can enable processes that engage with technology to cut down instances of fraud. Through advances in predictive analysis, machine learning, and data modeling, workflow solutions can engage with these resources to sift through historical claim data on previous fraud cases and produce a trained fraud model that can accurately predict the likelihood that claimants commit fraud. These models can detect fraud before it occurs and even help to correct for problems such as overpayments. By continuously improving both the processes and platform, state workforce agencies can mitigate and prevent fraud.
Partner with the Right Vendor
The right vendor can help agencies achieve both of these objectives. Sagitec's Neosurance™ solution helped a client identify 47,500 bogus UI claims and save more than $501 million. This was possible due to our emphasis on continuous improvement on the platform and processes. Our NeoFraud™ solution, designed by industry veterans, can help identify fraud or overpayments while integrating into agencies' current UI Tax and Benefits solution or being used as a standalone system.
Sagitec's solutions make it easy for agencies to define, evaluate, and execute models for identifying and preventing fraudulent payments. Neosurance and NeoFraud are proven to help agencies succeed as they evolve with new features and functions. See how these solutions can help and drive your vision into action by clicking the link below.