Texas Gov. Targets Fraud in Executive Order

July 14, 2004

Texas Gov. Rick Perry issued a sweeping directive to all state agencies to establish wide-ranging efforts to detect and eliminate fraud in government programs.

“Fraud increases the price employers pay for worker compensation, drains the unemployment insurance fund and steals from the poor in need of vital Medicaid services,” Perry said after signing an executive order directing agencies to set up anti-fraud measures.

Perry said Texans expect government to use tax dollars wisely, efficiently and fairly, but those who defraud government programs increase costs and rob citizens of vital services.

Perry’s executive order targets fraud in government, the unemployment insurance program and the health care system, and directs state agencies to:

· Develop their own anti-fraud measures and report those efforts to his office by Oct. 1.
· Designate a staff member to implement fraud prevention and fraud elimination activities. Cecile Young of the governor’s budget, planning and policy staff has been designated the statewide anti-fraud coordinator.
· Identify policy and organizational changes and provide legislative recommendations to improve fraud detection and prosecution efforts.

Perry directed the Texas Workforce Commission to prioritize anti-fraud efforts in the Unemployment Insurance Program. He also ordered all agencies that operate programs or regulate participants in health care systems to pursue anti-fraud steps—including seeking both civil and criminal penalties in appropriate cases.

The executive order builds on anti-fraud steps the governor has already taken, including last February at the Governor’s Management Council, when he directed state agencies to begin developing common components on anti-fraud efforts. In the 2003 legislative session, Perry signed into law House Bill 1743 and House Bill 2292, which established the Office of Inspector General at the Health and Human Services Commission to fight fraud. The governor also signed into law Senate Bill 104 which increased the authority of the Board of Medical Examiners.

Perry said no price tag could be affixed to the total cost of fraud in Texas. Nationally, the U.S. Department of Labor, has estimated that during 2001, about 24 percent (or $577 million) of the $2.4 billion in unemployment insurance overpayments were attributable to fraud or abuse.

“By signing this executive order I am sending a clear message to those defrauding the state, its businesses or its taxpayers: We’re coming after you,” Perry said.

Perry cited several examples of fraud that have forced taxpayers and businesses to pay millions of dollars in higher costs for health care, insurance and unemployment benefits.

“It’s not the (fraud) we know about that worries me, but rather the fraud we have yet to uncover,” Perry added.

Perry signed the executive order at an auto parts supply store in Dallas, noting that even employers who have not experienced workers’ compensation fraud pay a higher price when insurance companies spread the risk among various employers.

“By being more vigilant in eliminating fraud, government will have more money for the critical services it provides to Texans in need without creating a greater burden on Texas families,” Perry said. “The directive I am issuing today will help ensure that dollars paid by taxpayers and employers are used efficiently and responsibly, and will give the people of Texas greater trust in their government.”

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