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CLT UPDATE
Friday, October 19, 2012

Multi-millions for waste, not enough for our tiny tax cut?


Gov. Deval Patrick’s administration on Monday ordered tighter controls on state spending and hiring but opted not to revise its revenue estimate for the current fiscal year in the face of lagging tax collections.

Gov. Deval Patrick’s administration on Monday ordered tighter controls on state spending and hiring but opted not to revise its revenue estimate for the current fiscal year in the face of lagging tax collections.

Jay Gonzalez, the state Secretary of Administration and Finance, said in a letter to the governor and key lawmakers that he believed the state would have enough revenue to meet its budget obligations....

It was also possible that, by law, the state’s income tax rate could automatically fall from 5.25 percent to 5.20 percent on Jan. 1, Gonzalez said, resulting in a loss of about $57 million in revenue for the final six months of fiscal 2013.

Associated Press
Monday, October 15, 2012
Mass. tightens spending after revenue misses mark


A scathing state auditor’s review has found taxpayers are picking up the health insurance tab for people who don’t live in the state or who make too much money to qualify for benefits.

State Auditor Suzanne Bump’s office found MassHealth spent $6.5 million on health care in 2010 for 4,643 patients who had to be removed because they weren’t Bay State residents or were already getting benefits from another state.

The audit released yesterday concluded MassHealth doesn’t fully verify patients’ self-reported earned income or residency, creating conditions leaving it vulnerable to abuse and manipulation.

The Boston Herald
Thursday, October 18, 2012
Double dippers sap Mass. program


Thousands of out-of-state residents could be wrongfully receiving state health care benefits because MassHealth fails to verify their residency while others may be receiving benefits without meeting income qualifications, according to a state audit released Wednesday.

The lack of verification could be costing the state millions of dollars each year, according to the report from Auditor Suzanne Bump. Based on the magnitude of the program, which has 1.3 million enrollees, “the financial ramifications of MassHealth not performing effective income eligibility verifications for applicants could have an adverse effect on the Commonwealth’s finances,” the report stated....

In 2010, MassHealth spent approximately $6.5 million on services for 4,643 individuals who were later removed from the program because they were not Massachusetts residents, received benefits from another state, or state officials could not determine where the enrollees lived....

The auditor’s report also found MassHealth does not comply with state and federal regulations by not verifying an applicants’ self-reported income. A MassHealth recipients’ income is verified roughly one year after they are enrolled in the Medicaid program, and already receiving benefits, according to the audit. In addition, MassHealth does not verify unearned income, such as pension payments, rental income, stock dividends or any lottery winnings by checking information available from the IRS or the state Department of Revenue.

State House News Service
Wednesday, October 17, 2012
Audit: Verification procedures leave MassHealth vulnerable to fraud


House Minority Leader Bradley Jones, Jr. [R-North Reading], said a state auditor’s report detailing the potential for fraud in the state’s Medicaid program should serve as a “wakeup call” on Beacon Hill for Democrats who have left open the possibility of pursuing tax increases next year. Jones called the audit released Wednesday the “latest example of where Governor Patrick has fallen short in ringing out waste and demanding accountability in state spending.” ...

“Instead of proceeding with a tax and spend approach to addressing the state’s financial shortcomings -- without telling taxpayers until after the November election -- maybe Governor Patrick and his Democratic cohorts should first consider eliminating any and all waste, fraud, and abuse in state run programs. The failure to account for millions of dollars annually within a state agency is exactly why the idea of raising taxes should not be on the table.”

State House News Service
Wednesday, October 17, 2012
State Capitol Briefs
Jones: Medicaid audit a "wakeup call" for those considering new taxes


Chip Ford's CLT Commentary

Twenty-three years later we taxpayers are still waiting for the income tax to be rolled back to its historic 5 percent as promised when the tax hike was imposed. The voters are still waiting for the Legislature to find some respect for the voters, who in 2000 demanded by 59% that it be rolled back to 5 percent by 2003 but were flagrantly spurned by the Legislature.

All we've heard for now over two decades is that the state "can't afford" to keep its promise, how the state needs our money more than we do.

It has become much too evident why this is so.

It has only now been discovered that $6.5 million was wasted "on services for 4,643 individuals who were later removed from the program because they were not Massachusetts residents, received benefits from another state, or state officials could not determine where the enrollees lived."

Add that to the exposé of last June pried loose from the administration only through the dogged efforts of freshman state Rep. Jim Lyons (R-Andover)   "Illegal aliens, out-of-staters and others who failed to produce proof of Massachusetts residency drained $118 million from the pool of cash the state uses to reimburse hospitals and clinics that care for the poor in the latest year on record, state officials say."  (See:  CLT Update, Jun. 15, 2012 ("$118 million more for illegals acknowledged by Patrick administration - No wonder they say we need more taxes!")

Every day it seems there is a new scandal over wasted taxpayers' money — the ongoing probation department nepotism scandal, for instance. Here's yet another, indicting Bay State crony capitalism: Governor Patrick's "Green Energy" extravaganzas.


News Release
Executive Department
Office of Governor Deval L. Patrick
April 22, 2010


On Earth Day, Governor Patrick announces expansion of clean tech company,
celebrates report finding Massachusetts clean energy leader


$5 million in financing from Massachusetts Clean Energy Center will help A123 Systems expand facilities, create more than 250 jobs

On the 40th anniversary of Earth Day, Governor Deval Patrick today announced that advanced battery maker A123 Systems will create more than 250 new jobs and locate its growing grid power storage division in Massachusetts. The Governor also pointed to a new report's finding that Massachusetts is a clean energy leader nationally and progress in implementing the nation's most ambitious greenhouse gas law as further evidence of the Patrick-Murray Administration's commitment to building the Commonwealth's clean energy economy and future.

To help facilitate A123 System's expansion, the Massachusetts Clean Energy Center (MassCEC) has approved a $5 million forgivable loan for the Watertown-based company contingent on it hitting job creation and private investment milestones. The company anticipates making $80 million in capital expenditures in Massachusetts to build up its manufacturing and R&D capabilities here by the end of 2014.

"A123 has already established itself as a leading battery maker for the electric cars that are the clean energy future of the U.S. auto industry," said Governor Patrick. "I am pleased to see this Massachusetts company growing its operations here, creating jobs and contributing to the Commonwealth's clean energy leadership." ...

"The Clean Energy Center loan will help create jobs in Hopkinton while advancing the Commonwealth's goal of embracing the economy of the future through green technology and clean energy. I am excited that Massachusetts is able to continue to support A123 Systems as it seeks to revolutionize the way we create energy for our cars and consumer electronics. This partnership will result in good jobs for Massachusetts residents and good clean technology for the global economy," said Senator Karen Spilka, Senate Chair of the Joint Committee on Economic Development and Emerging Technology.

"The state has always been an innovator in clean energy technology and policy. This strategic investment will help the Commonwealth meet its emission reduction targets, while creating sustainable jobs. It is a win for both the environment and the economy," said Senator Marc Pacheco, Chairman of the Senate Committee on Global Warming and Climate Change.

"Massachusetts is at the forefront of clean energy innovation, and companies like A123 have put us there. With this investment from the Clean Energy Center, the company can expand its operation here in Metrowest, create needed jobs, and leverage $80 million in private funds. There's real opportunity here and I'm so pleased to see this funding come through. And what better way to recognize Earth Day than to support a local company like A123 that's leading the way in green and sustainable sources of energy," said Representative Carolyn Dykema.


The Boston Globe
October 17, 2012
Failure of A123 Systems becomes part of fray
By Erin Ailworth


Advanced battery maker A123 Systems Inc. filed for bankruptcy protection Tuesday after burning through more than $100 million in taxpayer money, thrusting the Waltham company into the middle of the presidential sparring over energy and economic policies....

A123’s bankruptcy filing represented a stunning fall for a company once viewed by both the Obama and Governor Deval Patrick administrations as a key component of a clean-energy driven economy. The Department of Energy awarded nearly $250 million in stimulus money to A123 to build plants in Michigan, more than half of which was spent by the company.

Massachusetts made a loan of $5 million to A123. Richard K. Sullivan Jr., state secretary of Energy and Environmental Affairs, said his office would monitor the proceedings and recoup the state’s money if possible.


New England Cable News
October 16, 2012
A123 becomes latest 'green energy' failure


Aides to Gov. Deval Patrick said Massachusetts taxpayers are on the hook for only $2.5 million, the balance of a $5 million grant from the state Clean Energy Center, the first half of which was forgiven based on what A123 spent building a headquarters at 200 West Street on the Waltham-Weston line and creating jobs....

Massachusetts made a loan of $5 million to A123. Richard K. Sullivan Jr., state secretary of Energy and Environmental Affairs, said his office would monitor the proceedings and recoup the state’s money if possible.


But that's just the latest utter waste of taxpayers' money thrown away to crony capitalists. This pie-in-the-sky spending has been going on for years, failing again and again.


News Release
Massachusetts Republican Party
November 11, 2011
As Green Energy corps. tank, Patrick touts investments


Beacon Power received $5 million in subsidies from the Patrick-Murray administration.

"Beacon Power is another in a series of clean energy technology companies that is making Massachusetts its home, and the world its customer," said Governor Patrick. "I'm proud of the help our agencies are giving this impressive young company, and proud to have them here in Tyngsborough." (Beacon Power Receives Commitment for $5 Million Loan for Facility Expansion and Clean Tech Job Creation, July 13 2008)...

Bill Capp, Beacon Power CEO gave $1,000 to Governor Patrick and $500 to the Democratic State Committee from '09 to '10. (OCPF)


CNNMoney
November 1, 2011

Beacon Power: Another energy loan gone bad
By Steve Hargreaves


Another alternative energy company that received a loan guarantee from the U.S. government has filed for bankruptcy.

Beacon Power, which makes energy storage devices used to help the power grid become more efficient, filed for bankruptcy protection Sunday, according to a filing with the Securities and Exchange Commission....


The state's Big One — Mini-Me Deval Patrick's Mini-Solyndra — alone would have been more than enough to cover this year's five-one-hundredths of one percent reduction of the state income tax, bringing it down minutely to 5.20 percent.


State House News Service
January 26, 2011
Auditor to look at Evergreen incentives as part of broader review
By Michael Norton


State Housing and Economic Development Secretary Greg Bialecki said last week that Evergreen had received $21 million in cash grants - $20 million to help build its facility and $1 million for workforce training - $7.5 million in investment tax credits and a long-term lease on state land valued at $2.7 million.

Evergreen has received other forms of public aid, but Bialecki said he did not count in his estimate $13 million in state grants used to build road and utilities infrastructure at Devens and some state taxes the company avoided when paying for equipment.

Bialecki estimated the state can recoup $13 million, including the $7.5 million investment tax credit, which he said won't be claimed, $3 million in state grants that were tied to a job creation formula, and land costs.


The Boston Herald
August 15, 2011
Evergreen Solar files for bankruptcy, plans asset sale
By Greg Turner and Jerry Kronenberg


Evergreen Solar Inc., the Massachusetts clean-energy company that received millions in state subsidies from the Patrick administration for an ill-fated Bay State factory, has filed for bankruptcy, listing $485.6 million in debt.

Evergreen, which closed its taxpayer-supported Devens factory in March and cut 800 jobs, has been trying to rework its debt for months....

The Massachusetts Republican Party called the Patrick administration’s $58 million financial aid package, which supported Evergreen’s $450 million factory, a “waste” of money....

The state is still trying to recoup about $4 million in cash from the Marlboro-based company.


This year's anticipated five-one-hundredths of one percent (0.05) reduction of the state income tax rate is projected to "cost" the state $57 Million.

That's a million of our bucks less than what the Patrick administration handed out to the now-bankrupt Evergreen Solar.

Some documented and blatant state spending waste

Health care in 2010 for 4,643 non-resident patients: $6.5 Million

Hospital/clinic reimbursements by the state for illegal aliens, out-of-staters and others who failed to produce proof of Massachusetts residency (Oct. 2010 - Sept. 2011):

$118 Million
Beacon Power: $5 Million
Evergreen Solar: $58 Million
A123 Systems: $5 Million

TOTAL WASTE:

$192.5 Million

If the powers-that-be on Bacon Hill can squander $192.5 Million so ineptly, can anyone honestly say with a straight face that the state government "can't afford" to finally roll back the income tax to 5 percent — as was promised twenty-three years ago, and demanded by the voters a dozen years back?

Remember in November when you vote!

CLT's 2½ PAC-endorsed legislative candidates for the 2012 election

Chip Ford


 

The Boston Herald
Thursday, October 18, 2012

Double dippers sap Mass. program
By Chris Cassidy


A scathing state auditor’s review has found taxpayers are picking up the health insurance tab for people who don’t live in the state or who make too much money to qualify for benefits.

State Auditor Suzanne Bump’s office found MassHealth spent $6.5 million on health care in 2010 for 4,643 patients who had to be removed because they weren’t Bay State residents or were already getting benefits from another state.

The audit released yesterday concluded MassHealth doesn’t fully verify patients’ self-reported earned income or residency, creating conditions leaving it vulnerable to abuse and manipulation.

“We found that while the policies conform, the practice doesn’t consistently conform to the policy,” Bump told the Herald.

The audit points to two examples:

• Taxpayers picked up $60,000 in medical bills for a Greek family who traveled to the Bay State specifically to seek treatment for two of their children.

• An 86-year-old Florida woman listing Rockport as her hometown — and supplying no proof of residency — was allowed to join the health care program.

MassHealth is a public health insurance system for low- to middle-income residents of the Bay State.

The agency defended itself yesterday, saying it’s already worked with Bump’s office to comply with the issues raised in the audit.

MassHealth claimed it’s already saved an estimated $21 million by identifying more than 6,000 members getting benefits in other states and that it’s created an office to root out fraud.

“Our goal is always to protect public resources, while also preserving access to health care for vulnerable populations,” MassHealth Director Julian Harris said in a statement.


State House News Service
Wednesday, October 17, 2012

Audit: Verification procedures leave MassHealth vulnerable to fraud
By Colleen Quinn


Thousands of out-of-state residents could be wrongfully receiving state health care benefits because MassHealth fails to verify their residency while others may be receiving benefits without meeting income qualifications, according to a state audit released Wednesday.

The lack of verification could be costing the state millions of dollars each year, according to the report from Auditor Suzanne Bump. Based on the magnitude of the program, which has 1.3 million enrollees, “the financial ramifications of MassHealth not performing effective income eligibility verifications for applicants could have an adverse effect on the Commonwealth’s finances,” the report stated.

Too many income and residency claims are left unchecked and taken at “face value,” Bump told the News Service. Asked if program overseers have the resources to verify all of the information submitted by applicants, Bump said, “They have an obligation to under the federal rules and under their own policies.”

“I realize that MassHealth has a very difficult job to do to maintain access to folks that experience a lot of job and residency instability. At the same time you’ve got to weigh that against the finite number of public dollars that support this program,” she said. “I urge MassHealth to find a better balance.”

Bump’s office, which has a Medicaid unit, launched its audit last year. “Obviously, our purpose was not to try to determine how many ineligible people receive benefits, but rather to look at the program’s integrity and raise the flags and help concentrate MassHealth on achieving a better balance,” Bump said.

The price tag for MassHealth - which provides health benefits to low- and moderate-income residents or nearly one in five Massachusetts residents - have increased significantly in the last five years, on average 8.7 percent annually. During the same period, enrollment has grown by more than 26 percent, according to the report. In fiscal 2011, MassHealth paid health care providers more than $12.2 billion, of which 35 percent was state-funded, according to the report.

Dr. Julian Harris, the state’s Medicaid director, said of the report, “Some important issues were raised, some we have already taken steps to address.”

Harris said protecting the program’s integrity is “paramount” and said MassHealth officials disagree with some policy recommendations made by Bump.

Bump’s office found MassHealth does not verify an applicant’s state residency, relying solely on self-declaration. MassHealth only checks someone’s address only when there are conflicts in an applicant’s information. While complying with legal obligations, the policy leaves MassHealth vulnerable to fraud, the auditor’s report found.

In 2010, MassHealth spent approximately $6.5 million on services for 4,643 individuals who were later removed from the program because they were not Massachusetts residents, received benefits from another state, or state officials could not determine where the enrollees lived.

The audit pointed to a case where one woman gave extensive documentation of her Florida residency, and another of a family visiting from Greece on a medical visa, but in both cases MassHealth failed to follow up and investigate the “obvious residency conflicts.”

The auditor’s report said MassHealth officials should ask for a driver’s license, utility bill or other documentation to prove residency, following policies in place in New York, New Hampshire, and California.

Requiring a driver’s license or other forms of residency proof would create barriers for some of the most vulnerable residents to receive benefits, Harris said. He cited homeless people and others in transitional living arrangements who would find it difficult to prove residency, and could wind up being denied health benefits they are eligible for.

“We would not want that person to be penalized, someone who was disabled or was in a transient state of residence, we wouldn’t want them to prevent them from accessing services,” Harris said. “We want to make sure administrative barriers are not put in place that could compromise access.”

Most states do not require Medicaid applicants to prove residency, Harris said.

“We have a great deal of sympathy and understand many MassHealth members have unstable employment and residency. But a failure to follow up and ask even additional questions is a program failure, and it is a failure to follow their own policies,” Bump said.

The auditor’s report also found MassHealth does not comply with state and federal regulations by not verifying an applicants’ self-reported income. A MassHealth recipients’ income is verified roughly one year after they are enrolled in the Medicaid program, and already receiving benefits, according to the audit. In addition, MassHealth does not verify unearned income, such as pension payments, rental income, stock dividends or any lottery winnings by checking information available from the IRS or the state Department of Revenue.

The lack of verification creates potential for someone whose income exceeds requirements to receive benefits for a year before MassHealth is able to remove them, according to the auditor’s report.

The Auditor’s Bureau of Special Investigations identified at least 18 MassHealth recipients who had annual lottery winnings ranging from $8,977 to $159,987, without any change to their state health benefits.

If MassHealth had implemented a data match process, it would have been made aware of these members’ lottery winnings, and been able to change or terminate benefits, the auditor’s report stated.

The auditor recommended MassHealth establish a data match system with DOR and the IRS to verify unearned income, as well implement as process with the state treasurer to be notified of significant lottery winnings.

Currently, MassHealth does not match recipients with the State Lottery Commission, but plans to discuss the potential of doing so, according to MassHealth’s response in the report.

Harris said many of income verification issues will be fixed when the state launches the Integrated Eligibility System in 2014 – made possible under the federal Affordable Care Act. The Integrated Eligibility system will give states better access to data from the IRS and other federal agencies.

“That system will give us enhanced access to DOR, IRS, and other state and federal databases that will help improve our” verification process, Harris said.

MassHealth officials said eligibility for the Medicaid program is determined annually with recipients demonstrating they meet financial requirements each year.

MassHealth verifies income at the time someone applies by requiring their two most recent pay stubs and requesting their most recent federal tax returns. Harris said they rely more heavily on pay stub information over federal and state tax returns because it is the most recent, reliable information.

“If MassHealth learns that an applicant or member intentionally falsifies any financial information used to determine eligibility, that individual would be referred for further investigation to the program integrity unit,” MassHealth officials responded in the audit report. “If appropriate, a further referral for a fraud investigation is made.”

By relying on pay stubs and not checking federal tax returns in most cases, some people could be underreporting their income, not reporting a second job or leaving off other household income, Bump said.

“When someone is applying for benefits they present their last two pay stubs. Far too frequently it seems MassHealth lets it go at that,” she said.


State House News Service
Wednesday, October 17, 2012

State Capitol Briefs
Jones: Medicaid audit a "wakeup call" for those considering new taxes


House Minority Leader Bradley Jones, Jr. [R-North Reading], said a state auditor’s report detailing the potential for fraud in the state’s Medicaid program should serve as a “wakeup call” on Beacon Hill for Democrats who have left open the possibility of pursuing tax increases next year. Jones called the audit released Wednesday the “latest example of where Governor Patrick has fallen short in ringing out waste and demanding accountability in state spending.”

Auditor Suzanne Bump’s report says thousands of out-of-state residents could be wrongfully receiving state health care benefits because MassHealth fails to verify their residency, while others may be receiving benefits without meeting income qualifications. The lack of verification in the program with 1.3 million enrollees could be costing the state millions of dollars each year, according to the report.

“Instead of proceeding with a tax and spend approach to addressing the state’s financial shortcomings -- without telling taxpayers until after the November election -- maybe Governor Patrick and his Democratic cohorts should first consider eliminating any and all waste, fraud, and abuse in state run programs. The failure to account for millions of dollars annually within a state agency is exactly why the idea of raising taxes should not be on the table.”

MassHealth officials said some of the issues raised by the audit were already being addressed, but that the administration disagreed with other policy recommendations made by Bump in the audit.

 

NOTE: In accordance with Title 17 U.S.C. section 107, this material is distributed without profit or payment to those who have expressed a prior interest in receiving this information for non-profit research and educational purposes only. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml


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