State

Wisconsin Department of Revenue Targets Fraud and Identity Theft

More than $63 million in fraudulent and erroneous refunds and credits were blocked last tax season thanks in part to the Wisconsin Department of Revenue’s use of identity verification tools.

“We are vigilant in our efforts to safeguard the refunds and identities of tax filers with enhanced ID verification tools,” said Richard Chandler, Wisconsin Department of Revenue Secretary.

“As reports of cybercrimes and identity theft become more common, the DOR prevents fraudulent activity by diligently reviewing filed tax returns to protect our citizens,” Sec. Chandler said. “Our systems are secure, however when fraudsters steal your identity from other sources, they may try to file a fraudulent tax return.”

“We ask tax filers to allow at up to 12 weeks processing time this season as we leverage our ID verification tools to ensure their refund is not going to someone who’s stolen their personal, confidential information,” Chandler added.

How ID Verification Works

The Wisconsin Department of Revenue uses analytics to identify returns that indicate possible identity theft. When this happens, the DOR sends a letter to the tax filer asking them to complete a quiz, enter a Personal Identification Number (PIN), or submit documentation to confirm their identity. The unique PINs are a tool the DOR began using last year to help safeguard tax filers.

During the past six tax seasons, the Department stopped more than $255 million in potential fraud. The increase is due to the DOR’s continuous expansion of its anti-fraud efforts and tools as more cybercriminals attempt fraud. For more information, visit the DOR’s Protecting Taxpayers page.

States may have Best Plan to make Health Care Affordable Again

As President Donald Trump, Republican, and Democrats in Congress wrangle over the future of Obamacare and its replacement, the answer to how to make health care affordable for all Americans may not come from another contentious health reform battle in Washington.

Instead, we may follow Trump’s ideas on Medicaid and education reform. Let the states derive their own solutions, particularly when it comes to cost containment.

Gallup says that 26 percent — or more than 1 in 4 health care dollars — are completely wasted. These dollars are spent on defensive medicine or when physicians order more tests, procedures, and medications than are clinically necessary. I see it every day as my colleagues order everything from x-rays, blood work, MRIs, CT scans and a host of other unnecessary procedures to protect themselves from a potential lawsuit.

The impact of wasteful spending by physicians –known as defensive medicine — is astounding. Consider this:

  • BioScience Valuation, a health care economics firm, says that doctors ordered $487 billion in defensive medicine in 2015. That, of course, results in higher premiums, co-pays, deductibles and out-of-pocket expenses for consumers and employers.
  • A 2015 survey conducted by the Congress of Neurological Surgeons found that 75 percent of neurosurgeons said they practice defensive medicine to protect themselves from litigation.
  • A 2014 survey of hospital administrators conducted by Jackson Health care, one of the nation’s largest medical staffing firms, found that 32 percent of costs generated in a hospital could be attributed to wasteful, defensive medicine.

According to the Centers for Medicare and Medicaid Services (CMS), health care spending is expected to consume more than 20 percent of our nation’s GDP by 2025, up from 17.5 percent today. In 2015, federal, state and local governments spent $1.5 trillion. In the same year, the private sector spent $1.7 trillion on health care, according to CMS. Spending will continue to skyrocket if we don’t offer incentives for physicians to change their behavior when it comes to defensive medicine.

That’s why we may need to look to six states that are aggressively working to contain costs. The Florida, Georgia, Alabama and Tennessee legislatures are considering a proposal to eliminate defensive medicine by abolishing each state’s medical malpractice system and replace it with a no-blame model similar to workers’ compensation. Two other states are also examining the concept.

When doctors are no longer the target of litigation, they would be less likely to order unnecessary tests, medications and procedures.

Under the proposal known as the Patients’ Compensation System, a patient could still file a claim if a physician had injured them. But the claim would no longer go through the traditional legal system and instead would be heard by a state administrative panel of health care experts. This administrative system, similar to workers’ comp, would hear a claim in a matter of months instead of the years it takes to litigate a case. Compensation would be identical to awards in a legal system. Patients with smaller injuries could also be compensated for a loss.

But completely abolishing the malpractice system and replacing it with a no-blame model would change the behavior of our nation’s physicians. It would result in annual savings of $115 billion in Medicare and $133 billion in Medicaid, according to BioScience Valuation. In the private sector, employers could save 11 to 22 percent in health care costs for each employee annually– as premiums, co-pays, deductibles and out-pocket costs drop with the elimination of defensive medicine, according to BioScience.

No matter how swiftly Congress acts to repeal and replace Obamacare, there is no doubt that waste in our health care system has to be a top priority. Eliminating defensive medicine with a new state-based solution may just be what’s needed to make health care affordable again for all of us.

State Senator wants Audit of Federal Funding, Obligations in State Programs

A conservative lawmaker wants an audit conducted of all state programs that use federal funds — and the ultimate costs federal obligations place on state and local freedom.

State Sen. David Craig sent a letter Tuesday to the Joint Legislative Audit Committee requesting it direct the Legislative Audit Bureau to conduct a “comprehensive audit of all state programs which receive or utilize federal funds.”

The Town of Vernon Republican wants a review of the “federal requirements, regulations, and restrictions which bind the usage of those (federal) funds and tie the hands of our state government officials, local officials, and limits the freedom of our constituents.”

Craig asks the audit bureau to consider:

  • The cost of compliance and freedom lost by the state agency and local officials due to regulation.
  • The estimated savings that could be realized should a regulation be lifted or lessened.
  • The cost of compliance and loss of freedom born by the citizens of the state as a result of the regulation.

A Tax Foundation review found that in fiscal year 2013 a combined 30 percent of state revenues nationally were derived from federal grants-in-aid. That included everything from federal Medicaid payments and education funding assistance to cash for infrastructure projects and housing grants.

Mississippi topped the dependency list in fiscal year 2013, deriving nearly 43 percent of its revenue from federal assistance. Louisiana was next at 41.9 percent, followed by Tennessee (39.5 percent).

Wisconsin ranked 36th in the nation, with 27.7 percent of revenue coming from federal sources, according to the Tax Foundation.

North Dakota was least dependent, at 19 percent, followed by Hawaii (21.5 percent), and Alaska (22.4 percent).

Such dependency creates obligations that can be costly for state and local governments, particularly in funding areas such as transportation and health care. In essence, the federal government demands that state and local governments follow costly rules and procedures or risk losing a portion or all of the federal dollars.

“As part of the on-going efforts to return powers and flexibilities back to the states though our (legislative) Federalism Committee, I am seeking additional information to identify the areas which would lift the burden of federal government regulations and mandates so the committee can craft reforms which will bring efficiency to our state government and liberty our citizens,” Craig wrote in the letter to state Sen. Robert Cowles, R-Green Bay, and Rep. Samantha Kerkman, R-Salem, co-chairs of the Joint Audit Committee.

Judge Upholds City of Oshkosh Ordinance Requiring Inspection of all Rental Housing

United States District Court judge sided with the city of Oshkosh on Monday after the Winnebago Apartment Association asked for an injunction to stop the city from beginning inspections on rental properties in the area.

The city wants to inspect roughly 14,000 rental properties over a five-year cycle to make sure landlords are keeping apartments and rental houses up to code. The city would inspect about 2,800 properties per year.

Oshkosh city manager Mark Rohloff says the city has heard from renters who have problems that their landlords aren’t fixing.

“We really feel that it’s necessary to make this as broad a program as possible so we can identify those problem areas and really get them addressed with very common health and safety issues that we have concerns about,” Rohloff explained.

Officials can already inspect properties where the tenants have submitted their complaints to the city, and the Winnebago Apartment Association’s lawyer wonders why that isn’t enough.

“The major problem with the program that the city has adopted now is it applies to every rental unit in the city, which we think is an overly broad solution to a problem that the city is trying to address with certain apartment units,” the WAA’s lawyer, Jeff Vercauteren of Husch Blackwell LLP, said.

The Association also said the wording of the city’s ordinance seemed that it would allow inspectors to go on the property without proper consent, which the group argued was a violation of landlords’ and tenants’ Fourth Amendment rights.

Oshkosh City Council plans to update the ordinance to make it more clear, and keep it in line with state and federal laws.

“We’re making some clarifications to our ordinance that the 21-day inspection window is going away because we’re going to be making appointments with people,” Rohloff said.

Inspectors are allowed inside an occupied property as long as they have consent from the tenants, and allowed into empty properties with permission from the landlord.

The city will also charge each landlord a fee per inspection, a $100 trip charge and $45 per-unit charge.

Oshkosh officials will charge that fee and inspect the outside of the property, even if the tenant or landlord does not allow the inspector inside.

State law requires the city to charge a fee that’s reasonable in relation to the inspection costs to the city, and we have yet to see the $100 trip charge and the $45 per unit charge is really reasonable,” Vercauteren said.

Oshkosh City Council is expected to approve the amendments to the ordinance on Tuesday night, and could start inspecting properties as early as Wednesday.

The Winnebago Apartment Associations plans to continue to fight against the new ordinance.