Privatization of Florida's Overpayment Recovery Function

EXECUTIVE SUMMARY:

This final report contains the results of our review of a Request for Proposal (RFP) initially released on December 1, 1995 by the Florida Department of Health and Rehabilitative Services (DHRS) concerning contracting out the State's welfare benefit overpayment recovery function.

The initial objective of our review as to follow-up and determine what actions DHRS had taken on our recommendations in the March 1992 Office of Inspector General report on overpayment recovery (A-04-91-00015).

During the planning phase of our review, we learned that the Administration for Children and Families (ACF) had completed a similar overpayment recovery review in September 1994. We also learned that Florida was in the process of privatizing its overpayment recovery function. In light of these events, a member of your staff requested that we postpone our planned follow-up and instead, review certain aspects of the DHRS' privatization efforts.

Our review of DHRS' privatization efforts encompassed the terms and provisions of the RFP, DHRS policies and procedures, and prior reports of the Office of Inspector General and ACF.

We concluded that privatization of the overpayment recovery function would only partially address problems cited by the ACF in its prior report. Most of the problems will likely remain until addressed by the DHRS. We found no significant operational problems with the language or clarity of the RFP itself.

We are recommending that ACF:

• require DHRS to prepare and implement a corrective action plan based on the deficiencies noted in ACF's September 1994 report and
• follow closely DHRS' implementation of any privatization effort and other correction actions. After a reasonable trial period of privatization, the ACF should reevaluate the entire Overpayment and Recovery process of DHRS to determine the effectiveness of DHRS' actions.

The ACF generally agreed with our findings and recommendations. By letter dated May 21, 1996, the ACF requested the State to develop and submit to ACF a corrective action plan.