State Presentation: MARYLAND October 14, 2011

1. UI Integrity/ Improper Payments Joint Federal/State Taskforce State Presentation: MARYLAND October 14, 2011 The UI Integrity Taskforce is committed to preserving the integrity of the UI program by focusing on and teaching integrity when dealing with claims. It is the goal of the taskforce to decrease and prevent improper payment of UI benefits.

2. State Specific Root Causes • Benefit Year Earnings (BYE): 42% • Work Search: 35% • Separations: 11%

3. Benefit Year Earnings (BYE) Root Causes Identified: Agency Causes: • Wage cross-matches are only run quarterly • No edits in the benefit system to stop payment when we receive SDNH/NDNH information which allows claimants to continue filing • SDNH/NDNH employers are never contacted for follow-up information such as the claimant’s earnings Claimant Causes: • Failure to report new employment/earnings while in filing status • Failure to be available/supply information for the fact finding interview Employer Causes: • Failure to comply with SDNH/NDNH requirements/timely reporting • Employer or third party representatives fail to respond to requests for information

4. Benefit Year Earnings (BYE) Planned Actions to Address: • Develop and implement flags for benefit system that will suspend payment of benefits when SDNH/NDNH information is received until the claimant contacts the agency • Contact SDNH/NDNH employers for follow-up information such as the claimant’s earnings • Create a weekly report on SDNH/NDNH hits to be sent to claim/adjudication centers to establish issues if the claimant continues to file • Query benefit system to determine industries where fraud occurs more frequently to target those employers and claimants. (in progress) • Reword the claimant letter to inform them that UI has received employer notification of employment and that failure to contact us could result in suspended payment until contact is made

5. Benefit Year Earnings (BYE) Principal Milestones: • Develop a poster/flyer to be mailed to claimants, employers and for public display (completed) • All SDNH employer are contacted for follow-up information such as claimant’s earnings; NDNH employers are randomly contacted. (completed) • Letter to employers that outlines the benefits of timely and accurate responses to agency requests for information (December 2011) • Add Fraud Hotline phone number to first page of Web site and on employer pages (December2011) • Cross-match will be run monthly (2012) • Conduct a study by industry to determine if fraud is more prevalent in certain industries to direct additional focus to those employers (November 2012) • Review language in all printed material to clarify instructions concerning reporting requirements (2012) • Clearly state the proper procedures for reporting earnings on IVR and Web page • Create a mailer to be sent after the 4th week, that addresses fraud. (2012)

6. Work Search Root Causes Identified: Agency Causes: • No way to routinely identify the issue • No verification of work search contacts • No collection of work search contacts Claimant Causes: • Failure to look for work • Failure to keep record of work search contacts • Confusion about their Maryland’s work search requirement Employer Causes: • We do not request the information from the employer • Employers do not keep records of contacts

7. Work Search Planned Action(s) to Address: • Review the language concerning work search contact requirements on the BRI • Require more detailed work search contact information for all claimants and that the information be submitted in writing upon request • Include a work search form on the website that the claimants can download to document their contacts. In the future, this work search form will be captured and the information stored(2012)

8. Work Search Principal Milestones: • Have the claimant complete an ERI type questionnaire during the 4th week of their claim and randomly verify contacts (2012) • Change the IVR telecert line to force claimants to fully listen to each question before they answer it as some claimants have memorized the response numbers and they are not truly addressing the individual questions. (future 2012) • Use EB data to determine feasibility of increased work search requirements (2012) • A work search contact information database will be included in the Modernization Project (long term)

9. Separations Root Causes Identified: Agency Causes: • Failure to identify Separation issues when claimants are in continued claim status • Failure to thoroughly train employees in the use of the fact finding tool Claimant Causes: • Failure to notify the agency of changes in unemployment status or failure to be available for fact finding interviews • Failure to understand UI eligibility responsibilities as ‘agency wording’ may be unclear Employer Causes: • Failure to return request for separation information form/ failure to provide information for fact finding interview/ failure to be available for appeal hearings • Third party representatives fail to supply timely or adequate information

10. Separations Planned Action(s) to Address: • Letter to employers that addresses the benefits of timely and accurate responses to agency requests for information. Educate employers that if a third party company is used that the employer is still responsible for the accuracy of the information • Inform employer of claimants stated reason for separation • If the claimant fails to be available an issue will be established and possibly suspend benefits • Create a way for claimants to supply separation information when they cannot be available for scheduled interviews. • Failure to supply requested information could result in employer charges that are currently non-charged • Implement SIDES • Address staff training on fact finding

11. Separations Principal Milestones: • Letter to employers that addresses the benefits of timely and accurate responses to agency requests for information and to ensure that even if they use a third party company they are still responsible for the accuracy of the information (December 2011) • Redesign the request for separation information form. Add the claimant’s stated reason for separation to the form( 2012) • SIDES implementation (planned 2012) • Ongoing training on best use of the fact finding system (2012) • Create a fillable form in the web site to allow claimants that cannot be available for scheduled fact finding interviews to provide a reason why they are not available and to supply information pertaining to the issue that is being resolved(2012) • Legislative proposal to institute change charging provisions or increased penalty for employers who fail to submit timely information necessary for a proper determination (long term)

12. Strategies to Support Owning UI Integrity Encourage Every Staff Member: • Provide all staff with specific information on over payments, new initiatives, and updates • Encourage staff to submit suggestions that are process oriented that improve workflow, to obtain better information and to encourage communication • Prepare a workflow chart for each function that shows its relationship to other functions. This can be used for training and to encourage ownership (2011) Develop Processes: • To keep staff included and updated on all new initiatives • Incorporate the principle of ownership into all new and refresher training seminars Maintain Management Oversight: • Management will continue to review all aspects of UI Integrity • Continue to emphasize the importance of ownership and integrity

13. Strategies to Support Owning UI Integrity Planned Action(s) to Address: • Include the UI Integrity initiative and its impact on UI in staff meetings • Keep staff involved in the integrity process Principal Milestones: • Email will be sent to all staff explaining the UI Integrity initiative and its impact on UI • UI Blast- A monthly news letter on the current status of UI operations, including suggestions regarding UI Integrity

14. Communication Strategies Claimants: • Place UI Fraud Posters in strategic public locations, One-Stop offices, and include the poster in the mailer that goes to employers • Moving strategic information to the first page of the Web site including Fraud Hotline phone number, and fraud message. Include a pop up message regarding fraud on all claimant web pages • Review ITSC IVR best practices and other available IVR best practices for possible use Employers: • Add overpayment information( causes and successful recoupments) to employer letters and other communications • Review ITSC IVR and other available IVR messaging for possible use • Add a fraud icon on employer web pages

15. Communication Strategies UI Staff: • Make the UI Integrity presentation available to all UI staff • Share information on successful and unsuccessful fraud detection cases with staff Public: • Post fraud information in public locations and on kiosks • Review ITSC IVR best practices and other available IVR best practices for possible use • Publicize fraud prosecution and judgment cases • Post Fraud Hotline phone number in public locations State Leaders: • Provide regular briefings to State Legislature during active sessions • Provide regular briefings to the UI Oversight Committee

16. Summary and Q&A “Follow The Road To Integrity!” Questions: State Contact for follow-up: Ornetta Craig: ocraig@dllr.state.md.us Phone: (410)767-2438