Montana DPHHS Secures Federal Grant to Combat Benefit Fraud

The Montana Department of Public Health and Human Services (DPHHS) has been awarded a federal grant aimed at improving fraud detection in public benefit applications. The $424,388 grant, provided by the U.S. Department of Agriculture, will fund a new technology-based system to identify potential fraud in online applications.

Heather Smith, chief of the Program Compliance Bureau at DPHHS, highlighted the growing concern, noting, “All states across the U.S. are reporting an uptick of online fraud, and this is going to give Montana the opportunity to review Montana’s standing with that.”

The initiative will primarily focus on the Supplemental Nutrition Assistance Program (SNAP), commonly referred to as food stamps. However, because Montana uses a unified application process, the new system will also affect the Temporary Assistance for Needy Families (TANF), Medicaid eligibility, and the Low-Income Home Energy Assistance Program (LIHEAP).

Examples of fraud in these programs include failing to report all household members, neglecting to update income changes, or continuing to receive benefits after moving out of state. The new system will flag suspicious activity, such as applications originating from out-of-state locations or multiple applications linked to the same device or phone number.

Smith explained the significance of leveraging digital tools, saying, “Digital transactions are becoming so prevalent in everyday life – you know, everyone seems to have a cell phone, text message, email. We’re submitting all sorts of applications and information online, purchasing online, and the digital information is going to be very important for us.”

She clarified that the system will not directly determine fraud but will instead signal cases that require further investigation. DPHHS will verify flagged cases before taking any action. Smith acknowledged the possibility of false positives, such as people applying from a shared computer at a library or using a relative’s device.

DPHHS plans to develop and test the system over the next few months, aiming for implementation by summer 2025. The process will not change for applicants. According to Smith, “It will not affect the user at all; they won’t see any different steps. It’ll just be our ability to capture and utilize that data as it comes in.”

While Smith did not provide an estimate of how widespread fraud is, she emphasized the department’s zero-tolerance stance: “For us, any amount is a high amount.” She added that applying for the grant aligns with DPHHS’s goal of being responsible stewards of taxpayer funds.

In the fiscal year 2024, DPHHS received 1,528 referrals for potential fraud, primarily related to SNAP eligibility. Of those, 241 individuals were disqualified from the program for violations. Similar figures were reported in prior years, with 1,625 referrals and 280 disqualifications in 2023, and 2,035 referrals and 320 disqualifications in 2022.

DPHHS hopes the new system will bolster their efforts to safeguard public assistance programs, ensuring resources go to those who genuinely need them.

By: Politics406 staff