Week CXL — Audit: Fraud rate for unemployment insurance increased three-fold during pandemic

— Chart from New York State comptroller’s Office

“The increase in improper payments and fraud was largely the result of identity theft,” says the state comptroller’s audit of the Department of Labor’s handling of unemployment insurance claims during the pandemic.

ALBANY COUNTY — As more than 300 Americans on average daily succumb to COVID-19 — Albany County lost two residents to the virus this week — infection and hospitalization rates have leveled off and even dropped.

The winter wave that surged in 2020 and 2021, starting around Halloween and crescendoing through the holidays, may not materialize this year.

Still, as Governor Kathy Kochul urged in her daily release on COVID, “As families prepare to gather to celebrate the holidays, I urge New Yorkers to remain vigilant and use all available tools to keep themselves and loved ones in their communities safe and healthy.

“Be sure to stay up to date on vaccine doses, and test before gatherings or travel,” she went on. “If you test positive, talk to your doctor about potential treatment options.”


DOL audit shows problems with UI

The state’s comptroller, Thomas DiNapoli, released an audit on Tuesday that showed some problems with the labor department’s handling of the massive number of unemployment insurance claims it got and paid out over the course of the pandemic.

The audit covered the period from January 2020 to March 2022.

“The Department’s mission is to protect workers, assist the unemployed, and connect jobless workers to jobs,” says the 38-page report. “One of its key tasks in assisting the unemployed is administering the State’s Unemployment Insurance (UI) program. The UI program is a joint federal–State initiative that provides benefits to eligible workers who become unemployed through no fault of their own ….”

In March 2020, with the executive order that closed nonessential businesses in New York State to quell the spread of the coronavirus, there was a dramatic increase in UI claims. At the same time, federal funds created temporary programs that allowed for enhanced UI benefits for those affected by COVID-19.

The audit states that labor department officials “did not heed warnings as far back as 2010 that the UI system was out of date and, consequently, difficult to maintain and that it lacked the agility necessary to adjust to new laws and the scalability to handle workload surges.”

Overall, the audit found deficiencies with the labor department’s oversight and management of its UI system that “ultimately compromised its ability to effectively mitigate risks related to the processing of claims — fraudulent claims in particular — and system and data security.”

“During the pandemic, faced with the high demand for UI benefits and the need to process claims quickly,” the report says, “the Department resorted to stop-gap measures to compensate for system limitations, which ultimately proved to be costly to the State.

“We found its workarounds resulted in misclassification of claims as State instead of federal liabilities, overpayment of claims, and supplemental spending to maintain the outdated UI system infrastructure while the new system was in development.”

Further, the audit says, labor department officials were unable to provide data to support the handling of fraudulent claims. This included “Support for $36 billion in fraudulent claims reported by the Department as prevented.”

“The increase in improper payments and fraud was largely the result of identity theft,” the report says.

The report notes that Roberta Reardon, the state’s labor commissioner, testified during the 2022-23 budget hearings that her department had prevented over $36 billion in fraudulent UI payments.

“However, during the course of the audit, Department officials were unable to provide us with granular data or analyses to support their management of and response to fraudulent claims on the UI system,” the report says.

“Among other critical questions that remain unanswered, officials could not account for the number of claims that were actually paid to fraudulent claimants before being detected; the length of time from when claims were filed to when they were identified as fraudulent (to determine the number of weeks that payments were made); and how the claims were originally identified as fraudulent (e.g., whether through departmental procedures or based on complaints from individuals whose identities were used by impostors to file false claims).

“In addition,” the report says, “Department officials could not provide supporting information to explain why the estimated fraud rate for its traditional UI increased more than threefold during SFY 2020-21, nor could they provide information on certain performance measures related to the implementation of the ID.me identity verification service.”

The audit goes on, “The Department did not take some fundamental, critical steps established in the Security Policy and the Classification, Encryption, Authentication, and Logging Standards to secure its UI system and data. As a result, the Department has minimal assurance that its substantial information assets are protected against loss or theft.”

Finally, the audit says, because the labor department was slow in answering some requests — in some cases taking up to six months — the comptroller’s office was delayed in issuing its findings and recommendations, which hampered the labor department’s ability to “promptly address serious problems.”

The audit made five key recommendations, most of which the department agreed with:

— To continue the development of the replacement UI system and ensure its timely implementation;

— To take steps, including collecting and analyzing data related to the identity verification process, to ensure the correct balance between fraudulent identity detection and a streamlined process for those in need of UI benefits;

— To follow up on the questionable claims identified by the audit to ensure adjustments have been made so they are paid from the proper funding source and overpayments are recovered, as warranted;

— To ensure the current and new UI system and data comply with provisions of the Security Policy, the Classification, Authentication, Encryption, and Logging Standards, as well as the Change Management Process and Policy; and

— To improve the timeliness of cooperation with state oversight inquiries to ensure transparent and accountable agency operations.


Albany County numbers

This week, Albany County’s 140th of dealing with the coronavirus, the governor’s office reported two more Albany County residents had succumbed to the virus: One COVID-related death was reported on Nov. 14 and another on Nov. 15.

However, the county’s dashboard, as of Tuesday, Nov. 15, still shows a death toll of 598, an increase of five from a week ago. 

For the second week in a row, the Centers for Disease Control and Prevention have designated Albany County as having a medium community level of COVID-19. The county had been at a medium level for 13 weeks before being labeled “high” for five weeks.

The weekly metrics the CDC used to determine the current medium level are: Albany County now has a case rate of about 104 per 100,000 of population and a COVID hospital admission rate of 15 per 100,000. Also, the county has 6.3 percent of its staffed hospital beds filled with COVID patients. All of these numbers are down slightly from last week.

As of Nov. 14, according to Albany County’s COVID dashboard, there were 33 patients hospitalized with COVID and the seven-day average for hospitalized COVID patients was 25.57, a marked decrease from last week’s seven-day average of 36.43. The last time the rate was that low was eight weeks ago when the seven-day average was 23.57, which itself was a huge increase from nine weeks ago when the county’s seven-day average for hospitalized residents was 15.14.

About 37.7 percent of the Capital Region residents hospitalized with COVID this week were not admitted because of having the virus, according to a chart from the governor’s office.

Nationwide, just 3 percent of counties are now labeled “high” while 21 percent are “medium” and 76 percent are “low.”

In New York State, just six counties are labeled “high” — Tioga, Broome, Kings, Queens, the Bronx, and Richmond — while 17 are “low,” including all but one surrounding Albany County, and the rest are “medium.”

Although figures on infection rates are no longer reliable since tracing and tracking systems have been disbanded, the state dashboard shows that cases statewide and in Albany County are continuing to level off and even drop after two months of climbing.

Albany County, as a seven-day average, now has 10.6 cases per 100,000 of population, a sharp decrease from 15.2 last week down from 16.3 two weeks ago, 17.1 three weeks ago,  21.0 four weeks ago, 21.1 five weeks ago, 19.1 six weeks ago, 19.7 seven weeks ago, 17.1 eight weeks ago, 16.3 nine weeks ago, 17.0 ten weeks ago, 17.3 eleven weeks ago, 17.9 twelve weeks ago, 19.3 thirteen weeks ago, and 21.8 cases per 100,000 fourteen weeks ago.

This compares with 18.8 cases per 100,000 statewide, which down from 20.9 last week and from 20.1 two week and from 18.9 three weeks ago, 20.3 four weeks ago, 19.9 cases five weeks ago, 21.4 six weeks ago, 23.4 cases seven weeks ago, and 22.2 eight weeks ago, but up from 18.6 cases nine weeks ago, while down from 21.1 cases ten weeks ago, 23.0 cases 11 weeks ago, 25.6 cases 12 weeks ago, and 30.03 per 100,000 of population 13 weeks ago.

The lowest rates are in Central New York at 8.77, which is down from last week’s 11.64 cases per 100,000 population. The highest count is now in New York City at 24.03, which is down just slightly from last week’s 24.89.

The numbers for vaccination in Albany County have hardly budged for several months.

As of Tuesday, 61.5 percent of eligible residents had received booster shots, according to the state’s dashboard, which is inexplicably lower than the 61.6 percent reported for the three previous weeks. At the same time, 75.5 percent of county residents had completed a vaccination series.

This compares with 79.8 percent of New Yorkers statewide completing a vaccination series, which has gone up slightly every week for the last month, when it was 79.1 percent.

The shift in the prevalence of Omicron sublineages has continued this week.

The once-dominant BA.5 now makes up about 30 percent of new COVID cases nationwide.

In Region 2 — New York, New Jersey, Puerto Rico, and the Virgin Islands — the spread of the new sublineages is even more pronounced.

For the week between Nov. 7 and 12, BA.5 now makes up just roughly 20 percent of the cases while BQ.1 is now dominant at roughly 31 percent followed by BQ.1.1 at 29 percent.

BF.7 accounts for 6 percent of new cases while BA.4.6 makes up 5 percent; the other sublineages each make up 3 percent or less.

The bivalent booster shot was designed to combat BA.4, which is now almost nonexistent, and BA.5 — and so may still be effective against its similarly highly contagious descendants.

New Yorkers are being encouraged by the state’s health department to get bivalent COVID-19 vaccine boosters from Pfizer-BioNTech for anyone age 5 or older and from Moderna for those 6 or older.

To schedule an appointment for a booster, New Yorkers are to contact their local pharmacy, county health department, or healthcare provider; visit vaccines.gov; text their ZIP code to 438829, or call 1-800-232-0233 to find nearby locations.


SUNY Poly gets grant

SUNY Polytechnic Institute was one of the first round of awardees of the $40 million New York State Biodefense Commercialization Fund.

Researchers at SUNY Poly got a $500,000 grant to develop a more affordable and accurate 30-minute COVID-19 antibody test.

The test will be marketed with Ciencia Inc., a Connecticut-based research and development company, and the state’s Wadsworth Center.

Nate Cady, a professor of nanobioscience will lead the research, using Ciencia’s high sensitivity fluorescent plasmonic platform to detect COVID-19 antibodies that define vaccination, prior exposure to the virus, and immunity against key variants.

“Importantly, our platform is not limited to COVID testing,” said Arturo Pilar, president of Ciencia Inc., in a release from SUNY Poly. “And this development will form the basis for the testing of a variety of serious infectious disease threats,” he said, citing “excellent early results for Lyme disease testing.”

“We are developing a similar serological approach to improve the diagnosis of tick-borne diseases,” said Klemen Strle of the Wadsworth Center in the release.

While COVID-19 cases appear to be declining globally, the release from SUNY Poly says, any decrease in immunity or the possibility of variants that might escape a person’s antibodies could threaten progress.

The goal of the technology researchers are developing is “to provide a data-driven pathway for virus mitigation through widely-available, accurate, and quantitative profiles of patient immunity,” says the release, giving this example:

By defining a personal inoculation schedule, identifying immunodeficient patients, and even characterizing the antibody response for those who are previously infected but refuse further vaccination, the commercialization of the new technology can facilitate the decline of COVID-19 cases, as well as the need for acute testing.

The grant program, according to the governor’s office, was created to speed the development and commercialization of life science innovations that address serious infectious disease threats including COVID-19 and its variants, while also creating jobs and encouraging continued growth across New York’s life science industry.

In this first round, 18 grants are being awarded for a total of $15,292,418.

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