Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

COST-EFFECTIVENESS OF SAVE 
OFFICE OF INSPECTOR GENERAL 

The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as 

amended, is to protect the integrity of the Department of Health and Human Services’ (HHS) 

programs as well as the health and welfare of beneficiaries served by those programs. This 

statutory mission is carried out through a nationwide network of audits, investigations, and 

inspections conducted by three OIG operating components: the Office of Audit Services, the 

Office of Investigations, and the Office of Evaluation and Inspections. The OIG also informs 

the Secreta~ of HHS of program and management problems and recommends courses to 

correct them. 

OFFICE OF AUDIT SERVICES 

The OIGS Office of Audit Services (OAS) provides all auditing services for HHS, either by 

conducting audits with its own audit resources or by overseeing audit work done by others. 

Audits examine the performance of HHS programs and/or its grantees and contractors in 

carrying out their respective responsibilities and are intended to provide independent 

assessments of HHS programs and operations in order to reduce waste, abuse, and 

mismanagement and to promote economy and efficiency throughout the Department. 

OFFICE OF INVESTIGATIONS 

The OIGS Office of Investigations (01) conducts criminal, civil, and administrative 

investigations of allegations of wrongdoing in HHS programs or to HHS beneficiaries and of 

unjust enrichment by providers. The investigative efforts of 01 lead to criminal convictions, 

administrative sanctions, or civil money penalties. The 01 also oversees State Medicaid fraud 

control units which investigate and prosecute fraud and patient abuse in the Medicaid program. 

OFFICE OF EVALUATION AND INSPECTIONS 

The OIG’S Office of Evaluation and Inspections (OEI) conducts short-term management and 

program evaluations (called inspections) that focus on issues of concern to the Department, 

the Congress, and the public. The findings and recommendations contained in these inspection 

reports generate rapid, accurate, and up-to-date information on the efficiency, vulnerability, 

and effectiveness of departmental programs. This report was prepared in the Kansas City 

Regional Office under the direction of James H. Wolf, Regional Inspector General. Project 

staff included: 

REGION HEADQUARTERS 

Hugh Owens, Project Leader Alan S. Levine, Program Specialist


Jennifer E. Collins, Program Analyst Barbara R. Tedesco, Mathematical Statistician


Perry A. Seaton, Program Analyst


Dennis E. Samworth, OAS,


Statistical Specialist 

For additional copies of this report, please contact the Kansas City Regional Office at 

(816) 426-3697. 
O*

Depatiment 01 JIGZW~~- ____ 

OFFICE OF


INSPECTOR GENERAL


COST-EFFECTIVENESS OF SAVE 

w

@‘ERVICES +

~f+ =? JUNEGIBBS BROWN 

; Inspector General ~ 

s

%e+ $ NOW~ER 1995 ++ 

%’dla OEI-07-91-01230 > 
EXECUTIVE SUMMARY


PURPOSE 

To determine if the Systematic Alien Verification for Entitlements (SAVE) is 

cost-effective in verifying the immigration status of aliens applying for Aid to Families 

with Dependent Children (AFDC) and Medicaid. 

BACKGROUND 

The Immigration Reform and Control Act of 1986 (Public Law 99-603) established the 

SAVE program. SAVE is designed to assist eligibility workers in preventing illegal 

aliens (noncitizens who are in the United States illegally or by reason of their 

immigration status) from receiving federally subsidized cash and medical benefits. 

However, this legislation permits States to request a waiver if they can demonstrate 

that either SAVE is not cost-effective for them or their alternative verification system 

is as effective. 

The Administration for Children and Families (ACF) requested this study. According 

to ACF, very few guidelines or criteria must be met to be granted a waiver. Since the 

inception of SAVE, nine States have been granted either full or partial waivers by 

ACF and the Health Care Financing Administration (HCFA). As part of our analysis, 

we reviewed these waiver requests. 

We selected statistically valid samples of case files that had been matched between the 

Immigration and Naturalization Service (INS) and States’ records. We then did a case 

file review in the four sample States (California, Florida, Illinois, and Texas) on those 

records the States were able to locate. These States represented almost 70 percent of 

the estimated 2.06 million undocumented alien population in the 1980 census, which 

was the last year aliens were identified in the survey. The Census Bureau estimates 

this population was between 3.5 and 4.0 million in 1994. In addition, we interviewed 

States’ staff on how they use SAVE and reviewed their SAVE procedures and 

administrative costs. A companion report “Rew”ewof the SAVE SJWenz’sPKXXWS” 

(OEI-07-91-01231) addresses deficiencies in INS and States’ systems. 

FINDINGS 

We Are Unable To Determine The Cost-Effectiveness Of The SAVE Program. 

.	 The INS could not isolate those records that apply only to the AFDC and 

Medicaid alien populations. 

. States could not locate all sample beneficiary case files. 

�	 Case file documentation was not adequate to determine if SAVE was 

instrumental in States’ determination of eligibility based upon immigration 

status. 

i 
.	 States lack consistency andcompleteness indocumenting SAVE administrative 

costs. 

However, the SAVE Program Has Value in Identifying Ineligible Aliens. 

. Cost avoidance cases were identified in each State. 

�	 SAVE assisted eligibility workers not trained in reviewing INS documents as 

review of documents is required to determine the alien’s immigration status. 

Further, eligibility workers cannot establish the authenticity of all documents 

without INS verification. 

.	 State and county officials cited deterrence as a factor in illegal aliens not 

applying for benefits. However, it was difficult to determine the overall 

deterrent effect of SAVE. 

GUIDELINES FOR EVALUATING WAIVER REQUESTS 

Based on the data we found and the results of our review, we cannot complete 

a cost benefit analysis and believe that until INS and States address weaknesses in the 

systems, such a cost benefit analysis will not be possible. (See companion report 

“Review of the SAVE System’s Processes” which addresses the system’s weaknesses 

and recommendations for improvements.) In the meantime we believe there may be 

more requests from States to obtain waivers. Based on our review, we believe there 

are a number of areas ACF and HCFA should be especially attentive to in reviewing 

those waivers, 

Completeness of Systems 

Review each State’s plan to ensure that the proposed alternative covers all 

steps of the process, including verification of involvement with INS for at least 

the secondary verification process, and the hearings and appeals process. 

l+hnary Verification 

If the SAVE primary verification process is eliminated, review the individual 

State’s plan for reviewing and verifying alien documentation and staff changes 

to accomplish this objective. 

Documentation Suppo&g the State-kEstbnated Savings 

Review each State’s definition of savings, how calculated, and method of 

projecting these savings. 

Costs of Adminktetig the SAVE and Alternative Systems 

Assure that agency instructions are followed in documenting SAVE (and 

alternative systems) administrative costs. 

ii 
AGENCY COMMENTS AND OIG RESPONSE 

The ACF commented that they hoped the OIG could have provided a more definitive 

response concerning the cost-effectiveness of SAVE. They recognized, however, that 

this was not possible because of the reasons stated in the report. 

The INS did not provide written comments to the report, but verbally indicated 

concurrence with the findings and recommendations. 

The ACF’S comments in their entirety are included in Appendix C. 

111 
TABLE OF CONTENTS


PAGE


EXECUTIVE SUMMARY


INTRODU(XION, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1


FINDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5


� Cost-Effectiveness of SAVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5


� The Value of SAVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8


GUIDELINES FOR EVALUATING WAIVER REQUESIS . . . . . . . . . . . . . . ..11


APPENDICES


A


B:


Criteria Usedin Selecting the Four Sample States


Methodology Used to Calculate Cost Avoidance .


Agency Comments . . . . . . . . . . . . . . . . . . . . . . .


. . . . . . . . . . . . . . . . . . . . A-1 

. . . . . . . . . . . . . . . . . . . . . B-1 

c . . . . . . . . . . . . . . . . . . . . . c-1 
INTRODUCTION


PURPOSE 

To determine if the Systematic Alien Verification for Entitlements (SAVE) system is 

cost-effective in verifying the immigration status of aliens applying for Aid to Families 

with Dependent Children (AFDC) and Medicaid. 

BACKGROUND 

The Immigration Reform and Control Act of 1986 (Public Law 99-603), hereafter


referred to as the Act, provides for the establishment and implementation of a


cost-effective system to verify the status of aliens applying for federally funded


benefits. The SAVE system is designed to assist eligibility workers in preventing illegal


aliens (noncitizens who are in the United States illegally or by reason of their


immigration status) from receiving federally subsidized cash and medical benefits. The


Immigration and Naturalization Service (INS) administers SAVE as an information


service for States and does not make determinations on any alien’s eligibility for a


specific federal benefit. The Act mandates the following programs use SAVE in


verifying alien documentation: Food Stamp Program; Housing Assistance Programs;


Unemployment Compensation; Title IV Educational Assistance; AFDC; the Medicaid


Program; and certain Territorial Assistance Programs.


Federal Regulations, 45 CFR 233.50, speci~ that to be eligible for federal cash or


medical assistance an individual must be a United States citizen, an alien lawfully


admitted for permanent residence, or an alien otherwise permanently residing in the


U.S. under color of law (PRUCOL). PRUCOL refers to aliens residing in the U.S.


whose presence is known and tolerated by authorities, although they have not become


permanent resident aliens.


The Martin Marietta Corporation contracts with INS to store and provide electronic


access to the SAVE Alien Status Verification Index, a data base containing more than


28 million records representing aliens. When an alien applies for the federally funded


programs listed above, an eligibility worker is required to verify the alien’s status by


initially querying the automated SAVE system (primary verification). This process is


used to authenticate the alien registration number listed on the applicant’s


immigration documents. When accessed by the user through a touch-tone or


computerized system, the INS, through the Alien Status Verification Index, will


respond within three to five seconds of the query providing the alien’s status.


If the INS is unable to establish the alien’s immigration status, an “Institute Secondary


Verification” message is sent to the State. Also, if there is missing information or a


problem is identified on INS’s data base, then an “Institute” message is sent to the


State. These messages can indicate a potential problem in the identification of alien


immigration status which may signify that the alien is ineligible to receive benefits.


The eligibility worker is then required to send copies of immigration documents and a


Document Verification Request (Form G-845) to an INS District Office for manual 
review of the immigration status (secondary verification). The INS staff examines the


document and conducts automated and manual validation searches to determine the


immigration status of the alien. The INS procedures indicate that it will respond to


the submitting agency within 10 working days. Results from the primary and


secondary verifications are used by eligibility workers to determine whether an alien is


eligible to receive benefits.


The INS maintains records of disclosure on all alien registration numbers checked


through the SAVE data base. The INS maintains and discloses these records in


accordance with the Privacy Act and the Freedom of Information Act.


The INS issued a public notice in the Federal Register in September 1987 (amended


in February 1989) concerning INS procedures for verifying an alien’s immigration


status for various federal benefit programs. This notice also stated that each


overseeing agency, which is the Department of Health and Human Services (HHS) for


AFDC and Medicaid, must develop its own regulations. Due to disagreement between


ACF and the Health Care Financing Administration (HCFA), regulations were never


issued. In lieu of regulations, ACF and HCFA are using the statute and guideline


instructions to the States to administer the SAVE program.


INS hjected Savings Due to SAK?Z 

The INS operating instructions to the States (September 1989) estimated that between 

$2.5 and $3 billion in claims from unentitled aliens could be avoided each year as a 

result of SAVE. While INS maintains projected savings provided by the States, this 

information is not published since States use various definitions of cost avoidance. 

HHSl~e of ImpectorGeneral(OIG) andDepa*ent of AgricultureOIG Studies 

A study conducted by the HHS/OIG, “Alien Verification for Entitlements”, February 

1988 (OAI-86-02-OOO03) and a Department of Agriculture OIG study, 

“Cost-Effectiveness of the Food Stamp Program”, September 1992 (Audit No. 27013-

47-Te) found that State officials believed SAVE was not cost-effective. In both studies 

conclusions were largely based on perceptions, however, and actual case files were not 

reviewed to determine savings that could be identified to SAVE. 

Waiver Requests 

While all States, the District of Columbia, and territories are required by the Act to 

participate in SAVE for the AFDC and Medicaid programs, section 121(c)(4)(B) of 

the Act permits a State to apply for a waiver if it can demonstrate that the costs of 

administering SAVE exceed estimated savings. The Secretary of HHS may also grant 

a waiver if the State has an alternative, equally effective, and timely system for 

verification of immigration status with comparable hearing and appeal rights as those 

provided under the Act. Nine States have been granted full or partial waivers (See 

Table 1 on the following page.) However, other than the statutory requirements, 

there are very few requirements or guidelines that must be met for a State to be 

granted a waiver. 

2

--

STATES 

California


District of Columbia


Hawaii


Maine


Michigan


Minnesota


Washington


Mississippi


Montana


I 

I 

lx 

1X1 

1X1 

PARTIAL 

~ X2

I X3 

I


I x I 

x 

1 I 

x 

I I 

x 

I


I 

I 

I 

I 

I 

1 

I 

DATE 

WAIVER 

APPROVED 

08-30-94 

11-07-91 

11-23-93 

12-28-94 

03-04-92 

08-11-92 

11-04-93 

Not Available 

04-10-90 

Partial waivers can also be granted to States whose small volume of SAVE primary 

queries would not make it [ost-effective. In this case, States bypass the primary query 

and all contacts with INS are for secondary verifications. 

New York State has previously sought a waiver from HHS based on the results of the 

Department of Agriculture’s OIG study. The HHS did not grant a waiver based on 

that study because the State had not furnished information which showed SAVE was 

not cost-effective or that the State had an alternate system which was as effective and 

timely as SAVE. 

METHODOI_XIGY 

We selected a purposive sample of four States for review (California, Florida, Illinois, 

and Texas). For details on how we selected the sample, see Appendix A. These 

States represent almost 70 percent of the estimated 2.06 million undocumented alien 

population in the 1980 census, which was the last year aliens were identified in the 

survey. The Census Bureau estimates this population was between 3.5 and 4.0 million 

3 
in 1994. We also obtained SAVE program administrative costs for AFDC and 

Medicaid in Fiscal Year (FY) 1992, and the volume of primary verifications and 

secondary referrals. The sample States rank above other States in one or more 

categories of undocumented aliens, costs, and verification activity. 

We requested INS to provide all record information on their SAVE data base with an 

“Institute Secondary Verification” message during the study period (September 1 

through November 30, 1993) for aliens who applied for AFDC and Medicaid benefits. 

From these records, we selected a statistically valid sample and requested each State 

to match them against their records. Since California is county-administered, we 

selected a statistically valid sample of six counties based on the volume of queries to 

the SAVE system during our study period. The sample counties selected were Fresno, 

Los Angeles, Orange, Riverside, San Bernardino, and San Francisco. Alien records 

were then selected from each county. 

We reviewed the case file documentation to determine if SAVE identified aliens who 

were not eligible for benefits. We also discussed SAVE program policy and operation, 

financial information, and case files with 75 State and county staff in the four sample 

States. Staff at the State level included program supervisors and analysts, systems and 

fiscal analysts, eligibility specialists, finance and accounting managers, field operations 

staff, quality control program managers, budget analysts, and program policy 

specialists. County staff included program managers and analysts, social service 

program managers, program specialists, an auditing chief, a quality review supervisor, 

and a program coordinator. 

We conducted our review in accordance with the QuaZ@ Standardsfor Impactions 

issued by the President’s Council on Integrity and Efficiency. 

4�
FINDINGS


WE ARE UNABLE TO DETERMINE THE COST-EFFECHVENESS OF THE 

SAVE PROGRAM. 

We could not determine the estimated savings generated by SAVE for the following 

reasons: 

. % INS could not isolhte those recordk that apply only to the AFDC and 

Medicaid alien populiulons. 

We had requested that INS furnish us records only for AFDC and Medicaid 

applicants. However, we received a large number of Food Stamp records as 

part of this request. 

� States could not locate all sample benejiciq case jik. 

Of the 935 cases in our sample, States could locate only 698 (75 percent) of the 

sample, 

As noted in our companion report “Revzkw of the SXK!3 system% Bocesses” 

(OEI-07-91-01231), States were unable to consistently match and locate sample 

cases when an “Institute Secondary Verification” message was sent by INS. 

States had insufficient data available to reconcile their files with INS’s data files 

as a result of inconsistent methods of designing and storing data information in 

their computer systems. States also lack sufficient matching points within their 

data records to identify alien case files in matches with the INS/SAVE data 

base. 

Out of the 698 case files that the States did locate, we had to eliminate 430 

cases, or 46 percent of the sample, because they were not AFDC or Medicaid 

eligible cases, which left us with just 29 percent of the cases (268) from which 

to identify potential cost savings cases. 

Table 2 on the following page provides a breakdown of the sample and details 

the various categories where it was necessary to exclude cases. 

�	 Casejiled ocumentation was not adequate to determine if MlL?? was instrumental 

in States’ determination of eiljjbility based upon immigration status. 

Of the 268 cases reviewed, in most instances we were unable to determine if 

SAVE was instrumental in the decision made by the State or county regarding 

immigration status due to lack of documentation in the case files. 

5�
Table 2 

Original number in samde I 335 I 200 I 200‘ I 200 I 935 

Less Cases not found 69 20 47 101 237 

I I I I I 

Less Denied - alien had too much income or 

resources or failed to cooperate 26 37 10 25 98 

Less Food Stamps 13212110 \45198 

Less Emergency Restricted 2 53 15 29 3 100 

1 1 1 1 I 

Less Refugee Cases 20 19 0 0 39 

I I I , 

Less Reference Only 2- payment on 

another case, but used as reference to the 

file 27 25 1 1 54 

Less Cases not in Study Period 151181012125 

Less U.S. Citizens 2 I 3 I o I o I 2 I 5 

Medicaid Only 42 22 59 7 130 

. Stateslizckconsistency and completeness ih documenting &lKE admiruktrative 

costs. 

Both ACF and HCFA have issued instructions to the States as to the types of 

SAVE activities that qualify for Federal reimbursement.1 (Effective April 1, 

1994 the 100 percent reimbursement for AFDC was reduced to 50 percent.2 

Medicaid reimbursement remains at 100 percent.) In addition to direct costs, 

indirect costs must be documented through the use of an approved cost 

allocation method. 

1	 AFDC Instructions: FSA-IM-87-16, November 3, 1987, and FSA-AT-91-22, 

July 22, 1991, and HCFA Instructions: Program Memorandum - Medicaid State 

Agencies, December 1987. 

2 Budget Reconciliation Act of 1993 (Public Law 103-66). 

6�
We found that States lack uniformity in the manner in which they document SAVE 

administrative costs. 

California uses a cost allocation plan to designate costs for SAVE. Each county 

applies a time study to identify costs applicable to SAVE. Although staff from the 

State told us that all counties use SAVE, not all of them specifically report these costs. 

They also stated that one county’s costs are greatly understated because of their use of 

time study methods to report costs. A State official told us, “We only claim these costs 

even though we know that actual SAVE costs are higher.” 

Florida includes salaries as direct costs, identified through random moment sampling. 

These costs are allocated between the various programs served by these workers. 

Indirect costs are allocated to SAVE through an allocation formula used by the State. 

Illinois reported only contract costs for telecommunication services. No personnel 

expenses are included in these administrative costs. 

Texas uses random moment sampling time studies to determine allocable costs to 

SAVE and other programs administered by its Department of Human Services. Most 

of the costs are allocated for the time that eligibility workers spend on SAVE since 

they are the biggest users of the system. Once the time has been identified, costs are 

allocated on the basis of object codes which identi@ the cost categories. Costs include 

such items as salaries, travel, building rental and upkeep, telephones, professional 

services, lease/purchase of furniture and equipment, supplies, computer software and 

equipment, and employee benefits. 

Table 3 shows the documented SAVE administrative costs for both the AFDC and 

Medicaid programs for each of the four States for our study period. 

Table 3 

II California I $1,258,664 II 

II Florida I 41.405 II 

II Illinois I 488 II 

II Texas I 214,973 II 

For FY 1993, 29 States documented AFDC/SAVE administrative costs and 17 States 

documented Medicaid/SAVE administrative costs. Documented administrative costs 

included $1,771,101 for AFDC/SAVE and $7,337,334 for Medicaid/SAVE for a total 

of $9,108,435. 

7�
HOWEVER THE SAVE PROGRAM HAS VALUE IN IDENTIFYING 

INELIGIBLE ALIENS 

our case file reviews and discussions with State and county officials indicated that the 

use of SAVE has value for accurately processing AFDC and Medicaid cases. Specific 

benefits include: 

� Cost avokkmcecases were iden@kd in each State. 

Cost avoidance is defined, for the purpose of this inspection, as program funds 

saved during the period of time an ineligible alien could have received benefits. 

Based on this definition, 11 sample cases were identified out of 268 case files; 

SAVE permitted States to determine seven cases were illegal aliens filing for 

benefits, with an additional four cases recognized when they completed the 

process of developing the cases at our request. These cases resulted in benefit 

savings of $56,199 for 5 AFDC cases and 6 Medicaid cases. Table 4 identifies 

the 11 cost avoidance cases for ineligible aliens who applied for AFDC or 

Medicaid benefits. 

The INS instructions require that a secondary verification be completed prior to 

the delay, denial, reduction, or termination of a benefit to any alien applicant 

for reasons of immigration status. Therefore, we did not include cost savings 

unless a secondary verification had been completed. In some instances the 

States had not followed this procedure so we asked them to request a 

secondary verification in all instances where it appeared payment of benefits 

was questionable. 

Appendix B gives the methodology used to calculate savings. 

FR 1 1 

x 1 

$3,361 1 Counterfeit document I 

bRllx I 3.361 I Counterfeit document II 

RI x 13,150 Expired document 

SF x 3,361 Expired document 

Totak I 1 3 $23,233 

1 CA Countiwx FR = Fresno RI = Riverside SF = San Francisco 

8�
x $1,924 Expired document 

x 4,173 Counterfeit document 

Total: 1 1 $6,097 k 

ILLINOIS CASES REVIEWED = 112 

/ AFDc M131XC!AID SAVINGS ERROR 

1 x 1 $8,941 Expired document 

1X1 8.941 ExDired & Altered Document 

x 1,087 Expired document 

Total: 2 1 $18,%9 

Grand


Total: 5 6 $56,199


� SAVE asskted eli’ility woken not trained in reviewing INS documenk% 

In all four States the majority of staff who we interviewed in AFDC and 

Medicaid commented on the utility or intangible benefits of using SAVE. 

In California, staff said that “SAVE is useful in detecting altered, forged 

documents. It is a security device to validate documents.” 

Staff in Florida stated that “SAVE is better than the prior process of verifying 

documents to INS.” 

Illinois staff responded that “SAVE identifies (alien) registration cards that 

were fake before the case went to pay. Prior to SAVE the case went to pay 

before the card could be authenticated.” 

9�

I 
In Texas staff told us that “SAVE provides a certain amount of protection, by 

using INS on all queries. Things have changed since 1988 (when SAVE was 

implemented). Now there are more cards; it is more complicated now.” 

� Detemmce a Factor in Aliens Not App&ng for Benejik 

our review identified two cases in which aliens voluntarily revealed that their 

alien documents (Resident Alien Cards) were forgeries when the eligibility 

workers queried SAVE. One official stated that SAVE is criticized as being 

ineffective because few if any misrepresentations are found through this 

process. To the contrary, the official believes that such an outcome proves that 

SAVE works as a deterrent and that eliminating SAVE would be like “a person 

saying they are going to stop locking their home as no one has ever tried to get 

in.” 

States generally responded that deterrence cannot be accurately determined 

because aliens do not volunteer this information. Three of the four States also 

noted that it is difficult to determine because of the number of illegal aliens 

who are entitled to emergency restricted Medicaid benefits. 

10

GUIDELINES FOR EVALUATING 

WAIVER REQUESTS 

Based on the data we found and the results of our review, we cannot complete 

a cost benefit analysis and believe that until INS and States address weaknesses in the 

systems, such a cost benefit analysis will not be possible. (See companion report 

“Review of the SAVE System’s Processes” which addresses the system’s weaknesses 

and recommendations for improvements.) In the meantime, we believe there may be 

more requests from States to obtain waivers. In our review, we came across a number 

of areas we believe ACF and HCFA should be aware of in reviewing those waivers. 

Instead of making recommendations, we offer the following guidelines. 

These guidelines address the major factors of cost-effectiveness and efficiency of 

SAVE and the States’ alternative system. These guidelines cover: 

Completeness of Systems 

The ACF and HCFA should review the description of each State’s proposal of an 

alternative system to SAVE to ensure that it includes every element essential to its 

success. The waiver request must detail how the State plans to verify alien status, and 

its involvement with INS through at least the secondary verification and hearings and 

appeals processes. 

primary Verification 

The State may not have considered all areas when submitting a proposal for an 

alternative to SAVE. The ACF and HCFA should review the proposal to determine: 

If the SAVE automated primary verification process is replaced, what process


will then exist? Will the alternative system be equally effective?


If the SAVE primary verification process is eliminated, will every alien


applicant have to be processed through the relatively costly and time consuming


secondary verification process?


Will the State need to decrease or increase staff? This should be fully


explained.


Will identification of counterfeit and forged documents be less effective? How


will staff identi@ these documents?


Will eligibility workers spend more time reviewing INS documents and the


codes used to determine the alien’s immigration status?


11

Documentation Supporting the State’s Estimated Savings 

The State should present documentation showing benefit payment savings. This 

material should be reviewed carefully to determine how the estimated savings were 

calculated. This review should include: 

�� Assuring that the estimated savings are counted for Medicaid as well as for 

AFDC when a savings amount is submitted by the State. If beneficiaries are 

eligible for AFDC, they would also be eligible for Medicaid. 

�� Reviewing the definition used by the State to determine what should be 

included as savings. Is the State counting savings that are based on submitted 

documentation only (at the time the primary verification is made) without 

submitting these documents for review through the INS district office and the 

secondary verification process? 

�� Assuring that the State is only counting savings due to alien immigration status, 

and not for denial because of excess income and resources or failure to 

cooperate. 

�� Reviewing the methodology the State presents to estimate projected savings. 

Determine if the State us~d a statistic~lly valid sample, how the projection-was 

calculated, and the resulting confidence level of the reported savings. 

Costs of Administering the SAVE and Alternative Systems 

The State should submit full documentation that shows SAVE administrative 

expenditures. 

� Assure that the time period over which the costs are being reported matches 

the same time period over which estimated savings have been identified. 

�� Determine if SAVE administrative costs include staff direct and indirect costs, 

and that agency instructions were followed in determining whether only SAVE 

authorized expenditures are being documented. 

�� If the State presents administrative costs beyond that being reported as claimed 

for AFDC and Medicaid reimbursement, review the cost data to determine how 

the State arrived at these cost figures. 

12

AGENCY COMMENTS AND OIG RESPONSE 

The ACF commented that they hoped the OIG could have provided a more definitive 

response concerning the cost-effectiveness of SAVE. They recognized, however, that 

this was not possible because of the reasons stated in the report. 

The INS did not provide written comments to the report, but verbally indicated 

concurrence with the findings and recommendations. 

The ACF’S comments in their entirety are included in Appendix C. 

13

COSB

APPENDIX A 

CRHZRIAUSED IN SELECTING THE FOUR SAMPLE STATES 

U.umented alkm population in the 1980 census (in millions) 

California 1,024	 50 percent (rounded) 04 Florida 80 

Illinois 136 07 “ 

Texas 186 og II 

Total 1,426 70 ,, 

National 2,057 100 “ 

1, 

Adrnihistrative for Al?DC and Medicaid in Fiscal Year 1992 

AFDC Medicaid Total 

California $1,234,098 $4,419,467 $5,653,565 

Florida 24,312 6,105 30,417 

Illinois 7,903 17,974 25,877 

Texas 59,179 84,911 144,090 

Total $1,325,492 $4,528,457 $5,853,949 

National $1,467,424 $4,623,758 $6,091,182 

Percent 

93.0 

.5 

.5 

2.0 

96 

100 

Volume of Mrnary and Secondmy Verifications - October 1992- March 1993 

Percent 

Primary Secondary Total (rounded) 

California 354,185 13,389 367,574 55 

Florida 41,060 3,726 44,786 7 

Illinois 33,577 459 34,036 5 

Texas 108,217 1,475 109,692 16 

Total 83 

National 666,316 100 

A-1

APPENDIX B�

METHODOLOGY USED TO CALCULA TE COST AVOIDANCE 

States provided the following information needed to calculate savings. (The statute 

provides that AFDC beneficiaries are also eligible for Medicaid benefits, as they are 

considered categorically needy) 

AFDC/Medicaid cases 

� Average monthly AFDC benefit payment for individuals


� Average length of time an individual receives AFDC benefits


� Average monthly Medicaid payment for individuals


� Average length of time a Medicaid beneficiary receives coverage is the


same as AFDC 

Medicaid onlv cases (medicallv needv) 

� Average monthly Medicaid payment for individuals


. Average length of time an individual receives Medicaid only coverage


The methodology used to calculate cost avoidance savings is the same for the four 

States. Savings are based on the average monthly benefit payment multiplied by the 

number of months in the benefit period. 

B-1

APPENDIX C 

AGENCY 

c-1 
-,*,1*.*-** “c. 

.+ 

:’ DEPARTMENT C)FI-IEALTH& HUMAN SERVICES 

:

s

8

%‘4

%(S,,m ADMINISTRATION FOR CHILDREN AND FAMILIES�

Office of the Assistant Secretary, Suite 600�

370 L’Enfant Promenade, S.W.�

Washington, D.C. 20447�

DATE : Aqgust 16, 1995 

TO:	 June Gibbs Brown 

Inspector General 

FROM:	 Mary Jo Bane 

A~~is~ant ~ec~~ta>~~ ~--”-

for Children and Families


SUBJECT : Comments - OIG Report: ?~Reviewof the SAVE System and 

Processes.” OEI-07-91-01231


As requested, we have reviewed the subject Report and founa that 

from an overall perspective, we would have liked the OIG review 

to have resulted in a more definitive answer to the question of


the Systematic Alien Verification for Entitlements (SAVE)


program’s cost effectiveness. However, we understand why this


was not possible, not only by virtue of the reasons described in


the OIG Report, IfcostEffectiveness of SAVE~l (oEI-07-91-01230) ,


but also, under the approach the OIG used for conducting the


analysis.


Also , the Review and companion, Cost-Effectiveness Reports find


fault with the way both the Immigration and Naturalization


Service (INS) and the States operate and use the SAVE program.


However, the tone of the reports and the study recommendations


appear to put much of the onus for this, and any corrective


actions, on the States. For example, the recommendation to


improve the match points between State and SAVE data is to us,


Principally, a responsibility of the INS and not the States. Our


comments on the speci.fi.c recommendations made in the Reports


reflect our concern in this regard. 

Regarding the recommendations contained in the “Review of the


SAVE System’s Processes,” we have the following comments:


RECOMMENDATION : The ACF and the Health Care Financing


Administration (HCFA) should remind States of the SAVE


requirements and suggest minimal documentation to be included in


the State case files.


RESPONSE: The Immigration and Naturalization Service (INS) is 

responsible for providing the States with the necessarY 

instructions for operating the SAVE program to include ~,n,rnal 
Page 2 - June Gibbs Brown 

documentation in the State case files. The INS should be


aware that the States require the latest and best information in


this regard in order to properly use the SAVE program.


RECOMMENDATION : The ACF and HCFA should coordinate with INS to


enhance the SAVE program to make it more timely and user


friendly.


RESPONSE: We have in the past and will in the future work with


INS to improve the SAVE program.


RECOMMENDATION : The ACF and HCFA should coordinate with the


States and the INS to identify the most efficient and effective


way to designate and implement matching points between their


respective data base systems.


RESPONSE: In our opinion, the best way of improving the ability


to match State files with the SAVE database is for the INS to


make every effort to capture and include the social security


number in SAVE records. It is our understanding that the SAVE


system is designed to store this information, but the INS is not


diligent in capturing and maintaining it. We would add that


making it easier in the future to determine the cost


effectiveness of SAVE is probably insufficient justification for


compelling the INS to do a better job of maintaining this


information.


If you have any questions concerning these comments, contact


Robert Shelbourne at (202) 401-5051 or Robert Laue at (202) 401-


5040.