Governor Ferguson creates Health & Human Services Chief Fraud Prevention Officer as part of new fraud-fighting initiative
Executive order also creates Public Funds Fraud Prevention & Accountability Workgroup to coordinate agency prevention efforts
OLYMPIA – Governor Bob Ferguson today signed an executive order creating the state’s first Chief Fraud Prevention Officer and a statewide fraud prevention workgroup to coordinate and expand on the state’s existing fraud prevention efforts.
Governor Ferguson also announced upcoming Governor-request legislation expanding the current Medicaid False Claims Act to cover all false claims against Washington state.
“Washington takes fraud seriously,” Governor Ferguson said. “As we continue to face challenging state budgets and devastating cuts from the federal government, it is more important than ever to protect every dollar. My executive order unifies our prevention efforts across state government and expands them.”
The Chief Fraud Prevention Officer is tasked with strengthening oversight and coordination of fraud prevention, detection, investigation and recovery efforts specifically related to health and human services programs administered by executive cabinet agencies. Those agencies include the state Health Care Authority and the departments of Health, Social & Health Services, Labor & Industries and Children, Youth & Families.
The Chief Fraud Prevention Officer will coordinate with these agencies to improve program integrity and protect federal funding. Governor Ferguson intends to implement this work using existing resources.
This work is different from the important work of the Washington State Auditor. The Auditor investigates fraud allegations and whistleblower reports, conducts performance audits of state agencies and local governments and provides technical guidance and training. The Chief Fraud Prevention Officer will work in partnership with the Auditor’s Office, and coordinate efforts in the Governor’s health and human services agencies to stop fraud before it happens.
“A loss of public resources anywhere diminishes the public’s trust in government overall,” said Washington State Auditor Pat McCarthy. “I applaud the governor’s efforts to improve fraud prevention and detection. Earlier this year I created a director-level Special Investigations division because, like the governor, I believe fraud prevention efforts need to be elevated across government.”
Public Funds Fraud Prevention & Accountability Workgroup
Governor Ferguson’s order also creates the Public Funds Fraud Prevention & Accountability Workgroup comprised of representatives of the Governor’s cabinet agencies to coordinate their efforts, share best practices and expand on successful strategies across state government. It will be co-chaired by the Governor’s Office and the Office of Financial Management (OFM).
The workgroup will create a statewide Public Funds Fraud Prevention and Accountability Framework no later than June 30, 2027, to establish a coordinated statewide approach to fraud prevention, detection, reporting and referral, response, recovery and accountability.
It will also provide recommendations on potential changes to statutes and regulations, enforcement authority, contractor suspension and debarment standards, reporting mechanisms and whistleblower protections.
In addition, the workgroup will make recommendations regarding a public-facing accountability dashboard that reports statewide fraud prevention and accountability performance measures, trends, recoveries, corrective actions and implementation progress.
The Governor’s executive order also tasks OFM, the Department of Enterprise Services, the Washington State Patrol and the state Criminal Justice Training Commission with developing new fraud prevention trainings for state employees. Those include basic fraud awareness and ethics, more advanced training for employees working specifically in fraud prevention and financial crimes training for investigators. The Executive Order also establishes a workforce pathway to build talent, provide opportunities for advancement for state employees, and keep talent in state government.
Governor to propose state False Claims Act
In the upcoming legislative session, Governor Ferguson will propose Governor-request legislation expanding the Medicaid False Claims Act to cover all false claims against Washington state. Currently, 25 states have False Claims Acts to protect against false claims against the government. Washington is one of only five that has only a Medicaid False Claims Act.
False claims include overcharging the government for goods or services, fraudulently seeking a government contract, submitting a false application for a government loan or grant, or otherwise defrauding the government and violators would be liable for up to three times the actual monetary damages the government sustained, plus civil penalties adjusted for inflation per false claim.
Enforcement would solely be through private individuals through the whistleblower, or “qui tam,” right of action.
In this kind of lawsuit, the person who reports the fraud — the relator — is entitled to a percentage of the penalties awarded by the court, and the state receives the rest. An agency would be designated to monitor the progress of these whistleblower lawsuits through the courts to ensure the state receives its share of recoveries.
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