D.C. leaders on Wednesday unveiled a strategy to reduce fraudulent enrollment in the District's health care safety net, as an outside audit confirms that the initiative is easily cheated by nonresidents.

The $129 million D.C. Healthcare Alliance serves some 45,000 low-income residents who are otherwise ineligible for other medical benefits, such as Medicaid. A new audit from consultant Bert Smith & Co., first reported in The Examiner last week, reveals huge loopholes in the safeguards designed to prevent non-District residents from becoming members.

“The program is strong, however there remain things that need to be fixed,” Mayor Adrian Fenty said during a news conference.

The audit revealed dozens of people claiming identical addresses, members exceeding the income-eligibility threshold, clients providing expired documents as proof of residency and others who are already receiving benefits in other states. It did not reveal a total number of ineligible Alliance clients, nor did it estimate the tax dollars lost through fraud.

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The District loses $1 million a year for every 400 ineligible members.

Staff with the Income Maintenance Administration, which enrolls applicants in the Alliance and other social service programs, will undergo training on enhanced verification of income and residency. The IMA will perform detailed reviews of “high-risk” applicants, improve their tracking of homeless clients, and cross-check D.C.’s public assistance databases with those of other states.

The Alliance serves as a “lifeline” to thousands, said D.C. Councilman David Catania, chairman of the health committee. The District, he said, must take care not to tighten the rules so much that eligible applicants such as the homeless are turned away.

“We do not want to make the perfect the enemy of the good, and the good is this Alliance program,” said Clarence Carter, human services director.

Sharon Baskerville, executive director of the D.C. Primary Care Association, said the District is making progress fixing a “chaotic program” into one that's “better managed but not perfect.” Better to have Maryland residents in the Alliance, she said, than flooding D.C.’s emergency rooms.

mneibauer@dcexaminer.com