Fraud, waste, and abuse (FWA) continue to drain public resources and threaten the stability of critical safety net programs like Medicaid. In fiscal year 2024 alone, improper Medicaid payments totaled $31.1 billion, with eligibility-related errors accounting for over 65% of those mistakes, according to the Center on Budget and Policy Priorities (CBPP).
While states have made strides in identifying FWA after the fact, the real solution lies in stopping improper payments before they happen. That’s where Asset Verification Systems (AVS) come in — providing state agencies with the tools to validate financial eligibility quickly, accurately, and securely.
The Problem: Fraud Starts with Incomplete or Inaccurate Data
Improper payments in Medicaid are often due not to malicious intent, but to incomplete, outdated, or unverified information. Applicants may underreport or unintentionally omit assets, while overburdened eligibility workers may lack the tools to validate data effectively.
Manual verification methods, like collecting paper bank statements or relying on self-attestation, leave state agencies vulnerable to:
- Intentional concealment of assets
- Duplicate or overlapping benefits
- Enrolling ineligible individuals
This creates openings not only for fraud, but also for waste and administrative inefficiency that impacts truly eligible beneficiaries.
The Solution: What Is an Asset Verification System (AVS)?
An Asset Verification System (AVS) allows Medicaid agencies to electronically verify an applicant’s financial resources — such as bank accounts and investment holdings — in real time or near real time.
Mandated under Section 1940 of the Social Security Act, AVS is required for programs serving aged, blind, and disabled populations who are subject to asset limits.
Key capabilities of AVS include:
- Direct connection to financial institutions (in- and out-of-state)
- Automated searches for asset data tied to applicants
- Historical data reporting (e.g., 60 months for long-term care eligibility)
- Integration into state eligibility systems and workflows
AVS in Action: How It Strengthens Program Integrity
Verifies Eligibility Up Front
By validating declared (and undeclared) assets at the time of application, AVS reduces the chance of enrolling ineligible individuals — helping states prevent improper payments before they start.
Reduces Human Error
Automated verification takes pressure off caseworkers, reducing the risk of oversights and inconsistency. It also helps speed up determinations, improving both accuracy and timeliness.
Supports Post-Enrollment Monitoring
AVS can be used during redetermination cycles to flag changes in asset levels or suspicious account activity — protecting the program throughout the beneficiary’s coverage.
Creates a Transparent, Auditable Trail
With secure, standardized data reporting, AVS helps agencies maintain compliance with federal regulations and supports CMS audit readiness.
Real-World Value: Prevention Over Penalties
While enforcement and recovery efforts play an important role in Medicaid program integrity, prevention is more efficient and less costly. Improper payments that go undetected for months or years are rarely recouped — and often erode public trust.
Tools like AVS shift the focus to proactive prevention, ensuring that taxpayer dollars are used wisely and vulnerable populations receive the care they’re entitled to — without delays or disruptions caused by verification issues.
How CITIZ3N Supports States with AVS
At CITIZ3N, we provide states with a modern, secure Asset Verification System designed to streamline eligibility determination and strengthen program integrity from day one.
Our AVS solution:
- Seamlessly integrates with state Medicaid systems
- Interfaces with thousands of financial institutions nationwide
- Flags discrepancies and risk factors in real time
- Provides actionable insights for eligibility workers and program auditors
By equipping agencies with the right technology, CITIZ3N helps reduce improper payments, ease administrative burden, and build public trust in Medicaid operations.
👉 Learn more about CITIZ3N’s AVS
Final Thoughts
Stopping fraud after it happens is good policy. Preventing it before it starts is a great strategy.
Asset Verification Systems are one of the most effective tools states can use to build stronger, more accountable Medicaid programs.
As improper payments continue to draw federal scrutiny, AVS isn’t just a best practice — it’s a critical part of future-ready eligibility modernization.
