Telecommunications companies overcharge public agencies across Virginia by at least $500,000 each month, said Robert Osmond, the state's chief information officer.
But thanks to mediation services provided by his firm, the Virginia Information Technology Agency, those additional fees are no longer necessary. Osmond told StateScoop that the intermediary service's customers (approximately 800 public universities, K-12 school districts, utilities, local governments, and county-affiliated rescue agencies) are entitled to help VITA dispute fees on their behalf. He said there is no need to pay these fees because the government is advocating the following.
Osmond said he believes the service is an unusual offering by the state government, allowing customers to receive one bill for all their telecommunications services, from pagers to satellite internet service. . Osmond described the service as a “cost-neutral” way for the state to save the state money and the hassle of double-checking many bills.
“They can buy our product, we bundle it together and give them one invoice, and we also do anti-fraud checks to check the invoice for errors,” Osmond said. “Overcharges often occur because they are double-billed, and we catch them, deny them, and dispute them.”
Osmond said the approximately $500,000 monthly overcharge likely represents only half of the savings the state could realize. He said he expected Virginia to switch to a new system powered by artificial intelligence this summer, which would increase monthly overbilling and inefficiency discoveries to as much as $1 million. As well as spotting double charges, Osmond said the new AI system could help the public sector understand which services they are paying for but not using.
“Earlier this year, we identified thousands of lines that had not received a call in six months,” Osmond said. “They just existed and people were using them just in case, and we just discontinued them. But if we hadn't encouraged it, no one would have done anything. That would have saved us a lot of money.”
Currently, VITA manually performs data analysis to find billing errors and unused services. But 18 months ago, VITA, accounting firm KPMG, and an AI company called Claro began developing a new AI system that would automate services more accurately and to a greater degree, Osmond said. But Osmond said it wasn't initially clear that the state would provide such mediation and fraud detection services because, despite significant cost savings, it would be “a lot of effort.”
“We've done a lot of self-reflection and asked ourselves, is this the business we want to be in?” Osmond said. “Because most [states] They provide the contract, but they don't actually provide the service behind it. ”
Osmond said part of the challenge is the size of the service catalog, which aggregates 5,700 services from 30 service providers, ranging from large companies like Comcast to small local businesses. Eventually, he said, his agency committed to providing the service.
“We came to the conclusion that if we don’t do it, no one will. [the overcharges] It just becomes a cost of doing business,” Osmond said. “Sometimes you pay money into an account you don't have, and people will just accept it. We thought this was an opportunity for the government to do a better job.”
