State Survey Analysis Report
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APPENDIX 17. PENALTIES DUE TO ERROR
17. What penalties does your program mandate for clients, agencies, or providers, who commit an error leading to improper payments?
25 State agencies responded to Question 17 (Appendix 17: pp. 104–112) |
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| State | Error Committed By | Penalties |
|---|---|---|
| Alabama | Agency | |
| Clients/Parents | Repayment of benefits; suspension from program participation | |
| Providers | Recoupment of benefits; suspension from program participation | |
| County/Local Agency | Prosecution for fraud | |
| Arizona | Agency | none |
| Clients/Parents | repayment | |
| Providers | repayment, potential loss of contract | |
| County/Local Agency | N/A | |
| California (DE) | Agency | |
| Clients/Parents | Clients failing to comply with program rules have services terminated. Intentionally providing incomplete or inaccurate information can result in a referral to local welfare fraud investigation agency if client is recipient of cash aid. | |
| Providers | Termination of contract. Civil action for recovery if provider does not comply with billing. Referral for prosecution if suspicion of criminal activity. | |
| County/Local Agency | Egregious and sustained failure to perform (high error rate) can lead to adverse action being taken against the local agency, including the termination of the local agency’s authorization to operate program. | |
| California (DSS) | Agency | Stage One child care is administered by either the County Welfare Departments (CWDs) or the Alternative Payment Providers (APPs). Currently, there are no State mandated penalties for stage one child care. However, State Assembly Bill 1542 (Ducheny, Chapter 270, Statutes of 1997) requires counties to take all “reasonable” steps necessary to promptly correct any overpayment or underpayment of supportive services payments to a recipient or a service provider, consistent with procedures developed by CDSS (Welfare Institutions Code Section 1123.4[b]). Counties should identify and track any overpayments involving recipients or providers, and pursue collection of those overpayments. Overpayments resulting from suspected fraud on the part of the recipient or provider should be referred for investigation, subject to the county’s criteria for fraud referrals. |
| Clients/Parents | For CDSS-administered Stage One Child Care, there exist no “mandated penalties.” However, errors leading to improper payments can be collected by counties through voluntary client/parent commitments, civil (e.g., small claims court), or criminal (e.g., post-conviction restitution orders) proceedings. | |
| Providers | For CDSS-administered Stage One Child Care, there exist no “mandated penalties” for child care providers. However, errors leading to improper payments can be collected by counties through voluntary provider commitment, civil (e.g., small claims court), or criminal (e.g., post-conviction restitution orders) proceedings. In Stage One, the termination of a provider’s contract is not a penalty option because counties do not contract with the child care providers, but rather, the county works through the client. |
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| County/Local Agency | In CDSS-administered Stage One Child Care, the CWD has oversight and is responsible for compiling an annual performance report and an update of their county plan, including administrative penalties. Additionally, CDSS ensures county compliance through its regular IEVS review process. | |
| Connecticut | Agency | Contract Compliance |
| Clients/Parents | Mandatory repayment of the overpayment. Progressive disqualification penalties in fraud cases. | |
| Providers | Mandatory repayment of the overpayment. Lifetime disqualification and State license forfeiture in fraud cases. | |
| County/Local Agency | N/A | |
| District of Columbia | Agency | N/A |
| Clients/Parents | If a parent/guardian is suspected of committing an error leading to an improper payment, they are referred to the Department of Human Services Office of Inspections and Compliance which conducts an investigation. If the investigation substantiates the error the child is terminated from the program and the parent/guardian is referred for | |
| Providers | If a program monitor observes that a provider continues to consistently commit an error leading to improper payment; the provider is placed in a stop placement status which means that no new children can be placed with that provider. The program monitor provides technical assistance and develops a corrective action plan and monitors for a period of six months for compliance. If there is compliance, then no further action is taken. If there is not compliance, the provider will be recommended for termination for participation in the child care subsidy program. | |
| County/Local Agency | N/A | |
| Georgia | Agency | The client or provider repays the money if agency error. |
| Clients/Parents | Once an error has been determined, the case manager will set up the claim. If the client does not respond to notice of the claim, childcare will be terminated. If the client does respond, case manager has 10 days to make a determination. Case managers may negotiate a reasonable repayment based on the client’s ability to pay. The claim must be paid within 3 years (36 months). Applicants who fail to honor the conditions of the repayment agreement cannot be recertified for childcare until the claim is paid in full. Applicants who have honored the repayment agreement can be certified for services if otherwise eligible. | |
| Providers | Provider must repay claim. If provider is still caring for children for whom subsidies are paid, the county will offset future payments by one-half (50%) of future reimbursements until the claim has been recouped in full. If provider is not caring for subsidized children, the county will send a collection notice. If payment is not made for three consecutive months, no further collection attempts are necessary unless the provider becomes active again. If a provider fails to comply with a claim negotiated by Office of Investigative Services (OIS), the county must notify OIS. The county’s obligation ends after reporting to IS. OIS is responsible for notifying the prosecutor of the delinquent payments for a possible contempt action. | |
| County/Local Agency | The client or provider repays the money if agency error. | |
| Kansas | Agency | Recovery action or payment is made to resolve the improper payment. A corrective action plan may also be developed. |
| Clients/Parents | Recovery action or payment is made to resolve the improper payment. A corrective action plan may also be developed. | |
| Providers | Recovery action or payment is made to resolve the improper payment. A corrective action plan may also be developed. In addition, the agency may terminate the provider contract in cases of overpayments and refuse to do further business with the provider. | |
| County/Local Agency | Recovery action or payment is made to resolve the improper payment. A corrective action plan may also be developed. | |
| Kentucky | Agency | Payment of Underpayments |
| Clients/Parents | Repayment of Overpayments | |
| Providers | Repayment of Overpayments | |
| County/Local Agency | N/A | |
| Maryland | Agency | none |
| Clients/Parents | There is no penalty for the customer or the provider, but both must repay a $10.00 or 10% repayment monthly until the balance is paid in full. If the monies are not repaid timely, the overpayment is sent to the Central Collection Unit. | |
| Providers | There is no penalty for the customer or the provider, but both must repay a $10.00 or 10% repayment monthly until the balance is paid in full. If the monies are not repaid timely, the overpayment is sent to the Central Collection Unit. | |
| County/Local Agency | none | |
| Massachusetts | Agency | Agency staff are retrained. Additional internal controls may have to be developed and implemented. |
| Clients/Parents | Repayment facilitated through Child Care Resource and Referral Agencies and/or the State Auditor’s Office | |
| Providers | EEC may hold or stop payments to providers or recoup funds. EEC may also fine contracted providers if they violate the terms and conditions of their contracts. | |
| County/Local Agency | EEC may direct local agencies (Child Care Resource and Referral Agency to develop a Corrective Action Plan, policies and procedures or internal controls). Staff training provided. | |
| Minnesota | Agency | None |
| Clients/Parents | Recoupment of overpayments from participants. If the redetermination of eligibility indicates the family remains eligible for child care assistance, the county must recoup the overpayment by reducing the amount of assistance paid to or on behalf of the family at the rates in item A, B, C, or D until the overpayment debt is retired. A. When a family has an overpayment due to agency or provider error, the monthly recoupment amount is one-fourth the family's co-payment or $20, whichever is greater. B. When the family has an overpayment due to the family's first failure to report changes as required by part 3400.0040, subpart 4, the monthly recoupment amount is one-half the family's co-payment or $20, whichever is greater. C. When a family has an overpayment due to the family's failure to provide accurate information at the time of application or redetermination or the family's second or subsequent failure to report changes as required by part 3400.0040, subpart 4, the monthly recoupment amount is one-half the family's co-payment or $100, whichever is greater. |
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| Providers | The county must recover an overpayment from a provider if the overpayment did not benefit the family by causing it to receive more child care assistance or to pay less for child care expenses than the family otherwise would have been eligible to receive or required to pay under child care assistance program requirements, and benefited the provider by causing the provider to receive more child care assistance than otherwise would have been paid on the family's behalf under child care assistance program requirements. If the provider continues to care for children receiving child care assistance, the overpayment must be recovered through reductions in child care assistance payments for services as described in an agreement with the county. The provider may not charge families using that provider more to cover the cost of recouping the overpayment. If the provider no longer cares for children receiving child care assistance, the county may choose to initiate efforts to recover overpayments of less than $50 from the provider. If the overpayment is greater than or equal to $50, the county shall seek voluntary repayment of the overpayment from the provider. If the county is unable to repayment arrangements. | |
| County/Local Agency | None | |
| Mississippi | Agency | No incidents to report from. |
| Clients/Parents | Recovery efforts as administered through MDHS and County/Local Agencies. | |
| Providers | Recovery efforts as administered through MDHS and County/Local Agencies. | |
| County/Local Agency | Recovery efforts and/or suspension/termination of related benefits. | |
| Missouri | Agency | |
| Clients/Parents | Possible termination of benefits and repayment. | |
| Providers | Possible termination of contract of provider agreement and repayment. | |
| County/Local Agency | Corrective action and possible disciplinary action. | |
| Montana | Agency | none |
| Clients/Parents | 10 % & 25% | |
| Providers | 10 % & 25% | |
| County/Local Agency | none | |
| Nebraska | Agency | Overpayments are collected; depending on the severity of the overpayment, the provider agreement may be terminated. If the overpayment involves serving more children than the license would allow, this is shared with the Licensing division. Licensing imposes consequences as determined by a review of the facts. |
| Clients/Parents | An attempt is made to collect overpayments. As stated previously, the client/parent is denied child care if s/he did not pay the required co-payment, is eligible for child care under the co-payment category, and does not make a satisfactory arrangement to pay the back co-payment(s). | |
| Providers | Overpayments are collected; depending on the severity of the overpayment, the provider agreement may be terminated. If the overpayment involves serving more children than the license would allow (for a licensed provider), this is shared with the Licensing division for application of their policies. | |
| County/Local Agency | N/A | |
| New Hampshire | Agency | |
| Clients/Parents | Generally, all suspected cases are referred to Special Investigations, including many cases of overpayment errors, with the understanding that Special Investigations will make the decision as to what constitutes error and fraud. Some cases are not pursued because they must reach a threshold of concern, identified by a certain amount of money, and whether they had been previously referred. If a person goes to court as a result of Special Investigations (and it is decided that improper payments have occurred) it will affect their TANF grant. |
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| Providers | An error resulting in improper payments will be recouped from that provider. | |
| County/Local Agency | Contract Child Care Centers are monitored a minimum of once in their two year contract cycle. An error resulting in improper payments will be recouped from that provider | |
| North Carolina | Agency | N/A |
| Clients/Parents | the parent is requested to pay the amount of funding that he/she was not eligible to receive. | |
| Providers | providers are required to return funds received that they were not eligible to receive. In addition. repeated instances of noncompliance with subsidy policies (e.g., submitting in accurate attendance reports, over-enrollment, etc.) can result in termination of the provider’s eligibility to receive subsidy funding. | |
| County/Local Agency | agency is required to correct any over or under payments made due to agency error. | |
| Ohio | Agency | A corrective action plan is instituted by our agency to the county agency. This corrective action plan requires counties to recoup funds and correctly implement administrative policy. |
| Clients/Parents | Pursuant to Ohio Administrative Code Section 5101:2-16-73 : (E) “…failure of the recipient to enter into or comply with an agreement with the CDJFS to repay a child care overpayment caused by recipient error or agency error, shall result in the termination of child care benefits after provision of appropriate hearing notice pursuant to division-level designation 5101:6 of the Administrative Code. Ineligibility for child care benefits shall continue as long as: (2) The recipient fails to enter into or comply with an agreement with the CDJFS to repay a child care overpayment caused by recipient error or agency error. The agreement shall be satisfactory to both the recipient and the CDJFS." |
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| Providers | Pursuant to Ohio Administrative Code Section 5101:2-16-73 : “(F) Failure of the child care provider to repay a child care overpayment made by the CDJFS as a result of provider error, provider fraud or agency error, shall result in the revocation of the type B family child care home or in-home aide certificate. Denial for certification shall continue until repayment is made to the CDJFS." |
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| County/Local Agency | ||
| Oklahoma | Agency | |
| Clients/Parents | Establish claim for overpayment and pursue collection | |
| Providers | Establish overpayment, recoup and/or cancel Child Care Provider Contract. Assess liquidated damages. | |
| County/Local Agency | ||
| Puerto Rico | Agency | |
| Clients/Parents | remove children of center | |
| Providers | Technical Assistance, Correction in files, Monitoring | |
| County/Local Agency | ||
| Utah | Agency | Parents have to pay the overpayment back. This is based on the worker making an error on the case the caused the parent to receive child care assistance that they were not eligible to receive. |
| Clients/Parents | Parents have to pay the overpayment back. | |
| Providers | Providers have to pay the overpayment back. We are currently working on our database to be able to track the type of errors more efficiently. This should be up and running by January 2006. If it is determined to be fraud, they are disqualified from being a provider for State assisted child care cases. | |
| County/Local Agency | N/A | |
| Washington | Agency | No penalties |
| Clients/Parents | No penalties | |
| Providers | No penalties | |
| County/Local Agency | No penalties | |
| West Virginia | Agency | Agency staff are given a corrective action plan to follow. Failure to comply with the corrective action plan results in termination |
| Clients/Parents | Clients are given a warning letter reminding them of their program responsibilities, and notified that with the next error, a thirty day penalty closure may occur. Should another error occur, the thirty day penalty closure is implemented. Clients must also repay any amounts owed to the Agency. | |
| Providers | From the Child Care Policy Manual 7.2.4.4. “Three Strikes Rule” – Child Care Providers will from time to time make errors in completing Requests for Payment. Occasional minor mistakes are not grounds for closure. However, consistent unwillingness or inability to comply with appropriate Request for Payment and Sign In and Out procedures should be addressed in the following manner: The R&R worker shall have the provider sign a statement indicating the provider received training and understands the forms and process. The worker shall explain that the following actions shall be implemented if provider does not complete forms correctly: • If the provider submits an incorrect Request for Payment Form (ECE-CC-10-A) and attendance sheet (ECE-CC-10-G), the R&R worker shall send a letter to the provider indicating the payment request is incorrect. The R&R worker shall have the provider submit another request for payment with the appropriate corrections made. Corrections on Request for Payment forms or Child Care Attendance records shall not be made with “white out.” Parents and/or Providers, as appropriate, shall strike through incorrect information, make corrections and initial them. If corrections need to be made to original Child Care Attendance sheets (ECE-CC-10G) – parents should also initial to verify the corrections. If Child Care Attendance sheets are incorrect, clients should also be notified of their responsibility for appropriately completing sign in and out procedures. • If the provider submits a second incorrect Request for Payment form (ECE-CC-10-A), the R&R worker shall contact the provider by telephone or letter to schedule an individual training session on the payment process. The additional training must be documented and the provider notified in writing that any future incorrect billing forms will result in termination from the Certificate system. • If a third incorrect payment form is submitted, the R&R worker shall send the provider a 13 day cancellation notice using Cancellation Notice for Childcare Provider Services Agreement. Families using the provider shall also receive notification to select a new provider. |
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| County/Local Agency | Local CCR&Rs can be given corrective action plans. Failure to implement the corrective action plan could result in the termination of the contract. | |
| Wisconsin | Agency | None |
| Clients/Parents | None | |
| Providers | Stop payment and not allow authorizations for up to 6 months (bar from child care subsidy program for 6 months) | |
| County/Local Agency | None | |
Appendix 18 >>