State Survey Analysis Report
Download this document in Word (1,076 KB) or PDF (1.28 MB)
APPENDIX 5. PROCESS FOR IDENTIFYING AND HANDLING IMPROPER PAYMENTS
5. Please describe your process for identifying and handling improper payments and include all aspects of the process through resolution.
25 State agencies responded to Question 5 (Appendix 5: pp. 50–64) |
|
| State | Process for Identifying and Handling Improper Payments |
|---|---|
| Alabama | Overpayments are identified by a review information received by the parent/provider, review of case records (annual monitoring review and monthly supervisory reviews); and/or investigation of reports from other entities. If an improper payment is identified the amount of the improper payment is then determined by entering information onto a claim form that explains the findings and calculates the amount owed, if an overpayment has occurred. The parent/provider is then notified of the amount owed, by letter. The parent/provider then has an opportunity to dispute the claim or provide evidence to reduce the claim. The parent/provider are then asked to make payment on the claim. Parent/Provider sign a repayment agreement for the full amount of the overpayment or for partial payment amounts until the balance is paid in full. |
| Arizona | Overpayments are identified by Child Care Specialists through a variety of means (some examples include, but are not limited to: at regular review, through quarterly interfaces with Unemployment data, through OSI investigations, through third party complaints, etc.). Once identified, the Specialist completes an overpayment packet which includes the computations to determine the amount of the overpayment, all information that was used to substantiate the overpayment, a summary of their work, and any other pertinent information. This packet is submitted to the Child Care Administration Review and Reconciliation Unit. Once it is received by the unit it is logged into a database and then reviewed for accuracy. At the point where the overpayment is determined to be accurate the packet is sent to the Office of Accounts Receivable and Collections which proceeds to set up an account and pursue collection of the overpayment. Overpayments over a certain dollar amount (as specified by the Arizona Attorney General’s office) are automatically reviewed for potential prosecution prior to the collection of the overpaid amount. The Office of Special Investigations in conjunction with the Arizona Attorney General’s office reviews the overpayment and conducts additional investigation to determine if the case is prosecutable. |
| California (DE) | See attached Training and Monitoring Resource Guide. The Training and Monitoring Resource Guide is used to perform program audits of CCDF programs. The Training and Monitoring Guide establishes standards for documenting program eligibility and verifying client provided information. Program audits use a statistically valid sample of cases to identify agency-caused errors that have a material program impact. The results of program audits are used to develop local policies and procedures to minimize errors and ensure that information on which eligibility and payments are based is complete and accurate. During determination or re-determination of eligibility or during regular processing of monthly payments, local agency may determine that client and/or provider has given incomplete or inaccurate information to obtain a benefit or payment to which the client or provider is not entitled. If such a determination is made, local agencies take action to terminate services and/or the provider’s contract. If client is recipient of cash aid, a referral is made to the local county welfare department. If client is not on cash aid, local agencies may initiate civil proceedings for recovery or refer to local law enforcement for prosecution. |
| California (DSS) | For CDSS-administered Stage One Child Care, the identification and handling of improper payments varies from each of California’s 58 counties. However, all counties systematically utilize IEVS reviews and other State or federal matches to establish eligibility standards for CalWORKs (the TANF program in California), a process which, in turn, establishes a client’s categorical eligibility for Stage One Child Care. California has no statutory authority to pursue collection of an improper payment in Stage One Child Care unless the monies are voluntarily relinquished by the client, or through civil (e.g., small claims court) and criminal (e.g., post-conviction restitution orders) proceedings. In order to reduce the percentage of improper payments, CDSS has recently formed an ad hoc workgroup with the counties to develop best practice administrative procedures to improve accuracy. |
| Connecticut | Please refer to Attachment 2 – Benefit Error Procedures – for additional details. Detection Errors are detected though a variety of sources and activities: standard verification practices; third party verification of error prone circumstances, changes discovered at redetermination; quality control and supervisory reviews; IRS; fraud hot-line complaints; fraud investigations; errors discovered in other public assistance programs administered by DSS; administrative hearings; ad hoc data integrity reports designed to look at error prone circumstance, such as out-of-State providers, capacity and extended hours of care; information reported by parents and providers; automated data matches and manual checks of other State, federal and private databases - e.g. Department of Labor (DOL) wage and unemployment records, Department of Corrections (DOC) incarceration records, motor vehicle records, child support database, child abuse/neglect registry, State and national criminal records, public assistance program eligibility databases, Department of Public Health (DPH) licensing records, national accrediting bodies, IRS TIN matching etc. Claims Underpayments – Underpayments are processed by the Case Counselor assigned to the case. The Case Counselor verifies the correct case circumstances and makes any necessary changes to ongoing eligibility/benefits. The counselor then completes a Payment Adjustment form and forwards the form together with back-up documentation to the Unit Supervisor for review. The Unit Supervisor forwards the approved adjustment to the Payment Unit for processing. Once received by the Payment Unit, a Payment Processor enters the case data from the Payment Adjustment form into an ad hoc Access program. The Access data is independent of the Child Care Eligibility Management System (CCMIS). This program calculates the correct benefit amount for each month of the underpayment. The payment processor generates a detailed Payment History Report through CCMIS. This report lists the actual payments issued at the provider, family or child level. The amount paid is compared to the corrected amount to determine the difference. Once this is done, the Payment Unit Supervisor reviews the claim and approves the adjustment. Payment is generated in the next payroll cycle. All information relating to the claim is scanned into the case record via the FileNet interface with CCMIS. Administrative and Non-Fraud Overpayments – This process parallels the procedures for processing underpayments. When an overpayment is discovered the Case Counselor takes action to correct any ongoing eligibility issues. The Case Counselor documents the case history and generates an Overpayment Referral to the Unit Supervisor who reviews the case and forwards the referral to the Internal Quality Control Unit. Referrals on closed cases by-pass Case Counselors and are referred directly to the Internal QC Unit from the referring source. Pending claims are entered into an ad hoc database and tracked. Each case is assigned to a Recoupment Specialist who obtains all necessary verification. The claim is calculated in the same manner as an underpayment by comparing the actual payments to the corrected pay amounts. All documentation relating to the claim is scanned into the case record. Care 4 Kids has one full-time Recoupment Specialist. Between 2 and 3 FTE’s are needed to handle the current claim volume. It should be noted that claims starting out as non-fraud errors may be referred to the DSS Client Fraud Investigations Unit (CFI) for prosecution or an administrative disqualification hearing (ADH) if the error is determined to be egregious or intentional. Claims may also involve overpayments other DSS programs. CFI determines if the case warrants an ADH or criminal action. If not, the case is referred back to C4K for handling as a non-fraud claim. Fraud - the DSS Client Fraud Investigation Unit processes all provider and client fraud claims. Referrals received by DSS from C4K, the Fraud Hot-Line and other sources are entered into a central tracking database and forwarded to the local DSS regional office, unless the referral was generated by the local DSS office. The CFI Regional Investigators have access to CCMIS and the FileNet document storage functions. The CFI Investigator completes the investigation and obtains documentation. If a non-fraud error occurred, the claim is referred to C4K for processing. If the error was intentional and warrants an ADH or prosecution, the CFI investigator processes the claim. C4K may assist CFI with calculating the claim if the error does not result in 100 percent of the benefit being overpaid. CFI maintains separate records, but forwards selected information to C4K for scanning. Overpayment Recovery Non-Fraud Claims – With the exception of refunds, cancelled/voided checks and offsets to adjustments, all non-fraud claims are recovered through a monthly billing process or State income tax intercepts. State regulations permit recovery from ongoing payments to parents and providers; however, DSS does not have the resources needed to build a CCMIS benefit error calculation and recoupment module. The agency responsible for non-fraud recoveries is the Department of Administrative Services Financial Service Center (DAS FSC or FSC). Once the claim has been calculated, the C4K Recoupment Specialist generates a notice to parents and providers detailing the circumstances of the claim, the amount and informs the client of the intent to forward the claim to FSC for collections. Following the expiration of the time limit for requesting an administrative hearing; C4K refers the claim to FSC for collection. FSC enters the claim into its Diamond tracking system and generates a demand letter to the client. If the client responds to the notice, FSC sets up a billing. If thirty days passes without a response, the claim is referred to a private collections agent. The collections agent receives 14.9% of all recovered funds. After a period, claims may be deemed unrecoverable and written off with approval of the Office of Policy and Management. |
| District of Columbia | -Documentation for a potential overpayment is given to the Program Development Division – Monitoring Unit to investigate. -If the PDD Monitoring Unit concludes that the ECEA is paying for a child that is not attending, the Monitoring Unit works with the Intake Unit of the Child Care Services Division to terminate the child. -The Intake Unit supervisor then sends documentation to the AP Unit authorizing deduction(s) from future payments. -PDD completes an agreement for repayment. |
| Georgia | When there is reason to believe that an overpayment or an underpayment has been made by the agency, contact must be made with the client or the child care provider to investigate. Based on the investigation, if no overpayment or underpayment exists, document the case record or the provider record. If an overpayment has been made, the type of claim should be determined. When an overpayment occurs, the case manager first determines if the overpayment is the result of a suspected intentional program violation (IPV), administrative error, or inadvertent error. The agency is responsible for calculating, reporting and collecting overpayments when the claim is the result of an administrative error (AE) or an inadvertent error (IE). In general, if the overpayment was caused by an administrative error or an inadvertent error, the case manager must determine the amount of the overpayment, obtain a repayment agreement, and follow county procedures for collecting and reporting the claim. 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. The county DFCS office refers all clients and all providers who are suspected of Intentional Program Violations (IPVs) to the Office of Investigative Services (OIS). MAXIMUS, Inc. may refer providers suspected of IPV to OIS. When findings are returned from OIS, the agency will follow OIS instructions. All child care providers who are suspected of IPVs should be referred to OIS. The results of the investigation will be sent to the county office. If appropriate, the results of the investigation will also be sent to MAXIMUS, Inc., the contractor managing payments to child care providers. The county of MAXIMUS, Inc. is responsible for collecting and tracking claims. All claims negotiated by OIS should be pursued, tracked, collected and reported. When OIS established claims as suspected fraud, the claims are not terminated after four years of inactivity. OIS is responsible for investigating suspected IPVs that are referred. When OIS has sufficient evidence to document the suspected IPV, OIS will calculate the claim and pursue the appropriate claim disposition. OIS have two avenues open: prosecution, when the claims identified by OIS as suspected IPVs have been accepted by the local prosecutor for further legal action and repayment agreements, established when claims identified by OIS as suspected IPVs are inappropriate for legal action. 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 OIS. OIS is responsible for notifying the prosecutor of the delinquent payments for a possible contempt action. |
| Kansas | Policy and procedure regarding improper payments is located in the Kansas Economic and Employment Support Manual (KEESM) in section 11000 which can be reviewed at http://www.srskansas.org/KEESM/keesmsec11000.htm Improper payments may be discovered in a number of ways including QA reviews, special audits, and the work of staff at the Regional level. The Regional level includes Case Managers, Supervisors, Quality Assurance Case Readers, Performance Improvement Case Readers, customer reports, provider reports or our fraud hotline. The Quality Assurance Case Readers are currently reviewing child care cases in which child care cases are being paid at the special needs and/or special purpose rates. Beginning in January, they will begin reviewing child care eligibility. Child care provider audits are currently in progress to review compliance with enrollment and operation requirements. Also, there are reports from the Central Office that are available to all child care case managers in which possible improper payments can be investigated. Examples of these reports include customers for whom excessive child care hours have been reported and providers who appear to be over capacity for their specific licensing. Once an improper payment has been identified and the result is an overpayment, a notice of this overpayment is sent to the client who has been improperly paid. This notice informs this person of the amount of the overpayment, the cause of the overpayment (client error, agency error), and requests that the person specify how they would like to arrange to return the overpayment to the State. The options for returning payment are full payment, partial payment or a portion of their monthly benefit may be deducted. Currently, Kansas is in the process of changing our child care benefit system to automatically deduct a percentage of the over payment from the monthly benefit. The person is given 10 days to respond to this notice. If a response is received, the agency will recoup according to the customers designated preference. If a response is not received and the person has an active child care benefit, the agency, giving the person timely notice, will begin to recoup the overpaid amount. If the person is not receiving a current monthly benefit, the overpayment will be placed in debt set off at which time monies owed may be off set from tax refunds until the full balance owed is repaid. When the improper payment is an underpayment, the State submits to the person the amount that the person was qualified to receive. If currently receiving child care assistance, the amount will be credited toward their family share (an amount the person is required to pay before the agency will make payment). If not currently receiving child care assistance, the agency may write a check to the person for the entire amount owed. If the cause of the overpayment was determined to be a fraud situation (this would have been determined through the Region’s fraud referral process) the payment can be recouped by debt set-off (see above regarding debt set-off). Once the overpayment has been fully recouped a notice is sent to the customer informing them that the monies have been fully returned. |
| Kentucky | See Attachment B |
| Maryland | 1. Identify: • Quality assurance reviews or audits of case records • Investigation of cases in response to public complaints – Fraud Hotlines include: • Governor’s Hotline • Legislative Auditor’s Hotline • Department of human Resources Hotline • Office of the Inspector General’s Web site 2. Reduce and/or Collect Improper Payments: • The child care automated system calculates eligibility, subsidy level and payment amount for each child based on worker input. • The child care automated system calculates payment adjustments based on worker input of adjusted number of absences • The child care automated system subtracts a recoupment amount that the worker enters to determine the net payment to providers with an established overpayment • The following disqualification penalties are in place for an intentional program violation: The parent or provider is ineligible to participate in the subsidy program as follows: 1. First violation: no payment for 6 months or until the individual makes full restitution, whichever is earlier 2. Second violation: no payment for 12 months or until the individual makes full restitution, whichever is earlier 3. Third violation: parent or provider is permanently barred from the subsidy program and shall pay restitution 4. If a parent or provider is convicted of misrepresenting the location of residence in order to obtain benefits from two or more States, the person is not eligible to receive subsidy payments for 10 years • Recovery of Erroneous Payments: 1. Once the amount of an overpayment is determined, a demand letter is sent stating the amount of the debt and the reason for the claim. The person is allowed the right to negotiate the repayment schedule within limits. The overpayment thresholds are $10 or 10% (whichever is greater) for non-fraud and $20 or 20% for fraud. 2. A second and third demand letter may be sent at 30 day intervals as needed. The third demand letter advises the debtor of the consequences of failure to respond in a positive manner (i.e. forwarding of the amount to the State Central Collections Unit). 3. In no event should the liquidation of the debt by installment payments exceed a term of three years. |
| Massachusetts | EEC identifies five (5) contract regions and each region potentially has a different contract/voucher rate for each program type. EEC reviews for compliance and improper payments in these five (5) regions using contract monitoring staff and child care resource and referral agency (voucher) monitoring. The EEC Contract Monitoring Program helps verify and ensure agencies are in compliance with all applicable laws, regulations, policies and procedures. All EEC Providers are reviewed within a three year period. The EEC Contract Monitors conduct risk assessments (which include desk reviews) of contracted providers to prioritize the order in which on-site visits will be performed. Based on a number of factors, the Contract Monitors assign a High, Moderate or Low Risk rating to each provider. At the conclusion of each site visit, the Contract Monitor conducts an exit interview with the Executive Director of the program and within 15 days of the visit sends a written Site Visit Report highlighting what, if any, non-compliances were found during the visit, including any improper payments. The contractor has 30 days to respond to the Report with a Corrective Action Plan (CAP). The contractor may submit additional documentation in an effort to correct the identified improper payments. EEC reviews the documentation and determines if repayment is still due. If funds are owed, EEC’s Monitoring staff notifies EEC’s Director of Accounting and the Account Specialist (individual who enters the regional payments into the MA accounting records, New MARRS). The Accounting Department generates an Accounting Recoupment Form which is sent to the contractor and outlines a repayment schedule, including options for immediate repayment in full or a short- term repayment plan. If the contractor repays funds which were paid to it during the current fiscal year, the funds will be deposited into EEC’s child care accounts to be allocated to other child care programs in the current fiscal year. If the improper billing is related to a prior fiscal year, EEC is mandated by Massachusetts Finance Law to deposit these funds into the Massachusetts General Fund and used for other Commonwealth purposes. In some instances, cases are referred to the agency’s Legal Unit for assistance in recouping improper payments. The Legal Unit may work cooperatively with the Attorney General’s Office to initiate civil and/or criminal proceedings against a provider. The improper payments related to client fraud are not usually addressed by our Office. Under Massachusetts Chapter 647, Acts of 1989, EEC is required to report fraud related payments to the State Auditor’s Office and its Bureau of Special Investigations. The State Auditor’s Office will review the file and make a decision based on a number of factors, including the sum at issue, whether to pursue the client directly and/or initiate legal proceedings. EEC is not authorized by existing regulations to recoup directly from an individual on the basis of fraud or misrepresentation. However, an individual may be barred for up to 3 years from receiving subsidized child care services if they knowingly submitted fraudulent or misleading information in order to qualify for subsidized care. EEC is working toward developing policies and regulations to address these issues. |
| Minnesota | Improper Payments - General Overpayments and Underpayment Policy – non-fraud See attachment 1 County CCAP workers determine eligibility and maintain ongoing case management for families applying and receiving benefits from the child care assistance program. When a worker identifies that a family has received an overpayment or under payment, the agency will recalculate eligibility using the current information. If the family remains eligible, the county agency must begin recoupment of the overpayment through the reduction of child care assistance payments in order to correct an overpayment of child care assistance. Recoupment of overpayments. "Recoupment of overpayments" means the reduction of child care assistance payments to an eligible family or a child care provider in order to correct an overpayment of child care assistance. Recovery of overpayments. (a) An amount of child care assistance paid to a recipient in excess of the payment due is recoverable by the county agency under paragraphs (b) and (c), even when the overpayment was caused by agency error or circumstances outside the responsibility and control of the family or provider. (b) An overpayment must be recouped or recovered from the family if the overpayment benefited the family by causing the family to pay less for child care expenses than the family otherwise would have been required to pay under child care assistance program requirements. If the family remains eligible for child care assistance, the overpayment must be recovered through recoupment as identified in Minnesota Rules, part 3400.0187, except that the overpayments must be calculated and collected on a service period basis. If the family no longer remains eligible for child care assistance, the county may choose to initiate efforts to recover overpayments from the family for overpayment less than $50. If the overpayment is greater than or equal to $50, the county shall seek voluntary repayment of the overpayment from the family. If the county is unable to recoup the overpayment through voluntary repayment, the county shall initiate civil court proceedings to recover the overpayment unless the county's costs to recover the overpayment will exceed the amount of the overpayment. A family with an outstanding debt under this subdivision is not eligible for child care assistance until: (1) the debt is paid in full; or (2) satisfactory arrangements are made with the county to retire the debt consistent with the requirements of this chapter and Minnesota Rules, chapter 3400, and the family is in compliance with the arrangements. (c) 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 recoup the overpayment through voluntary repayment, the county shall initiate civil court proceedings to recover the overpayment unless the county's costs to recover the overpayment will exceed the amount of the overpayment. A provider with an outstanding debt under this subdivision is not eligible to care for children receiving child care assistance until: (1) the debt is paid in full; or (2) satisfactory arrangements are made with the county to retire the debt consistent with the requirements of this chapter and Minnesota Rules, chapter 3400, and the provider is in compliance with the arrangements. (d) When both the family and the provider acted together to intentionally cause the overpayment, both the family and the provider are jointly liable for the overpayment regardless of who benefited from the overpayment. The county must recover the overpayment as provided in paragraphs (b) and (c). When the family or the provider is in compliance with a repayment agreement, the party in compliance is eligible to receive child care assistance or to care for children receiving child care assistance despite the other party's noncompliance with repayment arrangements. General Eligibility Requirements and Assistance Standards to Be Met By All Applicants and Participants. Subpart. 6b. Ineligibility For Failure To Pay Overpayments. A family with an outstanding overpayment is ineligible for child care assistance until the overpayment is paid in full or until the family arranges to repay the overpayment according to part 3400.0187 and then continues to comply with the repayment agreement. Minnesota Rules 3400.0187 Recoupment and Recovery of Overpayments Subpart 1. State recovery of overpayments. The commissioner must recover from counties any State or federal money that was spent for persons found to be ineligible for child care assistance, except as provided in Minnesota Statutes, section 119B.11, subdivision 3. The county's inability to recover an advance payment made to a provider or a family does not affect the commissioner's right to recover the advance payment from the county under Minnesota Statutes, section 119B.11, subdivision 3. Subp. 1a. County recovery of overpayments. When a county discovers that an amount of child care assistance in excess of the payment due to a family was paid to or on behalf of the family, the county must recoup or recover the overpayment according to this part. Subp. 2. Notice of overpayment. The county must notify the family of the overpayment in writing. A notice of overpayment must specify the reason for the overpayment, the time period in which the overpayment occurred, the amount of the overpayment, and the family's right to appeal the county's overpayment determination. Subp. 3. Redetermination of eligibility. When a county discovers that a family has received an overpayment, the county must immediately redetermine the family's eligibility for child care assistance. Subp. 4. 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. D. When a family has an overpayment due to a violation of Minnesota Statutes, section 256.98, subdivision 1, as established by a court conviction, a court-ordered stay of conviction with probationary or other terms, a disqualification agreement, a pretrial diversion, or an administrative disqualification hearing or waiver, the monthly recoupment amount equals the greater of: (1) the family's co-payment; (2) ten percent of the overpayment; or (3) $200. E. This item applies to families who have been disqualified or found to be ineligible for the child care assistance program and who have outstanding overpayments. If a disqualified or previously ineligible family returns to the child care assistance program, the county must begin recouping the family's outstanding overpayment using the recoupment schedule in items A to D unless another repayment schedule has been specified in a court order. Subp. 5. Recovering overpayment from former participants. If the redetermination of eligibility shows a family is no longer eligible for child care assistance, the county may choose to initiate efforts to recover overpayments from the family for overpayments less that $50. When the amount of the overpayment is greater than or equal to $50, the county shall seek voluntary repayment of the overpayment from the family. If the county is unable to recover the overpayment through voluntary repayment, the county shall initiate civil court proceedings to recover the overpayment unless the county's costs to recover the overpayment will exceed the amount of the overpayment. |
| Mississippi | See attached response |
| Missouri | Please refer to the attached flow chart that describes how referrals are received, investigated and resolved: |
| Montana | The Montana process includes the following steps: A. Identification of a willful action the definition of which is found in 1-3 of the CC Manual - “Willful Action includes, but is not limited to, the making of false or misleading Statements, misrepresentations, concealment, or withholding facts and/or information that results in an over claim of scholarship benefits.” B. Determination of the incidence of an intentional program violation If a willful action is an over claim, the following will occur: The first willful over claim (Strike 1) will result in: • An assessment of 10% of the amount actually due being added to the amount of repayment due if an overpayment has already been made to the claimant; • If an over claim is discovered before payment is made, deduction of 10% of the amount due from the amount paid to the claimant; and • If the provider is responsible, the loss of web invoicing privileges for six months and the imposition of the requirement that copies of sign-in/sign-out sheets must be submitted with invoices for the following three months. The second willful over claim (Strike 2) will result in: • An assessment of 25% of the amount actually due being either added to the amount of repayment due to the department or deducted from the amount of payment due to the claimant, depending upon whether payment to the claimant has already been made; • If the provider is responsible for the over claim, the loss of web invoicing privileges permanently and imposition of the requirement that the provider must submit copies of sign-in/sign-out sheets with invoices for the following six months. The third willful over claim (Strike 3) will result in the household or provider responsible being ineligible to participate in the child care development fund child care assistance, grant, and quality child care programs for seven years. The CCR&R should complete the IPV Tracking spreadsheet and e-mail it as an attachment to, HHSCCUBSPayments@mt.gov, when a parent or provider has been determined to have a 1st , 2nd or 3rd willful action. The spreadsheet headers below are required to be sent to the central office for compilation. The information is then dispersed to the field CCR&R offices quarterly. C. Determination of Overpayments in the Child Care Under the Big Sky (CCUBS) payments system. If a Best Beginnings Child Care Scholarship overpayment occurs because of a family, a provider or administrative error, the CCR&R Eligibility Specialist will contact the parent, or provider, to verify the error. - Adjust the invoice in CCUBS; - Notify the parent, or provider, that s/he must repay the amount of the overpayment; and - Attempt to have the parent, or provider, sign a Repayment Agreement, DPHHS-HCS/CC-121. CCR&R Eligibility Specialists adjusts the invoice in CCUBS. Repayment may be accomplished in any of the following ways: - The parent must make a monthly payment. - A provider’s payment may be reduced on CCUBS. - A parent or provider may pay the total amount of the overpayment by check or money order. Payments must be made out to DPHHS Fiscal and delivered to the CCR&R: - Credit the account on CCUBS; - Identify the payment as ‘child care’ and add the SSN, so A/R applies the payment correctly; - Include a copy of the A/R-110C (with the first payment only); and - Forward the payment to DPHHS Accounts Receivable: DPHHS Fiscal – A/R PO Box 4210 Helena, MT 50604-4210 - At no time should checks be held at the CCR&R. D. Accounts Receivable: DPHHS Accounts Receivable unit manages collections for the department: 1. A/R establishes a collection account using the information provided on the AR-110C form. 2. When payments are not received, A/R sends up to three collection letters. - When a balance remains, A/R forwards the account to the Department of Revenue Tax Offset system. Tax Offset monitors all State payments, in attempt to collect the debt. An account balance may be moved to Tax Offset at any time. All unpaid balances are forwarded to Tax Offset before tax season. |
| Nebraska | Our Collection Unit (Issuance and Collection Center, ICC) has identified red flag indicators which have been shared with staff. These include: § Attendance calendars which have the same time every day with no variations § Billing full days for a school-age child, especially if the child care closes at 6 PM or earlier § A child in attendance every day (no sick days, vacation days, early pickups) § Billing in excess of the allowable child care capacity § Excessive hours per day (i.e., 12 hours or more) § High dollar amounts paid to a provider § Numerous requests for increases in authorized units In addition, ICC gets computer-generated listings which have been designed to show providers with earnings in excess of identified thresholds; these are used as a basis for auditing. Client Overpayment Recovery Process 1. The overpayment is identified. a. If Case Management identifies the overpayment, the case manager refers the case to the Issuance and Collections Center (ICC) to research. ICC determines the amount and period of the overpayment within 30 days. The deadline may be extended for exceptionally difficult cases. b. If ICC refers to Case Management on a case involving client participation or authorization of service questions, Case Management has 15 days to process and send back to ICC. 2. If the case has Protection and Safety or Employment First involvement and the overpayment is determined by ICC to be an intentional violation, ICC must consult with the Protection & Safety or Employment First worker before making a decision to refer to the Special Investigation Unit (the agency's fraud unit). If P & S or EF concurs, ICC refers to SIU. 3. Once a referral is made to SIU, SIU has 30 days to determine if the case qualifies as Intentional Program Violation. a. If SIU determines the case qualifies as IPV, the client has the right to an administrative disqualification hearing, or may waive his/her right to a hearing. b. If the client waives the hearing, or the result of the hearing is a finding of IPV, the disqualification period is imposed. 4. For cases not determined to be IPV, ICC handles the correspondence with the client to recoup funds and collect the overpayments. Provider Overpayment Recovery Process 1. The overpayment is identified. a. If the Resource Development Unit (RD) identifies the overpayment, the RD worker refers the case to the Issuance and Collections Center (ICC) to research. b. If ICC identifies the overpayment, they determine the amount and period of the overpayment within 30 days. The deadline may be extended for exceptionally difficult cases. 2.RD may or may not keep the provider agreement open while ICC is auditing the case, depending on the nature of each individual situation. 3. If ICC believes the overpayment is an intentional violation, they forward the case to the Special Investigation Unit (SIU). SIU determines if criminal prosecution is appropriate. a. If criminal prosecution is feasible, SIU pursues criminal prosecution. b. If SIU determines criminal prosecution is not feasible, they refer back to ICC. 4. If ICC determines no action from SIU is required or SIU returns the case to ICC, ICC works with RD for an ongoing Corrective Action Plan. 5. When RD receives a referral for Corrective Action, the worker makes the decision to continue overpayment recovery. In serious cases, RD may terminate the provider agreement. 6. If the provider agreement: a. Is continued, RD develops a retrieval plan for recovery of the overpayment with ICC within 15 days. This may include provider forfeiture of a percentage of the provider's future paychecks. RD assists with any training needs and continues with audits of future billings. b. Is terminated, RD refers back to ICC for collection. 7. ICC handles the correspondence with the provider to recoup funds and collect the overpayments. 8. The provider has the right to appeal the existence and amount of overpayment. The provider has 45 days to appeal. If the provider does not appeal or contact the Department to work out a repayment agreement, the overpayment is recouped from future billings for the same or different children, or from another service. |
| New Hampshire | Overpayments of CCDF benefits are handled through the Office of Special Investigations. Referrals of allegation are received from many sources including the Child Care Licensing Bureau, the Child Care Development Bureau, other DHHS offices, other State and federal agencies as well as the public. Referrals are logged and tracked through the New Heights computer system. Claims that are a result of client error, agency error, or fraud are pursued for restitution. The claims are posted to the accounts receivable, which is also part of the New Heights computer system. Criminal cases are resolved through both the district courts and the superior courts of New Hampshire. If an NHEP or FSS staff believes a case (either client or provider) is fraudulent, the case is referred to the Special Investigations. Examples of fraudulent practice would be an individual not participating in an approved activity, but still using the approved child care (overpayment, inappropriate billing for child care, unless it was the approved “break in activity” period as allowed by DFA policy). An example of fraudulent child care practice would be asking clients to sign blank invoices for a period of time preceding the service. Most of the practices fall in the category of error rather than fraud, and are resolved between NHEP and client. Also, there is no formalized process for identifying error or fraud that would allow the identification to be a purposeful part of a case review, or redetermination. Usually it is a result of a complaint, or a redetermination error. |
| North Carolina | Improper payments are identified through monitoring visits conducted by the Division of Child Development. The Division notifies the Director of the LPA of the planned monitoring visit. Division staff select a sample of cases for review. An entrance conference is held at the beginning of the monitoring visit with the agency director and other LPA staff. Client and provider records are reviewed, provider visits and parent interviews are conducted and documented on standardized checklists. An exit conference is held with the LPA and a written report is provided. After the LPA completes all corrections, the Division provides a final written report. In addition to the Division’s monitoring, the Office of State Controller coordinates annual audits of all local agencies administering child care subsidy programs. Also, Division staff review a sample of records during technical assistance visits made monthly to the LPA. Any errors noted are shared with LPA staff. |
| Ohio | Ohio’s rules State the following: “The CDJFS (county department of job and family services), in cooperation with the county prosecutor, shall develop and implement procedures that the CDJFS shall follow for the investigation of alleged child care recipient fraud and the recovery of child care overpayments. The CDJFS shall update these procedures as necessary.” Actual processes and division of responsibility differ from county to county. |
| Oklahoma | Attach CC overpayment policy and Chapter 65 & Finance policy |
| Puerto Rico | 1. Provide training in elegibility 2. Direct supervision in centers 3. Technical Assistance 4. Payment reports 5. Monitory Reviewing |
| Utah | Underpayments are taken care of at the local level. All underpayments are authorized upon discovery to ensure that the parent is receiving the child care assistance as soon as possible. At each recertification, workers review past child care to verify that the customer was eligible for child care assistance. If the improper payment appears to be an overpayment, a referral is made to a Payment Specialist for calculation. The Payment Specialist looks at all the evidence and determines if it is in fact an overpayment based upon policy, rules, and procedures. If it is determined that an overpayment did occur, they determine the amount, and who caused the overpayment. It is then sent to the adjudicators, who determine if the overpayment was fraud. They also take all legal action to be able to collect the overpayment. It is then sent to the collections unit who collects the overpayment. Overpayments are collected by reduction of future child care benefits, or if they are no longer opened, by garnishment of wages, taxes, etc. We also have a case review process that randomly selects child care cases for supervisors. These reviews allow for an ongoing process to identify and fix potential problems with cases as they are discovered. The State also has investigators who are used to investigate occurrences that may arise. If the investigator determines that there is a potential improper payment, they refer this information to the Payment Specialist. |
| Washington | The department is responsible to review monitoring reports and to evaluate information as needed for possible overpayment action. Staff from the following divisions monitor case activities: The Division of Child Care and Early Learning, Social Service Payment Systems (SSPS), Operations Review/Consultation (by request), Office of the State Auditor, Community Services Division field offices, and the Payment Review Program (PRP). Monitoring activities may include reviews of case records in the Working Connections Automated Program (WCAP), documents in the Document Management System (DMS), SSPS reports, E-JAS on-line case information (contains WorkFirst information), ACES (contains TANF, Medical and Food Assistance information), on-site visits to a child care facility or home, telephone or written communication with DSHS staff, consumers, providers and licensors. To verify an overpayment, staff gather, analyze and verify all the necessary information. This includes contact with the parents and/or provider to determine the cause of the overpayment. They verify work schedules of the parents, and check provider attendance records. Once the overpayment is verified the overpayment is written in the WCAP and automatically transmitted to the Office of Financial Recovery (OFR). OFR reviews and then sends the overpayment notification to the parent or vendor. The person can request a fair hearing if they question the overpayment. If a fair hearing is requested, collection would begin following the fair hearing if the fair hearing decision is in the department’s favor. If no fair hearing is requested, the person is expected to contact OFR to establish a payment plan. |
| West Virginia | Strategies to Identify Errors: The FACTS system is designed to take the information entered in the system by the CCR&R agencies and use it to determine eligibility. This eliminates many of the errors, with the exception of errors in the data entry itself. As part of the required Quality Assurance plans, CCR&R agencies internally monitor eligibility determinations, payment processing, and FACTS input. In addition, a Child Care Policy Specialist works with CCR&R agencies to identify problem policies, procedures and forms that may lead to errors. Solutions are developed by committee, and supported in the field through training and technical assistance supplied by the Child Care consultants. From the Child Care Policy Manual: If a parent fails to fulfill program responsibilities, the worker shall give a written warning regarding specific problems, noting that subsequent abuses may result in a 30-day penalty closure. When a parent continues to use child care services when the need no longer exists (e.g., parent has lost job or quit school), the case will be closed and no further payment made. The Recipient shall repay to the agency any child care monies paid on their behalf during the period of ineligibility. If intentional misrepresentation may have occurred and if the estimated amount exceeds $1,000, the case will be referred to the Director of Investigation and Fraud Management. If the estimated amount is under $1,000, arrangements shall be made for recoupment. (See Chapter 6, Section 7, Suspected Fraud). 6.7.0. Suspected Fraud If the R&R Agency becomes aware that the client/provider is attempting to or has received services/payments to which they are not entitled, the R&R worker must take corrective action to prevent further payments from occurring. The following procedures should be applied: 6.7.1. If over payment is due to error by the R&R agency or error on the part of the provider and the amount is less than $1000, the R&R agency is responsible for negotiating the repayment. 6.7.2. If the overpayment is $1000 or greater and is due to misrepresentation by the client or provider, a memo referring the case to the Chief Investigator, IFM, will be mailed to the Department of Health & Human Resources, Office of Inspector General, Investigations and Fraud Management, Capitol Complex, Building 6, Charleston, West Virginia 25305, Attention: Chief Investigator. The memo should include a summary of the circumstances and copies of all documentation including ECE-CC-10-A (Payment Form) and attendance sheets ECE-CC-10-G. The CCR&R will notify the DHHR of all referrals. *Note: The client/provider is NOT to be advised that a referral has been made. If questioned, advise the client/provider that the matter has been referred to another unit for evaluation. DO NOT indicate that fraud is suspected. 6.8.0. Recovery of Overpayments 6.8.1. When an overpayment or misrepresentation of $1000 or less is discovered, either to/by a client or provider, the R&R worker should immediately notify the supervisor. 6.8.2. Supervisors are responsible for negotiating repayment schedules with providers and/or clients and completing a Repayment Agreement (ECE-CC-19) to include the amount to be recovered, the period of recovery, the monthly recovery amount, and the procedure for repayment. 6.8.3. If intentional misrepresentation may have occurred and the provider/client remains active, it is recommended that the R&R worker try to collect the payment in full. If this is not feasible, it is suggested that the R&R worker request that the client or provider be asked to repay the amount in monthly installment payments of approximately 10% of the amount due. 6.8.4. Payment schedules should be sufficient to recover the amount due within a reasonable time period but should not pose an undue hardship on a client. The amount of payment should not exceed living costs. 6.8.5. If a payment is more than forty-five (45) days late, the entire unpaid balance becomes due and must be paid in full. Failure to repay the requested amount shall result in case closure for clients or denial of participation in the certificate system for child care providers. Client services will not be reinstated until full payment is received. Clients who owe repayment are not eligible to participate in the subsidy system as providers until the balance is paid in full. Providers who apply as clients must enter into a repayment agreement. Child Care providers must request a waiver to participate in the subsidy system. (See Chapter 6, Section 5.2.3: If there is substantiated misrepresentation by the provider, the provider shall be prohibited from future participation in the Certificate Program. However, if the provider makes full restitution, a one time waiver may be considered. The provider must request the waiver in writing, and the R&R shall forward the request to the Division of Early Care and Education for approval/denial.) 6.8.6. Exceptions for WV Works participants – WV Works participants are subject to the same Recovery of Overpayment efforts as non-TANF Child Care recipients. However, when making repayment arrangements, the supervisor or case worker should consider the impact of payment schedules and amounts on very low income WV Works clients. When possible, graduated repayment arrangements can be considered, such as increasing the amount due per month as the client’s income increases. If a WV Works client fails to make repayment arrangements, or becomes delinquent, case managers should consult with WV Works supervisors and case managers to see if a joint counseling session with the client can be scheduled to reinforce program requirements. If no agreement can be reached, and the client fails to repay amounts due the agency, services will be closed. |
| Wisconsin | Provider Overpayments: We have several reports that identify possible provider overpayments. Those reports include over utilization (95-100% attendance for a 10 week period), under utilization (0-40% attendance for a 4 week period), and over capacity (more than 7 children at certified/license exempt provider and more than 12 children at a licensed family provider). Local agencies are required in their administrative contract to develop and adhere to a monitoring plan. Once a potential area of overpayment has been identified, the local agency contacts the provider for their attendance records. The provider’s attendance records are compared to the attendance records sent in for subsidy reimbursement. If there is a discrepancy, the appropriate overpayment or underpayment is processed for the appropriate amount. Underpayments are paid through positive adjustments entered into the computer system. Once a positive adjustment is entered, the payment is issued the following Monday. Overpayments are recovered through negative adjustments also processed through the computer system. Once negative adjustment is entered, an overpayment notice is issued the following Monday. Up to 50% of the providers future issuance is recouped until the overpayment is recovered. The recoupment process does not begin until the 2nd Monday after the overpayment notice has been sent. If the provider becomes inactive in the child care subsidy program, the system turns the negative adjustments into claims and they are then processed the same way as a client overpayment. See below for more information on that process. Client Overpayment: We have several data exchanges that help to alert workers to a change in the family’s income that may not have been reported timely. Local agencies indicate that any other changes that affect eligibility are not usually found until the 12 months face-to-face review or the 6 month mandatory mail in report. Once a discrepancy had been found that was not reported a timely, an overpayment is processed. The local agencies determine the period of time and amount of the overpayment and they enter that information into an automated benefit recovery system. The overpayment is collected through a voluntary payment process. The client is sent an overpayment notice and a repayment agreement. The client must sign the repayment agreement and make the monthly payments as agreed. For each month the repayment agreement has not been signed and/or repayment has not been received, a dunning notice is sent. After 3 dunning notices, the overpayment is sent to State of Wisconsin, Department of Revenue for collection through tax intercept. Both parent and providers can appeal overpayments through a fair hearing process with an administrative law judge. |
Appendix 6 >>