10.2 Fraud Investigation, Payment Recovery, and Sanctions

Lead Agencies must have the necessary controls to identify fraud and other program violations to ensure program integrity. Program violations can include both intentional and unintentional client and/or provider violations, as defined by the Lead Agency. These violations and errors, identified through the error-rate review process and other review processes, may result in payment or nonpayment (administrative) errors and may or may not be the result of fraud, based on the Lead Agency definition. 10.2.1 Strategies used to identify and prevent program violations Check the activities the Lead Agency employs to ensure program integrity, and for each checked activity, identify what type of program violations the activity addresses, describe the activity and the results of these activities based on the most recent analysis. a. [x] Share/match data from other programs (e.g., TANF program, Child and Adult Care Food Program, Food and Nutrition Service (FNS), Medicaid) or other databases (e.g., State Directory of New Hires, Social Security Administration, Public Assistance Reporting Information System (PARIS)). i. [x] Intentional program violations. Describe the activities, the results of these activities, and how they inform better practice: When a provider is determined to have committed an Intentional Program Violation (IPV), the lead agency imposes a disqualification and sends a Notice of Disqualification. A disqualification penalty shall adhere to the follow guidelines: 12 months disqualification for the first occurrence, 24 months for the second occurrence; and permanently disqualified for the third occurrence; or the length of penalty assigned by court. If a provider disagrees with the claim, they may request a hearing. All completed claim forms are sent to central office claims section so claim collections may be suspended if appeal is within a 30-day timeframe of the establishment of the claim. The cabinet shall assess a civil penalty in accordance with KRS199.896(8) and KRS 199.990(4) and a statement of deficiency shall be issued either prior to or concurrent with the notice established in 922 KAR 2:190 Section 5. There are 2 types of violations, Type A and Type B. For Type A (with a statement of Deficiency) must be corrected within 5 working days and may pay a penalty of no more than $1,000 for each occurrence of a Type A violation. For a Type B violation with a statement of deficiency, there will be a written corrective action plan within fifteen days (922 KAR 2:090, Section 14 (2&3) and be subject to a civil penalty of $250 for each occurrence of a Type B violation. A licensee can have a monetary credit applied towards a civil penalty in the amount of $50 if a review of the licensee’s history finds no Type A or B violations cited during 3 years prior to the date of the statement of deficiency, or $50 if the written corrective action plan is received by the specified time frame for the violation type noted in the applicable regulation and is accepted by the cabinet, or 25% of the civil penalty fee is the licensee waives appeal rights noted in 922 KAR 2:090, Section 5. Disqualification Results and Findings: January ￿ August 2022, child care clients had (0) IPV’s executed and (0) disqualifications imposed. Calendar year 2023, there was (1) child care client IPV executed and (0) disqualifications. January-July 2024, there has been (2) child care client IPV's executed and (2) disqualifications. Data is used to enhance our efforts as it pertains to program integrity such as systems flags, claims analytical reports for monitoring, training, modifications to areas within policy that strengthen measures of integrity. Citation: Child Care Claims Procedures Manual, Administrative Hearings for Claims Appeals. Policy Manual, MS 6050 IPV Disqualification Penalties. 922 KAR 2:020. Child Care Assistance Program (CCAP) improper payments, claims, and penalties. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: Unintentional Program Violations. An Error occurs when there is a misunderstanding or an unintended error by the recipient causing a Claim. The Agency utilizes the data match system to generate a 100% attendance report that flag attendance anomalies with Child Care Providers that may lead to IE, unintentional program violations, duplicate payments, overpayments, or other potentially non fraudulent activities. Results and Findings for Unintentional Program Violations: calendar year 2023 was (0) and January-July 2024 currently is (0). Data and findings are used to enhance program integrity through various mechanisms such as systems flags, claims analytical reports for monitoring, training, modifications to areas within policy that strengthen measures of integrity. Citation: Child Care Claims Procedures Manual, Administrative Hearings for Claims Appeals. Policy Manual, MS 6050 IPV Disqualification Penalties. 922 KAR 2:020. Child Care Assistance Program (CCAP) improper payments, claims, and penalties. Data Source: Business Intelligence Report (BI): Claims Analytics Detailed Report. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice:: Agency Errors is a mistake that occurs when an individual receives more benefits than they are eligible to receive. This is due to a result of an incorrect action or failure to take an action by the agency. Results and Findings for Agency Errors: calendar year 2023, (2) agency errors were discovered and January-July 2024, (2) agency errors have been discovered. If a claim has been determined to be an agency error or error (non-fraud), the Lead Agency sends out a repayment agreement. The agreement outlines the amount of the claim, repayment options and appeal process. Options are payment in full, monthly self-paid, voluntary monthly agreed upon payment reduction from their subsidy payment (DCC-97, Supplement A). If the provider chooses to use the voluntary payment reduction, they are sent the DCC-97, Supplement A. The amount indicated on the DCC-97 shall not be less than ten (10%) percent of the total CCAP payment. All Repayment agreements must be in writing on the DCC-98. Data is used to enhance our efforts as it pertains to program integrity such as systems flags, claims analytical reports for monitoring, training, modifications to areas within policy that strengthen measures of integrity. Citation: Child Care Claims Procedures Manual, Administrative Hearings for Claims Appeals. Policy Manual, MS 6050 IPV Disqualification Penalties. 922 KAR 2:020. Child Care Assistance Program (CCAP) improper payments, claims, and penalties. Data Source: Business Intelligence Report (BI): Claims Analytics Detailed Report b. [x] Run system reports that flag errors (include types). i. [x] Intentional program violations. Describe the activities, the results of these activities, and how they inform better practice: The IEES system generates reports access data to validate and report any inconsistencies. The Provider and Applicant Validation analyzes the employee master file and vendor master file for duplication or records, unusual relationships, potential conflicts of interests between vendors and employees and other anomalies. The Child Care Payment Analyst conduct an analysis of invoices, claims and payment records to identify trends and anomalies resulting in unauthorized disbursements, duplicate payments, potential over-payments, theft, and misappropriation of funds. Case reviews and interviews are conducted for Inadvertent Error (IE) determination. An Error occurs when there is a misunderstanding or an unintended error by the recipient causing a Claim. The Agency utilizes the data match system to generate a 100% attendance report that flag attendance anomalies with Child Care Providers that may lead to IE, duplicate payments, over-payments, or other potentially fraudulent activities. Results and Findings for Intentional Program Violations: calendar year 2023 was (3) and January-July 2024 currently is (1). Citation: Child Care Claims Procedures Manual, Administrative Hearings for Claims Appeals. Policy Manual, MS 6050 IPV Disqualification Penalties. 922 KAR 2:020. Child Care Assistance Program (CCAP) improper payments, claims, and penalties. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: The IEES system generates reports access data to validate and report any inconsistencies. The Provider and Applicant Validation analyzes the employee master file and vendor master file for duplication or records, unusual relationships, potential conflicts of interests between vendors and employees and other anomalies. The Child Care Payment Analyst conduct an analysis of invoices, claims and payment records to identify trends and anomalies resulting in unauthorized disbursements, duplicate payments, potential over-payments, theft, and misappropriation of funds. Case reviews and interviews are conducted for Inadvertent Error (IE) determination. An Error occurs when there is a misunderstanding or an unintended error by the recipient causing a Claim. The Agency utilizes the data match system to generate a 100% attendance report that flag attendance anomalies with Child Care Providers that may lead to IE, duplicate payments, over-payments, or other potentially fraudulent activities. The Lead Agency runs system reports that flag errors. IEES system generates reports access data to validate and report any inconsistencies. The child care payment analysis conducts an analysis of invoices, claims, and payment records to identify trends and anomalies resulting in authorized disbursements, duplicate payments, potential overpayments, fraud and misappropriation of funds. Documented findings of Inadvertent Error (IE) are submitted to the Claims’ Section for review and processing. Inadvertent Error, (IE) occurs when the claim is caused by a misunderstanding or an unintended error by the recipient. Reports, case reviews, and monitoring of activities will present with results. DCC acknowledges anomalies and will update their practices and results, as the needs presents. Results and Findings for Unintentional Program Violations: calendar year 2023 was (286) and January-July 2024 currently is (173). Citation: Child Care Claims Procedures Manual, Administrative Hearings for Claims Appeals. Policy Manual, MS 6050 IPV Disqualification Penalties. 922 KAR 2:020. Child Care Assistance Program (CCAP) improper payments, claims, and penalties. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: The IEES system generates reports access data to validate and report any inconsistencies. The Provider and Applicant Validation analyzes the employee master file and vendor master file for duplication or records, unusual relationships, potential conflicts of interests between vendors and employees and other anomalies. The Child Care Payment Analyst conduct an analysis of invoices, claims and payment records to identify trends and anomalies resulting in unauthorized disbursements, duplicate payments, potential over- payments, theft, and misappropriation of funds. Case reviews and interviews are conducted for Inadvertent Error (IE) determination. An Error occurs when there is a misunderstanding or an unintended error by the recipient causing a Claim. The Agency utilizes the data match system to generate a 100% attendance report that flag attendance anomalies with Child Care Providers that may lead to IE, duplicate payments, over-payments, or other potentially fraudulent activities. Results and Findings for Agency Errors: calendar year 2023 was (2) and January- July 2024 currently is (2). Citation: Child Care Claims Procedures Manual, Administrative Hearings for Claims Appeals. Policy Manual, MS 6050 IPV Disqualification Penalties. 922 KAR 2:020. Child Care Assistance Program (CCAP) improper payments, claims, and penalties. c. [x] Review enrollment documents and attendance or billing records. i. [x] Intentional program violations. Describe the activities, the results of these activities, and how they inform better practice: Designated Lead Agency staff during a review may request from the provider enrollment and attendance sign in sheets (DCC-97E) for comparison to the Kentucky Integrated Child Care System (KICCS) billing and payment records for errors and potential fraud or overpayment. The Claims Section processes documented findings of fraud and, if over $5,000 (Applicants) and $10,000 (Child Care Providers), the Office of Inspector General (OIG) conducts further investigation and potential prosecution. Some of the mechanisms used to identify violations are: DCC-94E, Child Care Daily Attendance Record, DCC-97, Provider Billing Form, and 100% Attendance Report. Citation: 922 KAR 2:160 ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: Designated Lead Agency staff during a review may request from the provider enrollment and attendance sign in sheets (DCC-97E) for comparison to the Kentucky Integrated Child Care System (KICCS) billing and payment records for errors and potential fraud or overpayment. The Claims Section processes documented findings of fraud and, if over $5,000 (Applicants) and $10,000 (Child Care Providers), the Office of Inspector General (OIG) conducts further investigation and potential prosecution. Some of the mechanisms used to identify violations are: DCC-94E, Child Care Daily Attendance Record, DCC-97, Provider Billing Form, and 100% Attendance Report. Citation: 922 KAR 2:160 iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: Designated Lead Agency staff during a review may request from the provider enrollment and attendance sign in sheets (DCC-97E) for comparison to the Kentucky Integrated Child Care System (KICCS) billing and payment records for errors and potential fraud or overpayment. The Claims Section processes documented findings of fraud and, if over $5,000 (Applicants) and $10,000 (Child Care Providers), the Office of Inspector General (OIG) conducts further investigation and potential prosecution. Some of the mechanisms used to identify violations are: DCC-94E, Child Care Daily Attendance Record, DCC-97, Provider Billing Form, and 100% Attendance Report. Citation: 922 KAR 2:160 d. [x] Conduct supervisory staff reviews or quality assurance reviews. i. [x] Intentional program violations. Describe the activities, the results of these activities, and how they inform better practice: The IEES online portal allows Kentucky's families access to public assistance benefits such as Supplemental Nutrition Assistance Program (SNAP), Kentucky Transitional Assistance Program (KTAP), Medicaid and Child Care Assistance Program (CCAP). The system shares and conducts a data match across eligibility programs to validate demographic details (e.g. income, addresses and social security numbers) of children, parents, and childcare providers. The Claim’s Section receives documented findings and reviews for potential processing of Claim establishment. Office of Inspector General (OIG) investigates further fraudulent activities of over $5,000 (Applicants) and $10,000 (Child Care Providers) for potential prosecution. Designated Lead Staff complete audits. They are each reviewed by the supervisor for quality assurance and accuracy. Citation: Child Care Claims Procedures Manual, Administrative Hearings for Claims Appeals. Policy Manual, MS 6050 IPV Disqualification Penalties. 922 KAR 2:020. Child Care Assistance Program (CCAP) improper payments, claims, and penalties. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: The IEES online portal allows Kentucky's families access to public assistance benefits such as Supplemental Nutrition Assistance Program (SNAP), Kentucky Transitional Assistance Program (KTAP), Medicaid and Child Care Assistance Program (CCAP). The system shares and conducts a data match across eligibility programs to validate demographic details (e.g. income, addresses and social security numbers) of children, parents, and childcare providers. The Claim’s Section receives documented findings and reviews for potential processing of Claim establishment. Office of Inspector General (OIG) investigates further fraudulent activities of over $5,000 (Applicants) and $10,000 (Child Care Providers) for potential prosecution. Designated Lead Staff complete audits. They are each reviewed by the supervisor for quality assurance and accuracy. Citation: Child Care Claims Procedures Manual, Administrative Hearings for Claims Appeals. Policy Manual, MS 6050 IPV Disqualification Penalties. 922 KAR 2:020. Child Care Assistance Program (CCAP) improper payments, claims, and penalties. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: The IEES online portal allows Kentucky's families access to public assistance benefits such as Supplemental Nutrition Assistance Program (SNAP), Kentucky Transitional Assistance Program (KTAP), Medicaid and Child Care Assistance Program (CCAP). The system shares and conducts a data match across eligibility programs to validate demographic details (e.g. income, addresses and social security numbers) of children, parents, and childcare providers. The Claim’s Section receives documented findings and reviews for potential processing of Claim establishment. Office of Inspector General (OIG) investigates further fraudulent activities of over $5,000 (Applicants) and $10,000 (Child Care Providers) for potential prosecution. Designated Lead Staff complete audits. They are each reviewed by the supervisor for quality assurance and accuracy. Citation: Child Care Claims Procedures Manual, Administrative Hearings for Claims Appeals. Policy Manual, MS 6050 IPV Disqualification Penalties. 922 KAR 2:020. Child Care Assistance Program (CCAP) improper payments, claims, and penalties. e. [x] Audit provider records. i. [x] Intentional program violations. Describe the activities, the results of these activities, and how they inform better practice: The activities the Lead Agency utilizes to identify, prevent program violations and complete audits include: the data match system to generate a 100% attendance report that flags attendance anomalies, comparison of the DCC-94E, the Child Care Daily Attendance Record and the DCC-97 Provider Billing Form for errors, hotline referrals, parent complaints, and through staff investigations. After reviewing the 100% attendance report, the claims' staff begins the audit process by requesting the DCC 94E, Daily Child Care Attendance Records from the Provider, screenshot or print out the Provider's Payment Rates and the DCC-97 Provider Billing Form. Staff then reviews and compares the daily attendance and provider's payment rates against their submitted billing, noting any discrepancies or errors. If errors are found during the audit process, a claim would be established in the Integrated Eligibility & Enrollment Solution (IEES) system. The IEES system would print and mail the Demand Notice, notifying the Provider of the Claim establishment, the amount of the Claim and the reason for the Claim establishment. Furthermore, giving the options for repayment of the Claim, the address to send the payment, and ways to send in the payment, such as a check, money order or if they are a Provider, they can have the payment deducted from their CCAP monthly payment through the recoupment process. A Repayment Agreement is completed, as to what amount the individual agrees to pay monthly. At the same time, agency staff will prepare an e-mail to send to the Provider with the same information; notifying the Provider of the Claim, reason for the Claim establishment, the amount of the Claim, options for repayment of the Claim, the address to send the payment too and the ways to send in the payment, or to have the payment deducted from their CCAP payment through the recoupment process and or completing a Repayment Agreement. Comments are added to the KICCS system and the IEES system about the Claim. Agency staff prepare the Claim file. Complete and print out the Claims Checklist, complete and print out the DCC-99, Claim Referral Form. Copy and/or print the Attendance Records, Provider rates, and the Provider Billing Form used to establish the Claim. Print out the comments of the Claim and give to supervisor for review and signature of approval. Once returned, scan all the Claim information to the Claim file in the IEES system. Calendar year 2022, there were 425 audits completed by lead agency staff. As a result of these audits, 286 Claims were established. Calendar year 2023, there was a total of 870 audits completed. As a result of these audits, 202 Claims were established and 626 were mentored and coached on their audit findings. January to July 2024, there have been a total of 482 audits completed. As a result of the audits, 94 Claims established. Informed Better Practice: Information gathered from the established claims is used to target trends in errors, which then used make edits, clarifications to training and related training materials. Some of the tools used for detecting anomalies are: DCC-94E, Child Care Daily Attendance Record, DCC-97, Provider Billing Form, and 100% Attendance Report. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: The Lead Agency utilizes the data match system to generate a 100% attendance report that flag attendance anomalies with Child Care Providers that may lead to IE, duplicate payments, over-payments, or other potentially fraudulent activities. Designated Lead Agency staff may audit provider records upon report or detection of potential fraud. Some of the tools used for detecting anomalies are: DCC-94E, Child Care Daily Attendance Record, DCC-97, Provider Billing Form, and 100% Attendance Report. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: The Lead Agency utilizes the data match system to generate a 100% attendance report that flag attendance anomalies with Child Care Providers that may lead to IE, duplicate payments, over-payments, or other potentially fraudulent activities. Designated Lead Agency staff may audit provider records upon report or detection of potential fraud. Some of the tools used for detecting anomalies are: DCC-94E, Child Care Daily Attendance Record, DCC-97, Provider Billing Form, and 100% Attendance Report. f. [x] Train staff on policy and/or audits. i. [x] Intentional program violations. Describe the activities, the results of these activities, and how they inform better practice: Lead Agency Staff are trained to review records for Intentional Program Violations. These activities include: • Failure to submit DCC 94-E upon request • Coded FD (or PD) on PBF when child was not listed on DCC 94-E • Missing weekly parent or applicant signature on DCC 94-E • Missing provider signature at the bottom of the DCC 94-E • Payment is not to be made to a licensed provider for more than five absences per child during a month if the provider fails to verify in writing, and maintain attendance records verifying, that the addition absences were related to: a death in the family; illness of the child or applicant; a disaster verified by utility provider, local, state, or federal government. • Billed for care on the weekends when the center is not approved for care • Coded FD on PBF when child was signed in less than 5 hours (which is considered PD) (ex: 7:35a to 11a) • Coded FD (full day) or PD (part day) on PBF (Provider Billing Form) when child was not signed in on the DCC 94-E • Missing arrival or departure time on DCC 94-E • Parent did not sign legibly (readable signature) with first/last name at end of week on the DCC 94-E (parent can PRINT name above or below signature if not legible) • Parent initials instead of full signature at the end of the week • Parent signing for multiple children with one signature (each child must be signed out individually (also ditto marks and a line to a connecting child are not acceptable) Creating an awareness of better practices, all providers are coached on the guidelines listed below: If the childcare provider does not bill accurately in accordance with 922 KAR 2:160 for a child, the childcare provider will not be paid for days that are not verified and will be required to pay back any overpayment. An overpayment may be pursued as an intentional program violation in accordance with 922 KAR 2:020. 922 KAR 2:160 - https://apps.legislature.ky.gov/law/kar/titles/922/002/160/ 922 KAR 2:020 - https://apps.legislature.ky.gov/law/kar/titles/922/002/020/ As of July 1, 2021, the Billing Basics Training was mandated to be completed yearly by Childcare Providers who submit CCAP for reimbursement. The link has been included for the Billing Training as a reference for proper coding on the provider billing form. The version for 2023 is now active online. Please submit a copy of your completed training to your claim's specialist for verification of completion. https://www.hdilearning.org/product/child-care-assistance-program-billing- basics-for-providers-learndash/ Also to inform better practices staff training efforts include: the Annual Policy Training for staff, the Annual Provider Billing Training, Policy updates trainings and e-mails, Manual and Policy reviews, any and all initial Cabinet trainings. New eligibility staff are required to complete CCAP Training on internal processes. These eligibility staff are considered non-case decision workers that must have all of their casework evaluated by a senior worker. Work of case decision workers is evaluated monthly through a quality control review process for accuracy. There are also regular policy and training meetings to review error trends and discussion ways to improve training materials for effectiveness. Informed Better Practice: Information gathered from the established claims is used to target trends in errors, which is then used to make edits, clarifications to trainings and related training materials. Due to the high-level trainings, education and mentoring of staff and Providers, there has been a decrease in the number of Claims established. In 2022, 286 Claims established, 2023, 202 Claims established and January-July 2024, 94 Claims established. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: The Lead Agency conducts analysis of invoices; Billing forms (DCC-97), Claims and payment; Child Care Daily Attendance Records (DCC-94E) to identify trends and anomalies that may result in unintentional program violations of unauthorized disbursements, duplicate payments, potential overpayments, theft, and misappropriation of funds. The tools used for detecting anomalies are: DCC-94E, Child Care Daily Attendance Record, DCC-97, Provider Billing Form, and 100% Attendance Report, Child Care Service Agreement, Annual Provider Billing Training and DCBS Policy Training for staff. To inform better practices Staff training efforts include trainings: the Annual Policy Training for staff, the Annual Provider Billing Training, Policy updates trainings and e-mails, manual and policy reviews, any and all initial Cabinet trainings. New eligibility staff are required to complete CCAP Training on internal processes. These eligibility staff are considered non-case decision workers that must have all of their casework evaluated by a senior worker. Work of case decision workers is evaluated monthly through a quality control review process for accuracy. There are also regular policy and training meetings to review error trends and discussion ways to improve training materials for effectiveness. These activities assist agency staff to continuously monitor and evaluate for unintentional program violations, training needs, and compliance. Due to the high-level trainings, education and mentoring of staff and Providers, there has been a decrease in the number of Claims established. In 2022, 286 Claims established, 2023, 202 Claims established and January-July 2024, 94 Claims established. . iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: Staff training efforts include: the Annual Policy Training for staff, the Annual Provider Billing Training, Policy updates trainings and e-mails, manual and policy reviews, any and all initial Cabinet trainings. New eligibility staff are required to complete CCAP Training on internal processes. These eligibility staff are considered non-case decision workers that must have all of their casework evaluated by a senior worker. Work of case decision workers is evaluated monthly through a quality control review process for accuracy. There are also regular policy and training meetings to review error trends and discussion ways to improve training materials for effectiveness. Some of the tools used for detecting anomalies are: DCC-94E, Child Care Daily Attendance Record, DCC-97, Provider Billing Form, and 100% Attendance Report, Child Care Service Agreement, Annual Provider Billing Training and DCBS Policy Training for staff. Agency staff also use the Claims Policy and Procedure Manual to gain additional knowledge of processes and as a training resource. To inform better practices data generated is used to enhance our efforts as it pertains to program integrity such as systems flags, claims analytical reports for monitoring, training, modifications to areas within policy that strengthen measures of integrity. Allows research to inform the direction of improvements to our agency's services and practices. These activities assist agency staff to monitor and evaluate unintentional program violations, training needs, and compliance. Results and Findings for Agency Errors: calendar year 2023 was (2) and January- July 2024 currently is (2). g. [x] Other. Describe the activity(ies): Non fraud claims are over-payments caused by an inadvertent or non-deliberate action on the part of a recipient or provider. Office of Inspector General (OIG), may return claims to the Lead Agency that do not meet the acceptance criteria of (i.e. less than $5,000.00 for individuals or $10,000.00 for Providers) without court action. The Lead Agency treat these claims as Inadvertent Error (IE) (non- fraud claims). Situations that may cause an Inadvertent Error claim include: •The recipient of childcare subsidy funds unintentionally fails to provide the service agent staff with correct or complete information. •The recipient unintentionally fails to report a change that impact childcare benefits to the Cabinet for Health & Family Services, Community Based Services staff. •A provider unintentionally fails to notify the Community Based Services staff of temporary operational changes or of circumstances, which affect payments for children receiving subsidies. The Lead Agency utilizes the data match system to generate a 100% attendance report that flag attendance anomalies with Child Care Providers that may lead to IE, duplicate payments, over-payments, or other potentially fraudulent activities. i. [ ] Intentional program violations. Describe the activities, the results of these activities, and how they inform better practice: ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: New eligibility staff are required to complete CCAP Training on internal processes. These eligibility staff are considered non-case decision workers that must have all of their casework evaluated by a senior worker. Work of case decision workers is evaluated monthly through a quality control review process for accuracy. There are also regular policy and training meetings to review error trends and discussion ways to improve training materials for effectiveness. Staff also use the Claims Policy and Procedure Manual to gain knowledge of processes and as a training resource. Other mechanisms used to improve unintentional program violations: DCC-94E, Child Care Daily Attendance Record, DCC-97, Provider Billing Form, 100% Attendance Report, annual Provider Billing Training, and 10th of the month Report. Above activities are used to monitor and evaluate unintentional program violations, training needs, and compliance. To inform better practices data generated is used to enhance our efforts as it pertains to program integrity such as systems flags, claims analytical reports for monitoring, training, modifications to areas within policy that strengthen measures of integrity. Allows research to inform the direction of improvements to our agency's services and practices. Agency staff use the Claims Policy and Procedure Manual to gain knowledge of processes and as a training resource. Other mechanisms used to improve unintentional program violations: DCC-94E, Child Care Daily Attendance Record, DCC-97, Provider Billing Form, 100% Attendance Report, annual Provider Billing Training, and 10th of the month Report. Designated Lead Staff complete audits. They are each reviewed by the supervisor for quality assurance and accuracy. Due to the high-level trainings, education and mentoring of staff and Providers, there has been a decrease in the number of Claims established. In 2022, 286 Claims established, 2023, 202 Claims established and January-July 2024, 94 Claims established. These activities assist agency staff to monitor and evaluate unintentional program violations, training needs, and compliance. iii. [ ] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: 10.2.2 Identification and recovery of misspent funds Lead Agencies must identify and recover misspent funds that are a result of fraud, and they have the option to recover any misspent funds that are a result of unintentional program violations or agency errors. a. Identify which agency is responsible for pursuing fraud and overpayments (e.g., State Office of the Inspector General, State Attorney): Agencies under the Cabinet for Health & Family Services responsible for pursing fraud and over-payments include: Division of Family Support, Claims Management Section and the Division of Child Care, Claims Section. The Office of Inspector General (OIG) is the entity within the Cabinet for Health and Family Services that investigates alleged fraud cases of, over $5,000 (Applicants) and $10,000 (Child Care Providers) and pursues prosecution through the court system. b. Check and describe all activities, including the results of such activity, that the Lead Agency uses to investigate and recover improper payments due to fraud. Consider in your response potential fraud committed by providers, clients, staff, vendors, and contractors. Include in the description how each activity assists in the investigation and recovery of improper payment due to fraud or intentional program violations. Activities can include, but are not limited to, the following: i. [x] Require recovery after a minimum dollar amount of an improper payment and identify the minimum dollar amount. Describe the activities and the results of these activities based on the most recent analysis: A Claim is categorized as fraud after the case has been adjudicated in court and the client/provider has been convicted of fraud by a court of law. The Office of Inspector General (OIG) is the entity within the Cabinet for Health and Family Services that investigates alleged fraud cases and pursues prosecution through the court system. If the claim amount estimation is or exceeds $5,000 (Individual) and $10,000 (Provider) and there is suspicion of fraud, a referral goes to the OIG for further investigation and possible prosecution by completion of the DCC-99A OIG Fraud Referral. The Claims Section receives documented findings and reviews for potential processing of claim establishment. Case reviews and interviews are conducted for Inadvertent Error (IE) determination. An Error occurs when there is a misunderstanding or an unintended error by the recipient causing a Claim. The results described are a Claim or a Court Claim. The different types of Claims include IE, Inadvertent Error, IHE, Inadvertent Household Error, IPV, Intentional Program Violation, SIPV, Suspected Intentional Program Violation, and a court claim is an, IPC, Intentional Program Violation-Court. If the Claim amount estimation is or exceeds $5,000 (Individual) and $10,000 (Provider) and there is suspicion of fraud, a referral goes to the OIG for further investigation and possible prosecution by completion of the DCC-99A OIG Fraud Referral. The IHE results for calendar year 2023 are 448, IPV results were 99, SIPV results 63, IPC court claim results were 192 and 81 Repayment Agreements were made. ii. [ ] Coordinate with and refer to the other State/Territory agencies (e.g., State/Territory collection agency, law enforcement agency). Describe the activities and the results of these activities based on the most recent analysis: iii. [x] Recover through repayment plans. Describe the activities and the results of these activities based on the most recent analysis: Repayment agreements are sent to the Individual/Provider if a Claim has been determined to be an agency error or error (non-fraud). If an individual, who is a Child Care Provider, submits a completed DCC-97 Supplement A, Voluntary Payment Reduction, indicating the amount the Provider wishes to have applied to the Claim, the Child Care Provider currently receiving CCAP payment may choose to have an amount withheld from the Provider’s CCAP payment to be applied towards the Claim. The amount indicated on the DCC-97 shall not be less than ten (10%) percent of the total CCAP payment. All Repayment agreements must be in writing on the DCC-98. The IHE results for calendar year 2023 are 448, IPV results were 99, SIPV results 63, IPC court claim results were 192 and 81 Repayment Agreements were made. Citation: 922 KAR 2:020. Child Care Assistance Program (CCAP) Collection of a Claim, DCC-97 Supplement A, Voluntary Payment Reduction, and DCC-98 Repayment Agreement. https://apps.legislature.ky.gov/law/kar/titles/922/002/020/ iv. [ ] Reduce payments in subsequent months. Describe the activities and the results of these activities based on the most recent analysis: v. [x] Recover through State/Territory tax intercepts. Describe the activities and the results of these activities based on the most recent analysis: Claims that become delinquent may be recouped through a tax intercept. Claim (Applicant) payments delinquent for 90 calendar days automatically go through the eligibility system to the Kentucky Revenue Service for state tax offset. vi. [ ] Recover through other means. Describe the activities and the results of these activities based on the most recent analysis: vii. [x] Establish a unit to investigate and collect improper payments and describe the composition of the unit. Describe the activities and the results of these activities based on the most recent analysis: The Office of Inspector General (OIG) investigates further fraudulent activities of over $5,000 (Applicants) and $10,000 (Child Care Providers) for potential prosecution. Each of these activities assists in the identification and prevention of fraud and IPVs through data matches on demographic elements (e.g. income, addresses and social security numbers) of children, parents, and childcare providers. viii. [ ] Other. Describe the activities and the results of these activities: c. Does the Lead Agency investigate and recover improper payments due to unintentional program violations? [ ] No. [x] Yes. If yes, check and describe below any activities that the Lead Agency will use to investigate and recover improper payments due to unintentional program violations. Include in the description how each activity assists in the investigation and recovery of improper payments due to unintentional program violations. Include a description of the results of such activity. i. [x] Require recovery after a minimum dollar amount of an improper payment and identify the minimum dollar amount. Describe the activities and the results of these activities based on the most recent analysis: Reports are generated through the IEES system and the BI system to access data to validate and report any inconsistencies, red flags, administrative errors, possible overpayments, and improper payments. Child Care staff conduct investigations of invoices, claims and payment records to identify trends and anomalies resulting in unauthorized disbursements, duplicate payments, potential overpayments, and misappropriation of funds. There is no specific dollar amount required to recover Unintentional Program Violations. If Program Violations are found, Lead Agency will establish a Claim to recoup the funds. Case reviews and interviews are conducted to investigate Provider Claims. The Lead Agency may request and review Provider Billing forms (DCC-97), Child Care Certificates/Contract (DCC-94b), and Child Care Daily Attendance Records (DCC- 94E) for comparison to the Kentucky Integrated Child Care System (KICCS) billing and payment records for potential errors, improper payments, and overpayments. The Office of Inspector General (OIG) is the entity within the Cabinet for Health and Family Services that investigates unintentional program violations and pursues prosecution through the court system if the claim amount estimation is or exceeds $5,000 (Individual) and $10,000 (Provider) to court for further action including prosecution and (2) have filed appeals. The Lead Agency investigated 513 total cases in calendar year 2022. 286 Claims were established, and 88 overpayments were completed. In calendar year 2023, a total 795 cases were investigated; 513 Providers were coached/mentored, 173 Claims were established and 71 overpayments completed. January to July 2024, a total of 461 cases have been investigated; 382 Providers have been coached/mentored and 79 overpayments have been completed. Citation: Provider Billing Form (DCC-97), Child Care Certificates/Contract (DCC- 94b), Child Care Daily Attendance Record (DCC-94E), and 100% Attendance Report. ii. [ ] Coordinate with and refer to the other State/Territory agencies (e.g., State/Territory collection agency, law enforcement agency). Describe the activities and the results of these activities based on the most recent analysis: iii. [x] Recover through repayment plans. Describe the activities and the results of these activities based on the most recent analysis: Repayment agreements are sent to the Individual/Provider if a Claim has been determined to be an agency error or error (non-fraud). If an individual, who is a Child Care Provider, submits a completed DCC-97 Supplement A, Voluntary Payment Reduction, indicating the amount the Provider wishes to have applied to the Claim, the Child Care Provider currently receiving CCAP payment may choose to have an amount withheld from the Provider’s CCAP payment to be applied towards the Claim. The amount indicated on the DCC-97 shall not be less than ten (10%) percent of the total CCAP payment. All Repayment agreements must be in writing on the DCC-98. Citation: 922 KAR 2:020. Child Care Assistance Program (CCAP) Collection of a Claim (https://apps.legislature.ky.gov/law/kar/titles/922/002/020/) Citation: 922 KAR 2:160 DCC-97 Supplement A, Voluntary Payment Reduction, and DCC-98 Repayment Agreement. (https://apps.legislature.ky.gov/law/kar/titles/922/002/160/) iv. [ ] Reduce payments in subsequent months. Describe the activities and the results of these activities based on the most recent analysis: v. [x] Recover through State/Territory tax intercepts. Describe the activities and the results of these activities based on the most recent analysis: Claim payments delinquent for 90 calendar days automatically go through the eligibility system to the Kentucky Department of Revenue for state tax intercept. Results: For 2024, there have only been (24) claims sent to the Kentucky Department of Revenue for state tax intercept. vi. [ ] Recover through other means. Describe the activities and the results of these activities based on the most recent analysis: vii. [ ] Establish a unit to investigate and collect improper payments and describe the composition of the unit. Describe the activities and the results of these activities based on the most recent analysis: viii. [ ] Other. Describe the activities and the results of these activities: d. Does the Lead Agency investigate and recover improper payments due to agency errors? [ ] No. [x] Yes. If yes, check and describe all activities that the Lead Agency will use to investigate and recover improper payments due to agency errors. Include in the description how each activity assists in the investigation and recovery of improper payments due to administrative errors. Include a description of the results of such activity. i. [x] Require recovery after a minimum dollar amount of an improper payment and identify the minimum dollar amount. Describe the activities and the results of these activities based on the most recent analysis: Non fraud claims are overpayments caused by an inadvertent or non-deliberate action on the part of a recipient or provider. Office of Inspector General (OIG), may return claims that do not meet the acceptance criteria of Office of the Inspector General (OIG), (i.e. less than $5,000.00 for individuals or $10,000.00 for Providers) without court action. These are Inadvertent Error (IE) (non-fraud claims). Situations that may cause an Inadvertent Error claim include: •The recipient of childcare subsidy funds unintentionally fails to provide the service agent staff with correct or complete information. •The recipient unintentionally fails to report a change that impact childcare benefits to the Cabinet for Health & Family Services, Community Based Services staff. •A provider unintentionally fails to notify the service agent of temporary operational changes or of circumstances, which affect payments for children receiving subsidies. Findings: In 2023, (9) were found to have been issued civil penalties. Results: In 2023, there were (8) provider sanctions, (23) assessed civil penalties and (0) disqualifications. There have only been (23) civil penalties issued in 2023. The penalties are monetary fines, with the amounts varying. There are no centers being prosecuted as a result of a penalty. Civil penalties are only ever issued to licensed centers, not certified family child care homes. Administrative Hearings Findings: In 2023, there (14) Administrative Hearing requests from Providers. Administrative Hearings Results: In 2023, there were (4) completed Administrative Hearings, (10) Hearings withdrew, and (2) continued Hearings. (38) provider claims were terminated and (173) had claims established which resulted in monetary recoupments. ii. [ ] Coordinate with and refer to the other State/Territory agencies (e.g., State/Territory collection agency, law enforcement agency). Describe the activities and the results of these activities based on the most recent analysis: iii. [x] Recover through repayment plans. Describe the activities and the results of these activities based on the most recent analysis: Repayment agreements are sent to the Individual/Provider is if a Claim has been determined to be an agency error or error (non-fraud). If an individual, who is a Child Care Provider, submits a completed DCC-97 Supplement A, Voluntary Payment Reduction, indicating the amount the Provider wishes to have applied to the Claim, the Child Care Provider currently receiving CCAP payment may choose to have an amount withheld from the Provider’s CCAP payment to be applied towards the Claim. The amount indicated on the DCC-97 shall not be less than ten (10%) percent of the total CCAP payment. All Repayment agreements must be in writing on the DCC-98. Citation: 922 KAR 2:020. Child Care Assistance Program (CCAP) Collection of a Claim. Citation: 922 KAR 2:020. Child Care Assistance Program (CCAP) Collection of a Claim (https://apps.legislature.ky.gov/law/kar/titles/922/002/020/) Citation: 922 KAR 2:160 DCC-97 Supplement A, Voluntary Payment Reduction, and DCC-98 Repayment Agreement. (https://apps.legislature.ky.gov/law/kar/titles/922/002/160/) iv. [x] Reduce payments in subsequent months. Describe the activities and the results of these activities based on the most recent analysis: Results would be Claim establishment. The Claims Section receives documented findings and reviews for potential processing of claim establishment. if a Claim has been determined to be an agency error or error (non-fraud), the error will be calculated. A claim will be established and discussed with the individual or Provider. The individual or Provider is responsible for the repayment of the Agency Error (AE). The agency error can be paid back by completing and submitting a completed DCC-97 Supplement A, Voluntary Payment Reduction, indicating the amount the Provider wishes to have applied to the Claim, the Child Care Provider currently receiving CCAP payment may choose to have an amount withheld from the Provider’s CCAP payment to be applied towards the Claim. The amount indicated on the DCC-97 shall not be less than ten (10%) percent of the total CCAP payment. All Repayment agreements must be in writing on the DCC-98. If the individual or Provider disagrees with the AE, an appeal can be offered for them to file. Repayment Agreements are sent to the Individual/Provider if a Claim has been determined to be an agency error or error (non-fraud). If an individual, who is a Child Care Provider, submits a completed DCC-97 Supplement A, Voluntary Payment Reduction, indicating the amount the Provider wishes to have applied to the Claim, the Child Care Provider currently receiving CCAP payment may choose to have an amount withheld from the Provider’s CCAP payment to be applied towards the Claim. The amount indicated on the DCC-97 shall not be less than ten (10%) percent of the total CCAP payment. All Repayment agreements must be in writing on the DCC-98. v. [x] Recover through State/Territory tax intercepts. Describe the activities and the results of these activities based on the most recent analysis: Claim (Applicant) payments delinquent for 90 calendar days automatically go through the eligibility system to the Kentucky Department of Revenue for state tax intercept. vi. [ ]Recover through other means. Describe the activities and the results of these activities based on the most recent analysis: vii. [ ] Establish a unit to investigate and collect improper payments and describe the composition of the unit. Describe the activities and the results of these activities based on the most recent analysis: viii. [ ] Other. Describe the activities and the results of these activities: e. What type of sanction will the Lead Agency place on clients and providers to help reduce improper payments due to intentional program violations or fraud? Check and describe all that apply: i. [x] Disqualify the client. Describe this process, including a description of the appeal process for clients who are disqualified. Describe the activities and the results of these activities based on the most recent analysis: When a recipient/provider is determined to have committed an Intentional Program Violation (IPV), the State Approved Agency imposes a disqualification and sends a Notice of Disqualification. A disqualification penalty shall adhere to the follow guidelines: 12 months disqualification for the first occurrence, 24 months for the second occurrence; and Permanently disqualified for the third occurrence; or The length of penalty assigned by court. If a recipient disagrees with the claim, they may request a hearing. All completed claim forms are sent to central office claims section so claim collections may be suspended if appeal is within a 30-day time frame of the establishment of the claim. If the appeal is timely but meets good cause criteria by Quality Assurance for hearing, collections will be suspended upon notification. Any hearing where a client has legal representation the hearing officer must request legal assistance to assist in these cases. Disqualification Findings: Calendar year 2023, Child Care clients had (3) IPV’s executed and (3) disqualification imposed. Disqualification Results: The total number of child care client disqualifications for the calendar year of 2023 is (3). Administrative Hearings Findings: Calendar year 2023, there has been (146) requested Administrative Hearings from clients. Administrative Hearing Results: During the calendar year of 2023, (39) Hearings have been withdrawn by the clients, (1) is being reviewed by the Secretary of CHFS, (4) are awaiting Hearings, (90) have a final order issued, and (2) have been dismissed. Citation: 922 KAR 2:020. Child Care Assistance Program (CCAP) improper payments, claims, and penalties, Section 8. https://apps.legislature.ky.gov/law/kar/titles/922/002/020/ ii. [x]Disqualify the provider. Describe this process, including a description of the appeal process for providers who are disqualified. Describe the activities and the results of these activities based on the most recent analysis: When a provider is determined to have committed an Intentional Program Violation (IPV), the State Approved Agency imposes a disqualification and sends a Notice of Disqualification. A disqualification penalty shall adhere to the follow guidelines: 12 months disqualification for the first occurrence, 24 months for the second occurrence; and Permanently disqualified for the third occurrence; or The length of penalty assigned by court. Disqualifying the Provider; if the Provider is disqualified, the appeal process, includes the Provider filing for an appeal of the disqualification. Provider will request appeal hearing with the Hearings Branch. If the IPV is over $5,000, it will be sent to OIG for further investigation. Once OIG investigates, they will determine if prosecution is warranted and present to the County Attorney. After the Child Care Claim has been investigated and substantiated by OIG, an agreement not to prosecute may be reached between the Courts and the Provider. This agreement is called a ￿Deferred Adjudication’. The Provider will sign the DCC-83 ￿Deferred Adjudication Disqualification Consent Agreement’. By signing the DCC-83, the provider does not admit quilt, but consents to the appropriate disqualification period and repayment of the Claim. The Claim will then be entered administratively on IEES. Staff must enter the disqualification within three (3) working days. Notification is a signed DCC-84 Supplement A or the DCC-83, a final hearing order, or notice of a court decision or agreement that finds the Provider guilty. At this time, the DCC- 82 ￿Notice of Disqualification’ is sent to the Provider; 12 months for the first occurrence; 24 months for the second occurrence: and permanently for the third occurrence or the length of penalty assigned by the Court. Appeal Process for Child Care Providers includes notifying the Provider of the established Claim. The Provider must file the appeal within 30 days of the Claim establishment to be timely. A hearing date is set, all parties are notified, and the hearing is held. The hearing officer issues their decision within 30 days. The recommended order is issued, and an exception period of 10 days is given to the Provider. A final order is issued. The Provider can appeal the final order to the circuit clerk, if they wish. The Hearings Branch schedules the hearing within 30 days and provides written notice to the Provider through certified mail and Cabinet staff copied on the notice. Criminal Prosecution: criminal prosecution is presented in criminal court to the county attorney to consider for prosecution. There is 15 days given to the Provider, to file an exception to the recommended order. The secretary of the Cabinet will review and issue a final order. The Provider can appeal the final order from the secretary within 30 days to circuit court. If pursued the case will go to a court hearing. The court hearing is scheduled and held. If convicted, a restitution order will be completed, along with any terms the courts impose on the Provider. DCC Claims' staff will be sent all orders of the Courts and will follow the court claim until paid in full. Administrative Hearings Findings: Calendar year 2023, there were (0) requested Administrative Hearings from providers. Results: Calendar year 2022, January ￿ August 2022, demonstrates (0) provider sanctions, and (0) disqualifications. Calendar year 2023, (0) provider sanctions, and (0) disqualifications and January-July 2024, (0) provider sanctions, and (0) disqualifications. Citation: Child Care Claims Procedures Manual, Administrative Hearings for Claims Appeals. Policy Manual, MS 6050 IPV Disqualification Penalties. 922 KAR 2:020. Child Care Assistance Program (CCAP) improper payments, claims, and penalties. Data Source: Business Intelligence Report (BI): Claims Analytics Detailed Report. iii. [x] Prosecute criminally. Describe the activities and the results of these activities based on the most recent analysis: If the IPV is over $5,000, it will be sent to OIG for further investigation. Once OIG investigates, they will determine if prosecution is warranted and present to the County Attorney. The Hearings Branch schedules the hearing within 30 days and provides written notice to the Provider through certified mail and Cabinet staff copied on the notice. iv. [ ] Other. Describe the activities and the results of these activities based on the most recent analysis: Appendix 1: Lead Agency Implementation Plan The Appendix will be available for Lead Agencies to use in CARS after the Plan approval letter is issued. For each non-compliance, Lead Agencies must describe the following: • Action Steps: List the action steps needed to correct the finding (e.g., update policy manual, legislative approval, IT system changes, etc.). For each action step list the: o Responsible Entity: Indicate the entity (e.g., agency, team, etc.) responsible for completing the action step. o Expected Completion Date: List the expected completion date for the action step. • Overall Target Date for Compliance: List date Lead Agency anticipates completing implementation, achieving full compliance with all aspects of the findings. (Note: Compliance will not be determined until the FFY 2025-2027 CCDF Plan is amended and approved). Appendix 1: Form [Plan question with non-compliance and associated provision will pre-populate based on preliminary notice of non-compliance] A. Action Steps for Implementation B. Responsible Entity(ies) C. Expected Completion Date Step 1: Step 2 (as necessary): [Additional steps added as necessary] Overall Target Date for Compliance: