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: Child care subsidy eligibility in Michigan is determined by MDHHS, which also determines eligibility for temporary assistance for needy families (TANF), Supplemental Nutrition Assistance Program (SNAP), Medicaid. Additionally, MDHHS receives data from the State directory of new hires, Social Security Administration and Public Assistance Reporting Information System (PARIS). These data bases ensure accurate processing of known information, reduce errors during program processing and therefore, reduces the chances of fraud. This also allows MiLEAP the ability to correct CDC cases, as necessary. It also allows the Office of Inspector General (OIG) located within MDHHS to have all necessary information for needed investigations of misuse of funds. When a potential client over issuance is discovered, a referral is made to the MDHHS Recoupment Specialist who obtains all evidence needed to establish an over issuance. The information is entered into the Bridges Recovery System (BRS). A claim is the resulting debit created by an over issuance of benefits. If the Recoupment Specialist suspects that an intentional program violation has occurred, it is referred to the Office of Inspector General (OIG). Provider intentional program violation (IPV): An intentional act where the provider is billing for more hours than a child is in attendance or intentionally maintaining time & attendance records that do not accurately capture the actual attendance of a child and/or otherwise billing in such a way that they are intentionally receiving higher payments than they are entitled to. Examples include billing for children while they are in school, billing for children who are no longer in care, knowingly billing for children not in care or more hours than children were in care and maintaining records that do not accurately reflect the time children were in care. Suspected IPVs go through a thorough review process conducted by MiLEAP's Intentionality Review Team (IRT). The purpose of the IRT review is to determine if the action of the provider was intentional. The result is an increase in locating mistakes and training needs during case reads; determining if time and attendance records were completed incorrectly intentionally and ensuring consistency with IPV's. This assists in educating providers about the CDC program rules and regulations so that they may correct their billing practices. Results include the following: Allows MiLEAP the ability to ensure CDC cases are corrected. Assists in educating providers about the CDC program rules and regulations so that they may correct their billing practices and/or requiring the provider submit a Corrective Action Plan when it is determined that the provider had an intentional program violation. Establish claims for overpayments and collect on the overpayments. Allows us to regularly review our processes to determine if additional changes are necessary. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: Child care subsidy eligibility in Michigan is determined by MDHHS, which also determines eligibility for temporary assistance for needy families (TANF), Supplemental Nutrition Assistance Program (SNAP), Medicaid. Additionally, MDHHS receives data from the State directory of new hires, Social Security Administration and Public Assistance Reporting Information System (PARIS). These data bases ensure accurate processing of known information, reduce errors during program processing and therefore, reduces the chances of fraud. This also allows MiLEAP the ability to correct CDC cases, as necessary. It also allows the Office of Inspector General (OIG) located within MDHHS to have all necessary information for needed investigations of misuse of funds. When a potential client over issuance is discovered, a referral is made to the MDHHS Recoupment Specialist who obtains all evidence needed to establish an over issuance. The information is entered into the Bridges Recovery System (BRS). A claim is the resulting debit created by an over issuance of benefits. Time and attendance review process: Providers are selected for a time and Attendance review using the following methods: random selection, parent referrals, call center referrals, and partner referrals. Time & attendance records are requested for two pay periods and reviewed. Records are reviewed to ensure they comply with CDC program guidelines. The result of a time & attendance review may include one of the following findings: provider errors: unintentional or inadvertent errors made by a CDC provider who reported incorrect information or failed to report information to the MiLEAP. These errors always trigger a program violation notice (PVN). A PVN is a written notice from MiLEAP detailing the program violation. The Time and Attendance Review process may also determine there was an over issuance. When a potential provider over issuance is discovered, a referral is made to the MiLEAP Recoupment Specialist/Analyst who obtains all evidence needed to establish an over issuance. The information is entered into the Bridges Recovery System (BRS). A claim is the resulting debit created by an over issuance of payments. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice:: Child care subsidy eligibility in Michigan is determined by MDHHS, which also determines eligibility for temporary assistance for needy families (TANF), Supplemental Nutrition Assistance Program (SNAP), Medicaid. Additionally, MDHHS receives data from the State directory of new hires, Social Security Administration and Public Assistance Reporting Information System (PARIS). These data bases ensure accurate processing of known information, reduce errors during program processing and therefore, reduces the chances of fraud. This also allows MiLEAP the ability to correct CDC cases, as necessary. It also allows the Office of Inspector General (OIG) located within MDHHS to have all necessary information for needed investigations of misuse of funds. When a potential client over issuance is discovered, a referral is made to the MDHHS Recoupment Specialist who obtains all evidence needed to establish an over issuance. The information is entered into the Bridges Recovery System (BRS). A claim is the resulting debit created by an over issuance of benefits. When a potential provider over issuance is discovered, a referral is made to the MiLEAP Recoupment Specialist/Analyst who obtains all evidence needed to establish an over issuance. The information is entered into the Bridges Recovery System (BRS). A claim is the resulting debit created by an over issuance of payments. 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 Lead Agency conducts randomly selected time and attendance (T&A) reviews that may result in the determination of intentional program violations. The T&A review process flags errors based on various criteria including school age maximum billing, billing excessive absences hours, etc. When it is determined that the provider intentionally violated the program rules, the provider is required to submit a Correction Action Plan, a Correction Action Plan Follow Up Letter and will have a follow-up time and attendance review to ensure the provider is complying with the CDC program rules. In addition, failure to submit a Corrective Action Plan may result in a disqualification. During FY23, 21 CAPs were created, seven were resolved by the close of FY23 for Intentional Program Violations (IPV) with the remaining 14 being resolved because the programs demonstrated compliance. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: The Lead Agency conducts randomly selected time and attendance (T&A) reviews that may result in the determination of unintentional program violations. The T&A review process flags errors based on various criteria including school age maximum billing, billing excessive absences hours, etc. When it is determined that the provider has unintentionally violated the program rules, the provider receives information and education on the proper way to bill and the program rules. In addition, the provider is mailed a Program Violation Notice and a Redetermination Letter informing them of the violation. As part of our T&A review process, approximately 75% are an administrative error rather than an improper payment or intentional program violation. This process allows the Department to educate providers on proper billing procedures as well to identify common errors that can be addressed through CDC handbook updates, information posted at the CDC website or through one-on-one conversations and support with providers. iii. [ ] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: 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: The Lead Agency conducts randomly selected time and attendance (T & A) reviews that may result in determination of intentional program violations. T & A reviews include monitoring records for errors based on various criteria including billing during school, billing for more children than allowed, providing care in the wrong location, completed attendance records, billing for children that are no longer in care. When it is determined that the provider has intentionally violated the program rules, the provider receives information and education on the proper way to bill and the program rules. In addition, the provider is mailed a Program Violation Notice and a Redetermination letter informing them of the violations. The result of a time & attendance review may include one of the following findings: provider errors: unintentional or inadvertent errors made by a CDC provider who reported incorrect information or failed to report information to the Department. These errors always trigger a program violation notice (PVN). A PVN is a written notice from the Department detailing the program violation. Provider intentional program violation (IPV): An intentional act where the provider is billing for more hours than a child is in attendance or intentionally maintaining time & attendance records that do not accurately capture the actual attendance of a child and/or otherwise billing in such a way that they are intentionally receiving higher payments than they are entitled to. Examples include billing for children while they are in school, billing for children who are no longer in care, knowingly billing for children not in care or more hours than children were in care and maintaining records that do not accurately reflect the time children were in care. Suspected IPVs go through a thorough review process conducted by Department’s Intentionality Review Team (IRT). The purpose of the IRT review is to determine if the action of the provider was intentional. The result is an increase in locating mistakes and training needs during case reads; determining if time and attendance records were completed incorrectly intentionally and ensuring consistency with IPV's. This assists in educating providers about the CDC program rules and regulations so that they may correct their billing practices. Results include the following: Allows the Department the ability to ensure CDC cases are corrected. Assists in educating providers about the CDC program rules and regulations so that they may correct their billing practices. Establish claims for overpayments and collect on the overpayments. Allows us to regularly review our processes to determine if additional changes are necessary. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: The Lead Agency conducts randomly selected time and attendance (T & A) reviews that may result in determination of unintentional program violations. T & A reviews include monitoring records for errors based on various criteria including billing during school, billing for more children than allowed, providing care in the wrong location, completed attendance records, billing for children that are no longer in care. The result of a time & attendance review may be determined as unintentional or inadvertent errors made by a CDC provider who reported incorrect information or failed to report information to the Department. These errors always trigger a program violation notice (PVN). A PVN is a written notice from the Department detailing the program violation and additional program information to assist the provider in making the correction in their program and prevent future violations. Results include the following: Allows the Department the ability to ensure CDC cases are corrected. Assists in educating providers about the CDC program rules and regulations so that they may correct their billing practices. Establish claims for overpayments and collect on the overpayments. Allows us to regularly review our processes to determine if additional changes are necessary. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: The purpose of the ongoing case review process is to determine if the CDC eligibility decisions and/or benefit amounts were determined correctly. Cases are randomly pulled for review monthly. If no errors are found, the local or county office is notified that a case read was completed and there were no errors found. If there are errors, the local or county office is notified of the error(s) and a correction due date is provided. The Department determines an error rate (by local office/county). A detailed Error Rate Report is sent to each local office or county. In addition to the case review process, the Department has a staff person who reads closed CDC cases to determine if any CDC cases were closed in error. If it is determined the case was closed in error, an email is sent to the local office or county, requesting they give the case be reviewed due to the error. A monthly closed case report is sent to MDHHS Field Operations. The result is an increase in locating mistakes and training needs during provider authorizations. The Department created checklist for MDHHS staff to make sure that they are completing all steps of the CDC approval and eligibility process so that steps and required documents are not overlooked. Allows us to regularly review our processes to determine if additional changes are necessary. At the beginning of each month, CDC pulls a Common Error Report which shows frequent errors for missing documents by local office. This report is used to identify commonly missed errors that inform us which areas need further training and job aides. Department identifies counties with the highest error rates and provide additional guidance to help reduce errors 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: Supervisory staff reviews are conducted by MDHHS managers or supervisors in each local office, at application processing or redetermination across all programs, including CDC. The guidelines for supervisory reviews at the local level are a minimum of two cases, per worker, per month, up to twenty cases. The supervisory review is intended to ensure staff are following program policy, meeting standard operating procedures, and correcting cases for proper determinations. Six secondary quality assurance reviews are completed monthly by MiLEAP staff. Accurate program processing and outcomes, manager/supervisors as well as specialists remain abreast of current policies and processing changes, and an opportunity to ensure program integrity are the results of these activities. This establishes claims for overpayments and collect on the overpayments. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: Supervisory staff reviews are conducted by MDHHS managers or supervisors in each local office, at application processing or redetermination across all programs, including CDC. The guidelines for supervisory reviews at the local level are a minimum of two cases, per worker, per month, up to twenty cases. The supervisory review is intended to ensure staff are following program policy, meeting standard operating procedures, and correcting cases for proper determinations. Six secondary quality assurance reviews are completed monthly by MiLEAP staff. Accurate program processing and outcomes, manager/supervisors as well as specialists remain abreast of current policies and processing changes, and an opportunity to ensure program integrity are the results of these activities. This establishes claims for overpayments and collect on the overpayments. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: Supervisory staff reviews are conducted by MDHHS managers or supervisors in each local office, at application processing or redetermination across all programs, including CDC. The guidelines for supervisory reviews at the local level are a minimum of two cases, per worker, per month, up to twenty cases. The supervisory review is intended to ensure staff are following program policy, meeting standard operating procedures, and correcting cases for proper determinations. Six secondary quality assurance reviews are completed monthly by MiLEAP staff. Accurate program processing and outcomes, manager/supervisors as well as specialists remain abreast of current policies and processing changes, and an opportunity to ensure program integrity are the results of these activities. This establishes claims for overpayments and collect on the overpayments. e. [x] Audit provider records. i. [x] Intentional program violations. Describe the activities, the results of these activities, and how they inform better practice: Time and attendance review process: Providers are selected for a time and attendance review using the following methods: random selection, parent referrals, call center referrals, and partner referrals. Time & attendance records are requested for two pay periods and reviewed. Records are reviewed to ensure they comply with CDC program guidelines. The result of a time & attendance review may include one of the following findings: provider errors: unintentional or an inadvertent error made by a CDC provider who reported incorrect information or failed to report information to MiLEAP. These errors always trigger a Provider Violation Notice PVN. Provider IPV: An intentional act where the provider is billing for more hours than a child is in attendance or intentionally maintaining time & attendance records that do not accurately capture the actual attendance of a child and/or otherwise billing in such a way that they are intentionally receiving higher payments than they are entitled to. Examples include billing for children while they are in school, billing for children who are no longer in care, knowingly billing for children not in care or more hours than children were in care and maintaining records that do not accurately reflect the time children were in care. Suspected IPVs go through a thorough review process conducted by MiLEAPs Intentional Review Team (IRT). The purpose of the IRT review is to determine if the action of the provider was intentional. The result is an increase in locating mistakes and training needs during case reads; determining if time and attendance records were completed incorrectly intentionally and ensuring consistency with IPV's. This Assists in educating providers about the CDC program rules and regulations so that they may correct their billing practices. If a provider is determined to have intentionally violated the CDC rules, they will be required to submit a Corrective Action Plan (CAP). ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: The result of a time & attendance review may include one of the following findings: provider errors: unintentional or an inadvertent error made by a CDC provider who reported incorrect information or failed to report information to MiLEAP. These errors always trigger a Provider Violation Notice PVN. A PVN is a written notice from MiLEAP detailing the program violation. Provider IPV: An intentional act where the provider is billing for more hours than a child is in attendance or intentionally maintaining time & attendance records that do not accurately capture the actual attendance of a child and/or otherwise billing in such a way that they are intentionally receiving higher payments than they are entitled to. Examples include billing for children while they are in school, billing for children who are no longer in care, knowingly billing for children not in care or more hours than children were in care and maintaining records that do not accurately reflect the time children were in care. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: MiLEAP has implemented several strategies to address agency errors. CDC Eligibility in Michigan is determined via a shared application process for other benefits with MDHHS (such as Medicaid, SNAP, etc.). MILEAP and MDHHS have jointly created a CDC Checklist for MDHHS staff to use when determining eligibility. Data indicates that when the CDC Checklist is used there are no errors made during eligibility determination. Currently, MDHHS is not requiring the use of the CDC Checklist. As we are preparing our FY25 interagency agreement, we are discussing making the CDC Checklist mandatory for processing either in all counties or in counties with an error rate above acceptable thresholds. A second activity is having a spot check performed by MDHHS local office management to verify that staff are completing the CDC Checklist and there are no errors on the case. 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: Training for Department staff on intentional program violations can be found in the Intentionality Review Team (IRT) Procedure document. MILEAP has an IRT Coordinator who handles the review of all Intentional Program Violations (IPV) referrals. The coordinator reviews all potential issues, convenes a team to review potential IPVs, and is responsible for training the team on intentionality determination to assure consensus on what constitutes IPVs. The team makes their recommendations to a Manager and the CDC Director, who both confirm whether or not there should be a program disqualification, or the case should be referred to the Office of Inspector General (OIG) at MDHHS for investigation of fraud. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: Training for Department staff on unintentional program violations can be found in the Time and Attendance Review Procedure. The procedure identifies all the areas that are assessed in a review. Unintentional provider mistakes made during the billing process. (1) These types of errors will result in a Program Violation Notice (even if error is found on 2nd review) and a Review Determination Letter. (2) Technical assistance will be provided by a TIO Analyst. The TIO Analyst completing the review selects the procedure that aligns with the violations and follows up with the provider using the steps in that procedure. This allows consistency in response to providers regarding violations. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: Training is available to the local MDHHS offices through online modules that includes training on policy understanding, application processing, as well as technology use. Monitoring and tracking of errors give the Department the ability to identify common errors and create TIPS that are shared with MDHHS on a SharePoint site that is used to access documents and resources. Accurate program processing and outcomes is the result as staff stay abreast of current policies and processing changes. This allows us to regularly review our processes to determine if additional changes are necessary. g. [ ] Other. Describe the activity(ies): i. [ ] Intentional program violations. Describe the activities, the results of these activities, and how they inform better practice: ii. [ ] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: 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): Both the Lead Agency and the Office of Inspector General (OIG) are responsible for pursuing fraud. 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: No minimum. All amounts are recovered after being identified. This activity ensures funds are returned and managed as intended. ii. [x] 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: When application/eligibility information is determined by DHHS caseworkers to be questionable, or when findings of a billing and payment review are determined to be egregious by billing analysts within the Department, a referral is made to DHHS Office of Inspector General (OIG) for further investigation. When the Department or the court systems is unsuccessful in the collection of overpayments/restitution, the debts are referred to the Department of Treasury for collection. For FY23 the program established 179 provider recoupments for overpayment and currently we have collected funds from 161 of those claims, which leaves 18 provider claims open from FY23. Additionally, in FY23 four providers were disqualified for either a time limited disqualification or permanent disqualification. In FY24, 6 providers were referred to MDHHS-OIG for investigation. iii. [x] Recover through repayment plans. Describe the activities and the results of these activities based on the most recent analysis: Voluntary agreement amounts unless otherwise ordered by a court. This allows for repayment of over issued funds which are reasonable and affordable for the payer. These repayment agreements may be adjusted, as necessary. iv. [x] Reduce payments in subsequent months. Describe the activities and the results of these activities based on the most recent analysis: Some CDC providers choose the option to have 20% of their subsequent payments deducted to pay down their overpayment/recoupment amount until it is paid in full. Active CDC providers who do not adhere to their Repay Agreement, by making regular payments to MiLEAP, are switched to automatic deductions of 20% of subsequent payments until their overpayment amount is paid in full or they request to resume cash payments. This method is determined to be successful because it allows the department to recoup payments without adding extra burden on the provider, particularly as there is not currently an electronic payment portal and case recoupment payment must be mailed in the form of a check or money order. v. [x] Recover through State/Territory tax intercepts. Describe the activities and the results of these activities based on the most recent analysis: The Department has a unit of time and attendance reviewers and recoupment staff. In addition, DHHS operates a unit that establishes recoupments for parents based on referrals and federal case reviews. Both the lead agency and DHHS refer outstanding provider and client debts to the Department of Treasury for collection via tax intercepts after they are unable to collect from the client and/or provider. The Department and DHHS work in partnership to ensure collaboration and to eliminate duplicate referrals. These efforts have increased our ability to work cross Department to utilize tax interceptions to collect funds that were payout as a result of fraud. vi. [x] Recover through other means. Describe the activities and the results of these activities based on the most recent analysis: The Lead Agency unit consists of three time and attendance reviewers; a Recoupment Analyst and a Recoupment Specialist that focus on provider overpayments. In addition to the above, the Michigan Department of Health and Human Services (MDHHS) operates a unit that establishes recoupments for clients based on referrals and federal case reviews. These areas work in partnership with each other to ensure collaboration. Both the Lead Agency and MDHHS refer outstanding debts to Treasury for collection after they are unable to collect from the client and/ or provider. The Lead Agency and MDHHS refer unpaid provider and client recoupment to the Department of Treasury, who have a more extensive means of locating the individual and have the capability to garnish their wages. These areas work in partners hip with each other to ensure collaboration and nonduplication of efforts. 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 Lead Agency unit consists of time and attendance reviewer(s); Recoupment Analyst(s) and a Recoupment Specialist. In addition, MDHHS operates a unit that establishes overpayments for parents and providers based on referrals. This ensures adequate staff for investigating and collecting improper payments The Lead Agency unit consists of billing analysts, recoupment specialists and case reviewers. The billing analyst establishes the improper payments through billing reviews and a recoupment specialist establishes the recoupments. The case reviewers review the cases for eligibility processing errors and work with MDHHS to establish the recoupment as a result of improper payments generated from the misappropriation of benefits. In addition, MDHHS operates a unit that establishes for parents and providers based on referrals. This ensures adequate staff for investigating and collecting improper payments. viii. [x] Other. Describe the activities and the results of these activities: Suspected fraud is reported to DHHS through a fraud hotline (1-800-222-8558) and the CDC office customer service line (866)390-3227. The CDC office handles provider fraud referrals by conducting time and attendance reviews for the pay periods over which the concerns were raised. If errors are substantiated, the provider may be asked to create a CAP or may go through an additional review through an intentionality review team or the OIG to determine intentionality and/or fraud. Offering multiple avenues for reporting potential fraud concerns creates a safe place for people to express concerns and offers the opportunity for earlier detection to reduce improper payments that need to be recovered. The early detection provided through the fraud referrals saves the Department from having to establish large recoupment amounts when fraud is substantiated later. 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: Minimum for repayment is $1.00. These amounts are recovered after being identified. This activity ensures funds are returned and managed as intended. ii. [x] 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: After three collection notices are sent to the provider and timely payment is not made, then the debt is referred to Michigan Department of Treasury. This resulted in 8 claims sent to Treasury in FY 23 with a debt balance of $14,901.69. iii. [x] Recover through repayment plans. Describe the activities and the results of these activities based on the most recent analysis: Providers have three choices of payment: a) lump sum payment b) standard recoupment (20% of current payments deducted and applied to the debt) or c) Repayment Agreement (monthly payment amount agreed upon between the Department and the provider). Provider options result in providers finding a plan that works for their budget (option to return funds as a lump sum or a monthly payment amount). The benefit to choosing to have it deducted from future payments is that it allows providers to track ongoing balance information and plan for their business budget needs. This option is selected by most providers. iv. [x] Reduce payments in subsequent months. Describe the activities and the results of these activities based on the most recent analysis: If providers have a hardship and cannot make the agreed upon payment amount, the Department can reduce the monthly payment amount through another repayment agreement. The result of giving providers options is that the agency can retain more providers, especially for those who are in recoupment for unintentional program violations, and it allows us to determine a payment structure that is not burdensome to providers. v. [x] Recover through State/Territory tax intercepts. Describe the activities and the results of these activities based on the most recent analysis: After three collection notices are sent to the provider and timely payment is not made, then the debt is referred to Michigan Department of Treasury. Tax intercepts result in collecting recoupments from those who have otherwise stopped making payments or are unreachable do to closing their child care business. This resulted in 8 claims sent to Treasury in FY 23 with a debt balance of $14,901.69. vi. [x] Recover through other means. Describe the activities and the results of these activities based on the most recent analysis: Voluntary agreement amounts identified by the provider. This allows for repayment for over issued funds, with the amount being determined by the provider. This results in the Department being able to retain providers and support them by decreasing their burden in regard to repayment. 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 unit consists of a recoupment analyst(s). They are responsible for determining and collecting overpayments through a variety of means. They are also responsible for entering collections from MDHHS­ OIG investigations and referring unpaid collections to Michigan Department of Treasury. 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: Agency error over issuances is not pursued if the estimated amount is less than $250. The exception is CDC system errors. For CDC system errors there is no minimum amount. All amounts are recovered after being identified. This activity ensures funds are returned and managed as intended. ii. [x] 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: The Department collaborates with DHHS to establish recoupments for agency errors based on incorrect case processing errors. When an agency error results in an overpayment, we follow the same recoupment process to establish a claim. In order to help reduce case eligibility determination decisions the Department collaborated with DHHS to create job aides and a CDC Checklist to be used by caseworkers during the eligibility process. For cases where the CDC checklist is used there are no eligibility determination errors. The Department is working with DHHS to make the checklist required for all CDC cases in FY25. iii. [x] Recover through repayment plans. Describe the activities and the results of these activities based on the most recent analysis: If a recoupment is established due to agency error and the provider cannot repay the amount as a lump sum, the Department works with the provider to establish repayment terms on an individual basis. When the Department discovers an agency error, information on a client error is shared with the DHHS county office for them to review with eligibility staff to determine if the error was due to a misunderstanding of process or a computation error. Client based agency error (BAM 705 Agency Error Overpayments) follow a process for establishment and recoupment including: definition, exceptions, overpayment period, overpayment amount, calculation, determining budgeable income, client notification, repayment and hearing request. (Note: clients eligible for expedited benefits during presumptive eligibility period will not be considered an overpayment, regardless of whether the ongoing eligibility determination is approved or denied.) The results of all agency errors include identifying in the case the reason for the agency error to establish the cause to reduce the risk of the error repeating and identify if additional preventative actions need to be considered. Once the overpayment claim has been established Bridges/DHHS will automatically start the repayment process for clients while provider repayments are handled by the Department. The benefit to utilizing repayment plans is that it reduces the financial burden on the client and provider minimizing the impact of a large lump sum payment on their budget. 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: If a recoupment is established due to agency error and a payment arrangement is not honored by the provider or client, the case is referred to Department of Treasury after MILEAP and DHHS has followed all processes to contact and reach a payment agreement with provider or client. This process is successful because the Department of Treasury has the authority to withhold tax returns for recoupments owed to the state and it increases the ability of the Department to recover the funds. 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: When MiLEAP determines that an improper payment has been made due to agency error, it is shared between the MiLEAP Case Review team and the DHHS ESA team. This team meets quarterly to discuss such errors and address patterns such as repeated errors or offices with high error rates. Through this team and the processes, they have developed in the last year, we have seen the overall error rate decrease below the 10% threshold in FY24 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: Clients or adult group members, who are found to be in violation of the identified program rules, may serve a six-month, twelve-month or lifetime disqualification. Rule violations include failure to: Provide accurate eligibility information, verify eligibility information, Cooperate with a Department investigation, and Report changes timely and accurately. Rule violations shall be considered intentional and result in a disqualification if established by: A court, An administrative law judge (ALJ), The client or adult group member's signed disqualification form. DISQUALIFICATION PROCESS: When it is determined that a client or adult group member intentionally violated a program rule, a referral should be submitted to the Office of Inspector General (OIG). If the OIG investigation determines an intentional program violation was committed, a disqualification referral and the Investigation Closure Packet will be sent to CDC policy for review. CDC Policy will impose the appropriate disqualification. Disqualification periods will be: Six months for the first occurrence, Twelve months for the second occurrence, Lifetime for the third occurrence, and Lifetime for welfare fraud conviction. If the CDC case is active at the time the disqualification is imposed, Bridges will send the DHS-1605, Notice of Case Action, giving timely notice to close the case. The client or adult group member will be ineligible for the entire disqualification period unless good cause is determined. The disqualification will be applied to all adult members on the case, unless the IPV is only for a specific adult member. If the CDC case is closed at the time the disqualification is imposed, the disqualification period would not be applied until the client or adult group member reapplies for CDC benefits. The client CDC Non-coop/Sanction information screen can be viewed in Bridges Data Collection. NOTIFICATION PROCESS: The local office recoupment specialist (RS) will be required to send the DHS-4357, Intentional Program Violation Client Notice, with all standard recoupment information. OIG will provide notice of the disqualification. GOOD CAUSE: CDC Policy may grant good cause when: The disqualification was entered incorrectly, An ALJ determines that one parent/substitute parent in a two-parent household is not responsible and the parent/substitute parent with the disqualification leaves the home. If a CDC case closes as a result of a disqualification and a good cause determination is made, a task and reminder will be sent to the specialist. The specialist will need to reinstate the case. If the case is pending closure when the good cause determination is made, the specialist will need to run eligibility determination and benefit calculation (EDBC) and certify the case for the disqualification period. If a CDC case closes as a result of a disqualification and the client or adult group member re-applies and is determined to have good cause, eligibility may need to be run for the previous months. 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: Providers are disqualified for 6 months, 12 months of a lifetime if convicted by a court for fraud. Providers may also be disqualified if they are found (during billing reviews) to have a history of intentionally violating the CDC program rules, not responding to a request for a Corrective Action Plan (CAP) or are not in compliance with a previous CAP they submitted. Providers who are referred for a disqualification are given an opportunity for an appeal during the reconsideration process before the disqualification is entered. However, there is no appeal allowed for provider who has been criminally prosecuted. Disqualification is infrequent, and only for cases of significant intentional fraud. This resulted in 4 providers being disqualified in FY 23. iii. [x] Prosecute criminally. Describe the activities and the results of these activities based on the most recent analysis: This is handled by DHHS-OIG office in coordination with local prosecutors. The Department has a process for referring cases to the OIG offices for criminal prosecution (BAM 720). When these cases are criminally prosecuted, and providers are found guilty next steps will vary based on the situation. If we receive court orders for payment structure, we follow those. This process is successful because the court has the authority to establish fraud and enforce the restitution owed to the state. Otherwise, if the Department uses our normal recoupment establishment process and ultimately refers recoupment to the Department of Treasury for tax intercept, we may not recoup the funds. If the client or provider is convicted of fraud, they receive disqualification from the CDC program for a lifetime. 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: Individuals with disabilities may contact the MiLEAP ADA Coordinator to request an alternative format to these materials. Please visit www.Michigan.gov/ADA for a list of state ADA Coordinators.