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: The state uses an electronic verification system to process all programs. This system is a rules-based system that accounts for all programs (Medicaid, SNAP, TANF, and Child Care). The electronic interface allows staff to run all interfaces at one time and quickly identifies results and in many cases will auto-populate the data into the eligibility system. This makes it easier for staff to see all relevant information and helps to prevent Intentional Program Violations (IPV's). ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: The state uses an electronic verification system to process all programs. This system is a rules based system that accounts for all programs (Medicaid, SNAP, TANF, and Child Care). The electronic interface allows staff to run all interfaces at one time and quickly identifies results and in many cases will auto-populate the data into the eligibility system. This makes it easier for staff to see all relevant information and helps to prevent unintentional program violations. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice:: The state uses an electronic verification system to process all programs. This system is a rules based system that accounts for all programs (Medicaid, SNAP, TANF, and Child Care). The electronic interface allows staff to run all interfaces at one time and quickly identifies results and in many cases will auto-populate the data into the eligibility system. This makes it easier for staff to see all relevant information and helps to prevent agency errors. b. [x] Run system reports that flag errors (include types). 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: At the beginning of each month, a certification report is run to identify providers who failed to certify in the previous month. Through this process, the Lead Agency has been able to identify providers who have requested their license be closed and have received subsidy payments in that month. This report helps to identify potential overpayments for failure to report changes timely iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: Six system reports are run to flag errors. They include the following: Monthly Review Status report, Case Review Workload, Case Review Causal Factor Report, Case Review, Case Review Accuracy and Quality Control Report. These reports are pulled on a monthly basis. The monthly review status report and case review workload are pulled to review each Quality Control specialists caseloads and the errors that they have cited. The case review causal factor report is pulled to identify the error trends that each analyst is finding. The case review accuracy report helps identify the team, manager, supervisor, and eligibility specialist of where the error occurred. The Quality Control report helps to identify the accuracy of the analyst's reviews. The case review report generates the cases that are to be reviewed by either the Performance Review Team or Quality Control. Reviewing these reports with staff on a monthly basis helps to maintain high case accuracy. The Quality Control Unit also uses the ACF 404 report to identify trends and inform policy decisions. The Quality Control team reviews cases monthly regardless of whether it is a federal on cycle reporting year. Of the Quality Control cases sampled during FY2023, less than one percent resulted in improper payments. 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: Providers are required to retain attendance records for three years. Attendance records are used to establish whether the minimum hours of services were provided and are requested during investigations and audits. This has resulted in detecting overpayments that have been referred for collection. If an IPV is suspected, Lead Agency staff meet to determine if an Administrative Disqualification Hearing should be held or if other measures should be taken. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: Providers are required to retain attendance records for three years. Attendance records are used to establish whether the minimum hours of services were provided and are requested during investigations and audits. This has resulted in detecting overpayments that have been referred for collection. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: Providers are required to retain attendance records for three years. Attendance records are used to establish whether the minimum hours of services were provided and are requested during investigations and audits. This has resulted in detecting overpayments that have been referred for collection. 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 state continues to complete quality control reviews every year even when the state is not on-cycle for federal reviews. The case reviews are conducted in the same manner as they are during the on-cycle period. This establishes consistency in processes and helps detect and reduce errors. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: The state continues to complete quality control reviews every year even when the state is not on cycle for federal reviews. The case reviews are conducted in the same manner as they are during the on-cycle period. This establishes consistency in processes and helps detect and reduce errors. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: The state continues to complete quality assurance reviews every year even when the state is not on cycle for federal reviews. The case reviews are conducted in the same manner as they are during the on-cycle period. This establishes consistency in processes and helps detect and reduce errors. 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 Lead Agency has developed and implemented an auditing process for situations identified as high risk. This has resulted in detecting overpayments that have been referred for collection. If an IPV is suspected, Lead Agency staff meet to determine if an Administrative Disqualification Hearing should be held or if other measures should be taken. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: The Lead Agency has developed and implemented an auditing process for situations identified as high risk. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: The Lead Agency has developed and implemented an auditing process for situations identified as high risk. This has resulted in detecting overpayments that have been referred for collection. 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: Staff are trained on policy and are instructed to submit an investigation referral when circumstances are questionable or fraud is suspected. This has resulted in detecting overpayments that have been referred for collection. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: Staff are trained on policy and are instructed to submit an investigation referral when circumstances are questionable or fraud is suspected. This has resulted in detecting overpayments that have been referred for collection. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: Staff are trained on policy and are instructed to submit an investigation referral when circumstances are questionable or fraud is suspected. This has resulted in detecting overpayments that have been referred for collection. g. [x] Other. Describe the activity(ies): The Lead Agency's eligibility payment system interfaces with other state systems. Licensed providers are required to review all cases, report required, known changes and self- certify that they have completed this process every month. These activities are described in further detail below. i. [x] Intentional program violations. Describe the activities, the results of these activities, and how they inform better practice: The Lead Agency has an electronic interface with the Office of Recovery Services for child support collection and with the Unemployment Insurance Division for start or stop of unemployment benefits. Additionally, child care providers are required to review all child care subsidy cases and children in their care in the Lead Agency's Provider Portal by the 25th of each month and report children who have not attended at least eight hours in the month. They are required to report changes such as a child no longer enrolled for the following month within 10 days. Additionally, licensed child care providers are required to certify between the 20th to the last calendar day of each month that they have reviewed all of their cases and reported required changes. The certification helps to prevent or reduce unintentional program violations and more readily identify intentional program violations. Overpayments are referred for collection. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: The Lead Agency has an electronic interface with the Office of Recovery Services for child support collection and with the Unemployment Insurance Division for start or stop of unemployment benefits. Additionally, child care providers are required to review all child care subsidy cases and children in their care in the Lead Agency's Provider Portal by the 25th of each month and report children who have not attended at least eight hours in the current month. Additionally, licensed child care providers are required to certify between the 25th to the last calendar day of each month that they have reviewed all of their cases and reported required changes within 10 days. The certification helps to prevent or reduce unintentional program violations and more readily identify intentional program violations. Overpayments are referred for collection. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: The Lead Agency has an electronic interface with the Office of Recovery Services for child support collection and with the Unemployment Insurance Division for start or stop of unemployment benefits. Additionally, child care providers are required to review all child care subsidy cases and children in their care in the Lead Agency's Provider Portal by the 25th of each month and report children who have not attended at least eight hours in the current month. They are required to report changes such as a child no longer enrolled for the following month within 10 days. Additionally, licensed child care providers are required to certify between the 25th to the last calendar day of each month that they have reviewed all of their cases and reported required changes. The certification helps to prevent or reduce unintentional program violations and more readily identify intentional program violations. Overpayments are referred for collection. 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): The Lead Agency is responsible for pursuing fraud and overpayments. The Lead Agency coordinates with the state Attorney General's office for criminal prosecution of 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: There is no minimum dollar amount needed to establish fraud. An individual or program may still be disqualified. In 2023, five customers were disqualified for an IPV. An additional six customers have a suspected IPV that are in the adjudication process. 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 Lead Agency coordinates with the state Attorney General's office for criminal prosecution of fraud. Three criminal cases were filed in 2023. iii. [x] Recover through repayment plans. Describe the activities and the results of these activities based on the most recent analysis: The Lead Agency works with customers and providers to negotiate repayment plans. Repayment plans are negotiated with an assigned collection agent. There is a minimum monthly payment amount of $45. The Lead Agency sends invoices to the provider or client that has the overpayment requesting repayment. In FY23, there were 11 customer IPV debts with a payment agreement. There were no provider IPV payment agreements. iv. [x] Reduce payments in subsequent months. Describe the activities and the results of these activities based on the most recent analysis: Customers and providers disqualified for fraud are subject to a one year, two year or lifetime disqualification. In FY23, there were a total of five customers with IPV’s, three criminal cases and six suspected IPV’s in process. There were no provider disqualifications in FY23. v. [x] Recover through State/Territory tax intercepts. Describe the activities and the results of these activities based on the most recent analysis: Offsets of state tax refunds are processed when the administrative order issued for the overpayment has been docketed with the court as a judgment. vi. [x] Recover through other means. Describe the activities and the results of these activities based on the most recent analysis: Payments may be received through wage garnishments and other sources including but not limited to direct payments by check, money order or phone payments with a credit or debit card. 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 investigation, adjudication, and collection units operate at a statewide level for all public assistance programs. The Investigation Unit is composed of a manager and 13 investigators who gather evidence of improper payments and IPV's. During the time period of January 1, 2023-December 31, 2023, 602 child care investigations were completed resulting in $629,444 in child care overpayment referrals submitted to the Adjudication Unit. The Adjudication Unit consists of a manager and 16 staff who calculate and adjudicate payments. The Collection Unit is composed of a manager and 10 staff who complete the collections and enforcement functions. Through multiple collection efforts, the Lead Agency recouped a total of $281,870 from child care recipients and $723,373 from child care providers in CY2023. This data may include recoupment of intentional, unintentional and agency errors. viii. [x] Other. Describe the activities and the results of these activities: Providers disqualified for fraud are not eligible to participate or receive any state or CCDF- funded grants from the Lead Agency during the disqualification period. The results are unknown since we have not disqualified any providers since the implementation of this change. 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: There is a $300 minimum recovery threshold for customers. There is no minimum recovery threshold for provider improper payments. In 2023, there were 32 unintentional program violations that customers were required to repay totaling $294,929. There were 715 unintentional program violations that providers were required to repay totaling $871,395. 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: The Lead Agency works with customers and providers to negotiate repayment plans. Repayment plans are negotiated with an assigned collection agent. There is a minimum monthly payment amount of $45. Customers and providers receive a monthly billing statement and payment reminder letters when payments are not received. In 2023, 11 customers set up payment agreements. No providers chose to set up payment agreements in 2023. This data includes unintentional program violations and agency errors. iv. [x] Reduce payments in subsequent months. Describe the activities and the results of these activities based on the most recent analysis: There are options for customers that will allow a repayment plan by reducing the monthly benefits until the repayment is paid in full. Recoupment from ongoing care benefits is set at $20 or 20%, whichever is greater. The customer can also opt for a higher recoupment. In 2023, 1,056 customers had a monthly recoupment plan in place. The Lead Agency collected over $53,OOO. This data includes unintentional program violations and agency errors. Providers may have subsidy payments ￿credited￿ or reduced in the month after an overpayment is identified; any remaining balance is referred for collection as an overpayment. Data is not available on the number of provider credits applied to offset overpayments. Additionally, for providers who receive an Enhanced Subsidy Grant, overpayments may be offset by reducing their monthly grant. System changes were recently made to implement this process. v. [x] Recover through State/Territory tax intercepts. Describe the activities and the results of these activities based on the most recent analysis: Offsets of state tax refunds are processed when the administrative order issued for the overpayment has been docketed with the court as a judgment. In 2023, there were 175 state offsets totaling over $95,000 in collections from customers and three state offsets for providers totaling $1285. This data includes unintentional program violations and agency errors. vi. [x] Recover through other means. Describe the activities and the results of these activities based on the most recent analysis: Payments may be received through wage garnishments and other sources, including but not limited, to direct payments by check, money order or phone payments with a credit or debit card. In 2023, there were 72 payments collected through wage garnishments totaling over $12,700 and 432 payments totaling over $110,000 were recouped through these methods listed. Additionally, 858 provider debts were collected in 2023 through check, money order, and phone debit or credit payments totaling $723,373. This data includes unintentional program violations and agency errors 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 investigation, adjudication, and collection units operate at a statewide level for all public assistance programs. The Investigation Unit is composed of a manager and 13 investigators who gather evidence of improper payments and IPV's. During the time period of January 1, 2023-December 31, 2023, 602 child care investigations were completed resulting in $629,444 in child care overpayment referrals submitted to the Adjudication Unit. The Adjudication Unit consists of a manager and 16 staff who calculate and adjudicate payments. The Collection Unit is composed of a manager and 10 staff who complete the collections and enforcement functions. Through multiple collection efforts, the Lead Agency recouped a total of $281,870 from child care recipients and $723,373 from child care providers in CY2023. This data may include recoupment of intentional, unintentional and agency errors. 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: There is a $300 minimum recovery threshold for customers. There is no minimum recovery threshold for provider improper payments. In 2023, there were 77 agency errors that customers were required to repay totaling $187,847. There were 40 agency errors that providers were required to repay totaling $50,470. 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: The Lead Agency works with customers and providers to negotiate repayment plans. Repayment plans are negotiated with an assigned collection agent. There is a minimum monthly payment amount of $45. Customers and providers receive a monthly billing statement and payment reminder letters when payments are not received. In 2023, 11 customers set up payment agreements. No providers chose to set up payment agreements in 2023. This data includes unintentional program violations and agency errors. iv. [x] Reduce payments in subsequent months. Describe the activities and the results of these activities based on the most recent analysis: There are options for customers that will allow a repayment plan by reducing the monthly benefits until the repayment is paid in full. Recoupment from ongoing care benefits is set at $20 or 20%, whichever is greater. The customer can also opt for a higher recoupment. In 2023, 1,056 customers had a monthly recoupment plan in place. The Lead Agency collected over $53,OOO. This data includes unintentional program violations and agency errors. Providers may have subsidy payments ￿credited￿ or reduced in the month after an overpayment is identified; any remaining balance is referred for collection as an overpayment. Data is not available on the number of provider credits applied to offset overpayments. Additionally, for providers who receive an Enhanced Subsidy Grant, overpayments may be offset by reducing their monthly grant. System changes were recently made to implement this process. v. [x] Recover through State/Territory tax intercepts. Describe the activities and the results of these activities based on the most recent analysis: Offsets of state tax refunds are processed when the administrative order issued for the overpayment has been docketed with the court as a judgment. In 2023, there were 175 state offsets totalling over $95,000 in collections from customers and three state offsets for providers totaling $1285. This data includes unintentional program violations and agency errors. vi. [x]Recover through other means. Describe the activities and the results of these activities based on the most recent analysis: Payments may be received through wage garnishments and other sources, including but not limited, to direct payments by check, money order or phone payments with a credit or debit card. In 2023, there were 72 payments collected through wage garnishments totaling over $12,700 and 432 payments totaling over $110,000 were recouped through these methods listed. Additionally, 858 provider debts were collected in 2023 through check, money order, and phone debit or credit payments totaling $723,373. This data includes unintentional program violations and agency errors. 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 investigation, adjudication, and collection units operate at a statewide level for all public assistance programs. The Investigation Unit is composed of a manager and 13 investigators who gather evidence of improper payments and IPV's. During the time period of January 1, 2023-December 31, 2023, 602 child care investigations were completed resulting in $629,444 in child care overpayment referrals submitted to the Adjudication Unit. The Adjudication Unit consists of a manager and 16 staff who calculate and adjudicate payments. The Collection Unit is composed of a manager and 10 staff who complete the collections and enforcement functions. Through multiple collection efforts, the Lead Agency recouped a total of $281,870 from child care recipients and $723,373 from child care providers in CY2023. This data may include recoupment of intentional, unintentional and agency errors. 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: A client who commits an Intentional Program Violation (IPV) is responsible for repayment of the overpayment and will be disqualified from receipt of any CCDF funds for a period of one year for the first IPV, two years for the second IPV, and for life for the third IPV. A client has a right to request a Department hearing. The client must request the hearing in writing or orally within 90 days of the date of the notice of agency action. A decision will be issued within 60 days of the date on which the client requests the hearing. In 2023, there were five customers with an IPV and six customers with a current suspected IPV status that are still in the process of adjudication. 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 the Lead Agency suspects a provider has committed an Intentional Program Violation (IPV), the director of the Utah Office of Child Care will request an Administrative Disqualification Hearing (ADH). The provider will receive written notice of the hearing, which includes the charges against the provider, a summary of the evidence, a listing of the providers rights and a good cause provision for failing to appear. The Administrative Law Judge (ALJ) will determine whether the provider should be disqualified. If the ALJ determines that the provider's conduct does not warrant a disqualification, the Department may impose remedial measures such as increased monitoring. If the ALJ determines the provider should be disqualified, the disqualification period is as follows: one year for the first IPV, two years for the second IPV and life for the third IPV. All overpayments must be paid in full including a 50 percent civil money penalty before the provider may be reinstated as an approved provider. A provider may appeal an ADH disqualification by filing a request for administrative review. Any appeal must be filed in writing within 30 days of the date of the ALJ order. Prior to requesting an ADH, representatives from the Lead Agency meet to determine if disqualification is the correct course of action. As a result, no ADH’s have been scheduled at present. Decisions have led to increased monitoring and overpayments assessed on providers instead. iii. [x] Prosecute criminally. Describe the activities and the results of these activities based on the most recent analysis: The state has options with the State Attorney General's office to prosecute individuals when the amount is supported with enough evidence to show fraud. In FY23 there were three customer criminal cases. iv. [x] Other. Describe the activities and the results of these activities based on the most recent analysis: The Lead Agency has the authority to impose remedial measures on a provider for reasons other than an IPV. This includes increased monitoring of providers who do not complete the monthly certification process or who have an established pattern of overpayments. Although it is difficult to track, it does appear that these steps have reduced improper payments. We have seen more accurate provider reporting and a reduction in overpayments for providers who have had additional monitoring and outreach over the past year. 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: