Attachment D Prosecution, Recovery, Investigation, Collection and Enforcement

Effective Date - Oct 1, 2007

Attachment D

Prosecution, Recovery, Investigation, Collection and Enforcement (PRICE)

D-1 Purpose and Goals

Child Care - ARW, Chapt. 1, Purchase of Service

SNAP - 7 CFR 272.1, 273.1, .2, .11, .16, .18; W.S. 42-2-112

POWER - W.S. 42-2-112

A. Purpose

Prosecution, Recovery, Investigation, Collection Enforcement (PRICE) is in the Financial Services Division of the Department of Family Services (DFS) with the authority and responsibility under W.S. 42-2-112 to prosecute and pursue repayment of benefits paid incorrectly by DFS to or on behalf of a recipient(s), whether caused by the recipient, the provider or the agency.

B. Goals

The goals of the program are to:

1. Refer to the County Attorney for prosecution when the case circumstances meet the referral criteria; and

2. Conduct investigations of cases when evidence indicates there was an intent to fraud DFS in order to receive benefits for which they were not entitled; and

3. Recover all program overpayments paid in error whether the overpayment was caused by the agency, client, or provider; and

4. Accurately account for cases prosecuted and overpayments recovered for compliance with federal reporting.

D-2 Sources and Types of Overpayment Complaints/Referrals

Child Care - ARW, Chapt. 1, Purchase of Service

SNAP - 7 CFR 272.1, 273.1, .2, .11, .16, .18; W.S. 42-2-112

POWER - W.S. 42-2-112

Realize an overpayment occurs whenever a recipient receives any benefit or service of value from DFS for which the assistance unit/provider was paid incorrectly or to which it is later determined s/he was not eligible.

A. Overpayments can occur in POWER, SNAP, any of the medical programs, Child Care providers or recipients, work programs or any other program administered by DFS.

B. Causes of overpayments include, but are not limited to, income, assets, assistance unit composition, shelter costs, calculation and deduction errors.

D-2.1 Sources of Complaints/Referrals

A. Understand reports of possible fraud involving clients of the DFS are received from various sources.

B. Understand evidence from the fraud reporting source must be gathered to verify or disprove the accusation in order to terminate or adjust benefits.

1. Telephone calls:

a. Extract as much client information as possible from a person who phones in a complaint;

b. Understand callers are seldom willing to give their names;

c. Gather as much of the following assistance unit information as possible:

(1) SSN’s;

(2) Date of birth;

(3) Address;

(4) Household members;

(5) Non-custodial parent information;

(6) Place of employment;

(7) A detailed report of exactly what the informant believes is happening and the source of the knowledge;

(8) List of possible witnesses for the case;

(9) Any verified proof the caller might have.

2. Letters;

3. Local authorities such as police or sheriff’s departments:

a. Inquire about possible available evidence when local authorities make contact to report fraud;

b. Question the circumstances which led the officer to believe a crime against the DFS has occurred;

c. Ask about the information which led the officer to believe the person in question is a client of the DFS;

d. Obtain copies of the officer’s report;

e. Gather any evidence which may be shared with the DFS to help prove fraud.

4. Staff investigators will turn a complaint over to the DFS-FO after it has been received by PRICE when:

a. The investigation has been completed, the accusations are verified and the overpayment must be established in order to proceed with criminal prosecution;

b. An investigation has been completed, the accusations have been verified and an overpayment must be established in order to refer for disqualification;

c. An investigation has been completed which verifies the complaint and an overpayment needs to be established on a client error (CL) or agency error (AG) claim;

d. The investigator feels the complaint needs to be verified by information more accessible to the DFS-FO; or

e. The PRICE supervisor determines the case will not be referred for prosecution;

f. The PRICE investigator determines the allegations cannot be substantiated.

5. DFS-FO’s;

6. Other DFS clients:

a. Inquire about motive to assist in taking the appropriate action;

b. Gather as much information as possible when a client reports possible fraud;

c. Use the guidelines in 1. c.

7. Administrative offices:

a. Realize the Director, DFS Administration, Ombudsman, or Administrator may contact the DFS-FO to refer a fraud complaint;

b. Verify or disprove the allegation; and

c. Submit findings to the Director or Ombudsman.

8. Attorneys:

a. Obtain evidence the attorney’s client is willing to release to you but DO NOT release client information to an attorney without a written client release; and

b. Obtain sworn court testimony or depositions.

9. Quality Control:

a. Understand Quality Control may discover an overpayment or fraud through a quality control investigation;

b. Obtain copies of evidence from the QC Investigator.

10. Child support services:

a. Understand reports of an overpayment(s) or fraud from child support must be accompanied by child support federal policy to support the allegations;

b. Require sworn court testimony to prove the noncustodial parent is/was actually living in the home with the child(ren);

c. Obtain verification child support has been retained or child support was paid directly to the client;

d. Understand child support information may come from the following sources:

(1) Information on the EPICS child support collection review (CSCR) screen;

(2) Collateral contact from a CSA or Clerk of Court;

(3) DFS 544 form or other documentation of retained child support;

(4) Disclosure, either intentional or unintentional, by the client or another member of the assistance unit;

(5) Complaints received from any person or agency which indicate the client has not reported something or has reported false or inaccurate information.

11. External audits or reviews:

a. State or Federal audits or reviews;

b. Quality Control reviews;

c. Management Evaluation or field audits.

12. Internal reviews:

a. Periodic reviews, SNAP recertifications, etc.;

b. Reapplications after a case has closed;

c. Change reports.

13. Desktop audits, peer or third party reviews.

14. Interface alerts on EPICS.

15. PRICE Unit:
Understand the PRICE Unit will redirect a possible overpayment to the DFS-FO for follow-up when PRICE investigation is not warranted.

D-2.2 Types of Overpayments/Fraud

A. Recognize the types of overpayments/fraud reported/discovered include, but are not limited to, the following:

1. Earned income;

2. Unearned income, including retained child support;

3. Self-employment income (see Section 903);

4. Vehicles;

5. Rental property;

6. Jewelry;

7. Bank accounts, stocks, bonds and trust funds;

8. Homes;

9. Other real or personal property;

10. Children out of the assistance unit;

11. Both biological parents in the home;

12. Boyfriend or girlfriend living in the home;

13. Other unreported persons in or out of the assistance unit/household;

14. Fraudulent verification of child care hours;

15. Administrative error;

16. Not eligible on date of the benefit;

17. Assistance unit had a person on strike;

18. Not reporting or underreporting education degree(s) or vocational training, etc., for POWER;

19. Incorrect supportive services expenditures under the work program.

B. Realize Child Care provider referrals usually claim one of the following:

1. The provider is charging DFS for hours the child is not in attendance;

2. The provider is charging the DFS more than it charges private non-DFS clients;

3. The provider is asking the client to sign blank billing statements which have not been completed; or

4. The provider is aware the client is not participating in an approved activity and billed for hours client was not participating.

C. Realize Child Care client referrals usually claim one of the following:

1. The client is not involved in their approved activity (see Section 701) and the child is at the day care;

2. The client is involved in some other form of overpayment/fraud which would make her/him ineligible for any or all benefits, including child care;

3. The client signs a blank billing form which may result in the provider submitting fraudulent billing information.

D-2.3 Verification of Possible Overpayment(s)/Fraud

Understand all reports of possible overpayments and/or fraud must be substantiated, documented, verified or found unsubstantiated.

A. Refer to the DFS-FO responsibilities in Section 2002.

B. Realize PRICE responsibilities are:

1. Accept the referral as outlined in D-2.1;

2. Investigate to determine validity;

3. Refer to the Staff Investigator Supervisor to:

a. Assign the referral; or

b. Send information from the investigation to the DFS-FO to be placed in the client’s file.

D-3 Establishing an Overpayment

Child Care - ARW, Chapt. 1, Purchase of Service

SNAP - 7 CFR 272.1, 273.1, .2, .11, .16, .18; W.S. 42-2-112

POWER - W.S. 42-2-112

D-3.1 Establishing Overpayments for Programs

A. Refer to the DFS-FO responsibilities in Section 2003.

B. Understand PRICE will:

1. Establish a PRICE case record or add the new information to an existing PRICE file;

2. Review the overpayment to:

a. Insure a complete record of documentation and evidence is on file;

b. Determine whether the case merits investigation for possible prosecution.

3. Take collection action as needed if prosecution is not appropriate.

a. Contact the client;

b. Assist the DFS-FO in obtaining a DFS 707;

c. Follow up and monitor for payment.

4. Enter the overpayment information on the PRICE computer system.

D-3.2 Establishing a Recoupment Plan

A. Refer to the DFS-FO responsibilities in Section 2004.

B. Understand PRICE will:

1. Request the DFS-FO to calculate benefits and the amount to be automatically recovered from the benefits;

2. Change the ERROR CAUSE to FR, PF, PM, PA and the PERCENT amount to 20% for SNAP;

3. Request the Benefit Specialist to change the OVCA screen and use the family penalty when applicable for POWER cases; (see Sections 2004 and 2006)

4. Notify the Benefit Specialist of the changes;

5. Request the Benefit Specialist to recalculate and reauthorize.

D-3.3 Case Contents/Submission of Material to PRICE

Realize verified evidence of an overpayment is essential for evaluation as potential fraud, legal action or if collection action is necessary at a later date.

A. Refer to the DFS-FO responsibilities in Section 2005.

B. Understand PRICE will:

1. Review each newly received overpayment referral to:

a. Ensure credit has been given for child support retained by the State;

b. Assure all required documents are attached.

2. Return the overpayment to the DFS-FO manager with an explanation of what is needed if some documents are missing;

3. Maintain a case tracking record for all overpayment referrals;

4. Review the case for:

a. Whether or not the case has been entered on EPICS;

b. Correctness of coding;

c. Whether currently recouping or not recouping;

d. Previous overpayments and prior recoupments; and

e. Whether disqualification or prosecution has been recommended.

5. Take whatever action is necessary, when cost effective, to assure the client pays the debt if the client is not making payments on all programs in which overpayments exist;

6. Open or update an overpayment case record and assure the case record contains:

a. OVCA screen prints for all overpayments on EPICS or copies of the DFS 760 for all overpayments not on EPICS;

b. Copies of all evidence used to substantiate the overpayment;

c. Copies of all decisions for any disqualifications, administrative hearings and legal actions;

d. Case narrative including, but not limited to, what caused the overpayment, how it was discovered and what action was taken;

e. Any additional evidence obtained by PRICE;

f. Records of referrals for disqualification, waivers and disqualification proceedings;

g. Copies of any correspondence with the client;

h. Copies of all DFS 707 forms executed by the client;

i. Copies of any legal documents related to the case;

j. Copies of recordings or transcripts of interviews with the client;

k. Written narrative containing a record of all action taken by PRICE.

7. Follow procedures for maintenance and destruction of PRICE and DFS-FO files to include:

a. Archive DFS-FO files with overpayments with an outstanding balance;

b. Maintain disqualification files in the PRICE office for an indefinite period of time;

c. Maintain PRICE overpayment files with an outstanding balance until paid in full, balance compromised or terminated;

d. Request Archives to destroy DFS-FO files and PRICE files that are at least ten years old since the closure of the case.

e. Require the DFS-FO’s to follow Appendix 6 when preparing DFS-FO cases for submission to PRICE to be archived.

D-3.4 Modification of Overpayments

A. Refer to the DFS-FO responsibilities in Section 2007.

B. Understand PRICE will:

1. Make changes, reversals and deletions as necessary to EPICS overpayment accounts;

2. Make changes on the PRICE computer system to match changes on EPICS;

3. Notify the Benefit Specialist of any change made to an overpayment or to correct claims not supported by EPICS;

4. Request the Benefit Specialist to change POWER cases that are disqualified or convicted of fraud to reflect the family penalty amount (see Section 2006);

5. Post all payments received on EPICS.

D-3.5 Database Maintenance

A. Understand the DFS-FO will request PRICE to make all changes once a claim is authorized including deletions, changes to amounts, coding changes, etc.

B. Understand PRICE will:

1. Comply with federal reporting requirements regarding outstanding overpayments and payments received;

2. Maintain a computerized record of outstanding overpayments, adjustments to overpayments and payments received on the PRICE off-line computer system;

3. NOT make changes to information on EPICS without the consent of the DFS-FO except:

a. Changes to inactive or closed cases;

b. Changes to post payments received;

c. Changes to reverse payments;

d. Deletion of overpayments or termination of collection;

e. Changing the DE code to FR and 10% to 20% as required for SNAP IPV’s;

f. Changing the FP and PP Codes to MA or % as required.

D-3.6 Overpayment/Recovery Notices

A. Refer to DFS-FO responsibilities in Section 2009.

B. Understand PRICE will send the First Notice of Overpayment (M903) when establishing a new medical overpayment claim.

C. Realize EPICS will automatically send the Receipt of Payment (930) notice prior to the fifth day of each month for the payment made in the previous month for all overpayments established on EPICS.

D. Realize EPICS will automatically send the Billing Statement (953) notice prior to the fifth day of each month following a month of nonpayment for all overpayments established on EPICS.

****************************************************************************************************

NOTES:

D-4 Disqualification Process

Child Care - ARW, Chapt. 1, Purchase of Service

SNAP - 7 CFR 273.11, .18; W.S. 42-2-112

POWER - W.S. 42-2-112

A. Acknowledge disqualification is a penalty imposed against an individual(s) who intentionally withheld information, made a false statement or concealed information to gain or maintain benefits s/he was not entitled to receive.

B. Realize a disqualification penalty is a penalty which bars an individual from receiving SNAP and/or POWER and Child Care benefits for a specified period of time.

C. Understand a disqualification penalty may be imposed when an overpayment did not occur but intent to fraud is proven.

D. Recognize all adults in the assistance unit may be disqualified if all individuals are proven to have participated in the action of intent to fraud.

E. Realize more than one violation may be the subject of a single hearing, but only one disqualification penalty may be assigned.

D-4.1 Referral for Disqualification

Understand PRICE staff will review cases referred with error cause “DE” for referral for disqualification hearing or further investigation for possible criminal prosecution.

A. Error Cause “CL”:

1. Review the referral with an error cause of “CL” to determine if the case circumstances meet the fraud criteria:

a. Errors occurred for the same reason for the same assistance unit;

b. A pattern of intent to commit fraud has been established.

2. Contact the DFS-FO supervisor to request the Benefit Specialist change the error cause from “CL” to “DE” when PRICE and the DFS-FO staff agree there is sufficient evidence to believe there was intent to commit fraud;

3. DO NOT refer the case for disqualification until the error cause is changed by the Benefit Specialist or the Benefit Specialist requests the investigator to make the code change on EPICS.

B. Error Cause “DE”:

1. Review the case initially to determine if the case should be referred for disqualification or criminal prosecution;

2. Assure there is clear and convincing evidence which indicates intent to commit fraud;

3. Notify the DFS-FO of the decision by sending a copy of the disqualification hearing notice for cases being referred for disqualification or an electronic mail if the case is being investigated for prosecution;

4. Contact the federal Disqualification Referral System (DRS) to determine if other disqualifications have been imposed against the recipient(s)/assistance unit;

5. Determine the length of the disqualification period to be imposed if the Hearing Officer rules in favor of the state;

6. Include a referral for all adults, all programs and all eligibility factors involved.

D-4.2 Disqualification Hearing

A. Understand the following actions will be taken by the hearing officer:

1. Schedule place, time and date of the hearing if no waiver is signed:

a. Schedule one hearing for all programs involved;

b. Schedule consecutive hearings to be held at the time of the initial hearing if more than one eligibility factor and possible multiple penalties are involved.

2. Notify the client and DFS-FO staff 30 days in advance of the date and time of the hearing(s);

3. Provide a waiver to give the client an opportunity to waive the hearing process;

4. Cancel and reschedule the hearing when necessary.

5. Serve as the hearing officer;

6. Render the decision of the hearing within ten days from the date of the hearing;

7. Send a decision letter for each eligibility factor involved in the hearing.

B. Take the following actions when the hearing officer rules in favor of the agency or a waiver has been signed by the client:

1. Send the hearing decision notice to the client and the DFS-FO;

2. Code the error cause as “FR” on the OVCA screen on EPICS when the disqualification hearing is in favor of the agency or the waiver is signed;

3. Send a copy of the findings to the DFS-FO and recipient which serves as the notice of the decision and includes what actions will be taken;

4. Notify the DFS-FO to:

a. Remove the needs of the individual or impose the appropriate penalty (see Section 2006);

b. Recalculate and authorize the new benefit amount in accordance with the program policy;

c. Send the appropriate notice (see Tables).

C. Take the following actions when the hearing officer rules in favor of the recipient:

1. Send a copy of the findings to the DFS-FO and recipient which provides notice of the decision and includes what actions will be taken;

2. Change the error cause on OVCA to “CL”.

D-4.3 Recalculate the Benefits

A. Refer to DFS-FO responsibilities in Section 2006.

B. Understand PRICE will:

1. Notify DFS-FO when notice of the hearing decision is received;

2. Change the percentage from 10% to 20% when a SNAP case is found guilty of fraud.

D-5 Investigation/Prosecution

Child Care - ARW, Chapt. 1, Purchase of Service

SNAP - 7 CFR 273.11, . 16; W.S. 42-2-112

POWER - W.S. 42-2-112

D-5.1 Investigations

A. Understand the following criteria will be considered when selecting a case for criminal investigation/prosecution and the final determination will be made by the PRICE Unit:

1. The dollar amount is greater than $500 constituting a felony;

2. The evidence must prove beyond a reasonable doubt the intent to fraud the program;

3. The DFS followed the program policy and procedures.

EXAMPLE: A client has retained child support. The child support was paid through the court. The investigation reveals DFS did not have an assignment in place. An overpayment must be established but this would not be a good case for prosecution.

4. The overpayment is likely to be recoverable because assets or income of the client is available;

5. The case must be cost effective to investigate;

B. Understand established overpayments might be selected for further investigation by PRICE when the criteria in A. are met.

1. Refer to the DFS-FO responsibilities in Section 2006.

2. Understand PRICE will:

a. Select cases for prosecution and for further investigation;

b. Notify the DFS-FO within 30 days of assignment of cases selected for or dropped from further investigation/possible prosecution;

c. Complete a case summary and necessary legal documents and submit to supervisor/manager/policy consultants for review;

d. Submit the case to the proper authority;

e. Testify at hearings and trial as required.

D-5.2 Criminal Prosecution

A. Realize some or all of the following actions occur during the process of criminal prosecution:

1. Refer to the DFS-FO responsibilities in Section 2006.

2. Understand PRICE will:

a. Prepare the case and case summary for referral to the appropriate prosecuting attorney to include:

(1) A witness list;

(2) An evidence list;

(3) A summary of the investigation;

(4) Summaries or transcripts of all interviews; and

(5) Statutes and regulations violated.

b. Refer the case to the Supervisor to assure all policy and procedures were applied accurately;

c. Request program staff review the case to assure the policy was applied and the amount of the overpayment calculated correctly prior to referring to the attorney;

d. Refer the case for criminal prosecution by presenting the prepared information to the local county or district attorney;

e. Testify at hearings and trials upon request of the attorney;

f. Complete a presentence investigation letter after receiving a request from Probation and Parole and/or appear and speak at sentencing;

g. Place a copy of the Court Order in the PRICE and DFS-FO case records.

3. Take the following actions when the client is convicted of criminal fraud:

a. Change the error cause on the OVCA screen from “DE” to “PF” for SNAP and “PA” for POWER on all overpayments included in the prosecution;

b. Change the recoupment plan on the OVCA screen to 20% for SNAP overpayments or to MA with the monthly amount ordered by the court;

c. Notify the DFS-FO staff and client of the disqualification penalty;

d. Request the Benefit Specialist to take the appropriate action to assure correct penalties and recoupment amounts are applied and to authorize the case;

e. Send the Notice of Disqualification (see Tables);

f. Monitor the client’s compliance with the restitution plan; and

g. Contact Probation and Parole when the client fails to make a payment for 60 days as the judge may impose a jail sentence or a fine.

4. Take the following action when the client is found not guilty (acquitted):

a. Notify the DFS-FO staff of the not guilty verdict;

b. Change the error cause on the OVCA screen from “DE” to “CL”; and

c. Take action specified in the court order and/or pursue an assistance unit error;

d. Do not refer for disqualification;

e. Pursue for collections of the debt unless during the court process it was proven there was no overpayment.

5. Realize the DFS has the legal authority to file a civil action following a conviction awarding partial or no restitution when the criminal judgment does not order repayment of the overpayment.

D-6 Collection of Overpayments

Child Care - ARW, Chapt. 1, Purchase of Service

SNAP - 7 CFR 273.11, .18; W.S. 42-2-112

POWER - W.S. 42-2-112

D-6.1 Collection Methods/Efforts

A. Refer to the DFS-FO responsibilities in Section 2008.

B. Understand PRICE will:

1. Accept payments made either in person at PRICE or mailed to PRICE;

2. Apply all payments received, from the DFS-FO’s or at PRICE, to the client’s outstanding overpayment balances;

3. Accept payment in the following forms:

a. Cash in accordance with the Code of Federal Regulations which specifies agencies must accept payment in cash when it is offered;

b. Money order or certified check;

c. Personal check unless the client has a history of writing non-sufficient funds checks, PRICE or the DFS-FO can refuse to accept a check;

d. SNAP EBT benefits for SNAP overpayments only;

e. POWER warrants being returned for cancellation or to repay an overpayment when the client was eligible for the payment;

f. Debits from an EBT card.

4. Verify the amount paid and issue a receipt noting:

a. Date; and

b. Name of person paying; and

c. Amount paid; and

d. Check or money order number, if applicable; and

e. The POWER warrant number and amount and/or the total amount of SNAP collected, if applicable; and

f. The EPICS number and head of assistance unit name to which the payment is applied; and

g. Name of the person who issued the receipt.

5. Divide payments among overpayments as follows:

a. As specified in the installment contract;

b. As specified by the payer;

c. Proceed as follows when not specified:

1) Verify the overpayment on EPICS for all programs and insure a concurrent automatic recoupment will not cause an overpayment of the claim;

2) Divide the total amount received by the number of programs involved;

3) Understand amounts will be posted to overpayments coded fraud first when more than one SNAP claim exists;

4) Note the amounts in b. on the DFS 721 form.

D-6.2 Collection Procedures

Realize program rules require all overpayments be pursued for collection.

A. Refer to the DFS-FO responsibilities in Section 2008.

B. Understand PRICE will:

1. Evaluate the collection method to be used on an ongoing basis;

2. Select the appropriate collection method:

a. Negotiate a payment agreement when no DFS 707 is received;

b. Refer cases for civil legal action;

c. File wage garnishments;

d. File asset attachments;

e. File income tax refund intercept;

f. Request the Benefit Specialist to offset underpayments against overpayments;

g. Obtain voluntary wage assignment;

h. Obtain cash payments or lump sum payments;

i. Negotiate voluntary child support offsets.

3. Contact the client by mail or in person;

4. Advise the client legal action will be taken to include civil action and wage garnishment, when appropriate;

5. Notify the DFS-FO when:

a. Decision has been made to investigate for criminal prosecution; and

b. Attempts to collect must be delayed as collection efforts may jeopardize acceptance for criminal prosecution;

c. The case has been referred for prosecution and waiting for judgment; and