Purpose: This chapter is about fraud or unlawful practices in obtaining cash or medical assistance, food assistance intentional program violations and administrative disqualification hearings.
Intentional program violation (IPV) and disqualification hearings for Basic Food
WAC 388-446-0001
WAC 388-446-0001
Effective January 1, 2005
WAC 388-446-0001 Cash and medical assistance fraud
All cash or medical assistance cases in which substantial evidence is found supporting a finding of fraud are referred to the county prosecuting attorney. The prosecuting attorney's office determines which cases are subject to criminal prosecution.
An applicant or recipient is suspected of committing fraud if intentional misstatement or failure to reveal information affecting eligibility results in an overpayment.
The FRAUD chapteris very closely related to the BENEFIT ERRORS and the FAIR HEARINGS chapters. An overpayment of benefits precedes a referral to the court system or to an Administrative Disqualification Hearing for a determination of fraud. The process begins when the department becomes aware of facts that indicate an overpayment has occurred as a result of a client's intent to conceal or misrepresent facts to the department.
Discovery of possible fraudulent or unlawful practices may result from complaints or information received by the local Community Services Office (CSO) in a variety of ways:
Direct calls to the CSO;
Welfare Fraud Hot Line Complaint (1-800-562-6906);
Client change of circumstance report;
Verification and Overpayment Control System (VOCS) Complaint;
ESD Quarterly Earnings Alert or Comparison Report;
Fraud Early Detection Program (FRED) investigations.
FRED investigations may be requested for active cases to establish ongoing eligibility.
A Quality Assurance Review (QA).
The Financial Service Specialist (FSS) can establish an Intentional overpayment if the client received incorrect cash benefits and there is evidence in the case record showing intent. Intent means that the client knows what facts or changes to report, when to report those changes, had the opportunity to report, and chose not to report. Intent also implies that the client didn't report a change or a fact because they knew that reporting it would probably have a negative effect on their benefits.
After establishing an intentional cash overpayment, the case is referred to the Division of Fraud Investigation (DFI) for possible prosecution. The client has the right to a Fair Hearing over the establishment of the overpayment and the intentional designation. See BENEFIT ERRORS and FAIR HEARINGS.
When the overpayment involves food assistance, federal law states that only a court of law or an Administrative Disqualification Hearing can determine an Intentional Program Violation (IPV). The FSS establishes an unintentional overpayment, called Inadvertent Error, and refers, with any cash overpayment, to DFI for prosecution.
If the food assistance overpayment, or separate instances of suspected IVP total $450.00, the FSS proceeds with an Administrative Disqualification Hearing, according to CSO policy. See FAIR HEARINGS.
The Fraud Early Detection program (FRED) is under the direction of the Division of Fraud Investigation and provides criminal investigators when activities are required that go beyond the scope of the Financial Service Specialist's authority. The purpose of FRED is to:
Provide a cost effective measure for reduction of errors;
Save benefit funds for families requiring assistance;
Reduce investigation and prosecution of recipients by resolving questionable circumstances prior to the authorization of benefits.
FRED investigators assist the department in the following ways:
Obtain information requested by the FSS;
Use interviews with clients and third parties (called collateral contacts) to resolve questions or inconsistencies;
Report findings to the FSS;
Make recommendations regarding criminal prosecution;
Participate in Fair Hearings, if necessary.
WORKER RESPONSIBILITIES
The investigation of information for possible overpayment has priorities as follows:
First Priority: Current or future eligibility or payment/Active cash or food assistance cases
Second Priority: Past overpayment of benefits/Active cash or food assistance cases
Third Priority: Closed cash/food assistance cases
Last Priority: Medical only assistance case
Use the VOCS process when investigating complaints that typically fall under the authority of an FSS. The purpose of VOCS is to:
Identify error trends and procedural changes or training needed to prevent error;
Have a set procedure for the processing of complaints and overpayments alleging Welfare Fraud;
Record the resolution and disposition of complaints.
Initiate a VOCS referral using ACES Letter 065-05 when:
Information received indicates either program ineligibility or benefit payment error; and
It appears to be the result of deliberate client error.
Route a copy of a VOCS referral to the VOCS clerk for entry into the record keeping system.
Processing a VOCS Referral
The responsibilities for VOCS processing may be the work duty of:
A designated VOCS worker within a CSO; or
An FSS, for VOCS complaints which fall within their assigned work load.
Screen VOCS referrals received from others and route the complaint to other divisions or locations as indicated:
Abuse or neglect of children to Division of Children and Family Services (DCFS);
Abuse, neglect or misuse of monies of adults to Home and Community Services (HCS) or Adult Protective Service (APS) hotline number: 1-800-422-3263;
Mistreatment of nursing home clients or misuse of their funds to APS, Residential Care Services, Complaint Resolution Unit (CRU) at hotline number: 1-800-562-6078.
Misuse of funds by medical providers to Division of Provider Services (DPS) or to the Medicaid Fraud Control Unit, Phone number: (253) 593-2154;
Contractor or vendor complaints to Central Contract Services;
Complaints alleging fraudulent receipt of SSI benefits to the Social Security Administration.
When resolving a VOCS complaint, request information and verification first from the client. The client is the primary contact person for information.
A signed Application or Eligibility Review gives DSHS permissio n to contact a third party for verification of information necessary to establish eligibility. If the client is unwilling or unable to provide verification, request the information/verification directly from the collateral contact.
Request assistance from FRED in situations outlined below under FRED.
See: LETTERS for the ACES letters with specific forms attached.
All communication with the client and collateral contacts;
Copies of the overpayment calculations and letters;
Originals or copies of documents to support the intent allegation;
The DFI referral.
The summary sheet of all action taken (065-06 and VOCS response (065-11).
Retain the VOCS file for one year after the action is completed. Flag the file if the case is under consideration for prosecution to make sure that the record is not purged in error. Before purging, return all original documents to the financial case record, except those for which confidentiality is an issue. Destroy those documents in the purge.
Retain the VOCS file beyond one year when other, similar complaints are under investigation. Overpayments can be combined to demonstrate intent for prosecution.
Assistance from Fraud Early Detection Program (FRED)
Initiate a FRED referral using ACES Letter 065-03 when:
A collateral contact does not respond with requested information;
The information received from the client or contact raises inconsistencies, or is unclear, unconvincing, or questionable;
Verification documents can not be obtained through normal methods available to an FSS;
According to CSO policy on initial applications;
The application interview raises questions or concerns about the reported facts.
Some examples of situations where a FRED referral is in order:
The client's household expenses are within $25.00 of the income available, and shelter and utilities are paid up to date;
The physical record indicates previous ownership of real property, but the client states no ownership on a new application. The client does not provide adequate or convincing verification on the status of the property.
Numerous complaints have been received of a client having multiple vehicles on the property and it appears that the client is restoring and selling the vehicles. The client denies any such thing and states that the cars are there temporarily and belong to a relative.
Client reports living alone and the landlord statement reflects the same information; but a complaint received shows others are in the home and supporting the client.
Client has a history of working for cash and not reporting. There is currently no source of income being reported for the household and the client does not have a reasonable explanation of how expenses are being met.
Client states that the non-custodial parent (NCP) has left the home but cannot say where the NCP is located. The landlord states that to his knowledge, both parents reside in the home. The client states that the NCP only comes to visit the children.
Dispose of a FRED response as follows:
If the referral contains facts which adversely affect current or future eligibility or payment, follow procedures found in CHANGE OF CIRCUMSTANCES;
If an overpayment is identified, follow procedures in BENEFIT ERRORS;
Complete the return response to FRED, indicating the action taken.
Referral to the Division of Fraud Investigation(DFI)
An intentional cash assistance overpayment has been identified and processed;
A food assistance overpayment has been completed which appears to be intentional;
Documents in the case record appear to give clear evidence of the client's willful concealment of information or intentional failure to reveal information, which caused the overpayment.
List the documents in the case file that demonstrate intent on the DFI referral form (065-07). Documents to examine for that time period include:
Rights and Responsibilities signed by client;
Application showing facts omitted or false information declared;
Eligibility Review reflecting circumstances found later to be untrue;
Six-Month report completed and signed but does not report the change;
Change of Circumstance reporting one change but not another.
Any other document presented by the client or a collateral contact which demonstrates the intent of the client to give misleading or incorrect information in order to receive benefits.
Create alert 450 for a 60-day response from DFI. If no response is received, request a response date. DFI will respond with their decision on forwarding the case for prosecution and instructions to the worker on whether to proceed with the Food Assistance Disqualification Hearing.
Follow the CSO policy regarding the preparation of cases for prosecution. In some CSOs, the FSS is responsible for the copying of documents to be used in the prosecution's case.
WAC 388-446-0015 Intentional program violation (IPV) and disqualification hearings for Basic Food
An intentional program violation (IPV) is defined as an act in which a person intentionally:
Makes a false or misleading statement;
Misrepresents, conceals or withholds facts; or
Acts in violation of the Food Stamp Act, the Food Stamp Program regulations, or any state statute relating to the use, presentation, transfer, acquisition, receipt, trafficking, or possession of food benefits.
Basic Food clients suspected of committing an (IPV) are subject to referral for an administrative disqualification hearing, if:
The suspected IPV causes an over-issuance of four hundred fifty dollars or more; or
The suspected IPV is due to the trafficking of food benefits; and
The person has not been referred for criminal proceedings; and
The person resides in Washington state, at the time of the referral; or
The person resides outside Washington state, but is within one hour's reasonable drive to a CSO.
An administrative disqualification hearing (ADH) is a formal hearing to determine if a person committed an IPV. ADHs are governed by the rules found in chapter 388-02 WAC. However, rules in this section are the overriding authority if there is a conflict.
A client who commits one or more IPVs and is suspected of committing another, is referred for an ADH when the act of suspected violation occurred:
After the department mailed the disqualification notice to the client for the most recent IPV; or
After criminal proceedings for the most recent IPV are concluded.
A person suspected of IPV is entitled to receive notice of an ADH at least thirty days in advance of the hearing date. The notice is sent by certified mail, or provided to the client by personal service and will contain the following:
The date, time, and place of the hearing;
The charges against the individual;
A summary of the evidence, and how and where the evidence can be examined;
A warning that a decision will be based solely on evidence provided by the department, if the individual fails to appear at the hearing;
A statement that the individual has ten days from the date of the scheduled hearing to show good cause for failure to appear at the hearing and to request rescheduling;
A warning that a determination of IPV will result in a disqualification period; and
A statement that if a telephone hearing is scheduled, the individual can request an in-person hearing by filing a request with the administrative law judge one week or more prior to the date of the hearing.
The person or a representative shall have the right to one continuance of up to thirty days if a request is filed ten days or more prior to the hearing date.
The hearing will be conducted and a decision rendered even if the person or representative fail to appear, unless within ten days from the date of the scheduled hearing:
The person can show good cause for failing to appear; and
The person or representative requests the hearing be re-instated.
A scheduled telephone hearing may be changed to an in-person hearing if requested one week or more in advance. If requested less than one week in advance the person must show good cause for the requested change.
The ALJ issues a final decision as specified in WAC 388-02-0215(5) and WAC 388-02-0527. The decision determines whether the department establishes with clear and convincing evidence that the person committed and intended to commit an IPV.
The department and the client each have the right to request a reconsideration of the decision as specified in WAC 388-02-0610 through WAC 388-02-0635. The final order or the reconsideration decision is the final agency decision.
A client's disqualification is not implemented and benefits continue at the current amount when:
The client can show good cause for not attending the hearing within thirty days from the date the disqualification notice was mailed; and
An administrative law judge determines the client had good cause; or
The client requests reconsideration or files a petition for judicial review to appeal the disqualification as specified in WAC 388-02-0530 (1) or (4).
An administrative disqualification hearing and a regular hearing can be combined when the cause for both hearings is related.
Separate Instances of suspected Intentional Program Violation (IPV) of the Food Assistance program can be combined into one complaint that totals $450.00 or more and can then be taken to an Administrative Disqualification Hearing (ADH). (See FAIR HEARINGSfor ADH Worker Responsibilities)
Trafficking means the trade of food benefits for cash or other non-eligible food items or services, controlled substances, or weapons.
The department must prove the IPV with clear and convincing evidence. This means that the evidence must establish that it is highly probable the actions that resulted in the overpayment were intentional.
An IPV can be determined either by a court decision in a criminal prosecution or by decision in an ADH.
The department must decide whether to refer an IPV instance for prosecution or for an ADH; both procedures shall not be pursued at the same time. Upon completion of an ADH, the department may choose to then refer the case for prosecution.
The Disqualified Recipient System (DRS) is a nationwide exchange of information between the Federal government and the States regarding IPV decisions. DRS interfaces with ACES on a monthly basis and notifies the worker of record of a discrepancy using a two tiered alert.
The second tier displays the disqualification details including:
The effective date;
The length;
The type;
A five-digit code. The first two digits represent the state; and the last three represent, the county.
WORKER RESPONSIBILITIES
A 10-day advance notice must be given to any client who is being disqualified from food assistance.
Timely Disqualifications
For an ADH decision, disqualify the person who has committed the IPV effective the first of the month following the date the person and the department are notified in writing of the ADH decision.
For a court decision, a timely disqualification is within 45 days of the date of the written order unless the court specifically sets a different time frame.
If a disqualification is not processed timely, disqualify the person for the remaining time of the penalty period. Do not disqualify a person once the disqualification period that should have been applied has expired. Establish an Administrative Error overpayment for the time period from the first day of the intended month of disqualification until the effective date of action.
EXAMPLE
A recipient of Basic Food has been disqualified by written order of the court dated January 20, 2000. The disqualification must be established by March 1, 2000 to be timely. The decision was delayed in the mail and not received by the department until February 28, 2000. Because of the ten day advance notice rule, the disqualification cannot be implemented until April 1, 2000. There is a one-month administrative overpayment for the month of March. The penalty time is from March 1, 2000 to February 28, 2001.
Once the disqualification period has been implemented, it continues uninterrupted regardless of the eligibility of the assistance unit.
