9520. Overpayment and Underpayment Identification and Recovery

  1. Purpose and Scope
    1. These procedures establish guidelines for CA staff in the resolution of vendor or foster parent disputes regarding payments through an administrative hearing and pre-hearing process. It provides direction when staff determines that an overpayment to a vendor or foster parent exists, for staff participation in steps to recover the overpayment, and for staff participation in the settlement of any overpayment disputes. The procedures also provide direction for pre-hearing efforts to mediate and resolve payment disputes prior to proceeding to hearing.
    2. Contracted and non-contracted service providers, including foster parents, may seek dispute resolution through these procedures, under the Administrative Procedure Act and RCW 43.20B.675, with respect to overpayments. However, the following limitations apply:
      1. The right of vendors or foster parents to seek an administrative hearing to contest alleged overpayments applies only to overpayments for goods or services provided on or after July 1, 1998.
      2. These procedures do not create a right to a hearing where no dispute right previously existed except as provided in RCW 43.20B.675. These procedures and department policy limit disputes for foster family and child day care providers to:
        1. Alleged overpayments;
        2. Perceived failure of the department to pay for services actually provided under an agency service authorization; and
        3. Licensing actions taken under WAC 388-73-036 or WAC 388-155-090, as applicable.
      3. Adoptive parents who receive assistance through the Adoption Support Program are not vendors within the meaning of the law. They have hearing rights under other provisions of law and WAC. Accordingly, payment disputes involving the Adoption Support Program do not fall within the scope of these procedures.
    3. Discovery or recovery of overpayments has no time limit. The department may identify and initiate recovery of overpayments without regard to the length of time that may have elapsed since the overpayment actually occurred or was discovered.
    4. CA employees do not have authority to forgive or waive overpayments, nor to offset overpayments from future payments. All such authority rests with the Office of Financial Recovery (OFR). Designated CA staff may mediate a disputed payment with the vendor, but final approval for any negotiated proposed settlement rests with OFR.
    5. Governmental entities, including Indian Tribes, with an Inter-local Agreement with the department do not have the right to an adjudicative hearing through the Office of Administrative Hearings (OAH). The dispute process described in the agreement between the entity and the department governs the resolution process.
  2. Policy
    1. RCW 43.20B.675 and DSHS Administrative Policy 10.02 provide that all vendors have the right to request an adjudicative proceeding if they have a bona fide dispute. Disputes involving rates set in rule or Washington Administrative Code (WAC) are not subject to resolution through an adjudicative hearing held by OAH. The responsible CA organizational unit must routinely offer a pre-hearing conference to all clients and vendors that request an administrative hearing.
    2. The department and CA must, when undertaking activities relating to overpayment identification and recovery as well as adjudicative proceedings, comply with:
      1. DSHS Administrative Policy 7.02, Equal Access to Services for Individuals with Disabilities;
      2. DSHS Administrative Policy 7.20, Communication Access for Persons Who Are Deaf, Deaf/Blind, and Hard of Hearing; and
      3. DSHS Administrative Policy 7.21, Provision of Services to Limited English Proficient (LEP) Clients
  3. Procedures
    1. Regional and Headquarters Procedures:
      1. Each DCFS Regional Administrator, DLR Regional Manager, or division Director, as applicable, must establish procedures to provide for consistency in the handling of vendor/contractor disputes in accordance with the Children's Administration Pre-hearing Procedures. Procedures must include:
        1. Methods to informally notify vendors of their right to request a formal adjudicative proceeding if they have a bona fide contract dispute and to provide all appellants with a copy of the CA written pre-hearing process. (OFR provides formal notification of overpayments.) The department limits adjudicative disputes for foster parents to those issues identified in paragraph 1.B., above;
        2. Pre-hearing/alternative dispute resolution that incorporates routine offers of a pre-hearing conference to all clients or vendors who have requested an administrative hearing;
        3. Identification of overpayments and steps to initiate recovery of amounts due to the department as a result of overpayments;
        4. Designation of staff to represent CA in behalf of the department in pre-hearing/alternative dispute resolution and administrative hearings for disputes resulting from activities or actions of the applicable organizational unit;
        5. Identification of staff to mediate overpayment and other disputes prior to a formal administrative hearing;
        6. A system to identify overpayments in a timely manner;
        7. A method to document that an overpayment has occurred;
        8. A method to notify the vendor/provider that an overpayment has occurred and to determine the vendor's agreement or disagreement with that determination; and
        9. Identification of staff assigned to review overpayments and to refer them to OFR for collection.
      2. CA expects disputes to be resolved at the lowest possible level in the organization. Therefore, CA staff will handle disputes at the following organizational levels:
        1. The DCFS Regional Administrator is responsible for the dispute resolution process for all payments authorized by local office social workers and all payments authorized under regionally managed contracts and service agreements. Regional DCFS staff will coordinate pre-hearing conferences, mediation activities, and administrative hearings for regionally-managed contracts.
        2. Assigned CA Division of Program and Policy Development or Office of Foster Care Licensing (OFCL) headquarters staff, as applicable, will handle pre-hearing conferences, mediation activities, and administrative hearings arising from headquarters-managed contracts and service agreements.
    2. Determination of Existence of an Overpayment and Documentation of Referral
      1. If any CA employee has reason to believe that the department has overpaid a contractor or vendor, that employee must contact the employee who authorized the payment and the authorizing employee's supervisor by written memo or e-mail.
        1. The CA employee identifying the overpayment must inform the authorizing employee and that employee's supervisor that the employee has reason to believe an overpayment has occurred and must provide the information that led the employee to that conclusion.
        2. If the authorizing employee identifies an overpayment, that employee must inform and provide supporting information to the supervisor.
      2. The authorizing employee, or other employee designated in DCFS or DLR regional procedures or CA headquarters procedures must contact the vendor/provider directly to inform the vendor/provider of the identified overpayment and the reason the payment constitutes an overpayment.
        1. This contact provides the CA employee and the vendor/provider an opportunity to identify any errors in the conclusion that an overpayment occurred and to enable the CA employee to discontinue overpayment procedures if CA incorrectly identified an overpayment.
          1. This contact serves as an opportunity for CA to educate the vendor/provider in correct methods to complete invoices in order to prevent overpayments from recurring.
          2. In addition, the CA employee can support the vendor/provider in continuing to offer services to CA and its clients.
        2. If the vendor/provider is a foster parent who disagrees with CA determination of an overpayment, the CA employee informs the foster parent of the foster parent liaison program and provides the contact telephone number for the CA office's liaison.
        3. If the CA employee, after contact with the vendor/ provider, continues to believe that an overpayment occurred, the authorizing worker or other employee designated by regional procedures informs the vendor/ provider that the employee will notify OFR of the overpayment. OFR will send an official notice of overpayment to the provider/vendor. This notice will include instructions for the vendor/provider to return the overpaid funds to the department and information on steps to dispute the overpayment.
      3. The employee who originally authorized the payment gathers written documentation of the overpayment. This may include gathering payment records through the SPAYMENT procedure in FamLink.
      4. The authorizing employee refers to the regional designee any overpayments, with supporting documentation. This information will include documentation of the vendor/ provider's agreement or disagreement with the determination of overpayment. The regional designee reviews the referral information to ensure that supporting documentation adequately supports the conclusion that an overpayment in the amount stated did occur.
    3. Referral to the Office of Financial Recovery
      1. The applicable CA designee sends the completed SSPS Overpayment Notice, DSHS 18-398A, (dated 7/1998) along with the documentation of the overpayment, to OFR.
      2. OFR then issues formal notice of the overpayment by certified mail to, and tracks responses from, the vendor/provider. If the vendor/provider wants to formally dispute the overpayment, the vendor/provider must respond to OFR within 28 days of the notice of overpayment.
      3. If the vendor/provider does not dispute the overpayment, OFR establishes a schedule for repayment with the vendor/provider. In accordance with RCW 43.20B.695, interest will not accrue when the overpayment results from department error.
    4. Disputed Department Actions
      1. OAH schedules a hearing when a vendor/provider requests a hearing. After a vendor/provider requests a hearing, the CA authorized staff person offers a pre-hearing conference. The pre-hearing conference may be a telephone call, a meeting, or a mediation session with a third party mediator.
      2. The responsible CA organizational unit must identify individuals authorized to mediate a disagreement between the department and the vendor/provider. Those persons designated to refer overpayments to OFR for collection may not serve in the role of mediator for overpayment disputes.
      3. If the CA authorized staff and the vendor/provider reach a settlement, the CA representative and the vendor/provider may execute a stipulated agreement in writing, signed by the parties. If the parties do not resolve the dispute, the formal hearing with OAH takes place as scheduled.
      4. For overpayments:
        1. If the vendor/contractor and the CA representative reach an agreement, before signing the agreement, the CA representative must contact OFR at (360) 664-5557 to obtain verbal approval for the stipulated agreement if it forgives an identified overpayment.
        2. If the OFR representative approves the agreement, the CA representative and the vendor/contractor representative sign the agreement, and the CA representative mails it to the OFR representative for signature. Once the OFR representative signs the agreement, it takes effect.
        3. If the administrative hearing occurs, the CA employee who authorized the payment must participate in the administrative hearing. Regional or headquarters procedures, as applicable, determine if additional individuals will participate in the administrative hearing to represent the department.