Legal Strategies for Fraud Prevention- Recent Wisconsin Administrative Hearing Decisions Sandra Lee Esrael, Wisconsin Attorney Annual NARA Conference Pittsburgh, Pennsylvania September 12-14, 2011 National Association for Regulatory Administration ~consumer protection through prevention~

Program Integrity Wisconsin requires Program Integrity on the part of providers and clients. Wisconsin Shares reimburses only eligible child care programs and not programs that knowingly violate child care policy. Involves both parents and providers

Pre-Assessment Examples of Provider fraud: A.The provider knowingly reported hours of attendance greater than the actual hours of attendance in order to receive a higher payment B.The provider reported the child in attendance at their authorized location when the child was elsewhere C.The provider knowingly neglected to report when a child was no longer in care to continue receiving payment for that child D.Both A and B E.All of the above

Prevention of Overpayment Front End Verification…..Red Flags: 1. Questionable reporting of earned or unearned income including inadequate verification. 2. Contradictory, incomplete or unclear information. 3. History of committing fraud. 4. Questionable reporting of household composition. 5. Questionable approved activities. 6. Close financial or family relationship between parent and provider or employer.

Provider Overpayments 1.The provider recorded incorrect hours of attendance which caused an overpayment. This applies to both enrollment and attendance based authorizations. It is critical that providers report actual hours of attendance, as verified by their sign in/out sheets 2. The worker entered incorrect authorization or provider information or failed to act on reported information resulting in an authorization related overpayment. 3. The provider did not report to the local agency when a child stopped attending day care. 4. The provider was not properly regulated during the hours for which attendance was paid (e.g. license was suspended, had more children in care than the regulation allowed (over capacity), care occurred at a location other than the authorized location, attendance was claimed for hours outside hours of licensure etc.).

Fraud Referral Fraud referrals are issued either by the agency or the Department to the local or state investigator. A fraud referral directs the investigator to conduct an investigation where there is documented information to suspect that a program violation occurred. Identification of inconsistencies or errors is required to refer the case to a fraud investigator for further analysis.

Wis. Stat. §49.155(7)(d) Subsidy Payment Suspension Refusal to Pay Child Care Providers. The department … may refuse to pay a child care provider for child care provided … if any of the following applies to the … provider, employee or person living on the premises …. a) Conviction of a felony of misdemeanor that the department determines substantially relates to care of children. b) The person is subject to a pending criminal charge that substantially relates to care of children. c) The person has been determined under statute to have abused of neglected a child. d) The department reasonably suspects that the person has violated any provision under the child welfare program or any rule promulgated under this section.* – The welfare program rules include rules similar to licensing rules requiring maintenance of accurate daily attendance records.

Appeal Process Clients who believe that an agency decision regarding any component of Child Care is incorrect may request a fair hearing through the Division of Hearings and Appeals within certain number of days of the agency’s decision. Providers who believe that an agency decision relating to a child care authorization, payment or overpayment is incorrect may request a fair hearing through the Division of Hearings and Appeals. For active providers, the agency will continue to recover the overpayment during the appeal process by reducing issuance by 50%. Payments to providers may not be paid for post suspension care if reasonable suspicion is proved at a hearing. Payment Reconciliation Process: Provider’s overpayment will be offset against pre-suspension payments.

Overpayment Recovery Client overpayment – repayment agreement Provider overpayment: 1. If the provider is active and has a current authorization that they are receiving payment for, the agency will deduct a percentage of the provider’s future payments until the negative adjustment has been satisfied. 2. If the provider is not active and/or is not receiving payments, the negative adjustment will be referred to the benefit recovery (BV) system in CARES and the repayment agreement process will begin.

Agency determines reasonable suspicion Possible issues include suspicious attendance reports, no access or refusal to submit requested documents Payment is suspended, authorizations are suspended when a provider’s license has been suspended, revoked, or denied. If provider believes that the agency decision is incorrect, the provider may request a hearing through the Division of Hearings and Appeals within 30 days Legal decision made regarding eligibility of provider to receive WI Shares subsidy and whether or not fraud has occurred. Intentional Program Violation – Appeal Process

Licensing Actions Support Fraud Cases Licensors review many records when tracking inaccurate attendance and food program violations. That documentary evidence may support fraud cases. Graph hours children are in care based on the on-site attendance records, records submitted to the subsidy program and food program records to show inaccurate/inconsistent reporting. Check convictions for food stamp violation, child support, state health care system violations. These convictions substantially relate to provider ability to maintain accurate records.

5 Types of Evidence Testimonial-Statements Real-Physical Object Documentary-Paper Trail Demonstrative-Charts, Maps, Diagrams Judicially-Noted-law 12

On-site AttendanceFood Subsidy Program Subsidy Program Attendance Record Actual hours of attendance shown by Sign in/Sign Out sheets Meals served: Breakfast, am snack, lunch, pm snack, dinner, evening snack. (Establish times that are meals served.) Hours of attendance submitted to subsidy program. Provider License and Subsidy Applications. Verification clauses assert all information submitted is truthful and accurate Provider verifies that information is accurate by signing subsidy application.

Best wishes in your pursuit of health, safety and welfare for people in care through effective enforcement actions. Sandra Lee Esrael, Attorney NARA Trainer/Consultant Madison, Wisconsin National Association for Regulatory Administration ~consumer protection through prevention~