RELATES TO: KRS 13B, 23A.010, 45.237-45.241, 194A.060, 45
C.F.R. 98,
205.50,
42
U.S.C. 601-619,
9857-9858q
NECESSITY, FUNCTION, and CONFORMITY:
KRS
194A.050(1) requires the
Secretary of the Cabinet for Health and Family Services to promulgate
administrative regulations necessary to operate programs and fulfill the
responsibilities vested in the cabinet, qualify for the receipt of federal
funds, and cooperate with other state and federal agencies for the proper
administration of the cabinet and its programs.
KRS
199.8994 requires the cabinet to administer
all child care funds to the extent allowable under federal law or regulation
and in a manner which is in the best interest of the clients to be served.
45 C.F.R.
98.60(i) and
KRS
45.237(4) require the
cabinet, as the lead agency for Kentucky, to recover child care payments that
are the result of fraud or improper payment. This administrative regulation
establishes procedures for improper payments, claims, and penalties used by the
cabinet in the administration of the Child Care Assistance Program
(CCAP).
Section 1. Definitions.
(1) "Agency error" means an error on the part
of the cabinet or its de-signee.
(2) "Cabinet" means the Cabinet for Health
and Family Services or its designee.
(3) "Child Care Assistance Program" or "CCAP"
means Kentucky's child care subsidy program providing families, who meet the
eligibility requirements of 922 KAR
2:160, with the financial resources to find
and afford quality child care.
(4)
"Child care provider" means the individual, business, or business proprietor
who is receiving, or has received, payment for child care services under
CCAP.
(5) "Claim" means an amount
owed to the cabinet as a result of an overpayment of CCAP.
(6) "Claimant" means a current or former CCAP
recipient or child care provider subject to a claim.
(7) "Compromise a claim" means accepting less
than the full value of a claim.
(8)
"Hearing officer" is defined by
KRS
13B.010(7).
(9) "Improper payment" is defined by
KRS
45.237(1)(f) or
45 C.F.R.
98.100(d).
(10) "Inadvertent error claim" means an
overpayment resulting from a misunderstanding or unintended error on the part
of a recipient or a child care provider.
(11) "Intentional program violation" or "IPV"
means a CCAP recipient or child care provider having intentionally:
(a) Made a false or misleading statement;
or
(b) Misrepresented, concealed,
or withheld facts.
(12)
"Overpayment" means a CCAP payment which exceeded the amount a CCAP recipient
or a child care provider was eligible to receive.
(13) "Recipient" means a family who has been
found eligible for CCAP.
(14)
"Terminate a claim" means ceasing all collection actions on a claim.
(15) "Underpayment" means a payment which was
less than the amount a recipient or a child care provider was eligible to
receive.
Section 2.
Responsibility for a Claim.
(1) A parent of a
recipient household or a child care provider shall be responsible for paying a
claim which resulted from an:
(a) Overpayment
due to an action or inaction on the part of the recipient or the child care
provider, including failure to report a change in circumstance in accordance
with 922 KAR
2:160, Section 11; or
(b) Agency error that provided the recipient
or the child care provider with an overpayment.
(2) The cabinet shall make an exception to subsection
1(b) of this section if the recipient:
(a) Is
approved for CCAP in accordance with 922 KAR
2:160, Section 5 or 6;
and
(b) Complied with the
requirements of the recipient's:
1. Case plan
developed in accordance with 922 KAR
1:430; or
2. Kentucky Works Program self-sufficiency
plan developed in accordance with
921
KAR 2:370.
Section 3. Claim Category.
(1) A claim shall be classified in one (1) of
the following three (3) categories:
(a) A
claim resulting from an IPV;
(b)
Inadvertent error claim; or
(c)
Agency error claim.
(2)
The cabinet shall establish an IPV against a recipient or a child care provider
if:
(a) A court of appropriate jurisdiction
issues a conviction, or accepts an Alford or guilty plea, related to an IPV in
CCAP against a parent of the recipient household or the child care
provider;
(b) A parent of the
recipient household or a child care provider completes, signs, and returns the:
1. DCC-84 Supplement A, Voluntary Waiver of
Administrative Disqualification Hearing, 02/16; or
2. DCC-83, Deferred Adjudication
Disqualification Consent Agreement, 02/16; or
(c) A hearing officer or an agency head makes
a determination finding an IPV as a result of an administrative
disqualification hearing.
Section 4. Action on an Improper Payment.
(1) The cabinet shall investigate each:
(a) Instance of an improper payment;
or
(b) Allegation of an IPV related
to a:
1. Recipient; or
2. Child care provider.
(2) The cabinet shall initiate
action to correct an improper payment in a CCAP case.
(3) If an overpayment has occurred, the
cabinet shall:
(a) Determine the amount of
overpayment in accordance with Section 5 of this administrative regulation;
and
(b) Categorize and establish a
claim to recover the amount of the overpayment.
(4) If the cabinet has sufficient documentary
evidence to confirm that a recipient or child care provider has committed an
IPV, the cabinet shall:
(a)
1. Refer the case to the cabinet's Office of
Inspector General (OIG) for investigation or referral for prosecution if
warranted by the facts of the case;
2. Initiate an administrative
disqualification hearing in accordance with Section 9 of this administrative
regulation; or
3. Accept a parent
of a recipient household or a child care provider's waiver of an administrative
disqualification hearing through the parent or child care provider's
completing, signing, and returning a DCC-84 Supplement A as specified in
Section 3(2)(b) of this administrative regulation; and
(b) Take an action necessary to establish a
claim to collect any overpayment resulting from the suspected IPV.
Section 5. Calculating
a Claim.
(1) The cabinet shall calculate the
amount of an overpayment for an:
(a) Agency
error back to the month that the error first occurred, but not more than twelve
(12) months prior to the date that the cabinet became aware of the
overpayment;
(b) Inadvertent error
back to the month that the misunderstanding or error first occurred, but not
more than three (3) years prior to date that the cabinet became aware of the
overpayment; and
(c) IPV back to
the month of the fraudulent act first occurred, but not more than five (5)
years prior to the date that the cabinet became aware of the
overpayment.
(2) If an
overpayment occurred as a result of a change during the period of CCAP
eligibility, the first day of the claim shall begin thirty-one (31) days from
the date of the change.
(3) If the
overpayment occurred due to the failure of a parent of a recipient household to
report information at application or recertification for eligibility in
accordance with 922 KAR
2:160, Section 2 or 8, the claim shall start the first
day of the approval of the application or recertification.
(4)
(a) The
cabinet shall:
1. Calculate the amount of
CCAP for each month that a recipient or a child care provider received the
improper payment; and
2. Subtract
the correct amount of CCAP from the CCAP actually received.
(b) The difference shall be the
amount of the overpayment.
(5) If the overpayment exists for the entire
period of CCAP eligibility, the cabinet shall calculate the full amount of
benefits overpaid:
(a) On behalf of the
recipient; or
(b) To the child care
provider.
(6) If an
overpayment and an underpayment exist for a recipient or a child care provider,
the amounts of the overpayment and the underpayment shall be offset to
determine the total amount of the claim.
(7) The amount of a claim may differ from a
calculation obtained through the methods outlined in this section if a
different claim amount is ordered by:
(a) An
administrative hearing officer or agency head in accordance with:
1. Until April 1, 2017, 922 KAR
1:320;
or
2. Effective April 1, 2017, 922
KAR
2:260; or
(b) A
court of appropriate jurisdiction.
Section 6. General Claim Notices.
(1) A KCD-2, General Claims Notice, 02/16,
shall serve many purposes in the administration of CCAP claims collections,
including the use as:
(a) An appointment
letter;
(b) A demand
letter;
(c) A notification of
benefit reduction;
(d) A past due
notice;
(e) A repayment
agreement;
(f) A claim adjustment
notice;
(g) A claim termination
notice;
(h) A payment
receipt;
(i) Notice of a claim
being paid in full; or
(j) Notice
of a delinquent claim's referral for collection in accordance with Section
11(2) of this administrative regulation.
(2) The language on the KCD-2 shall differ
according to the purpose of the notice as described in subsection (1) of this
section.
Section 7.
Notification of a Claim.
(1) The cabinet
shall:
(a) Provide initial notice in
accordance with Section 6 of this administrative regulation to a recipient or a
child care provider suspected of having a claim;
(b) Provide notice of a suspected IPV, if
applicable, with a:
1. DCC-84, Notice of
Suspected Intentional Program Violation, 02/16; and
2. DCC-84 Supplement A, 02/16; and
(c) Offer the recipient or the
child care provider an opportunity to meet with the cabinet to:
1. Discuss the potential claim;
2. Determine the category of the claim as
specified in Section 3 of this administrative regulation; and
3. Sign the DCC-84 Supplement A, if an IPV is
suspected.
(2) If a recipient or a child care provider
requests to reschedule the meeting within ten (10) days of the date of the
notice provided in accordance with subsection (1) of this section, the cabinet
shall reschedule the meeting.
(3)
The cabinet shall determine the claim's category in accordance with Section 3
of this administrative regulation and the amount of the claim based on the
information available to the cabinet if the recipient or the child care
provider:
(a) Fails to attend the meeting to
discuss the claim; and
(b) Does not
contact the cabinet to reschedule the meeting in accordance with subsection (2)
of this section.
(4) If
the cabinet determines the category and amount of a claim in accordance with
subsections (1) through (3) of this section:
(a) Collection shall be initiated in
accordance with Section 10 of this administrative regulation; and
(b) Subsequent notice pursuant to Section 6
of this administrative regulation shall be mailed to the recipient or the child
care provider to give the claim:
1.
Amount;
2. Time period;
3. Reason; and
4. Classification in accordance with Section
3 of this administrative regulation.
(5) A recipient or a child care provider
shall return the notice made pursuant to subsection (4)(b) of this section
within ten (10) days of receipt if the recipient or child care provider chooses
to request an administrative hearing on the establishment of the claim in
accordance with this administrative regulation.
Section 8. Disqualification Period.
(1) A recipient or a child care provider
determined to have committed an IPV in accordance with Section 3(2) of this
administration regulation shall have a period of disqualification from CCAP
pursuant to subsection (2) of this section.
(2)
(a) A
disqualification period from CCAP shall adhere to the following guidelines:
1. Twelve (12) months disqualification for a
first occurrence of IPV;
2.
Twenty-four (24) months disqualification for a second occurrence of IPV;
and
3. Permanent disqualification
for a third occurrence of IPV.
(b) The cabinet shall make an exception to
paragraph (a) of this subsection if:
1. The
recipient is approved for CCAP in accordance with 922 KAR
2:160, Section 5 or
6; and
2. CCAP is necessary for the
recipient to comply with the requirements of the recipient's:
a. Case plan developed in accordance with 922
KAR
1:430; or
b. Kentucky Works
Program self-sufficiency plan developed in accordance with
921
KAR 2:370.
(3) If a court of appropriate jurisdiction
issues a disqualification period upon conviction of a charge, or acceptance of
an Alford or guilty plea, related to the IPV, the cabinet:
(a) May make exception to a disqualification
period specified in subsection (2) of this section; and
(b) Shall enforce the court-ordered
disqualification period.
(4) Unless subsection (2)(b) of this section
applies, the disqualification period shall continue uninterrupted until it is
completed regardless of the eligibility of the recipient or the child care
provider.
(5) Regardless of the
disqualification period, the recipient or the child care provider shall
continue to be responsible for the payment of a claim resulting from the
IPV.
(6) Eligibility of a recipient
or payment to a child care provider shall not be affected by a suspected IPV
until a disqualification is established in accordance with subsection (1) of
this section.
(7) If a court of
appropriate jurisdiction fails to impose a disqualification period for an IPV,
the cabinet shall impose a penalty in accordance with this section.
(8) The cabinet shall not separate the same
act of IPV repeated over a period of time for the imposition of multiple,
separate penalties.
Section
9. Administrative Disqualification Hearing.
(1) The cabinet shall initiate an
administrative disqualification hearing on the establishment of an IPV if the:
(a) Facts of the IPV do not warrant civil or
criminal prosecution through a court of appropriate jurisdiction;
(b) Referral for prosecution is declined by
prosecutorial authorities;
(c)
Referral for prosecution is withdrawn by the cabinet; or
(d) Recipient or child care provider declines
to sign the DCC-84 Supplement A.
(2) If the facts of the case arise out of the
same or related circumstances, the cabinet shall not initiate an administrative
disqualification hearing against a recipient or a child care provider:
(a) Whose case is currently referred for
prosecution; or
(b) Subsequent to
an action taken against the recipient or the child care provider by the
prosecutor or a court of appropriate jurisdiction.
(3) Unless a different procedure is specified
in this section, an administrative disqualification hearing shall:
(a) Be conducted in accordance with KRS
Chapter 13B and:
1. Until April 1, 2017, 922
KAR
1:320; or
2. Effective April 1,
2017, 922 KAR
2:160; and
(b) Include:
1. The issuance of a recommended
order;
2. Procedures for written
exceptions; and
3. The issuance of
a final order.
(4) The cabinet may initiate an
administrative disqualification hearing regardless of the current eligibility
of a recipient or the payment status of a child care provider.
(5)
(a) In
accordance with
KRS
13B.050, an administrative disqualification
hearing notice shall be sent by:
1. Certified
mail, return receipt requested, to the individual; or
2. Another method, such as electronic or
first class mail, if the individual waives his or her right to certified mail
delivery under
KRS
13B.050.
(b) An administrative disqualification
hearing notice shall provide information in accordance with
KRS
13B.050.
(6) Timeframes for an administrative
disqualification hearing shall be in accordance with
KRS 13B.110 and
13B.120.
(7)
(a) The
cabinet shall combine a request for an administrative hearing in accordance
with Section 16 of this administrative regulation and an administrative
disqualification hearing into a single hearing if the:
1. Factual issues arise out of the same or
related circumstances; and
2.
Recipient or the child care provider receives prior notice that the hearings
are being combined.
(b)
If the hearings are combined for the purpose of settling the amount of the
claim concurrent with a determination of whether an IPV occurred, the recipient
or the child care provider subject to the claim shall lose the right to a
subsequent administrative hearing on the amount of the claim.
(8) During an administrative
disqualification hearing, the hearing officer shall advise the recipient or
child care provider accused of an IPV of the option to refuse to answer
questions during the hearing.
(9)
(a) If a recipient or child care provider
does not appear for the administrative disqualification hearing, the hearing
officer shall proceed in accordance with
KRS
13B.080(6).
(b) The cabinet shall conduct a new
administrative disqualification hearing if the:
1. Recipient or the child care provider was
not represented at the hearing;
2.
Recipient or the child care provider was determined to have committed an IPV;
and
3. Hearing officer determined
the household had good cause for not appearing, in accordance with:
a. Until April 1, 2017, 922 KAR
1:320,
Section 6(7); or
b. Effective April
1, 2017, 922 KAR
2:260, Section 5(7).
(10)
(a) The determination of an IPV made through
an administrative disqualification hearing shall not be reversed by a
subsequent administrative hearing decision.
(b) A recipient or child care provider shall
be entitled to seek relief through a court of appropriate jurisdiction in
accordance with:
1.
KRS
13B.140 to
13B.160;
or
2.
KRS
23A.010.
Section 10. Collection of a Claim.
(1) The cabinet shall collect a claim from a
claimant through:
(a) Voluntary payment
arrangement, negotiated either orally or in writing, which includes a payment
schedule;
(b) Court-ordered
repayment;
(c) State tax refund
interception in accordance with
KRS
45.238;
(d) Lottery offsets;
(e) Wage garnishment; or
(f) Referral to a collection
agency.
(2)
(a) The cabinet shall accept a lump sum
payment on a claim from a recipient or a child care provider.
(b) The lump sum payment may be a full or
partial payment.
(3)
(a) If a claimant who is a child care
provider submits a completed DCC-97 Supplement A, Voluntary Payment Reduction,
indicating the amount the provider wishes to have applied to the claim, the
child care provider currently receiving CCAP payment may choose to have an
amount withheld from the provider's CCAP payment to be applied towards a
claim.
(b) The amount indicated on
the DCC-97 shall not be less than ten (10) percent of the total CCAP
payment.
(4) The cabinet
shall refund to a claimant any amount the claimant pays in excess of the amount
of the claim.
Section
11. Delinquent Claims.
(1) In
accordance with
KRS
45.237(4), a claim shall be
considered delinquent if:
(a) A claimant has
not made a payment or entered into a satisfactory payment arrangement with
cabinet sixty (60) calendar days from the date on the notice provided in
accordance with Section 7(4)(b) of this administrative regulation; or
(b) Sixty (60) days have lapsed since the
claimant has missed a scheduled payment pursuant to the payment arrangement
with the cabinet.
(2)
The cabinet shall pursue collection on a delinquent claim through a collection
method specified in Section 10(1)(b) through (f) of this administrative
regulation.
(3)
(a) If the cabinet determines that a claimant
who is a recipient is delinquent on a payment in accordance with subsection (1)
of this section for ninety (90) days, the cabinet shall:
1. Terminate the recipient's CCAP;
and
2. Not reapprove the recipient
for CCAP until the recipient has paid all delinquent payments.
(b) The cabinet shall make an
exception to paragraph (a) of this subsection if:
1. The recipient is approved for CCAP in
accordance with 922 KAR
2:160, Section 5 or 6; and
2. CCAP is necessary for the recipient to
comply with the requirements of the recipient's:
a. Case plan developed in accordance with 922
KAR
1:430; or
b. Kentucky Works
Program self-sufficiency plan developed in accordance with
921
KAR 2:370.
(4) If the cabinet determines that a claimant
who is a child care provider is delinquent on a payment in accordance with
subsection (1) of this section for ninety (90) days, the cabinet shall:
(a) Disallow any CCAP payments to the child
care provider; and
(b) Not approve
the child care provider for further CCAP payments until the provider has paid
all delinquent payments.
(5) The cabinet shall provide notice in
accordance with Section 6 of this administrative regulation prior to an action
specified in subsection (3) or (4) of this section.
(6) If the cabinet is unable to determine a
claim's delinquency status because the claim collection is coordinated through
the court system, the cabinet shall not subject a claim to the requirements for
delinquent debts in accordance with this section.
(7) A claim shall not be considered
delinquent if:
(a) Another claim for the same
claimant is currently being paid through a repayment agreement or court order;
and
(b) The cabinet expects to
begin collection on the claim once the prior claim is settled.
(8)
(a) A claim awaiting an administrative
hearing shall not be considered delinquent.
(b) If a hearing officer or agency head
determines that a claim does exist as result of an administrative hearing, the
cabinet shall:
1. Send subsequent notice of
the claim in accordance with Section 6 of this administrative regulation;
and
2. Base delinquency on the due
date of the subsequent notice.
(c) If a hearing officer or agency head
determines that a claim does not exist as a result of an administrative
hearing, the cabinet shall terminate the claim in accordance with Section 12(2)
of this administrative regulation.
Section 12. Compromising or Terminating a
Claim.
(1) Except for a claim that is
established by a court of appropriate jurisdiction, the cabinet may compromise
a claim or a portion of a claim if:
(a) A
request for a compromise is received from the claimant; and
(b) The cabinet makes a determination that
the claimant will be unable to pay the claim within five (5) years.
(2) The cabinet shall terminate a
claim if the:
(a) Claim:
1. Is invalid, unless pursuing the
overpayment as a different type of claim is appropriate;
2. Balance is twenty-five (25) dollars or
less, and the claim has been delinquent for ninety (90) days or more, unless
another claim is pending against the same claimant resulting in an aggregate
claim total of greater than twenty-five (25) dollars; or
3. Has been delinquent for at least three (3)
years;
(b) Claimant
dies; or
(c) Cabinet is unable to
locate the claimant.
(3)
The cabinet shall provide notice in accordance with Section 6 of this
administrative regulation if the cabinet:
(a)
Compromises or terminates a claim; and
(b) Has a mailing address for the
claimant.
Section
13. Underpayments and CCAP Restoration.
(1) If an underpayment has occurred, the
cabinet shall issue a payment to the child care provider that includes the
difference between the amount that the child care provider:
(a) Was entitled to receive; and
(b) Actually received.
(2) CCAP shall be restored for no more than
twelve (12) months to a recipient or a child care provider if benefits were
lost:
(a) Due to an agency error;
or
(b) By a disqualification period
for an IPV that is subsequently reversed through an order of a court of
appropriate jurisdiction.
Section 14. Disclosure of Information. The
disclosure or the use of CCAP information shall be restricted in accordance
with:
(1)
KRS
194A.060; and
Section 15. Retention of Records.
(1) Records for CCAP shall be retained in
accordance with
45
C.F.R.
98.90(e).
(2) The cabinet shall retain:
(a) The official records of an administrative
disqualification hearing until all appeals have been exhausted; and
(b) A CCAP record with an IPV
disqualification indefinitely.
Section 16. A parent in the recipient
household or a child care provider may request an appeal of the establishment
of a claim in accordance with:
(1) Until April
1, 2017, 922 KAR
1:320, Section 2(10); or
(2) Effective April 1, 2017, 922 KAR
2:260,
Section 2(4).
Section
17. Incorporation by Reference.
(1) The following material is incorporated by
reference:
(a) "DCC-83, Deferred Adjudication
Disqualification Consent Agreement", 02/16;
(b) "DCC-84, Notice of Suspected Intentional
Program Violation", 02/16;
(c)
"DCC-84 Supplement A, Voluntary Waiver of Administrative Disqualification
Hearing", 02/16;
(d) "DCC-97
Supplement A, Voluntary Payment Reductions", 11/09; and
(e) "KCD-2, General Claims Notice",
02/16.
(2) This material
may be inspected, copied, or obtained, subject to applicable copyright law, at
the Cabinet for Health and Family Services, Department for Community Based
Services, 275 East Main Street, Frankfort, Kentucky 40621, Monday through
Friday, 8 am through 4:30 p.m.