.................... moves to amend H.F. No. 1233, the delete everything amendment
(A13-0408) as follows:
Page 143, after line 4, insert:
"Sec. 4. [245E.01] CHILD CARE PROVIDER AND RECIPIENT FRAUD
1.5INVESTIGATIONS WITHIN THE CHILD CARE ASSISTANCE PROGRAM.
1.6 Subdivision 1. Definitions. (a) For purposes of this section, the terms defined in this
1.7subdivision have the meanings given them.
1.8(b) "Applicant" has the meaning given in section 119B.011, subdivision 2.
1.9(c) "Child care assistance program" means any of the assistance programs under
1.11(d) "Commissioner" means the commissioner of human services.
1.12(e) "Controlling individual" has the meaning given in section 245A.02, subdivision
1.14(f) "County" means a local county child care assistance program staff or
1.15subcontracted staff, or a county investigator acting on behalf of the commissioner.
1.16(g) "Department" means the Department of Human Services.
1.17(h) "Financial misconduct" or "misconduct" means an entity's or individual's acts or
1.18omissions that result in fraud and abuse or error against the Department of Human Services.
1.19(i) "Identify" means to furnish the full name, current or last known address, phone
1.20number, and e-mail address of the individual or business entity.
1.21(j) "License holder" has the meaning given in section 245A.02, subdivision 9.
1.22(k) "Mail" means the use of any mail service with proof of delivery and receipt.
1.23(l) "Provider" means either a provider as defined in section 119B.011, subdivision
1.2419, or a legal unlicensed provider as defined in section 119B.011, subdivision 16.
1.25(m) "Recipient" means a family receiving assistance as defined under section
1.26119B.011, subdivision 13.
2.1(n) "Terminate" means revocation of participation in the child care assistance
2.3 Subd. 2. Investigating provider or recipient financial misconduct. The
2.4department shall investigate alleged or suspected financial misconduct by providers and
2.5errors related to payments issued by the child care assistance program under this chapter.
2.6Recipients, employees, and staff persons may be investigated when the evidence shows
2.7that their conduct is related to the financial misconduct of a provider, license holder,
2.8or controlling individual.
2.9 Subd. 3. Scope of investigations. (a) The department may contact any person,
2.10agency, organization, or other entity that is necessary to an investigation.
2.11(b) The department may examine or interview any individual, document, or piece of
2.12evidence that may lead to information that is relevant to child care assistance program
2.13benefits, payments, and child care provider authorizations. This includes, but is not
2.15(1) child care assistance program payments;
2.16(2) services provided by the program or related to child care assistance program
2.18(3) services provided to a provider;
2.19(4) provider financial records of any type;
2.20(5) daily attendance records of the children receiving services from the provider;
2.21(6) billings; and
2.22(7) verification of the credentials of a license holder, controlling individual, employee,
2.23staff person, contractor, subcontractor, and entities under contract with the provider to
2.24provide services or maintain service and financial records related to those services.
2.25 Subd. 4. Determination of investigation. After completing its investigation, the
2.26department shall issue one of the following determinations:
2.27(1) no violation of child care assistance requirements occurred;
2.28(2) there is insufficient evidence to show that a violation of child care assistance
2.30(3) a preponderance of evidence shows a violation of child care assistance program
2.31law, rule, or policy; or
2.32(4) there exists a credible allegation of fraud.
2.33 Subd. 5. Actions or administrative sanctions. (a) In addition to section 256.98,
2.34after completing the determination under subdivision 4, the department may take one or
2.35more of the actions or sanctions specified in this subdivision.
2.36(b) The department may take the following actions:
3.1(1) refer the investigation to law enforcement or a county attorney for possible
3.3(2) refer relevant information to the department's licensing division, the child care
3.4assistance program, the Department of Education, the federal child and adult care food
3.5program, or appropriate child or adult protection agency;
3.6(3) enter into a settlement agreement with a provider, license holder, controlling
3.7individual, or recipient; or
3.8(4) refer the matter for review by a prosecutorial agency with appropriate jurisdiction
3.9for possible civil action under the Minnesota False Claims Act, chapter 15C.
3.10(c) The department may impose sanctions by:
3.11(1) pursuing administrative disqualification through hearings or waivers;
3.12(2) establishing and seeking monetary recovery or recoupment; or
3.13(3) issuing an order of corrective action that states the practices that are violations of
3.14child care assistance program policies, laws, or regulations, and that they must be corrected.
3.15 Subd. 6. Duty to provide access. (a) A provider, license holder, controlling
3.16individual, employee, staff person, or recipient has an affirmative duty to provide access
3.17upon request to information specified under subdivision 8 or the program facility.
3.18(b) Failure to provide access may result in denial or termination of authorizations for
3.19or payments to a recipient, provider, license holder, or controlling individual in the child
3.20care assistance program.
3.21(c) When a provider fails to provide access, a 15-day notice of denial or termination
3.22must be issued to the provider, which prohibits the provider from participating in the child
3.23care assistance program. Notice must be sent to recipients whose children are under the
3.24provider's care pursuant to Minnesota Rules, part 3400.0185.
3.25(d) If the provider continues to fail to provide access at the expiration of the 15-day
3.26notice period, child care assistance program payments to the provider must be denied
3.27beginning the 16th day following notice of the initial failure or refusal to provide access.
3.28The department may rescind the denial based upon good cause if the provider submits in
3.29writing a good cause basis for having failed or refused to provide access. The writing must
3.30be postmarked no later than the 15th day following the provider's notice of initial failure
3.31to provide access. Additionally, the provider, license holder, or controlling individual
3.32must immediately provide complete, ongoing access to the department. Repeated failures
3.33to provide access must, after the initial failure or for any subsequent failure, result in
3.34termination from participation in the child care assistance program.
3.35(e) The department, at its own expense, may photocopy or otherwise duplicate
3.36records referenced in subdivision 8. Photocopying must be done on the provider's
4.1premises on the day of the request or other mutually agreeable time, unless removal of
4.2records is specifically permitted by the provider. If requested, a provider, license holder,
4.3or controlling individual, or a designee, must assist the investigator in duplicating any
4.4record, including a hard copy or electronically stored data, on the day of the request.
4.5(f) A provider, license holder, controlling individual, employee, or staff person must
4.6grant the department access during the department's normal business hours, and any hours
4.7that the program is operated, to examine the provider's program or the records listed in
4.8subdivision 8. A provider shall make records available at the provider's place of business
4.9on the day for which access is requested, unless the provider and the department both agree
4.10otherwise. The department's normal business hours are 8:00 a.m. to 5:00 p.m., Monday
4.11through Friday, excluding state holidays as defined in section 645.44, subdivision 5.
4.12 Subd. 7. Honest and truthful statements. It shall be unlawful for a provider
4.13or recipient to:
4.14(1) falsify, conceal, or cover up by any trick, scheme, or device a material fact;
4.15(2) make any materially false, fictitious, or fraudulent statement or representation; or
4.16(3) make or use any false writing or document knowing the same to contain
4.17any materially false, fictitious, or fraudulent statement or entry related to any child
4.18care assistance program services that the provider supplies or in relation to any child
4.19care assistance payments received by a provider, or to any fraud investigator or law
4.20enforcement officer conducting a financial misconduct investigation.
4.21 Subd. 8. Record retention. (a) The following records must be maintained,
4.22controlled, and made immediately accessible to license holders, providers, and controlling
4.23individuals. The records must be organized and labeled to correspond to categories that
4.24make them easy to identify so that they can be made available immediately upon request
4.25to an investigator acting on behalf of the commissioner at the provider's place of business:
4.26(1) payroll ledgers, canceled checks, bank deposit slips, and any other accounting
4.28(2) daily attendance records required by and that comply with section 119B.125,
4.30(3) billing transmittal forms requesting payments from the child care assistance
4.31program and billing adjustments related to child care assistance program payments;
4.32(4) records identifying all persons, corporations, partnerships, and entities with an
4.33ownership or controlling interest in the provider's child care business;
4.34(5) employee records identifying those persons currently employed by the provider's
4.35child care business or who have been employed by the business at any time within the
4.36previous five years. The records must include each employee's name, hourly and annual
5.1salary, qualifications, position description, job title, and dates of employment. In addition,
5.2employee records that must be made available include the employee's time sheets, current
5.3home address of the employee or last known address of any former employee, and
5.4documentation of background studies required under chapter 119B or 245C;
5.5(6) records related to transportation of children in care, including but not limited to:
5.6(i) the dates and times that transportation is provided to children for transportation to
5.7and from the provider's business location for any purpose. For transportation related to
5.8field trips or locations away from the provider's business location, the names and addresses
5.9of those field trips and locations must also be provided;
5.10(ii) the name, business address, phone number, and Web site address, if any, of the
5.11transportation service utilized; and
5.12(iii) all billing or transportation records related to the transportation.
5.13(b) A provider, license holder, or controlling individual must retain all records
5.14in paragraph (a) for at least six years after the date the record is created. Microfilm or
5.15electronically stored records satisfy the record keeping requirements of this subdivision.
5.16(c) A provider, license holder, or controlling individual who withdraws or is
5.17terminated from the child care assistance program must retain the records required under
5.18this subdivision and make them available to the department on demand.
5.19(d) If the ownership of a provider changes, the transferor, unless otherwise provided
5.20by law or by written agreement with the transferee, is responsible for maintaining,
5.21preserving, and upon request from the department, making available the records related to
5.22the provider that were generated before the date of the transfer. Any written agreement
5.23affecting this provision must be held in the possession of the transferor and transferee.
5.24The written agreement must be provided to the department or county immediately upon
5.25request, and the written agreement must be retained by the transferor and transferee for six
5.26years after the agreement is fully executed.
5.27(e) In the event of an appealed case, the provider must retain all records required in
5.28this subdivision for the duration of the appeal or six years, whichever is longer.
5.29(f) A provider's use of electronic record keeping or electronic signatures is governed
5.30by chapter 325L.
5.31 Subd. 9. Factors regarding imposition of administrative sanctions. (a) The
5.32department shall consider the following factors in determining the administrative sanctions
5.33to be imposed:
5.34(1) nature and extent of financial misconduct;
5.35(2) history of financial misconduct;
6.1(3) actions taken or recommended by other state agencies, other divisions of the
6.2department, and court and administrative decisions;
6.3(4) prior imposition of sanctions;
6.4(5) size and type of provider;
6.5(6) information obtained through an investigation from any source;
6.6(7) convictions or pending criminal charges; and
6.7(8) any other information relevant to the acts or omissions related to the financial
6.9(b) Any single factor under paragraph (a) may be determinative of the department's
6.10decision of whether and what sanctions are imposed.
6.11 Subd. 10. Written notice of department sanction. (a) The department shall give
6.12notice in writing to a person of an administrative sanction that is to be imposed. The notice
6.13shall be sent by mail as defined in subdivision 1, paragraph (k).
6.14(b) The notice shall state:
6.15(1) the factual basis for the department's determination;
6.16(2) the sanction the department intends to take;
6.17(3) the dollar amount of the monetary recovery or recoupment, if any;
6.18(4) how the dollar amount was computed;
6.19(5) the right to dispute the department's determination and to provide evidence;
6.20(6) the right to appeal the department's proposed sanction; and
6.21(7) the option to meet informally with department staff, and to bring additional
6.22documentation or information, to resolve the issues.
6.23(c) In cases of determinations resulting in denial or termination of payments, in
6.24addition to the requirements of paragraph (b), the notice must state:
6.25(1) the length of the denial or termination;
6.26(2) the requirements and procedures for reinstatement; and
6.27(3) the provider's right to submit documents and written arguments against the
6.28denial or termination of payments for review by the department before the effective date
6.29of denial or termination.
6.30(d) The submission of documents and written argument for review by the department
6.31under paragraph (b), clause (5) or (7), or paragraph (c), clause (3), does not stay the
6.32deadline for filing an appeal.
6.33(e) Unless appealed, the effective date of the proposed sanction shall be 30 days after
6.34the license holder's, provider's, controlling individual's, or recipient's receipt of the notice.
6.35If an appeal is made, the proposed sanction shall be delayed pending the final outcome of
6.36the appeal. Implementation of a proposed sanction following the resolution of an appeal
7.1may be postponed if, in the opinion of the department, the delay of sanction is necessary to
7.2protect the health or safety of children in care. The department may consider the economic
7.3hardship of a person in implementing the proposed sanction, but economic hardship shall
7.4not be a determinative factor in implementing the proposed sanction.
7.5(f) Requests for an informal meeting to attempt to resolve issues and requests
7.6for appeals must be sent or delivered to the department's Office of Inspector General,
7.7Financial Fraud and Abuse Division.
7.8 Subd. 11. Appeal of department sanction under this section. (a) If the department
7.9does not pursue a criminal action against a provider, license holder, controlling individual,
7.10or recipient for financial misconduct, but the department imposes an administrative
7.11sanction, any individual or entity against whom the sanction was imposed may appeal the
7.12department's administrative sanction under this section pursuant to section 119B.16 or
7.13256.045 with the additional requirements in clauses (1) to (4). An appeal must specify:
7.14(1) each disputed item, the reason for the dispute, and an estimate of the dollar
7.15amount involved for each disputed item, if appropriate;
7.16(2) the computation that is believed to be correct, if appropriate;
7.17(3) the authority in the statute or rule relied upon for each disputed item; and
7.18(4) the name, address, and phone number of the person at the provider's place of
7.19business with whom contact may be made regarding the appeal.
7.20(b) An appeal is considered timely only if postmarked or received by the
7.21department's Office of Inspector General, Financial Fraud and Abuse Division within 30
7.22days after receiving a notice of department sanction.
7.23(c) Before the appeal hearing, the department may deny or terminate authorizations
7.24or payment to the entity or individual if the department determines that action is necessary
7.25to protect the public welfare and the interests of the program.
7.26 Subd. 12. Consolidated hearings with licensing sanction. If an overpayment
7.27recovery action has an appeal hearing right and it is timely appealed, and a licensing
7.28sanction exists for which there is an appeal hearing right and the sanction is timely
7.29appealed, and the overpayment recovery action and licensing sanction involve the same
7.30set of facts, the overpayment recovery action and licensing sanction must be consolidated
7.31in the contested case hearing related to the licensing sanction.
7.32 Subd. 13. Grounds for and methods of monetary recovery. (a) The department
7.33may obtain monetary recovery from a provider who has been improperly paid by the
7.34child care assistance program, regardless of whether the error was intentional or county
7.35error. The department does not need to establish a pattern as a precondition of monetary
8.1recovery of erroneous or false billing claims, duplicate billing claims, or billing claims
8.2based on false statements or financial misconduct.
8.3(b) The department shall obtain monetary recovery from providers by the following
8.5(1) permitting voluntary repayment of money, either in lump-sum payment or
8.7(2) using any legal collection process;
8.8(3) deducting or withholding program payments; or
8.9(4) utilizing the means set forth in chapter 16D.
8.10 Subd. 14. Reporting of suspected fraudulent activity. (a) A person who, in
8.11good faith, makes a report of or testifies in any action or proceeding in which financial
8.12misconduct is alleged, and who is not involved in, has not participated in, or has not aided
8.13and abetted, conspired, or colluded in the financial misconduct, shall have immunity from
8.14any liability, civil or criminal, that results by reason of the person's report or testimony.
8.15For the purpose of any proceeding, the good faith of any person reporting or testifying
8.16under this provision shall be presumed.
8.17(b) If a person that is or has been involved in, participated in, aided and abetted,
8.18conspired, or colluded in the financial misconduct reports the financial misconduct,
8.19the department may consider that person's report and assistance in investigating the
8.20misconduct as a mitigating factor in the department's pursuit of civil, criminal, or
8.22 Subd. 15. Data privacy. Data of any kind obtained or created in relation to a provider
8.23or recipient investigation under this section is defined, classified, and protected the same as
8.24all other data under section 13.46, and this data has the same classification as licensing data.
8.25 Subd. 16. Monetary recovery; random sample extrapolation. The department is
8.26authorized to calculate the amount of monetary recovery from a provider, license holder, or
8.27controlling individual based upon extrapolation from a statistical random sample of claims
8.28submitted by the provider, license holder, or controlling individual and paid by the child
8.29care assistance program. The department's random sample extrapolation shall constitute a
8.30rebuttable presumption of the accuracy of the calculation of monetary recovery. If the
8.31presumption is not rebutted by the provider, license holder, or controlling individual in the
8.32appeal process, the department shall use the extrapolation as the monetary recovery figure.
8.33The department may use sampling and extrapolation to calculate the amount of monetary
8.34recovery if the claims to be reviewed represent services to 50 or more children in care.
8.35 Subd. 17. Effect of department's monetary penalty determination. Unless
8.36a timely and proper appeal is received by the department's Office of Inspector General,
9.1Financial Fraud and Abuse Division, the department's administrative determination or
9.2sanction shall be considered a final department determination.
9.3 Subd. 18. Office of Inspector General recoveries. Overpayment recoveries
9.4resulting from child care provider fraud investigations initiated by the department's Office
9.5of Inspector General's fraud investigations staff are excluded from the county recovery
9.6provision in section 119B.11, subdivision 3.
Page 446, line 14, delete "$6,452,631,000
" and insert "$6,453,219,000
" and delete
" and insert "6,453,053,000
Page 446, line 17, delete "$5,557,782,000
" and insert ""5,558,370,000
" and delete
" and insert "$5,796,589,000
Page 451, line 31, delete "$88,310,000
" and insert "$88,898,000
" and delete
" and insert "$90,744,000