OCC/NCCCSIA Program Integrity Conference Call

Series 2012 New York State Child Care

Subsidy Making Every Dollar Count

Wednesday, April 11, 2012

Shannon Rudisill, Director, Office of Child Care Shannon Rudisill, Director, Office of Child Care Carol Pearson, NCCCSIA Project Director Carol Pearson, NCCCSIA Project Director

New York State PresentersNew York State Presenters• Janice Molnar, Deputy Commissioner Division of Child Care ServicesJanice Molnar, Deputy Commissioner Division of Child Care Services• Renee Rider, Assistant Commissioner Division of Child Care Services, Renee Rider, Assistant Commissioner Division of Child Care Services, • Jim Hart, Director of Regional Operations Division of Child Care Jim Hart, Director of Regional Operations Division of Child Care

Services, Services, • Rhonda Duffney, Acting Director of the Child Care Subsidy ProgramRhonda Duffney, Acting Director of the Child Care Subsidy Program• Sean Hicks, Supervising Welfare Fraud InvestigatorSean Hicks, Supervising Welfare Fraud Investigator• Albany County DSSAlbany County DSS• Katherine Waluschka, Associate Commissioner Westchester County Katherine Waluschka, Associate Commissioner Westchester County

DSS DSS

INTRODUCTIONSINTRODUCTIONS

AGENDAAGENDAOverview of New York State Child CareOverview of New York State Child Care

Making Every Dollar CountMaking Every Dollar CountChild Care Subsidy RegulationsChild Care Subsidy Regulations

New York State Projects:New York State Projects:Albany CountyAlbany County

Westchester CountyWestchester County

New York StateNew York StateOffice of Children and Family ServicesOffice of Children and Family Services

Gladys Carrión, Esq. Gladys Carrión, Esq. Commissioner Commissioner

Andrew M. CuomoAndrew M. CuomoGovernorGovernor

Program IntegrityCCDF Fraud Prevention,

Detection, and Recovery

April 11, 2012

Mission of OCFSMission of OCFS““Promoting the safety, permanency and well being Promoting the safety, permanency and well being of our children, families, and communities. We will of our children, families, and communities. We will achieve results by setting and enforcing policies, achieve results by setting and enforcing policies, building partnerships, and funding and providing building partnerships, and funding and providing

quality services.” quality services.”

New York State: An New York State: An OverviewOverview NYS is a large state, comprising 62 NYS is a large state, comprising 62

counties, over 47,000 sq. miles, and counties, over 47,000 sq. miles, and almost 19.5 million peoplealmost 19.5 million people

NYS is a state-supervised, county-NYS is a state-supervised, county-administered system administered system

The counties/local social services districts The counties/local social services districts have significant decision-making authority have significant decision-making authority with respect to their administration of the with respect to their administration of the child care subsidy program child care subsidy program

Regulated Child CareRegulated Child Carein New York Statein New York State

(*Data as of 1/1/12)

SubsidizedSubsidizedChild Care in New York Child Care in New York StateState

In FFY 2011, the modalities of care for In FFY 2011, the modalities of care for children receiving subsidies:children receiving subsidies: 61% in regulated care (34% in licensed child care 61% in regulated care (34% in licensed child care

centers, 27% in regulated family child care homes, centers, 27% in regulated family child care homes, including group family child care)including group family child care)

39% 39% in legally-exempt care, almost exclusively in legally-exempt care, almost exclusively home-based setting: home-based setting: 51,10351,103 legally-exempt providers served legally-exempt providers served 95,88795,887 subsidized children over the course subsidized children over the course of the of the yearyear

SubsidizedSubsidizedChild Care in New York Child Care in New York StateState

Program IntegrityProgram Integrityin New York State: in New York State: ContextContext2010 was a banner year for NYS -2010 was a banner year for NYS -Investigation of $18M fraud ring in New York Investigation of $18M fraud ring in New York City announced in August, 2010City announced in August, 2010GAO study, in which 5 states – including NYS – GAO study, in which 5 states – including NYS – were found to be vulnerable to fraud, released in were found to be vulnerable to fraud, released in September, 2010September, 2010““What Are We Going to Do About This?”What Are We Going to Do About This?”We started with listening and learningWe started with listening and learning

New York State Takes New York State Takes Action Action October, 2010 roundtable: October, 2010 roundtable: ““Child Care Subsidy in Child Care Subsidy in

New York State: Making Every Dollar CountNew York State: Making Every Dollar Count”” FocusFocus: Program integrity : Program integrity ParticipantsParticipants: Local prosecutors, local social : Local prosecutors, local social

services commissioners, caseworkers, fraud services commissioners, caseworkers, fraud investigators, child care advocates, among others investigators, child care advocates, among others

GoalGoal: : to generate recommendations for changes in to generate recommendations for changes in policy and program supports, and to create an policy and program supports, and to create an action plan to guide efforts to improve the level of action plan to guide efforts to improve the level of program integrity at all levels of governmentprogram integrity at all levels of government

Child Care Subsidy in New Child Care Subsidy in New York State: Making Every York State: Making Every Dollar CountDollar Count Peer-learning – keynote speaker: Jim Bates Peer-learning – keynote speaker: Jim Bates

from Wisconsinfrom Wisconsin All-day working sessionAll-day working session

Breakout sessionsBreakout sessions Group report outsGroup report outs Recommendations for changesRecommendations for changes

See the OCFS website for more information:See the OCFS website for more information:http://www.ocfs.state.ny.us/main/childcare/programintegrity/http://www.ocfs.state.ny.us/main/childcare/programintegrity/

Making Every Dollar Count:Making Every Dollar Count:Recommendations for Recommendations for ChangeChange Focus on front-end detection (FEDS)Focus on front-end detection (FEDS) Break down silosBreak down silos

Between licensing/regulation and subsidy administrationBetween licensing/regulation and subsidy administration Between OCFS child care staff and local fraud investigators and agenciesBetween OCFS child care staff and local fraud investigators and agencies

Give counties more authority to take action when fraud is Give counties more authority to take action when fraud is identified identified

Create a financial incentive for counties that engage in fraud Create a financial incentive for counties that engage in fraud detection and preventiondetection and prevention

Automate a statewide child care time and attendance systemAutomate a statewide child care time and attendance system Create a data-mining system that helps predict and Create a data-mining system that helps predict and identify fraudidentify fraud

Steps New York State Has Steps New York State Has TakenTakento Prevent Waste, Fraud, & to Prevent Waste, Fraud, & Abuse Abuse Issued new child care subsidy regulationsIssued new child care subsidy regulations Deployed an automated child care time and attendance system Deployed an automated child care time and attendance system

in all of the counties outside the City of New Yorkin all of the counties outside the City of New York Learned from the information technology vendor community Learned from the information technology vendor community

about implementing a statewide technical solution that predicts about implementing a statewide technical solution that predicts fraudulent activityfraudulent activity

Identified resources for counties to use toward identifying, Identified resources for counties to use toward identifying, investigating and prosecuting child care subsidy fraudinvestigating and prosecuting child care subsidy fraud

Created an investigative protocol for child care inspectors of Created an investigative protocol for child care inspectors of regulatory care and county caseworkers to work together to regulatory care and county caseworkers to work together to address fraudaddress fraud

Partnered with the NY Welfare Fraud Investigator’s AssociationPartnered with the NY Welfare Fraud Investigator’s Association

Front End Detection System Front End Detection System (FEDS)(FEDS) Purpose of FEDS: Purpose of FEDS:

Refer, investigate and resolve applications Refer, investigate and resolve applications beforebefore a a case is openedcase is opened

Act as a deterrentAct as a deterrent Applications that meet FEDS indicators are Applications that meet FEDS indicators are

referred to the investigations unit within each referred to the investigations unit within each local district/countylocal district/county

FEDS indicators must be approved by OCFSFEDS indicators must be approved by OCFS FEDS investigations must be conducted in an FEDS investigations must be conducted in an

expeditious mannerexpeditious manner Examples of FEDS indicators:Examples of FEDS indicators:

P.O. Box supplied as a mailing address without a reasonable P.O. Box supplied as a mailing address without a reasonable explanationexplanation

Applicant cannot provide a birth certificate for a child younger than Applicant cannot provide a birth certificate for a child younger than 6 years6 years

Applicant is self employed, but cannot provide adequate business Applicant is self employed, but cannot provide adequate business recordsrecords

Child care provider lives in same household as the childChild care provider lives in same household as the child

Front End Detection System Front End Detection System (FEDS)(FEDS)

New Child Care Subsidy New Child Care Subsidy Fraud RegulationsFraud Regulations OCFS revised the child care subsidy OCFS revised the child care subsidy

regulations to:regulations to: Provide local social services districts with Provide local social services districts with

more authority to stop child care payments more authority to stop child care payments where appropriatewhere appropriate

Initiate enforcement actions against child Initiate enforcement actions against child care providers when they are found to be care providers when they are found to be engaging in fraudulent activitiesengaging in fraudulent activities

Child care subsidy regulations now allow Child care subsidy regulations now allow counties to:counties to:DeferDefer a claim for reimbursement a claim for reimbursement DisallowDisallow payments payments DisqualifyDisqualify a provider from receiving payment a provider from receiving payment for servicesfor services

Child Care Subsidy Fraud Child Care Subsidy Fraud RegulationsRegulations

Provider may be disqualified if they have:Provider may be disqualified if they have:Been convicted of fraudBeen convicted of fraudBeen found civilly liable for fraudBeen found civilly liable for fraudVoluntarily admitted to fraudVoluntarily admitted to fraudVoluntarily admitted to filing a false statementVoluntarily admitted to filing a false statement

Child Care Subsidy Fraud Child Care Subsidy Fraud Regulations Regulations (cont’d.) (cont’d.)

Provider may be disqualified if they have:Provider may be disqualified if they have:Been convicted of activity indicating lack of Been convicted of activity indicating lack of business integritybusiness integrityBeen disqualified from the Child and Adult Care Been disqualified from the Child and Adult Care Food Program (CACFP)Food Program (CACFP)Failed to comply with a repayment planFailed to comply with a repayment planBeen found to have submitted false claims, Been found to have submitted false claims, after an administrative review was after an administrative review was conducted by the countyconducted by the county

Child Care Subsidy Fraud Child Care Subsidy Fraud Regulations Regulations (cont’d.) (cont’d.)

Disqualification Penalties:Disqualification Penalties:Provider ineligible to receive child care subsidy Provider ineligible to receive child care subsidy payment for 5 yearspayment for 5 yearsProvider must make full restitutionProvider must make full restitutionFailure to make full restitution will result in the Failure to make full restitution will result in the provider being ineligible to provide subsidized provider being ineligible to provide subsidized child carechild care

Child Care Subsidy Fraud Child Care Subsidy Fraud Regulations Regulations (cont’d.) (cont’d.)

Child Care Time & Child Care Time & Attendance (CCTA)Attendance (CCTA)CCTA Design:CCTA Design:Key parameter: CCTA is Key parameter: CCTA is parentparent-driven-drivenCCTA is designed to support:CCTA is designed to support:

Parent time-in/time-outParent time-in/time-out Provider web submittalProvider web submittal Automated pay calculationAutomated pay calculation Export calculations to statewide payment system Export calculations to statewide payment system

CCTA helps identify CCTA helps identify Red FlagsRed Flags

Program Integrity-Technical Program Integrity-Technical SolutionSolution Current challenge: various disparate data sources that Current challenge: various disparate data sources that

exist; lack of data integration between systems/data in exist; lack of data integration between systems/data in “silos”“silos”

September 2011- released a Request For Information (RFI)September 2011- released a Request For Information (RFI) Lessons learned: Spectrum of services should include, but Lessons learned: Spectrum of services should include, but

are not limited to:are not limited to: Data integrationData integration Rules managementRules management Anomaly detectionAnomaly detection Predictive modelingPredictive modeling Social networking analysisSocial networking analysis Forensic reviewForensic review Fraud case managementFraud case management

Next steps: Next steps: OCFS to release a Request for Proposal (RFP) OCFS to release a Request for Proposal (RFP) Implement a tool that will analyze and integrate data Implement a tool that will analyze and integrate data from the various data systems in NYSfrom the various data systems in NYSRun data against various predictors/red flags identified Run data against various predictors/red flags identified as highly indicative of fraudulent activity as highly indicative of fraudulent activity Focus investigations on cases that have a higher Focus investigations on cases that have a higher propensity of fraudulent activitypropensity of fraudulent activity

Program Integrity-Technical Program Integrity-Technical SolutionSolution

AA BB CC DD

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Can you tell who the Can you tell who the fraudulent provider is?fraudulent provider is?

Child Care Fraud Child Care Fraud PreventionPrevention& Detection Incentive & Detection Incentive ProgramProgram Competitive grants program for local county social Competitive grants program for local county social

services districtsservices districts 12-month initiative, starting April 1, 201212-month initiative, starting April 1, 2012 $1.2M total funding pool$1.2M total funding pool Flexible funding, tiered according to child population Flexible funding, tiered according to child population

(maximum grants of $40,000, $60,000, or $100,000 (maximum grants of $40,000, $60,000, or $100,000 for small, medium, and high child population counties, for small, medium, and high child population counties, respectively)respectively)

20 winning counties20 winning counties Proposed outcomes considered relative to each Proposed outcomes considered relative to each

applicant’s goals – and starting placeapplicant’s goals – and starting place Many promising practices in the winning proposals, for Many promising practices in the winning proposals, for

example:example: Data matching between CCTA and CACFP Data matching between CCTA and CACFP

databasesdatabases More emphasis on FEDS and referring them More emphasis on FEDS and referring them for investigationfor investigation

Child Care Fraud Child Care Fraud PreventionPrevention& Detection Incentive & Detection Incentive ProgramProgram(con’t.d)(con’t.d)

Profile on the Profile on the CountiesCounties

Albany CountyAlbany County&&

Westchester CountyWestchester County• Albany County

• Westchester County

Albany County, New York Albany County, New York Child Care ProgramChild Care Program 304,204 residents in 304,204 residents in

Albany County Albany County 375 legally-exempt 375 legally-exempt

providers in any given providers in any given month month

25-30 anticipated newly 25-30 anticipated newly enrolled providers monthlyenrolled providers monthly

Albany CountyAlbany CountyChild Care Fraud Initiative Child Care Fraud Initiative 20112011 Full-time investigator out-posted to child care and Full-time investigator out-posted to child care and

accounting division accounting division Improved accessibility to investigatorImproved accessibility to investigator Strengthened partnership between child care and Strengthened partnership between child care and

investigative staffinvestigative staff AccomplishmentsAccomplishments

$216,000+ in total fraud detected$216,000+ in total fraud detected $80,000+ in recoveries (cash restitution)$80,000+ in recoveries (cash restitution) $198,000+ in cost avoidance (disqualifications)$198,000+ in cost avoidance (disqualifications)

Investigative Approach:Investigative Approach:Home Visits Home Visits Unscheduled visits Unscheduled visits Outside traditional hoursOutside traditional hours

Looking to verify:Looking to verify: If care is being providedIf care is being provided Identity of providerIdentity of provider The actual children in attendanceThe actual children in attendance Procedure of recording attendance Procedure of recording attendance

Prevention/EducationPrevention/Education Review of county formsReview of county forms Proper billing procedures/expectationsProper billing procedures/expectations Payment expectations Payment expectations Reporting changes Reporting changes Definition of fraud and abuse Definition of fraud and abuse Penalties for fraudPenalties for fraud Reporting suspected fraud and abuse Reporting suspected fraud and abuse For new providers:For new providers:

Mandatory informational meeting with orientation to above Mandatory informational meeting with orientation to above Introduction to Introduction to CCTACCTA and strong encouragement for participation and strong encouragement for participation

Westchester County Day Westchester County Day Care Subsidy Fraud, Waste Care Subsidy Fraud, Waste and Abuse Prevention and Abuse Prevention InitiativesInitiatives

WCDSS Organizational WCDSS Organizational Structure & Day Care Structure & Day Care SubsidiesSubsidies

Four District Offices

Day Care for TA recipients

Centralized Day Care

Subsidy Unit

Low Income and Title XX

Central Program

Office

Roster Review for

Cost Avoidance

Payment Processing

Bureau of Case Review

Process Payments w/

CCTA and BICS

Fraud Investigation

Refer cases for

Prosecution

Cost Avoidance Resulting Cost Avoidance Resulting from Roster Reviewfrom Roster ReviewJanuary 2009 - December 2009January 2009 - December 2009 $682,895$682,895 Monthly average cost avoidance in 2009 = $56,908Monthly average cost avoidance in 2009 = $56,908January 2010 - December 2010January 2010 - December 2010 $917, 214$917, 214 Monthly average cost avoidance in 2010 = $76,435Monthly average cost avoidance in 2010 = $76,435    January 2011 - December 2011January 2011 - December 2011 $788,721 $788,721 Monthly average cost avoidance in 2011 = $65,727Monthly average cost avoidance in 2011 = $65,727

Current & Past BCR Current & Past BCR InitiativesInitiativesFEDS:FEDS: May - November 2011 May - November 2011 235 FEDS cases reviewed 235 FEDS cases reviewed 112 slots closed112 slots closed Cost avoidance: $643,554Cost avoidance: $643,554

Audit and Review of ongoing cases: First 11 months of 2011 Audit and Review of ongoing cases: First 11 months of 2011 892 service cases (Low Income and Title XX) reviewed892 service cases (Low Income and Title XX) reviewed 502 temporary assistance related subsidy cases reviewed502 temporary assistance related subsidy cases reviewed 153 slots discontinued as a result of review153 slots discontinued as a result of review Cost avoidance: $1.19Cost avoidance: $1.19 million to the county million to the county

Review of sign-in sheets at centers Review of sign-in sheets at centers Reconciliation with claims submitted on rostersReconciliation with claims submitted on rosters Amount of overpayments identified in 2011: $41,391 (centers)Amount of overpayments identified in 2011: $41,391 (centers)

New & Enhanced New & Enhanced InitiativesInitiativesProvider FraudProvider Fraud Customer FraudCustomer Fraud Creation of HOT LINE and Creation of HOT LINE and

Public Awareness Public Awareness CampaignCampaign

Training of fiscal staff in Training of fiscal staff in forensic auditingforensic auditing

Increased auditsIncreased audits Increased investigationIncreased investigation For additional information For additional information

contact: contact: kkw6@westchestergov.com

HOT LINE and Public HOT LINE and Public Awareness CampaignAwareness Campaign

Credit ChecksCredit Checks Lexis Nexis/AccurintLexis Nexis/Accurint

Employment HistoryEmployment History AssetsAssets Criminal RecordsCriminal Records

Increase staff in BCRIncrease staff in BCR Increase percentage of Increase percentage of

cases reviewedcases reviewed

Questions Questions and and

AnswersAnswers

http://www.ocfs.state.ny.us/main/childcare Contact OCFS: 518-474-9454Contact OCFS: 518-474-9454

New York State New York State Presenters:Presenters:Janice Molnar, Deputy CommissionerDivision of Child Care Services, NYS Office of Children and Family Services

Renee Rider, Assistant CommissionerDivision of Child Care Services, NYS Office of Children and Family Services

Jim Hart, Director of Regional OperationsDivision of Child Care Services, NYS Office of Children and Family Services

Rhonda Duffney, Acting Director of the Child Care Subsidy ProgramDivision of Child Care Services, NYS Office of Children and Family Services

Sean Hicks, Supervising Welfare Fraud InvestigatorAlbany County Department of Social Services

Katherine Waluschka, Associate CommissionerWestchester County Department of Social Services