BILL ANALYSIS
SENATE HUMAN
SERVICES COMMITTEE
Senator Carol Liu, Chair
BILL NO: SB 141
S
AUTHOR: Maldonado
B
VERSION: To be amended
HEARING DATE: April 28, 2009
1
FISCAL: To Appropriations
4
1
CONSULTANT:
Hailey
SUBJECT
In-home supportive services: provider timesheets
SUMMARY
Requires that timesheets for in-home supportive services
(IHSS), which are signed by the recipient and the provider
of services, contain a legal certification; a person
knowingly providing false information would be subject to a
civil penalty, the minimum of which is $2,500 and the
maximum is $25,000.
ABSTRACT
Current law
1. Establishes the in-home supportive services program
(IHSS) to assist qualifying aged, blind, and disabled
individuals to remain safely in their own homes.
2. Establishes the crime of perjury as a felony punishable
by two, three, or four years in state prison. (Penal Code
Sections 118 and 126)
3. Requires applicants for IHSS to sign their application
under penalty of perjury.
Continued---
STAFF ANALYSIS OF SENATE BILL 141 (Maldonado) Page
2
4. Requires the State Department of Social Services (DSS)
to establish statewide hourly task guidelines for the
chores and services provided through IHSS and to provide a
standardized tool for consistent and accurate assessment of
a client's service needs.
5. Requires recipients and providers of IHSS to sign a
time sheet every fourteen days showing the number of hours
per day of services received.
This bill
Note: this analysis reflects the author's intent to amend
the bill in committee per the recommendation of the Senate
Public Safety Committee. That amendment is provided in
full in the Comments and Questions section of the analysis.
1. Requires that the time sheet contain a legal
certification to be signed by the provider and recipient.
2. Provides that a person who knowingly provides false
information be subject to a civil penalty for each
violation in the minimum amount of $2,500 and the maximum
amount of $25,000.
3. Provides that an action for a civil penalty may be
brought by any public prosecutor and the penalty imposed
shall be enforceable as a civil judgment.
FISCAL IMPACT
Unknown
BACKGROUND AND DISCUSSION
Need for the bill
The author places the bill within the context of the growth
of the IHSS program during the past ten to 15 years -
doubling in size in the past decade and forecast to grow at
nearly 8 percent per year through 2014. However, the
author believes that state and county resources for
oversight do not match the program's growth.
In 2005, the Legislature added quality assurance provisions
to IHSS to ensure that assessment and the provision of
services are uniform across the state and to prevent or
STAFF ANALYSIS OF SENATE BILL 141 (Maldonado) Page
3
eliminate fraud within the program. It is time, says the
author, to revisit and strengthen quality assurance and
program integrity within IHSS. Because oversight is
limited, the author believes that fraud has been able to go
virtually undetected.
The author believes that adding a civil penalty to the
knowing provision of false information on the timesheet
will deter some fraudulent activity and ensure the
program's integrity.
Fraud in IHSS and benefit payment programs: DSS and county
reporting
Reports of suspected or possible fraud in IHSS have raised
concerns in counties, including Los Angeles, Fresno, and
Sacramento, with grand juries raising specters of
extensive, purposeful misuse of public funds. Further
investigation of those charges has yielded somewhat less.
While people tend to remember the headlines when a grand
jury report is released, they may miss the report to a
board of supervisors summarizing the result of
investigations.
At a recent Human Services Committee oversight hearing on
IHSS, representatives of DSS reported that
state and county quality assurance staff performed
20,532 desk/case file reviews and 3,833 home
visits during 2008. While slightly more than
13,000 required some case action, more than 10,000
of those did not result in a change of authorized
hours but rather involved a missing signature, an
expired form, or clerical errors of this nature.
These desk reviews not only identify routine case
processing discrepancies, these reviews can also
identify cases that warranted further review or
investigation, such as the provider's travel
distance being greater than 30 miles or the
provider's working in excess of 300 hours a month.
Of the cases reviewed, 557 or 2.3 percent of cases
were deemed suspicious enough to refer to DHCS for
further investigation. This referral rate is
comparable to the CalWORKs and food stamp programs
as indicated in the October through December 2007
Fraud Investigation Report, which reported 2.44
STAFF ANALYSIS OF SENATE BILL 141 (Maldonado) Page
4
percent and 2.03 percent rate for investigation
requests for the respective programs.
Of the CalWORKs investigations completed during the period
reported, one-third of the 2.44 percent of cases deemed
suspicious (that is, 0.8 percent of all CalWORKs cases)
were found to have evidence sufficient to support an
allegation of fraud. DSS found that $8 million in
fraudulent overpayments were made during that last quarter
of 2007 and $3.6 million was recovered. Of the food stamp
investigations completed during the period reported,
one-third of the 2.03 percent of cases deemed suspicions
(that is, 0.65 percent of all food stamp cases) were found
to have evidence sufficient to support an allegation of
fraud. DSS found that $3.75 million in fraudulent
over-issuances were made in that quarter, and $1.7 million
was recovered.
Unrecovered fraudulent overpayments in CalWORKs for the
last quarter of 2007 represented 0.58 percent of benefits
paid ($4.4 million of $753.5 million) and the unrecovered
fraudulent provision of benefits in food stamps during that
period represent 0.28 percent of food stamp benefits
provided.
According to a report released in March 2009 by the Senate
Office of Oversight and Outcomes, during a three month
period in 2008, Fresno County reviewed 639 cases of
suspected or alleged fraud and sent 58 to the district
attorney - the IHSS caseload in Fresno County is about
15,000. During the same period, Sacramento County, which
has 16,500 IHSS cases, considered 298 IHSS fraud referrals
and substantiated fraud in seven; two went to the district
attorney.
In Los Angeles County, fraud investigations conducted
between 2005 and 2008 led to a "fraud sweep," resulting in
20 arrests. According to the Department of Public Social
Services in Los Angeles County, the referral dates from
DPSS to the district attorney for cases in the "sweep"
ranged from August 2006 through May 2008. The arrests
included charges of defrauding IHSS, Medi-Cal, and SSI/SSP
(benefit payments for blind, aged, and disabled persons
with qualifying incomes). Total money loss was $2,061,000;
$840,000 of that was from the IHSS program and $1.2 million
STAFF ANALYSIS OF SENATE BILL 141 (Maldonado) Page
5
was from Medi-Cal and SSI/SSP.
Random sampling for home visits to detect organized fraud
Quality assurance activities initiated in 2004 include home
visits made to ensure that the client is receiving services
- and that clients and providers are not "made up"
individuals that are part of a deliberate attempt to
defraud the program. In 2008, DSS and counties made more
than 3,500 such home visits. (In addition, DSS and
counties conduct desk reviews of an additional 20,000
cases, but these are mainly a check to see if the
timesheets and payroll systems are being used accurately
and within the law's requirements.)
If these 3,500 cases are selected each year at random -
with the selection outside the control of any one
individual who might have reason to steer investigators
away from particular households, is this sample size
sufficient to uncover organized fraud? According to
statisticians working in public policy, a sample size of
1000 can provide national information with a margin of
error of 7 or 8 percent. A sample size of 3,500 per year
in California will most assuredly disclose patterns of
fraud that are greater than one or two person operations.
It may be important for the Legislature to look carefully
at the methodology DSS uses for its annual home visits for
quality assurance purposes to ensure that the sampling is
done properly.
DHCS review of suspected fraud cases
Because federal participation in the cost of IHSS services
comes through the Medicaid program, and because the
Department of Health Care Services (DHCS) is California's
single state agency for Medicaid, the unit charged with
investigating reports of suspected fraud in the IHSS
program is located within DHCS. Counties are instructed to
refer cases of suspected fraud to DHCS for further
investigation. This unit has had, until recently, two
investigators. Cases awaiting investigation have been
piling up at the department with at least two results: some
counties reported to the Senate Office of Oversight and
Outcomes that they have stopped reporting suspected fraud
to DHCS and have begun their own investigations. Second,
DHCS reported to the committee that they assigned 22 field
officers to work on the backlog of suspected fraud cases.
STAFF ANALYSIS OF SENATE BILL 141 (Maldonado) Page
6
That concentration of personnel began in February of this
year; DHCS promises to report the results of this
concentrated set of investigations to the committee soon.
As part of the budget that passed earlier in 2009, DHCS is
to increases its IHSS investigators from two to five.
Other overpayment- and fraud-detection changes nearing
implementation
The new payroll system (referred to as CMIPS-II) will
enable counties to know more quickly if an IHSS client has
been hospitalized or has died. More rapid transmittal of
those data will reduce the opportunity to file claims for
services that were not provided.
Grand jury reports: narrow data and broad assertions
During the same week that this committee held a hearing on
IHSS quality assurance activities, a Sacramento County
grand jury released a report "IHSS: for the needy, not the
greedy."
The grand jury begins with statistics. From 2005-05
through 2006-07, Sacramento County paid $151 million to
IHSS providers. Investigations found $820,000 in
fraudulent overpayments. This represents 0.54 percent of
payments. About 10 percent of these overpayments were
recovered, according to the grand jury.
Then, the grand jury shifts away from data to sworn
testimony. The report provides a list of fraudulent
activities that at least one witness believes has taken
place at least once within the county. The list is without
quantification or details, and the report includes no
direct quotations from witnesses' statements. Moreover,
the grand jury does not assert that these activities went
undetected, only that a witness said each activity had
occurred. The grand jury concludes, offering no evidence
in support and offering some evidence to the contrary, that
fraud is "rampant and out of control."
The grand jury chose to highlight this broad and
unsubstantiated claim in its executive summary and press
release, and the media reported on it. When public
discussion of IHSS focuses on unsubstantiated conclusions,
some people may believe they are proven facts.
STAFF ANALYSIS OF SENATE BILL 141 (Maldonado) Page
7
Related legislation
The committee is also considering SB 142 (Maldonado), which
would require that IHSS time sheets indicate the specific
hours in the day that the client received services, and SB
246 (Benoit), which would require a criminal records
clearance for every IHSS provider.
Arguments in opposition
Opponents believe that claims of IHSS fraud are often
inflated and without foundation. They believe that the
penalties contained in this bill are out of proportion to
the common errors and mistakes that happen when IHSS
timesheets are submitted.
COMMENTS AND QUESTIONS
1. Criminal penalty for perjury vs. civil penalty for
false information
The Senate Committee on Public Safety is concerned with
matching crime with punishment. The committee notes that
perjury is a felony punishable by sentences of two, three,
and four years in the state penitentiary. The Public
Safety Committee recommends an amendment substituting
certification that the information in the time sheet is
true and correct for a statement signed under penalty of
perjury. Knowingly providing false information would be
punishable by a civil penalty ranging from $2,500 to
$25,000 per violation. The author will offer this
amendment at the April 28 hearing.
Notwithstanding any other provision of law, the
standardized provider timesheet used to track the work
performed by providers of services under this article shall
contain a legal verification certification to be signed by
the provider and recipient, verifying under penalty of
perjury that the information provided in the timesheet is
true and correct. A person who knowingly provides false
information shall be subject to a civil penalty for each
violation in the minimum amount of two thousand five
hundred dollars ($2,500) and the maximum amount of
twenty-five thousand dollars ($25,000). An action for a
civil penalty under this provision may be brought by any
public prosecutor in the name of the people of the State of
California and the penalty imposed shall be enforceable as
STAFF ANALYSIS OF SENATE BILL 141 (Maldonado) Page
8
a civil judgment.
2. Other occupations required to sign time sheets with
civil penalties for providing false information
Committee staff could find no instances of other
professions signing their timesheet under the threat of
civil or criminal penalties beyond those that apply to all
cases of fraud.
The committee may wish to ask the author why the job of
IHSS provider requires a level of potential penalty that no
other profession requires.
POSITIONS
Support: None received
Oppose: IHSS Coalition
-- END --