BILL ANALYSIS
SB 141
Page 1
Date of Hearing: June 30, 2009
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Jim Beall, Jr., Chair
SB 141 (Maldonado) - As Amended: May 5, 2009
SENATE VOTE : 29-1
SUBJECT : In-home supportive services: provider timesheets
SUMMARY : Requires that timesheets for in-home supportive
services contain a legal certification signed by the provider
and recipient verifying that the information is true and
correct, and establishes civil penalties for knowingly providing
false information. Specifically, this bill :
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 $500 and the maximum amount of
$1,000.
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.
EXISTING LAW
1)Establishes the in-home supportive services (IHSS) program to
assist qualifying aged, blind, and disabled individuals to
remain safely in their own homes.
2)Requires applicants for IHSS to sign their application under
penalty of perjury.
3)Requires the 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 recipient's service
needs.
4)Requires recipients and providers of IHSS to sign a time sheet
every fourteen days showing the number of hours per day of
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services received.
5)Defines "fraud" for purposes of the IHSS program to mean:
"the intentional deception or misrepresentation made by a
person with the knowledge that the deception could result in
some unauthorized benefit to himself or herself or some other
person. Fraud also includes any act that constitutes fraud
under applicable federal or state law." (Welfare &
Institutions Code Section 12305.8(a).)
6)Defines "overpayment" for purposes of the IHSS program to
mean: "the amount paid by [DSS] or the Department of Health
Care Services to a provider or recipient, which is in excess
of the amount for services authorized or furnished pursuant to
[the IHSS program]."
7)Specifies the responsibilities of DSS, the Department of
Health Care Services (DHCS) and the counties for various
quality assurance activities, including activities to ensure
program integrity, including fraud detection and prevention.
8)Prohibits persons who have been convicted of certain crimes,
including fraud against a government health care or supportive
services program, within the preceding 10 years from providing
or receiving IHSS services. (Welfare & Institutions Code
Section 12305.81(a).)
9)Provides for the recovery of overpayments to IHSS providers
and, if the overpayment is determined to be the result of
fraud by the service provider, prohibits future payments to
the provider for up to 10 years following conviction or the
term of incarceration following the conviction for fraud.
(Welfare & Institutions Code Section 12805.83.)
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS :
Background : The IHSS Program helps pay for services so that the
elderly, disabled, or blind individuals can remain in their own
homes and avoid institutionalization. IHSS services include,
but are not limited to, housecleaning, meal preparation,
laundry, grocery shopping, personal care services (such as bowel
and bladder care, bathing, grooming and paramedical services),
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accompaniment to medical appointments, and protective
supervision for people with mental impairments. IHSS consists
of four programs, including: Personal Care Services Program
(PCSP), IHSS Plus Waiver Program (IPW), IHSS Residual Program
(IRP), and Medi-Cal Waiver Personal Care Program (MWPCS). The
PCSP, IPW, and IRP are administered at the county level by
county welfare departments and at the State level by the Adult
Programs Division within DSS. The Medi-Cal Waiver Personal Care
Services (MWPCS) Program is administered through Department of
Health Care Services (DHCS). A portion of the costs for IHSS
services are paid by federal funding. The entire program
consists of over 444,000 recipients and on average 325,000 IHSS
workers.
In 2004, as part of the budget trailer bill, SB 1104 (Committee
on Budget and Fiscal Review), Chapter 229, Statutes of 2004, the
Legislature imposed a number of mandatory duties on DSS, DHCS
and the counties with respect to quality, cost controls and
program integrity within the IHSS program. Among other things,
SB 1104 defined and distinguished between "fraud" and
"overpayments," with fraud being limited to traditional
prosecutable acts of intentional misrepresntation, while
overpayment was defined broadly to include all instances in
which providers are paid in excess of the amount for authorized
services, whether fraudulent or not. SB 1104 authorized DHCS to
investigate fraud in the provision or receipt of supportive
services, and required counties to refer instances of suspected
fraud to DHCS for investigation. It required DHCS to notify
DSS, the county, and the county's nonprofit consortium or public
authority, if any, of a determination that a provider has
engaged in fraud.
Need for this bill : The author notes that, "[i]n 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 fraud within the program." According
to the author, "[i]t's time to revisit and strengthen quality
assurance and program integrity within IHSS. Because oversight
is limited, fraud has been able to go undetected. 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."
Reports of suspected or possible fraud in IHSS have raised
concerns in counties, including Los Angeles, Fresno, and
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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.
The author cites to a report from the Legislative Analyst's
Office (LAO) (March 24, 2009) related to the IHSS program. The
report states that "[b]etween July 2005 and November 2008, DHCS
investigated about 5,000 cases of fraud. They identified $6.1
million in overpayments and collected about $670,000 of that
amount." It is, perhaps, noteworthy that the LAO report does
not indicate how many of the 5,000 fraud investigations resulted
in substantiated findings of or convictions for fraud, or the
percentage of the identified "overpayments" that were related to
substantiated fraud (that is, "intentional deception or
misrepresentation") as opposed to overpayments that were
unintentional or non-fraudulent.
In March, 2009, the California Senate Office of Oversight and
Outcomes issued a report entitled, In-Home Supportive Services:
Examination of the Impact of SB 1104: The 2004 Quality Assurance
Initiative (OOO Report) . The OOO Report likewise cites selected
state and county statistics on numbers of fraud allegations
reviewed and the amount of money recouped. These statistics
typically reveal that only a small percentage of such
allegations result in recovery of significant overpayments and
relatively few result in substantiated fraud. For example, the
OOO Report notes that, of 298 IHSS fraud referrals in Sacramento
County over a several month period, only seven resulted in
substantiated fraud, only two were sent to the district
attorney, and no overpayments were recovered. In Fresno County,
for the same period, the County "reviewed" 639 cases, only 58 of
which were sent to the district attorney, with $106,000
recouped. It is not clear how much of the amount recouped was
the result of "fraud" versus overpayments not due to intentional
deception or misrepresentation. The OOO Report also notes that
not all substantiated fraud is committed by IHSS recipients or
providers. County IHSS workers, for example, have also been the
subject of fraud investigations.
This is not to suggest that fraud is not a problem or that
efforts to combat fraud should not be increased. As the United
Domestic Workers of America (UDW)/AFSCME says in supporting this
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bill, "any purposeful behavior that damages the integrity of the
IHSS Program . . . cannot be tolerated." The OOO Report
describes state and county anti-fraud efforts and suggestions
that have been made for bolstering anti-fraud efforts. The
issue addressed by this bill is under consideration in the
budget process as part of the Governor's anti-fraud initiative.
A bill heard by the Assembly Human Services Committee earlier
this year, AB 682 (Lowenthal), would require the collection of
data on the numbers of fraud convictions for a 5-year period.
AB 682 calls for evaluation of implementation of provisions
intended to combat fraud in the IHSS program and identification
of the magnitude of fraud in terms of the total dollars
inappropriately spent or removed from the program, and the
number of consumers harmed or placed at risk of harm as a result
of fraudulent activity. It also would require DSS, DHCS and
stakeholders to make recommendations on the best means to combat
IHSS fraud.
Arguments in opposition : This bill would require a legal
certification by both IHSS recipients and providers that
timesheets are true and correct, and establish civil penalties
for knowingly providing false information. Because any
overpayment--fraudulent or not--is recoverable under current
law, and intentional deception or misrepresentation on
timesheets is already prosecutable as fraud, the need for the
additional offense and penalty is not clear. This bill does not
specify what process or standard would apply for establishing,
in a civil action, that an overpayment is "knowingly" false, and
how such activities would be funded. The penalties would not
warrant the time and expense of "prosecuting" such civil
actions. The standard of proof required for purposes of
imposing a civil penalty would presumably be less than the
standard for a conviction for fraud, which would mean a greater
chance of an erroneous determination in the case of civil
penalties. Fines, even as low as $500-$1,000, would be a major
hardship on low-income IHSS recipients and providers.
Moreover, IHSS recipients function as employers in that they are
given the right to hire, fire, and supervise their IHSS workers.
Even in other situations involving public employers or public
funds, no examples could be identified in which employers or
supervisors and their employees/supervisees are subject to civil
penalties, as established by this bill. The rationale for
imposing such requirements and sanctions only in this context is
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unclear. The clear implication, however, is that low-income
elderly and disabled service recipients and their low-paid
service providers are less trustworthy than other employers and
employees. UDW/AFSCME says that this bill is consistent with
the direction of other states, such as Massachusetts, which
requires a homecare provider to acknowledge on the timesheet
that, "It is a federal crime to provide false information."
This bill, however, does more than to require acknowledgment of
existing law; it establishes a new civil offense with new
penalties over and above existing state and federal law.
In sum, criminal sanctions already exist for substantiated IHSS
fraud--so, any additional deterrent effect of this bill's
provisions is questionable. Other efforts to evaluate the
incidence of IHSS fraud and to bolster anti-fraud efforts are
ongoing; so, the bill is arguably premature. Moreover, the
additional civil offense established by this bill would be
stigmatizing and likely to be erroneously applied.
PROPOSED AMENDMENT :
Most of the concerns with this bill would be addressed if,
instead of establishing a new civil action for intentional
misrepresentations on timesheets, the civil penalties
established by this bill were imposed in addition to criminal
penalties imposed upon a conviction for fraud. The author
reportedly is agreeable to the following amendment:
Amend Section 12301.25(b), page 2, lines 9-15, as follows:
(b) A person who willfully and knowingly provides false
information under this section is convicted of fraud, as
defined in subdivision (a) of Section 12305.8, resulting
from intentional deception or misrepresentation in the
provision of timesheet information under this section
shall, in addition to any criminal penalties imposed, shall
be subject to a civil penalty of at least five hundred
dollars ($500), but not to exceed one thousand dollars
($1,000), for each violation. An action for a civil penalty
under this section may be brought by any public prosecutor
in the name of the people of the State of California, and
the penalty shall be enforceable as a civil judgment.
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REGISTERED SUPPORT / OPPOSITION :
Support
County of San Diego
United Domestic Workers of America /AFSCME
Opposition
Disability Rights California
Analysis Prepared by : Eric Gelber / HUM. S. / (916) 319-2089