BILL ANALYSIS �
SB 930
Page 1
SENATE THIRD READING
SB 930 (Evans)
As Amended August 15, 2011
Majority vote
SENATE VOTE :23-16
HUMAN SERVICES 4-1 APPROPRIATIONS 11-6
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|Ayes:|Beall, Ammiano, Hall, |Ayes:|Fuentes, Blumenfield, |
| |Portantino | |Bradford, Charles |
| | | |Calderon, Campos, Davis, |
| | | |Hall, Hill, Lara, |
| | | |Mitchell, Solorio |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Jones |Nays:|Harkey, Donnelly, Gatto, |
| | | |Nielsen, Norby, Wagner |
| | | | |
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SUMMARY : Repeals requirements that In-Home Supportive Services
(IHSS) recipients provide fingerprint images and that provider
timesheets include spaces for provider and recipient
fingerprints; repeals the prohibition against providers using a
post office box address to receive their paychecks; and,
corrects problems with the provider appeals process.
Specifically, this bill :
1)Repeals the requirement that IHSS recipients provide
fingerprint images at the time of assessment or reassessment.
2)Repeals the requirement that the standardized timesheet
include designated spaces for the index fingerprints of the
provider and the recipient.
3)Deletes the requirements and prohibitions related to the use
of a post office box address by an IHSS provider.
4)Requires the county or IHSS public authority to provide the
state Department of Social Services (DSS) with an unmodified
copy of the Department of Justice (DOJ) criminal offender
record information search response (CORI) if an IHSS provider
or provider applicant has requested an appeal of a denial of
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placement on the IHSS provider registry as a result of a DOJ
criminal background check.
5)Requires the county or public authority to provide an IHSS
provider or provider applicant with an unmodified copy of his
or her CORI with any notice of denial, along with information
on how the individual may contest the accuracy or completeness
of, or refute any erroneous information in the CORI.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
Savings of $41.6 million ($21 million GF) spread over
seven years associated with not implementing the finger
imaging requirements. Those savings would be offset to
an unknown degree by forgone savings associated with
deterring fraudulent activity.
1) Absent this bill, it is assumed that the
administrations would need to comply at some point
with current law and implement the finger imaging
requirements and the prohibition against providers
using post office boxes. Previous budget estimates
suggest that total costs for finger imaging would be
approximately $41.6 million ($21 million GF) over
seven years. Therefore, this bill removes that cost
pressure.
2) Though these anti-fraud provisions were never
implemented, the Governor's 2010-11 budget assumed
all of the anti-fraud initiatives adopted in 2009
would result in approximately $390 million ($135
million GF) in savings in the first full year. It
is unclear how much of that would have been
attributable to finger imaging and the prohibition
against post office boxes. Proponents of this
finger imaging policy would argue, however, that
there are foregone savings of perhaps tens of
millions of dollars associated with this
legislation.
Proponents of this legislation, on the other hand,
argue that there is no evidence of widespread fraud
in the IHSS program and therefore it is unlikely the
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level of savings assumed by the previous
administration is realistic.
COMMENTS :
Anti-fraud measures : According to the author, this bill is
intended to repeal three untenable components of the "IHSS
Anti-Fraud Initiative" included in the 2009-10 budget trailer
bill related to IHSS, AB 19 X4 (Evans), Chapter 17, Statutes of
2009 Fourth Extraordinary Session. The author says:
In 2009, Governor Schwarzenegger persuaded the
Legislature to adopt the "IHSS Anti-Fraud Initiative."
The purpose of this effort was to ensure the identity
of IHSS applicants and to prevent duplicate aid. The
initiative included ten separate components. Three
components of this initiative have proven to be costly
and ineffective: (1) fingerprinting for all
consumers, (2) provider and consumer fingerprints on
timesheets, and (3) prohibition of the use of P.O.
Boxes by providers on IHSS forms. There is no
evidence to support the effectiveness of these three
"anti-fraud" mandates. In the absence of this
evidence, the $41.6 million to be spent on this part
of the program should be spent on other priorities.
Background : In 2004, comprehensive legislation was enacted to
standardize assessment of IHSS recipients' needs and to ensure
integrity in the IHSS program, SB 1104 (Budget & Fiscal Review
Committee), Chapter 224, Statutes of 2004. SB 1104 directed DSS
and the Department of Health Care Services (DHCS) to develop a
new provider enrollment form that each person seeking to provide
supportive services must complete, sign under penalty of
perjury, and submit to the county. SB 1104 also gave DHCS
authority to investigate suspected instances of fraud in the
IHSS program. SB 1104 required DSS, DHCS, and county quality
assurance staff to work together and coordinate activities.
In July 2009, AB 1 X4 (Evans), Chapter 1, Statutes of 2009
Fourth Extraordinary Session, allocated additional 2009-10 and
2010-11 funds to DHCS and DSS for a total of 25 new fraud
investigation and program integrity-related positions. AB 1 X4
(Evans) additionally included $10 million in additional funds to
be allocated to counties based on their approved plans. AB 4 X4
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(Evans), Chapter 4, Statutes of the 2009-10 Fourth Extraordinary
Session, the human services trailer bill, also included changes
to provisions governing the new provider enrollment form,
requiring documentation to be submitted in person by applicant
providers to county offices.
At the same time, AB 19 X4 (Evans), was enacted to enhance
program integrity and anti-fraud protections in the IHSS
program. AB 19 X4 was considered through the budget process and
was not vetted through legislative policy committees. It
included the following anti-fraud measures: 1) new provider
enrollment requirements; 2) fingerprinting and criminal
background checks for all providers; 3) increased data matching
with jail, death and other official records to eliminate
fraudulent claims; 4) provider acknowledgement of delivering
services; 5) provider orientations; 6) unannounced home visits;
7) fraud training for county staff; 8) prohibition on the use of
post office boxes by providers on IHSS forms; 9) fingerprinting
recipients; and, 10) fingerprints of recipient and provider on
each timesheet. This bill repeals the last three of these
measures.
No cost-benefit analysis was done at the time to support the
anti-fraud measures of AB 19 X4, including the fingerprinting
requirements. Nonetheless, the 2009-10 Budget included the
Schwarzenegger Administration's estimate of about $162 million
General Fund savings as a result of new anti-fraud activities in
the IHSS program. The estimated savings were based on an
assumption of a basic 10% of program costs. No further
empirical basis for the assumption was offered. The
Administration's 2010-11 Budget estimated an annual General Fund
Savings of $130 million annually from anti-fraud measures.
How common is IHSS fraud ? Statewide data on the incidence of
fraud in the IHSS program is lacking. Federal participation in
the cost of IHSS services comes through the Medicaid program,
and because 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 that
department. As reported in June 2009, according to DHCS:
Currently there is no accurate means of measuring or
monitoring IHSS fraud within the state. This is
because of the number of jurisdictions involved and
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the various data collection systems in place . . .
Because there is no accurate means of measuring or
monitoring IHSS fraud within the state, we do not know
the exact number of providers or recipients committing
fraud.
In-Home Supportive Services: A Primer on Potential Fraud and
Suggestions for Curbing It, California Senate Office of
Oversight and Outcomes (June 26, 2009), p. 3.
While accurate statewide data on the incidence of IHSS fraud is
lacking, there is no shortage of misinformation. For example,
in support of the prior administration's anti-fraud proposals,
Governor Schwarzenegger and a number of district attorneys
repeatedly referenced a figure of 25% in fraudulent IHSS
payments. This figure appears to have originated in a 2004
Spring Finance Letter in reference, not to fraud but, rather, to
weaknesses and deficiencies in the needs assessments conducted
at the time. Based on state level case reviews conducted for a
number of years, the Finance Letter notes, "at least 10% of all
paid services may be over-assessed or have not actually been
provided." The Finance Letter then references the Governor's
Budget for fiscal year 2004-05, which reportedly "acknowledged
that up to 25% of the hours may be over-assessed." This 25%
figure was then picked up by news media and reported as a
reflection of fraud in the IHSS program, rather than
over-assessments due to problems with the need assessment
process then in use.
In short, available data do not support the conclusion that
there is widespread fraud in the IHSS program. Nonetheless,
this bill does not impact most of the anti-fraud measures
enacted through AB 19 X4 (Evans). It would cancel only the
requirement that counties secure fingerprint images of
applicants for and recipients of IHSS at the time of application
or reapplication; the requirement that timesheets have a space
for an index-finger print of both the recipient and the provider
of IHSS; and, the prohibition against providers using a post
office box for receipt of wage checks. In addition to "quality
assurance" provisions added by the Legislature in 2004, seven of
the ten measures included in AB 19 X4.
Duplicate aid fraud : Fingerprinting of IHSS recipients is
purportedly intended to prevent duplicate aid fraud-i.e.,
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receiving aid under more than one identity or in more than one
county. Whatever the overall incidence of fraud in the IHSS
program, no data are available on the incidence of this type of
fraud. In fact, it is difficult to even conceive of scenarios
of how such duplicate aid fraud might be perpetrated by the
seniors and people with disabilities who receive IHSS services.
As advocates opposing proposed 2010-11 Budget expenditures for
proceeding with recipient fingerprinting pointedly remarked at
the time, "�t]his is a solution in search of a problem; there is
no evidence that people are disguising themselves as someone
else to get IHSS, or that people are going from county to county
to be bathed."
Arguments in support : Supporters of this bill note that the
state has estimated that it would need $8.2 million this year
alone, and a total of $41.6 million over the next 7 years, to
implement the recipient fingerprinting requirement. "Clearly,"
these supporters say, "in these difficult fiscal times, the
expenditure of millions to implement an anti-fraud initiative in
the absence of demonstrated widespread fraud would be imprudent
at best." Supporters point to a May 8, 2010, letter to DSS from
the Obama Administration concerning fingerprinting in the
CalFresh program, which notes that "�m]ost States satisfy the
requirement to establish a system to prevent duplicate
participation by matching names with social security numbers,
which is far less costly than finger image systems yet equally
effective at detecting duplicate participation."
On the issue of post office boxes, supporters note that there
are many valid reasons that IHSS providers use post office
boxes. Many IHSS providers live in rural areas where there are
no alternative means for receiving mail. Also, many providers
live with relatives or roommates who do not allow them to get
mail sent to their residence. The U.S. Postal Service itself
points out on its Web site that "�m]any customers value the
privacy, security, and flexibility of a Post Office Box,"
noting, for example, that: "It's fast. Mail typically arrives
faster at a PO Box than at a residential or business address"
and "It's permanent. You can move around, but your PO Box
address stays the same." Organizations representing counties
and county human services departments assert that limiting the
use of post office boxes may harm the ability of counties and
consumers to recruit and retain providers. Supporters also
point out that no evidence was ever offered to connect post
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office boxes with fraud.
Arguments in opposition : In opposition, the California District
Attorneys Association (CDAA) suggests that the anti-fraud
measures in question, and particularly the fingerprinting
requirements have a deterrent effect and that repealing these
measures "will significantly hinder efforts to deter persons
from seeking duplicate aid and could potentially make the
discovery of such fraud more difficult." CDAA also opposes
repeal of the prohibition on using post office boxes, asserting
that "�t]he less physical information law enforcement and
prosecutors have about persons who would defraud the IHSS
program, the harder it is to intercede and stop such activity."
Provider appeals : As a condition of being placed or maintained
on a county's IHSS provider registry, AB 19 X4 required criminal
background checks to be completed for all prospective IHSS
providers as of October 1, 2009, and to be completed by July 2,
2010, for anyone already a provider on October 1, 2009.
Under California law, consistent with federal Medicaid law, an
individual may not serve as a provider of services under the
IHSS program for 10 years following a conviction for specified
crimes involving fraud against a government health care or
supportive services program, child endangerment, or elder or
dependent adult abuse. (These are commonly referred to as "Tier
1" offenses.) The 2010 human services budget trailer bill, AB
1612 (Budget Committee), Chapter 725, Statutes of 2010, provided
for the additional exclusion, with certain exceptions, of
provider applicants for 10 years following a conviction for a
violent or serious felony, as defined in the Penal Code, and
other specified felony offenses. These exclusions, referred to
as "Tier 2" offenses, apply prospectively, to new provider
applicants, beginning 90 days following the effective date of
that bill.
Persons disqualified from providing IHSS services based on prior
conviction for a Tier 1 or Tier 2 offense have appeal rights to
challenge the accuracy of a criminal background check. The
author notes that there is a flaw in the statutory appeal
process in that it does not authorize counties and public
authorities to provide DSS with an actual copy of the
individual's CORI in the event of an appeal. Instead,
information from the CORI must be manually extracted from the
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CORI and copied into a separate document, which is then
transmitted to DSS. This process increases the likelihood of
DSS' receiving inaccurate information due to clerical errors or
omissions.
This bill, by way of clean-up, corrects this situation by
requiring that DSS be provided with an unmodified copy of the
CORI itself. This bill further clarifies that the individual
provider or provider applicant must be provided with an
unmodified copy of his or her CORI in the event of a denial of
eligibility to be placed on the IHSS registry, along with
information on how the individual may contest the accuracy of
information in the CORI.
Analysis Prepared by : Eric Gelber / HUM. S. / (916) 319-2089
FN: 0002199