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Chapter 14. Correction of Payment Irregularities

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Regulation .01 Definitions.Copy Citation

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A.
In this chapter, the following terms have the meanings indicated.
B.
Terms Defined.
(1)
“Agency error” means an error caused by the local department's action or failure to act.
(2)
“Assistance unit” means a group of eligible individuals living together for whom cash assistance has been authorized.
(3)
“Client error” means failure by the recipient to correctly, promptly, or adequately report information which would have:
(a)
Reduced the amount of the continuing benefits payments; or
(b)
Resulted in total ineligibility.
(4)
“Department” means the Department of Human Services.
(5)
“Fraud” means:
(a)
Willfully making a false statement or representation, willfully failing to disclose a material change in household or financial condition, impersonating another person to obtain, or attempting to obtain, benefits to which the individual is not entitled; or
(b)
An intentional program violation as described in COMAR 07.03.10.
(6)
“Local department” means a department of social services in a county or Baltimore City and the Montgomery County Department of Health and Human Services.
(7)
Overpayment.
(a)
“Overpayment” means the amount by which a benefit payment received by or for an assistance unit exceeds the amount it was eligible to receive.
(b)
“Overpayment” may result from:
(i)
Agency error;
(ii)
Client error; or
(iii)
Fraud.
(8)
“Recoupment” means a process used by a local department to recover an overpayment from the continuing benefit payment of a recipient by withholding an amount determined appropriate, as described in Regulation .05 of this chapter.
(9)
“Recovery” means a process used by a local department to recover an overpayment from an individual whose case is closed.
(10)
Underpayment.
(a)
“Underpayment” means a payment received by or for an assistance unit which is less than the proper amount allowable to the assistance unit.
(b)
“Underpayment” occurs when the local department has a properly completed application and all information needed for an eligibility decision but does not:
(i)
Act upon a reported change;
(ii)
Act upon a policy change;
(iii)
Correctly interpret policy;
(iv)
Correctly compute a benefit; or
(v)
Act promptly on information.

Regulation .02 Underpayment Procedures.Copy Citation

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A.
To correct an underpayment, the local department shall:
(1)
Correct continuing payments promptly, if appropriate;
(2)
Authorize corrective payment as a one-time-only payment equal to the total amount of the underpayment from the time of discovery and correction, retroactive to the time the underpayment first occurred; and
(3)
Require that a supervisory level employee review and approve each fiscal authorization to correct an underpayment before payment is made.
B.
Corrective payments are not counted as income or resource for determining eligibility in the month paid or in the following month.
C.
The corrective payment is charged to the program funding source according to instructions issued by the Department.
D.
An uncorrected underpayment may be applied to offset an overpayment debt.
E.
When a decision of the Office of Administrative Hearings as applied to individuals similarly situated would result in a benefit, the local department shall, upon request of the individual, make retroactive adjustments to the date that the incorrect action was taken.
F.
A recipient or former recipient may request an administrative hearing to challenge the amount of an underpayment.

Regulation .03 Overpayment Procedures.Copy Citation

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A.
To correct an overpayment, the local department shall:
(1)
Determine the correct benefit amount promptly and take action to correct the continuing payment as needed; and
(2)
Calculate the total amount of the overpayment retroactive to the time of the error.
B.
The local department may waive establishment of an overpayment if the:
(1)
Overpayment is $125 or less; and
(2)
Case is closed.
C.
Administrative Hearings.
(1)
The recipient may request an administrative hearing to challenge the proposed action to reduce, suspend, or terminate benefits.
(2)
If a hearing decision upholds the proposed reduction, suspension, or termination, the overpayment includes any overpayments made pending the decision.
(3)
A former recipient of benefits may request an administrative hearing to challenge the local department's decision:
(a)
That an overpayment occurred;
(b)
Of the amount or cause of the overpayment; or
(c)
Of the proposed method to repay the overpayment.
D.
Collection of an Overpayment.
(1)
Termination of benefits does not relieve the recipient of the obligation to reimburse the local department for any overpayment.
(2)
The local department shall:
(a)
Request repayment of the overpayment debt; and
(b)
Refer the debt to the Central Collection Unit of the Department of Budget and Management, if appropriate.
(3)
If benefits are subsequently reinstated, the local department shall begin recoupment of the amount of the overpayment in accordance with this chapter.
E.
A current or former recipient shall reimburse the local department for any overpayment and the local department shall accept and credit the payment.

Regulation .04 Suspected Fraud Procedures.Copy Citation

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A.
When the local department suspects fraud, the local department shall refer the case to the Office of the Inspector General (OIG) or directly to the local State’s Attorney Office (SAO).
B.
A supervisory-level employee shall approve the referral document and the director of the local department or designee shall sign it before a referral is made.
C.
After a referral has been made, the local department shall inform the OIG or the SAO of any newly discovered facts or changed circumstances in the case.
D.
The local department shall provide access to the relevant records in its possession for the investigators assigned to investigate suspected fraud.
E.
The local department may not give notice to an applicant or recipient of any referral to OIG or SAO for action on suspected fraud except that the local department representative may answer “yes” or “no” when the recipient asks whether referral has been made.
F.
The decision to refer a case of suspected fraud may not be the sole basis for requesting a fair hearing not withstanding the regulations in the Fair Hearings Chapter.

Regulation .05 Recoupment Procedures.Copy Citation

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A.
Local Department Action. The local department shall:
(1)
Take action to recoup an overpayment except as described in §C of this regulation;
(2)
Determine the total amount to be recouped; and
(3)
Set an amount to be recouped through a monthly deduction from the continuing benefit for as many months as are necessary until the overpayment is repaid.
B.
Recoupment Amount. The recoupment may not cause the family's remaining income from all sources and savings or other liquid assets to be less than 90 percent of the allowable payment for an assistance unit of the same size with no other income.
C.
Local Department Action with Respect to Specific Situation. The local department:
(1)
Shall handle any improper food supplement issuance in accordance with COMAR 07.03.17.53—.55;
(2)
Shall refer any case in which an overpayment was made to an ineligible individual to the Maryland Department of Health for possible recovery of any overpayment of medical assistance benefits;
(3)
May not recoup from:
(a)
Emergency Assistance to Families with Children; or
(b)
Burial Assistance;
(4)
Shall recoup from Public Assistance to Adults only after the recipient fails to comply with court-ordered collection or restitution which is the result of fraud; and
(5)
May not reduce through recoupment the personal needs allowance of the Public Assistance to Adults recipient by more than 50 percent.
Chapter annotations
Authority: Human Services Article §§4-207, 4-303, 5-207, and 5-607, Annotated Code of Maryland
(Agency Note: Federal Regulatory Reference 45 CFR 233.20(a)(12))
History: Effective date: January 18, 1982 (9:1 Md. R. 19)
History: Regulation .01B amended effective May 23, 1983 (10:10 Md. R. 872); March 23, 1987 (14:6 Md. R. 713)
History: Regulations .02, .03C, and .05A, C amended effective May 23, 1983 (10:10 Md. R. 872)
History: Regulation .03E adopted effective July 25, 1988 (15:15 Md. R. 1808)
History: Regulation .05 amended effective March 23, 1987 (14:6 Md. R. 713); April 12, 1993 (20:7 Md. R. 640); October 1, 1996 (23:18 Md. R. 1315)
History: Chapter revised effective October 29, 2001 (28:21 Md. R. 1854)
History: Regulation .04 amended effective April 28, 2014 (41:8 Md. R. 469)
History: Regulation .05C amended effective August 16, 2004 (31:16 Md. R. 1253); April 28, 2014 (41:8 Md. R. 469)