Foster Care Overpayments (O/P)

Definition

An overpayment occurs when a foster care provider receives payment(s) in excess of the amount the provider was entitled to receive for a child in foster care. Per EAS 45-201, a child's minimum need is the foster care rate. Therefore, a subsequent month's rate payment cannot be reduced to recoup an overpayment without permission of the provider. Refer to Recoupment for details].

Note: An overpayment can be adjusted against an underpayment (offset) when a retroactive rate increase is computed, except when Bass v. Anderson prohibits collection of the overpayment.

Required Documentation

For all overpayments which occur, the county shall document:

  • the amount of the overpayment
  • the actual dates of the days overpaid
  • the date of discovery of the overpayment
  • the aid code for which the overpayment was made, and,
  • include a description of the circumstances that resulted in the payment error.

Collectible Period [45-304.4]

A county shall not initiate overpayment recovery after one year from the date the county discovers the overpayment. The initial discovery of the overpayment may occur more than a year after the actual overpayment occurred and recovery shall be sought unless prohibited [EAS 45-304.123]. The date of discovery is controlling the collectible period, not the date of the actual overpayment.

When the overpayment recovery was initiated within one year of the date the county discovered the overpayment, the county shall continue to recover the overpayment until fully recovered or written off pursuant under the county's write off policy.

Bass v. Anderson

Ruling

In the Bass v. Anderson lawsuit, the Superior Court ruled that the State of California does not have the authority under either state or federal law to demand repayment of non-fraudulent Foster Care overpayments from individual foster parents, which includes the following:

  • Relatives
  • State licensed foster family homes
  • Legal guardians
  • Kinship family homes, or
  • State licensed small family homes.

Required Actions

The Bass v. Anderson court order directs counties to:

  • Discontinue the practice of pursuing mandatory recovery of non-fraudulent overpayments from relatives, state licensed foster family homes, legal guardians, kinship family homes and state licensed small family homes.
  • Identify and rescind all current actions to recover non-fraudulent overpayments from affected foster care providers (specified above).
  • Notify all affected providers, who are currently subject to overpayment recovery actions, of the recision of actions to collect such overpayments.

In December 1997, RNL mailed the required informing letter to persons who were subject to overpayment recovery and stopped their billing statements.

Not Affected by the Bass Decision

The Bass court order does NOT apply to overpayment collections from:

  • Group Homes (GHs)
  • Foster Family Agencies (FFAs),
  • Wraparound Services,
  • Adoption Assistance Program (AAP) benefits, or
  • Overpayments resulting from fraud.

Fraud

Fraud is defined as “the intentional failure to notify the county of any changes affecting eligibility as required, including but not limited to the failure to actually provide foster care services during the period in question, without informing the county.” A referral to the DA investigators is required to confirm that the overpayment is fraudulent. However, a court decision is not required to establish that an overpayment is fraudulent.

It is NOT considered “fraud” when information is reported to the child’s SW/PO, and an overpayment results because the SW/PO does not convey it to the EW. For example, if a foster parent reports to the child’s Social Worker that a child has left the foster home, and the SW fails to report it to the EW, the resulting overpayment is a county administrative error and not fraud.

Voluntary Repayment Policy

In compliance with this court order, EWs MUST NOT in any way, demand that a foster parent repay a non-fraudulent overpayment. The EW will:

  • Document the Case Comments window with the appropriate information regarding the overpayment..

Recording Overpayments Subject to the Bass Decision

Foster Care Eligibility Workers will no longer send claims to RNL for collections. However, Fiscal Management Services must track overpayments for state reporting. FC EWs will continue to:

  • Add the claim in CalWIN, select the reason “Bass vs. Anderson,” and terminate the claim. This way the overpayment is recorded but is not sent to R&L for collection.
  • Document in a CalSAWS journal based on requirement.
  • Delete the Notice of Action regarding the overpayment in CalSAWS as the county cannot demand repayment.

Recoupment

Repayment can be requested from a provider if the overpayment is NOT subject to the requirements of Bass v. Anderson. The grant may be reduced to recoup an overpayment when the foster care provider signs a written statement requesting a voluntary grant offset or permission to recoup is verbally granted during a telephone conversation (an SCD 50 must be sent confirming the telephone conversation). This written statement must conclude that the grant offset is voluntary and that it can be cancelled at any time. [EAS 44-351.2.]

Notice of Action Forms

  • The “Notice of Action For Group Homes and Foster Family Agencies Only” form (NA 1261) was revised to include specific instructions for GHs and FFAs. This document must only be used when requesting overpayments from GHs and FFAs, it must not be used for individual providers.
  • The “Notice of Action For Approved Relatives, Non-Relative Extended Family Members (NREFM), Foster Family Homes, Non-Related Legal Guardians (NLRG) or Non-Minor Dependents (NMD) “Residing in a Supervised Independent Living Setting (SILS)” (NA 1261A). Workers must document the information that supports the determination that Relative Caregiver, NREFM, FFH, NRLG or SILS where the NMD resides, knowingly contributed to or caused the overpayment and that the overpayment is based upon the child not being in the home, or other collectible reasons, before sending the NA 1261A.

Important: The N/A 1261A was revised in March 2020. Since CalWIN is not planning on programming this revised form, workers will have to manually generate the form from the DEBS Forms Library.

  • The “Notice of Action For Kinship-Guardians Only” (NA 1261B). Workers must document the underlying information that supports the determination that a Kin-GAP guardian knowingly contributed to or caused the overpayment and that the overpayment is based upon the child not being in the home, or other collectible reasons, before sending the NA 1261B.

Overpayment Procedure

These procedures apply to overpayments incurred by:

  • Group Homes/STRTPs
  • Foster Family Agencies (FFAs) and,
  • To any overpayments resulting from fraud.

The EW must:.

  1. Review the overpayment detail and liable party in CalSAWS, then authorize the overpayment claim.
    1. Complete a “Foster Care Overpayment Report” (SCD 13) for AAP GH/STRP or Wraparound overpayments. A description of the cause of the overpayment must be documented in a CalSAWS journal as well as the SCD 13 filed in imaging.
    2. The CalSAWS journal must include the following overpayment details:
      1. The time period which it occurred
      2. The liable individual or party
      3. The amount
      4. The cause
  2. Refer the overpayment claim to RNL using CalWIN. From the Display Claim Summary by Liable Party/Individual window, select the appropriate claim number and click on the [Refer to Collections] button.
  3. Send a copy of the SCD 13 to imaging (if applicable).

    1. Note: An SCD 13 is only used for AAP GH/STRP and Wraparound overpayments.

  4. Send appropriate Notice of Action form NA 1261 to the provider explaining:
    1. Why the overpayment occurred,
    2. When the overpayment occurred,
    3. The total amount of the overpayment, and
    4. That the overpayment can be repaid through the RNL Department.

      1. Reminder: Delete all unnecessary correspondence.

  5. In order to help prevent overpayments, send “Worker Change Letter” (CSF 59) which advises that you are the assigned Eligibility Worker. This letter must always be manually sent to payees and to adoptive parents. This will encourage them to call you when a child leaves their facility.

Administrative Overpayments

An administrative overpayment occurs when a foster parent did not cause or contribute to the overpayment. The foster parent must have provided care for the child and must be otherwise entitled to payment.

Administrative overpayments are NOT referred to Recovery & Legal.

Related Topics

Underpayments/Overpayments