Section 11466.22.

(a) It is the intent of the Legislature to ensure overall program integrity in the AFDC-FC program through the establishment of an effective and efficient process for the collection of group home provider sustained overpayments. Furthermore, the intent of the Legislature is to ensure that children placed in an AFDC-FC group home program receive the level of care and supervision commensurate with the group home program's rate classification level.

(b) For the purposes of this section, a group home provider is a licensee of one or more group homes, as defined in subdivision (h) of Section 11400, receiving foster care maintenance payments under the AFDC-FC program. The department may collect a sustained overpayment from the party responsible for the sustained overpayment, regardless of whether the party remains in the business of providing group home programs, and regardless of whether the party remains licensed by the department.

(c) For the purposes of this section, a group home provider overpayment is an overpayment that results in an audit period when a group home provider receives a rate reimbursement to which it is not entitled. If a group home provider receives a rate reimbursement to which it is not entitled, it shall be liable to repay the overpayment.

(d) (1) Overpayments shall be determined by either a group home provider audit or a group home provider self-reporting an overpayment.

(2) If an informal hearing is not requested, or on the 60th day after an informal decision if a provider or the department does not file a notice of intent to file a formal appeal, or on the 30th day following a formal appeal hearing decision, whichever is latest, a group home provider overpayment shall be sustained for collection purposes and the department shall issue a demand letter for repayment of the sustained overpayment.

(3) The department shall establish a voluntary repayment agreement procedure with a maximum repayment period of nine years. The procedure shall take into account the amount of the overpayment, projected annual income of the program that caused the overpayment, a minimum repayment amount, including principal and interest, of 3 percent of annual income prorated on a monthly basis, simple interest for the first seven years of the voluntary repayment agreement on the overpayment amount based on the Surplus Money Investment Fund, and simple interest for the eighth and ninth years of the voluntary repayment agreement based on the prime rate at that time plus 3 percent. The department may adopt regulations permitting the director, at his or her discretion, to renegotiate the volunteer repayment agreement if the director determines that the agreement would cause severe harm to children in placement.

(4) The department shall establish an involuntary overpayment collection procedure, that shall take into account the amount of the overpayment, projected annual income, a minimum required repayment amount, including principal and interest, of 5 percent of the annual income prorated on a monthly basis, simple interest on the overpayment amount based on the Surplus Money Investment Fund, and a maximum repayment period of seven years. The department may establish regulations permitting the director at his or her discretion to renegotiate the involuntary payment agreement if the director determines that the agreement would cause severe harm to children in placement.

(e) The department shall develop regulations for recovery of any group home provider sustained overpayments. The regulations shall prioritize collection methods, that shall include voluntary repayment agreement procedures, involuntary overpayment collection procedures, including the use of a statutory lien, rate request denials, rate decreases without an RCL reduction, and rate terminations.

(f) Whenever the department determines that a group home provider sustained overpayment has occurred, the department shall recover from the group home provider the full amount of the sustained overpayment, and simple interest on the sustained overpayment amount, pursuant to methods described in subdivision (e), against the group home provider's income or assets.

(g) If a provider is successful in its appeal of a collected overpayment, it shall be repaid the collected overpayment plus simple interest based on the Surplus Money Investment Fund.

(Added by Stats. 1993, Ch. 1089, Sec. 14. Effective January 1, 1994.)