Kansas Department of Health & Environment

Kansas Family Medical Assistance

Manual (KFMAM)

Eligibility Policy - 5/16/2022

08000 >>> 08400

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08400 Determination of Fraud - A fraud error can only be established through a finding by a court of appropriate jurisdiction. Therefore additional steps are required before collection action may commence.

A suspected fraud error shall be referred to the KDHE-DHCF Legal Division. The Legal Division will make a determination as to whether or not to pursue the case in court. If a decision is made not to pursue, the claim will be labeled as Client Error and processed as such. If the claim is accepted by the Legal Division for prosecution, no further action shall be taken until a decision by the court has been rendered.

Individuals should not receive notice that the case is under investigation for fraud. Client inquiries concerning possible fraud investigation should be responded with a statement that the case is “under administrative review”. No additional information should be provided.

8410 Definition of Fraud - A fraudulent error occurs when the client intentionally:

1. Makes false or misleading statement, misrepresentation, concealment, or withholding of facts for the purpose of improperly establishing or maintaining eligibility; or

2. Misuses medical benefits, including selling, sharing or trading the medical I.D. number for money or other renumeration, signing for services that were not provided to the recipient, or other misuse as determined by the agency.

An individual shall be considered to have committed fraud when the individual has been legally determined to have committed fraud through a court of appropriate jurisdiction. There is no other method of establishing a fraud claim.

A finding of fraud under these provisions may result in criminal penalty, including fines and imprisonment, but may only result in a period of ineligibility if so ordered by the court (see 8363). Fraud error status is not established if the court’s resolution to the willful client error is to place the individual on diversion.

8420 Medical Assistance Penalties - An individual who has been convicted of medical assistance fraud under 42 U.S.C. Sec. 1320a-7b shall be ineligible for medical assistance for one year from the date of conviction. Convictions under state law do not carry a disqualification period.

Pregnant women who are sanctioned remain eligible for medical coverage when continuous eligibility provisions apply. See 2300.

8430 Fraud Referral - Fraud Referral - Before a referral to KDHE-DHCF Legal for prosecution of suspected fraud can be made, it is necessary for the agency to first determine the amount (if any) of the alleged fraudulent overstated eligibility by following the procedures outlined in 8340. The same act of alleged fraud repeated over a period of time shall not be separated so that separate penalties can be imposed. If it is decided that a case will not be prosecuted for fraud, then the overpayment shall be handled as a client overpayment as outlined in 8313. The burden of proving fraud is on the agency. All referrals shall be reviewed by the Eligibility Supervisor prior to the referral being sent to KDHE-DHCF Legal.

There is no minimum amount of alleged fraudulent overstated eligibility required to initiate a fraud referral.

Claims (individual program or combined) of less than $1001 are to be referred to an Administrative Disqualification Hearing.

Claims (individual program or combined) of $1001 and over are to be referred to the fraud unit who will determine the appropriate course of action.

8480 Imposition of Disqualification Penalties -

8481 Applying the Disqualification Penalty - Once the court has found the individual to be guilty of fraud the disqualification penalty shall be applied as follows:

8481.01 - Individuals found guilty of civil fraud or criminal fraud by a court of appropriate jurisdiction shall be disqualified for a period of one year. If the court fails to impose a disqualification period, a disqualification period shall be imposed in accordance with 8420, unless contrary to the court order. If a disqualification is ordered, but a date for initiating the disqualification period is not specified, the disqualification period for currently eligible individuals shall be initiated within 45 days of the date the disqualification was ordered. The disqualification period is initiated by the sending of the notice. The notice must be sent within 45 days, with the disqualification starting the month following the month in which the notice is sent (or should have been sent in cases where the agency does not act timely to disqualify the individual). For fraudulent individuals not currently eligible, disqualification periods shall be initiated by notifying the household of the fraud and the specific time period established for disqualification. The disqualification period for individuals not currently eligible shall also be established within 45 days of the date the disqualification was ordered, or within 45 days of the date the court found the individual guilty of fraud as described above. The eligibility worker is responsible for notifying the fraudulent individual of the disqualification period and the effect on the remaining household members, if any.

8481.02 - Once a disqualification period has been imposed against the fraudulent individual, the period of disqualification shall be initiated and shall continue uninterrupted until completed regardless of the eligibility of the fraudulent individual's household. The fraudulent individual's household shall continue to be responsible for repayment of the fraudulent overstated eligibility regardless of its eligibility for program benefits.

8481.03 - If the agency fails to act timely to disqualify the fraudulent individual, the individual can only be disqualified to the extent that the disqualification period has not elapsed. An agency error claim SHALL NOT be established for any overstated eligibility resulting from the fraudulent individual participating in the program when he/she should have been disqualified.

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