State to pay millions for faking food stamp reviews

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The Virginia Department of Social Services (VDSS) has reached a $7,150,436 settlement to resolve a case in which it was accused of violating the False Claims Act in its administration of the Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program.

The U.S. Department of Agriculture (USDA) provides eligible low-income individuals and families with financial assistance to buy nutritious food through the SNAP program. The program has served, on average, more than 45 million Americans per month since 2010, and provided funds in excess of $71 billion annually.

“SNAP is an important vehicle for helping needy families,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “This settlement reflects the Justice Department’s commitment to ensuring that taxpayer funds are spent appropriately so that the public can have confidence in the integrity of vital programs like SNAP.”

SNAP benefits are federally funded, yet states determine the eligibility of applicants, administer benefits, and enforce quality control to ensure that eligibility decisions are accurate. The USDA requires that states correctly award benefits without bias and that they accurately report error rates in making eligibility decisions. States receive reimbursement for some administrative expenses from the USDA, as well as performance bonuses for the lowest and most improved error rates annually.

In order to reduce its error rates, VDSS retained Julie Osnes Consulting, a quality control consultant, in 2010. The firm trained VDSS quality control employees to “use whatever means necessary” to find a benefits decision “correct” as opposed to finding an error. The settlement revealed that if VDSS’s quality control staff “could not find a way to make a benefits decision correct,” they were instructed to “find a reason to ‘drop’ the case, or eliminate it from the sample.”

VDSS admitted that this tactic, utilized between 2010 and 2015, “injected bias into the case review process” because it decreased VDSS’s reported error rate. Through the use of the strategy, VDSS was improperly paid USDA performance bonuses for 2011, 2012, and 2013.

According to the settlement, VDSS’s quality control employees did not want to use the tactics proposed by Julie Osnes Consulting due to the methods’ lack of integrity, inherent bias, and violations of USDA requirements.

Although workers informed supervisors of their concerns, they were pressured and intimidated by managers to utilize the proposed methods. Intimidation included threats of termination and negative performance reviews, taking away teleworking and flexible scheduling, and other forms of retaliation.

The VDSS has since taken corrective actions and no longer uses the improper quality control strategies.


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