BILL REQ. #:  S-2250.2 

Read first time 03/16/11.   Referred to Committee on Human Services & Corrections.

     AN ACT Relating to the creation of the office of program integrity; amending RCW 49.60.210; adding a new section to chapter 43.09 RCW; adding a new chapter to Title 43 RCW; providing an effective date; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   The legislature finds that efforts to combat fraud and abuse in public assistance programs have failed to meet the public's expectation for integrity and accountability around use of their tax dollars. The legislature further finds that it is necessary to fundamentally reorganize the fraud investigative activities within the department of social and health services to ensure accountability for beneficiaries, state employees, and vendors. The legislature declares that in a time of shrinking resources, eliminating waste, fraud, and abuse should be a top priority of the department, and this can best be reflected in a newly organized, accountable, and proactive fraud unit directly under the secretary's authority with the resources necessary to combat fraud and to ensure the confidence of the public in the critical social safety net programs it funds.

NEW SECTION.  Sec. 2   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Department" means the department of social and health services.
     (2) "Director" means the director of the office of program integrity.
     (3) "Disclosable information" means public information that (a) is not exempt from disclosure under chapter 42.17 RCW; and (b) does not pertain to an ongoing investigation.
     (4) "Fraud" or "abuse" means any intentional action, inaction, or statements made by an individual for the purposes of obtaining public assistance benefits to which he or she is not entitled or the illegal misuse of public assistance benefits once obtained. This does not include provider fraud as it relates to the department's administration of funds under Title XIX of the federal social security act for which the medicaid fraud control unit of the office of the attorney general has jurisdiction.
     (5) "Office" means the office of program integrity.
     (6) "Secretary" means the secretary of social and health services.

NEW SECTION.  Sec. 3   The office of program integrity is created within the department to provide a dedicated and accountable unit directly responsible for the following tasks:
     (1) Conducting and supervising independent and objective investigations relating to allegations of fraud and abuse in any program or service administered by the department including the child care subsidy program administered jointly with the department of early learning;
     (2) Providing leadership and coordination in recommending policies and procedures designed to detect and prevent fraud and abuse;
     (3) Informing the secretary, governor, and legislature about vulnerabilities and deficiencies relating to the detection and prevention of fraud and abuse as may be discovered as a result of completed investigations conducted or coordinated by the office;
     (4) Ensuring that policy, practice, and information technology systems are mitigating the risk for fraud and abuse and appropriate referrals to law enforcement or prosecuting authorities are made when fraud and abuse is suspected; and
     (5) Assisting the fraud ombudsman in the state auditor's office with his or her responsibilities in auditing and overseeing the activities of the office of program integrity under section 9 of this act.

NEW SECTION.  Sec. 4   The director is the head of the office and is selected by the secretary on the basis of integrity and must demonstrate suitable capacity and experience in law enforcement management, public administration, and criminal investigations. The director shall report directly to the secretary.

NEW SECTION.  Sec. 5   (1) The director shall:
     (a) Conduct, supervise, and coordinate fraud and abuse investigations and provide policy direction as it relates to program integrity and fraud and abuse;
     (b) Review proposed legislation and rules relating to the detection and prevention of fraud and abuse in public assistance programs administered by the department, and make recommendations for improvement;
     (c) Recommend policies for, and conduct, supervise, and coordinate, relationships between other fraud units and federal, state, and local governmental agencies, and nongovernmental entities, with respect to:
     (i) Matters relating to the prevention and detection of fraud and abuse in programs and operations administered by the department; or
     (ii) The identification and prosecution of participants in the fraud and abuse;
     (d) Provide reports to the secretary, governor, and legislature concerning the detection and prevention of fraud and abuse, and make recommendations for improvement of the activities, including changes in the application and eligibility processes for public assistance programs to improve capacity and effectiveness of fraud and abuse investigations;
     (e) Ensure that front line employees of the office of program integrity have a direct line of communication with the director to address concerns pertaining to their duties and recommend changes to improve the work product of the office;
     (f) Develop a realistic funding model for adding necessary criminal and fraud investigator staff in a budget neutral fashion;
     (g) Develop policies and protocols to allow consistent and real-time review of all cash assistance programs administered by the department to assure that benefits are being used for their statutorily stated goals and analyze alternatives to the cash delivery system that are consistent with federal law, cost effective, and can help ensure that benefits are being used for appropriate purposes;
     (h) Collaborate with other state agencies on common algorithms, risk factors, models, and other data analytics to detect possible fraud and abuse; and
     (i) Manage fraud investigative tools and resources to effectively balance them between field operations and data analytics.
     (2) In carrying out the duties and responsibilities established in this chapter, the director must refer all investigations in which the director has found substantial evidence supporting a finding of a violation of federal or state criminal law to the appropriate prosecuting authority for possible criminal prosecution. The director must collaborate with county prosecuting attorneys to increase prosecution of welfare fraud cases and publicize convictions to serve as an effective deterrent on fraud and abuse in public assistance programs.

NEW SECTION.  Sec. 6   (1) The office of program integrity has the authority to apply for and execute all warrants and serve process of law issued by the courts in enforcing the provisions of this chapter.
     (2) The office has the full authority to administer oaths and take testimony, to issue subpoenas requiring the attendance of witnesses before the office, together with all books, memoranda, papers, and other documents, articles, or instruments, and to compel the disclosure by such witnesses of all facts known to them relative to the matters under investigation.
     (3) Subpoenas issued in adjudicative proceedings are governed by RCW 34.05.588(1).
     (4) Subpoenas issued in the conduct of investigations required or authorized by other statutory provisions or necessary in the enforcement of other statutory provisions are governed by RCW 34.05.588(2).

NEW SECTION.  Sec. 7   (1) In carrying out the provisions of this chapter, the director shall have prompt access to all individuals, records, electronic data, reports, audits, reviews, documents, and other materials available to the department of revenue, department of labor and industries, department of early learning, employment security department, department of licensing, and any other government entity that can be used to help facilitate investigations of fraud or abuse as determined necessary by the director.
     (2) Whenever information or assistance requested under subsection (1) of this section is, in the judgment of the director, unreasonably refused or not provided, the director must report the circumstances to the secretary immediately.

Sec. 8   RCW 49.60.210 and 1992 c 118 s 4 are each amended to read as follows:
     (1) It is an unfair practice for any employer, employment agency, labor union, or other person to discharge, expel, or otherwise discriminate against any person because he or she has opposed any practices forbidden by this chapter, or because he or she has filed a charge, testified, or assisted in any proceeding under this chapter.
     (2) It is an unfair practice for a government agency or government manager or supervisor to retaliate against a whistleblower as defined in chapter 42.40 RCW.
     (3) It is an unfair practice for any employer, employment agency, labor union, government agency, government manager, or government supervisor to discharge, expel, discriminate, or otherwise retaliate against an individual assisting with an office of program integrity investigation under chapter 43.--- RCW (the new chapter created in section 10 of this act), unless the individual has willfully disregarded the truth in providing information to the office.

NEW SECTION.  Sec. 9   A new section is added to chapter 43.09 RCW to read as follows:
     (1) The auditor shall appoint a fraud ombudsman to oversee and annually audit the work of the office of program integrity within the department of social and health services. The ombudsman shall review the fraud investigative work done by the office including cases filed with local prosecuting authorities. The ombudsman shall also have authority to investigate citizen complaints made to the auditor's office related to fraud or abuse in any public assistance program. The department of social and health services shall provide the ombudsman with access to any relevant records it has in its possession related to a fraud or abuse investigation as determined by the fraud ombudsman, including access to historic and real-time electronic benefit transfer card transaction data.
     (2) The fraud ombudsman shall have access to front line personnel in the office of program integrity for purposes of interviews and evaluation.
     (3) The fraud ombudsman must submit a report summarizing its auditing activities of the office to the appropriate committees of the legislature by November 30, 2012, and biennially thereafter. The office of program integrity shall assist the ombudsman to the fullest extent practicable in producing this report. The report shall contain only disclosable information, including:
     (a) A description of significant fraud or abuse, and of vulnerabilities or deficiencies relating to the prevention and detection of fraud or abuse, discovered as a result of investigations completed during the reporting period;
     (b) A description of corrective action taken by the department of social and health services regarding fraud and abuse discovered as a result of investigations conducted by the office of program integrity;
     (c) Recommendations for improving the activities of the office of program integrity with respect to the vulnerabilities or deficiencies identified under (a) of this subsection;
     (d) An identification of each significant recommendation described in the previous reports on which corrective action has or has not been completed;
     (e) A summary of matters referred to prosecuting authorities during the reporting period and the charges filed and convictions entered during the reporting period that have resulted from referrals by the office of program integrity;
     (f) A description of the division of duties within the office of program integrity between fraud early detection and criminal investigative assignments and whether the office has appropriate resources to adequately respond to referrals from the department, other agencies, and the public concerning fraud or abuse;
     (g) A description of the ease of access allowed by the office of program integrity to all necessary data and personnel for purposes of conducting the audit; and
     (h) A determination of whether the director has met the requirements in section 4 of this act.

NEW SECTION.  Sec. 10   Sections 1 through 7 of this act constitute a new chapter in Title 43 RCW.

NEW SECTION.  Sec. 11   This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect July 1, 2011.