Alaska settles with DOJ over alleged false claims in SNAP

by Ben Vernia | September 19th, 2017

On September 18, the Department of Justice announced a settlement with the state of Alaska over its use of federal nutrition assistance funds. According to DOJ’s press release:

The Alaska Department of Health and Social Services (ADHSS) has agreed to pay the United States $2,489,999 to resolve allegations that it violated the False Claims Act in its administration of the Supplemental Nutrition Assistance Program (SNAP), the Department of Justice announced today. Until 2008, SNAP was known as the Food Stamp Program.

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

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Although the federal government funds SNAP benefits, it relies on the states to determine whether applicants are eligible for benefits, to administer those benefits, and to perform quality control to ensure that eligibility decisions are accurate. USDA requires that the states’ quality control processes ensure that benefits are correctly awarded, are free from bias, and accurately report states’ error rates in making eligibility decisions. The USDA reimburses states for a portion of their administrative expenses in administering SNAP, including expenses for providing quality control. The USDA also pays performance bonuses to states that report the lowest and the most improved error rates each year, and can impose monetary sanctions on states with high error rates that do not show improvement.

The settlement resolves allegations that ADHSS, beginning in late 2009, contracted with a consultant known as Julie Osnes Consulting LLC (Osnes Consulting) to provide advice and recommendations designed to lower its SNAP quality control error rate. The United States alleged that Osnes Consulting’s recommendations, as implemented by ADHSS, injected bias into ADHSS’s quality control process and resulted in ADHSS submitting inaccurate quality control data and information to USDA and receiving performance bonuses for fiscal years 2010, 2011, 2012, and 2013, that it should not have received.

This is the third settlement with a state agency resolving allegations that implementation of recommendations by Osnes Consulting resulted in states submitting inaccurate SNAP quality control findings, and claiming performance bonuses they had not earned. Through these settlements, the United States will recover over $16.5 million. On April 7, the Virginia Department of Social Services agreed to pay over $7 million to resolve its liability associated with the use of Julie Osnes Consulting to improperly reduce its reported error rate. On April 12, the Wisconsin Department of Health Services agreed to pay nearly $7 million to resolve its liability associated with its use of Julie Osnes Consulting for quality control.

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