Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
SUBJECT: District of Columbia
Department of Social Services
Docket No. A-93-222
Decision No. QC58
DATE: December 17, 1993
DECISION
The District of Columbia Department of Human Services
(District) appealed
a July 28, 1993 quality control (QC)
determination by the Regional
Administrator of the
Administration for Children and Families (ACF).
ACF
determined that the District had erred in finding that an
Aid to
Families with Dependent Children (AFDC) grant
recipient had been overpaid
$88 because the recipient had
not reported her son's Social Security Number
(SSN) as of
the September 1, 1992 review date. For the reasons
discussed below, we affirm ACF's determination.
Applicable Authority
Section 408(a) of the Social Security Act (Act) provides:
In order to improve the accuracy of payments of aid
to families
with dependent children, the Secretary
shall establish and operate a quality
control system
under which the Secretary shall determine, with
respect
to each State, the amount (if any) of the
disallowance required to be repaid
to the Secretary
due to erroneous payments made by the State in
carrying
out the State plan approved under this
part. 1/
Section 408(c)(3)(B) of the Act provides that a payment
shall not be
considered erroneous if it is in error
solely by reason of the State's
reliance upon and correct
use of erroneous information provided to the State
by the
Secretary about matters of fact.
Section 408(c)(3)(C) of the Act provides that a payment
shall not be
considered erroneous if it is in error
solely by reason of the State's
reliance upon and correct
use of written statements of Federal policy
provided to
the State by the Secretary.
Section 408(c)(4)(B) of the Act provides that
notwithstanding any other
provision of this section, a
payment shall be considered erroneous if the
payment is
made to a family any member of which is a recipient of
aid
under an approved State plan and does not have a
Social Security account
number (unless an application for
a Social Security account number for the
family member
has been filed within 30 days after the date of
application for such aid).
Regulations provide that payment errors resulting solely
from a state's
reliance on, and correct use of, incorrect
written factual information
provided by the Department
about matters of fact or incorrect written
statement of
Federal policy by Department officials shall not be
counted
as errors. 57 Fed. Reg. 46,782, 46,808 (1992),
to be codified at 45
C.F.R. � 205.42(d)(2)(ii).
"Written factual information" is defined by regulation to
mean hard copy
documentation, such as a signed statement,
a computer printout or data tape,
and reports of specific
data provided by the Department about a specific
individual (e.g. Social Security data). 57 Fed. Reg.
46,782,
46,791 and 46,808 (1992).
Section 3539 of the Quality Control Manual (QCM) provides
three methods
through which a client may obtain a SSN for
her dependent child:
First, a client may obtain a SSN by applying for a
SSN for her
newborn child while in the hospital.
This process is called the
Enumeration at Birth
(EAB), and is done at the same time the birth
certificate information is completed by indicating
on the form that
permission is given for the State's
Vital Statistics Office to share the
vital
information with the Social Security Administration
(SSA).
Second, an individual may apply directly for a SSN
at his/her
Social Security District Office (DO).
After the application is
processed, a SSN card is
issued and mailed to the individual.
Third, a State assists the applicant by either 1)
having an
agreement with SSA through which the local
agency takes applications for
SSNs (form SS-5), on
behalf of SSA and indicates welfare identification
information on it, and forwards the form to SSA for
processing or 2)
referring recipients to the DO,
providing the welfare identification number,
to make
direct application.
Section 3539 of the QCM further provides
that a parent of
a newborn has until the first day of the second month
after the birth of the child or the mother's discharge
from the hospital
to apply for an SSN for the child.
Factual Background
The District QC reviewers found there was no error in the
processing in
the case of D.A. in the review month of
September 1992. 2/
However, federal QC found an $88
overpayment because, as of September 1,
1992, there was
no documentation that D.A. had reported her son's SSN
within the time required by Section 3539 of the QCM.
Federal QC
informed the District of its determination in
a letter dated June 8,
1993.
In a letter dated July 9, 1993, the District stated that
it did not
disagree with federal QC's determination of an
$88 overpayment.
However, the District contended that it
would have found the $88 overpayment
an error, but for
its reasonable reliance on the federal difference finding
in a case (State review number 920229, federal re-review
#77) that the
District alleged was factually similar to
this one. In the other case,
federal QC found no error
because they found no need for the client to
report her
son's SSN based on their understanding of the District's
arrangement with SSA. 3/ ACF Ex. 3. Accordingly, the
District found no error existed in D.A.'s case based on
federal QC's
original determination in State review
number 920229. The federal QC
determination in that case
was later rescinded, but not until after the
District
transmitted its original state finding in D.A.'s case to
ACF on
February 19, 1993.
In a letter dated July 28, 1993, the Regional
Administrator declined to
reverse the finding of error.
On August 30, 1993, the District
appealed the
Administrator's decision to the Quality Control Review
Panel. 4/
The Parties' Arguments
The District acknowledges that D.A. did not report her
son's SSN within
the required time to be eligible for
AFDC assistance in the review month at
issue here.
However, as explained above, the District contends that
its finding was based on its reliance on a January 21,
1993 federal QC
decision issued by ACF in another case
with similar facts (State review
number 920229). The
District argues that but for the earlier federal
QC
decision, it would not have found the case of D.A. to
have been
correctly paid. Accordingly, the District
contends it reasonably
relied on the earlier decision by
ACF and that fairness requires the
withdrawal of the
overpayment error from calculation of the fiscal year
1992 final error rate.
ACF contends that the District may not rely on the
January 21, 1993
federal QC decision (State review number
920229) because reliance on such a
decision is not within
the ambit of the regulatory provisions on detrimental
reliance. ACF notes that the applicable regulations only
exempt
the District from payment errors that result
"solely from a State's reliance
on, and correct use of,
incorrect written factual information provided by
the
Department about matters of fact or from incorrect
written
statements of federal policy by Department
officials." 45 C.F.R. �
205.42(d)(2)(ii). However, ACF
argues that neither of these scenarios
is applicable
here. Accordingly, ACF contends that the District's
reliance on the January 21, 1993 federal QC decision does
not exempt the
District's determination in the case of
D.A. from being an error.
Analysis
There is no dispute among the parties that the payment to
D.A. was an
error because D.A. failed to obtain a SSN for
her newborn son within the
required time period. The
dispute centers around whether this error
should be
exempted for purposes of determining the District's
payment
error rate under the Act and regulations as a
payment made in error solely
by reason of a state's
reliance on incorrect written factual information
provided by the Department. Specifically, the issue is
whether the
District properly relied on a prior federal
QC decision that was
subsequently found to be erroneous
and was ultimately rescinded.
This type of situation was contemplated by the
regulations. In
response to a comment on the proposed
regulations, ACF stated that --
[a] State is not exempted from a payment error as a
result of
incorrect information obtained through the
QC re-review process . . .
. The Federal re-review
is conducted against the same laws,
regulations, and
policies the State should have used in making the
eligibility and payment determination. It is not a
system for
introducing new policy guidance, but a
system for applying existing
policy. Furthermore,
we are specifying in the final regulations that
only
certain officials may provide written program policy
statements on
behalf of the Department. If, during
the re-review process, the State
believes that
application of policy conflicts with policy
statements
from Departmental officials, the appeal
process affords States the
opportunity to raise
issues regarding consistency of agency policy and QC
application of that policy.
57 Fed. Reg. 46,782, 46,793 (October 13, 1992). The
District
contends that the January 21, 1993 federal QC
decision is a written
statement of federal policy by
Department officials. Accordingly, the
District avers
that its determination in this case was not an error
because it arose from "incorrect written statements of
federal policy by
Department officials." 45 C.F.R.
� 205.42(d)(2)(ii). We do
not agree.
It is evident from the provision quoted above that a
state cannot be
exempted from a payment error as a result
of incorrect information obtained
during the re-review
process. 5/ The regulations are very
specific as to
which officials can provide written policy statements on
behalf of the Department. These are the Assistant
Secretary for
Children and Families, the ACF Regional
Administrator or the Director of the
Office of Family
Assistance. 57 Fed. Reg. 46,782, 46,791 (1992).
The
January 21, 1993 federal QC decision was not issued by
one of these
officials. Moreover, ACF's responses to the
comments to the
regulations make clear that the appeal
process is the appropriate mechanism
to correct any
erroneous application of policy by federal QC reviewers.
If the federal QC decision was wrong, the District was
obligated
to appeal that decision. Instead, the District
based a state QC
finding in another case on a federal QC
decision it admits it knew was
wrong. Thus, the Panel
concludes that the District was not entitled to
rely on
that decision in making its determination as to whether
there
was an overpayment error in the case of D.A.
The District also contends that its determination in this
case arose
solely from its reliance on, and correct use
of, incorrect written factual
information provided by the
Department about matters of fact. The
"incorrect"
factual information the District claims to have relied on
is
the information contained in the same January 21, 1993
federal QC
decision. We find that the District's
interpretation of "written
factual information" is faulty
in this situation.
The regulatory definition of "written factual
information" is "hard copy
documentation, such as a
signed statement, a computer printout or data tape,
and
reports of specific data provided by the Department about
a given
individual (e.g. Social Security data)." 57 Fed.
Reg. 46,782, at
46,788, 46,791. The regulatory
definition therefore encompasses
information that could
be classified as raw data or basic information about
a
particular AFDC recipient, but does not reach legal
conclusions drawn
from a given set of facts by the agency
in the form of a federal QC
decision. This
interpretation is further supported by the preamble to
the regulations which indicates that the District is not
entitled to
rely on information obtained in the re-review
process. 57 Fed. Reg.
46,782, 46,808 (1992). When
viewed against the backdrop of the
preamble, it is
apparent that the definition of "written factual
information" should be narrowly construed to cover
factual data and
documentation of the kind described in
the regulations, not a decision in
the QC re-review
process.
Further, we note that the District does not dispute that
the January 21,
1993 federal QC decision was based on the
federal reviewers' initial and
erroneous conclusion that
SSA 5028 was a District referral/turnaround form,
which
would allow the District to provide a SSN for a newborn.
Additionally, the District does not dispute ACF's
contention that
its conclusion was based on erroneous
information received from the
District. To the extent
that the January 21, 1993 decision of the
federal
reviewers was based on a misunderstanding or
misapplication of
the District's procedures regarding SSA
form 5028, the District itself was
in the best position
to know this information. The District could have
acted
to appeal the erroneous January 21, 1993 determination,
rather
than attempt to follow a precedent in this case
that it admittedly knew to
be based on a misunderstanding
of the procedures regarding SSA form
5028.
Finally, the District argues that, if nothing else,
fairness requires
that it be allowed to change its
original state finding to correspond to the
federal
finding. We cannot grant this relief. The District has
not pointed to any authorization granting this Panel the
power to permit
retroactive revision of state QC
findings. The Board has, in many
decisions, stated that
it decides only the merits of the dispute between the
parties. See Guam Dept. of Public Health and Social
Services, DAB
1050 (1989) and decisions cited therein.
By analogy, nothing in the QC
regulations vests this
Panel with the authority to grant equitable
relief.
Conclusion
For the reasons cited above, we uphold ACF's
determination of an $88
overpayment in this case.
Carmen Cafasso
Peggy McFadden-Elmore
Joseph T. Gatewood
* * * Footnotes * * *
1. The District is a "state"
for purposes of the Act.
See � 1101(a)(1) of the
Act.
2. We identify the
recipient by her initials to protect
her privacy. The State quality
control review number is 920932.
3. In State review number 920229, decided on January 21,
1993, federal QC disagreed with the District's conclusion that an
individual had failed to report her son's SSN. The federal
reviewers, relying on information from the District, had
erroneously
concluded that SSA form 5028 was the District's
referral/turnaround form
used to refer clients to SSA to make
application for a SSN, and that the
individual who had used this
form was not required to report the number
herself. After
discovering that the form was a SSA form which is only
used to
verify that a self-referring applicant has applied for a number,
this difference finding was rescinded by letter dated March 15,
1993,
because self-referred individuals are required to report
their SSNs to the
State agency upon receipt.
4. The Panel acknowledged the receipt of the District's
appeal request, and ACF filed a timely response. When no reply
was
received from the District, the Panel contacted Dr. Michael
Barthel, the
District's representative in this case. Dr. Barthel
informed the Panel
that the District did not wish to file a
reply.
5. We note that the term
"re-review" might be somewhat
confusing in that the initial federal review
of a state's QC
determination is the beginning of the "re-review"
process.