Earlier this week, the Department of Justice announced that it had reached a $2.5 million settlement with the Alaska Department of Health and Social Services (ADHSS) over allegations that it violated the False Claims Act in its administration of the Supplemental Nutrition Assistance Program (SNAP), previously known as the Food Stamp Program. Through SNAP, the U.S. Department of Agriculture (USDA) provides financial assistance to low-income individuals and families to purchase nutritious foods.
Although SNAP is federally funded, the individual states determine whether applicants are eligible to receive SNAP benefits and administer those benefits. The states also must implement quality control processes designed to ensure that they award SNAP benefits only to eligible applicants, and to self-report their error rates. The federal government reimburses states for such administrative costs; it also pays performance bonuses to states reporting low or improved error rates.
The settlement resolves the United States’ allegations that Alaska submitted inaccurate quality control data to USDA, resulting in the state’s unwarranted receipt of performance bonuses for fiscal years 2010 through 2013. Specifically, the United States alleged that Alaska contracted with Julie Osnes Consulting, LLC to provide recommendations to improve the state’s error rate. As implemented by ADHSS, Osnes’ recommendations allegedly injected bias into the quality control process and caused ADHSS to submit inaccurate quality control data to USDA.
This is the third settlement reached by the United States to resolve allegations that Osnes’ advice caused states to submit inaccurate quality control data, and to receive corresponding unearned performance bonuses. In April, the Virginia Department of Social Services and the Wisconsin Department of Health Services agreed to pay the United States approximately $7 million each.
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