SECTION 31.30. Participant Fraud and Abuse

(a) Participants and parents, guardians, client-designated proxies, state agency-appointed proxies, or caretakers of participants identified and documented as having abused the WIC Program shall be sanctioned.

(b) If the state agency or the Office of Inspector General, Health and Human Services Commission, determines that a participant or parent, guardian, client-designated proxy, state agency-appointed proxy, or caretaker of a participant has received benefits unlawfully due to WIC Program abuse, including but not limited to dual participation, the matter may be referred for criminal prosecution.

(c) Program violations means any intentional act of an applicant, participant, parent, guardian or caretaker of an infant or child applicant or participant, client-designated proxy, or state agency-designated proxy that violates Federal or State statutes, regulations, rules, policies or procedures governing the WIC Program. Violations include, but are not limited to, intentionally making a false or misleading statement; intentionally misrepresenting, concealing, or withholding facts to obtain benefits; exchanging food instruments or food for cash, credit, non-food items, or unauthorized foods, including foods in excess of that authorized; threatening to harm or physically harming local agency, vendor or state agency staff; and simultaneous participation in the Program in one or more than one WIC clinic or participation in the Commodity Supplemental Food Program during the same period of time.

(d) The state agency, or local agency as directed by the state agency, shall initiate sanctions which may include disqualification from the Program for up to one year.

(e) Upon a final determination by the Office of the Inspector General, Health and Human Services Commission, that a program violation has occurred, the following mandatory disqualifications shall apply.

(1) For an offense where a claim of $100 or more is assessed, the participant shall be disqualified for one year.

(2) For an offense where a participant illegally received benefits at more than one WIC office and the state agency or the Office of the Inspector General, Health and Human Services Commission, assesses a claim for such dual participation, the participant shall be disqualified for one year.

(3) When the state agency or the Office of the Inspector General, Health and Human Services Commission, assesses a second or subsequent claim of any amount, the participant shall be disqualified for one year.

(f) If after finding that a program violation has occurred, the Office of Inspector General, Health and Human Services Commission, further determines that the program violation does not warrant a one year mandatory disqualification, the following sanctions shall apply.

(1) When a participant or a parent, guardian, client-designated proxy, state agency-appointed proxy, or caretaker of a participant exchanges food instruments or food for cash or credit, the participant shall be disqualified for a period of six months for a first offense and 12 months for a second or subsequent offense.

(2) When a participant or a parent, guardian, client-designated proxy, state agency-appointed proxy, or caretaker of a participant exchanges food instruments or food for firearms, explosives, ammunition, controlled substances, alcohol, or tobacco products, the participant shall be disqualified for a period of six months for a first offense and 12 months for a second or subsequent offense.

(3) When a participant or a parent, guardian, client-designated proxy, state agency-appointed proxy, or caretaker of a participant exchanges food instruments or food for non-food items not listed in paragraph (2) of this subsection, the participant shall receive a warning for the first offense and shall be disqualified for a period of 12 months for a second or subsequent offense.

(4) When a participant or a parent, guardian, client-designated proxy, state agency-appointed proxy, or caretaker of a participant exchanges food instruments or food for unauthorized food including foods in excess of that authorized, the participant shall receive a warning for the first offense to and shall be disqualified for a period of 12 months for a second or subsequent offense.

(5) When a participant or a parent, guardian, client-designated proxy, state agency-appointed proxy, or caretaker of a participant threatens to harm local agency, vendor, or state agency staff, the participant shall be disqualified for a period of six months for a first offense and 12 months for a second or subsequent offense.

(6) When a participant or a parent, guardian, client-designated proxy, state agency-appointed proxy, or caretaker of a participant physically harms local agency, vendor, or state agency staff, the participant shall be disqualified for a period of 12 months for a first offense and 12 months for a second or subsequent offense.

(g) Exceptions to disqualification:

(1) The state agency may decide not to impose a disqualification if, for violations which resulted in a claim assessed by the state agency against the participant, parent, guardian, client designated proxy, state agency-appointed proxy, or caretaker of a participant, full restitution is made within 30 days of receipt of a letter demanding repayment or a repayment schedule is agreed on.

(2) The state agency may permit a disqualified participant to reapply for the program before the end of a disqualification period if, in the case of a violation where a claim was assessed by the state agency against the participant or parent, guardian, client-designated proxy, state-agency appointed proxy, or caretaker of a participant, full restitution is made or a repayment schedule is agreed upon.

(3) The state agency may issue a waiver to appoint a person as a special proxy to transact food instruments and receive nutrition education for an infant, child, or participant under age 18 when the infant, child, or participant under age 18 will incur a serious health risk from the suspension of benefits.

(h) The state agency may attempt to recover, in cash, the value of the benefits received by a participant or the parent, guardian, client-designated proxy, state agency-appointed proxy or caretaker of a participant as a result of participant abuse. The state agency may request and authorize the Office of the Inspector General, Health and Human Services Commission, to perform this recovery on its behalf.

(1) The state agency or the Office of the Inspector General, Health and Human Services Commission, may determine the amount of the benefits improperly received by a participant through an independent review of local agency records and such other procedures as the state agency considers necessary under the specific circumstances. The state agency may request and authorize the Office of the Inspector General, Health and Human Services Commission, to perform this recovery on its behalf.

(2) In cases involving criminal prosecutions for violations of law, repayment of cash value of benefits improperly received may become a part of any restitution agreement with the prosecutor and approved by the court. In such cases, the participant shall not have the right to a fair hearing by the department.

(3) In cases involving an administrative claim but no criminal prosecution, the Office of the Inspector General, Health and Human Services Commission, shall notify the participant or parent, caretaker, or guardian of a participant in writing that a financial claim has been established and shall request repayment of an amount equal to the value of the benefits improperly received. The written notification shall include the reasons for the claim, the value of the benefits improperly received, the participant's right to a fair hearing, and shall state that the participant or parent, caretaker, or guardian of a participant may be subject to disqualification.

(i) Collection of a financial claim assessed against a participant by offset of future benefits is not authorized.

Source Note: The provisions of this §31.30 adopted to be effective August 5, 2001, 26 TexReg 5642; amended to be effective April 1, 2002, 27 TexReg 2014; amended to be effective June 4, 2006, 31 TexReg 4428; amended to be effective November 30, 2008, 33 TexReg 9505