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CONCURRENT RESOLUTION
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WHEREAS, In 2015, the federal Department of Justice (DOJ) |
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began an investigation of the Health and Human Services Commission |
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(HHSC) quality control (QC) of the Supplemental Nutrition |
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Assistance Program (SNAP) from 2007 to the present, requesting |
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documents from HHSC in April 2017 and deposing HHSC staff in March |
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2019; and |
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WHEREAS, DOJ's investigation focused on whether HHSC |
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properly and accurately calculated, determined, and reported |
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Texas' error rates in compliance with FNS requirements regarding |
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SNAP QC; specifically, DOJ focused on HHSC's relationship with |
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Julie Osnes Consulting (Osnes), a contractor who assisted HHSC in |
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determining SNAP error rates and quality control review of SNAP |
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cases from September 2009 to June 2015; and |
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WHEREAS, DOJ was concerned that, by following certain |
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recommendations by Osnes, HHSC failed to maintain the integrity of |
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the QC system by introducing bias into its processes; and |
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WHEREAS, Osnes reached a settlement with DOJ in June 2019 of |
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$751,571, and to date three other states have settled DOJ's claims |
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related to their implementation of Osnes's recommendations: |
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(a) April 2017--Virginia settled for $7,150,436; |
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(b) April 2017--Wisconsin settled for $6,991,905; |
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(c) September 2017--Alaska settled for $2,489,999; and |
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WHEREAS, DOJ claimed that HHSC's SNAP management violated the |
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Federal False Claims Act (31 U.S.C. 3729, et seq.) and the Program |
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Fraud Civil Remedies Act (31 U.S.C. 3801, et seq.), in addition to |
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asserting various claims under common law; and |
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WHEREAS, The Covered Conduct alleged by DOJ included: |
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(a) Changing QC findings or dropping cases from review to |
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reduce or eliminate errors; |
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(b) Adding to or removing information from case files as |
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necessary to support the new findings and submitting the revised |
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findings and information to the U.S. Food and Nutrition Service; |
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(c) Finding ways to induce client responses to justify |
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dropping error cases from the review and asking leading questions |
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of clients to obtain desired answers to eliminate error potential; |
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(d) Selectively applying requirements and policies to |
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overturn and reduce errors; |
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(e) Retaliating against SNAP employees who questioned using |
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Osnes's methods by removing the employees from the QC review team; |
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and |
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WHEREAS, DOJ sought recovery of two years of accuracy |
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performance bonuses paid to HHSC, as well as certain other costs |
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associated with the QC process and the relationship with Osnes; and |
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WHEREAS, DOJ engaged HHSC in settlement negotiations, with |
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the Office of the Attorney General representing HHSC in both the |
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investigation and settlement discussions; and |
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WHEREAS, In December 2019, the parties reached agreement on |
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the following terms: |
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(a) A total settlement amount of $15,294,360: |
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(1) Of that amount, DOJ characterizes $13,396,343 as |
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restitution for the performance bonuses paid to the State; |
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(2) The remaining $1,898,017 represents repayment of |
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the federally funded portion of HHSC's QC costs and the amounts paid |
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to Osnes, plus a "multiplier" required by DOJ; |
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(b) Waiver by HHSC of any claim to the 2014 performance |
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bonus that was awarded but never paid to the State; |
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(c) No admission of liability by HHSC; and |
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WHEREAS, Section 111.003(b) of the Texas Civil Practice and |
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Remedies Code prohibits HHSC from entering a settlement agreement |
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that requires the payment of damages of more than $10,000,000 |
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within a fiscal biennium; therefore, the settlement agreement is |
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expressly conditioned upon the legislature approving and |
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appropriating the agreed upon settlement amount; and |
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WHEREAS, Since the findings resulting in the settlement, the |
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U.S. Department of Agriculture has reviewed HHSC's Quality Control |
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SNAP section processes twice and did not identify any adverse |
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finding; now, therefore, be it |
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RESOLVED, That the 87th Legislature of the State of Texas |
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hereby approve the proposed Settlement Agreement. |