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Dec 19 -- Comment period reopened and extended to January 2, 2024. https://www.federalregister.gov/d/2023-27821

Sept 19 -- The U.S. Department of Agriculture (the Department) is issuing this notice of proposed rulemaking to improve the Food and Nutrition Service's (FNS) Supplemental Nutrition Assistance Program (SNAP) quality control (QC) system as required in the Agriculture Improvement Act of 2018 (2018 Farm Bill). The proposed changes are intended to strengthen and improve the integrity and accuracy of the SNAP QC system and to better align SNAP with requirements in the Payment Integrity Information Act of 2019 (PIIA). These changes include a significant adjustment to the SNAP QC system that involves changes to Federal and State agency sampling processes, as well as changes to the active case review process. Quality Control case sampling and review processes are key aspects of the system used to annually assess SNAP payment error rates. The Department requests comment on this rule's proposed provisions. Written comments must be received on or before November 20, 2023 to ensure their consideration.

SNAP QC—In General

The Supplemental Nutrition Assistance Program (SNAP) is the nation's largest domestic food assistance program for Americans, reaching about 40 million people (approximately 12 percent of the nation's population) per month during fiscal year 2020. Although the Federal government funds SNAP benefits, under 7 U.S.C. 2020(a)(1), State agencies are responsible for general program administration of SNAP within their States, including determining the eligibility of individuals and households to receive SNAP benefits and issuing monthly allotments of benefits.

However, given the large volume of SNAP cases, complexities of eligibility policies, and availability of State options, State agencies may issue overpayments or underpayments of SNAP allotments to participant households.

Pursuant to Section 16 of the Food and Nutrition Act of 2008, as amended (FNA), each State agency is responsible for monitoring and improving its administration of SNAP. A Quality Control (QC) system is necessary to help ensure State agencies measure improper payments and improve their administration of SNAP. SNAP QC reviews have four goals, identified at 7 CFR 275.10(b), which are to provide: (1) a systematic method of measuring the validity of the SNAP eligibility caseload; (2) a basis for determining all SNAP error rates; (3) a timely, continuous flow of information on which to base corrective action at all levels of administration; and (4) a basis for establishing State agency liability for payment errors that exceed the National performance measure pursuant to Section 16(c)(1)(C) of the FNA.

To comply with Section 16 of the FNA, State agencies conduct monthly reviews of a statistically representative sample of both participating SNAP households (active cases) and households for whom participation was denied, terminated, or suspended (negative cases). These reviews measure the accuracy of SNAP eligibility and ongoing allotment determinations and ultimately serve as the basis for the SNAP payment error rate (PER) and case and procedural error rate (CAPER).

The results of these reviews provide feedback on State-by-State and national administration of the Program, including how State agencies' chosen policy options, waivers, and business processes affect the accuracy of their eligibility determinations. In short, the QC system allows FNS and the States to assess the integrity of SNAP by determining the extent to which the program is operating as required by statute and regulations. The system directly measures the accuracy of State actions to certify households as eligible for SNAP allotments and to determine the amount of those allotments, which are the actions that States should prioritize to ensure effective stewardship of taxpayer dollars and effective service to households in need.

Farm Bill Provisions

On December 20, 2018, the President signed Public Law 115–334, the Agriculture Improvement Act of 2018 (2018 Farm Bill). Section 4013(b) of the 2018 Farm Bill required the Department to issue an interim final rule to:  (1) ensure the SNAP QC system produces valid statistical results;  (2) provide for the oversight of contracts entered into by a State agency to improve payment accuracy;  (3) ensure the accuracy of data collected in the QC system; and  (4) provide for the evaluation of the integrity of the QC system for a minimum of two State agencies per fiscal year. Section 4013(e) of the 2018 Farm Bill also required that cost sharing for State computerization costs be, in part, contingent on State agencies granting FNS access to all State computer systems containing documentation and evidence related to SNAP eligibility. The Department determined that the most effective way to meet the statutory requirements was to issue two rules:  (1) an IFR for the non-discretionary provisions, which FNS believed were necessary to comply with the 2018 Farm Bill and would be effective immediately, and  (2) a proposed rule for the additional, discretionary provisions to improve the integrity and data quality of SNAP QC. By doing so, the Department ensures that major discretionary changes to SNAP QC go through the full notice and comment process, which allows stakeholders an opportunity to be part of the rulemaking process.

The Department codified all the non-discretionary requirements in Section 4013(b) in SNAP regulations by publishing the interim final rule (IFR) titled, “Supplemental Nutrition Assistance Program: Non-Discretionary Quality Control Provisions of the Agricultural Improvement Act of 2018” on August 13, 2021 (86 FR 44575.) A correction to that interim final rule was published on September 2, 2021 (86 FR 49229) and the final rule was published on April 18, 2023 (88 FR 23559).

Improper Payment Determinations

The SNAP QC review process precedes Federal improper payment laws, including the Payment Integrity Information Act of 2019 (PIIA) (Pub. L. 116–117.) These PIIA requirements include: identifying any case that a reviewer is unable to determine the accuracy of (known as an incomplete case) as an improper payment (31 U.S.C. 3352(c)(2)); and measuring technically improper payments, or payments in which a recipient was entitled to a payment but the payment failed to follow statutory or regulatory requirements (31 U.S.C. 3351(4)). With Congress' requirement to improve the SNAP QC system, the Department is including proposed changes in this rule that will better align SNAP with requirements in PIIA. In addition, the proposed shift in review focus for active cases (discussed later) will align the SNAP QC review process for determining SNAP payment errors more closely with the processes used to determine improper payments in other Federal programs that provide benefits to similar populations (e.g., Medicaid and the Earned Income Tax Credit). . . .
New Proposed QC Approach

The rest of this preamble will share the Department's proposals for this rulemaking. The Department proposes to improve the SNAP QC active review process using lessons learned from the QCIRs, the OIG audit, the completion rate study on QC, the 2018 RFI on QC, and other activities, such as technical assistance, that FNS has completed since FY 2015. As such, the Department is proposing a different active case review that: (1) would be less complicated, thus making it easier for State agencies and households to comply with, FNS to oversee, and less susceptible to bias; and (2) would still be capable of collecting detailed program information regarding State agency administration and the over and under issuance of SNAP allotments. In addition, the proposed active review would resolve an ongoing concern from OIG about how SNAP QC's use of Comparison I and Comparison II resulted in a measurement from two different points in time.

SNAP regulations require all SNAP State agencies to operate a QC system (7 CFR 275.10(a)). Although the 2018 IFR increased various reporting and recordkeeping requirements for State agencies to comply with the 2018 Farm Bill, the active review process for the SNAP QC system has remained relatively unchanged since February 1984 (49 FR 6292) and can be improved upon. Since SNAP's QC system existed at least 25 years prior to the first Federal improper payment laws, such as the Improper Payments Information Act of 2002 (IPIA). SNAP's active QC review methodology and processes require adjustment to come into alignment with other Federal programs where the improper payment determination procedures were created after the first Federal improper payment laws and associated regulations and guidance came into existence.

The proposed process would change the active case review to focus on eligibility actions instead of a random, point-in-time review for each case. This proposed change would eliminate the two-comparison allotment tests (Comparison I and Comparison II) from the QC review and instead focus on eligibility determinations, consider cases that a State agency cannot validate as total dollar errors, and alter the sampling and sampling plan requirements to correspond to the changed review focus.

To help the reader understand the flow of the proposed provisions that follow, the provisions are organized in the same order as existing regulations found in the Code of Federal Regulations at 7 CFR part 275. It is important to note, this is a proposed rule that requires public comment before a final rule may implement any changes to SNAP's QC system. The Department proposes the following provisions for comment.  . . .

FRN: https://www.federalregister.gov/d/2023-20023 [34 pages]

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