Legislature(2015 - 2016)HOUSE FINANCE 519
02/24/2015 01:30 PM House FINANCE
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|Confirmation Hearing: Department of Revenue, Randall Hoffbeck, Commissioner Designee|
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE BILL NO. 26 "An Act extending the termination date of the Board of Certified Direct-Entry Midwives; and providing for an effective date." 2:39:44 PM LAURA STIDOLPH, STAFF, REPRESENTATIVE KURT OLSON, read a statement to the committee: Before you today is HB26, this legislation extends the termination date for the Board of Certified Direct- Entry Midwives to June 30, 2017. Each year the Division of Legislative Audit reviews state boards and commissions to determine if they should be reestablished per AS 24.44. The Division of Legislative Audit reviewed the activities of the Board of Certified Direct-Entry Midwives. The purpose of this audit was to determine whether there is a demonstrated public need for the board's continued existence and whether it has been operating in an effective manner. As the members noted in their review of the audit in their packets, it is the opinion of the Division of Legislative Audit that the board be extended two years to June 30, 2017. You saw that in the opinion of our auditors, the board is serving the public's interest by effectively licensing certified direct-entry midwives and apprentices. Additionally, it was found that the board continues to improve the profession by modifying and adopting midwifery regulations to conform to current standards of care. As the members also may have noted from the audit, there were four findings and recommendations, including having the Department pursue disciplinary cases, increasing licensing fees to eliminate the board's operating deficit, having the board communicate certificate requirements to continuing education providers, as well as approving apprentice applications in accordance with statutes. To speak to the recommendations, Kris Kurtis of Legislative Audit and Sara Chambers of the Department of Commerce are here, and Cheryl Corrick, the CDM Board Chair is on line from Anchorage. In closing, the Board of Certified Direct-Entry Midwives serves an important role in protecting the well-being of Alaskans by identifying individuals who are willing to pursue technical training and meet specified technical qualifications necessary for license as midwives. The continuation of this board is very important to the health and safety of Alaska's women and children. Thank you for your support of this legislation. KRIS CURTIS, LEGISLATIVE AUDITOR, ALASKA DIVISION OF LEGISLATIVE AUDIT, relayed that the division had conducted a sunset audit and concluded that the board was operating in the public's interest. However, the audit had found that the Division of Corporations, Business and Professional Licensing (DCBPL), Department of Commerce, Community and Economic Development (DCCED) failed to carry out timely disciplinary sanctions related to four midwife investigations. Therefore, the division only recommended a two year extension. The audit contained four recommendations; the most serious was to DCCED's commissioner to "take immediate action to pursue disciplinary sanctions for certified direct-entry midwives (CDM) cases when warranted." She detailed that disciplinary sanctions were not actively pursued for four related investigations involving two people, which supported disciplinary sanctions. She continued to read from the audit report: In all four CDM cases, the respondents refused to sign a CA. Rather than file an accusation and pursue an administrative hearing, DCBPL staff followed alternate procedures. Two of the four cases were forwarded to the Department of Law's (DOL) Office of Special Prosecutions and Appeals (OSPA) without a sufficiency of evidence review by an AAG. A year after the cases were forwarded to OSPA, no action had been taken. According to OSPA, the cases represent their lowest priority as the related offenses were categorized as Class B misdemeanors…. Due to staff turnover, it is unclear why DCBPL staff did not pursue a civil licensing action as required by standard operating procedures. At a minimum, licensing action should be pursued concurrently to ensure the public is protected from incompetent, negligent, or unlicensed practitioners. By not pursuing licensing action, the respondents were allowed to continue practicing, and the public's safety was placed at risk. Ms. Curtis noted that the other three recommendations were administrative. Co-Chair Neuman surmised that the board had done a very good job. He observed that the members had worked to modify and adopt regulations to conform to current standards of care. He felt that the fault lied with DCBPL. He wondered why the audit recommendation only extended the board for two years when it was the department that failed in carrying out its duties. Ms. Curtis replied that typically when the division of audit identified issues within DCBPL that needed correction audit followed up the following year especially related to a system or procedure that was central to all of the occupations. She elaborated that specific to the midwives case the investigations were related to the midwifery board. The sunset mechanism was the only mechanism that was available for follow up and due to the seriousness of the deficiency a shorter period was warranted to ensure correction. She agreed that the board was operating in the public's interest. Two of the audit's recommendations to the board were simple housekeeping recommendations that did not warrant an extension change. The other two recommendations were directed at the department. Co-Chair Neuman wondered whether it was common practice that DCBPL was not getting its job done. Ms. Curtis replied that it was fairly unusual and did not find that the deficiency was characteristic of DCBPL. Vice-Chair Saddler asked whether DCCED responded to recommendation number one. Ms. Curtis replied that the responses were included at the back of the audit; DCCED had concurred with the recommendations. Vice-Chair Saddler asked about recommendation number two related to license fee changes and noted the board carried a deficit since 2010. He asked what the reason for the deficit was. 2:48:55 PM Ms. Curtis could not speak to the deficit directly but offered some perspectives. During the last audit in 2006, the auditor had found that the board was suffering from a deficit and at that point the board had the highest occupational fees of over $2 thousand. The deficit was not a new problem for the board. The board had had incurred high investigation costs and had only a small number of licensees. Representative Guttenberg wondered whether the investigation expenses came as a result of investigating people that were not licensed. He detailed that the board assumed costs for unlicensed practitioners and the licensees acting within the law bore the cost of the investigations. He asked whether the expense was related to dealing with people who were not licensed. Ms. Curtis responded that the investigation information was not pubic. She elaborated that in general it was common for audit to find investigations related to unlicensed activity on occupational boards. Representative Guttenberg reiterated his question whether the investigation expense was related to people who were not licensed. Ms. Curtis responded in the affirmative. Representative Wilson referenced recommendation number two and asked whether the deficit was expected to grow in the next ten years. Ms. Curtis cited pages 14 and 15 of the audit that contained the board's financial information since 2010. She noted the board's deficit in 2006 was "significant" and the fee was over $2 thousand. She found it unusual that the certification fee in 2010 was lowered to $500. The low fee could have driven the deficit as well as four significant investigations. Representative Wilson pointed to the FY 2010 direct expenditures of $22,600. She understood why the deficit happened but noted the growth of expenditures. She deduced that even if fees were increased to $2,000 the deficit would still continue to grow. Ms. Curtis deferred to the department for a more detailed answer. She revealed that investigations or regulatory projects drove board's personal services costs. Representative Wilson wondered how much the audit cost for the board were. She wondered why the audit charges were not charged back to the board. Ms. Curtis replied that the Division of Legislative Budget and Audit (LBA) had a personal services allocation to perform its work. She offered that LBA's work encompassed financial, sunset, special request, and federal compliance audits. She reported that there had never been an attempt to recover the costs from the boards. SARA CHAMBERS, ACTING DIRECTOR, DIVISION OF CORPORATIONS, BUSINESS AND PROFESSIONAL LICENSING, DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, related that the division concurred with the audit findings. The department agreed that there was a serious need for improvement within the department. She delineated that within the past year the division incorporated changes to the structure of its investigative unit. The division currently worked "more closely" with DOL and OSPA to ensure "the processes were codified" and the cases were recognized as a priority when sent to DOL. The division's chief investigator had set up a meeting every 30 days with DOL to confirm that cases were acted upon. She added that the division was "closing in on definitive action" regarding the cases identified in the audit. 2:55:51 PM Co-Chair Thompson asked how many registered midwives there were in Alaska. Ms. Chambers answered that there were approximately 50 registered midwives including apprentices. Co-Chair Thompson pointed to the $115,000 deficit; he wondered whether it was possible for the board to catch up. Ms. Chambers replied that the board and the division had been working over the past several years to chip away at the deficit. She detailed that an increase to a $4 thousand to $5 thousand licensing fee would be unsustainable for midwives. She anticipated that the deficit costs could be recovered over a period of time. The division with the board's concurrence increased licensing fees over the last two previous licensing cycles and would continue to do so. She continued that prior to 2010 the division had provided incorrect information to boards that "was not reconciled with the state accounting system." The midwifery board was given incorrect information and based on the misinformation set the fee too low. She revealed that the division discovered the mistake which affected several other boards that incurred large deficits. Co-Chair Thompson asked if there was a fear that a continual increase in fees would reduce the number of midwives. Ms. Chambers replied in the affirmative. She stated that however, as long as the fees were mandated to cover all of a board's expenses including investigations she believed that "it was a cost of doing business." Representative Wilson surmised that according to statute there was not a choice "to chip away" at a board's deficits. She wondered what gave the division the authority to not collect the full deficit amount in fees by the next licensing cycle. Ms. Chambers answered that the division attempted to clarify the issue since 2011. She indicated that the Division of Legislative Audit and the Division of Legislative Finance (LFD) interpreted AS.08.01.065 as a requirement for the division to analyze fees each year but not necessarily increase fees each year to recover the costs. Representative Wilson asked why the midwifery "industry" would not be safe without a board since the licensing requirements would still be mandated. 3:00:23 PM Ms. Chambers replied that the division maintained safety standards with or without boards. A professional board ensured timely information on regulatory issues to keep current with standards of practice. Representative Wilson asked whether not only the midwifery board but any board could regulate itself voluntarily. She restated her skepticism that the board could recover costs and pay for itself with only 50 licensees. Ms. Chambers answered that the model often used in professions without boards employed "quite a bit of input from the professional community and associations." Those professions lacked the statutory authority to take action therefore; a volunteer board's meetings would have to be subject to open meetings laws regarding drafting regulations. She thought that the board's value was "in keeping current with continuing education." She related that the division's licensing staff may not be aware of nuanced information that could affect regulation without a board. She remarked that a possibility existed that the midwifery board's activities could be assumed by another board. Vice-Chair Saddler asked what the standard board extension was. Ms. Chambers replied that legislative audit could extend a board for up to eight years. Vice-Chair Saddler asked how long the midwifery board was in existence and what percentage of births were assisted by midwives in the state. Ms. Chambers deferred the question to the board. Representative Guttenberg commented that the issue was part of a "larger structural issue" that had been encountered before. He pondered how many of the professional boards' costs resulted from dealing with people who were not licensed. He wondered how many boards were in financial trouble due to investigations of unlicensed people who were outside of a board's regulatory authority. He suggested that perusing unlicensed individuals was the state's responsibility instead of putting the burden onto the licensed professional acting within the law. He believed that scenario was the "larger issue." Ms. Chambers answered that the division did not have a specific statistic to offer. She stressed that according to statute, each board was mandated to pursue unlicensed individuals if discovered by the division's investigative unit. 3:07:32 PM Co-Chair Thompson redirected the conversation back to the midwifery board. Representative Pruitt wondered whether the division had the authority to recoup the investigative costs from the unlicensed individual, which would help limit the costs to the midwives. Ms. Chambers replied in the negative. She delineated that all fines collected were deposited into the general fund. Licensees with or without a board covered the investigative costs. The division had requested an attorney's opinion on whether the division could "bill" the individual for the investigative costs but did not currently possess the authority. Representative Kawasaki noted that the board requested increased fees for certified midwifes and apprentices but that the division denied the increase. He requested clarity. Ms. Chambers answered that the issue had recently been resolved and all of the fees were increased. Representative Gattis wondered what would happen if the board was allowed to sunset. Ms. Chambers replied that the board would sunset but the licensing program would continue and deferred to Ms. Curtis for technical answers. CHERYL CORRICK, CHAIR, BOARD OF CERTIFIED DIRECT-ENTRY MIDWIVES (via teleconference), provided a statement and addressed members questions. She stated that the board was an important part of the profession and worked tirelessly to regulate and update midwifery in the state. She elaborated that the board was working arduously to improve its budget and investigation issues. She relayed that the division was restructuring its investigative procedures to address the board's concerns. Previous investigative practices had increased the public's risk. She added that the division was working with the board to implement cost saving measures including administrative overhead. She planned to eliminate the deficit through increasing licensing fees over several licensing cycles. She addressed the $500 licensing fee in FY 2010. She communicated that she was a member of the board at the time and recalled the collective concern from the licensees and board over the low fee. The board's request for an increase was denied by the division. Ms. Corrick informed the committee that the board had been in existence since 1988 and that approximately 10 percent of the births in the state were attended by midwives. In reference to questions concerning the public's safety without a board, she added that an obstetrician and a certified nurse midwife were board members. She discussed that the team worked hard to ensure regulations were updated to national standards. She deemed that the cost of the board was minimal and that the higher costs were associated with administration and investigations. 3:15:20 PM Representative Munoz wondered whether the four ongoing investigations were related to uncertified activity. Ms. Corrick replied that two of the cases were related to uncertified activity. Representative Munoz wondered how many uncertified midwives were operating in Alaska. Ms. Corrick guessed that there were two. Vice-Chair Saddler referred to Ms. Corrick's letter in response to the audit's recommendations. He noted that the board was researching the possibility of a legal defense fund to help smaller boards with investigative costs. He requested more information. Ms. Corrick responded that the midwives were interested in working with other professions regarding the idea but that no action had been taken to date. HB 26 was HEARD and HELD in committee for further consideration.
|HB26 Supporting Documents-Legislative Audit 6-30-2014.pdf||
HFIN 2/24/2015 1:30:00 PM
|HB26 Sponsor Statement.pdf||
HFIN 2/24/2015 1:30:00 PM
|Commissioner DOR - Hoffbeck #3.pdf||
HFIN 2/24/2015 1:30:00 PM
Confirmation HFIN Hoffbeck DOR