Legislature(2017 - 2018)BARNES 124
03/01/2017 03:15 PM LABOR & COMMERCE
Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
Download Mp3. <- Right click and save file as
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 90-OCC. LICENSING FEES; INVESTIGATION COSTS 3:26:24 PM CHAIR KITO announced that the final order of business would be HOUSE BILL NO. 90, "An Act relating to occupational licensing fees; relating to an occupational investigation surcharge; and providing for an effective date." 3:27:02 PM CHRYSTAL KOENEMAN, Staff, Representative Sam Kito, Alaska State Legislature, presented HB 90 on behalf of Representative Kito, prime sponsor. She stated that HB 90 would spread the total investigation surcharge across all licensees, regardless of profession. The proposed investigative surcharge replace the amount that the licensees currently pay in their overall license fee. She noted that the bill would have no impact on any deficits among the various boards; she remarked, "Those boards will still be required to pay off that deficit." She added that the department has stated that HB 90 would not impact the investigations: under HB 90, there would be no increase in investigations and there would be no diminishment of service. 3:28:07 PM REPRESENTATIVE JOSEPHSON asked what the administration's response is to the proposed bill. 3:28:29 PM JANEY HOVENDEN, Director, Division of Corporations, Businesses, and Professional Licensing (DCBPL), Department of Commerce, Community & Economic Development (DCCED), stated that the administration has no position on HB 90, although many boards have weighed in and awaited a solution to the volatility in investigative costs. She noted that some boards have submitted their position. REPRESENTATIVE JOSEPHSON asked Ms. Koeneman if HB 90 is "the grand solution that we've been looking for." 3:29:36 PM MS. KOENEMAN answered, "I hope so." She expressed that she has worked on this issue for seven years and there have been many different proposals over the years. Some of the proposals would have utilized the General Fund which is not "palatable" given the state's current fiscal situation. 3:30:18 PM REPRESENTATIVE STUTES noted her support of the bill because in the past, boards have had difficulties and the department has had issues with proper accounting. She said, "I'm not trying to cast any dispersions currently. ... My thought is this may be a wider overview so things won't go so far before they're brought back around." 3:31:22 PM REPRESENTATIVE BIRCH noted that in 2010-2011 the investigative budget was $6.8 million, in 2012-2013 it was $7.5 million, in 2014-2015 it was $8.3 million, and in 2016-2017 it is estimated to be over $9 million. He characterized this as significant growth. He mentioned that the main cost driver seems to be the investigative work. He asked how the investigators are managed. He asked, "How do you get to a point where you don't need any investigators, where everybody is doing what they are supposed to be doing?" 3:32:51 PM ANGELA BIRT, Chief Investigator, Anchorage Office, Division of Corporations, Businesses, and Professional Licensing (DCBPL), Department of Commerce, Community & Economic Development (DCCED), responded that the 22 investigative staff members engage in positive timekeeping and support 43 licensed professions with 21 sitting boards. She explained that two staff members were added last year under Senate Bill 74. She explained that some staff members are dedicated to certain programs because these programs have enough of a workload and other staff members work on an as-needed basis during surge times, such as biennial license renewals. Renewals require reviewing applications because under statute, any "yes" answer to a professional fitness question has to have an investigative review. She remarked: I, like you, would prefer that we get to a point where people do not have to endure investigations, but unfortunately we do have some consumers that have bad experiences and the investigative staff provides them with an opportunity to redress those and talk with both sides to determine whether or not a violation of the law has occurred. MS. BIRT informed the committee that the investigative staff keeps track of time to the quarter hour and charges the particular program for the time spent supporting it. The costs vary significantly between programs. 3:34:30 PM REPRESENTATIVE BIRCH asked if the complaints are public. He asked how the investigative staff directs its energy and effort in responding to a criticism or initiating an investigation. MS. BIRT answered that the primary driver of investigations is consumer complaints. She explained, "We triage those based on the severity of the complaint and the potential for public harm." She expressed that reports of doctors overprescribing medications are an example of high-visibility, high-priority investigations. Some complaints driven by customer dissatisfaction are investigated and often do not involve a violation of the law. She remarked: For instance, if you contract to come up here and go big game hunting and you don't get a sheep, that doesn't necessarily mean that your guide did anything wrong. When we receive a complaint we do need to look into it, we do need to solicit the input from the person who is licensed and ask them what happened, and that does take time and effort on the investigators to collect all the materials in order to provide a full and fair inquiry. MS. BIRT explained that in many investigations involving the health care industry, investigators must collect medical records from before, during, and after treatment to determine whether or not the treatment was appropriate. She noted that consumer complaints are the most common; complaints from facilities who let licensed staff go due to mental, behavioral, or substance problems are the highest priority. Other complaints include inconsistencies in applications or falsified applications for licensure. She remarked, "In order to make the best decision about whether or not a person is safe to practice in Alaska and should be given a license, the boards rely on us to collect the information to make their decisions." 3:37:25 PM REPRESENTATIVE BIRCH asked if the complaints are recorded and allocated to the 43 professions and 21 sitting boards. He asked where the bulk of the resources are going. MS. BIRT responded, "The primary drivers of our complaints are based on the licensee base." She noted that there are over 16,000 practicing nurses, which is about a third of the licensed professionals in the state, and two investigators are designated to that program because of the volume. Other investigators have responsibility for up to 10 programs with small licensing bases. She commented that some sectors receive few complaints and other sectors get many. She remarked, "Some sectors are extremely litigious, so we have less opportunity to resolve these without going into a hearing, which increases cost." 3:39:09 PM REPRESENTATIVE JOSEPHSON pointed out that a schedule of revenue and expenditures dated October 27, 2016, [included in the committee packet] shows a budget of about $11 million, which came almost entirely from the licensees themselves. He remarked, "So we see an increase in the budget, but it's all self-funded, except for this $12,000." 3:39:52 PM MS. HOVENDEN responded, "That's correct." REPRESENTATIVE JOSEPHSON mentioned that the number of licensees has grown by 20,000 in the last six or seven years. He asked whether more people asking to be licensed demonstrates that there is more money in the economy, that people are getting insurance claims filed more easily, and that there is more confidence in each industry. MS. HOVENDEN answered yes. She added that the department has added some licensing programs and has seen an increase of licensing in the existing programs. 3:40:48 PM REPRESENTATIVE WOOL pointed out that the proposed surcharge is estimated at $55, which he stated is "a pretty good deal." He noted that the surcharge would slightly increase some [licensees'] payments and would save others a large amount. He drew attention to the current fee of $3,800 for midwives' licensing. He remarked, "Now the investigative portion would be 55, and I understand there is old debt that needs to be paid off." He stated that the current investigative costs per licensee was $639 for midwives and $776 for naturopaths, and both groups have roughly the same amount of licensees. He asked if old debt is the reason midwives' current licensing fee is so high. 3:42:35 PM MS. KOENEMAN answered that the high fee is the result of two things: paying off debt of prior investigations and spreading the costs among few licensees. REPRESENTATIVE WOOL asked whether requiring all licensees to pay a $55 investigative charge in addition to licensing fees would encourage more investigations: There would be no incentive for any group to "keep an eye on its members" if investigative costs were distributed among 74,000 licensees. 3:43:55 PM MS. HOVENDEN offered her opinion that a flat fee would not affect the amount of investigations. The cost of an investigation shouldn't impact whether or not an investigation is pursued or the validity of an investigation. 3:44:35 PM CHAIR KITO offered his understanding that Representative Wool is concerned that changing the funding methodology would change the amount of investigations that occur. He expressed that there is a kind of firewall in place: the investigations start by complaints from individuals or members of the board and such complaints would not be affected by a change in the cost structure. 3:45:29 PM REPRESENTATIVE KNOPP stated that he does not like the bill. He remarked, "I think I just heard her say that all investigations should be pursued regardless of costs." He explained that boards are created to regulate an industry and control costs. He said that there is no incentive for a board to control its activities and costs when costs are spread without individual board responsibility. He pointed out that investigative costs vary greatly by profession. He offered his opinion that spreading the cost is not the appropriate way to go and that HB 90 wouldn't fix the problem. He offered that it would be better to let the boards discuss how to control costs with individualized responsibility. 3:47:37 PM CHAIR KITO, after ascertaining that there was no one who wished to testify, closed public testimony on HB 90. 3:47:47 PM REPRESENTATIVE WOOL commented that he understands Representative Knopp's concern. He pointed out that investigative costs also include pursuing non-licensed individuals, and those costs are largely borne by the responsible, [licensed] individuals. He expressed that HB 90 would help disperse that situation. 3:48:43 PM REPRESENTATIVE BIRCH observed that the Board of Massage Therapists had 756 licensees and spent $879 in investigations in 2014 and 2015, which amounted to about a dollar per person. He said he agrees with Representative Knopp. He noted that there is a $622 cost with every Euthanasia licensee. He stated, "If you get a permit and there's a $6,000 charge, I'm ok with that because it seems like it's a cost-causer, cost-payer." He expressed that he likes the current system, which maps out "what's going on." 3:50:17 PM CHAIR KITO maintained that HB 90 would resolve one issue: investigations are not equitable across boards. This disparity leads to boards with fewer members having higher investigative costs, and those with large membership end up with lower costs; however, the department is asked to provide the same amount of safety and security to all boards. He remarked that it seemed worthwhile to him to spread the costs among the professions because the investigators are available to support all of the boards. 3:51:02 PM REPRESENTATIVE JOSEPHSON stated his support for HB 90, although he remarked that it is not a perfect solution. He said, "Part of the reason I'm comfortable with this bill is because it's $55." He characterized that such a fee would be a well-spent form of insurance: Board membership and licensing costs could be subject to hikes because of bad actors; therefore he called the bill "a victory for 75,000 people." He expressed that the issue has been discussed for many years and it is unfair to say that one profession should be subject to massive fees and licensure expenditures when a solution like HB 90 is available. 3:52:42 PM REPRESENTATIVE WOOL moved to report HB 90 out of committee with individual recommendations and the accompanying fiscal notes. 3:53:03 PM REPRESENTATIVE KNOPP objected. 3:53:07 PM A roll call vote was taken. Representatives Stutes, Josephson, Wool, and Kito voted in favor of HB 90. Representatives Knopp, Sullivan-Leonard, and Birch voted against it. Therefore, HB 90 was reported out of the House Labor and Commerce Standing Committee by a vote of 4-3.
|HB090 Supporting Documents - Letters of Support 2.28.17.pdf||
HL&C 3/1/2017 3:15:00 PM
|HB090 Supporting Documents - Letters of Opposition 2.28.17.pdf||
HL&C 3/1/2017 3:15:00 PM
|HB090 Supporting Document - CBPL Program Fees and Investigation Cost Comparison 2.28.17.pdf||
HL&C 3/1/2017 3:15:00 PM