Legislature(2001 - 2002)
10/28/2002 10:01 AM House HES
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* first hearing in first committee of referral
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ALASKA STATE LEGISLATURE
HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES
STANDING COMMITTEE
SENATE HEALTH, EDUCATION AND SOCIAL SERVICES
STANDING COMMITTEE
Anchorage, Alaska
October 28, 2002
10:01 a.m.
HOUSE MEMBERS PRESENT
Representative Fred Dyson, Chair
Representative Peggy Wilson, Vice Chair (via teleconference)
Representative John Coghill (via teleconference)
Representative Sharon Cissna
HOUSE MEMBERS ABSENT
Representative Gary Stevens
Representative Vic Kohring
Representative Reggie Joule
SENATE MEMBERS PRESENT
Senator Lyda Green, Chair
Senator Loren Leman, Vice Chair
Senator Wilken (via teleconference)
Senator Bettye Davis
SENATE MEMBERS ABSENT
Senator Jerry Ward
COMMITTEE CALENDAR
OVERVIEW: JOINT HEARING WITH SENATE HEALTH, EDUCATION AND
SOCIAL SERVICES STANDING COMMITTEE PRESENTATION FROM THE
DIVISION OF PUBLIC ASSISTANCE: THE IMPLEMENTATION OF HB 402 AND
WORK-FIRST PHILOSOPHY
PREVIOUS ACTION
No previous action to record
WITNESS REGISTER
ANGELA SALERNO, Program Coordinator
Division of Public Assistance (DPA)
Department of Health & Social Services (DHSS)
PO Box 110640
Juneau, Alaska 99811-0640
ELLIE FITZJARRALD, Chief
Policy & Program Development
Division of Public Assistance (DPA)
Department of Health & Social Services (DHSS)
PO Box 110640
Juneau, Alaska 99811-0640
MARY ROGERS, Chief of Field Services
Division of Public Assistance (DPA)
Department of Health & Social Services (DHSS)
PO Box 110640
Juneau, Alaska 99811-0640
RON KREHER, Work Services Manager
Policy & Program Development
Division of Public Assistance (DPA)
Department of Health & Social Services (DHSS)
PO Box 110640
Juneau, Alaska 99811-0640
CLAIRE SIGURDSSON, Program Manager
Fraud Control Unit
Division of Public Assistance (DPA)
Department of Health & Social Services (DHSS)
619 East Ship Creek Avenue, Suite 220
Anchorage, Alaska 99501
TAPES
02-41, SIDES A & B [House HES tapes]
02-42, SIDES A & B
CALL TO ORDER
REPRESENTATIVE FRED DYSON, Chair, convened the joint House and
Senate Health, Education and Social Services Standing Committees
meeting at 10:01 a.m. in Anchorage. Committee members present
were Representatives Dyson, Coghill, Wilson, and Cissna, and
Senators Green, Leman, Wilken, and Davis.
ACTION NARRATIVE
OVERVIEW: JOINT HEARING WITH SENATE HEALTH, EDUCATION AND
SOCIAL SERVICES STANDING COMMITTEE PRESENTATION FROM THE
DIVISION OF PUBLIC ASSISTANCE: THE IMPLEMENTATION OF HB 402 AND
WORK-FIRST PHILOSOPHY
CHAIR DYSON announced that the committees would hear a
Presentation from the Division of Public Assistance: The
Implementation of HB 402 and Work-First Philosophy
ANGELA SALERNO, Program Coordinator, Division of Public
Assistance (DPA), Department of Health & Social Services (DHSS),
began an update of changes in the Alaska Temporary Assistance
Program (ATAP) and welfare reform. She introduced the other
presenters from DPA and outlined the direction of the
presentation.
ELLIE FITZJARRALD, Chief, Policy & Program Development, Division
of Public Assistance (DPA), Department of Health & Social
Services (DHSS), pointed out that, in addition to changes from
HB 402, they would speak to the results of the recommendations
from the American Institute for Full Employment, who recently
evaluated DPA. In response to a question from Chair Dyson, Ms.
Fitzjarrald reported that as a result of the federal food
stamp/farm bill, the state has new options to aid low-income
families with nutritional needs. In addition, states may
strengthen the food stamp employment and training program to
help single adults who do not have children.
MS. FITZJARRALD stated that the first important provision in
HB 402 is diversion payments: one-time, short-term payments
aimed to meet immediate employment-related needs and keep the
family from entering ATAP and receiving ongoing assistance.
With the current bill, DPA may pay an applicant up to four
months' benefits as a diversion, she reported. Since July of
2002, the number of applicants choosing diversion has tripled,
demonstrating the success of this option.
MS. FITZJARRALD offered that the other important change in
HB 402 is progressive penalties for those recipients who do not
comply with work requirements or family self-sufficiency plans.
For the first four months of noncompliance, a family's benefits
are reduced 40 percent. If noncompliance is continued more than
four months, their benefit is decreased 75 percent. For
noncompliance over eight months, 100 percent of their benefit is
reduced, and they become subject to case closure. Benefits are
reinstated after five days of re-compliance, for the first
offense. With pending regulations, the second offense will
require ten days of compliance for benefits to be reinstated,
and the third requires a month of compliance. She explained
that a family would start back at the first level of benefit
reduction for each successive period of noncompliance.
CHAIR DYSON questioned the wisdom of such a policy. Instead, he
believes that penalty severity should increase for each
successive period of noncompliance.
MS. FITZJARRALD explained that DPA is not allowed to practice
such a penalty system under current law.
CHAIR GREEN disapproved this new penalty system and stated that
the new penalty system does not concur with legislative intent.
REPRESENTATIVE CISSNA asked if exemptions exist to excuse the
family from the penalty process due to legitimate reasons.
MS. FITZJARRALD agreed, naming these "good cause provisions" as
sick children, school issues, et cetera.
MS. FITZJARRALD, in answer to a question from Chair Dyson,
indicated that the case manager is responsible for supervising
activity attendance.
CHAIR DYSON revealed his preference that, since the public is
paying for the work-related activities of welfare recipients
(such as substance abuse counseling, job-training, et cetera),
the public deserves to be notified by the personnel of those
programs who deal with the recipients, especially because case
managers are overworked and the public is paying the bill.
MS. FITZJARRALD continued, saying that as a result of the new
penalty process, a larger percentage of the caseload is "on
penalty" (4.7 percent) and a larger number of people are
compliant. She suspects that, as the time limit approaches [for
receiving cash benefits], families become more motivated to find
work. She also points toward new policies as motivating job
seeking. Fifty-five percent of the families encountering the
60-month limit have received month-to-month extensions,
determined case by case, she reports.
CHAIR DYSON commented that the supporters of this bill worked
hard with the former director of DPA, Jim Nordlund, to ensure
that extensions are not granted solely based on geography.
MS. FITZJARRALD commented that the only valid reasons for an
extension on cash benefits are caring for a disabled child or
adult and extreme hardship. If necessary, recipients are
required to relocate to find available jobs. As of September
2002, 343 families have encountered the 60-month time limit. Of
those, 190 have received an extension. She cited a report that
indicates that as families draw closer to the time limit, they
are choosing to leave the program.
CHAIR DYSON surmised that if the time limit, rather than
obstacles to employment, motivates clients in a job search, then
the time limit should be lowered.
MS. FITZJARRALD commented on DPA's new cooperation with the
Division of Family and Youth Services (DFYS) to identify
families jointly served. This cooperation will allow joint case
planning and notification to DFYS of families who may need
additional support due to an approaching time limit on cash
benefits or being on penalty.
CHAIR DYSON remarked that the home visit process seems overly
complicated and cumbersome.
MS. FITZJARRALD briefly explained that the home visit process is
a penalty for non-compliance.
MARY ROGERS, Chief of Field Services, Division of Public
Assistance (DPA), Department of Health & Social Services (DHSS),
explained that DPA is concerned about the safety of its workers
during home visits and about continuing to strengthen the
relationship with the recipient family throughout the process.
MS. FITZJARRALD explained that DPA's policy is to announce to
the family, by letter or telephone, that a home visit is
required and that they will be evaluating the home for safety of
the children, et cetera to determine if a benefit reduction is
in order. Because home visits are very costly, she explained
that DPA caseworkers sometimes collaborate with DFYS personnel
or other agencies to see the family.
CHAIR DYSON indicated his desire to help DPA make the home visit
process smoother.
REPRESENTATIVE CISSNA stressed the importance of the recipients'
receiving face-to-face contact with DPA personnel, if they are
to be motivated to comply and engage in the system. She also
inquired about the training procedures for home visits.
MS. ROGERS explained that DPA provides home visit training as
well as certified crisis-prevention training.
REPRESENTATIVE COGHILL asked: out of the families that were
denied services as the 60-month limit approaches, how many are
in rural areas, and do they require further governmental
intervention?
MS. FITZJARRALD indicated that DPA does not yet know what
happens to these families if their cases are not open within
DPA.
CHAIR DYSON asked if DPA personnel receive information from
other agencies about domestic violence, outstanding warrants, et
cetera, before initiating a home visit with the family.
MS. FITZJARRALD answered that DPA staff often receive this
information, but do not have "automated" systems to provide this
information yet.
CHAIR DYSON relayed his support for such a system that removes
confidentiality barriers while preserving privacy, and that
supports information sharing and the safety of DPA personnel.
MS. ROGERS explained that DPA staff do have access to public
information and automated systems, and periodically check those
databases.
MS. FITZJARRALD explained that, by law, a home visit is required
before a benefit reduction may be authorized, to ensure health
and safety of all family members.
CHAIR GREEN inquired about the status of the pilot program in
the Matanuska-Susitna (Mat-Su) office, which combines several
agencies' interactions with recipients when they apply for
services.
MS. FITZJARRALD commented that such interagency collaboration is
beginning throughout the state.
CHAIR GREEN observed that HB 402 required a home visit to be
attempted, not necessarily completed.
MS. FITZJARRALD concurred that if unable to complete the home
visit, DPA decides whether or not to impose sanctions based on
all the information about the family that they have gathered,
including the incomplete visit.
REPRESENTATIVE WILSON inquired about the new wage-subsidy
program.
RON KREHER, Work Services Manager, Policy & Program Development,
Division of Public Assistance (DPA), Department of Health &
Social Services (DHSS), indicated that DPA is still in the
planning process for implementing the wage-supplementation
program. He reported DPA believes that small businesses are
most likely to be able to grow and benefit from a wage-
supplementation program. He specified that this wage-
supplementation program only involves new job positions, because
there is national ambition to expand businesses and the economy,
and because of federal law that prohibits displacing a current
employee with a subsidized welfare employee. In other states,
once that job position is established, it is to be permanently
staffed by subsequent subsidized welfare employees.
Traditionally, recipients who begin in a subsidized job position
are later hired permanently by the company. Typically, he
continued, participants in a wage-supplementation program have
some level of job skills, training, or experience; on-the-job-
training programs, however, usually involve formal training
plans. He commended the success of the on-the-job-training
program as evidenced by more participants, good wages, and
permanent hire of those employees.
MR. KREHER, in response to Representative Cissna's question,
turned the discussion to performance-based budgeting. This
year, DPA has specified an outcome that reflects the core of its
goal for work services: cases close with earnings and do not
return to temporary assistance (TA). They will evaluate this
outcome by measuring:
· Percentage of clients who obtain employment within 30 days.
· Percentage of cases with earnings.
· Percentage of employed clients who retain employment for 4
consecutive months.
· Percentage of employed clients with earnings progression.
· Percentage of cases that closed with earnings.
· Percentage of cases closed with earnings that don't return
to TA for 6 months.
· Percentage of cases meeting overall participation
requirements.
· Percentage of cases meeting two-parent participation
requirements.
MR. KREHER added that these measures will be used to evaluate
the effectiveness and efficiency of internal DPA offices as well
as grantees, contractors, and service providers. They will also
be viewable using the Internet. He stated his belief that these
outcome-based performance measures push Alaska to the leading
edge of state efforts in work services.
MS. FITZJARRALD stated in answer to a question from Chair Dyson,
that DPA has an "automatic interface" with the Department of
Labor & Workforce Development that will inform DPA staff when
temporary assistance recipients are also receiving unemployment
benefits. Further, she clarified that permanent fund dividends
and [under $2,000 of] Native corporation dividends are "held
harmless" from being counted towards earnings when determining
eligibility for temporary assistance.
CHAIR DYSON inquired which assets are counted for eligibility
determinations.
MS. FITZJARRALD answered that a family can own up to $2,000 in
cash assets. Further, a family's home, vehicle(s), and self-
owned business assets are excluded from consideration; there are
no limits for those assets for families concerning eligibility.
CHAIR DYSON relayed his belief that other states do, as Alaska
should, set a total asset limit - $10,000, for instance - that
families must meet before eligibility. If they have more
assets, they are required to sell them or use them or buy less-
expensive assets or take out equity loans so that they may
finance their own recovery, rather than passing on the expense
to other tax-paying citizens or, in Alaska's case, oil industry
revenues.
MS. FITZJARRALD informed the committees that many of these
limits and rules conflict from program to program and from state
to federal standards. In certain cases, states may receive
waivers from federal requirements. The DPA staff have worked in
the past to align state temporary assistance guidelines with
those of the federal food stamp program. She further clarified
that a recipient's vehicle that is used to commute to and from
work is excluded from the asset limit. Ms. Fitzjarrald went on
to report that DPA has decreased its caseload 40 percent since
1996 to less than 6,000 families today.
MR. KREHER specified that DPA aims to involve 1 percent to 5
percent of its caseload, 30 to 100 recipients, in the wage-
supplementation program, particularly in regions with a weakened
economy.
MS. FITZJARRALD reported that the new leadership of DPA intends
to continue its commitment to the wage-supplementation program,
as previous leaders have. In addition, more efficient progress
is seen as staff emphasize employment from the first contact
with applicants.
REPRESENTATIVE WILSON asked how DPA has motivated businesses to
seek out benefit recipients as potential employees.
MS. ROGERS pointed out that the most efficient function that has
enhanced service delivery has been screening. Applicants now
can be more effectively referred to appropriate services at the
beginning of the process. She concurred that diversion payments
are an increasingly popular and effective service. Recipients
can be diverted from enrollment in ATAP in several ways
including cash payments, job referrals, or involvement in other
services. In addition to diversion, staff also organize a ten-
day job club that evaluates recipient needs, strengths,
eligibility, and employment opportunities. This activity is
designed to assist the recipient in immediate employment. The
new benefit-briefing process is a computerized, online program
that explains the benefits of employment and organizes a
participant's skills, which helps in future interviews. Some
companies come to DPA offices and, in addition to providing
information about their organization, conduct interviews. These
include Tesoro, J.C. Penney, Fred Meyer, and Carrs. The DPA has
regional job centers that contain resource rooms that provide
computers and other tools to assist recipients searching for
employment. This project has grown in attendance and success.
MS. ROGERS highlighted the enhanced relationship between
eligibility staff and contracted case managers by redesigning
team structure to promote close contact between the two groups.
Another improvement is increased job-retention and career-
advancement activities. The DPA has recently increased the
caseload in the Mat-Su office by relocating six staff and
shifting cases there in order to utilize experienced staff who
work there.
MS. FITZJARRALD, in response to a question from Chair Dyson,
reported that DPA has an interface with the Internal Revenue
Service (IRS) that enables staff to use tax information in
eligibility determinations. The DPA also uses state wage
records and social security records.
CHAIR DYSON reported that in the Western states he has worked
with, approximately 30 percent of the recipients are fraudulent.
MS. FITZJARRALD identified differing types of fraud: applicant
fraud and recipient overpayment fraud. Due to the quality
control measures of the federal food stamp program and ATAP,
about 5 percent of the cases that are reviewed yearly are
referred to a fraud investigator. The DPA collects overpayments
from fraudulent recipients of these services that amount to
$300,000 to $500,000 yearly. In response to a question from
Chair Dyson, she explained that DPA does not collect interest on
the overpayments.
CLAIRE SIGURDSSON, Program Manager, Fraud Control Unit, Division
of Public Assistance (DPA), Department of Health & Social
Services (DHSS), defined applicant fraud as fraud within the
first four months of application. Applicant fraud is only
investigated in the Anchorage, Fairbanks, Kenai, and Mat-Su
regions - not in rural areas. Her unit receives 50 to 60
referrals a month for its 14 staff, 11 of which are
investigators. In response to a question from Chair Dyson, she
reported that DPA does not automatically prosecute each
applicant fraud case; another option is disqualification from
future benefits. Penalties for fraud of ATAP, per guilty adult,
are suspension of benefits for 6 months for the first offense,
12 months for the second, and permanently for the third.
Penalties for fraud of the federal food stamp program are 12
months for the first offense, 24 months for the second, and
permanently for the third. Chair Dyson encouraged DPA to
discuss "full-family sanctions" rather than penalties per
offending adult as a means to more effectively motivate
compliance.
MS. SIGURDSSON stressed the importance and difficulty of being
able to clearly and convincingly prove that fraud occurred.
Recipient fraud is investigated statewide and must be provable
for criminal prosecution or administrative sanctions.
CHAIR DYSON stated that Western states report using former
police officers and military criminal investigation staff; DPA
uses eligibility staff, some of whom have been investigating for
quite some time, as reported by Ms. Sigurdsson.
MS. SIGURDSSON, in response to a question from Chair Dyson,
reported that DPA doesn't seize fraudulent recipients' assets,
but enters into an agreement with them to receive payment back
for the fraudulently received benefits, which is supported by
collections policies that allow permanent fund dividends and IRS
garnishments. Further, she answered that additional fraud
investigator positions would recover enough fraudulently
received benefits to pay for themselves. Historically, of the
50 to 60 potential fraud referrals received monthly, fraud is
provable in approximately half of those cases. Concerning
recipient fraud, 20 percent to 30 percent of the cases can be
proved. Over the past year, 185 cases were proven to be
fraudulent out of 566 referrals, worth over $1,000,000. Last
year, DPA recovered $406,000. Thirteen cases, because of their
egregious nature, were forwarded to the Department of Law for
investigation, four of which resulted in a conviction, yielding
$50,923 in court-ordered restitution, and seven indictments
involving $160,000 in alleged fraudulent overpayments are
pending. There were 126 ATAP recipients disqualified due to
fraud, resulting in program savings of $312,000. There were 181
federal food stamp recipients disqualified, saving $408,000.
CHAIR DYSON inquired whether DPA can provide transportation
costs to relocate recipients elsewhere if they agree to not
return and apply for benefits.
MS. FITZJARRALD reported that DPA can pay for transportation for
recipients to move to an area where they can receive a job.
CHAIR DYSON asked for other suggestions for improvement from the
representatives of DPA.
MS. FITZJARRALD reported that an increased budget would be
beneficial.
MS. ROGERS requested increased staff.
ANNOUNCEMENTS
There were no announcements.
COMMITTEE ACTION
The committee took no action.
ADJOURNMENT
CHAIR DYSON adjourned the joint hearing of the House and Senate
Health, Education and Social Services Standing Committees at
12:39 p.m.
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