Legislature(2015 - 2016)HOUSE FINANCE 519
02/24/2015 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearing: Department of Revenue, Randall Hoffbeck, Commissioner Designee | |
| HB26 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | HB 26 | TELECONFERENCED | |
| *+ | HB 94 | TELECONFERENCED | |
| + | TELECONFERENCED |
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 public. 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.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB26 Supporting Documents-Legislative Audit 6-30-2014.pdf |
HFIN 2/24/2015 1:30:00 PM |
HB 26 |
| HB26 Sponsor Statement.pdf |
HFIN 2/24/2015 1:30:00 PM |
HB 26 |
| Commissioner DOR - Hoffbeck #3.pdf |
HFIN 2/24/2015 1:30:00 PM |
Confirmation HFIN Hoffbeck DOR |