01/28/2016 03:00 PM House HEALTH & SOCIAL SERVICES

         HB 260-DAY CARE ASSISTANCE & CHILD CARE GRANTS                                                                     
                                                                                                                                
3:58:39 PM                                                                                                                    
                                                                                                                                
CHAIR SEATON announced  that the next order of  business would be                                                               
HOUSE  BILL  NO.  260,  "An  Act  relating  to  the  recovery  of                                                               
overpayments of  day care assistance  and child care  grants; and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
3:59:23 PM                                                                                                                    
                                                                                                                                
SEAN  O'BRIEN, Director,  Director's Office,  Division of  Public                                                               
Assistance,  Department of  Health  and  Social Services  (DHSS),                                                               
explained  that  the  division provided  child  care  funding  to                                                               
qualified  individuals with  low to  moderate incomes  who needed                                                               
assistance in  order to  return to  work.   He reported  that the                                                               
proposed bill would allow for  the collection of overpayments and                                                               
misspent  funds   through  the  garnishment  of   permanent  fund                                                               
dividends  (PFDs)   when  it  could  not   be  collected  through                                                               
voluntary repayment, as was the  current strategy.  Reflecting on                                                               
FY15, he  reported that  the division had  about 30  open claims,                                                               
with about  half actively repaying.   He stated that most  of the                                                               
department's  claims occurred  when there  was either  a lack  of                                                               
accurate information or neglect for  the reporting of a change to                                                               
circumstances.    The  proposed   bill  included  four  important                                                               
aspects, which  the department  considered justification  for its                                                               
passage.   The bill supported  federal compliance with  the child                                                               
care  development  program  to  recover  improper  or  fraudulent                                                               
payments,  and   addressed  a  gap  in   the  division's  current                                                               
authority  to  recoup  those  payments.     He  shared  that  the                                                               
inability  to  recoup  these payments  through  voluntary  means,                                                               
resulted in the  cost being covered through  state general funds.                                                               
The  proposed  bill would  provide  a  consistency of  collection                                                               
practices  with other  Division  of  Public Assistance  programs,                                                               
thereby  streamlining  the  process.     He  clarified  that  the                                                               
effective date would be July 1,  2016, in order to allow leverage                                                               
of  the 2016  PFD.   He  shared that  the division  had a  policy                                                               
allowing for  a one year  look back period, which  was consistent                                                               
with practices  for recouping payment in  other public assistance                                                               
programs.   He clarified that  child care assistance was  paid to                                                               
providers on  a parent's  behalf, so  that the  collections would                                                               
come from  the parents.   He  noted that,  for child  care grants                                                               
paid to  licensed providers for  specific purposes,  the division                                                               
would go directly to the provider to recoup the funds.                                                                          
                                                                                                                                
4:03:33 PM                                                                                                                    
                                                                                                                                
CHAIR SEATON  asked if  the proposed  bill enabled  collection of                                                               
overpayment  of  grants for  daycare  and  child care  assistance                                                               
similar to  collection from adult  public assistance  and medical                                                               
assistance.                                                                                                                     
                                                                                                                                
MR. O'BRIEN  expressed agreement, stating that  the proposed bill                                                               
would make consistent and align the recovery collection systems.                                                                
                                                                                                                                
CHAIR SEATON asked  if the proposed bill would  necessitate a new                                                               
set of regulations for implementation.                                                                                          
                                                                                                                                
MR.  O'BRIEN  explained  that  the   Child  Care  Program  Office                                                               
currently had  a notice of  proposed rulemaking, and  within that                                                               
language two  major features were  indicated:  identify  fraud or                                                               
other  program   violations  and  investigate  the   recovery  of                                                               
fraudulent payments  with accompanying  sanctions on  clients and                                                               
providers.   He offered  his belief that  the ability  to collect                                                               
the payments  was in place,  but the methodology  for enforcement                                                               
and collection was in volunteer status.                                                                                         
                                                                                                                                
CHAIR SEATON  asked for  clarification whether  regulations would                                                               
need to be written.  He  opined that regulations would need to be                                                               
written for Section 2 of the proposed bill.                                                                                     
                                                                                                                                
4:06:39 PM                                                                                                                    
                                                                                                                                
STACIE  KRALY,   Chief  Assistant  Attorney   General,  Statewide                                                               
Section  Supervisor,  Human   Services  Section,  Civil  Division                                                               
(Juneau), Department of  Law, offered her belief that  it was not                                                               
necessary to  draft regulations to  implement the  proposed bill,                                                               
as the  ability for  recovery already  existed, and  the proposed                                                               
bill offered an additional tool  with the statutory provision for                                                               
the  garnishment of  PFDs.    In response  to  Chair Seaton,  she                                                               
explained   that   Section    2,   the   retroactive   provision,                                                               
contemplated the  ability to  garnish the 2016  PFD for  debts or                                                               
overpayments that had accrued prior  to the effective date of the                                                               
proposed bill.   She pointed  out that the department  policy was                                                               
to look back one year for collection of debts.                                                                                  
                                                                                                                                
4:09:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE VAZQUEZ  expressed her support for  the closure of                                                               
this  loophole, and  she asked  about inclusion  in the  proposed                                                               
bill  for collection  of overpayments  to the  heating assistance                                                               
program.                                                                                                                        
                                                                                                                                
MR.  O'BRIEN replied  that he  did  not know  the background  for                                                               
whether this  program had  been considered  for inclusion  to the                                                               
proposed bill.                                                                                                                  
                                                                                                                                
MS. KRALY acknowledged that this  program should be considered by                                                               
the committee for addition to the proposed bill.                                                                                
                                                                                                                                
CHAIR  SEATON  asked  for  more  information  so  this  could  be                                                               
considered in an amendment.                                                                                                     
                                                                                                                                
REPRESENTATIVE VAZQUEZ  expressed the  desire for  the Department                                                               
of  Health and  Social Services  to have  any necessary  tools to                                                               
recover any overpayments, "especially in  the light of our fiscal                                                               
gaps."                                                                                                                          
                                                                                                                                
4:11:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR,  referencing  the fiscal  note,  asked  for                                                               
clarification  of  the  breakdown  between  the  grants  and  the                                                               
individual recipients  for day care  assistance.  She  noted that                                                               
she had been  pondering ways for program  improvement, and shared                                                               
that  one  challenge  posed  by   many  providers  was  that  the                                                               
assistance was done  in time blocks, which made  it difficult for                                                               
"drop-in" services  and often resulted  in payment for  time that                                                               
was not  necessary.   She asked if  flexibility for  shorter time                                                               
blocks could be considered.                                                                                                     
                                                                                                                                
4:13:17 PM                                                                                                                    
                                                                                                                                
JANICE  BRADEN, Child  Care Program  Office,  Division of  Public                                                               
Assistance,  Department   of  Health  and  Social   Services,  in                                                               
response to Representative Tarr, said  that she did not have that                                                               
information readily available.   She relayed that,  as the recent                                                               
re-authorization of the federal  child care development and block                                                               
grants had made many changes,  states also needed to make changes                                                               
within the regulations.  She reported  that her office was in the                                                               
process  of reviewing  the necessary  changes to  meet these  new                                                               
requirements for the child care assistance program.                                                                             
                                                                                                                                
CHAIR SEATON  asked that any  federal changes be  brought forward                                                               
to be included in the proposed bill.                                                                                            
                                                                                                                                
REPRESENTATIVE TARR  asked if the aforementioned  breakdown could                                                               
be sent to the committee.                                                                                                       
                                                                                                                                
MS. BRADEN acknowledged that she would send them.                                                                               
                                                                                                                                
4:16:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  asked if  the funding  went directly  to the                                                               
child care  provider or  to the  parent, and  how often  was this                                                               
audited to reconcile any overpayments.                                                                                          
                                                                                                                                
MS. BRADEN explained that with  the Child Care Assistance program                                                               
the family  would apply and provide  documentation for household,                                                               
income,  and activity,  such as  work  or school,  in support  of                                                               
eligibility.  She explained that  recipients were asked to report                                                               
any changes  and eligibility was then  reviewed and re-determined                                                               
at  six months.    She  shared that  the  most common  unreported                                                               
change was  for a second parent  back in the home,  which affects                                                               
the family size  and income to determine benefit levels.   In the                                                               
childcare assistance program, the  benefits were paid directly to                                                               
the child care provider on the  family's behalf, so any recoup of                                                               
overpayment came from the parent.                                                                                               
                                                                                                                                
CHAIR SEATON asked for clarification  that, if there was a single                                                               
parent upon  determination of eligibility,  but then  the parents                                                               
reunited  prior to  the six  month review  resulting in  a second                                                               
income  to the  household, this  was  an example  of "things  not                                                               
getting reported."                                                                                                              
                                                                                                                                
MS. BRADEN expressed her agreement that  this was one of the most                                                               
common examples.                                                                                                                
                                                                                                                                
REPRESENTATIVE  WOOL  asked  for  clarification  that,  when  the                                                               
payments went to the child care  provider, if there were a change                                                               
in   situation,  then   the  parent   was  responsible   for  any                                                               
overpayment.  He  asked if they would have to  approach the child                                                               
care provider for reimbursement.   He opined that the discrepancy                                                               
was  not for  the  amount of  child care  provided,  but for  the                                                               
amount of [financial] assistance that was provided.                                                                             
                                                                                                                                
REPRESENTATIVE  TARR asked  for clarification  that although  the                                                               
overpayment went directly to the  provider, the individual parent                                                               
was responsible  for repayment.   She asked  if the  provider was                                                               
entitled to keep the funding, as they had provided the service.                                                                 
                                                                                                                                
MS. BRADEN explained that the  provider would not be penalized by                                                               
recouping money as  they had provided the services,  and they had                                                               
a cost for those services.  What  the state had paid on behalf of                                                               
the family was  too much, as the family should  have paid more of                                                               
the portion to the provider.                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL asked if the child's PFD could be garnished.                                                                
                                                                                                                                
MS. KRALY explained  that, as the agreement was  with the parent,                                                               
not with the child, it would be garnishment of the parent's PFD.                                                                
                                                                                                                                
CHAIR SEATON said that HB 260 would be held over.