Legislature(1999 - 2000)
03/23/2000 03:03 PM House HES
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HB 300 - MEDICAL SUPPORT ORDERS FOR CHILDREN Number 1564 CHAIRMAN DYSON announced the next order of business as House Bill No. 300, "An Act relating to the establishment and enforcement of medical support orders for children; and providing for an effective date." BARBARA MIKLOS, Director, Central Office, Child Support Enforcement Division (CSED), Department of Revenue, came forward to testify. She said one of the major questions a number of the committee had asked was if this bill passes, what can be done about existing cases even though parents didn't want the financial and medical orders tied together. She noted that CSED came up with a plan. The CSED can run a list of those cases using the computer, then it can notify the parents that they may apply to CSED to have the financial support obligation vacated. Then CSED would review the case to make sure that both parents had due process, and if they both agreed the financial support order should be vacated, it would be vacated. CHAIRMAN DYSON asked Ms. Miklos when the financial order was initiated, did both parents have to give permission. MS. MIKLOS answered no. CHAIRMAN DYSON asked then why do both parents have to give permission to undo it. MS. MIKLOS said whenever an order is vacated, the CSED wants to make sure that both parents are in agreement in the action. If one of the parents wants the financial support order enforced, the CSED is obligated to do that. CHAIRMAN DYSON asked if Ms. Miklos was saying even if one of the parents wants to continue to have the order in enforcement, that should have never been there in the first place, the CSED is going to continue it. MS. MIKLOS answered yes, and the CSED would be required to do that. CHAIRMAN DYSON said he must be missing something. MS. MIKLOS explained the CSED is required to establish a child support order when someone goes on public assistance or Medicaid. The order is established. Both parents are not always in agreement that they have that order. The CSED continues to enforce that order until the parents withdraw from services. REPRESENTATIVE COGHILL asked for an explanation of the orders. MS. MIKLOS answered that are court orders and there are administrative orders that come from CSED which hold not quite equal weight to the court order. In cases of divorce and dissolution, there is a court order because there has been a legal process. In cases of public assistance and Medicaid, there hasn't necessarily been that legal process so CSED develops an order. If there is already a court order, the CSED does not do an order. In terms of correcting the problem, this bill is only talking about the orders done by CSED. Number 1920 MS. MIKLOS said the most important thing to her is that this bill will prevent problems in the future. This bill helps CSED take care of some problems that shouldn't be there. The CSED is glad to go back and correct the problems from the past. CHAIRMAN DYSON asked Ms. Miklos what the process is for an administrative order. Number 1946 MS. MIKLOS said first of all paternity is established, then the people would be notified that CSED, because of public assistance, is getting ready to prepare an order. The CSED asks for income information on the noncustodial parent. There is always an opportunity for the people to ask for an administrative review, an internal review within the agency. If the people don't agree with the decisions made by CSED, they can go to a hearing officer in the Department of Revenue. If the people don't agree with the hearing officer, then they still may go to court, and the court may overturn the CSED order. That process happens in every single action the CSED takes. CHAIRMAN DYSON asked Ms. Miklos if HB 300 passes and the CSED wanted to go in and vacate the financial support order, and the custodial parents says, "I've changed my mind, I want you to put it in force," would that be retroactive or prospective. MS. MIKLOS said it would go from the date they applied for Medicaid. The custodial parent would be able to change his/her mind. That is the whole point of this bill that obligations and debt are mounting up. CHAIRMAN DYSON asked Ms. Miklos if the noncustodial parent is then liable for all those things covered in the "phony" financial support order. MS. MIKLOS answered yes, and that is one of the major reasons for this bill. It is a valid support order; the CSED is required by state law to tie the financial support order and the medical support order together when someone opens a Medicaid case. It is a real order, and the obligations continue to mount up. Another issue is when both parents agree they don't want this financial support, but the custodial parent goes on public assistance, the CSED will go back and collect the arrears. That is exactly why this bill is needed; the CSED doesn't want to be in the position of doing this when that was never the intent in the first place. Number 2116 MS. MIKLOS commented that this bill has no enemies, and everyone benefits from it. It is a debt that is accumulating, and at some point the CSED may have to go back and enforce it. REPRESENTATIVE COGHILL asked if a child has Denali KidCare insurance or Indian Health Insurance is that a requirement that will be put on the parent who should be paying. MS. MIKLOS said that in terms of Indian Health Insurance, that is one of the reasons the CSED does not have to do a medical support order. If there is already reasonable health care coverage for the child, the medical support order doesn't have to be enforced. It is not the paying parent that has to pay for anything having to do with Indian Health Service (IHS) It is the paying parent who would be responsible if there were no available, and the paying parent had reasonable health insurance available. REPRESENTATIVE COGHILL asked if Denali KidCare could be considered reasonable health insurance. Number 2214 MS. MIKLOS stated that Denali KidCare is not considered. The CSED is doing this so there will be less public money that goes into the case, so Denali KidCare is not counted as reasonable health coverage. Instead of having Denali KidCare or Medicaid cover the full cost of health care, the CSED is trying to find someone out there who has private money or private insurance to help balance out that cost. REPRESENTATIVE COGHILL suggested defining the health care as "private" health care in the bill. MS. MIKLOS clarified that the CSED can go after money; there is nothing in state or federal law that prohibits the CSED from doing that. It doesn't necessarily need to be a legislative change. The CSED has not done that very much. REPRESENTATIVE COGHILL said it seems like the CSED is trying to get the public-pay health care mandated for people by giving this proving ground that it can't find these people out here without health insurance or it seems like the proof goes to the easiest available insurance rather than what the parent's responsibility really is. Number 2315 MS. MIKLOS explained that for someone who is on Medicaid only-- not on public assistance--the medical support assists with Medicaid. That would help reduce the obligation or the liability if someone had medical support. The financial part of the order goes to the custodial parent. This isn't true if the custodial parent is on public assistance. If he/she is on public assistance, then the CSED collects everything on behalf of the state so the CSED is not in any way trying to reduce the money that is coming into the state. A custodial parent who said he/she doesn't want this, but the CSED is still trying to collect the medical insurance which will help medical assistance. In fact, the CSED has worked with the parents even more closely and thinks it will be able to increase those collections. It is true, separate from all this legislation, the CSED has not really aggressively gone after the private money; that could be done-- nothing prohibits that. There is no intent in this legislation to gear down the efforts. TAPE 00-35, SIDE B Number 2360 MS. MIKLOS said the reasons the CSED hasn't gone after the private pay is it doesn't have information that there is a lot of money out there. Many people who are on public assistance, the father or the obligee or the paying parent, also doesn't have very much money so there just isn't a lot of money. "I suppose if we found out that the paying parent is incredibly wealthy but didn't have insurance, we could go after that financial obligation for the medical insurance." REPRESENTATIVE COGHILL asked if the obligee doesn't have insurance and the custodial parent is on public assistance and getting Medicaid and/or Denali KidCare, what is the mechanism for charging. How do you go back to the obligee for that? Does that change the Medicaid or CHIP [Children's Health Insurance Program] Denali KidCare qualifications? Is this Medicaid CHIP money assessed back to the obligee and then does it change the qualifications for the person on assistance because of this order. MS. MIKLOS said that has not been done, but there is nothing in law that prohibits the CSED from doing that. It is more of a resource issue. She suggested that Diane Wendlandt could talk about the mechanism. CHAIRMAN DYSON asked if the amount the state can go after from the obligor is limited by the amount of the medical support order. MS. MIKLOS answered no, the medical support order does not speak to an amount right now so it wouldn't be limited. CHAIRMAN DYSON asked if the requirement in the medical support order is for insurance, the maximum of Denali KidCare would be about $150 per year, so would that be what CSED would go after the obligor for. MS. MIKLOS explained no, right now the CSED is going after the coverage, not after the money. CHAIRMAN DYSON said he was uncomfortable with the words "to require basic care coverage for the child" and he wanted to know why it wouldn't require basic health care for the child. It seems to him the use of the word coverage precludes the direct pay. Somewhere else it said an employee or group insurance program which seemed to him to unduly limit either the direct pay or a private insurance program. Number 2221 DIANE WENDLANDT, Assistant Attorney General, Collections and Support, Civil Division (Anchorage), Department of Law, testified via teleconference from Anchorage. She referred to the original question that has to do with the difference between requiring someone to provide insurance as opposed to making cash payments. Right now the focus of CSED is to assure that there is private insurance for the children, but that is not the only thing that CSED can or does do. Already in Civil Rule 90.3 and in most court orders now, there is a provision requiring parents, generally the noncustodial parent, to pay a portion of any unreimbursed health care costs. If there is no insurance, there is a requirement in the order that the parent pays basically cash whenever a child has medical expenses. That really addresses the issue of the cash. As the law stands currently, normally those expenses are split between the parents 50-50. Instead of ordering insurance, a payment could be ordered but the approach of Civil Rule 90.3 has been to focus on either getting the insurance or to require parents to pay once those expenses are incurred, rather than trying to say that expenses will be averaged per year, and this amount per year will be set on. That is not the approach that has been taken. CHAIRMAN DYSON asked Ms. Wendlandt why in the amendments it couldn't continue to say insurance, private, public, employer, or direct payment. MS. WENDLANDT said she didn't see any reason why it couldn't say that; it has not been included in this bill because there is a different purpose. This bill is trying to solve different problems. The CSED is focusing on an existing problem; the question of direct payments hasn't come up in the problem because it has been addressed in Civil Rule 90.3. That goes to the questions of having child support issues split between a court rule and statute. It has not been a problem given the provisions in Civil Rule 90.3 which are incorporated into most administrative orders. Number 1935 REPRESENTATIVE COGHILL asked if there would be a problem with inserting "private" when insurance is talked about throughout the bill. He suggested that on page 1, line 5, "private" be added so it read "private health care coverage" and that coverage could then be anything from a cash payment to an insurance policy. The reason he says "private" is to clear up the confusion he had. MS. MIKLOS said the "private" would include personal insurance as well as insurance through the employer. She asked Ms. Wendlandt if she sees any problems with adding the word "private" in the bill. Number 1864 MS. WENDLANDT answered no she does not. That issue has not come up in litigation. It has never been a problem explaining to the court that yes, in fact, the requirements for private health care insurance and that programs like Medicaid or Denali KidCare would not be considered other insurance to exempt a parent from providing some sort of private health care coverage. As far as she knows, the question of whether this is limited to employer has never come up. She doesn't think there would be any legal problem adding "private health care." MS. MIKLOS noted it wouldn't affect the court rule at all because the one amendment considered which would clarify this was a court rule change. The committee took an at-ease from 5:40 p.m. to 5:41 p.m. Number 1818 MS. MIKLOS noted this would only go into effect after they have already considered whether the child had adequate health care through the or other insurance coverage which would then be CHAMPUS [Civilian Health and Medical Program Uniformed Service] so then if the parents don't have that coverage then the CSED would be looking for some kind of private coverage. MS. WENDLANDT agreed that is correct. If it is initially determined that there is or CHAMPUS or something similar, she doesn't believe the CSED takes the next step of issuing a medical support order. REPRESENTATIVE COGHILL said it seemed to him that "we're saying Indian Health Services would be the first payer; and other insurance would be the other payer unless there was Denali KidCare who always says Indian Health Services is the last payer of resort. And then CHAMPUS and then the medical support order would then go to the parent. That parent would not necessarily be on any kind of assistance at that point, the medical order would go forward. If it could be satisfied by the state then is there an assessment on the obligor because of that. If private health care is going to be required as part of the support order, but we're always going to cave in at public pay first, is that an assessment that goes forward?" MS. MIKLOS said that Denali KidCare and Medicare are not included in the same category as and CHAMPUS. It is true that if someone is covered by or CHAMPUS, the CSED may not even do a medical support order. If they're not, then the CSED looks for a medical support from private health care. Number 1708 REPRESENTATIVE COGHILL said he understands that the health insurance carried by an employer or some private health insurance generally would be considered adequate as would the ability to pay. He asked if the public pay is considered adequate and has "adequate" been challenged by an irate parent. MS. MIKLOS said the whole purpose of this bill is for CSED to reimburse Medicaid so that Medicaid is not in any way considered the initial "adequate." It is only the other public ones like CHAMPUS. She doesn't know if there have been any challenges. One concern in terms of has been it is actually available to the child as opposed to someone who is eligible for and lives in New York, it may not do him/her any good. The CSED does look at that to determine if it is adequate. MS. WENDLANDT answered that she believes "adequate" has been challenged - not necessarily CSED's definition but in the context of a court action. She believes there have been a couple of cases where one parent has argued that was not adequate, and, therefore, one parent or the other should be required to provide private insurance, either because was not available in the area or because did not provide the special services to meet the special needs of the child, and private insurance would better meet the needs of the child. She is not aware of any ruling by CSED on that, but she believes courts have ruled on that. She knows of one case where the court agreed with the custodial parent that for special needs of the child, was not adequate and required the obligor to provide insurance because insurance was available to the obligor. Number 1574 CHAIRMAN DYSON suggested there may be some amendments forthcoming and he would try to bring this bill back up next week. [HB 300 was heard and held.]
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