Policy Press

Federation Board President Testifies to Senate Oversight Committee

On Thursday, December 1, Federation Board President and Highfields President/CEO Brian Philson testified before the Senate Oversight Committee on SBs 1148-49. The bills, sponsored by Chairman Peter MacGregor (R-Rockford), relate to the Child Care Fund. The Michigan Federation has worked with leadership at the MDHHS, Michigan Association of Counties, Michigan Association of Family Court Administrators and the Michigan Legislature for more than a year to develop strategies and processes to create a leaner, more efficient payment system as outlined in these bills. Chairman MacGregor noted this workgroup began 18 months ago, and all parties have been working so well together, particularly given that this is the first time all of these stakeholders have worked together in this way.

SB 1148 establishes reimbursement procedures for an appeal of determination made regarding reimbursement of a Child Care Fund cost incurred. SB 1149 designates the state as the first payer for expenditures for children placed with the Department for care, supervision, or placement.

Brian Philson testified that designating the state as the first payer will create greater consistency for agencies that contract with the state in the areas of management of reimbursement, and for the timeframes in which agencies providing service can anticipate payment. With the state serving as the first payer to its contractors, agencies with questions or concerns related to reimbursement will always know where to communicate and follow up on the issue, streamlining the whole process.

Chairman MacGregor asked Philson to illustrate a specific example of how lack of payment creates issues for agencies, and wanted to understand how much payment issues can affect a business. Philson walked the committee members through the process of seeking payment, and how different processes are in place in each county in which providers work. Further matters such as IV-E eligibility can take additional time to work out, and Brian noted 4-6 months may go by before a provider sees payment for services, and other issues take longer than 9 months to sort out. An agency can manage a few payment issues needing to be resolved, but when the number of cases with payment concerns adds up, it can impact a business.

Chairman MacGregor appreciated the explanation of payment issues given, and noted that the intention was not to point fault at anyone, stating “the system is convoluted, and the people providing services to children do not get paid.”

Wendy Campau, MDHHS Director of Child Welfare Field Operations, testified the Department is excited to work collaboratively to develop a better structure for payment with all entities involved. Wendy noted the number of different processes that exist among the counties, stating that providers contract with the Department, but have to seek payment from the county. Wendy noted that a simplified system will make payments more transparent and will help to prevent duplicative payments. The Department supports the legislation, noting that it will relieve administrative burdens for the counties, private agencies, and the Department.

Elizabeth Gorz of the Michigan Association of Counties and John Evans, incoming-President of the Michigan Association of Family Court Administrators, testified they are working together on long-term reform. John Evans stated that MAFCA supports the bills in concept but has proposals for amendment, as the courts and counties want assurances their needs will be taken into consideration as the payment systems are developed.

The committee did not take a vote on the bills, as Chairman MacGregor noted the bills are likely to die during lame duck session, but they will be re-introduced in January in the new session.

The changes outlined in SBs 1148-49 demonstrate an effort to move an outdated and complex payment system forward, making it easier for contractors to navigate. The Federation will continue to advocate for this important legislation to move forward during this lame duck session.

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