MINUTES OF MEETING
ASSEMBLY COMMITTEE ON COMMERCE
Sixty-seventh Session
May 5, 1993
The Assembly Committee on Commerce was called to order by Chairman Gene T. Porter at 3:45 p.m., Wednesday, May 5, 1993, in Room 332 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda, Exhibit B is the Attendance Roster.
COMMITTEE MEMBERS PRESENT:
Mr. Gene T. Porter, Chairman
Mr. Morse Arberry, Jr., Vice Chairman
Ms. Kathy M. Augustine
Mr. Rick C. Bennett
Mr. John Bonaventura
Mr. Val Z. Garner
Ms. Chris Giunchigliani
Mr. Dean A. Heller
Mr. David E. Humke
Ms. Erin Kenny
Mr. Richard Perkins
Mr. Scott Scherer
Ms. Myrna T. Williams
COMMITTEE MEMBERS ABSENT:
None
GUEST LEGISLATORS PRESENT:
Assemblyman Lynn C. Hettrick, District 39
STAFF MEMBERS PRESENT:
Mr. Paul Mouritsen, Senior Staff Analyst, Legislative Counsel Bureau
OTHERS PRESENT:
Mr. John Sande, Nevada Bankers Association; Mr. Bill Martin, President and Chief Executive Officer, Pioneer Citizens Bank; Ms. Charlotte Shaber, National Business Factories; Mr. Scott Walshaw, Commissioner, Financial Institutions Division; Mr. Jerry Ash, President, Nevada Hospital Association; Ms. Pat Raetz, past president, Nevada Health Information Management Association; Ms. Chris Thorne, Nevada Health Information Management Association; Mr. Larry Mathias, Nevada State Medical Association; Dr. Jerry Nims, Nevada State Psychological Association; Dr. Frank Shallenberger, M.D.; Ms. Mimi Jobe; Mr. Vernon Bell; Mr. Bob Shaw; Mr. Robert F. Martin, Chairman, Legislative Committee, Washoe County Democratic Central Committee; Mr. David Horton, Alternative Therapy Support Group; Mr. Tom Johnson, Carson City Chapter, Committee to Restore the Constitution; Ms. Juanita Cox; Ms. Alice Williams (See also Exhibit B attached hereto).
SB 201 Prohibits factoring of drafts on credit cards and authorizes banks to report employees' defalcations to each other.
Mr. John Sande, Nevada Bankers Association, introduced Mr. Bill Martin, President and Chief Executive Officer, Pioneer Citizens Bank.
Mr. Bill Martin testified. He explained how a (credit card) draft was processed. He advised a draft was signed and then either physically deposited in a bank or transmitted electronically, and the merchant who deposited the draft was given instant credit for the draft, just as though he had deposited cash into his account. He indicated banks were careful with regard to whom they granted such depositing privileges, because in effect, the banks were extending credit to those with such privileges, and days, weeks or months might pass before bad drafts were returned.
Mr. Martin explained how factoring occurred. He stated an organization or entity, usually one involved in telemarketing, received a credit card number and generated a draft. He advised such a company or entity would not qualify with a bank as a merchant and would need to "launder" the draft. He said the company or entity would approach a merchant and offer the merchant a commission on each draft he processed through his (bank) account. He stated drafts would be deposited (in the merchant's bank account) and processed and in a matter of weeks would begin to be returned. He contended frequently the volume of such drafts "puts the merchant out of business", by which time, the telemarketer or other entity who generated the drafts was gone.
He suggested SB 201 would benefit consumers, banks and merchants. He contended when fraud was eliminated, costs were suppressed. He advised AB 201 would increase banks' abilities to prevent factoring and fraudulent drafts, and merchants would be more reluctant to participate in such activity if they knew a law prohibited it. He suggested the final benefit of SB 201 would be to deter operations of unscrupulous telemarketers by eliminating their ability to "launder" money.
Mr. John Sande testified. He advised banks were required by federal law to report any suspicions of theft, embezzlement, misappropriation of funds or other defalcation. He said Sections 2 and 3 of SB 201 would permit a financial institution to report to another financial institution that the first institution had been required to make such a report to the federal authorities concerning one of its employees if that employee applied to the second financial institution for work.
Chairman Porter asked if Mr. Sande was stating there was a federal statute which required a financial institution which suspected one of its employees of stealing not only to notify the federal government but also to disclose that information "...on an employment application somewhere else." Mr. Sande replied he was not. He stated if a financial institution suspected such activity, it was required to report its suspicions to the federal authorities. Chairman Porter observed SB 201 was silent regarding acquittal or lack of conviction of an employee reported to the federal authorities. Mr. Sande confirmed Chairman Porter's observation but stated, "...it is part of their employment record. It is something that is reported from time to time between financial institutions." A colloquy ensued between Chairman Porter and Mr. Sande concerning the propriety of including in an employee's employment record information regarding his involvement in the activities under discussion if he was found not guilty or otherwise acquitted.
Chairman Porter closed the hearing on SB 201.
AB 480 Makes various changes related to collection agencies.
Ms. Charlotte Shaber, National Business Factories, testified. She advised National Business Factories and Nevada Collectors Association strongly supported AB 480. She contended a collection agency in another state should not be required to be licensed to send mail to a debtor residing in Nevada and suggested AB 480 would eliminate such requirement.
Ms. Shaber advised AB 480 would eliminate the concept of branch collection agencies. She stated a collection agency was an individual entity and operated as such. She asserted a collection agency was a business like any other business and should not be licensed for its branches. She said AB 480 stated a separate license must be obtained for each office of a collection agency.
Ms. Shaber explained AB 480 would require the Financial Institutions Division to investigate a debtor's complaint against a collection agency to determine if the complaint was justified prior to involving the Attorney General.
Mrs. Williams directed a question to Mr. Scott Walshaw, Commissioner, Financial Institutions Division. She asked if Mr. Walshaw believed there was no fiscal note on AB 480. Mr. Walshaw prefaced his answer by advising AB 480 was discussed during a hearing on SB 406 before the Senate Commerce Committee. He advised SB 406 was referred to a subcommittee to arrive at a compromise between the language of SB 406 and AB 480. Mr. Walshaw stated there was no fiscal note on AB 480.
Mrs. Williams asked Mr. Walshaw to verify he would not ask the financial committee for an additional employee position because AB 480 placed an extra burden on his division. Mr. Walshaw said there were two reasons why he would not do so. He stated one reason was AB 480 addressed collection agency exemptions, and those were already handled by his division. He said the second reason was the division was a "revenue neutral agency", which meant the division returned a dollar to the General Fund for each dollar it received from the fund. He contended any fiscal impact of AB 480 would be self-supporting, but none was contemplated.
Discussions were held between Chairman Porter and Mr. Walshaw regarding the fact the subject matter of AB 480 was also addressed by SB 406.
Ms. Shaber again addressed the committee and stated the Nevada Collectors Association was opposed to SB 406.
Chairman Porter closed the hearing on AB 480.
AB 459 Makes various changes relating to health care records.
Mr. Jerry Ash, President, Nevada Hospital Association, testified. He presented proposed amendments to AB 459 (Exhibit C). He advised the proposed amendments were the result of suggestions made by two other interested parties and were acceptable both to those parties and to Nevada Hospital Association. He explained Nevada Hospital Association sponsored AB 459 on behalf of an affiliated organization, Nevada Health Information Management Association.
Ms. Pat Raetz, past president, Nevada Health Information Management Association, testified. She advised health institutions were making major investments in automated information systems, and Nevada statutes needed clarification and updating regarding admissability of computer generated, authenticated and stored health records.
She stated Nevada Health Information Management Association was in favor of AB 459 and in agreement with the proposed amendments thereto (Exhibit C).
Ms. Raetz explained Section 1 of AB 459 addressed the definition of health care records and expanded that definition to include electronic records. She advised Section 2 of AB 459 addressed retention of records and increased the media available for storage of records to include microfiche, computer disk, magnetic tape and optical imaging.
Ms. Chris Thorne, Nevada Health Information Management Association, testified. She stated AB 459 reflected current hospital practice. She explained the association wished to evolve from producing paper (records) by means of computers to maintaining records in computers without producing paper (records).
Mr. Larry Mathias, Nevada State Medical Association, testified, stating only that the association supported AB 459.
Dr. Jerry Nims, Nevada State Psychological Association, testified. He proposed AB 459 offered an opportunity to address a problem posed when a mental health record contained information which might be harmful to a patient. He suggested the most notable example of that problem involved possible retaliation by a parent against a child being treated by a mental health professional if information came to the parent's attention which made the parent unhappy. He advised California law contained a provision, adopted by many other states, which permitted a mental health professional to refuse to give a patient's records to the patient or the patient's guardian, provided the mental health professional forwarded the record to another mental health professional designated by the patient or the patient's guardian. He said the association proposed an amendment to AB 459 (Exhibit D) to include a like provision.
Mrs. Williams stated the law presently established confidentiality for certain fields of practice, and she understood the amendment to AB 459 proposed by Mr. Ash to guaranty inappropriate individuals would not be permitted access to information. She said she did not see the relevance of Dr. Nims proposed amendment (Exhibit D) to AB 459. Dr. Nims responded the proposed amendment (Exhibit D) addressed issues raised in NRS 629, which mandated a health care provider must release a patient's record to the patient or the patient's representative. Dr. Nims explained there were statutes which provided for confidentiality (of records) with respect to health care, but an authorized representative or guardian of a child would not be denied access (to the child's records) based on those statutes. He said the problem which concerned him could also arise in civil commitment or guardianship cases involving husbands and wives.
Mrs. Williams suggested the language of the proposed amendment to AB 459 (Exhibit D) was very broad. She stated, "It may be very important for a guardian to get those records." Dr. Nims contended Mrs. Williams concern was addressed by the requirement a mental health professional, unwilling to release the records of a child he was treating (to a parent or guardian), forward those records to another mental health professional designated (by the parent or guardian).
Discussions were held among committee members concerning the proposed amendment to AB 459 (Exhibit D).
Ms. Giunchigliani asked if Dr. Nims would report a suspected case of child abuse (regarding a child patient). Dr. Nims answered, "If it were a case that would trigger the criminal abuse provisions or the reporting provisions, yes." He advised emotional abuse or knowledge concerning family secrets or parental relationships could be explosive within a family but not give rise to a situation which would result in a report of abuse.
Further discussions were held among committee members and Dr. Nims concerning the proposed amendment to AB 459 (Exhibit D).
Mr. Ash pointed out AB 459 pertained to the manner in which records were stored, not the manner with which they were dealt. He advised several bills dealing with the manner in which records were handled were being heard by another Assembly committee and suggested Dr. Nims' concern might more properly be addressed through those bills.
Chairman Porter closed the hearing on AB 459.
AB 518 Provides for patient's right to choose alternative therapy for health care.
Assemblyman Lynn C. Hettrick, District 39, testified. He advised the purpose of AB 518 was to allow patients the right to choose alternative health care. He stated that right was one society should protect. He suggested alternative health care also should be explored because of the cost to the public of the present health care system.
Dr. Frank Shallenberger, M.D., testified. He contended AB 518 was not concerned with whether one form of medical care was better than another but whether, as free citizens, individuals could choose the kind of medical care they wished to receive.
Dr. Shallenberger stated he respected conventional, modern medicine but believed modern medicine did not "have all the answers." He advised (medical) literature was replete with examples of situations in which conventional medical treatment was not acceptable treatment. He referred to a report in the Journal of Thoracic and Cardiovascular Surgery which said patients who had coronary artery bypass surgery had a lower survival rate than control patients who elected not to have such surgery. He referred to an article in another medical journal which stated aspirin and other anti-inflammatory drugs suppressed symptoms of arthritis but promoted progression of the disease process. He advised patients who underwent surgery to remove plaque from their carotid arteries had a 10 percent chance of either having a stroke or dying during the surgery.
Dr. Shallenberger advised AB 518 was also concerned with permitting medical practitioners to choose (methods of treatment). He said the Medical Board at present had only one criteria; if a medical practitioner practiced standard, usual and customary care, he was doing the correct thing, but if he practiced any other care, he was doing the incorrect thing.
Dr. Shallenberger advised a survey done by Dr. Eisenberg of the Harvard School of Medicine determined 85 million Americans had utilized alternative or nontraditional, nonstandard medical care, and in 1990, one in three Americans had chosen some type of alternative medical care. He stated AB 518 would provide the Medical Board with stringent criteria for the regulation of nonstandard medical practices.
Dr. Shallenberger advised Alaska and Washington had laws such as those AB 518 would provide, and such laws were pending before the legislatures of New York and Maryland.
Dr. Shallenberger read a letter from Dr. James Forsythe, M.D. (Exhibit E). He said approximately 20 medical doctors had sent him similar letters of support for AB 518.
Mr. Scherer pointed out standards for disciplinary action by a regulatory board set forth in Section 2, subsection 2, of AB 518, differed from standards for issuing a cease and desist order set forth in Section 3 of AB 518. He opined the same standards should be used both for issuing a cease and desist order and for taking disciplinary action.
Mr. Scherer asked if AB 518 had anything to do with insurance coverage for (alternative) methods of treatment. Dr. Shallenberger replied it did not.
Ms. Giunchigliani asked Dr. Shallenberger to explain what he meant by "alternative therapy." Dr. Shallenberger responded he meant any nonstandard therapy as defined by what was usual and customary therapy. He used homeopathy as an example. He advised homeopathy was permitted in Nevada, but a medical practitioner who practiced homeopathy in California would be subject to censure by his medical board because homeopathy was not authorized in California. He suggested "alternative therapy" could include vitamin therapy, dietary manipulation, chelation therapy and other therapies.
Ms. Giunchigliani asked if there were licenses or certification processes for those types of therapies. Dr. Shallenberger replied there was a license for homeopathic medicine in Nevada. Ms. Giunchigliani asked "But that's the only one?" Dr. Shallenberger answered, "And that will cover use of homeopathic preparations, but it won't cover all the potential nonstandard therapies that are available and used worldwide."
Ms. Giunchigliani asked if AB 518 provided for licensing by a regulatory board. Dr. Shallenberger answered, "No." He advised AB 518 provided criteria by which a regulatory board could judge nonstandard therapy.
Ms. Giunchigliani asked how fees were established (for alternative therapies). Dr. Shallenberger responded a doctor could establish his own fee.
Ms. Giunchigliani asked whether insurance companies provided medical coverage (for alternative therapies). Dr. Shallenberger answered insurance companies rarely provided coverage for nonstandard medical treatment.
Ms. Giunchigliani asked if the legislature would be required to create a medical fee schedule if the legislature passed AB 518. Dr. Shallenberger replied the legislature would not be required to do so.
Mrs. Williams asked if Dr. Shallenberger was a medical doctor and if he practiced homeopathy. Dr. Shallenberger responded he was a medical doctor and also had a license to practice homeopathy.
Mrs. Williams commented on instances in Clark County in which individuals were bilked by clinics "with big machines and electrodes." She said she was uncertain why licensed medical practitioners could not provide alternate methods of health care. Dr. Shallenberger responded medical doctors could be censured if "...we step out of our narrow, little bounds..."
He suggested bilking occurred because legitimate medical practitioners were unable to provide alternative medical treatments.
A colloquy ensued between Mrs. Williams and Dr. Shallenberger.
Ms. Augustine asked if Dr. Shallenberger had considered the possibility of lawsuits. Dr. Shallenberger responded AB 518 would not protect medical practitioners from lawsuits but would provide medical practitioners and patients freedom of choice regarding medical treatments to be given and received. Further discussions ensued between Ms. Augustine and Dr. Shallenberger concerning the possibility of lawsuits resulting from nonstandard medical treatments.
Ms. Kenny stated she understood the concern expressed by Dr. Shallenberger. She suggested if a medical practitioner did something his fellow practitioners did not agree should be done, he could be "blackballed." Dr. Shallenberger explained fear prevented doctors from doing "something a little bit different" and kept medicine from evolving. Ms. Kenny suggested a licensed medical practitioner should have the option of discussing alternative methods of treatment with a patient and of giving the patient the option of receiving such treatment.
Ms. Mimi Jobe testified. She spoke of utilizing nutrition and vitamins and minerals to maintain her health. She told of using homeopathic remedies on her sister after her sister had back surgery and of the benefits her sister experienced. She said she supported giving doctors freedom to do what they felt necessary and patients freedom to choose methods of healing which did not involve drugs.
Mr. Vernon Bell testified. He told of being diagnosed as having cancer and undergoing five major surgeries. He said following his last surgery, his doctors advised no further treatment would assist him and he had one or two weeks to live. He said he had since been using nonstandard treatment.
Mr. Bell stated he should have the right to decide what type of treatment could help him. He advised without criteria such as those provided by AB 518, the state medical board would be compelled to rule his treatments be stopped even though those treatments obviously helped him and offered him hope. He contended hope was essential to survival.
Mr. Bob Shaw testified. He said in 1982, he was diagnosed as having cancer and was treated with a course of radiation which kept his disease in check for approximately a year and a half to two years. He advised after two years, based on results of a test, he was given a prognosis of death in either the near or distant future. Mr. Shaw said he then sought alternative methods of treatment and underwent a "laetrile/nutritional treatment" under which he did well for approximately 8 years.
Mr. Shaw advised in November or December of 1992, he experienced rapid weight loss, weakness and difficulty in breathing. He explained he then sought a homeopathic physician and learned of Dr. Shallenberger. He described treatment given him by Dr. Shallenberger together with Dr. Forsythe and told of the restoration of his vigor and vitality.
Mr. Robert F. Martin, Chairman, Legislative Committee, Washoe County Democratic Central Committee, testified. He stated the legislative committee was unanimously in favor of AB 518 because it established a patient as the person responsible for his health care and allowed a doctor to follow a patient's wishes without risking censure, loss of license or other penalty as long as the doctor operated within the scope of his license.
He advised he had served as director of the Homeopathic Medical Clinic. He suggested there were many types of alternative treatments not generally available. He said many organizations throughout the United States had ongoing protocols of various kinds of treatment and were monitored by an institutional review board. He said the treatments for which those organizations sponsored research were not generally acceptable treatments. He contended if a medical doctor, within the scope of his practice, used one of those treatments, he ran the risk of being chastised or losing his license, which was unfortunate because many of those treatments had proven very effective.
Mr. David Horton, Alternative Therapy Support Group, testified.
He stated AB 518 would provide some protection (for doctors) from being blackballed or harassed because they "...happen to be in a different area of medicine..." Mr. Horton then read from prepared text (Exhibit F).
Ms. Giunchigliani commented there was a tendency to misuse the word "right", and said she would be more comfortable with the language "an opportunity to choose."
Mr. Tom Johnson, Carson City Chapter, Committee to Restore the Constitution, testified. He advised he had worked for a major medical firm and one of his duties was to recall products proven dangerous. He said he learned what was "usual and customary" at one point in time was later proven dangerous.
Mr. Johnson stated he became very ill and spent tens of thousands of dollars for conventional medical treatment which gave no results. He advised he was presently free from all (health) problems due to alternative health care.
He said his daughter had undergone an operation which cost $30,000 and still had the problems she had before the surgery. He said his daughter's doctor now suggested she meditate
as the doctor had seen evidence meditation was helpful.
Mr. Johnson contended over time, things conventional medicine said were safe were proven dangerous, and things conventional medicine laughed at were proven efficacious. He advocated support of AB 518.
Ms. Juanita Cox testified. She said she supported AB 518. She stated she believed the Constitution guaranteed a patient's right to choose. She said she believed a doctor also had a right to choose those scientific findings he believed would help his patient.
Ms. Alice Williams testified. She advised she was an American Indian. She stated many American Indians lived to be ancient because of their medicinal practices, and there was no reason those practices could not be shared with others.
Ms. Williams then made certain comments which did not pertain to AB 518.
Vice Chairman Arberry advised Ms. Williams she was out of order and adjourned the meeting.
RESPECTFULLY SUBMITTED,
________________________
SARA J. KAUFMAN
Committee Secretary
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Assembly Committee on Commerce
May 5, 1993
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