MINUTES OF THE JOINT MEETING OF
ASSEMBLY COMMITTEE ON WAYS AND MEANS
AND
SENATE COMMITTEE ON FINANCE
Sixty-seventh Session
February 11, 1993
The joint meeting of the Assembly Committee on Ways and Means and the Senate Committee on Finance was called to order by Chairman Morse Arberry Jr., at 8:07 a.m., on Thursday, February 11, 1993, in Room 119 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda. Exhibit B is the Attendance Roster.
ASSEMBLY COMMITTEE MEMBERS PRESENT:
Mr. Morse Arberry, Jr., Chairman
Mr. Larry L. Spitler, Vice Chairman
Mrs. Vonne Chowning
Mr. Joseph E. Dini, Jr.
Mrs. Jan Evans
Ms. Christina R. Giunchigliani
Mr. Dean A. Heller
Mr. David E. Humke
Mr. John W. Marvel
Mr. Richard Perkins
Mr. Robert E. Price
Ms. Sandra Tiffany
Mrs. Myrna T. Williams
SENATE COMMITTEE MEMBERS PRESENT:
Senator William J. Raggio, Chairman
Senator Raymond D. Rawson, Vice Chairman
Senator Lawrence E. Jacobson
Senator Bob Coffin
Senator Diana M. Glomb
Senator William R. O'Donnell
Senator Matthew Q. Callister
ASSEMBLY COMMITTEE MEMBERS ABSENT:
None
SENATE COMMITTEE MEMBERS ABSENT:
None
STAFF MEMBERS PRESENT:
Mark Stevens, Fiscal Analyst
Dan Miles, Fiscal Analyst
Gary Ghiggeri, Deputy Fiscal Analyst
Bob Guernsey, Deputy Fiscal Analyst
Gary Crews, Legislative Auditor; presented the committee with a copy of the Department of Human Resources Welfare Division Nevada Medicaid Program, Audit Report Year Ending June 30, 1991. The report is on file at the Legislative Counsel Bureau, Fiscal Division. The report defined serious system deficiencies and administrative control weaknesses within the Medicaid claims processing system. The conditions affected the Welfare Division's ability to effectively manage and control the Nevada Medicaid Program. The Medicaid Program represented 12.4 percent of the total State General Fund expenditures for the year ended June 30, 1991.
Mr. Crews stated the Welfare Division needed to improve controls over payments to medical providers. Critical segments of the program function without adequate oversight to ensure the efficient operation of the program. He noted the Welfare Division did not always comply with laws and regulations significant to the administration of the Medicaid program. Mr. Crews noted federal mandates had increased the scope and complexity of the Medicaid Program in recent years. States participating in the Medicaid program must cover inpatient hospital services, outpatient services, rural health clinic services, other laboratory and x-ray services, and nurse practitioners services. Nevada had elected to include as options podiatrists' services, prosthetic devices, optometrists' services and eyeglasses.
Mr. Crews pointed out the Medicaid program relied extensively on computerized edits built into the claims processing system to detect and reject improper medical claims. He explained Nevada Medicaid had turned off the Conflicting Procedures Edit (CPE) function, a key component of the Medicaid computer claims processing system. During the period between May 1986 to August 1988 the Medicaid program processed and paid $174 million in Medicaid claims. It was estimated $5.1 million of those claims would have been denied or rejected pending medical review before being authorized for payment. The CPE was an on-line process designed to assist Medicaid's medical review personnel to detect medical procedures which logically should not occur. He noted the CPE detected procedures by comparing an incoming claim against the claim history of the recipient to see if those two things could logically happen together. Mr. Crews stated 466 recipients with potentially $628,000 of illogical or medically incompatible procedures were tested. He indicted of the 466 recipients found, 25 claims were tested with a value of $34,311. It was disclosed that 19 of 25 claims were paid incorrectly. The incorrect payments resulted from: failure to pay a less expensive, all inclusive rate when multiple procedures were performed, and paying assisting surgeons as billed instead of the lower assisting surgeon rate.
Mr. Crews indicated the Welfare Division exercised little control or oversight over the fiscal agent's use of computer edit override codes in the processing and paying of Medicaid claims. He reported the Welfare Division lacked documented approval of computer edit changes requested. In 23 of 25 requests tested there was no documented evidence of supervisory approval.
Mr. Crews reported during fiscal year 1991, the fiscal agent deposited $954,000 received from Medicaid providers in the Medicaid bank account. Management Personnel of the Medicaid Program did not review the reasons why provider payments were returned to the fiscal agent. He noted failure to review why payments were returned increased the likelihood similar errors could occur and not be detected or corrected.
Mr. Crews indicated the Welfare Division did not match Medicaid recipient data with the State Industrial Insurance System 's (SIIS) data base. He explained data matching could detect Medicaid recipients whose medical claims resulted from an employment-related injury.
During testimony Mr. Crews stressed the Welfare Division had not complied with federal regulations requiring the cost avoidance procedures for pharmacy services. The Medicaid Program spent $28.9 million on pharmacy costs in the last 4 fiscal years. It was estimated the Medicaid Program could have avoided $539,000 in pharmacy costs during that period had viable cost avoidance procedures been in effect.
Mr. Crews said the Medicaid program had lost control and accountability over durable medical equipment. He noted in the past 4 years it was estimated $1.1 million was spent on recoverable and reusable medical equipment including wheelchairs, semi-electric beds, and other specialized equipment. The Medicaid program's policy was to purchase and retain title to the equipment and then loan the equipment to Medicaid recipients. The list of durable medical equipment had not been updated since 1988. Physical inventories of durable equipment had not been done in recent years. It was reported only 30 percent of durable equipment proposed by the Welfare Division could be located.
Mr. Crews pointed out the Welfare Division needed to develop and institute management controls over medical transportation to ensure the least expensive means of transportation was used. He stated the transportation methods were private car, taxi, bus, airline, medical van, ambulance, and air ambulance. It was noted all non-emergency transportation had to be pre-approved. Medical transportation costs increased 134 percent from $836,000 in 1987 to nearly $2 million in 1991. He reported the Medicaid program's failure to properly monitor its transportation program had created the potential for inappropriate use of medical transportation services. In fiscal year 1991, only $530 was spent for local public bus transportation for Medicaid recipients in northern Nevada. In Las Vegas 62 percent of all Medicaid recipients lived in areas serviced by public bus lines.
Mr. Crews reported Nevada had not established an estate recovery program to provide for a cost-effective method to offset Medicaid costs for nursing home care. He explained estate recovery programs allowed states to recover from the estates of nursing home recipients or their survivors a portion of the expenses the state incurred while providing nursing home care. Mr. Crews stated in 1988, the U. S. General Accounting office reported 21 states had established estate recovery programs. He concluded the benefits of an estate recovery program could be significant.
Mr. Crews said the Welfare Division needed to improve procedures to detect the existence of Medicaid trusts. Medicaid trusts allowed individuals to shelter assets in order to qualify for Medicaid. He explained a trust document specifies the terms under which an individual may receive all or part of the income from the trust. The trust must be irrevocable so the individual has no legal ability to withdraw funds from the trust. He said a properly designed trust would protect a person's income and assets from being depleted by nursing home costs. Assets must be transferred to a Medicaid trust at least 30 months prior to applying for Medicaid.
Senator Rawson asked whether the audit indicated more personnel was needed to correct the problem in the Medicaid program. Mr. Crews replied the amount of personnel was not part of the review, however, there were concerns whether the agency had the most qualified people in financial management positions and key administrative positions. He said the primary concern was the State Personnel System did not always obtain the most qualified personnel. The hiring process was usually done within state employee ranks, and Mr. Crews stated he felt there should be room for some outside person with new and different ideas.
Mr. Crews stated an occupational study was recently completed on the state's personnel system, specifically on the financial ranks to include auditors and accountants. He indicated the entry level requirements for state employees in the financial area was too low.
Senator Rawson said he had received reports from various agencies indicating money had been transferred away from the agency and asked Mr. Crews to document the flow of general fund money going into the Welfare agency. Mr. Crews noted briefly some concerns on how money was accounted for, and that these issues were reported in the audit of the Welfare Administrative account. He stated $10 million of 1991 money was reported in 1992. They were concerned with the state not having adequate financial information, and it would be impossible to know what the program was costing the state, or how to control the costs. In November 1991 a letter which referred to NRS 218.880 expressed concern for a situation which may be outside legal realms of operation. It was noted $3 million was transferred from another agency's budget through Department of Human Resources into the Medicaid program. This money was used to reduce the cost of the Medicaid program and gave Medicaid additional spending authority. He indicated his division was especially concerned with the flow of money and the proper recording of the cost of operations.
Senator Rawson stated he did not have a clear understanding of what happened to money going into the Medicaid program. He voiced concern the agency was too large and complicated. He noted without line items in the budget it was easy to lose a sense of what was needed. Senator Rawson asked if would be appropriate to set up a committee to review Medicaid operations and what branch should oversee the committee. He asked who should do internal audits and report to the Ways and Means Committee.
Mr. Crews remarked there were different mechanisms for internal audit monitoring. He stated the Institute of Internal Auditors had produced some model legislation. The legislation suggested agencies with expenditures over a certain plateau would have an internal auditor who reported to the director of the department.
He stressed the external audit function would still report directly to the Legislature. He said an internal audit function within the Welfare Division would help the administrator find the areas of concern and correct them as need be.
Senator Rawson asked whether any evidence of fraud was found during the audit. Mr. Crews answered they were not specifically looking for fraud, and there was no indication of fraud found. He said he felt the system was very loose and the capability for mistakes was everpresent.
Mr. Marvel asked Mrs. Judy Matteucci, Budget Director if she felt under reorganization it would be possible to tighten up internal controls by moving some of the audit functions. Mrs. Matteucci stated the audit functions which were recommended to be consolidated were financial audits of businesses. The Welfare Division was not impacted because the division does not have any excess financial staff. She recommended the Welfare Division remain where they were. A new internal audit unit within the proposed Department of Finance has been proposed to address difficulties and assist agencies with problems. The bureau would preclude the need to wait for the legislative auditor to return and re-review the agencies' internal controls. Mrs. Matteucci summarized the internal audit unit would improve internal control procedure mechanisms in the Executive Branch. She maintained it was important to regulate internal controls for the agencies. She stated the Department of Finance's approach to internal controls was to have central management as opposed to placing controls with the agencies. She said if agencies do the controlling, with all the other responsibilities of the agencies internal controls would get deferred which should not happen.
Mr. Humke questioned whether there were federal programs existing which would allow the institution of programs such as an estate recovery program and would the federal government participate in financing these activities. Mr. Crews said he was not sure but based on the information received from the state of Oregon it would be a minimal cost. He stated he could research the question and get the information to Mr. Humke at a later date. Mr. Humke asked if there was a need for a performance audit. Mr. Crews said there were 4 audits conducted last year and each contained performance elements. He added the four reports were Medicaid, the Administrative account, Child Support Enforcement, and Aid to Dependent Children. The Welfare Division had been given additional time to implement procedures for some of the problems identified last year. He suggested this may not be the appropriate time for a performance audit.
Mr. Humke suggested with Nevada being unsophisticated in regulating this service the system may be easy prey to fraud. Mr. Crews asserted Nevada needed to be alert and aware since this was a business of competing with providers and others who were knowledgeable. It was important for Nevada to have people just as knowledgeable to protect its position in these matters. He indicated it was wise to understand there were two elements of internal control, accounting control and administrative control. Administrative control was important to allow the department to know if programs were done in an efficient and effective manner. Accounting controls provided proof things were accounted for and recorded properly. The absence of internal controls in state government was costing millions of dollars. In 1987 the Legislature enacted statutes relating to the establishing of internal controls in all state agencies.
Senator Raggio admitted he was startled to read in the audit report an estimated $5.1 million in claims would have been denied or rejected pending medical review. Yet he heard during testimony there was no evidence of fraud. He questioned whether anything was being done to recover the $5.1 million dollars incorrectly paid.
Myla Florence, Administrator, State Welfare Division, expressed the agency's agreement of the findings of the audit. She pointed out this was the first audit the agency had received in 10 years from the Legislative Counsel Bureau staff. She said she felt this was too long a period not to have a lengthy, intensive audit. Mrs. Florence stressed the findings of the audit were very important to the Welfare Division and many actions had been undertaken by the agency to respond in a positive way. She explained the $5.1 million estimate was derived from a review of FY91 data and was extrapolated to a $5.1 million estimate. It was not evident to the committee in the audit report many other review processes were in place and had been in place at the time of the audit. Mrs. Florence stressed she did not believe it could be clearly said the state's potential loss was as great as estimated. However, she said she had no question in her mind the conflicting procedures edit should not have been turned off. She said she understood it was a lower staff decision and was sure management was not aware until approximately the time of the audit. She noted this occurred between 1986 and 1988 at the time when procedure codes were being changed from one medical procedure coding system to another. Mrs. Florence said there were many claims during the change-over process and it would be an expensive process to retrieve those claims.
Senator Raggio asked Mr. Crews how the estimate of $5.1 million was achieved. Mr. Crews explained they reviewed the expenditures for that period and reviewed what amount of expenditures were being rejected during 1991 when the edit function was operating and used the percentage as an application toward the period when the function was turned off. Senator Raggio suggested considering the magnitude of loss and how someone had profited improperly, there should be a method to recover the loss.
Senator Coffin, stated he was not suggesting fraud inside the agency, but fraud by providers who were smart enough to test Nevada's system on a regular basis. Medical providers were not happy with the payment system. There was a great resentment toward the level of Medicaid payments. He said he was sure some providers had taken advantage of the system. He indicated it was simple for a provider to overlook the fact it had been reimbursed by another carrier and a balance remained in the account. He noted after a time and no one checked on the balance, it got absorbed into their accounts. He said with the new and aggressive efforts on Medicaid fraud he was sure it would cease to happened. Senator Coffin commented this may be the time to take advantage of the 90/10 reimbursement ratio for Medicaid fraud activities even if only on a short-time basis.
Mr. Crews maintained there was a fraud unit within the Attorney General's office which investigated fraud. He stated the General Accounting Office (GAO) had done work in the area of provider abuse. It was estimated 10 percent of money paid out was in the provider abuse category.
Senator Coffin stated there were 17 recommendations from the last audit that were not implemented or partially implemented. He said the medical community must have been aware the editing function was not functioning. He asked if there was a way to be sure compliance was being met. Mr. Crews commented the audit subcommittee would address the matter in a follow-up procedure. The agency had 6 months to institute some of the procedures identified in the audit. The Department of Administration will verify implementation of recommendation and submit a report to Mr. Crews and the Audit subcommittee.
Senator Glomb pointed out Page 7 of the Legislative Audit Repot stated the amount paid for ADC children in the Medicaid Program versus the disabled and aged and the disproportionate share which disabled and aged paid versus ADC.
Senator Callister said he shared the concerns of the various speakers over the quick review of the Medicaid program and the $5.1 million error because computer edits were turned off for 2 years. Millions of additional dollars were lost because providers were allowed to bill the state two and three times for the same service, or charge double payments totalling $53,000. He hoped the subcommittee would receive swift and immediate assurance that enforcement mechanisms were in place to recover money incorrectly paid out. If the state was being taken for huge amounts of money routinely, he said he felt the state was remiss in not taking criminal and civil enforcement action. He asked whether the repetitive problem of failing to monitor the Medicaid program was a personnel problem or management problem.
Mrs. Florence answered it was all of the above mentioned problems in some form. She assured the committee action had been taken in many of the cases. Senator Callister asked Mrs. Florence to provide the subcommittee with data on how many times a physician or provider had been sued for abuse involving state Medicaid money.
Mrs. Williams clarified the issue of public transportation for the Las Vegas area. She maintained there was no adequate public transportation in Las Vegas in 1987. However, the current bus and public transportation for Medicaid recipients had improved.
Welfare Administration - Page 865
Mrs. Myla Florence, Administrator, Welfare Division, offered introductory remarks and explained the mission of the Nevada State Welfare Division was to administer cash, food coupons, energy and medical assistance programs to Nevadans meeting certain eligibility criteria. She added child support enforcement services were provided to children deprived of financial support from an absent parent. She explained the Welfare Division had adopted for their slogan "WORKING FOR THE WELFARE OF ALL NEVADANS." Mrs. Florence added this meant a sensitivity to the needs of the recipients they served as well as the taxpayers to whom they were accountable. She maintained although Nevada had imposed stringent eligibility criteria, imposed Legislative caps, and held error rates below National levels, the public continued to request reform.
Mrs. Florence provided the committee with a handout labeled Exhibit C entitled "Nevada State Welfare Division Overview of Programs." It offered a brief description of all programs administered by the Division and a limited explanation of program criteria and the geographic location of services. The division administers 13 programs with 814 authorized staff in 17 district offices. Two budgets, Petroleum Overcharge and Community Services Block Grant, are recommended to be transferred to the Division from the Office of Community Services. She indicated the activities of the current biennium could be summarized by meeting the challenges of caseload growth in a period of budget reductions.
Mrs. Florence insisted caseload growth in an era of needed budget reductions obviously created stress on a strained system. In FY92 General Fund Reversions amounted to $6.1 million. Most remarkable was the reduction in ADC payments implemented in February 1992 with 40 positions eliminated. In FY93, the Division General Fund reductions would total $16 million. She noted an important point was that most reductions resulted in an equal reduction of federal funding participation. Mrs. Florence stressed the Governor had recommended ADC payments at current levels for the 1993-95 biennium and provided a moderate provision for rate increases within the Medicaid program. He also emphasized prenatal care through implementation of the Baby your Baby Program and expansion of the MOMS Program. Mrs. Florence proposed to review the agency's budget by highlighting any change, in base budgets and reviewing Maintenance/Enhancement modules.
Mrs. Florence explained the Welfare Administration Budget provided for staff and associated operating costs for the general administration of all Welfare Division Programs. It provided for direct administration salaries and operating cost for all staff who determined eligibility for various programs administered by the Welfare Program. Within this budget is the Aid to Dependent children (ADC) and Medicaid program staff.
Mrs. Florence indicated the Maintenance Module dealing with Demographics/Caseload Changes provided for new positions and support costs for those positions required to perform eligibility determinations. A new staffing standard had been employed in the allocation of new staff. The case workers were currently operating at that caseload level and were able to maintain at that level. The operating costs were derived by using 1992's actual costs per staff and then employing a caseload ratio. Mrs. Florence explained in order to comply with the Americans with Disabilities Act two devices for the deaf were recommended.
Mrs. Florence defined for the committee the meaning of NOMADS. She indicated it meant Nevada Operations Multi-Automated Data System project. Many of the findings in earlier testimony were tied to inadequacies in the agency's data system. NOMADS was intended to provide assistance in the area for Family Assistance Management Information System (FAMIS) as well as the Child's Support Enforcement Information System. Federal requirements has obligated the state to have the child support component of NOMADS operational and certified by October 1, 1995. She explained the expenditures in the data processing category were all related to the design, development and implementation of the system which will be fully operational by 1995.
The School Medical Screening program will allow Welfare start-up costs to develop a data processing program to monitor this activity.
Mrs. Evans stated since there was no information available on the managed care program for Medicaid, it was difficult to tell how it would impact the Welfare Administration Budget. She informed Mrs. Florence the subcommittee reviewing the Welfare Division had been tentatively scheduled for March 10th, and requested a full description of how ADC reforms would work and information on managed care system.
Senator Glomb noted on Page 869 the difference in the agency's request and the governor's recommendation for the NOMADS conversion. She asked if the amount recommended would be used for the purchase of the NOMADS system and would more money be required for Medicaid management.
Mrs. Florence replied the requested amount for NOMADS had been fully provided for and the data processing cost had also been provided for in terms of systems change. There had been a reduction between the governor's recommendation and the agency's request. This was due to costs methodology by the data processing department. The Medicaid Management Information System would cost approximately $568,000 in general fund money for the first year of the biennium and $1.8 million for the second year.
Senator Callister inquired whether the NOMADS project was $4 or 5 million over budget. Mrs. Florence replied it was important to keep in mind the estimated cost for the program was developed in 1988 and updated slightly in 1990. The total cost for the project at that time was estimated at $11 million, since then the cost has doubled.
Senator Callister remarked in 1991 the committee was led to understand the cost was $16 million of which $2.4 million was state funds. He said the cost was now $22.6 million of which $5.5 million was state funds. He asked if the Medicaid Management would provide an early warning system for some of the abuses referenced in the audit report. Mrs. Florence said the current data system, developed in the 1970's, was largely undocumented by the audit. To effect any system change creates anxiety with the programmers because they realize they are working in an undocumented system, with a possibility of the system crashing.
Mrs. Tiffany asked if the Welfare Department was given a break in its budget cuts by the Governor.
Mrs. Judy Matteucci, Budget Director, said the agency was not subject to budget targets. The way the state budget was built was to provide target amounts for all agencies based on their percentage of the general fund after the budget cuts for 92/93. All agencies were subject to the target amounts with the exception of the Welfare Division and Distributive School Account.
Ms. Giunchigliani inquired how many positions were frozen or not filled due to the budget cuts. Mrs. Florence indicated there were 110 overall vacancies in the division. Within Welfare Administration there were 14 frozen positions and 9 vacant positions. She indicated 23 positions in Welfare were eligibility workers. The 110 included all budgets throughout the agency.
Ms. Giunchigliani asked Mrs. Florence to provide the committee with a status report of all data processing and a needs assessment report. She asked if it was possible for the school districts to absorb the cost for data processing for the School Medical Screening Program rather than the Welfare Division. Mrs. Florence replied the districts had not been approached, but it was worth considering.
Senator Raggio said he presumed the state was still under the court's supervision and asked if the 45 day period for case processing of ADC applications was being met or were recipients being assumed eligible. Mrs. Florence replied monthly reports were being supplied to the court and the Welfare Division was meeting case processing times within tolerable limits in the ADC areas. She noted there had been some digression in the last few months. In June and July 1992 the agency was processing approximately 95 percent of all cases within the 45 day time period. In December 1992 the number had declined to approximately 90 percent. The decline was attributed to workers being on vacation. Senator Raggio questioned if 10 percent still were presumed eligible and did not get a review. Mrs. Florence answered no those were cases requiring more than 45 days to process. Senator Raggio said he understood if they were not processed in 45 days they would be presumed eligible.
Mike Willden, Deputy Administrator, Welfare Division said the court was considering presumptive eligibility during the early phases of the lawsuit, but presumptive eligibility was never ordered. The agencies were required to report to the court on a monthly basis. Senator Raggio asked what the tolerance level was and would the court at some point say if it could not be done by the agency then the court would presume eligibility. Mr. Willden indicated it was a possibility the court would rule on presumptive eligibility. He remarked in all the hearings and discussion he had participated in, the court had said there was no acceptable percentage of determinations past the 45-day period. Senator Raggio questioned whether the counties would bear the burden of support until the person had been approved for State Welfare benefits.
Mrs. Florence said while individuals were pending grant assistance, they may be eligible for financial assistance from the counties. Senator Raggio asked if the increase in staff would provide added capability in determining eligibility. Mrs. Florence answered affirmatively. Senator Raggio asked what the error rate was in 1992 for determining eligibility for Medicaid and ADC. Mrs. Florence reported the unofficial error rate within the area of ADC was 4.4 percent, in Medicaid 1.9 percent and in Food Stamps 6.8 percent. She advised 3 percent was the federal tolerance level for ADC, 6 percent for Food Stamps.
Mr. Heller said he was concerned because he did not see any performance indicators in the budget. Mrs. Florence reiterated all performance indicators associated with this budget will be found in the individual program budgets. Mr. Heller said he reviewed the performance indicators in the other budgets and none seemed to address the problems found in the audit. He urged the subcommittees on audit and Welfare to use the information found in the audit to produce indicators allowing the committee in the next two years to determine what problems still existed. Mrs. Florence acknowledged the point was well made and she would be willing to incorporate financial performance indicators. Generally, performance indicators had considered only services and had not considered or addressed fiscal issues.
Senator Raggio suggested it would be good policy for subcommittees when going through the budget to develop additional performance indicators.
AID TO DEPENDENT CHILDREN (ADC) - PAGE 872
Mrs. Florence explained the purpose of ADC was to encourage the care of dependent children in their own homes or homes of relatives by furnishing financial and medical assistance. By federal law in October 1990 children residing with unemployed parents or underemployed individuals became eligible recipients. All ADC recipients receive medical assistance through the Medicaid program.
The base budget provides for ADC payments, the maintenance module provides for caseload growth. She indicated there was an error in the committee's narrative. Listed on the second line of the narrative it should read $348 per month for non-public housing recipients and $272 per month for recipients receiving public housing. She reviewed the performance indicators on Page 873 and noted there were some changes. The first performance indicator dealt with the average number of monthly recipients on ADC. In FY92 there were an average of 31,286 recipients per month and in FY93 the number of recipients projected should reflect 35,044 recipients per month. The projected number of recipients in FY94 should read 40,365, projected number in FY95 should read 46,444 recipients. She indicated the projected numbers showed the anticipated growth in recipients over a four-year period. She said there was a change in the number of closures because of employment and should reflect 1,233. The number of fraud investigations should be 854 in FY92 and projected in FY93, FY94 and FY95 should reflect 900. The number of recipients disqualification under FY93 should be 0.
Senator Glomb said she was curious about the stripper well money to be used in this account. She asked what the money was previously being used for. Mrs. Florence answered the funds were administered by the Office of Community Services generally in the area of energy programs.
Mike Willden answered the $250,000 going into the agency budget in 1993 was used the last two years to provide revenue in the low income assistance energy program. There was a ruling made through the federal government which stated there could be extended use of stripper well funds and it did not have to be energy related. He concluded states had begun to use these funds to finance agency programs. He noted because of funding issues, a decision was made to utilize stripper well funds to support the ADC program in FY94 and FY95.
Mr. Marvel asked if the budgets had been structured with regard to welfare reform. Mrs. Florence stated the budget did not reflect the welfare reform package, the proposals had not been finalized but would be reviewed by the subcommittee. Mr. Marvel questioned the impact it would have on the present budget and asked if there was a backup budget. Mrs. Florence replied there would be documentation which would provide information on how the budget was impacted. The primary areas would address ADC, Medicaid and the Employment and Training budgets.
Mrs. Tiffany referred to the audit report dated June 30, 1991 and asked what had been done to improve the collection of ADC overpayments. Mr. Willden gave some history on the background of the audit findings. He maintained when Welfare was sued under the Hamilton vs. Griepentrog lawsuit, which was a case processing time frame lawsuit, many staff members who were normally assigned to collect overpayments and to conduct fraud investigations were diverted to the front line to process cases. In reassigning staff to cover case processing the agency fell behind in collecting money paid to clients erroneously. Due to progress made in the case processing lawsuit, the staff has been reassigned to overpayment collection process for the past year. He explained he felt great strides were being made in collecting money paid incorrectly, it was not as much as desired, but strides were being made. Mrs. Tiffany asked whether it was a staffing issue or a data processing issue. Mr. Willden replied it was both, automated systems which were designed 10 to 15 years ago were being improved. He added it was mostly staffing and workers could only handle so many cases. Mrs. Tiffany questioned whether the new software package would include functions on overpayment and collections.
Mr. Willden acknowledged the new NOMADS system included a detailed process on overpayment and collections. Mrs. Tiffany asked to have included in the performance indicators the information to allow the committee to keep track of overpayments. She also questioned if procedures would be included to investigate an overpayment before shutting off payment to recipients. Mr. Willden maintained historically, the Welfare Division had a policy stating if an ADC recipient was not eligible for the cash benefits they received, they were also not eligible for the medical payments paid on their behalf. He said they would locate the recipient and attempt to recover the payments from the recipient. Prior to the audit the federal government and the state corresponded over whether the policy was correct to attempt to recover ADC overpayments from recipients. A decision was made by the administrator of Welfare at that time to stop the collection efforts. The audit was done and it questioned the validity of the decision. More correspondence was done with the federal government and it was decided the decision to stop collection efforts was erroneous. The issue was clarified and now the Welfare Division had re-implemented this function.
Mr. John Sasser, Coordinator of Litigation and Training, Nevada Legal Services, furnished the committee with written testimony labeled Exhibit D. He summarized the state was facing recession and therefore poverty was rising dramatically. He explained he represented 23,000 Nevada children receiving ADC benefits. He indicated in 1989 the Legislature recommended an increase in ADC benefits from $330 per month for a family of three without a housing subsidy to $348 in the first year of the biennium and $364 in the second. He maintained despite the rising caseloads and the cap on the Division's budget the increase was implemented. In 1991 there was a recommended increase from $330 per month to $372 per month for those families without subsidies. He added on February 1, 1992, four months later the grants were reduced to $348 per month. He stressed in the last 5 1/2 years the increase has only been $18 per month for families without housing subsidies. Since 1987 families with subsidies have had their grants decrease from $300 monthly to $272.
Mr. Sasser pointed out the Governor had recommended grants for those without subsidies remain at the current post budget cut levels for the next two years. The Governor recommended a cut to $233 per month for those with subsidies. Mr. Sasser indicated the apparent reasons for the cuts were the state's fiscal crisis and projected caseload growth from an average of 31,286 recipients per month in FY92 to 46,007 by the end of the biennium. He explained ADC and Medicaid were portrayed as a "Black Hole" sucking up the state's available revenues. He defined "Black Hole" as an impersonal term allowing the state to forget the 23,000 plus children who relied on ADC for their basic necessities.
Mr. Sasser asserted the ADC Coalition renewed its past requests of the Legislature which were as follows: the elimination of the cap on the Welfare's budget; restoring the payment of benefits to the date of application instead of the date of approval, returning to the policy in existence prior to the budget cut in October 1989. Mr. Sasser said the Governor rejected "Fill the Gap Budgeting," which was a positive recommendation allowing Welfare mothers to supplement their inadequate grants with their own earnings. He explained the Coalition was generally supportive of the Employment and Training program and has helped individuals obtain necessary training to secure jobs. Mr. Sasser said in the final analysis the committee had to make a choice between expending money on Employment and Training and trying the new Fill the Gap program. The ADC Coalition urged the adoption of "Fill the Gap". He said this approach would offer hope to every ADC family, since each family would have an opportunity to immediately improve its plight. He summarized by reminding the committee, ADC grants have been frozen for six years and the Governor proposes no relief. As a result of low grants and restrictions against earnings, the 23,000 plus children on ADC continued to live in abject poverty with daily exposure to depression, frustration, potential abuse and hunger. He declared these children were the future students and workers on whom Nevadans would depend to fuel the economy and pay Social Security benefits in the future. He said it was time to say, "We will help the best we can and moreover we will allow you to help yourselves."
Mrs. Tiffany asked if was true some women remain on Welfare because of medical and dental benefits and some reduced housing benefits versus an income. Mr. Sasser explained it was true most women did remain on Welfare for the full coverage of their children. Mrs. Tiffany asked if statistically it would be based more on medical and dental benefits or subsidizing for child care rather than a salary issue. Mr. Sasser replied there was no subsidized child care unless the parent was participating in the jobs program.
Senator Rawson questioned at what percent of poverty must an individual be to become eligible. Mr. Sasser said it was not geared to percent of poverty, it was according to money earned.
Senator Rawson asked would it be better to limit the amount of people on the grant program and give them a larger grant or take the limited funds and spread it around. Mr. Sasser answered the grant was $348 per month today and the eligibility was as tight as possible. Senator Rawson replied the monthly grant could be raised to $600 with fewer people. Mr. Sasser restated to raise the grant, restrictions would be greatly increased.
Sandra Neese, Representative, Lutheran Alliance, testified in an atmosphere promoting welfare reform, one cry was go to work and become economically independent. She said this was an idealistic solution to a very complicated problem. Mrs. Neese presented the committee with a handout labeled as Exhibit E. She explained the symbol of the wall in Exhibit E summarized the difficulties facing ADC families. ADC families were without options, often abandoned, had limited support and received lagging wages. The lack of education, training and experience restricted opportunity for above minimum wage jobs. A mother of small children needed to weigh her child's need for parenting against working to earn $130. ADC families were often abandoned and received no child support from the absent parent, they were usually without a car, or had an unreliable $1,500 or less clunker allowed by ADC rules. Mrs. Neese pointed out ADC families received limited support from the system and society. ADC mothers received lagging wages, entry level jobs and no health insurance, resulting in an increased population of what was termed as the working poor.
Jan Gilbert, Representative, League of Women Voters, offered a chart labeled as Exhibit F entitled "How Fill-the-Gap Could Work in Nevada." She said her organization supported "Fill the Gap Program". She indicated the program did not penalize the recipient for working, but was a positive reinforcement. The purpose of the program was to allow the recipient to help themselves and get off the ADC program.
Senator Callister asked what the program would cost the state. Mrs. Neese answered it was difficult to find statistical data. The State Welfare Division attempted to formulate some data, but looked at only 4 percent of the women using the program . If only 4 percent of the women were using the program it would be very expensive to operate the program. She admitted at this point no statistics were available. Senator Callister stressed someone needed to developed a model even if it was based on the Utah program in order to justify the support for the program. Mrs. Neese offered as evidence written testimony from Alicia Smalley (see Exhibit J).
Mr. Raymond Rodriguez, Attorney, Nevada Legal Services, submitted written testimony labeled Exhibit H. He stated it was popular belief welfare families resided in public housing. Approximately 75 percent of welfare families do not reside in public or subsidized housing. He indicated there was a waiting list of 1,400 families for subsidized and conventional public housing in Clark County, 1,300 in Washoe County and 930 for rental subsidies in rural Nevada. The wait on these lists was between 4-6 months and 2 years. He added for those families without subsidies, the ADC benefit amount was far below the cost of rental housing. Mr. Rodriguez said an estimated 70,000 families with incomes below 125 percent of the poverty level competed for affordable housing with approximately 9,171 welfare families who did not reside in public housing or have a rental subsidy. Child abuse has become a major concern and inadequate housing was identified as a major factor in 26.6 percent of all substantiated child abuse cases. Of the total number of substantiated cases of child abuse in 1992, 22 percent involved families on public assistance. Mr. Rodriguez concluded the families on ADC needed the help of the committee by increasing the grants to a meaningful level. He urged the committee to adopt the Fill the Gap proposal.
Senator Callister referred to Page 2 of Exhibit G and asked if the figure of 22 percent of families involved in child abuse cases were all Nevada families or was it nationwide. Mr. Rodriguez said it was nationwide. Senator Callister asked what the source was of the information. Mr. Rodriguez said it was produced by Nevada Legal Services and he would furnish Senator Callister with a copy.
Abby Johnson, Resident, Carson City, spoke on her own behalf. She testified she was a past member of the State Welfare Board for 2 years. During her services on the board she affirmed she learned Welfare caseload estimates were always too low. Welfare policy in Nevada was being driven by budget policy. To impose an asset test on the CHAP program which provides prenatal care for poor mothers, would save the state money now. However, in the future it will result in major neonatal intensive care costs. She urged the committee to adopt the "Fill the Gap" proposal.
CHILD SUPPORT ENFORCEMENT PROGRAM - PAGE 875
Mrs. Myla Florence continued testimony on the budget stating this budget served to reduce Welfare spending by placing the responsibility for supporting children on the absent parent. Non-Welfare families were also provided services through local district attorneys. The staff locate absent parents, establish paternity, establish and enforce support orders through various means. This budget contained no general fund dollars and is financed from collections and matching federal funds. She explained in the area of expenditures costs would be higher in FY94 due to holding some positions vacant in FY92. The budget provided for 94 existing positions within the Child Support Enforcement Program. Mrs. Florence indicated an error in 1992 Work Program, the correct figure should read $1.2 million as opposed to the $2 million printed. In the Demographics/Caseload area the recommended amounts provided for increased caseload resulting in 20 new staff and associated costs. The positions will provide for increased child support enforcement activities, quality control specialists and supportive program staff. She maintained the caseload factor growth of 30 percent in FY94 and 46 percent in FY95 has been incorporated within the operating categories. She pointed out the Interim Finance Committee had previously approved an effort to initiate a private collection program effort within the budget. In summation Mrs. Florence said the overall budget is recommended to increase by 10.6 percent in FY94, 8.7 percent in FY95. Under Performance Indicators on Page 879 she made the following changes. The second line should read "Number of cases where absent parent has been located." The following numbers should be inserted under FY92, 10,082 individuals, projected in FY93 11,631 individuals, projected in FY94 13,180 individuals, projected FY95 14,728. The sentence should continue "Referral has been made to District Attorney's Office or to Administrative Hearings Office." The change in line 4 should read "Number of obligations established" as opposed to "Number of wage withholdings." Line 5 should read, "Percent of ADC caseload collected on."
Chairman Arberry pointed out the budget did not address the position entitled, Support Office Enforcement Assistant II. He asked what the duties of the person were and how the new classification would benefit the program. Mrs. Florence explained the new classification was proposed to provide for a career ladder within the Support Enforcement program. The position would be a Grade 28, with potential to move to Support Enforcement Specialist with time and experience.
Senator Glomb stated the total budgeted amount was $23 million for FY94-95 and asked what percentage would be used to operate the program. Mr. Willden answered he did not have the percentages, but could identify the categories used for operating costs versus pass through funds. He referred to the categories on Page 875 of the Executive Budget, indicating the following categories were administrative: Personnel, Out of State Travel, In State Travel, Operating, Equipment, Training, Hearing Officers, County Cost Reimbursement, and Utility Account. He noted the following items were pass through funds, IRS Intercept, Non-Assistance Clients, Pass on Payments, ADC Disregard Account, Federal Share Account. Senator Glomb asked Mr. Willden to furnish the subcommittee with a break-down on how much money goes directly to child support payments and how much goes into operating the program.
Chairman Arberry noted the Interim Finance Committee had enacted a program to privatize child support collections and asked Mrs. Florence to elaborate on the progress of the program. Mrs. Florence indicated the Welfare Division had been working with Data Processing to get a list of cases with no collection activity for at least 36 months. From the information a determination would be made on what the target group should be to refer to collection agencies. The intent of the program would be to turn accounts over to collection agencies which would retain a portion of what was collected.
Ms. Giunchigliani asked if the new staff would be assigned to help implement the audit recommendations. Mrs. Florence said they would be used. Ms. Giunchigliani asked if the Division was confident it could implement all the recommendations made by the audit. Mrs. Florence answered affirmatively. Ms. Giunchigliani asked for an explanation of the district attorney's incentive. Mrs. Florence explained the intent would be to provide incentives to district attorneys to enroll and enforce medical support obligations. Currently there was no provision for that support and it had not been a priority of the district attorneys.
Senator Raggio said he wanted to follow-up on the question asked by Chairman Arberry. He asked what the problem was in getting a contract going on the program to utilize private collection agencies. Mrs. Florence said it was a data processing issue, to download the information and get it sorted, to identify cases with over 24 to 36 months lapse time. Mrs. Florence stressed the average caseload each month was close to 35,000 recipients. Senator Raggio said he understood the caseload, but he thought when the program was authorized the particulars had been worked out. Mrs. Florence said the individuals targeted for release had not been identified, the problem and the concept for a solution was identified. Senator Raggio questioned what was being done to get the program started. Mrs. Florence stated it was not possible to manually search for the cases with no activity and determine the length of time. The process would require a special run from the data base to secure the information. Senator Raggio urged the Welfare Division to expedite the program as soon as possible. Mrs. Florence maintained it was being implemented and hoped by Spring it would be operating.
Karen Kavenau, Director, Department Data Processing interjected that one of the difficulties had been several vacancies within the department and the department has had trouble recruiting personnel. The Personnel Department was extending its reach to fill those positions, however.
Chairman Arberry stressed he echoed Senator Raggio's concern and asked if there was a follow-up to the program assuring the money went to the children as intended. Mrs. Florence stated within the program there was no staff assigned to monitoring the distribution of the funds. Mrs. Florence said if there was a situation resulting in neglect, the children and family services division would be responsible for follow-up.
ASSISTANCE TO AGING AND BLIND - PAGE 880
Mrs. Florence explained the purpose of the budget was to provide income assistance to the aged and blind with income below specific levels. The program was administered by the Social Security Administration. The state contracted with Social Security to determine eligibility and make payments. She emphasized during the next biennium there was no recommended increase in the monthly supplement. The base budget was 100 percent general funded. The Maintenance Budget provided for increased caseload in the aged and blind caseload as well as group care facilities. The Enhancement budget dealing with nursing home waiver will provide for a new initiative within the division to transfer nursing home recipients to group care facilities. Group care facilities will be eligible for the state supplement and savings are projected to result in the Medicaid budget. Mrs. Florence stated projected payments to group care facilities would result in savings of approximately $591,000 in Medicaid in FY94 and $1.1 million in FY95. She explained the group care supplement was $242.25 per month, the supplement for Aged and Blind would be $36.40 in FY94 and $109 per month for the blind FY94.
FOOD STAMP PROGRAM - 883
Mrs. Myla Florence stated the purpose of the Food Stamp Program was to raise the nutritional level among low income households with limited food purchasing power. The program provides food coupons to eligible individuals and families. Alcohol, tobacco, paper goods and pet items were not permitted to be purchased with food stamps. The coupons were issued under the Department of Agriculture with 100 percent federal funding. Mrs. Florence indicated $70.3 million in food stamps issued during FY92 were financed by the federal government and not reflected in this budget. The budget supports the eligibility staff and operational expenses for the issuance staff.
Mrs. Chowning said she was concerned over the amount of cheating in the Food Stamp Program. She insisted she was in favor of those persons needing food stamp assistance receive it, but the cheaters should be cast out. She asked what was being done to alleviate the amount of cheating in the program. Mrs. Florence maintained there was an active investigations unit to follow-up on the fraud referrals. She said recent correspondence had been done with the Department of Agriculture regarding the many complaints received. The complaints stated merchants were not checking for identification when purchases were made. The Agriculture Department was requested to have training sessions with merchants and encourage them to make identifications prior to purchases.
Mr. Marvel asked if any information had been received on the two shipments of lost food stamps. Mr. Willden answered no, the investigation has been closed. Investigations were done by the Inspector General, the State Welfare Division, Food Stamp Postal inspectors and private investigators. The total loss of food stamps to the State of Nevada was $230,000.
Ms. Giunchigliani asked for a review of the 30 eligibility staff workers transferred to assist with caseload and what impact it had on the budget of their original division. Mrs. Florence stated the 30 workers were transferred a year ago to food stamps and were not reflected in the food stamp's budget.
Mr. Heller noted there was an estimated reduction in the error rate for FY92 as opposed to FY91. He asked what was being done to reduce the error rate. Mrs. Florence indicated there was a quality control unit which retrospectively reviewed cases to determine the appropriateness of the determination by the eligibility worker. The Food Stamp error rate in FY91 was 7.5 percent, the projected error rate for FY92 is 6.8 percent.
Senator Jacobsen asked if individuals should report any irregularities. Mrs. Florence stressed an individual should complain to the manager of a store if he observed any misuse or failure in checking for proper identification.
HOMEMAKING SERVICES - PAGE 903
Mrs. Myla Florence explained the Homemaking Budget was supported entirely by Social Service Block Grant Funds and Title XX funds.
The purpose of the Homemaker Program was to maintain disabled adults and elderly persons in their own homes. Homemakers travel to the homes of clients and provide non-nursing personal care, meal preparation, laundry services, grocery shopping and housekeeping. In FY92 the Homemaker Program served 830 clients, in FY94 the projected total would be 887 clients. In FY95 there will a be slight drop to 864 clients because of the level of funding.
ENERGY ASSISTANCE - WELFARE DIVISION PAGE 910
Mrs. Myla Florence noted this budget provided a one time heating payment for eligible households in central and northern Nevada. In southern Nevada a payment was split between a winter heating and summer cooling payment. She indicated the program was federally funded and the Stripper Well funds were eliminated within this budget. The funding provided for 5 personnel to process applications for assistance with heating and cooling payments. The Low Income Home Energy Assistance Program (LIHEA) had been discontinued in FY94 as a result of reduced federal funding. She pointed out in the Performance Indicators on Page 913 there was an error for FY94. The numbers were based on an 11 month period. Under FY92 the number of households receiving LIHEA
should read, 12,193. The number for ECIP should read 2,739, while line 4, Average LIHEA payment should read $190.51.
Mrs. Evans asked how the policy decision was reached to cut the budget, and take money away from energy assistance. She questioned why this budget was considered less important. Mrs. Florence said the budget was not less important, it was a matter of the reduction in Stripper Well funds. In order to provide for the ADC budget and to try to work within the overall budget targets, it was determined to move the funding to ADC which was a higher priority.
Mr. Heller questioned whether applications were received by her office for the Weatherization Program. Mrs. Florence said yes, the LIHEA applications were handled by her office. Mr. Heller asked how many applications were received, as opposed to the number of people who received the assistance. Mrs. Florence reported she did not have the total number of applications received.
Mr. Sam McMullin, representing podiatrists, spoke in regard to the cuts in the Medicaid budget. He said he felt there could be a different solution than what was planned. He indicated the budget totally eliminated podiatry care. Mr. McMullin said podiatric medicine was a necessary service and asked the committee to give it favorable consideration.
Mrs. Tiffany said she agreed with Mr. McMullin and had requested a bill draft to get the bill heard again. She stated there was a cost savings with podiatry care particularly with diabetics. She stressed she felt there was a definite need to review the bill again.
Mr. McMullin furnished the committee with a handout, labeled as Exhibit H explaining the Medicaid reimbursement rates showing the differential per unit.
NEVADA MEDICAID - 888
Mrs. Florence explained the Medicaid Program provided services to families and children eligible under Title XIX of the Social Security Act. Most recipients were income eligible through programs such as ADC and Supplement Security Insurance (SSI). She indicated it also covered persons in nursing homes who were determined medically needy, pregnant women, women and children, home services for the disabled, the aged and provided certain assistance to Medicare beneficiaries. Mrs. Florence said there were a number of federal mandates which had impacted this program over the past four years. The first program maintenance item provided for an inflationary increase for medical providers at the estimated rate of 5 percent. Most providers received a 10.33 percent reduction in rates during the previous budget reduction process which took them back to the 1986 level. Under the Demographic/Caseload changes provided for caseload driven increases for the fiscal agent, medical payments, county indigent program, utilization review and utilities. She explained it was federally mandated that coverage be provided for pregnant women and children at 133 percent of poverty, if the children were ages 5 years and under. Benefits must be provided at 100 percent for children ages 6 and all children born after 1983.
Mrs. Florence explained Post Medical Assistance was a federal mandate. The Family Support Act of 1988, required continuation of medical assistance after welfare and eligibility from a 4 month period to a 12 month period. The program was implemented April 1, 1990 and the eligibility was the result of earnings, increased wages and disregards.
Senator Raggio asked Mrs. Florence to elaborate more on the Catastrophic Coverage. She explained the recipients were not categorically eligible under the SSI Program and entitled to Medicaid coverage. It was people whose income was slightly higher but with incomes below 100 percent of poverty level.
Ms. Giunchigliani asked if Utilization Review were there protocols existed in other states or must they be developed. Mrs. Florence admitted there were existing protocols which could be modeled for Nevada's need. Ms. Giunchigliani requested the formula for how the poverty level was determined. Mrs. Florence maintained it was published annually in the Federal Register. Ms. Giunchigliani asked to have a work-up study on the documentation which showed the recommended Medicaid Budget was under funded. Ms. Giunchigliani questioned the meaning of the "1634" contract. Mrs. Florence explained it was the provision which enabled automatic eligibility determination for Supplemental Security Income recipients.
Mr. Spitler requested Mrs. Florence provide the committee with details on the proposed medical school screening program. He wanted the information to include how Clark and Washoe Counties would use the funds for the medical screening. He said he hoped they would not use the funds to cover expenditures for current funded programs and then divert funds to other sources.
Ms. Despina M. Hatton, Attorney, Senior Law Project, testified she represented individuals over the age of 60 years and who were Washoe County residents. She explained there were persons on limited retirement incomes with multiple medical problems and unable to purchase their medication and pay the remainder of the bills for the month. She pointed out to the committee they either go without eating to pay for prescriptions or save on drugs by taking one prescription one day and doing without the next. Ms. Hatton indicated many of the people were old enough to retire but were not 65 years old and therefore could not receive Medicare benefits. They could not go and get an education or find employment and were just going to getter older, sicker and poorer. She maintained it was the responsibility of society and society was not meeting that responsibility.
Ms. Mary Ellen McCarthy, Senior Attorney, Nevada Legal Services, Inc. explained the Medicaid budget was proposed by both the agency and the Governor was woefully inadequate to address the health care needs of Nevada's poorest and most vulnerable citizens, the aged, disabled and children both born and unborn. She asked the committee to consider the following items when deliberating on the various budgets: 1) The proposed Medicaid Managed Care System may not save the state any money and if not properly monitored and could result in significant financial liability, as well as a decrease in the quality of care, 2) Except for the Las Vegas area, Nevada's population is insufficient to support competitive managed care, 3) Every state dollar saved by the recent Medicaid budget cuts has cost the citizens of Nevada a loss of $2.40 in health care; 4) A "1634" contract with the federal government would eliminate the duplicate administrative expenses of processing virtually identical information for SSI-Medicaid recipients, 5) A medically needy program at both state and county levels would dramatically increase the access to health care of Nevadans who now must choose between health and homelessness, 6) A home maintenance allowance for a very small number of unmarried, childless Medicaid recipients, such as widows who need a short period (a maximum of six months) of institutionalization, would enable these persons to avoid the choice between medical care or permanent institutionalization due to the loss of their homes; and 7) Past budget cuts, not included in the present budget, should be carefully examined for their financial and human costs.
EMPLOYMENT AND TRAINING - 905
Mrs. Florence explained the purpose of Employment and Training Program was to provide employment, education and training in support services to categorically eligible individuals. The services would assist recipients to become more self sufficient and would reduce long term dependency on public assistance programs. Mrs. Florence stated there were no changes in the budget. She stated this was a maintenance budget providing services to over 3,000 individuals. She noted the total budget for Employment and Training was $3.4 million in FY94 and FY95.
Ms. Giunchigliani asked whether any studies had been done to determine why people return to the Welfare system. Mr. Willden answered the Division had a tracking system which registered each time a client went off Welfare, whether he stayed off or returned. He indicated a questionnaire had been done to try and ascertain the reasons for leaving and returning. The reasons varied, but the most common was recipients having a job on the low end of the economic scale who often lose their jobs and return to Welfare. Mr. Willden said he believed the reason for most people returning to Welfare was the same reasons for applying, health care issues and child care issues.
Ms. Giunchigliani asked if there were any calculations on the Welfare Reform package and would the committee receive the documentation prior to the drafting of the bill. Mrs. Florence stated the information would be ready for the subcommittee meeting on March 10.
Mrs. Evans said she was concerned the ACE program was not being utilized well. She asked for further explanation on the program.
Mrs. Florence indicated the medical assistance for recipients was often the cause for many to return to the welfare rolls. Mrs. Florence maintained the utilization of ACE by participants was also effected by many recipients not wanting to retain a connection to the Welfare system.
PETROLEUM OVERCHARGE REBATE - 914
Mr. James Hawke, Director, Office of Community Services, noted the agency was created in early 1970 by Governor O'Callahan's executive order. The Office of Community Services was tasked with fighting the "war on poverty." Mr. Hawke reported there were no general funds in the Community Services' budget. He presented the committee a handout labeled Exhibit I entitled, "Oil Overcharge Settlement Funds." He indicated his office had settlements on a variety of oil overcharge accounts. Mr. Hawke stated all oil companies doing business in the State of Nevada from 1973 to January 1, 1981 were fined by the federal government for overcharging for domestic petroleum at the retail level. He said Community Services was in the process of collecting the funds from the federal government and making indirect restitution to the citizens of Nevada. Mr. Hawke explained Stripper Well was a name applied by the Office of Hearing and Appeals to all further oil overcharge settlements. Mr. Hawke stated the interest rates were declining, and by FY95 the agency would be out of the oil overcharge business and by FY96 they would only be distributing residual amounts.
COMMUNITY SERVICES BLOCK GRANT - 924
Mr. Hawke explained the Community Services Block Grant (CSBG) was used to provide individualized services to low income Nevadans in order for them to maintain self-sufficiency. He said the program was operated with a half-time person and accountant assistant. The state utilizes very little funding from this program and the majority of funds go directly into programs and services for Nevadans. He reported the Block Grant program had received its comprehensive audit from the Legislative Counsel Bureau and the audit was perfect. He voiced concern for transferring the program to the Welfare Division and said he wanted to be sure the communities were not harmed by the transfer. He stated by transferring one senior accountant from Community Services into the Welfare Division and a half-time person the program could be administered.
Ms. Giunchigliani asked what the rationale was for eliminating the Office of Community Services.
Mrs. Judy Mattuecci explained when all the organizations of state government were reviewed by the consultants it was found the Office of Community Services had become a catch-all. The original mandate had changed and the focus of the original program had been diluted over the years. In keeping with the idea of grouping like functions together it was recommended the office be eliminated but the duties and responsibilities would be reassigned.
DOE WEATHERIZATION - WELFARE PAGE 916
Mrs. Florence explained the Weatherization Budget was recommended at the same level as the current biennium. It provided home weatherization and energy efficient insulation to individuals at 150 percent of poverty or below.
ENERGY ASSISTANCE - PAGE 920
Mrs. Florence explained the Energy Assistance program provided brief term emergency services for shelter to individuals in a personal crisis situation. There were no general funds within this program, it was a reinstitution of a previously operating program. During the 66th Session provisions were made to fund this program through and increased real estate transfer tax.
HOMELESS GRANTS - PAGE 922
Mrs. Florence explained the Homeless Grants Program was supported by Federal funds. The Welfare Division acted as a pass through agency for distribution of funds for emergency housing or emergency shelter programs. The program was dependent on federal funds and subject to receipt of the funds.
Senator Raggio asked how the federal funds would be administered and whether funds would be received by the agency or flow directly to individuals. Mrs. Florence answered the payments would be made to individuals whose eligibility was established through Welfare Division district offices. Senator Raggio asked how needy families would know what agency would administer the program. Mrs. Florence stated information would be handle through referrals.
Chairman Arberry adjourned the hearing at 2:41 p.m.
RESPECTFULLY SUBMITTED:
_______________________
Keri E. Putnam
Committee Secretary
??
Assembly Committee on Ways and Means
Senate Committee on Finance
February 11, 1993
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