Assembly Bill 386: Revises provisions governing funding for institutional care of medically indigent persons under state plan for Medicaid. (BDR 38-519)

Michelle Gamble identified herself as program assistant, Nevada Association of Counties (NACO). A.B. 386 addressed a growing problem in Nevada. The Federal Government had established a federal matching program for states to assist them in paying for institutional care for indigent persons. The program paid for patients with incomes between $30 and 300 percent of Social Security Income (SSI). To qualify for federal match there had to be a qualified state program. In 1989 by inter-local agreement the state and the counties determined people with incomes between $714 a month and 300 percent of SSI were deemed to be county responsibility. The counties agreed to give the state the matching portion of the money and the state would then administer the program and obtain a federal match.

Since 1989 the state had twice increased its responsibility; once to $750 and once to 155 percent of SSI. In the 1997 legislative session an agreement was negotiated with the states so that counties would not continue to bear cost of living raises for the program. The state said it would assume up to 150 percent of SSI starting January 1, 1998. On January 1, 1999 it increased to 156 percent of SSI which had helped the counties tremendously. Since that time the Department of Human Resources chose to increase again, but the increase was taken out of the executive budget due to the financial situation of the State of Nevada.

Section 1 of A.B. 386 provided on January 1, 2001 the state's portion of the match program would go up to 157 percent of SSI. There would be a fiscal impact. Thereafter, every January 1 the state's percentage would increase 1 percent, up to 300 percent of SSI. Section 2 of the bill addressed a program put into place in the 1997 legislative session. The program had to be statewide, all 17 counties must participate. If a county was unable to participate (to meet their match payments) the state became disqualified from the federal match program and all federal funds that came to the program would cease to come to the state. There were counties, such as Mineral and Lyon, with a disproportionately high share of long-term care patients that were not generating enough revenue to keep up with the number of long-term care patients. Toward the end of the fiscal year NACO found counties that had been unable to meet their last long-term care patient bill to the state. In order for the program to continue the county had to make that match payment. If the county had no money to do that the state would be in a terrible situation.

In 1997 a program was initiated whereby a pool of money, $300,000, was set aside and a board comprised of county commissioners appointed by the governor was established to administer the fund. If a county could not meet their match payment they could apply to the fund to have the payment made for them. Over the biennium $163,000 was paid out of the original appropriation. The balance of the fund had to cover the rest of 1999, and there was concern there might be a few counties that would again be unable to make their match payment. For that reason NACO was asking for another $300,000 appropriation from the state with which to fund the program for the next biennium to assist counties that might not be able to make their match payments.

Chairman Freeman asked if there was language to require replenishment of the fund. Ms. Gamble said section 2 of the bill asked for another one time appropriation. In 1997 an automatic replenishment of the fund had been requested, but the Committee on Ways and Means had not been willing to do that. It would be an appropriation NACO would ask for every 2 years.

Assemblywoman Leslie asked what criteria determined which county used the fund and had requests from counties ever been declined. Ms. Gamble answered there was criteria that said the board must look at the county's financial ability to pay, other revenue sources, and whether they had expended their indigent dollars appropriately. When the board was established the legislation was drafted so county commissioners who were in charge of county budgets were dealing with the problem. It put them in charge because they knew how the county budgets worked. To date no county had been turned down. Lyon County had a tremendously disproportionate share of long-term care patients based on their population. They had an aging population and their growth in long-term care caseloads had far outpaced their revenue gross.

Assemblywoman Von Tobel asked for clarification on the criteria. Ms. Gamble replied the criteria were in statute. The board looked at the county's source of revenue available to pay, whether they had taxing authority for their indigent program; those counties who had accessed the fund in prior years had been taxing the maximum allowable for their indigent population. They had also been putting in additional general fund dollars. The board also looked at the audited revenues making sure the money had been spent appropriately, and whether the county had budgeted appropriately for the anticipated growth in revenues. The board also looked at any other factors it deemed appropriate.

Chairman Freeman said a bill had been introduced in the floor session asking for an interim study of rural health issues and she felt the issue should be a part of it. She expressed a desire to come up with something in the interim committee to deal with the issue more comprehensively.

Ms. Gamble expressed appreciation and added NACO was extremely concerned Mineral County would not have enough funds to meet their long-term care obligation. Mineral County was also at the $3.64 property tax cap. It had a declining assessed value and they had a school bond issue so when their assessed value went down the county was the entity that had to lower its operating rate. According to the county's auditor just to maintain the same level of service they would have to dedicate another 5 cents of their property tax strictly to long-term care. NACO did not know how they would do that.

Mrs. Freeman asked if the people in long-term care facilities were residents of the county. Ms. Gamble said the residency went back to the county in which they had been a resident prior to being admitted to the facility.

ASSEMBLYWOMAN GIBBON MOVED TO DO PASS AND

REREFER A.B. 386 TO THE COMMITTEE ON WAYS AND MEANS.

ASSEMBLYWOMAN LESLIE SECONDED THE MOTION.

MOTION CARRIED UNANIMOUSLY.

Chairman Freeman opened the hearing on A.B. 305.

Debbie Hosselkus, deputy administrator, Division of Mental Hygiene and Mental Retardation, stated A.B. 305 would change their name to the Division of Mental Health and Developmental Services. The change allowed the division to remove the antiquated term "Hygiene" and replace it with "Health" and also allowed the division to address the change in their service base. They served people with mental retardation and persons with conditions related to mental retardation and the term "Developmental Services" would encompass that.

Assemblywoman Leslie asked about page 2, section 5 of the bill where a listing that included Las Vegas Mental Health Center, Henderson Mental Health Center, and Reno Mental Health Center had been crossed out. Ms. Hosselkus said the division had changed the names of various agencies within the division and the bill allowed those changes to be cleaned up.

Mrs. Freeman asked about a fiscal note. Ms. Hosselkus said no fiscal impact was anticipated other than purchasing new stationery which was part of their base budget.

Mrs. Freeman asked for a motion.

ASSEMBLYWOMAN GIBBONS MOVED TO DO PASS A.B. 305.

ASSEMBLYMAN MANENDO SECONDED THE MOTION.

MOTION CARRIED UNANIMOUSLY.

Mrs. Freeman opened the work session on A.B. 474 and asked Ms. Jan Evans to discuss her bill.

Assemblywoman Jan Evans, Assembly District 30, said A.B. 474 was for the creation of a trust fund for public health in connection with the tobacco settlement money and a proposal for expenditure. To give the committee some background, Ms. Evans explained in spring of 1998 there had been a National Conference of State Legislators meeting and during one of the plenary sessions Christine Gregoire, attorney general, State of Washington, addressed the group. Ms. Gregoire was one of the lead attorneys general in pursuing the funds from the tobacco companies. Ms. Evans realized when the settlement was made late last fall it would not take long for "everyone under the sun to swoop in with their pet project" and think of ways to spend all the money. If it went untouched by Health Care Financing Administration (HCFA), it would amount to about $1.2 billion over a 25 year period. Ms. Evans told Attorney General Del Papa she would like to preserve some of the money because it had been the practice of the state to quickly spend whatever it received.

Ms. Evans said she was a long time investor and believed in planning for the future. A.B. 474 preserved a small portion of the tobacco settlement. Irrespective of what might occur with the balance of the funds the bill asked 10 percent be set aside as it came in on an annual basis and put into a trust fund then expended through the mechanism outlined in the bill.

She then explained the various bill sections. Section 2 was language that explained how the monies would be managed by the state treasurer, Brian Krolicki. Mr. Krolicki had provided the correct language for that portion. Page 2, line 12, subsection 4 stated only the interest in income earned on the money in the trust fund may be expended. The grants would be used for:

(1) promotion of public health and programs for the prevention of disease or illness; The nature of public health was about the promotion and prevention of disease and illness; (2) for research on issues related to public health; and (3) for direct health care services for children and elderly persons.

Ms. Evans said she had spoken to quite a few individuals in the drafting of the bill asking where the funds should be directed. The consensus was the greatest need seemed to be among the young and the aging population.

Ms. Evans explained the various provisions of the bill:

Assemblywoman Buckley commented the bill was a great idea and a great bill. She remarked the latest publication from National Conference of State Legislators published information on what other states were doing with their tobacco proceeds. One state had 175 bills asking for everything from sound walls to donations to farm boards, but to focus the funds on education and health was paramount. The idea of setting aside 10 percent to be invested, that our state could have in perpetuity made so much sense. To do that with a small enough portion would enable the state to address the very grave health care needs of the state. Ms. Buckley applauded Assemblywoman Evans for being ahead of the curve in introducing the bill early and for recognizing that it made sense to provide for the state long into the future.

Ms. Evans said that was exactly what a trust fund or endowment provided. It did not expire and the interest and proceeds would go on forever. Long after the settlement money would cease to be, there would always be the small core of money that would be directed for public health purposes.

Chairman Freeman asked if the 10 percent was upon each distribution or one time. Ms. Evans said once it was up and rolling the estimated income would be about $48 million. Of that, $4.8 million would go into the trust fund. The next year if it was still $48 million, another $4.8 million would go into the fund. Whatever amount came in, 10 percent of that went into the trust fund. The treasurer then would invest that money and the interest derived became the expenditure for the governing board. They never touched the principal and it would continue to grow.

Mrs. Freeman saw no reason for the bill to go to the Committee on Ways and Means. Ms. Evans agreed that it had no impact on state government. If Mr. Arberry wished to see it however she had no objection, and it was concurrent so would go to the Committee on Ways and Means in any event.

Assemblywoman Angle asked if Ms. Evans had coordinated efforts with other legislators who might also have bills. Ms. Evans said she had not. There would be other proposals before the committee in terms of the expenditure of the tobacco settlement money and each one had to be weighed on its merit.

Assemblywoman Von Tobel asked if the bill asked for 10 percent of the 50 percent that would be left after the scholarship plan, or 10 percent on the 100 percent and the other programs proposed would cut up the pie.

Ms. Evans responded that the bill was written so that whatever amount came to the state 10 percent would be taken from that on an annual basis.

Tom Patton, assistant attorney general, identified himself and explained that Attorney General Frankie Sue Del Papa was in Washington, D.C., at the spring conference of the National Association of Attorneys General and he spoke on her behalf in support of A.B. 474. He provided a letter from Attorney General Del Papa (EXHIBIT C) expressing her support. She would even consider dedicating a greater percentage of the proceeds to the trust fund. However, she reminded the committee there were legal hurdles still to be overcome before the proceeds came to Nevada. The issues were still being discussed at the federal level and would hopefully be resolved in the state's favor.

Mr. Patton said an issue was underway in the U.S. Congress to disclaim any entitlement to any of the monies. The issue was not without opposition and one of the significant factors was whether the states would make a commitment to public health with the proceeds. A.B. 474 was a major step in the right direction toward helping that issue be resolved in Nevada's favor. There would be more information, he said, when Attorney General Del Papa returned and the committee would be updated at that time.

In conclusion, Mr. Patton said he had not yet reviewed chapter 439 or related chapters to see if there was a definition of children and elderly. However, as one of the uses proposed for the money was direct health care services for those two groups he urged consideration of a more definite statement as to how that direct care could be utilized.

Chairman Freeman asked if there had been discussion in Washington, D.C., about potential problems related to how the states were deciding to use the funds. Mr. Patton said the Senate Appropriations Committee had passed a bill to disclaim Federal Government entitlement to the funds. Elsewhere within the executive administration of the Federal Government there was opposition to that, possibly in Health and Human Services, and that issue of the varying potential scenarios in the states as to where the money would ultimately go was playing a large part in the debate.

In regard to his question on the definition of children and elderly, Mrs. Freeman asked Mr. Patton if he would resolve the issue and get back to the committee at its next meeting. Mr. Patton said he would.

Assemblywoman Leslie said she shared the attorney general's opinion that 10 percent was low in terms of the amount of money to be set aside for public health purposes. She asked Mr. Patton if the attorney general's office had a specific number in mind. He said "No." The intent was to leave that to the governing bodies to make those appropriations. There would be an issue about the cumulative nature of the trust. At the onset the trust fund would be at its lowest and by its cumulative nature, $1.2 billion over 25 years at 10 percent would be $120 million eventually. The income from that of approximately 10 percent would go from about a half-million in the first year up to $12 million in years to come. That was a significant increase in use the fund would have years down the road. A big issue was public health needs in Nevada existed now. As pointed out to the committee in the attorney general's report in February 1999 concerning health issues, it was of grave concern that Nevada ranked number one in smoking-related deaths. How the state might address that to get a jump start on the public health purposes promoted by A.B. 474 was a serious issue and one best left to the committee.

Mrs. Freeman remarked she had attended a national conference in Washington D.C. where a speaker, a health officer for the State of Texas,

said in the national budget less than 1 percent of federal dollars went to public health. If the state only strengthened its public health department with some of the proceeds it would be a enormous help. Some members of the committee wanted to vote the bill out and the issue of the amount could be resolved in the Committee on Ways and Means.

Assemblywoman Von Tobel believed A.B. 474, which she co-sponsored, was a very important bill. However, until the different bills were put on the table and discussed it was unknown how much that 10 percent would be. Would it be 10 percent of 50 percent or of 100 percent, and that made a big difference. She would abstain from voting until the other issues had been clarified.

Assemblywoman Buckley said from reading the bill the intent was clear that it be 10 percent of the total amount. So it was 10 percent of 100 percent. There were two bills in regard to where the tobacco proceeds would go:

(1) The governor's bill, which was introduced in the senate; we cannot hold A.B. 474 pending receipt of a senate bill because of our deadlines; and

(2) The democratic proposal that 10 percent be put in a trust fund consistent with Ms. Evans' bill; 25 percent used for public health and health care programs; 25 percent for public health and anti-smoking programs; 15 percent to the counties for local health care programs, and 25 percent for education.

In either event, A.B. 474 was consistent with both plans. It made sense to invest the money for the good of the state so that when "we were all gone, there would be a continuing source available for health care programs." In view of the facts that Nevada ranked last in health care spending, that we had children and senior citizens desperate for coverage and for waiver services, it was a legacy that could be given to the state. The other assembly health care program had been directly referred to the Committee on Ways and Means, so A.B. 474 was the only bill on the tobacco proceeds to be considered by the committee. Ms. Buckley expressed her strong support and belief the bill should be enacted.

ASSEMBLYWOMAN BUCKLEY MOVED TO DO PASS A.B. 474.

ASSEMBLYMAN MANENDO SECONDED THE MOTION.

THE MOTION CARRIED WITH ASSEMBLYWOMEN VON TOBEL AND ANGLE ABSTAINING.

Chairman Freeman opened the hearing on A.B. 190.

Dr. Mary Guinan, state health officer, identified herself and stated she was testifying on behalf of the Department of Human Resources. The bill focused on communicable diseases and public safety workers. A.B. 190

duplicated numerous provisions and costs of federal Occupational Safety and Health Administration (OSHA) regulations specifically designed to protect public safety workers who might be exposed to a communicable disease. Workers safety programs already in place under OSHA regulations provided for appropriate testing and management of a public safety worker exposed to blood or body fluids of another person in order to protect the worker from contracting disease.

The bill would not change the recommended testing or treatment of exposed workers. It provided no additional protection or safety benefits for exposed workers. It did shift the cost and responsibilities for testing, counseling, and notification of exposed workers from the employer under OSHA regulations to the health authorities, and the health authorities in Nevada were the state health division and Clark or Washoe County Health Districts. It made that shift without providing funds for the purpose.

The bill also placed the decision of whether a communicable disease exposure had occurred into the hands of exposed workers with no expertise in communicable diseases.

Dr. Guinan said she had received a letter from Dr. Kwalick, Clark County District Health Officer, who supported the state health office's position on the bill because it neither improved the safety and health of public safety workers nor contributed to an improved public health. Dr. Kwalick stated the bill as presented was discriminatory in that firefighters, emergency medical technicians (EMTs), and other health care workers had the greatest numbers of reported exposures to communicable diseases while responding to emergencies. The bill would force testing to only those public safety workers. The testing for HIV and other common forms of hepatitis would cost the Clark County Health District $120 per blood sample depending upon how many arresting officers wanted to test arrestees. If only 5 percent requested a test the health district would be liable for over $135,000 in costs.

Raymond McAllister identified himself and stated he appeared on behalf of the Professional Firefighters of Nevada who supported A.B. 190 in concept. There was a need for a means by which public safety workers could determine whether the person to whom they had been exposed had some form of communicable disease. However, his group believed the bill was not inclusive enough and covered only those who worked in places where people were arrested. It did not address firefighters, EMTs, or health care workers. It should include all public safety employees, police officers, firefighters, and those who performed emergency medical services. Current federal law provided that a public safety worker with a significant exposure had the right to ask the person to whom they were exposed if they would be willing to submit to blood test to check for the presence of a contagious disease. If the person refused there was no recourse for the exposed employee other than to undergo a series of tests to check for the presence of the disease. Those tests were administered at time of exposure, at 3 months, 6 months, 12 months, and in some cases 18 months after the exposure. During that period the employee and his family had to worry about the outcome.

If a person taken in for treatment by public safety workers had a condition which automatically necessitated a blood test and was found to be positive for a communicable disease, the worker who had been exposed would be notified. However, there was no requirement to draw blood from a person taken in for an injury requiring, for example sutures, and the public safety worker had no means to find out if there had been exposure.

Currently a treatment was available that might significantly reduce the contraction of HIV antibodies, if treatment was begun within the first 24 hours of a significant exposure. Called an "AZT cocktail," it consisted of about 15 pills a day for 4 to 5 weeks. But, the antidote had to be started within 24 hours and preferably the first 3 hours after exposure. The side effects of the treatment were extremely brutal, Mr. McAllister said, rendering one almost incapacitated and unable to work, and the person still would not know for up to 18 months if they had the disease.

Laws in the states of Oregon, California, Utah, Arizona, Washington and Florida addressed the subject of mandatory blood draws and the reasons for them. All those states and many others provided for mandatory blood draws under strictly required circumstances. Mr. McAllister requested legislators to investigate the issue and attempt to address it, if not in the current bill form then in different bill language. He believed the Fourth Amendment rights of individuals regarding illegal search and seizure and their right to privacy should be protected, and had seen areas where the bill's language could be more strictly controlled.

Mr. McAllister informed the committee another bill, A.B. 483, sponsored by Assemblyman Anderson, addressed the same subject and was also not as inclusive as his group would like. But it did address confidentiality which A.B. 190 did not and stated the only disease that could be checked was HIV, which was the only one for which there was a prophylactic treatment. Like A.B. 190, Mr. Anderson's bill stated the health authority would be the one to do the testing. The problem with that provision was that "health authorities" were not open 24 hours a day. After 5 p.m., on weekends, or holidays, there would be no means by which to get blood tested.

Mr. McAllister said his group would like to see the issue returned to the worker's compensation arena so the exposed worker could be tested at a local hospital, not have to go through the health authority and infringe upon their budget. Significant exposure to blood or bodily fluids through open skin membranes of a public safety worker did not happen often, therefore there was little potential for huge sums being expended on blood testing. However, if significant exposure was present it needed to be addressed immediately.

Mr. McAllister took no position on the second portion of the bill which dealt with penalties for knowingly exposing someone to a communicable disease.

Chairman Freeman suggested Mr. McAllister meet with Mr. Arberry and with Mr. Anderson regarding the provisions of both bills.

Dr. Brus concurred with Mr. McAllister that testing was the domain of the occupational medical provider. The cost of taking appropriate care of the employee should not be shifted from the employer where it rightfully belonged to the local health department.

Wallace J. Henkelman, on behalf of the Nevada Nurses Association, faxed a letter on February 24, 1999, which stated areas of concern in A.B. 190 as followed:

Chairman Freeman, to whom the above referenced letter was faxed, asked that it be entered into the record and marked as EXHIBIT E.

Mrs. Freeman closed the hearing and said no action would be taken on A.B. 190 until further word from Mr. Arberry.

With no further business before the committee, the meeting was adjourned at 2:24 p.m.