Mark W. Stevens, Fiscal Analyst

Daniel G. Miles, Fiscal Analyst

Gary Ghiggeri, Principal Deputy Fiscal Analyst

Robert A. Guernsey, Principal Deputy Fiscal Analyst

Steve Abba, Program Analyst

Ginny Wiswell, Program Analyst

Larry Peri, Program Analyst

Carol Thomsen, Committee Secretary

Rachel Baker, Committee Secretary

Vice Chair Evans asked Charlotte Crawford, Director, Department of Human Resources, to present the budget overview for the Division of Health Care Financing and Policy (HCF&P).

Ms. Crawford introduced Janice Wright, Deputy Administrator HCF&P and April Townley, Deputy Administrator, Nevada Medicaid Office. According to Ms. Crawford, Chris Thompson, the first administrator of HCF&P, had recently submitted his resignation, and Ms. Wright had agreed to assume the duties as acting administrator. As such, she would present the budget overview to the committee.

Vice Chair Evans explained the purpose of the hearing was budget overview, highlights, and key issues, and asked Ms. Wright to assist new members of the committee with an explanation of the acronyms used in her presentation. Ms. Wright indicated she would make sure the acronyms used were well defined so staff and committee members would have an understanding of the issues under discussion.

Ms. Wright announced she felt somewhat like an "understudy" who had been asked to step into the "starring role" and undoubtedly the former administrator could have provided immediate answers to all questions posed by the committee. Ms. Wright indicated while she would be unable to provide answers as quickly, she pledged to provide all information requested in a timely fashion.

Ms. Wright stated she would provide a brief overview of HCF&P’s goals, objectives, and services provided, and called attention to the information packet the committee had been given entitled "Department of Human Resources - Division of Health Care Financing and Policy" (Exhibit C), which contained charts and graphs of the division’s performance to date.

Ms. Wright explained S.B. 427 of the 1997 session separated the Medicaid program from the Welfare Division where it had previously been housed, and moved it into the newly created HCF&P Division. Also moved was the Health Care Financial Analysis Unit, previously housed in the director’s office of the Department of Human Resources. The purpose of the split was to put the two units together in order to look more closely at the fiscal oversight of Medicaid and other related health programs in the State of Nevada.

According to Ms. Wright, some of the goals specified in S.B. 427 were worth sharing with the committee in order to ascertain what the division’s focus had been.

Ms. Wright went on to explain that S.B. 427 required HCF&P to sunset in June of 1999. That date would allow the current legislature the opportunity to examine issues and programs contained within the division, make suggestions or conclusions about its effectiveness, and determine whether or not HCF&P should continue.

Ms. Wright noted The Executive Budget proposed and recommended the continuation of HCF&P, as contained in decision module 275, Budget Account 3158, which she would address in depth later in her presentation. As created by S.B. 427, the new division was to provide an increased focus on fiscal oversight of Medicaid and other cost containment programs. While The Executive Budget recommended continuation of the division, it also recommended the elimination of two positions. Those positions were charged with the Hospital Charge Master Oversight Program, also destined to sunset in June 1999.

Ms. Wright reiterated HCF&P was created to focus more attention on fiscal oversight of the health care activities in the state, specifically Medicaid. However, one responsibility which remained with the Welfare Division was Medicaid eligibility determination, which would accomplish two things: The continuity of the current eligibility program, and continued integration with other welfare programs. Ms. Wright explained while the two divisions had split, a very close working relationship was maintained in a cooperative effort.

In general, according to Ms. Wright, the transition had been completed; however, there were two areas she felt should be brought to the committee’s attention: The Elder Protective Services and Homemaking Services Programs. Both programs were discussed during the 1997 Legislative Session and considered for transfer from the Welfare Division to the Aging Services Division. That transfer did not occur in 1997 and, in fact, those two programs were transferred to HCF&P. The division brought that transfer to the Interim Finance Committee (IFC) for review and there was discussion of going forward with the transfer to the Aging Services Division, but no action was taken.

Ms. Wright explained the difficulties were fiscal and logistical in nature, and the IFC determined the best solution would be reconsideration of transfer of those programs during the current legislative session. In fact, The Executive Budget recommended the transfer of Elder Protective Services and Homemaking Services to the Aging Services Division once again. Ms. Wright stated she would provide more detailed information during discussion of the Medicaid budget. At that time, she would also specifically address the Visiting Homemakers Program, which was federally funded. Ms. Wright further advised the only other portion of the transition from Welfare Division to HCF&P not yet completed was the move of some Medicaid staff into the HCF&P offices; those staff members were still located within the Welfare Division’s office building.

According to Ms. Wright, throughout the past 18 months, the HCF&P had moved forward with several key policy initiatives. Two of the most important were the Nevada Check-Up Program, implemented in October of 1998, and the Mandatory Managed Care Program, implemented December 1, 1998.

Ms. Wright went on to explain HCF&P considered the Nevada Check-Up Program a great success. Using funds made available by limited caseload growth in Medicaid, the program was established to provide low-cost health insurance for children from families with incomes up to 200 percent of federal poverty level, or approximately $33,000 per year for a family of four. The coverage provided was basically the same as that provided by a mandatory Medicaid Health Maintenance Organization (HMO). Ms. Wright noted the program provided coverage in areas where existing HMO’s were serving Medicaid clients, or Washoe and Clark Counties. The remaining rural portions of the state were covered as fee-for-service areas for the Nevada Check-Up Program. Ms. Wright advised the premiums for the program ranged from $10 to $50 per family per quarter.

Senator Mathews inquired how Indian services fit into the program, indicating she had posed that question several times during the past year and no one seemed to know the answer. Further, she stated she had been informed the Indian population was, in fact, not being served.

Ms. Wright stated there was information contained in Exhibit C which addressed that issue, and she would elaborate when the charts were reviewed. To her knowledge, there were currently a number of Nevada Check-Up enrollees from various Indian tribes, and Indian health clinics were currently able to provide services as long as they were also providing Medicaid services.

The funding for the Nevada Check-Up Program was a federal/state partnership and revenue was provided by a 65 percent federal match and a 35 percent state match. Ms. Wright informed the committee as of January 1999, there were 4,005 children enrolled in the program, with an additional approximately 1,000 children currently approved, but their premiums had not yet been paid, nor an HMO selected. There were approximately 1,000 applications pending due to incomplete information.

Ms. Wright said HCF&P projected as many as 10,000 children could be enrolled in the Nevada Check-Up Program within the next biennium. The Executive Budget provided approximately $13 million and $13.5 million respectively in each year of the biennium, and the division anticipated that amount would be sufficient to serve those children. Nationally, over $148 million was allocated in federal Title XXI funds for Nevada through the year 2002. Ms. Wright advised the appropriation was for a 10-year period, with revenue actually allocated for the next 5 years. Unused dollars per year would roll forward, allowing the state to utilize those funds for up to approximately 3 years. Congress would recalculate the allocations allowed each state over the 10-year period.

Ms. Wright then called the committee’s attention to Budget Account 3157, the Intergovernmental Transfer Program, which provided substantial revenue to both Medicaid and Nevada Check-Up Programs. The transfer program leveraged federal money brought in through the disproportionate share program to provide more than $21 million in additional revenue to hospitals in Nevada, and created $16 million per year for additional Medicaid services.

Ms. Wright began her page-by-page review of Exhibit C on page 1, which depicted Medicaid expenses vs General Fund expenses. The chart emphasized the fact that total Medicaid expenses during years FY 1991 through FY 1999 had increased significantly.

Page 2 of the exhibit cited Medicaid expenses for FY 1991 at approximately $178 million; that figure increased in FY 1999 to approximately $558 million, a 214 percent increase. Medicaid expenses increased for a variety of reasons, i.e., rate increases, provisions for additional services, more expensive client needs, the expense for institutionalized clients, and use of new pharmaceuticals such as protease inhibitors.

According to Ms. Wright, the state appropriation amounts had increased only 66 percent since 1991; the point being that HCF&P was attempting to maximize federal revenues and look for the most cost-effective ways of funding Medicaid and health care services for Nevada.

Ms. Wright explained page 3 of Exhibit C showed the average monthly Medicaid eligibles. In FY 1991 there were approximately 48,000 Medicaid eligibles, which increased to approximately 100,000 eligibles in FY 1999, an increase of 108 percent.

Page 4 of the exhibit indicated the various Medicaid categories, an important distinction because only some of the categories were increasing. Ms. Wright felt it was very significant to share the reasons for this deviation and the impact it had on Medicaid. She explained the acronyms contained on page 4 as follows:

Ms. Wright went on to explain the totals indicated for each fiscal year on page 4 of the exhibit were simply divided by 12 months to arrive at the monthly averages shown. Some Medicaid clients received no services during a month while others received many, so there was some "double counting" which needed to be eliminated in order to provide an accurate count.

According to Ms. Wright, the increase from FY 1998 with approximately 96,000 average Medicaid monthly clients to FY 1999 with approximately 100,000 average clients represented an increase of only 4.5 percent. The importance of that percentage was to recognize in the upcoming biennium, the division projected approximately 104,000 clients would be served by FY 2000, and 108,000 clients by FY 2001. Those figures represented a 3.7 percent increase for FY 2000, and a 4.1 percent increase for FY 2001. Ms. Wright wanted the committee to be aware of the fact the increases proposed for caseloads were relatively modest and, in fact, were less than the increase that occurred from FY 1998 to FY 1999.

Ms. Wright stated Medicaid eligibles were difficult to track, because the statistics changed from month to month. It was important to be aware of the fact that current Medicaid eligibility projections were calculated by the Welfare Division, as that division maintained the research and statistical staff, along with all data banks necessary to make those projections. Ms. Wright advised once the caseload projections were produced by the Welfare Division, HCF&P utilized them as the basis for its Medicaid Projection Program (MPP). The MPP gave the division the tool or model to build in the caseload amounts received from the Welfare Division, which then produced the projected costs by the various Medicaid categories. HCF&P then had an indication of anticipated future spending for Medicaid.

To date, indicated Ms. Wright, the MPP model was the best tool the division had for projected costs, even though it was difficult to project how many people were going to become sick, how sick they would become, and what the cost of necessary care would be. HCF&P also worked closely with Legislative Counsel Bureau (LCB) staff, and Budget Office staff to monitor the projections on a regular basis. Ms. Wright advised the division was very aware of the fact it would need to continue to work closely with both of those entities in the upcoming months, because it was critical that accurate and timely information was provided to the legislature so it could make the necessary funding decisions. At that point, Ms. Wright displayed an overhead projection of the charts contained on Pages 5 and 6 of Exhibit C in order to allow audience participation in the discussion.

Senator Raggio asked for clarification of the acronym QMB used in the exhibit. Ms. Wright replied QMB stood for Qualified Medicare Beneficiary. Senator Raggio then asked for an explanation of who fell into that particular category. Ms. Townley elected to respond, advising those were eligible persons whose Medicaid premiums and co-insurance deductibles were paid, however, they were not eligible for other Medicaid benefits. Special Low Income Medicare Beneficiary, or SLMB, referred to a person who received only premium benefits.

Ms. Wright then explained the "pie" charts contained on pages 5 and 6 of the exhibit, and shown to the audience via overhead projection, which depicted the percentages by category of Medicaid eligibles. She advised it was important to note the TANF and CHAP populations of the Medicaid eligibles represented 35 percent of all clients served. When combined with the TANF cash population (those who received temporary cash assistance) the total represented 64 percent of the population of Medicaid eligibles. The chart also depicted the disabled population at 16 percent, and 20 percent for other populations such as aged, blind, QMB’s, SLMB’s, and all others. The totals in those four categories represented 100 percent of the 1998 eligible population.

According to Ms. Wright, the chart on page 6 of the exhibit contained Medicaid claims expenditure information, which correlated strongly with the chart on page 5. The TANF cash recipients, along with TANF and CHAP populations, represented 29 percent of total expenditures. Those two groups represented 64 percent of the population, yet only accounted for 29 percent of the costs. She went on to explain the disabled category, which represented only 16 percent of the population, actually incurred 39 percent of the cost of Medicaid. A disproportionate number of persons were causing a disproportionate amount of expense, which Ms. Wright felt was an important distinction due to caseload distribution. Increases in caseload did not necessarily have a dollar-for-dollar increase in cost.

Senator Mathews inquired if clients in the disabled group were being cared for in a home setting rather than an institutional setting, would the costs be reduced? Ms. Wright responded the institutionalized clients accounted for the largest amount of expense, while those individuals who remained at home constituted the smallest expenses. In other words, the expense depicted by the chart in the disabled category was definitely driven by institutionalized clients.

Page 7 of Exhibit C showed the average monthly comparisons by category, which Ms. Wright felt was significant due to the fact welfare reform would produce some changes that would directly impact the Medicaid population. She explained that while some categories were smaller, other groups increased, so costs remained somewhat stable. Of significance was the depiction for the disabled group, which increased from 7,300 clients in FY 1991 to approximately 18,000 clients in FY 1999. As previously discussed, the disabled category accounted for a large percentage of Medicaid cost, and any increase to that caseload would have a dramatic impact on the dollar expenditures for Medicaid.

Ms. Wright indicated Page 8 of Exhibit C showed the actual caseload figures used to prepare the charts. In FY 1991, the Aid for Disabled Children (AFDC), and TANF cash categories had 25,000 clients, which rose to approximately 40,000 in FY 1995, when it again began to decrease to 39,000 eligibles in FY 1996. According to Ms. Wright, the caseload continued to fall in FY 1997 to 30,000, and in FY 1999 to approximately 25,000, the same number of eligibles as 1995. However, stated Ms. Wright, within the AFDC/TANF/CHAP medical only category, the division had seen just the reverse. In FY 1991 there were approximately 6,000 eligibles and in FY 1999 there were approximately 37,000. Again, the cost for those categories was relatively comparable.

Ms. Wright advised the difficult category was the disabled population, which in FY 1991 was 7,300 and in FY 1999 was 18,200 eligibles, which represented a 39 percent increase. The category depicting all others began with approximately 9,700 eligibles in FY 1991 and increased to approximately 19,000 in FY 1999, which represented about 32 percent of the Medicaid cost.

According to Ms. Wright, Page 9 of Exhibit C also dealt with Medicaid eligible information. In the Average Monthly Caseload category there was a 5-year gap from the first set of figures for FY 1991 to the next set of figures for FY 1996. There was then a 2-year gap to FY 1998, a 1-year gap to FY 1999, and finally projected figures for FY 2000 and 2001. Those numbers "tracked" the charts earlier discussed, delineating the percentages of caseload distribution for each category.

Continuing her presentation, Ms. Wright reviewed the Annual Percentage of Change by Eligibility category on page 9. She stated as the percentage of TANF cash clients declined, there was a proportionate percentage increase in the TANF/CHAP medical only eligibility group. The Disabled category, which showed a 17 percent increase in the first 5-year period, had shown only a 4.18 percent increase during the next 2-year period, and in FY 1999 had shown a decrease to 3.69 percent. The projection for the upcoming biennium reflected a 4.18 percent increase for FY 2000 and a 4.39 increase for FY 2001. Ms. Wright explained those projected increases were modest, and HCF&P hoped it would encounter no dramatic changes in the Disabled category. Using the best tools available, the division anticipated there would be a small but modest growth in the disabled client population in the upcoming biennium. Ms. Wright advised the division was aware of how important it was to accurately estimate the disabled population because of the impact on program costs.

Ms. Wright went on to explain in the Cost Per Eligible category, page 9 of Exhibit C, it was important to note what the average cost would be for each individual eligible category. She called the committee’s attention to the FY 1996 costs for TANF cash clients of $132.94 monthly, and those costs then showed a gradual increase to the projected figure of $156.14 per month for FY 2001. There were modest monthly increases for all categories from FY 1999 through FY 2001. The TANF/CHAP medical only client group increased from $189.68 to $208.32 per month, again a very modest increase. Ms. Wright advised the figure for the disabled eligible client category in FY 1996 was $717.22, gradually increasing to $816.02 by FY 2001; the agency again anticipated only modest increases in the disabled cost per eligible. The All Others category, which included a variety of

aged, blind, QMB’s, SLMB’s, county match, and child welfare clients, increased from $596.96 per month in FY 1991 to a projected cost of $722.33 by FY 2001.

According to Ms. Wright, HCF&P attempted to be very fiscally conservative and project costs as accurately as possible, reflecting modest increases in the actual cost per eligible client categories. The division hoped it had made correct projections, as it wanted to provide the legislature with accurate information in order to allow proper funding determinations.

The last page of Exhibit C, page 10, concerned the Nevada Check-Up Program, and would give Ms. Wright the opportunity to address some of Senator Mathews’ previous concerns. The chart listed the number of children enrolled in the program by county, showing a total of 4,005 currently enrolled. Approximately 9,000 children had applied for the program and there had been a variety of opportunities for the division to market the program. HCF&P had made a concerted effort to contact each of the tribal chairs and tribal health clinics, and there were 279 American Indian applicants for the program, with 71 actually enrolled and receiving services. The total number of children approved for the program was 4,800 vs the 4,005 actually enrolled. Ms. Wright explained there were various reasons some applicants had not been enrolled, such as those who failed to return, had not selected HMO’s, had provided incomplete information, or had failed to remit premium payment.

Ms. Wright indicated HCF&P completed an income eligibility determination for families of all children who applied to the Nevada Check-Up Program, and had referred 603 of those applicants to Medicaid, because their income level qualified the children for that program. There were approximately 2,800 of the total number of applicants who were determined not eligible, and one of the primary reasons for the ineligibility was a prior application and approval for Medicaid benefits.

Assemblywoman de Braga inquired if there were federal funds earmarked specifically for minority health care. Ms. Wright responded that would be difficult to answer because statistics for minorities were currently included with all applicants for the Medicaid and Nevada Check-Up Programs. She advised she was not aware of specific federal funds available solely for minority groups; however, she would research that possibility and provide information to the committee at a later date.

Assemblyman Goldwater indicated he had long been a critic of the Nevada Check-Up Program, and felt it should perhaps be rolled into the Medicaid program, because in the end, the two programs appeared to be exactly the same, or very close to each other. The biggest problem seemed to be the determination of whether a person was Medicaid eligible or Nevada Check-Up eligible. Mr. Goldwater asked if it was too late to simply take the federal funds and expand the Medicaid program, thus eliminating the bureaucracies that existed in the Nevada Check-Up Program?

According to Ms. Wright, the legislature would have the opportunity to make the decision regarding funding for both the Nevada Check-Up and Medicaid Programs, and it would certainly be within the jurisdiction of that body to make such a determination. With respect to Mr. Goldwater’s question on whether it was too late for funding decisions, Ms. Wright advised it was never too late. She reported she had already seen a Bill Draft Request (BDR) which indicated there was an appetite on the part of some legislators to combine the eligibility application forms from each program. The Nevada Check-Up application was a two-sided page, while the current Medicaid application, depending on the group or program, was approximately 16 pages in length. Ms. Wright felt one concern of the applicants was the bureaucracy and, in her opinion, it would be difficult for anyone to sit down and fill out a 16-page form. When the BDR was introduced, Ms. Wright felt one thing legislators should consider was whether combining the applications would create a barrier to the program because of its length.

Senator Mathews asked HCF&P, in its report to the committee regarding federal funds, to include any information regarding funds earmarked for minorities in areas such as diabetes, or other high incidence health problems specific to minority groups. She indicated she felt there were such funds and they were not being used appropriately. If that was in fact true, Senator Mathews wanted to know how the program could be put back "on track."

Ms. Wright indicated she could not answer that question, however, assured Senator Mathews there was an appropriation from the Title XXI Program specifically for treatment of diabetes, and those funds had been rolled into the Nevada Check-Up Program. She was unsure if those funds addressed minority health care, and would make that information a part of her report to the committee.

Senator Mathews stated she did not advocate for or against a minority health officer, however, did not want the monies to get off track. She felt federal funds should be carefully monitored regarding minority health care needs.

Vice Chair Evans stated in talking to colleagues from other states, it was determined there were two things which kept enrollment down in health programs, a lengthy or complicated application process, and the perception that it was a welfare program. People were uncomfortable with that term and, therefore, it was important to project those programs as health insurance programs for children. She indicated she was concerned about how user-friendly the application process was. Another way to keep enrollment low was to do a poor job of marketing and community education or outreach. According to Vice Chair Evans, other states where similar programs were initiated, before the federal program was available had struggled; however, when aggressive marketing and outreach programs were initiated, enrollment figures went way up. On the other hand, if that marketing effort was decreased in any way, applications immediately began to drop. Vice Chair Evans advised Ms. Wright the subcommittee would want a comprehensive report regarding HCF&P’s marketing and outreach programs. She felt the division was not making a dent in the number of children eligible for the Nevada Check-Up Program, which was very unfortunate.

Responding to Vice Chair Evans, Ms. Wright agreed there were barriers to the program, with the bureaucratic barrier being the one other states felt caused the most difficulty in attracting applicants. One of the things she wanted to note was when the Nevada Check-Up Program started, there were three staff persons assigned to bring the program online, and to date there was a total of five persons working the program. One of those individuals was the marketing and outreach coordinator, and some very distinctive areas of success in that area could be seen. One success area she wanted to point out was with the Hispanic population. Of the 4,005 children currently enrolled in the program, 950 were Hispanic children. That figure indicated the division had made a very concentrated effort to ensure all applications were bilingual, that bilingual persons were hired to assist applicants, and there was a bilingual automated telephone answering system in place.

Ms. Wright advised every effort had been made to complete marketing and outreach programs in Hispanic community areas and school districts in order to ensure all persons received the information. Also, the program was marketed not as a welfare program, but as a health program for children with easy access to applications.

Ms. Wright said one of the things needed as the program expanded was to review those areas where the division actually believed it had demonstrated some success, to see what was being done well vs not done well. It was imperative that all states looked at the various issues and shared that information. Ms. Wright advised she read where states with programs similar to the Nevada Check-Up Program had found one of the biggest barriers was the lack of confidentiality associated with the program. While HCF&P was able to enroll young children in the program, teenagers did not want to tell their parents what they were doing, and if they wanted to seek health care, they were embarrassed to approach their parents for access to it. There was currently a barrier in that respect, because in order to apply for the Nevada Check-Up Program, eligibility was determined based on family income, which required information from parents.

Ms. Wright went on to explain some states posed the possibility of allowing children to apply for the program independently, however, one question that arose was the possibility of fraudulent applications. She questioned if the focus of the division should be whether or not children would create a fraudulent application to abuse the system, or should the division focus on providing services to the children who needed them. Those were all areas not yet explored, and there was much for Nevada health care professionals to learn. Ms. Wright felt the division should look carefully at the specific areas it felt created barriers to services.

Vice Chair Evans indicated the committee might have additional questions regarding the Medicaid program, and what would be Ms. Wright’s preference for the remainder of her presentation. Ms. Wright responded she would like the opportunity to go through the budget accounts briefly. Vice Chair Evans advised her to proceed.

Ms. Wright stated she would briefly review two budgets she felt could be dealt with expeditiously, as follows:

Health Resources Cost Review, budget page HCF&P-27: Ms. Wright stated that budget was nothing more than a "pass through" account. Money passed through the budget as a result of audits of hospitals where charges were paid. Penalties for indigent care and fees for various reports also passed through that budget, and there were no provisions for staff or monies.

Homemaking Services, budget page HCF&P-28: That budget was entirely federally funded, and the program was anticipated to transfer to the Aging Services Division.

Vice Chair Evans instructed Ms. Wright to focus on the major budget items for the committee’s overview, as insignificant budget items would be reviewed at a later date.

Ms. Wright stated with the vice chair’s approval, she would return to the Medicaid budget, number 3243, budget page HCF&P-1. The mission of the Medicaid program was to purchase and provide quality and economical health care and related social services to Nevada citizens who were eligible for medical assistance. One of the significant areas in the budget was the Mandatory Managed Care

Program. Ms. Wright explained the state plan amendment for managed care was approved in October 1998 by the Federal Health Care Financing Administration (HCFA). Nevada’s was the first state plan amendment to be submitted and approved, allowing the state to mandate managed care following the guidelines set forth in the Balanced Budget Act of 1997. The service area for mandatory managed care was Clark County. As of the latter part of 1998, the Medicaid eligible population, TANF and CHAP, qualified for mandatory managed care in Clark County and it was anticipated there were about 46,000 of those individuals who would become a part of the mandatory managed care program.

According to Ms. Wright, there were three Health Maintenance Organizations (HMO’s), Health Plan of Nevada, Nevada Health Solutions, and Amil International of Nevada, which had signed mandatory managed care contracts. Those HMO’s, which were also participants in the voluntary managed care program, had adequate provider networks in place, offered comprehensive participant and provider services, and had utilization management operations in effect. Washoe County, explained Ms. Wright, remained a voluntary managed care program to date, due to the fact there was only one HMO, Nevada Health Solutions, operating under a fully capitated contract. There was also Hometown Health Plan, which had capped their enrollment and participated on a prepaid health plan status. HCF&P was hopeful it could encourage additional participation for northern Nevada.

Vice Chair Evans inquired if HCF&P proposed a rate increase for providers in the FY 1999-2001 biennium. Ms. Wright responded the only rate increase anticipated by the Medicaid budget was a 9.97 percent increase for pharmaceuticals. There were no other rate increases built into the Medicaid budget for the next biennium.

Vice Chair Evans stated Hometown Health, which participated in the voluntary program, had capped enrollment even in that program, because it could not provide services for the reimbursement rate allowed. According to Vice Chair Evans, she was concerned on two fronts, whether current participating HMO’s could be retained for the managed care program, and HCF&P’s ability to secure long-term care providers in light of the demise of the Boren amendment. The question was whether long-term care providers, an extensive part of Medicaid, could sustain their effort without some type of rate increase. Vice Chair Evans asked what the division’s thinking was for not requesting a rate increase for providers?

Ms. Wright explained the thinking was that it was important for the state to offer adequate rate increases in order to ensure there were sufficient providers available to serve the needs of Medicaid clients. Recognizing that The Executive Budget had some revenue restrictions, the proposed enhancement units could not be funded. Ms. Wright reiterated the only proposed increase was the pharmaceutical rate increase.

According to Ms. Wright, HCF&P had some concerns regarding the long-term care industry, and currently Medicaid was approximately two-thirds of their business. If no rate increases were offered, she felt there could be problems, however, it was a funding issue and the division’s budget presented no opportunities to build in rate increases. HCF&P had some concerns in several areas; home health agencies, long-term care, and managed care, all difficult areas. There would come a point where individual providers simply no longer wanted to conduct business with Medicaid because of the reimbursement schedule.

Vice Chair Evans observed that access was provided quite adequately through managed care, and access was a problem for low-income persons. She asked Ms. Wright to be prepared to present a breakdown of the various provider categories, and what the projected cost would be for an increase, even as low as 1 percent, when she appeared before the subcommittee.

Senator O’Connell asked if the problem was just the reimbursement schedule, or was it the time it took to receive payment, or a combination of both? Ms. Wright indicated she felt, more often than not, it was a question of reimbursement and the rates were what would drive some providers to decline business with Medicaid. When the budget was reviewed by subcommittee, Ms. Wright stated she would provide more specifics regarding what issues were of concern to individual provider groups, and whether or not there were timing issues. In the past the legislature had approved rate increases of approximately 2.5 percent and she would provide specifics on those past increases.

Senator Neal wondered why the Nevada federal matching rate was 50 percent, and it was indicated that was the lowest of any state in the nation. Secondly, in The Executive Budget, page HCF&P-1, the first performance indicator showed the percentage of third-party liability collected of total claims dollars paid, and was it the total Medicaid budget in which those percentages were projected?

In response to Senator Neal’s questions, Ms. Wright explained the federal matching percentage was based on the average per capita income in each state, so it was computed specifically for Nevada, and while it was 50 percent in most areas, there were a few accelerated matches available to the state. Those included family planning, which was matchable at 90 percent federal dollars, and two other areas which provided a 75 percent match. Responding to the question of third party liability collected, Ms. Townley advised those figures were calculated on the amount of claims paid, so it was based on the medical payment portion, and did not include staffing. The money spent paying claims was the percentage targeted to collect for third party liability.

Vice Chair Evans asked Ms. Townley to explain the Medicaid "tail," those funds reserved each session in order to initiate the managed care program, and explain to the committee how it was handled.

According to Ms. Townley, the necessity of a "tail" developed because when a person first joined an HMO, the payments were automatically made up front and monthly, but for those enrolled in other programs, the bills were processed through the system as incurred. So, for those persons in fee-for-service programs, the bills would process through the system after they had received services. Initially with managed care there were actually dual costs, i.e., costs for the person to be a member of an HMO, and the cost to process the claims for persons who had received services prior to enrollment. That, explained Ms. Townley, was the reason there was a Medicaid "tail."

Vice Chair Evans inquired in terms of the current budget, what was the anticipated amount of that "tail?" Ms. Wright responded the amount remaining unexpended at the end of the current fiscal year would be rolled forward to FY 1999 – FY 2001. There was a BDR which proposed to roll the full amount remaining at the end of the current fiscal year into the next biennium. HCF&P anticipated needing those funds only in the first year of FY 1999-2001, when the division would review the funding again. The need for additional funds was not anticipated in the second year of the biennium, because the greatest impact should occur during the first year.

Vice Chair Evans asked about funds in reserve and how those funds were administered in order to draw funding from the reserve in lieu of the General Fund. She explained there was some concern that a very small reserve balance could result, or even the possibility of ending up "in the hole" on the reserve funds.

Ms. Wright advised the reserve was actually an account in the General Fund, Budget Account 101-3157, page HCF&P-24, the Intergovernmental Transfer Program. That account had been used to provide additional revenue for the Medicaid and Nevada Check-Up Programs. There had been much discussion recently regarding reserve accounts. The division felt it was necessary to recognize that while there were historical reasons for accumulating additional reserves, currently there was an evident fiscal concern throughout the state which required reassessment of all reserve funds, and the utilization of those funds to the fullest possible extent.

Ms. Wright felt The Executive Budget reassessed the reserve funds, made calculations regarding the minimum amount necessary to preserve those funds, and determined the amount that could be utilized. HCF&P was working very closely with Budget Office and LCB staff to accurately project the amount necessary to fund Medicaid in FY 1999. The consensus was that by April 1999 the Medicaid Projection Program (MPP) could provide figures that included as many months of FY 1999 as possible, in order to accurately provide the bottom line figures. She advised the division would watch every expenditure made from the Medicaid and Nevada Check-Up budgets to ensure correct calculation of the total funding amount needed. While it was difficult to fully explain how the projection worked, Ms. Wright indicated she would take the opportunity to provide some history to the subcommittee, along with more detailed information as to how the figures were developed.

Returning to the Medicaid program, Ms. Wright reminded the committee of the rate increase of 9.97 percent for pharmaceuticals. There were also rate increases allowed in FY 1999 by the 1997 legislature, and there would be no cuts to the previously authorized rate increases.

According to Ms. Wright, she would not go into detail regarding the other areas of the budget. However, she advised the committee there were some changes with respect to the Child Health Assurance Program on budget page HCF&P-7. The federal requirement mandated children ages 16 and 17 be included in the program, and the figures reflected the amount necessary to comply with that requirement. Also included in that decision unit were figures for QMB’s.

Ms. Wright advised the first significant decision unit was Accessible Flexible Responsive Government, budget page HCF&P-8, which included the Business Process Re-engineering (BPR) module. The division contracted with a company entitled BDM International in April 1998 to perform the study requirements. At the present time, BDM was continuing to complete the study and finalize its recommendations for the division. Once the study was complete, stated Ms. Wright, the staff of both the division and BDM would appear before the committee and present the findings. It had been anticipated those figures would be available in advance, however, it became apparent that the actual project of studying the Medicaid Management Information System (MMIS) was more complex than anticipated.

Ms. Wright stated the division expected to have the BPR report submitted and finalized shortly. There were two other reports necessary, a cost benefit report

and an alternative analysis report. The vendor was working on those reports and hoped to have them completed within the next 2 weeks. The division and the vendor would then appear before the committee for a joint presentation. Ms. Wright explained Nevada was currently the only state in the nation that did not have MMIS, and the division was aware of the difficulty that status posed in projecting information for Medicaid. Currently, HCF&P was attempting to resolve the situation as a result of much work done by the 1997 legislature.

Vice Chair Evans stated the legislature had been struggling with the term "MMIS" and the need for such a system for several years. She felt HCF&P had made good progress, but asked how the division anticipated initiating the recommendations in terms of funding?

Ms. Wright stated there was no funding currently projected in the budget for MMIS. There were four positions approved by the 1997 legislature, and those positions had been filled; they were the current staff working with the vendor to produce the report. Much work still needed to be done and those four people would continue to provide services through the end of the current biennium. However, explained Ms. Wright, there was no funding available to continue those positions and they were not reflected in The Executive Budget.

Further, stated Ms. Wright, it was imperative for the division to maintain a certain amount of knowledge regarding changes in technology, as there would be much work initially to implement the recommendations from the report with respect to the necessary advance planning documents. The division had been working with other states to ensure the most cost-effective method for initiating the MMIS, and had the benefit of knowledge from 49 states where systems were currently in operation.

Vice Chair Evans asked in addition to the positions, which of course were necessary to do the job, how would the division fund the necessary purchases for the system, i.e., hardware and software?

Responding to Vice Chair Evans’ inquiry, Ms. Crawford advised there was no funding reflected in The Executive Budget as it was presently structured. However, in Budget Account 3157, page HCF&P-24, the Intergovernmental Transfer Program, it was anticipated there would be approximately $20 million in reserve at end of the current biennium, if projections were accurate. It was also anticipated those funds could be used to move forward on the automated system. Ms. Crawford indicated HCF&P was watching caseloads closely, as a margin of $20 million was very narrow in Medicaid. The Budget Office, the Governor’s Office, and HCF&P were very sensitive to the issue, and also sensitive to the very difficult decisions necessary regarding funding and reserve amounts. It was the expectation, if anticipated caseload projections stayed on target, there would be funding available for development of the MMIS.

Vice Chair Evans asked when the outcome of the caseload projections would be known. According to Ms. Crawford, it was very difficult to project caseloads, however, if they continued along the same trend line, the results should be known by the end of session. She anticipated the division would need to observe caseloads through the first year of the biennium at least. Vice Chair Evans advised Ms. Crawford the automated system was a major issue for the legislature.

Vice Chair Evans asked for information regarding the County Match Program for Medicaid long-term care, how many counties currently participated, and the status

of the fund. Responding was Ms. Townley, who related the County Match Program had been established years ago, and was jointly financed by the state and the counties up to the maximum percent of the federally allowed Supplemental Security Income (SSI) rate. Counties actually provided the funds for their share, and federal funding for the program was dispersed through the state. The Medicaid Office actually determined client eligibility and drew the federal funds. It was of benefit to counties, who already had an obligation to provide nursing care for certain individuals, to participate in the program.

Ms. Townley went on to explain that years ago when there was a funding problem, instead of continuing to increase the state share for eligibility, the amount of money a person could receive and be housed in a medical institution was frozen at approximately $700. The income level allowed for Medicaid eligibility while living in a medical institution was 300 percent of the SSI rate. While the state had frozen the eligibility level, the counties continued to assume additional clients, because of population growth and increased SSI benefits. In 1997 legislation was passed which increased the state’s financial obligation for Medicaid long-term care, thereby resulting in an overall savings for counties.

According to Ms. Townley, aged or disabled persons who lived in the community would be eligible for Medicaid only if their income was up to the allowed SSI income rate. However, if aged or disabled persons lived in a medical institution, namely nursing homes, or were hospitalized over 30 days, they could have income up to 300 percent of the SSI amount. The state identified those persons who were eligible for state funds, and those who fell under county jurisdiction, and billed the counties accordingly. The Executive Budget included a module which would maintain the state’s obligation for Medicaid recipients whose income was at or below $780 per month, and the counties would be responsible for clients with income levels above $780, up to the SSI benefit maximum.

Vice Chair Evans stated her concern was that the federal requirement included the participation of all counties. The 1997 legislature had set up an Institutional Care Fund for the purpose of assisting those counties who found themselves strapped for funds and not able to participate. Vice Chair Evans asked if there were any counties presently unable to provide their match, and what was the status of the Institutional Care Fund for FY 1999 – FY 2001.

Ms. Townley responded it was her understanding there were no counties currently drawing on the Institutional Care Fund, and deferred to Ms. Crawford regarding the status for the upcoming biennium. Ms. Crawford advised she believed there were some changes during the 1997 session, allowing the Nevada Association of Counties (NACO) to make the determination regarding draws against the fund. It was her understanding that Lyon County had applied again this biennium, and was the only applicant to her knowledge. Ms. Crawford stated she did not have up-to-date details in terms of the dollar level of the fund, however, would provide that information to the committee, along with anticipated future funding. She advised the division recommended no changes regarding the determinations being made by NACO.

Vice Chair Evans then inquired how much funding was being recommended to replenish the Institutional Care Fund? Ms. Wright responded, advising the budget account originally set up for the fund was account 3246, with $300,000 initially appropriated out of the Intergovernmental Transfer Program fund by the 1997 legislature. There had been two distributions during the past 2 years, both to Lyon County. The current standing balance of the fund was approximately $138,000 according to the report provided by NACO to the Interim Finance Committee (IFC). Ms. Wright stated there was an earlier request from Mineral County for approximately $53,000, however, that request had been withdrawn.

Vice Chair Evans inquired again what was being recommended in The Executive Budget to replenish the fund? According to Ms. Wright, there was nothing represented in the budget to replenish or continue the fund.

Mr. Goldwater asked what would happen to the fund if something horrible happened to the caseload, or if there were catastrophic illnesses or something of that nature. Ms. Wright advised there was a maximum amount remaining in the fund of approximately $138,000 and there was nothing anticipated in the budget to make any changes in that status.

Senator O’Connell stated she recently participated in an extensive meeting where all counties were invited to discuss their problems, and the County Match Program was the number one concern mentioned by representatives of at least six counties. She then asked what the time frame was for qualifying to receive money from the fund, and during that time frame, was the county required to pick up the cost prior to the match coming into play.

Ms. Wright advised the Governor appointed a board consisting of NACO representatives, who sat as the governing board and heard appeals for that budget account. HCF&P really was not involved in that process, explained Ms. Wright, and she was not privy to the information as to how the process worked. She stated the request initially went to NACO, the board then made a determination as to whether or not they felt it was appropriate, and informed HCF&P. At that time, the division actually completed the paperwork necessary to make the distribution. According to Ms. Wright, that was as much information as she could provide.

Ms. Crawford indicated she would like to provide some history on the issue related to long-term care and the county match. Counties had long expressed concern about their escalating responsibilities and costs for long-term care. The county responsibility had grown, as had the state responsibility. Over the last several years, the division attempted to make budget adjustments, and while it had only been a percent or two, it had resulted in some relief to the counties; however, counties continued to have a great burden in that area. There was no funding recommended in the budget to facilitate further increases in the shift from county to state, which was also a concern to the counties. The money simply was not available for the state to continue to try and absorb a greater percentage of the burden.

Ms. Crawford went on to explain the account was developed originally for administration by the Department of Human Resources in order to address those cases where the county absolutely could not pay their match. That was particularly of concern to small rural counties where one or two admissions to long-term care could literally put their budget over-the-top, and there was no way they could anticipate those admissions. The criteria was that the Department of Taxation would review the application to assure that the county did not have the ability to pay, had appropriately planned, but was not able to meet its fiscal obligations due to unforeseen circumstances. At the 1997 session, the legislature had been asked to shift the decision-making responsibilities from the Department of Human Resources to NACO.

Unfortunately, stated Ms. Crawford, the state again found itself in the position of not having adequate money to put into the fund in the event something catastrophic occurred. The state had addressed the issue in the past, prior to the time there was such a fund, and it was determined every county in the state would have to participate in order to keep the program going. The state had a vested interest in keeping all of the counties involved in the program. Many times, if counties had problems in health care areas such as long-term care, the state had to make provisions and if there was an emergency, the legislature through the IFC, and the Department of Human Resources would do everything possible to assist the counties. It was simply not possible in the current budget to allow funds to remain in reserve accounts as had been done in the past, stated Ms. Crawford, and it was not being done because of a lack of sensitivity to the problems facing counties.

Senator Neal stated on page HCF&P-2 of The Executive Budget, the Governor recommended $5 million over the agency request in the "Transfer from B/A 3157" category, and wondered what the logic was behind that recommendation.

Ms. Wright advised the Governor’s recommendation differed from the agency request, which had been submitted early in the summer. Because there had been many fiscal changes since it was submitted, the decision was made to use the Intergovernmental Transfer Account to support the state’s share of Medicaid. As many committee members were aware, the reserves that had built up in that account were substantial. The state simply could not afford to leave funds in an idle account when Governor Guinn had been forced to make some very, very difficult decisions about how to fund the state budget. Therefore, stated Ms. Wright, there would be more funds drawn from the Intergovernmental Transfer Account to support Medicaid in order to reduce the General Fund appropriation necessary to support the program.

Continuing her presentation, Ms. Wright stated the Medicaid budget contained one other issue she wanted to bring forward, and that was the transfer of the Elder Protective Services and Homemaking Services Programs to the Aging Services Division. That transfer was discussed during the 1997 legislature, was discussed in the interim before IFC, and was again part of The Executive Budget. Such transfer would include a portion in the Medicaid budget, account 3243, which covered 15 full-time employees. Those employees were currently working on programs in the Medicaid budget and all would transfer to the Aging Services Division. In addition, explained Ms. Wright, there was Budget Account 3250, which was 100 percent federally funded through Title XX, and that account would transfer in its entirety to the Aging Services Division. Those transfers were also reflected in the budget for Aging Services, and had been reconciled through the Budget Office to facilitate the transfer.

Ms. Wright informed the committee the only other item in the Medicaid budget was the transfer of some administrative staff within the division from one budget account to another, which did not bear discussion at the current time; Ms. Wright advised she would provide greater detail before the subcommittee.

Ms. Wright reminded the committee that Budget Account 3178, the Nevada Check-Up Program had already been discussed in some detail. She did, however, want to point out that the continuation of the program was recommended in The Executive Budget, along with sufficient funding for the 10,000 children HCF&P anticipated enrolling in the program. There would be one adjustment, and that would be in terms of staff. The IFC approved 15 staff positions, and the budget

proposed to reduce that number by two. Other than that, there were no significant differences between what was ongoing as approved by IFC, and what was being proposed in The Executive Budget.

Vice Chair Evans asked for clarification regarding dental services in the Nevada Check-Up Program. Ms. Wright answered dental services had been carved from the program, and were in a fee-for-service category at the present time. The difficulty with dental services was finding providers who were willing to participate in the program. Currently, HCF&P had the opportunity to approach some local providers in northern Nevada who were showing interest in participating. The division was hopeful there could be a working relationship developed with those providers. Since the program began on October 1, 1998, the division found there was a fairly large amount of dental services currently needed by the children, which were being provided. HCF&P was working on a report with LCB staff to accurately determine how many dollars in dental services had been expended for Nevada Check-Up children. Hopefully, she could provide the committee with some detail at a later date, but it did appear there were a large number of children receiving at least partial dental care.

According to Vice Chair Evans, 2 years ago the legislature granted a very substantial increase for Medicaid dental payments, approximately 40 to 50 percent. The reason for the increase was to improve access; no dentists were willing to perform services because the rate was so low, and if access was to be increased, the reimbursement rates would have to be increased substantially. Vice Chair Evans instructed the division to prepare a report for subcommittee review regarding what response the division had seen due to the rate increase.

Ms. Townley advised the division had attempted to complete before-and- after-studies in terms of dentists who had agreed to become providers and the services they were providing, rather than increased expenditures. The completed study was approximately 6 months old, and it showed that access had increased, primarily for children and the aged. The division would be happy to repeat the study, showing statistics prior-to and after the rate increase. The increase did not solve all problems, according to Ms. Townley, and there were still access problems; however, the division was able to show improvement in that area.

Ms. Wright continued her presentation by addressing Budget Account 3158, the administrative budget for HCF&P. The significance of that budget was the division was anticipated to sunset at the end of June 1999. The Executive Budget did recommend continuation of the division, and 3158 would be the budget account where that would occur. Because there were no base expenditures, the modules were built somewhat differently; more detail regarding the specifics of the budget would be presented before subcommittee. Suffice it to say, stated Ms. Wright, the continuation of the division would encompass all programs currently being provided, with the exception of the Hospital Charge Master Program, which was anticipated to sunset by the end of the current fiscal year. That particular program currently encompassed two staff positions and The Executive Budget also recommended the elimination of those positions.

Ms. Wright commented other than the elimination of the one program, HCF&P would continue at the existing statutory requirements in terms of programs funded. The only change would be a reallocation of some of the current positions in Medicaid, Budget Account 3243, which would be transferred into the HCF&P budget account to consolidate the accounting and administrative functions. The creation of the division did occur late in the 1997 session, and there were issues

that needed to be addressed. There had been a modification and movement of staff, not an increased number of staff, just movement from one budget account within the division to another.

Vice Chair Evans agreed with Ms. Wright’s statement that the division was created at the end of the 1997 session, and Senator Rawson’s committee was charged with working with the new division to make any recommendations for change. Since the committee did not have the benefit of his insight at the present time, Vice Chair Evans inquired if the interim health care committee had made any recommendations. Ms. Wright advised she had not attended any of those meetings, however, it was her understanding there were some recommendations from the interim health care committee which were being presented as BDR’s. She did not recall if any recommendations were made with respect to changing the structure of HCF&P. She would report back to the committee on that matter.

Steve Abba, Program Analyst, LCB, informed the committee Ms. Wright was correct, and there were several pieces of legislation which had come about as a result of the interim health care committee. To his knowledge, there were no organizational changes recommended; there were a number of suggestions regarding enhancements for such as the managed care program and data systems.

Ms. Wright concluded her presentation, advising the only other budget account to come before the committee was 3157, the Intergovernmental Transfer Program, which had previously been discussed. She stated she would present more detailed information on that budget to subcommittee.

Vice Chair Evans called for further questions from the committee, and hearing none, closed the hearing on the Division of Health Care Financing and Policy, with the committee’s thanks extended to Ms. Crawford, Ms. Wright and Ms. Townley. Vice Chair Evans then called for public input.

Jim Boscacci introduced himself to the committee, and stated he had not planned to testify at the hearing, however, wanted to respond to Senator Mathews’ question regarding the cost for disabled clients. Mr. Boscacci called the committee’s attention to page 6 of Exhibit C, the chart depicting medical claims expenditures. He stated he was a member of the 39 percent disabled group and he wanted to alert new members of the committee to the reasons the cost was so high for that group. First, there was durable equipment such as his wheelchair, which was his only means of mobility, and cost approximately $12,000. Senator Mathews had asked if it would be cheaper for disabled persons to be institutionalized, which Mr. Boscacci stated scared him to death, as he was a recipient of Medicaid services at home. He advised he received 4 to 6 hours of attendant care daily, which prevented him from being institutionalized and gave him quality of life.

Mr. Boscacci said the same issue had come up before, and the problem was there was not enough money at the present time for personal assistant services in the home. When he looked at the chart on page 6, of Exhibit C, Mr. Boscacci wondered how many persons were institutionalized in the disabled category because there were no funds available for personal assistant services, and he also wondered how many disabled persons were being threatened with institutionalization. It was his understanding the list was long, yet there were no funds allocated for personal assistant services. He asked members of the committee to keep that fact in mind when the budget was finalized.

Vice Chair Evans thanked Mr. Boscacci for his testimony and stated the agency should also look ahead and recommend policy changes or future planning. As the numbers continued to climb, it was clearly cost effective to keep disabled persons at home, and that also addressed the quality of life issue. In terms of finding money or shifting money, that program should be at the top of the list for consideration. Vice Chair Evans told Mr. Boscacci he had been a wonderful advocate for the disabled over the years, and encouraged him to continue.

Vice Chair Evans advised committee members the next budget to be reviewed was the State Health Division, and recognized Yvonne Sylva, State Health Administrator, as the spokesperson for that budget. Vice Chair Evans asked Ms. Sylva to give committee members the budget and page numbers of the specific budget accounts as she addressed each.

Ms. Sylva introduced herself and Mary Guinan, M.D., Ph.D., Nevada State Health Officer, who would provide opening remarks concerning public health in Nevada. By way of introduction, Ms. Sylva asked Dr. Guinan to say a few words about her background to the committee along with her presentation on the status of public health in Nevada. Ms. Sylva advised she would then present the budget overview.

Dr. Guinan stated she was delighted to be practicing public health in Nevada. She came to Nevada from the Centers for Disease Control (CDC) in Atlanta, Georgia, where she practiced public health for 20 years. Further, she advised she was trained as a public health scientist, and her job in the past had been to make sure public health programs were grounded in science. She intended to bring that work to Nevada and assist policymakers in determining what programs science did or did not support. Dr. Guinan expressed the hope that she could work together with all concerned to bring the best possible public health program to Nevada, and could apply public health science to the unique conditions in the state.

According to Dr. Guinan, a recent national survey showed that most people in the United States had no idea what public health was and how it worked on a daily basis to promote their safety and health. Public health dealt with the health of populations or groups, rather than individuals. The State Health Division was concerned with the health and safety of not only citizens of Nevada, but also visitors to the state. Dr. Guinan went on to explain the focus of public health was prevention of disease and illness and health promotion, rather than medical treatment. One end of medicine was treatment, the other was prevention, and public health was the prevention arm of medicine.

Dr. Guinan stated she would give the committee a few examples of how the Health Division worked to keep Nevadans safe and healthy, and why it was not only good for the citizens, but good for the state’s economy as well. Dr. Guinan mentioned some of the core responsibilities of the Health Division included keeping the water supply and food supply safe, and the air supply healthy, which was taken for granted by the public. Were they safe, asked Dr. Guinan, and indicated yes, they were. The division had a group of highly trained engineers, environmental specialists, and communicable disease investigators who worked behind the scenes to keep those vital elements safe. For example, she explained, if there was microbial contamination of a water supply, a notice would be issued for the consumers of that water source to boil the water until it was known to be safe, which prevented water-borne diseases.

In cooperation with others, advised Dr. Guinan, the State Health Division oversaw the testing of all drinking water supplies in Nevada. The water was tested for over 60 substances, not only microbial, but also chemical and radioactive substances. As indicated by the performance indicators in The Executive Budget, there was not one outbreak of water-borne disease in Nevada in 1998. That gave evidence as to the effectiveness of prevention and control programs.

According to Dr. Guinan, the State Health Division licensed and inspected eating establishments and required any suspected food-borne illness to be reported within 24 hours. As an example of how that process worked, Dr. Guinan indicated in November 1998 the Health Division was notified of an ill patient in Eureka, who was suffering from severe vomiting and diarrhea. He was so ill that he was evacuated to a Reno area hospital. Several other persons in Eureka also reported illness, and all had attended a family reunion party the previous evening. The division’s communicable disease specialists immediately took action, advising all northern Nevada hospital emergency rooms of a suspected outbreak of food-borne disease with recommendations for testing and treatment. All cultures from those patients were sent to the state laboratory at the University of Nevada, Reno, where state-of-the-art techniques were used to detect and subtype all organisms. The division then had a "fingerprint" which would most likely reveal the source of the organism. It was critically important to have such a laboratory.

According to Dr. Guinan, family members of ill patients from Eureka who had hosted the party were notified and interviewed. Of the approximately 100 persons who attended the party, 72 became ill within 48 hours of the dinner party, a very high attack rate. The outbreak produced panic, as many patients were acutely ill and were evacuated to hospitals in Reno. After interviewing family members, several dishes served at the dinner and consumed by most of the ill persons were implicated as the source of the illness. The caterer was notified and provided samples of the dishes served at the party, and those were sent to the state laboratory. Cultures from patients and a pasta dish were positive for Salmonella enteriditis. Fingerprinting of the bacteria in the state laboratory showed a strain previously traced to eggs imported from another state. The pasta dish, made with eggs, was baked for 2 hours, but not at a temperature high enough to kill Salmonella. The food handlers and caterers were given instructions on how to properly cook egg dishes. The ill patients returned to six different states and various Nevada counties after being treated appropriately, and all health departments were notified, thus containing the outbreak of disease.

Dr. Guinan explained that to keep the food supply safe, the division needed highly trained investigators and a state-of-the-art laboratory. Also needed was data for decision-making. The Health Division monitored diseases, injuries and other health-related conditions in Nevada via a surveillance system. Besides communicable diseases, it monitored cancer, diabetes, birth defects, trauma and immunization rates. All data was analyzed annually and reported to the citizens of Nevada. In addition, reported Dr. Guinan, the division collected behavioral data on smoking, alcohol use, exercise and eating patterns through telephone surveys.

According to Dr. Guinan, the division required an adequate information system in order to make appropriate decisions regarding investment of resources for the state. The division’s Vital Statistics Unit worked continuously to upgrade the quality of the information system. Analyses of data showed what the prevention priorities should be for the Health Division. For example, the data showed that Nevada had one of the highest teen pregnancy rates in the nation. In 1997 the rate was 145 pregnancies per 1,000 teenagers under the age of 17. The division’s

goal was to reduce that number to less than 50 pregnancies per 1,000 teenagers. Dr. Guinan informed the committee the Health Division had launched a statewide teen pregnancy prevention program in every county. The surveillance data would be used to indicate how effective the program was in reaching that goal.

Continuing her presentation, Dr. Guinan stated Washoe and Clark Counties had district health departments that conducted the prevention and health promotion programs and public health work in their respective districts. Dr. Guinan explained in the rural counties, it was the responsibility of the Health Division to provide services. There were 28 community health nurses in the rural and frontier counties, who provided primary and preventive health services, and health education to residents at 55 different sites over an area of 96,000 square miles. The nurses worked not only to prevent teen pregnancy, but also administered immunizations, diagnosed and treated sexually transmitted diseases, screened for breast and cervical cancer, as well as performing routine health care. They were a trusted source of health care for the working poor, the uninsured, and the indigent population.

According to Dr. Guinan, recently one nurse saw a young teenage boy who asked to be checked for sexually transmitted diseases. The nurse found an abnormal lump during her examination and the patient was referred to an appropriate specialist who diagnosed testicular cancer. The cancer was removed and the young man was cured. That particular cancer had a very high mortality rate if not diagnosed early. Because the young man had enough trust in the community health nurse to confide his concern, his life was saved. That was an example of prevention in action in the rural counties of the state.

Dr. Guinan then explained why she felt public health was good for the economy. Nevada depended on tourism for most of its revenue and tourists did not like to visit places were there were unusual health risks. For example, she worked at CDC during the outbreak of Legionnaire’s Disease, which occurred at a hotel in Philadelphia during the seventies. Because of the adverse publicity that occurred as a result of the outbreak, the hotel closed. A year later, the hotel attempted to open again for business, but was unable to do so. Tourism to the city of Philadelphia plummeted for a 2-year period, which caused major problems for its economy.

Dr. Guinan went on to describe a recent case that happened at the Comdex Conference in Las Vegas, which she referred to as the "Comdex case." The computer and software-related conference was one of the largest industrial meetings in the United States with over 200,000 highly technical participants. Two brothers who were reporters and writers for computer magazines, came to Nevada for the Comdex Conference. The two brothers became ill with cramps and diarrhea, and both thought they had a food-borne illness. One brother returned to his residence in California and the second brother went to the emergency room of a Las Vegas hospital, where he was admitted and died a few days later. The surviving brother put the information regarding the illness on the Internet for Comdex Conference participants, and listed all the hotels in Las Vegas where he and his brother had eaten. The Associated Press published the information and the State Health Division received a telephone call from Canadian reporters, asking about the outbreak of E-coli, a food-borne disease, at the Comdex Conference and asked if a state health alert would be issued.

Dr. Guinan stated the Health Division talked to Clark County officials who had issued the death certificate for the deceased brother, and the diagnosis was adult respiratory distress syndrome, with no mention of a food-borne disease. The alert public health worker in Clark County contacted the hospital pathologist and asked that the deceased patient be tested for Hantavirus, because that illness caused adult respiratory syndrome. The pathologist sent a specimen to the state laboratory, and a test for the Hantavirus antibody was conducted, which proved negative. Because the public health worker was so convinced it was a Hantavirus infection, she asked that a more specific test be conducted, one which would detect the DNA or RNA of a virus. The test was completed and showed positive for Hantavirus, which was confirmed by the CDC.

Dr. Guinan explained the press then reported a Hantavirus outbreak at the Comdex Conference, which was not much better than a food-borne illness. The public health worker knew the incubation period for Hantavirus infection was between 2 and 6 weeks, and the man had been in Las Vegas only 2 days when his symptoms developed. Because he was from California, the Health Division contacted the health department there. The deceased’s house was investigated and evidence of deer mice and their droppings were found, both know to spread the disease. Further, stated Dr. Guinan, there had never been a case of Hantavirus in Las Vegas; every case was investigated and the division was aware of the exact location of those cases.

Per Dr. Guinan, the Clark County Health District issued a press release indicating there had been no food-borne outbreak at the Comdex Conference, but rather an incident of Hantavirus which had been contracted in California, stopping the panic and bad publicity. Had the publicity gone unchecked and the disease undiagnosed, the Comdex Conference might never have returned to Las Vegas, and other conventions might have canceled, which was why it was important to keep public health strong.

Dr. Guinan next reported the division’s involvement in The Burning Man Festival, held in the Black Rock Desert of Pershing and Washoe Counties. Between 15,000 and 20,000 tourists attended the festival in the desert area, where there was no potable water and no sanitary facilities. A city in the desert was actually created, which caused many public health problems. Dr. Guinan called the member’s attention to the binder of material presented to them entitled "Public Health in Nevada – Performance and Workload Indicators" (Exhibit D), which contained pictures of The Burning Man Festival. She reported there had been two Health Division investigators working with Washoe County authorities during the festival. Those investigators had taken their own trailer to the festival and camped for 7 days, to make sure portable toilets were brought in and were inspected two or three times a day to ensure sanitary conditions. The water used in water sculptures displayed at the festival was being used for showers, and because it was recirculating water, it could have caused any number of diseases. The investigators stopped that activity, and along with Washoe County health workers also stopped the distribution of a load of frozen Chinese food, which came from San Francisco in a truck that was not refrigerated. As a tribute to state and county health workers, there was not one outbreak of water-borne or food-borne diseases at the festival.

Vice Chair Evans thanked Dr. Guinan, and stated many of the things that went into public health were often forgotten, along with the work behind the scenes. She indicated she would like Dr. Guinan to submit her testimony in writing because she had important information for the committee. Because of time constraints, however, it would be necessary to move to presentation of the budgets, and Vice Chair Evans asked Dr. Guinan to please wrap up her presentation.

Dr. Guinan replied she had provided a copy of her testimony (Exhibit E). She then called attention to the pocket in the back cover of Exhibit D which contained charts showing how dramatically the syphilis and gonorrhea rates had dropped statewide. That drop was attributed directly to the division’s investigators, who investigated every new case. There were only 11 cases of syphilis statewide, and it was possible the state could be syphilis-free for the first time since the disease was introduced in the days of Columbus.

Also, stated Dr. Guinan, she wanted to discuss Yucca Mountain and how it would affect the health of Nevadans. The proposed nuclear waste repository in Yucca Mountain represented potential short-term and long-term public health problems and threats to the citizens of the state. Public health voices needed to be heard and included in any determination of the impact of that repository, both in design and implementation of prevention programs to remove those health threats.

Dr. Guinan went on to say there was a threat of bio-terrorism in the state, and leaders had been told about the threat of terrorism in the form of biological agents such as Anthrax, Smallpox, Ebola, Lassa Fever and plague, all potential terrorist agents. She explained the division was working with many different groups around the state to build up bio-terrorism defenses.

Dr. Guinan pointed out the division knew there was a limited supply of resources statewide, and it was committed to make sure every program asked for or submitted was cost effective and gave the "greatest bang for the buck." The division was always looking at cost effectiveness as well as health and quality of life for Nevada citizens.

Vice Chair Evans thanked Dr. Guinan for her presentation and welcomed her to Nevada. Ms. Sylva was then invited to present the budget overview of the Health Division.

Ms. Sylva stated it had taken a long time to fill the State Health Officer position and the division was very pleased to have Dr. Guinan on board, as she brought an extensive background of a scientific nature to the state.

Ms. Sylva then referenced Exhibit D (Original on file at the Research Library, Legislative Counsel Bureau), the binder which contained a summary sheet of the State Health Division budget, a full set of work performance indicators and workload graphics, and also a booklet overview of the State Health Division programs. She informed the committee she would talk about public health issues occurring in rural Nevada and also wanted to talk about what had been done with the 1997 General Fund enhancements received by the division. Those enhancements consisted of additional funds for the immunization registry, funds for the state revolving loan fund for the Safe Drinking Water Program, and funds received for protease inhibitors.

Ms. Sylva stated she would also address current issues which related to the budget as well as the division’s operation within the State of Nevada and its growth. Those two areas would be Special Children’s Clinics and the Bureau of Licensure and Certification. She would then make some broad-based comments regarding the budget request because the State Health Division consisted of 19 separate budgets. Vice Chair Evans advised the committee was interested in key budget issues, and some of the smaller or "pass-through" budgets could be eliminated at the present time.

Ms. Sylva stated she intended to address only key issues. Also, she wanted the committee to note Karl Munninger, Administrative Services Manager, Clark County Health District, and James Begbie, R.E.H.S., Administrative Health Services Officer, Washoe County District Health Department, were present at the hearing in the event committee members had questions for them.

Vice Chair Evans indicated before the committee recessed for the lunch break, she would give each gentleman an opportunity to come forward for a few minutes and present testimony.

According to Ms. Sylva, in 1997 the State Health Division invested almost $12 million in rural counties. Delivering services to Nevadans who resided in rural and frontier areas was often times a challenge, however, it could also be an opportunity. After the 1997 session ended, management staff set out to tour rural Nevada and meet with community leaders and citizens alike, to learn firsthand what their public health needs were, and to examine ways the Health Division could better target its resources and be far more cost effective. The tour was accomplished in three trips, and staff visited with people in Lovelock, Winnemucca, Elko, Ely, Eureka, Tonopah, Battle Mountain, Pahrump, Stateline, Gardnerville, Dayton, Fernley, Yerington, Fallon, and Caliente.

Ms. Sylva explained that many of the towns held meetings so division staff could meet with rural division staff, community leaders, public officials, senior citizens, and other members of the community. Staff also toured hospitals, nursing homes, county offices and senior centers, talking to both the young and aged.

Ms. Sylva indicated she wanted to share with committee members some of the common themes heard by staff. In general, the population residing in rural and frontier Nevada had a difficult time accessing basic primary medical care in their own communities. Residents were concerned about where to get mammograms or pap smears, how pregnant women who did not have much money could receive prenatal care, and in some communities, even if women had financial resources, where could they go for prenatal care. Ms. Sylva explained residents were also concerned about access to dental care for children without specialists in their communities who were participants in their health plans. Senior citizens were particularly concerned because they had to travel long distances to see a specialist or sometimes to even see a physician. They were concerned because they did not have a physician in their own community. Some communities actually had a visiting physician, explained Ms. Sylva, who would see patients one day per week and perhaps the next week there would be a different physician who visited.

Ms. Sylva stated the physicians in rural Nevada expressed a need for the expansion of telemedicine capabilities through the medical school, which would provide them with greater assistance. Oftentimes, when making a difficult diagnosis, those physicians did not have a support system in place.

As public health professionals, staff decided they needed to work with their new friends in rural Nevada to assist them in meeting those needs. Ms. Sylva stated in 1997 the Health Division became a partner with the Federal Government in a program called the J-1 Vista Program. The program allowed Nevada and foreign medical graduates to develop a partnership in order to meet the primary health care needs of the underserved. As a result, Nevada now had more than 40 physicians practicing in the rural and frontier areas of the state, and there were eight pending applications with the Federal Government. Participation in the J-1 Vista Program meant more and more Nevada communities could have a resident physician to provide services to the population.

Ms. Sylva disclosed while staff was touring in rural Nevada, they had the opportunity to note firsthand the value of having a J-1 Vista physician. In Ely, one of the staff members became ill and needed to visit the emergency room. The physician on call was the J-1 Vista doctor, and he was surprised to learn staff actually knew who he was because they had played a role in getting him placed there. The J-1 Vista doctors in Caliente were a team, husband and wife, one an internal medicine physician and the other a pediatrician. They were concerned because they saw many congenital anomalies in Caliente and had no help in diagnosing some of the issues facing the children. Both doctors worked with the University of Nevada School of Medicine so telemedicine could provide them the opportunity to make sure of their diagnosis. Ms. Sylva stated the J-1 Vista physicians had been part of the answer to rural communities in Nevada and had afforded the opportunity for citizens to have their own physician.

Ms. Sylva reported in 1998 the Health Division was able to permit a mobile mammography van to serve rural Nevada, as well as the urban areas. That van was currently providing services to a population which never had them before. The Health Division was partnering with the mobile mammography van to provide low-cost services to women who met the criteria, and who otherwise would not be able to afford a mammogram.

Two communities on the staff tour identified the need to have some type of community health center or clinic in their location, so the population could be served on-site, eliminating the need for travel. Ms. Sylva advised the division had been working with those two communities to determine whether or not they would qualify for federal funding to assist in the development of community health centers. More importantly, even if they were able to receive federal money, could those communities sustain the ongoing cost of having a clinic. The division believed there were two communities in Nevada eligible for federal funds, and it would assist them in securing funds if possible. Senator Raggio asked where the two locations were. Ms. Sylva responded they were the Yerington and Elko areas.

Ms. Sylva indicated transportation to service locations and long distances to travel were major issues for senior citizens living in rural Nevada. The long distances between services might become even greater with the potential closure of the Nye County General Hospital. That closure would mean Nevada’s volunteer emergency medical personnel would be required to travel even greater distances in order to transport persons in need of care. For example, the distance from Tonopah to Las Vegas, Ely or Hawthorne was between 175 to 200 miles. It was well known that the first hour was the most important when a person was critically injured. Ms. Sylva stated it was imperative that voluntary emergency medical services personnel remain well trained and ambulance services in tip-top condition, because without a well trained voluntary service, people could not survive. In fact, with the long distances involved, they might not survive anyway. Ms. Sylva advised she was merely providing the committee with information, and did not have answers.

According to Ms. Sylva, division staff learned that communities in rural Nevada clearly knew how to do more with less, and more often than not, the work was accomplished through partnerships and use of volunteers. For example, stated Ms. Sylva, the community health nurses in Yerington and Lovelock never missed an opportunity to vaccinate children. In the State of Nevada, the immunization rate for 2-year olds was currently 73 percent. Yvonne Rempp was the community health nurse in Yerington, where the rate was 90 percent; Denise Engel was the community health nurse in Lovelock and the rate there was 97 percent. Ms. Sylva stated she had never been more impressed with a community health nurse than she was with the Caliente nurse, who was a pillar and valuable member of the community. She served not only as a public health nurse, but was the school nurse, a school board member, distributed welfare checks, accepted Medicaid applications, sat on the emergency management committee, was the infection control nurse at the hospital, was an emergency medical technician who rode in the ambulance, and on Saturdays baked pies for the local restaurant.

Ms. Sylva reported the second thing staff learned firsthand about traveling long distances was the actual amount of time it took. Staff began their days at 7 a.m. and ended with dinner at 10 p.m., which reinforced the philosophy about partnerships and how important and necessary they were in order to maximize all available resources to achieve the division’s public health goals.

Ms. Sylva noted the 1997 legislature gave the Health Division three enhancements to its budget: Immunization, State Revolving Loan Fund, and funds to supplement the AIDS Drug Assistance Program (ADAP). A one-time General Fund appropriation of $132,200 was granted for FY 1998 to accelerate the implementation of a statewide immunization registry. The expansion of the statewide communication network to link Clark County Health District and community health nursing clinic sites into the immunization registry had been completed, Ms. Sylva reported. That wide area network linked Nevada counties to the statewide registry via a combination of high-speed communication lines and dial-up modems. All community health nursing clinics, Women, Infants and Children,(WIC), clinics, and local health district sites now had computerized access to the immunization registry.

In addition, stated Ms. Sylva, the following progress had been made:

Ms. Sylva advised the State Health Division would continue to connect providers to the registry utilizing available funds. A combination of federal monies and private grants currently supported the immunization registry. In addition, in 1998, the division received a grant from the Robert Wood Johnson Foundation which would expand the registry by extending it to private providers, including managed care organizations.

According to Ms. Sylva, the second enhancement from the 1997 legislature was $750,000 in General Fund money by passage of S.B. 302. Those funds were to be used for the startup of the state revolving loan fund for the Safe Drinking Water Program and would cover a 2-year period with reversion scheduled for June 1999.

The funds were utilized as leverage to receive more than $12 million from the Environmental Protection Agency (EPA). The primary purpose of those funds was to provide community water systems with low interest loans so communities could come into compliance with the federal Safe Drinking Water Act. During the initial phase of the program, explained Ms. Sylva, the funds were used to hire and train new staff, secure new equipment and for operating costs associated with program development. Through utilization of those funds, the Health Division was able to prepare and submit a grant request to EPA to receive the $12 million Capitalization Grant. That grant allowed the division to reimburse expenditures made from the General Fund and restored the account to its original balance of $750,000.

Ms. Sylva explained that in January 1999 the division agreed to comply with an early reversion of $400,000 to the State General Fund. The portion remaining would be utilized as match for "set-aside" programs, including obligations with contractors and the Division of Environmental Protection, along with improvements made to the division’s information system to ensure collection of appropriate data. Any remaining balance would revert on June 30, 1999. Ms. Sylva indicated she felt it was money well spent.

The commitment of staff to develop the program in such a short period of time was commendable, advised Ms. Sylva. They had done everything from hiring the staff, writing the grants, forming public/private partnerships, and the Health Division was almost ready to make the first loan to the first community water system in the state. She noted loans had a 20-year term with an anticipated interest rate of between 4 and 5 percent. Full implementation of the program would clearly have an impact on Nevada.

Ms. Sylva informed the committee the third major General Fund initiative was the provision of $1.3 million in each year of the biennium to add protease inhibitors to the ADAP drug formulary to treat patients with HIV infection and AIDS. That program provided AIDS-related drugs to patients with a CD4 count of less than 500, were below 200 percent of poverty with less than $4,000 in assets, and had no other means of obtaining the treatment. The division had been successful in negotiating with pharmaceutical companies to ensure that in the event eligible clients were on a waiting list, they would receive the drugs they needed through the ADAP. Recent advancements in treatment methodology had greatly enhanced the ability to more effectively treat and manage patients with HIV infection and AIDS. According to Ms. Sylva, although the disease still could not be cured, many patients were now able to live with the disease, experiencing a greater quality of life as a productive member of society.

Ms. Sylva went on to explain there were currently 453 clients enrolled in the ADAP program and 309, or 68 percent, received protease inhibitors along with other appropriate drugs. Even though there had been significant advances in the treatment of HIV and AIDS, which resulted in a decrease in death, the rate of new infections had not declined. It was, therefore, projected that the number of persons eligible for the ADAP program would increase. In an effort to ensure accessibility and reduce the potential for waiting lists, it made sense to combine drug resources in an effort to maximize the number of clients receiving services. Expenditures for protease inhibitors would continue to be documented while optimizing the formulary and maximizing the caseload.

Just as a note to the committee, stated Ms. Sylva, the Health Division had been advised to submit an increased budget to the Federal Government for the next Ryan White Grant cycle. The budget amount the division had been asked to

request was approximately $4.7 million. If that became a reality, it would represent an increase of almost $800,000. The division anticipated earmarking those funds for the drug assistance program and also to allow continuation of the drug formulary to include protease inhibitors.

Vice Chair Evans stated when the issue was discussed last session, the question was raised regarding Medicaid eligibility for some patients, and what had been the outcome of that discussion. Ms. Sylva responded that any person who was eligible for Medicaid received their protease inhibitors through that program, and the division would continue to refer all eligible clients.

Continuing her presentation, Ms. Sylva stated the rapid growth of Nevada continued to have an impact on public health, and systems and services had a difficult time keeping up. The State Health Division had been successful in accessing available federal resources over the past 6 years, and had been able to initiate new programs to address current needs. In many cases, the division had even leveraged general funds in order to bring federal dollars into the state, as previously mentioned. In some areas, the federal dollars had increased three to four times their original amounts. For example, she advised, the Ryan White Grant started out at $1 million and was soon going to be almost $5 million. Also, the breast and cervical cancer grant program started out at approximately $250,000 per year and that particular grant was now almost $2 million. However, in other areas the division had seen flat or decreasing funds, sometimes with increased unfunded mandates, as was the case with the funding the Bureau of Licensure and Certification received through Title XVIII and Title XIX.

Further, explained Ms. Sylva, mandates had increased to ensure the Health Division was providing more visits to long-term care facilities than it traditionally had done. She did not suggest that was bad, and felt the division should be providing more visits to long-term care facilities that had a history of problems in Nevada. The problem was the mandate was coming from the Federal Government and they were not paying the division to complete more visits. Ms. Sylva stated the division had concerns about the lack of funding from the Federal Government along with those increased mandates, and increased growth in the number of facilities throughout the state did not help either. The situation was translating into less oversight and eventually it would translate into increased fees as the demands being placed on the Health Division continued to increase. Skilled nursing and group care facilities had grown over 33 percent over the past biennium. There were currently 35 group care facilities under construction in Las Vegas alone.

According to Ms. Sylva, those facilities the division pictured as family residences that were converted to provide services to four, five, or six persons living in a "home-like" environment were being replaced with 100-bed facilities. Even though such facilities were generally licensed by the Health Division as group homes or residential group facilities, they often referred to themselves as assisted living facilities or retirement villages. The 1995 legislature passed a bill requiring that homes providing services to less than three persons register with the Bureau of Licensure and Certification. In 1997 there were 257 registered homes and in 1998 there were 451. Ms. Sylva advised she had heard estimates that there could be 200 to 300 more that were not currently registered.

Ms. Sylva went on to explain that an increasing population, an increasing number of facilities and changing medical technology, all had a major impact on the staff’s ability to keep up with the demand. The division continued to analyze staff and budget requirements to meet current needs. The Bureau of Licensure and Certification’s funding sources were from Title XVIII, which was Medicare and Title XIX which was Medicaid, and the remainder came from user fees charged to the facilities. When the analysis was complete, the division would share that information with the subcommittee in terms of need.

Ms. Sylva reported the rapid growth in Nevada continued to have a negative impact on the Special Children’s Clinics ability to meet the demand for services. The clinics, located in Reno and Las Vegas, had existed since the 1950s. Those two clinics currently served as the major providers of early intervention services to children ages 0 to 3. Children with known or suspected developmental delays were eligible to receive services through those clinics. Services were based upon a child’s need and included pediatric developmental assessment provided by pediatricians, psychologists, social workers, speech pathologists, and audiologists. Intervention services were provided by a multi-disciplinary team of professionals.

Ms. Sylva stated since at least 1994, families seeking services at the clinics had been faced with two waiting lists, the first for intake and the second for treatment. The intake list affected families seeking first-time services. Families who contacted either clinic were scheduled for initial intake interview, and had a waiting time of anywhere from 2 weeks in Reno to 6 weeks in Las Vegas. Once the child’s family had completed the diagnostic process, the child was then placed on the treatment waiting list. Based upon a current waiting list of 71 children in Reno and 72 in Las Vegas, the waiting time was estimated to be 4 months in Reno and 6 months in Las Vegas before children received intervention services. The division intended to address the waiting list problem by reallocating resources from the Children With Special Health Care Needs Program, (CSHCN).

The division anticipated that many children whose medical services were previously paid for through CSHCN would now be eligible for the Nevada Check-Up Program. Ms. Sylva explained that would result in the potential for the division to review reallocation or a shift of funds to the Special Children’s Clinics to reduce waiting lists and better meet the needs of children and their families. The total dollars available as a result of that transition remained unknown at the current time, as eligibility determination had yet to be made by the division. A report would be provided to the subcommittee as soon as the information was made available.

Vice Chair Evans asked Ms. Sylva to hold the remainder of her testimony until after the lunch recess, in order to allow public testimony.

Mr. Begbie, Acting District Health Officer, Washoe County Health District addressed the committee, and stated he had an information packet for distribution to members (Exhibit F) after the hearing. He went on to state it was a pleasure to speak to the legislature concerning funding for county health aid, and stated the district had been doing that for many years. Aid to county funding was an important component of the revenue picture for the district, and it used that funding in two broad areas; the first was a regulatory and enforcement program, and the second was personal health care programs and public health disease surveillance and reporting. According to Mr. Begbie, the interesting thing from the district’s perspective about funding for county health aid was that health districts were charged with enforcing the Nevada Revised Statutes, the Nevada Administrative Code, and District Board of Health regulations. The district used the funding with discretion to support those three areas. Included in Exhibit F was information regarding the program areas, amount of money expended, percentages and some history on aid to county funding. The district understood the state’s circumstances regarding program funding, because it was similar to the local government’s aid to county funding, and was population-driven every biennium.

Mr. Begbie stated the district appreciated the legislature’s continuing interest and support. The district was the grantor of the franchise for the Regional Medical Services Authority, (REMSA), but also used the funds to assist in emergency management issues, disaster preparedness and multi-casualty incidents. There were a number of programs served in the personal health care area, Reno Child Health, public health nursing, AIDS and sexually transmitted diseases programs for education and testing, and child immunization. In the regulatory and enforcement area, funds were used for the Environmental Health Division for permitting and enforcement, and also for land use regulations. In air quality management, funds were used for permitting, monitoring and also enforcement. Mr. Begbie advised the committee he or a representative would be available at future hearings, and would be happy to answer questions.

Next to appear before the committee was Karl Munninger, Clark County Health District. According to Mr. Munninger, Medicaid managed care was required in Clark County, which placed approximately $500,000 in Medicaid funding in jeopardy for the Clark County Health District. He asked the committee to consider restoring the state aid to county funding to the $1.10 per capita rate as it had been in 1991 prior to Governor Miller’s budget cuts; at the present time, the rate was only 55 cents per capita.

Vice Chair Evans asked what amount of money was under consideration with such a restoration to $1.10 per capita. Mr. Munniger replied the present rate was approximately half, and the increase would cost approximately $700,000. Mr. Begbie advised for Washoe Health District the appropriation was approximately $180,000, and restoration to $1.10 per capita would amount to approximately $360,000.

Both gentlemen were thanked for their participation, and there being no further testimony to come before the committee, Vice Chair Evans declared the hearing in recess until 1:30 p.m.

The joint meeting of Legislative Commission’s Budget Subcommittee was reconvened at 1:40 p.m. by Vice Chair Evans, who inquired if Ms. Sylva had completed her testimony relative to opening remarks and background information, so the committee could focus on major funding and budget issues. Ms. Sylva responded she could conclude her opening remarks in approximately 5 minutes, which included a "broad-brush" overview of the budget for the upcoming biennium; however, if the committee preferred, she would provide a more detailed account of budget issues. Ms. Sylva suggested the committee advise her upon completion of her overall summary if they wished a more in-depth presentation of budget items.

Continuing her presentation, Ms. Sylva stated the Advisory Committee for Immunization Practices at the Centers for Disease Control had recently approved the addition of Rotovirus as one of the recommended vaccines for children. That vaccine would prevent diarrheal types of illness in infants and the resulting dehydration, which could lead to death.

According to Ms. Sylva, pursuant to the legislative letter of intent, the Health Division was currently assessing the cost-effectiveness of adding such a vaccine in Nevada, and would review both human and monetary costs. The legislature would be advised of the outcome of that review. Ms. Sylva also alluded to the probable approval by the next biennium of the Pneumo 7 vaccine. That particular vaccine fought diseases that were normally caused by pneumococci, such as ear infections, pneumonia and bacterial meningitis, and also had the potential to result in substantial cost savings. The results of the division’s review of cost-effectiveness for the Pneumo 7 vaccine would also be provided.

Addressing the State Health Division’s budget request for the next biennium, Ms. Sylva commented it was basically a "mirror" of the division’s budget for FY 1998 in terms of dollars and program activities, and included no program expansions. She explained the division operated under more than 30 chapters of the Nevada Revised Statutes (NRS), had 19 separate budget accounts representing many programs, and over 75 separate funding sources.

Currently, the division had 366 full-time positions, stated Ms. Sylva, and the FY 2000 request represented an increase of 7.5 positions, all of which would be funded by federal grants or fee-based. Of those, 6.5 positions would provide direct services. Recommended new positions included three nutritionists who would provide services to children with special health care needs at special children’s clinics, or other school populations. Funding was also recommended for a half-time certified nutritional aide for the Women’s, Infant’s & Children’s (WIC) Program, and three community health nurses.

Ms. Sylva explained the only position which would not provide direct service was the requested full-time auditor. The Health Division had grown so large, and passed a great deal of money through its budget to counties, private nonprofit, and other community-based organizations, it was essential for the division to have the opportunity to monitor how funds were being utilized in the communities. Ms. Sylva noted that due to the fact the division invested $30 million in Clark County and $22 million in Washoe County in terms of time, effort, and direct funding, it was important to ensure the money was being appropriately expended.

With regard to the overall budget, Ms. Sylva indicated the division had requested $86 million for FY 2000 and $89 million for FY 2001. She added the General Fund currently represented 17 percent of the overall budget for the Health Division. In FY 2000 the General Fund support would represent 15 percent of the overall budget, which was a slight decrease in percentage; however, represented a slight increase in the actual dollar amount. Ten enhancement decision units were included in the State Health Division’s budget, three of which contained General Fund allocations and totaled less that $41,000 over the 1999-2001 biennium.

Ms. Sylva advised the division was requesting a one-shot allocation for equipment totaling $20,630. She explained there were General Fund revenues included in the maintenance decision units related to growth, and also included in decision units related to occupational studies and/or salary adjustments. The division’s overall request for General Fund support was approximately $13.2 million in FY 2000 and $13.6 million in FY 2001, compared to the $13 million allocated for the current biennium. Ms. Sylva noted that was not a substantial increase. She indicated she would be happy to review the recommended enhancements in each budget category if the committee wished, or she could present more detail at subcommittee hearings.

Vice Chair Evans replied the committee had questions regarding some of the enhancement units, and instructed Ms. Sylva to commence with a brief review.

Ms. Sylva reviewed the following enhancements:

Vice Chair Evans asked how long funds to support the Clark and Washoe County Health Districts had been at the per capita rate of 55 cents. Ms. Sylva replied she believed the rate had been at 55 cents per capita since the last budget revisions implemented in 1991 or 1992. Vice Chair Evans voiced her concern regarding the per capita rate, indicating it had not been increased for quite some time, and in Clark County the pressures were felt more acutely because of growth.

Ms. Sylva indicated she would address that issue from the perspective of General Fund shortfall. During the 1989 or 1991 session, the budget account was reduced from $1.10 per capita to 55 cents per capita. At that point in time, the State Health Division programs funded by the General Fund also took a reduction. Ms. Sylva advised the Health Division had reverted $722,000 in General Fund money in FY 1999 to make up for budget shortfalls. She indicated no money from Budget Account 3209 had been reverted and, in fact, the division was protecting that account.

Vice Chair Evans stated she understood the division had made budget cuts during the current fiscal year in order to meet the reversion targets, but the budget for Health Aid to Counties was not included in those cuts. Ms. Sylva replied that was correct.

Vice Chair Evans instructed Ms. Sylva to enlighten the committee regarding the declining fees and also the frequency of inspections. Ms. Sylva asked if Vice Chair Evans referred to fees and inspections in general, or was she solely interested in what purpose Module E-130 served. Vice Chair Evans replied she was interested in those included in Budget Account 3194.

Ms. Sylva disclosed fees in that particular budget account had been adjusted for food establishments, and she believed they were substantial adjustments. Some controversy ensued during last legislative session concerning the amount of the fee adjustment. She was unsure of the specific amount of the fee adjustment for food establishment inspections. She stressed the division was required by law to inspect all establishments that served food, and also dairies; those inspections were included in the budget.

According to Ms. Sylva there was an increase in the number of positions over the last biennium, and one was an environmental engineer position with the expressed purpose of reviewing food establishments. Inspections, she admitted, were not being done to the degree needed. Oftentimes, a complaint about an establishment or a complaint from a person with suspected food poisoning from a particular establishment was received, and the division spent a great deal of time investigating those complaints. Ms. Sylva indicated she felt the fees were justified. She went on to explain the division had revised its performance indicators to consider the outcome rather than the number of inspections, and she felt the division was meeting those needs.

Vice Chair Evans inquired about the match-up of positions and fees generated. Ms. Sylva answered the division believed that other than the funding lost from drug manufacturing companies, which generated large fee amounts, and the loss of funds from the Nevada Division of Environmental Protection, that fees recommended in the budget would be met. Vice Chair Evans then asked what was the current inspection cycle or frequency. Ms. Sylva advised the current cycle was pursuant to NRS, which mandated inspection of prisons and food establishments on an annual basis by the State Health Division. Vice Chair Evans asked if the division was able to comply with that mandate. Ms. Sylva advised the division had not met the mandate during the past biennium, however, she believed it would be met during the current biennium.

Vice Chair Evans stressed the importance of inspections, referring to Dr. Guinan’s opening remarks in terms of public health and prevention, noting the two were synonymous. It was necessary for the division to meet the required inspection schedule, and follow-up in a timely manner. Vice Chair Evans asked that the division keep the committee informed if it was falling behind regarding inspection timetables; Ms. Sylva stated the division would comply with that request.

Vice Chair Evans asked Ms. Sylva to revisit Budget Account 3216, page Health-24, the Health Facilities Hospital Licensing budget, asking Ms. Sylva to provide a review. Ms. Sylva advised the division had originally included a decision unit which was later voluntarily withdrawn, as reviewed earlier in the hearing. Projected revenues were being reviewed relative to statewide health facilities, and workload, in order to identify position needs and operating expenses. She stated when the analysis was completed the subcommittee would be informed.

Vice Chair Evans stated the committee was concerned about the division’s ability to address the backlog in the licensing of health facilities. Ms. Sylva responded during the last year, the division had focused its inspections based upon federal revenues rather than General Fund revenues, and was unable to meet state licensing requirements as mandated by NRS. That did not mean the division failed to investigate complaints that were received, but due to lack of adequate staff, full-scale surveys could not be done. The division had been attempting to "swim up-stream," explained Ms. Sylva, and the issue was being assessed at the present time.

Vice Chair Evans then asked why there was such a large reserve shown in the account. Alex Haartz, Administrative Services Officer, Nevada State Health Division, responded that reserve had slowly grown over the past several biennium as a result of a fee increase implemented by the Health Division, as well as the continued growth of health facilities within the state.

Vice Chair Evans requested information regarding vacant positions over the biennium, and to what degree those positions contributed to the large reserve. Ms. Sylva said she would conduct research regarding the vacancies, and provide the committee with that information. She added that to her knowledge, there were not a large number of vacant positions over the past biennium. The division had its fair share of vacancies because at times it was difficult to recruit for positions in this budget. She explained the reserve had grown because of changes occurring on a statewide basis, which included local facilities being bought-out by major corporations. Each time there was a change in ownership of a facility, there was a requirement to re-file with the state; that created huge fees from those companies now doing business in Nevada.

Vice Chair Evans stated she understood the importance of timely inspections in the area of changes in ownership, and simply did not want to see the division get behind. She advised there would be more detailed review at the subcommittee hearing.

Ms. Sylva continued her explanation of enhancement units.

Regarding Ms. Sylva’s earlier testimony describing the assistance and participation by pharmaceutical companies relating to protease inhibitors, Vice Chair Evans asked if she could expand on that program and explain how it worked. Ms. Sylva informed the committee in the event a person was placed on a waiting list, he would be eligible to receive all necessary drugs, and a pharmaceutical company would provide those drugs as part of its patient assistance program. She mentioned the division had entities in both Northern and Southern Nevada that worked with persons seeking services, assisting them with completion of the application and paperwork for the patient assistance program. Those persons would then remain on the pharmaceutical company’s patient assistance program until the division could transition them to the Aids Drug Assistance Program (ADAP).

Vice Chair Evans recalled the eligibility level for ADAP at 200 percent of poverty. Ms. Sylva responded that was correct, and equated that percentage to an income level of $15,000 for one person per year. Vice Chair Evans then asked what typically happened to people who were just over the $15,000 limit. Ms. Sylva responded that amount was much higher than the eligibility requirement for Supplemental Security Income (SSI) or Medicaid. She stated there were options for those over the limit, such as participation in clinical trial programs, or assistance in other programs. With protease inhibitors, she noted, persons were able to work longer thereby maintaining medical insurance. She added when insurance was maintained, the state was not required to pay, as insurance companies would pick up the cost of medications. There was no question, however, that some individuals were not eligible for any programs.

Vice Chair Evans asked if a survey had been done concerning increasing incident rates so that information could be attained on the care and treatment of patients in the community. Ms. Sylva replied she was not familiar with any survey information but would be happy to look into the matter.

Ms. Sylva then continued her budget enhancement review.

Decision units in Budget Account 3222, Maternal and Child Health Program, page Health-48 included:

Ms. Sylva reviewed two decision units included in Budget Account 3208, Special Children’s Clinics, page 54:

Vice Chair Evans instructed Ms. Sylva to provide the subcommittee with the division’s plan to increase services at both clinics. She also recalled that Ms. Sylva mentioned the Federal Health Care Financing Administration (HCFA), and asked if the proposed changes needed federal approval. Ms. Sylva replied HCFA was not mentioned, however, she had discussed the fact that when the Nevada Check-up Program began providing services to children otherwise covered under the MCH block grant, the division would shift those funds to the Special Children’s Clinics, which would not require federal approval. Ms. Sylva also noted that shift of funding was dependent upon the amount of time it would take for Nevada Check-up to approve the transfer of those children and the number actually transferred.

Ms. Sylva continued with Budget Account 3214, page Health-58, Women, Infants, and Childrens Program (WIC):

Ms. Sylva declared those were all of the decision units within the Health Division budget with the exception of a few maintenance units that were funded with federal monies.

Ms. Sylva concluded her testimony by informing the committee she had reviewed the budget from FY 1992, and discovered that out of a total budget of $35 million, 26 percent was General Fund, which represented approximately $9 million in General Fund monies. She noted the General Fund request for FY 2000 was $13 million, which represented 15 percent of the budget. Because of the effort to maximize federal funding, the overall budget had tripled to $90 million, but the reliance on the General Fund had decreased.

Vice Chair Evans called for questions from the committee.

Addressing telemedicine, Ms. de Braga stated there was a pilot project in Austin that was operating out of the sheriff’s department, and asked if the division had any involvement or reports regarding that project in order for the committee to determine its success. Ms. Sylva replied the division had not been involved with the project, she was aware of it only superficially, was not sure of how it worked, and had not seen any reports. Ms. de Braga stated the program was not fully functional, but she was told if it worked in Austin, it would work anywhere. The program could serve a huge area and she hoped additional information would be submitted to the committee.

Mr. Dini asked how the waiting list for special children’s clinic services could be reduced by funds made available through decreased services to Children With Special Health Care Needs Program. Ms. Sylva replied in the Children With Special Health Care Needs Program the division had been paying for medical care for children who were at or below 200 percent of poverty. The Nevada Check-Up Program was designed to serve those children at or below 200 percent of poverty, therefore, rather than funding two programs geared to serve the same population, those children would be transitioned from one program to the other. That did not mean children would not receive services, instead it meant the payer source would be different. Once the division knew how many children were actually enrolled in the program, those funds could be used to offset the waiting list for the clinics, without additional requests for General Fund money.

Vice Chair Evans asked for questions from the committee; hearing none, she thanked Ms. Sylva and her staff for their testimony. She then asked if anyone in the audience wished to speak to any budget items within the Health Division.

Steve Tognoli, District Chief, Mason Valley Fire Protection District, discussed his concerns regarding Emergency Medical Services (EMS) issues. He stated he supported the budget regarding emergency medical services, however felt the EMS section needed to assume a stronger role in the Health Division. EMS in Nevada was far behind current trends, and some agencies needed assistance through guidance and direction.

According to Mr. Tognoli, as pre-hospital care providers, the fire department saw patients who relied on the health system first. The recent 1997 Office of Traffic Safety report on traffic accidents placed Nevada in the top 10 states regarding fatalities caused by traffic accidents.

Emergency medical personnel treated and saved the lives of persons who were sick and injured on a daily basis, and Mr. Tognoli felt the state EMS section needed to move up on the Health Division’s list for funding and staff support. The Nevada EMS Task Force proposed a Bill Draft Request (BDR) which would enact a Board of Emergency Medical Services to assist and advise the State Health Division, EMS section, regarding what needs should be addressed. Those needs included such as review and update of regulations concerning EMS, funding sources, urban and rural EMS needs, and the standard of care throughout the state. The Board of Emergency Medical Services would provide one voice, one direction, and assist in providing the best patient care possible. Mr. Tognoli stated he wanted to leave committee members with one thing on their minds, and that was Emergency Medical Services. He and his co-workers throughout the state hoped to provide the best care possible for family members, and other individuals throughout the state.

Mr. Tognoli introduced Scott Huntley, Division Training Chief with Mason Valley Fire District, Vice President of the Nevada Emergency Medical Association, and also chairman of the EMS Task Force. He advised both he and Mr. Huntley would be available if needed to testify or provide comments for the committee in the future, and would also answer any questions members might have today.

Vice Chair Evans thanked Mr. Tognoli for his testimony, and expressed her gratitude for the good work done by EMS. She asked him in terms of steps necessary to strengthen EMS services, what came to mind as the most pressing need. Mr. Tognoli replied there were several, which included funding of positions that could help with training. He stated several agencies were self-providing, but others did not have the ability or the guidance to provide volunteers with training, which was a major concern.

Mr. Huntley "seconded" those issues stated by Mr. Tognoli, and further expressed the importance of the Nevada EMS Task Force and EMS Association not taking a "backseat" in the area of patient care. Mr. Huntley stressed more active involvement on behalf of the providers was needed and anticipated attending more legislative meetings to represent providers. He hoped the state board could answer questions that were faced by EMS personnel, and reiterated the importance of EMS not taking a backseat.

Mr. Marvel inquired how grant funds were distributed. Mr. Tognoli responded there were grant funds for equipment available through the Office of Traffic Safety. Some smaller grants were also available to volunteer departments for training through a regulated re-certification fee that was assessed to Emergency Medical Technicians (EMT’s). He advised his department and others had not yet received notification of the grants. Mr. Marvel then asked if there was a formula used for grant fund distribution, and if critical areas received the funds. Mr. Tognoli stated the critical areas were volunteer services; they had submitted a grant request, but had not yet received any funding.

Mr. Huntley stated urban areas needed input concerning distribution of grant funds. Those areas were interested in receiving money, but again, they needed to be informed as to the distribution. Mr. Huntley stated he knew money was available for training, but had no idea where and how it was to be distributed. Mr. Marvel asked how they could find that information, and Mr. Tognoli replied the decision was supposed to be made by representatives of the Health Division.

Mr. Marvel stated the subcommittee should ask for that information. Mr. Huntley replied he was sure it was the Health Division’s priority that the best healthcare was provided for Nevadans. He suggested the committee ask themselves what agency would receive the first call if a person suffered a fall in the street. In his opinion, the EMS providers were the first-line defense for Nevadans health.

Vice Chair Evans referred to a summary of emergency medical services presented by Ms. Sylva and stated the actual cost within the training category for FY 97-98 was $12,008. The work program for FY 1999 reflected $44,300, and the amount recommended by the Governor was $34,000. Vice Chair Evans said it seemed like a "roller coaster," and asked how determinations of spending for training items was finalized. Mr. Haartz responded, indicating the Health Division requested, as part of the fundamental review of base budgets, that a self-funded training program be established and implemented. He went on to explain the $34,000 recommended represented both the actual costs, as well as the establishment of the self-funded training program. Vice Chair Evans requested the division return to subcommittee with more details regarding the EMS training program.

Senator Jacobsen reiterated the sentiments of Vice Chair Evans regarding emergency services being the health and the salvation of many in the State of Nevada. He asked for an approximation of how many women and men were certified, and how many responses were made. Mr. Tognoni replied in Lyon County there were four fire districts unique to Nevada, and in Mason Valley there were 546 EMS calls answered. Out of the 546 calls, 128 were for patient transport between hospital facilities.

Mr. Dini stated in 1997 the legislature provided for the position of medical director, which had never been filled, and was never taken out of the budget. He asked how that affected the quality of service provided. Mr. Huntley responded the position was there as a liaison to the State Health Board. At times it was difficult to speak with physicians regarding issues of pre-hospital care in cases of drug use, equipment needed, or variances concerning the use of drivers plus two attendants, due to lack of EMT’s to drive the ambulance. Emergency services personnel had counted on the physician to be the liaison to relay concerns, however, that was never accomplished.

Mr. Dini noted the training budget had suffered a decline due to unavailability of grants from the Office of Traffic Safety, and inquired how grant funds had been utilized. Mr. Huntley replied the Office of Traffic Safety had played a key role in past years with the state EMS conference, as had the Health Division. He said the division had used some funds to support the conference, but those grants were becoming more and more difficult to acquire. It was hoped that participation in the conference would interest volunteers, but because of distance, travel to outside areas was difficult.

Because of budget restraints, the Bureau of Licensure and Certification was not able to appear before the Board of Health as scheduled in April for approval of Advanced Life Support and Intermediate Life Support Drugs and Procedures. Mr. Dini asked how the quality of service EMS was able to offer was affected because of that. Mr. Tognoni responded that was an issue which would be addressed by the Board of Emergency Medical Services. Because of the 400 hours of training required for a volunteer, it was felt this reduced the level of advanced care down to the basic level once again.

Vice Chair Evans thanked the speakers for their presentations and requested they submit written recommendations to the committee, including phone numbers where they could be reached.

There being no further testimony regarding the health care budget, Vice Chair Evans opened the budget overview for Division of Child and Family Services.

Vice Chair Evans opened the overview by informing Steve Shaw, Administrator, Division of Child and Family Services (DCFS), that the committee would hear testimony from others present prior to his budget presentation. She stated she had been advised there were representatives from the Nevada Foster Care Association present, and asked that the spokesperson come forward to present testimony.

Patty Donatelli, President, Sierra Association of Foster Families and spokesperson for the Foster Care Association of Nevada, made the following remarks:

Upon completion of her testimony, Ms. Donatelli offered to answer any questions.

Mrs. Chowning remarked she, with the help of others, was able to get a bill passed that gave funds for extra-curricular activities to foster parents. She inquired if Ms. Donatelli was aware of the funds, and if they were being used. Ms. Donatelli replied although she was aware of it, not all foster families were receiving those funds. She stated through local associations, families were reminded of the funds and when those funds were depleted, they could turn to local associations. Mrs. Chowning requested a yearly update from the director as to how the funds had been expended since the last session.

Ms. Donatelli stated if there were no further questions of her, would others be permitted to speak to the committee. Vice Chair Evans answered budgets had not been addressed, and time needed to be allotted for the presentation of those budgets. She said there would, however, be additional opportunity to present testimony at future subcommittee meetings. Ms. Donatelli thanked the committee for allowing her to present her testimony.

Mr. Shaw introduced himself, and stated he had been the Administrator of the Division of Child and Family Services (DCFS) for 1 year, 4 months and 28 days. He then introduced Jim Baumann, Acting Chief Fiscal Officer, DCFS. Addressing Mrs. Chowning, Mr. Shaw stated he had a report on the effects of her bill and would either submit the information directly to her in writing or present it in subcommittee.

Mr. Shaw presented the mission statement of the division as:

He stated the DCFS was formed in 1991 and was one of the younger and larger divisions in the state. DCFS requested $120 million and 909 full time positions in FY 2001. Mr. Shaw indicated 55 percent of the division’s revenue was derived from non-state funds through federal funds and fees. The percentage increase contained in The Executive Budget for FY 2001 over the adjusted base was about 15 percent. The requested increase of full time positions would provide a total of 25 positions over the biennium, which represented a 2.83 percent increase. Components of the division included child welfare, juvenile justice, and children’s mental health.

Mr. Shaw continued that the DCFS was one of six agencies in the United States that was structured to that particular configuration, stressing they were doing more to integrate service delivery. The division’s performance indicators were being improved and he would like to work at the subcommittee level to present the new indicators. He remarked the biggest issue facing the division was the implementation of the Adoption Safe Family Act (Public Law 105.89) (ASFA), a federal law passed in November of 1997, and was the first major revision to the federal child welfare law since 1980. Mr. Shaw explained that it was radical child welfare reform and he likened it to Temporary Assistance to Needy Families (TANF). Implementation of ASFA was tied directly to Title IV-E and Title IV-B funds; Nevada had received $19 million over the biennium. He stated ASFA made sense and would work for Nevada’s children and families. Mr. Shaw said since it was such a critical issue, the provisions of ASFA would be reviewed for the committee.

Vice Chair Evans said the presentation of the ASFA overview would be helpful and requested Mr. Shaw outline any potential budget implications related to ASFA.

Mr. Shaw explained ASFA was developed and passed by Congress to address several issues, one being high-profile child deaths, and the other was the growing foster care caseload. He said there had been some confusion about reasonable efforts. In the case of child abuse and neglect, reasonable efforts referred to a judge finding that an agency had made reasonable efforts to keep a child in his own biological home. Because of confusion over the definition of reasonable efforts, children were left in dangerous situations and injured. The ASFA law would clarify reasonable efforts by discussing what exactly it was not. He remarked that in the mid-eighties, foster care cost escalated with 250,000 kids in substitute care. By the mid-nineties there were 500,000, thus doubling the costs. According to Mr. Shaw, the safety issue permeated the law and was the key to ASFA, therefore, it should be the guiding light to child removal and/or placement. The child should be safe on the initial child-protective service call, safe in foster care, safe in adoption, and safe in reunification. There were cases where no reasonable effort would be made to unify the child with the family. The examples included: Abandonment, torture, chronic abuse, chronic sexual abuse, child murder, prior felony assault of any child, and any prior involuntary termination of parental rights.

Mr. Shaw stated the law also allowed for current planning in that reasonable efforts would not need to be performed for 18 months upon termination of parental rights, but both could be done at the same time. With the new law, termination of parental rights could take place within a 12-month time frame. That would strengthen the background check required on a relative foster home and a shorter time frame for permanency would be provided. The new law would speed up the time spent in substitute care in Nevada, which averaged 3.1 years. Mr. Shaw was unsure if it would require additional funds, but present resources could be re-deployed.

Mr. Shaw also indicated that ASFA restructured the Title IV-E payments. He explained Title IV-E payment was received for each month a child remained in foster care, and next year the payments would be "front-loaded." A higher proportion than the current 50 percent of federal funds would be received for children that were Title IV-E eligible. In Mr. Shaw’s opinion, payments would be "front-loaded" at a very high percentage until federal funding was completely eliminated or decreased to a minimum amount. If ASFA worked, and children were moved through the system in 2 years instead of 3, there would be savings. In terms of fiscal impact, if the bill were not implemented, the impact would be the loss of $19 million. There was legislation introduced by Senator Porter to privatize adoptions. Mr. Shaw explained 60 percent of adoptions were special-needs children, and the other 40 percent included private adoptions of healthy children which involved the DCFS.

Mr. Shaw thanked Vice Chair Evans for allowing him to speak on ASFA and presented the second issue faced by DCFS. During the last legislative session the county juvenile detention facility experienced significant backlog while waiting for placement at state facilities located in Elko and Caliente. Response by the legislature included three separate initiatives.

There was a transitional community reintegration program which allowed for early release of children from Elko and Caliente. The funds allowed youth to be placed in a contract residential house or day-treatment programs, and allowed the DCFS to "direct-commit" to Caliente where assessments would be completed in the community.

Mr. Shaw said the DCFS monitored the placement wait lists on a daily basis for children awaiting placement particularly those awaiting placement in excess of 30 days. Judge Hardcastle in Clark County and Judge McGee in Washoe County had issued orders that children committed by the state would not remain at local detention facilities for more than 30 days. Mr. Shaw advised he was not sure of the legality of that ruling, but the DCFS tried to abide by its intent. The number of juveniles awaiting placement reached the maximum number of 103 in March of 1997, and currently the number had decreased to 28. In terms of those who waited longer than 30 days, the maximum in juvenile facilities across the state was 70. The DCFS averaged less than one youth in the last 6 months on the waiting list. Although the number of youth at the state training centers was over the designed capacity, the numbers were lower than in 1997. For instance, explained Mr. Shaw, Elko previously served 190 youth, and the capacity was set at 160. Elko was currently serving 175 youth. Even though the state continued to experience a significant population growth, reductions occurred resulting in the juvenile population being served in a more comprehensive and expedient manner. He stated although there was a recent upturn in the number of commitments, it was too early to declare a trend. However, the situation was being monitored and more data would be presented to the subcommittee.

Continuing, Mr. Shaw presented Budget Account 3148, Juvenile Correctional Facility, page DCFS-51. He recalled S.B. 495, passed by the 1997 legislature, provided the Department of Administration the authority to finance, acquire, and construct a juvenile correctional facility. Mr. Shaw stated with some reluctance, the DCFS had recommended the facility be operated through privatization. He stressed he was not an avid supporter of privatization of government services. The Correctional Service Corporation would be issued the contract for the operation, but ultimately it was up to the legislature to approve the appropriation. Mr. Shaw indicated the $108,411 recommended in FY 2000 was for operation of that facility for a period of 1 month. Although the facility had a capacity rate of 96, it was not felt there would be 96 youth being served in the initial stage. In FY 2001, $4,000,059 would not cover the cost to bring it up to a fully functional facility for 1 year. The "ramp-up," or number of juveniles entering the facility each month included 30 in June, an additional 30 in July, 20 in August, and 10 in September until full capacity was reached.

Mr. Shaw said the Department of Administration assembled a team to work on the Request for Proposals (RFP) which included DCFS, Public Works, the Purchasing Division, the Attorney General’s Office, the director of the Department of Prisons, and the Treasurer’s Office. At the Chair’s suggestion, an experienced consultant was brought in from the Office of Juvenile Justice and Delinquency to assist with the RFP for the serious and chronic facility. Much time was devoted to the development of the RFP. It was the opinion of Mr. Shaw that what DCFS was paying was not significantly different from what was paid to the Correctional Corporation of America for out-of-state placements, however, he explained that many more programs were included to serve the population. He added a business plan and a parallel budget for a publicly operated facility was complete and would be made available to the subcommittee.

Continuing, Mr. Shaw said that staffing was critical when dealing with the serious and chronic population. According to the standard of the Correctional Corporation of America, a facility required a staff with a ratio of 1 to 8 juvenile inmates to be fully American Correctional Association (ACA) accredited. To his knowledge, there were currently no ACA accredited facilities in Nevada, however, the new facility would be. Regarding privatization, Mr. Shaw advised his concern was in the area of ACA accreditation, a weak area. He sent two DCFS staff members to survey facilities in Texas and Florida. Upon return, the staff reported being totally impressed with the Florida facility. Mr. Shaw remarked the Florida facility was a fully accredited 300-bed serious and chronic facility which had received Florida’s Correctional Facility of the Year award last year. The American Association of Corrections had 39 or 40 mandatory and 400 optional standards on which juvenile centers were surveyed. Florida met all but four of the standards because the facility was not designed and built to house juveniles, and was too large to be ACA approved on that standard.

Mr. Shaw expressed his assurance that the new Nevada facility would have 100 percent compliance with all mandatory and optional standards, and the state would benefit from the model facility. He explained that a DCFS staff member would be hired to continually monitor the programming. The facility would be located in Las Vegas, 7 miles from the freeway, bordered by Nellis Air Force Base.

Mr. Shaw explained that although the budget did not contain many enhancements, one major enhancement was the addition of the serious and chronic facility. He reiterated the three issues that faced DCFS were ASFA, juvenile detention overcrowding, and the recommendation of the interim study on juvenile justice chaired by Assemblywoman Evans.

In regard to privatization, Senator Neal asked if Mr. Shaw was familiar with The Atlantic Monthly article entitled "The Prison Industrial Complex" which spoke of facilities being built with the sole purpose of giving people money when crime was on a decrease. Mr. Shaw replied in the affirmative, and added that he was not an advocate of privatization, only with this particular case and company.

Vice Chair Evans asked for clarification on two issues, first, the facility would be operated so contract placements at Rite of Passage would not be necessary for the second year of the biennium, and inquired if that was also the case with out-of-state placements. She also requested the status of the contract for construction of the facility. Mr. Shaw responded no Rite of Passage placements would be needed in the second year of the biennium, however, he would have to defer to the Department of Administration regarding the construction contract. As far as he knew, Clark & Sullivan would construct the facility. Mr. Shaw explained the entire contract was before the Board of Examiners.

Perry Comeaux, Director, Department of Administration, explained he had a copy of the contract to be signed by the parties involved, and it was on the Board of Examiners agenda for next Tuesday. In terms of financing, the Treasure’s Office would issue Certificates of Participation to finance the construction cost beginning approximately the first of April.

Vice Chair Evans asked if the $120 daily rate mentioned earlier by Mr. Shaw included debt retirement on the bonds. Mr. Comeaux responded it did not, but believed an estimate of the required debt service was included in that decision unit. He stated the Department of Administration would give the committee the adjusted figure on the debt retirement cost when certificates were sold.

Vice Chair Evans asked for target dates regarding the start of construction and estimated completion of the project. Mr. Comeaux answered he would relay those dates to the committee. He estimated the facility would be open to admit the first 30 youth in June of 2000.

Mr. Marvel asked if the local and regional juvenile facilities had taken much pressure off the DCFS and the state. Mr. Shaw responded they had not yet; however, the facility in Winnemucca did a good job keeping children in the community.

Mr. Marvel asked if the Elko facility retained most of its juveniles. Mr. Shaw replied he was unsure but would get back to the committee. Mr. Marvel remarked if that was the current trend, it would continue for the new facility. Mr. Shaw reiterated the sentiments expressed by Senator Neal regarding decreasing crime, and stated that a juvenile facility had not been built since the 1960’s. He advised over 350 juveniles were incarcerated in the adult prison system, some by mandatory commitment, and some optional; he felt a juvenile facility was much needed. Mr. Shaw remarked even though crime was decreasing, population was increasing rapidly, and he did not anticipate any problems with the facility.

Vice Chair Evans thought Mr. Marvel brought up a good point and stated a number of juvenile correction beds was projected when National Council on Crime and Delinquency (NCCD) completed the juvenile corrections needs assessment a number of years ago. She requested Mr. Shaw update the subcommittee on the status and occupancy of the various detention centers. Mr. Shaw advised he would provide that information.

Continuing with ACR-57 (1997), Mr. Shaw indicated the interim legislative study authorized last session dealt with juvenile justice. In his opinion, the interim legislative study was the best study done, shining the light on juvenile justice. He explained top consultants methodically reviewed it, and several issues including standardized placement, were touched on. He remarked on the issue of juveniles being inappropriately placed, or seemingly so within different jurisdictions, and it was hoped the study would standardize the placement of youth. To the benefit of chief juvenile officers, also known as the Nevada Association of Juvenile Justice Administrators, standards were being developed for placement, community placement, and detention. Mr. Shaw stated that ACR-57 investigated intermediate sanctions and what sanctions the state lacked. He explained a critical area being examined within the juvenile justice population was substance abuse treatment. Also, he added, emphasis was being placed on examining the potential restructuring of the contentious state-county relationship. The study was examining the mental health within the juvenile justice population, which had never been reviewed in that manner before. Mr. Shaw hoped the juvenile justice study would continue through the next biennium, as it deserved more than a 2-year look. He remarked half the work was complete and the juvenile justice community was committed to completion of the other half after the close of the 1999 Session.

Mr. Shaw addressed Budget Account 3262, The Juvenile Accountability Block Grant, page DCFS-45 of The Executive Budget. The Juvenile Accountability Block Grant was federal legislation which represented an enhanced federal commitment to juvenile justice. A total of $2.1 million in federal funds had been received, and in the past, federal dollars totaled only $600,000 for the entire state. Mr. Shaw stated 75 percent of the $2.1 million was passed through units of local governments. He believed that there were 10 or 12 areas where the money was directed, and it could only be used in those areas. According to Mr. Shaw, 50 percent could be used for construction, but only if it were matched by a like amount of non-federal funds.

Mr. Shaw called attention to the issue of the bifurcated system of providing juvenile services. He indicated the county operated the front-end of the system and the state operated the back-end. The state had two bifurcated systems with which DCFS worked, the child welfare system and the juvenile justice system. The counties of Washoe and Clark provided investigations of child abuse and removal. Once a case went to court, the child could remain in custody from 60 to 180 days before being transferred to the state. In the juvenile justice system, the county provided the front-end service (i.e. the probation officers and local detention), and the state provided rear-end services (i.e. the correctional facilities and parole). In regard to the budget, he stated that bifurcation was a very volatile area. If the front-end of the system was not controlled, it was difficult to control the back-end.

Mr. Shaw explained in the area of child welfare, Budget Account 3229, Youth Community Services, page DCFS-28 reflected most of the division’s placements. In 1996, DCFS experienced a 15 to 20 percent increase in child welfare placements, but current numbers indicated child welfare placement appeared to be leveling off. He explained that child abuse rates, child abuse reporting, individual judges, and the news media all affected child welfare placement. With the volatility of the situation and the amount of projected child placements, the agency’s request was substantial compared to The Executive Budget.

Continuing, Mr. Shaw stressed the bifurcated system was a shame. He explained the system was built for adults, by adults, and harmed children. In the Washoe County area children were moved an average of 3.6 times because of the system, and Nevada was under scrutiny by those coming into the state to investigate child welfare issues. A Bill Draft Request (BDR) had been submitted by a number of judges and Assemblyman Humke to call for an interim legislative study that would investigate how the system could be reorganized. Mr. Shaw advised in the meantime he was working with the Director of Washoe County Social Services to develop a pilot program which would not require statutory changes. He would present that to the subcommittee for review.

Senator Coffin commented he thought the goal of DCFS, created in 1991, would be to aid in the removal of the bifurcated system; the "one-stop" shop for children. Mr. Shaw responded, from his viewpoint, he was significantly involved in the design of DCFS in the 1980’s as Chief of Planning for the director’s office of the Department of Human Resources. The division was not meant to end the bifurcated system, but to integrate youth services with corrections, children’s mental health and child welfare.

Senator Coffin remarked the impression he was given years ago was DCFS would take the burden off local systems. He recalled joint conferences on the subject. Mr. Shaw stated he could not answer as he was not involved with DCFS at the time.

Senator Coffin queried why bifurcation had not been eliminated as promised and studies were still being discussed. He asked if the committee had not given the resources, or if presentation to the committee had been neglected. Mr. Shaw was unsure.

Vice Chair Evans requested Mr. Shaw conclude the juvenile justice overview with questions from the committee, and return to child welfare, Unified Nevada Information Technology for Youth (UNITY), and mental health.

With regard to Budget Account 1383, CFS Juvenile Justice Programs, page DCFS-44, Vice Chair Evans acknowledged $200,000 was appropriated to counties in the 1997 budget targeting juvenile sex offenders, but only $1,420 was expended in FY 1997-98. She questioned why the division requested those same funds. Mr. Shaw replied, to his knowledge, the division made a slow start and $85,000 was reverted. The $200,000 was requested for both years of the biennium because the sexual offender program was fully operational.

Vice Chair Evans requested Mr. Shaw report program achievements to the committee before expenditures were decided.

Vice Chair Evans remarked that a goal of the Community Corrections Block Grant was to reduce commitments to state facilities. She recalled Clark County’s Freedom Program had been operating successfully until resources were pulled back resulting in overcrowding of detention centers, and asked for a status report. Mr. Shaw replied success was difficult to isolate when three new programs operated at the same time and dealt with overcrowding: Community Correction Block Grant, transitional community reintegration, and placement funds. He stressed in combination, the data acquired handled the backup well. Legislators received a report on the Community Correction Block Grant, a series of programs developed in judicial districts including the expansion of The Freedom Program. He explained those programs had taken the pressure off commitments to the state. He said a range of nonresidential programs were available, operating in different stages, and included in-home monitoring, day treatment programs, and intensive supervision for children who would otherwise be committed to state facilities. Mr. Shaw indicated a specific progress report would be presented to the committee.

Vice Chair Evans requested a brief comment regarding the contract residential house and intensive aftercare programs. Mr. Shaw replied the Youth Parole Budget, Budget Account 3263, page DCFS-67, was not funded for the 1999-01 biennium, and two positions for intensive aftercare would be eliminated. He explained funding for the transitional community reintegration, or halfway house, would continue for the day treatment and residential programs.

Vice Chair Evans remarked a goal of intensive aftercare was to decrease numbers of revocations and aid youngsters in staying on-track once they left the facility. She asked what the thinking was behind not supporting the continuation of the intensive aftercare program. Mr. Shaw stated the Governor had placed them in an awkward position when deciding on priorities due to lack of funds.

Vice Chair Evans asked Mr. Shaw if he would like to have Mr. Kennedy and Mr. Burgess present their programs to the committee. Mr. Shaw replied in the affirmative.

Bruce Kennedy, Chief of the Nevada Youth Parole Bureau, introduced himself and stated he would be happy to answer questions and would give the committee a program statement. He began by stating youth parole provided the aftercare for youth released from juvenile correctional institutions and other state institutions, provided treatment and case management under NRS 62.213, and also supervised mental health cases in which a crime had been committed.

Vice Chair Evans requested that Mr. Kennedy comment on the aftercare program. Mr. Kennedy stated children were monitored for 5 years to determine if intensive care received made a difference in deterrence from the adult criminal system. He explained that his own personal data showed no significant difference in revocations or terminations between the control group and the intensive group. Those in the intensive group were seen almost on a daily basis and were not being terminated or revoked any differently than others who did not benefit from the same level of supervision. A community protection aspect of the program was that children were being held accountable for their behavior by doing community service work 5 to 6 days a week in the evenings. With regard to figures, he couldn’t say there was a difference, however, he believed there was a difference only in that they were seen much more often.

Vice Chair Evans remarked the committee had also made appropriations for the transitional community reintegration program last session and asked for comments on its success. Mr. Kennedy reiterated the sentiments of Mr. Shaw on the program being the most innovative development, but it took some time to start due to staffing, contracts, and RFP’s. He stated the division was able to "mold" programs that were needed. Prior to initiation of the sex offender program a number of those offenders were placed in out-of-state institutions due to the lack of appropriate in-state programs. In southern Nevada, the bureau developed a program for those offenders with wrap-around services in place at the Center for Independent Living.

Ed Burgess, Superintendent, Youth Training Center presented some statistics indicating how funds appropriated last session were expended. During FY 1997-98, 380 juveniles were admitted to the training center. Male youths entering the system totaled 429 and some went directly to Caliente. He remarked, with the number of juveniles currently in residence plus those recently admitted, the center provided services for 565 youths. Mr. Burgess stated the average daily population level of 185, and for the first 6 months of 1999 the center operated at a population of 176. The average length of stay was 7 months, 29 days. The center had three incidents of runaways; two occurred after winning a state championship track meet in Las Vegas. Of the youth on parole, 90.7 percent did not return to the center.

Continuing, Mr. Burgess stated records showed how many of those youth graduated from high school, and in the last year, 46 diplomas and 65 GED’s were issued. Of the 254 youth released, 44 percent graduated from high school and the average age was 16. The center issued 257 vocational certificates that indicated the competency level of the juveniles in vocational trades. Children were tested upon entry and exit in reading, math, and language arts, and monthly academic gains were based on standardized tests. Mr. Burgess presented a breakdown of ethnic backgrounds of the juveniles confined in the training center: Caucasians, 45 percent; African-Americans, 25 percent; Hispanics, 4.7 percent; Native American/Asian, 4.5 percent. He indicated the program cost totaled $84.20 per day, or $30,733 per year, one of the lowest institutional costs in the United States. He felt exceptionally good about the academic achievements in diplomas and certificates.

Mrs. Chowning complimented and thanked Mr. Burgess for his work. She related a story about the son of a friend that had been in and out of the youth correctional system, was on the street, and had a multitude of problems. The track program and counselors at The Nevada Youth Training Center (NYTC) helped the boy tremendously and he went home with medals from the state championship. His self-esteem and dignity had been greatly increased, and he returned home with a diploma.

Mr. Marvel asked how the juveniles were monitored upon leaving the facility to which Mr. Burgess replied the children were placed on parole for 6 to 18 months.

Mr. Marvel asked if there was a tracking system implemented, or if the juveniles "straightened-out" after leaving. Mr. Burgess answered it was difficult to track juveniles after the age of 18, as many were transient or moved out-of-state. The intensive aftercare program would track juveniles by use of social security numbers. He stated 212 juveniles had gone through the program, which meant approximately 100 were in a control group and 100 in the intensive aftercare group. Statistically speaking the numbers were significant and the Federal Government was very happy with the numbers produced by Nevada.

Vice Chair Evans requested Mr. Burgess comment on the budget line item regarding uniforms. Mr. Burgess advised children arrived at the center wearing their own clothes, which sometimes included gang colors. He described the difficulty of allowing the youth to wear personal clothing and still arrive at an acceptable dress standard that did not project negative subcultures. The request for funds by NYTC was to implement a dress code whereby the appearance of the juveniles would be controlled.

Vice Chair Evans stated she felt that was a great idea. The tight budget of the 1993 session caused the legislature to consider dissolution of the center’s sports program, however, that had not happened. Mr. Burgess replied that since then, the program had expanded to include a cross-country track program and academic Olympics. The center hosted the academic Olympics’ state championships in December, which was a very positive experience for the children. Mr. Burgess advised the committee he had been at Elko for 39-years, 25-days.

Senator Jacobsen asked how much prison industries was utilized for furniture. Mr. Burgess replied most of their furnishings came from prison industries.

Regarding Budget Account 3145, Child and Family Administration, page DCFS-1, Mr. Shaw stated that was the major account used to support child protection, family assessment, family preservation, substitute care, and adoption. Nineteen positions recommended within The Executive Budget would substantially reduce individual caseload ratios from 1 to 38 to 1 to 34. Given the state of the budget, he was pleased with the addition of those positions, although he would like to have had more. Of the 19 positions, 3 were maintenance positions, and 16 were included in enhancement units. He said there were fifteen child welfare workers, two supervisors, and two secretaries recommended in the budget.

Continuing, Mr. Shaw presented the Unified Nevada Information Technology for Youth (UNITY), the federally funded automated statewide child welfare system. He said the budget contained an enhancement unit for five positions to operate the program. UNITY was scheduled to become operational in October 1999 and would allow the DCFS to do a number of things that could not be done previously. The program would be state maintained and Mr. Shaw envisioned no over budgeting situations that would push the operational date back. Mr. Shaw then introduced Madilyn Maire, Program Chief, UNITY Project.

Vice Chair Evans welcomed Ms. Maire and requested comments regarding increased staff positions within the Department of Information Technology (DoIT), if staffing was at the level needed for the upcoming biennium, and if there were any anticipated staffing increases. Ms. Maire said the operations portion of the UNITY program was prepared by observing other states, particularly Arizona. Arizona’s transfer system and staffing patterns were researched to determine operations for Nevada. She said one thing done differently in Nevada was operating the system using state staff rather than contractors. A realistic staffing level was assimilated for on-going systems operation, and the actual operation of the system would be handled by DoIT staff. Vice Chair Evans asked if DoIT staff would be working on UNITY exclusively, and Ms. Maire replied in the affirmative.

Vice Chair Evans asked if there were further questions regarding child welfare or UNITY. There being none, she asked Mr. Shaw if there was information to present on special education programs or child and adolescent services. He requested to address out-of-state placements.

Mr. Shaw stated DCFS placed 134 children out-of-state in 1995; however, currently the out-of-state placements totaled 25. Of those, three were no-cost placements, and 22 were paid placements. Five children placed out-of-state in Utah were developmentally delayed with high medical needs. He said those children would never return unless the Division of Mental Health/Mental Retardation had a program for them. Eight of sixteen children were high-risk sexual offenders which the Desert Willow facility, housing only low to moderate offenders, was not designed to house. He said the additional eight youth were seriously emotionally disturbed and on treatment regimes; one was brought back to Desert Willow. According to Mr. Shaw, Desert Willow was an accredited 56,000-sq. ft., 56-bed facility that would keep more juvenile offenders from future out-of-state placement and urged legislators to tour the facility if at all possible. He explained Desert Willow received a full provisional accreditation in October 1998 and no problems were anticipated for the next provisional accreditation that was scheduled in approximately 6 months. The facility would be a significant addition to Nevada in the ability to treat children.

Mr. Marvel asked how many children in the facility were Medicaid eligible. Mr. Shaw replied due to lack of clarification of HCFA, a Medicaid contract would not be allowed until full accreditation had been achieved. He believed the interpretation was wrong and said the Joint Commission on Accreditation of Health Care Organizations, sided with the division. A meeting was scheduled with director in order to receive a Medicaid contract. Mr. Marvel then asked how many children would be Medicaid eligible once the contract was in place. Mr. Shaw believed it would be nearly 100 percent.

Vice Chair Evans asked if there was any information to be brought before the committee regarding northern or southern Adolescent Services. Mr. Shaw responded the increase in southern Nevada was the operation of Desert Willow Juvenile Treatment Center. Currently there was a staff of 66, but when the facility was fully operational he anticipated 100 positions. He stated that the census was at 40 of the 56-bed capacity and anticipated no problems in filling the facility as soon as the Medicaid authorization was received. Mr. Shaw hoped to have the issue clarified within a month.

Mr. Marvel remarked that when the legislature created the DCFS, one of the dilemmas faced was whether or not the youngsters would receive mental health services. He asked if Mr. Shaw felt the children’s mental health needs were being adequately addressed. Mr. Shaw replied he believed the mental health needs were being more adequately addressed than in the past.

Mrs. Chowning remarked on the closing of the Southern Nevada Children’s Home last session and families and siblings being separated. She asked if Mr. Shaw could inform the committee of the policy of keeping siblings together. Mr. Shaw replied he would supply greater detail to the subcommittee. He said data received from a 6-month follow-up revealed good numbers. A research study done on sibling groups indicated 60 percent of all sibling groups were kept together, and 70 to 75 percent were partial sibling groups.

Mrs. Chowning remarked she knew some sibling groups were separated, but requested information on those that were together before the closure. Mr. Shaw replied that he would supply her with that data.

Mr. Hettrick stated he was actively involved in the closure of the Southern Nevada Children’s Home and information had been forwarded to him regarding the home. A survey taken of the children who had resided in the home after being placed revealed 90 percent felt they were better off and more sufficiently taken care of in their new settings.

Senator O’Donnell voiced his concern that children could not be tracked without being hand-counted. In the event of an emergency, there should be a computerized list available for tracking. Mr. Shaw replied the UNITY system would be fully operational in October and sibling groups would be tracked using the system. He stated with the exception of those from the children’s home, DCFS had made a point of tracking children. He hoped to have the necessary data by October.

Senator Coffin asked if statistical information acquired was applied to sibling groups or the entire population of the home. Mr. Shaw replied to his knowledge it included all children in the home and he would supply additional information to the committee.

Vice Chair Evans recognized Mr. Baumann, who stated after 17 years at the institute, it was nice working with DCFS. Vice Chair Evans solicited additional public testimony on items or issues within the DCFS budget that had not been covered.

Christine Bitonti, Ph.D., LCSW introduced herself and stated she was a researcher and a member of the MH/MR commission and offered her testimony:

Vice Chair Evans thanked Dr. Bitonti for sharing her findings and bringing them to the committee’s attention.

Senator O’Connell asked for information outlining the cost of the program. Dr. Bitonti referred the question to Jim Baumann. Mr. Baumann replied the funding loss which resulted in 3.5 positions being cut, was in the neighborhood of $180,000.

Dr. Bitonti said the research project conducted to evaluate the program cost $10,000 through the University of Nevada. She added it really was not expensive to produce good, solid findings.

Kathleen Adkins, foster caregiver, introduced her daughter Sara Elizabeth, and asked the committee members to take part in a game of interaction for the benefit of her 8-year-old daughter. Ms. Adkins asked the committee how many played T-ball or baseball when they were younger. Many committee members raised their hands. She then asked how many took gymnastics or swimming. Again members acknowledged by a show of hands. She turned to her daughter and remarked how much in common she had with the members.

Addressing the committee, Ms. Adkins assured the committee this was no "dog-and-pony show." She stated her daughter was 6 years old when taken from her home and placed in Kid’s Cottage. Her length of stay was 4 weeks, and in November the Adkins family adopted her. She remarked her family was very public and was glad to have adopted Sara.

Continuing, Ms. Adkins stated she wanted to honor many aspects of the department. First, the family was very impressed with the staff of Kid’s Cottage and the facility itself. Once the family learned of respite and therapeutic services, the services received by the Adkins’ helped in adjustment issues. Ms. Adkins said they could not take credit for the increase in the child care subsidy however, foster families did expend all subsidies received and more was needed. She remarked the northern adoption unit in Reno was very caring and family oriented compared to the unit located on Mill Street in Reno. The family’s court appointed special advocate worker represented Sara’s best interest and became a family friend. She recalled the public celebration upon adoption of her daughter and she believed, as a result, more families were truly interested in fostering and adoption of special needs children in Nevada. Ms. Adkins said she would like to work with Mr. Shaw and DCFS on additional ways to market potential adoptive families. She concluded in the future if given another opportunity she would speak about the bifurcated system and related a story of a time when her daughter was under the care of a Washoe county worker who assured the family that Sara would be informed about what was about to occur. Forty-eight hours later due to lack of communication, and the problems that occurred with the bifurcation system, the Adkins went to pick up Sara and she had no clue what was happening. She explained as the case was first transferred to the state there were many delays. Ms. Adkins assured the committee she was not trying to "pull at their heart strings" but asked the committee to consider what they were doing. There were many other children who needed a family.

Vice Chair Evans thanked Ms. Adkins for the important information and asked Sara if she had questions for the committee. She commented that Sara had been very good during the presentation and asked where she attended school. Miss Adkins responded she attended Spanish Springs Elementary School.

Teresa Becker, President of Foster Parent Association of Southern Nevada, and foster parent of three teenage girls addressed the committee and stated the association was in support of the proposal for an increase to the reimbursement rate for foster care. She called attention to the critical need Nevada had for increased caseworkers. A time study done on a caseworker in 1998 revealed the basic minimum standard of meeting with one child face-to-face per month, had not been met. The report indicated visits with the parents and children were at the bottom of the caseworkers’ priority list. The study also determined the hours required to meet the minimum policy standards by reviewing the time that it took each caseworker depending on the case complexity. Based on information attained, the report revealed 247 casework positions were required for mandates to be met by DCFS. Given the caseloads, an additional 118 caseworkers would be required by DCFS in order to meet minimal policy standards. She stated the study did not, however, take into account additional workload requirements due to the ASFA.

Continuing, Ms. Becker stated the request for 19 caseworkers was not adequate and would not solve the problems. She stated that by not providing sufficient workers to meet the minimum policy standards as set by the state, both the state and the children would suffer.

Vice Chair Evans remarked that was an important issue. She added the ratios would be reviewed in subcommittee and thanked Ms. Becker for bringing the issue to the attention of the committee members.

Lori Bushey, foster parent, informed the committee that fully funding the foster family/foster care made good economical sense. The alternative, the Kid’s Cottage, had been tried by the county and in excess of $90 per day was paid per child without disabilities. Both the Sierra Regional Center and Eagle Valley Children’s Home cost the state approximately $300 per day for children with disabilities. She determined a foster family saved the state 87 to 90 percent and she requested support for the request.

Ms. Cegavske advised she had the pleasure of being a foster parent to one of the dolls provided by the association during the 1997 session. She commented what a challenge it was to provide foster care, and that the "doll" concept was interesting.

Ms. Bushey added she cared for special needs children and the child currently in her care had been in 11 placements before coming to her. In 18 months, the 11 placements included hospitalization and time with the biological parents. Ms. Bushey said prior to coming to her, her son was in a county home and was asked to leave because the county paid more than the state. She said she was in the program because of the children, and more resources were needed so families would not have to quit on the children.

Mrs. de Braga remarked she had many calls from foster parents who stated the biggest shortage was in clothing allowances, particularly for older children. She asked Ms. Bushey to comment on the greatest need. Ms. Bushey said she could comment only on the babies she cared for. She added diapers were greatly needed, but once the children turned 3 years old, Medicaid picked up the cost. With regard to the clothing allowance, Ms. Bushey said the increase given was adequate for her personally if she shopped at garage sales, but older children did not prefer that. She stated Ms. Donatelli had older children and could add more on the subject.

Vice Chair Evans thanked Ms. Bushey for her presentation and remarked it took a special person to work with special needs children.

Allison Reardon, Employee Representative, State of Nevada Employees’ Association, stated this was an area in which she had a personal interest. She knew the committee was interested in quantifying and justifying why recommended positions were so important. She relayed a story of meeting with social workers, one of whom gave a graphic example of a case. One child came from an abusive home in which the parents had divorced and remarried. Because the child was in an abusive situation, one or more of the parents were involved in the criminal justice system resulting in attorneys being involved. A CASA worker was also involved, as well as teachers and mental health workers who assisted the child in returning to some sense of "normality." She said the social worker determined that for each child she dealt with up to 50 other people. She asked the committee to consider how many people were involved when it came to social workers’ caseloads and added just trying to get two people in the room together was very time consuming and that was the daily job of the social worker.

Continuing, Ms. Reardon said she echoed the social workers comments about the case studies done to get the caseworkers to visit children in their homes. Foster parents were very important to the social workers providing the transporting and coordinating the social workers did not have the time to perform. She reiterated her sentiments to the committee about taking into consideration the ratios and all the people involved trying to reunite the family or moving the child to a healthy atmosphere.

Vice Chair thanked Ms. Reardon for her presentation and asked if there were any more presentations.

Patty Donatelli echoed all sentiments previously presented, and commented on family preservation. She said she had three children who were going home after 1 year in her care because of the Family Preservation Program. Family Preservation was involved in "knitting" the family back together to create a healthy environment, thereby saving the state money. With regard to clothing allowances, she added they were now reimbursed monthly instead of quarterly. Families were reimbursed $56 for children over the age of 12 and $36 for children under the age of 12, which helped tremendously because clothing children was costly. She concluded many foster families were frugal and although that amount was not adequate, it was much appreciated.

Vice Chair Evans thanked Ms. Donatelli for sharing her comments and assured her the committee would review the positions which had been cut.

There being no further business, the meeting was adjourned at 4:50 p.m.

RESPECTFULLY SUBMITTED:

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Carol Thomsen,

Committee Secretary

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Rachel Baker,

Committee Secretary

APPROVED BY:

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Assemblywoman Jan Evans

Vice Chair

DATE:___________________________

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Senator William J. Raggio

Chairman

DATE:___________________________