The joint hearing of the Assembly Ways and Means Committee/ Senate Finance Subcommittee on Human Resources/ K-12 was called to order at 8:20 a.m. on Tuesday March 30, 1999 by Chairwoman Jan Evans. Exhibit A is the Agenda. Exhibit B is the Guest List. All Exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

Ms. Jan Evans, Chair

Mr. Joseph Dini, Jr.

Mr. David Goldwater

Mr. Lynn Hettrick

Mr. David Parks

SENATE COMMITTEE MEMBERS PRESENT:

Senator Robert Coffin

Senator Bernice Mathews

Senator Raymond Rawson

Senator William Raggio, Chairman

None

None

Mark Stevens, Assembly Fiscal Analyst

Dan Miles, Senate Fiscal Analyst

Steve Abba, Senior Program Analyst

Ginny Wiswell, Program Analyst

Cynthia M. Cendagorta, Committee Secretary

Janice Wright, Division of Health Care Financing and Policy, identified Budget Account 3157 as the Intergovernmental Transfer Account (IGT). Ms. Wright said there was some concern the Intergovernmental Transfer Account was overextended as a result of the expenditure amounts in the Medicaid and Check-up budgets. That particular account provided revenues for both of those individual programs. If there were under-expenditures in the current fiscal year, there would be an amount available to balance forward. If there were not, then the division would have to address that particular issue.

Chair Evans said closing sheets would need to be prepared, so it was important to ask questions. She noted concern that there could be a deficit in Medicaid in 2001. A lot of money had been transferred from IGT into Medicaid. The committee didn’t really see any contingency built in, and just needed to have the divisions on record. Ms. Wright answered the Executive Budget projected the division would have a surplus of $21 million at the end of the next biennium. That was predicated on the fact that the division would have to under-expend in the existing fiscal year 1999, as well as in fiscal year 2000. The under-expenditures could occur as a result of decreased caseloads in the Medicaid and Check-up budgets. If the under-expenditure were to occur, they would generate that additional amount available for the upcoming biennium. However, at that point, there were concerns that were becoming more difficult to address in light of the fact Medicaid caseloads were not decreasing in 1999 as they had in 1998.

Senator Rawson said if the budget under-expended it would be all right. There were indicators that would lead someone to believe the budget was going to under-expend. The committee had the problem of knowing how much of a balance it was going to base the budget on. Because of this the Economic Forum had been established. With the forum the committee was returning to using internal devices to be able to play with the amount of money available. Senator Rawson wanted to deal with the issue, and wanted the best estimates of where the state was going to be. He wanted to leave there knowing there was a budget out there that was presumed to be sound and would not be a problem. If caseloads were looked at, the senator wanted to know if there was an upsurge and the division expected to be short.

Ms. Wright said the concern about caseload was critical to the success of the budget. It was also critical to being able to determine if there was available money to balance forward. The caseload information the division was working with was what it had back in June. There had been changes that occurred since then. The most recent caseload information available was based on the Welfare Division’s projections from November. The actual figures showed a slight increase over what was budgeted for fiscal year 1999. That caused the division some concern in looking at the way it built The Executive Budget. At the time the budget was constructed, it did not look too bad. In light of the more recent caseload, the projection was looking less favorable. The division would have an opportunity to use March caseload information and re-run the division’s Medicaid Projection Program (MPP). After the MPP was run, the division would have to go back into the budget and re-run the Governor Recommend portion of the budget. Then it would take a few days to reconcile the numbers between the MPP and the Governor Recommend budgets. According to the projections the division was currently working on, it would have those figures available to the committee by April 29,1999. It was Ms. Wright’s understanding the committee was concerned that would be too late since it was trying to close all of the budgets by the latter part of April. Chair Evans said that was correct.

Ms. Wright said the only other option would be to not include the month of March. If the division went back and had the Welfare Division redo the caseload for February, the division would be shorting itself one month’s worth of information. According to the division’s recent discussions, it appeared the Welfare Division would be able to redo their caseload by April 5, 1999. It would then take the division a week to run the MPP, another week to redo the Governor’s recommended budget proposal and a few days to reconcile the numbers. What would be gained by excluding the March figures was a couple of days at the back end. Ms. Wright promised the division would work very hard during that time, and stated that it would provide the information as soon as possible.

Senator Rawson asked if the March data had been analyzed. Ms. Wright said it had been analyzed to some degree, but there were differences in reconciling the figures. However unsuccessful in their attempt, she indicated that the Welfare Division tried very hard to reconcile all of the figures on their caseload at that time.

Senator Rawson then proposed an economic solution to the problem. He said he would like to have a figure that was broken down through November or December. Then, after March 30, 1999, the committee would receive an update from which the committee could make its projections. He noted that he did not intend to lock the committee’s projections, but only to provide a point from which the committee could base its predictions. He indicated that the calculation of such statistics could not be accomplished during the 1999 legislature so he recommended that it be written in the budget closing, thereby ensuring that the committee would have those economic projections to go by in the future.

Senator Rawson added at some point the committee would have to cut the line and ask for the information the division had and not wait until May. Whether the committee gained that much by including the March figures was not clear. However, identifiable trends should have already been observed, excluding March. Furthermore, the Senator said the Governor’s budget was based on 10,000 CHIP patients, while the actual numbers totaled almost 5,000 patients. Senator Rawson thought those figures were under-projected for the biennium.

Myla Florence, Administrator of the State Welfare Division, said the information she provided the committee (Exhibit C) would be helpful.

Bob Anderson, Administrative Services Officer for the Welfare Division, stated the division operated a Research and Coordination Unit that addressed the eligibility process. The division had all the information it needed to project caseload except for six categories: the aged, blind, disabled, qualified medical beneficiaries, special low-income beneficiaries, and county match recipients. He explained that it was a four-day process to run each of the models using the data elements and data points the division had collected through February. He did not believe that one added data element would skew the results.

He explained that after the division ran a multiple regression, a linear and a smoothing model, they would look at the statistical validity of each test and determine which test provided the most accurate results, while using historical trends with a five percent deviation. He did not think that the caseload should be cut down to the point where the division was in a negative regression. It was more desirable to have a positive side. The division could be a little more conservative in terms of caseload though so that payments were sufficient to take care of the medical claims.

Mr. Anderson said the division anticipated a four-day work effort collaborating with the Budget Division, Medicaid, and the Welfare Division. Shortly after, the information could be loaded into the Medicaid Payments Projection (MPP) model.

The Chair asked if Ms. Wright had reviewed Exhibit C. Ms. Wright indicated she had. Ms. Florence then added that once the caseload projections were finalized, the Division of Health Care Financing and Policy (HCF&P) would run the MPP model. This would add additional time to the process.

Chairwoman Evans asked if the information would change the aforementioned timetable for the MPP model. Ms. Florence said the division might be able to get the information to the committee four days earlier than the division originally had planned. She indicated that the division hoped to calculate the figures quickly. If all of the numbers were reconciled early and if there were no deviations from the MPP information, the report would be available a few days earlier than planned.

Senator Rawson wanted the division to begin working on the report and the data immediately as the committee couldn’t wait long for the report. Ms. Florence reported the division was prepared to start immediately. She indicated that the difficulty the division previously had, involved reconciling reports out of Nevada Operations Multi-Automated Data System (NOMADS) to the Legacy system. As a result, categories were seen as lagging from projections the division had done on other parts of the caseload.

Chairwoman Evans said after the division’s report was submitted to the committee there were additional steps which would demand even more time. Although she thought that the end of April seemed reasonable as a deadline, she commented that if the committee did not have everything complete by mid-May, the legislature would not be able to finish by May 31, 1999. The Chair added that the voter’s had asked legislator’s to finish their task in a 120-day timeframe. This requirement did not only apply to solely the legislative branch of government. The executive branch and the legislative branches were inextricably linked in the budget process. She felt that the legislative branch was working as hard as possible, but the executive agencies did not realize that the 120-day requirement was also their deadline. Therefore, she emphasized that each branch of government had to cooperate or the legislature would not make its targeted completion date. In many ways, she thought that the legislature’s timetable was at the mercy of the agencies. Furthermore, the budget in question was an important one for the committee and for this reason the committee was distressed at the delay in the delivery of the information it needed to complete its task.

Ms. Florence remarked that the delay was not the result of a lack of willingness on the division’s part, but rather the result of a high volume of work that needed to be accomplished. She said the division’s work could not be compressed if the goal was to obtain good, valid data. The division appreciated the committee’s concern and understood the importance of moving the budget along very quickly.

Chair Evans said the committee empathized with the amount of work the division needed to accomplish, as the committee itself had been tasked to resolve 474 budget accounts by May 31, 1999. She added that in order to move the process along more quickly, the legislature spent roughly a year redesigning the legislative process in anticipation that the timetable would change and that the voters would request the 120-day session. She speculated that similar amounts of thought and effort did not occur in the other branches of government. Therefore, she mentioned that the legislative timetables would have to be reconsidered for future sessions.

Ms. Florence then commented that the division had been very proactive in looking at how it could coordinate joint testimony, fiscal notes and information for the legislature’s benefit. Typically, she said the division re-projected caseloads in November and March. However, the division understood that because budgets were closed by the end of April, it would have to use February data. For this reason, she articulated that the division had been working diligently to get the information reconciled as early as possible. Regardless, the division had experienced difficulty in bringing two system reports together in order to realize caseload numbers that made sense. Unfortunately, the information the division had received from NOMADS did not provide credible data. Despite those difficulties, Ms. Florence averred the division had definitely changed the way it operated.

Ms. Wright added that the legislative staff had been very cooperative in working with the agencies. She noted the 120-day legislative process was a learning process for all of the agencies who were also tasked with figuring out how the legislative deadlines would operate. It had been her hope that HCF&P would be able to provide the committee with the most recent information, including the month of March. However, the division later realized their goal would not be met and so adjustments were made. Ms. Wright promised that the division stood committed to do the work that was necessary and to do it in an expedited fashion, in order to insure the committee did get the information as timely as possible.

Chair Evans asked how much money would need to be transferred in FY 99 to meet the reversion target of $53.5 million. She added the committee was still waiting for the division’s assessment of its surplus. Also, she stated that the committee still requested the division’s plan, regarding a possible $30 million deficit.

Ms. Wright answered that in order to achieve the $53.5 million reversion, the division had reviewed weekly calculations of Medicaid expenditures for medical services. She indicated that in certain weeks, categories 12, 14 and 15, had expenditure levels that averaged around $4 million, while in other weeks, expenditures averaged closer to $20 million. Thus, it was very difficult to accomplish a reasonable projection with such numbers. If the division was to achieve the reversion, she stated that it would have to observe under-expenditures of a few million dollars more than what the division was currently budgeted for. Also the division would need an additional $15 million in under-expenditures in order to have a sufficient balance forward for FY 2000.

Chair Evans asked how the division planned to under-expend.

Ms. Wright replied the issue was difficult and of constant concern. There were things the division could not control, such as medical expenditures, which was the largest category in the Medicaid budget. If all of the other categories, including the staff category, were eliminated Ms. Wright felt that she could not even come close to what a weekly expenditure would amount to in the medical expenditures category.

Chair Evans then commented that the legislature was facing a budget deficit and she did not know how it could be avoided. She added that she had not heard anyone address how that would be handled when it occurred.

Ms. Wright answered the program was an entitlement program and however the budget was capped therefore they were not allowed to go forward to the Interim Finance Committee (IFC) if there were additional concerns. Furthermore, the division could not request a contingency fund allocation. Ms. Wright knew of no way to address the deficit within the existing resources budgeted.

Senator Rawson said that in past, the legislature had been able to roll funds over from the first to the second year and that the legislature was in session before the end of the second biennial year. The legislature assumed that the situation would stabilize and anticipated addressing the issue when it returned to session. Although it was not the ideal way to budget, he thought that it acted as a cushion.

He commented that another issue of concern was related to the amount of time it took the division to pay the medical expenses. He asked if 30 days was the average length of time to do so.

Ms. Wright answered the division was relatively current, and in some instances, the division averaged even less than a 30-day wait.

Senator Rawson noted that the division had built a reserve, and if the average time period for payment lasted 60 days, the division would have even more money to work with. He maintained that most physicians disliked that practice, as did health care providers. He mentioned that there were other ways to slow down the number of people signing on and approved for medical payment, yet none of those methods were desirable.

Senator Rawson felt that before the agency’s budget was closed, there needed to be forthright discussion on what the division needed to get through the next biennium. The governor’s budget staff were trying to get the committee a budget and he felt they deserved the division’s assistance. The committee needed accurate data, and he was not comfortable ending the session with an under-funded Medicaid budget.

Ms. Wright said when the division built the budget it was a much easier to utilize the information from 1998, since the division had a caseload reduction in 1998. She explained that typically if a problem occurred late enough, the division waited until the legislature was already back in session, to address the problem appropriately. In the current instance, the division took dollars that were available from the under-expenditures in 1998 and reverted those monies to the General Fund in 1999. This caused a more difficult problem, assuming that continued under-expenditures would go forward into the next biennium. The division needed to focus on getting the legislature more accurate information and on ways of looking at projections with more timely information. The division needed to do this to make sure it was refining those under-expenditure amounts. She stressed that the division would need to work hard to accomplish those tasks, and she pledged to cooperate with the Budget Division and Legislative Counsel Bureau (LCB) staff to try to develop a proper solution to the agency’s problems.

Senator Coffin thought the agency could access the rainy day fund, since it was becoming more and more evident that the state was experiencing an emergency in one of its accounts. He asked if the Department of Administration would allow the committee to change the statute in such a way as to allow the agency to take money out of the rainy day fund to fill the hole in the agency’s budget. He felt there was plenty of money in the rainy day fund to do that, as the fund was over and above its ending balance projection.

Perry Comeaux, Director of the Department of Administration, reported he had discussed the possibility of Senator Coffin’s idea with the Governor. If both parties agreed, Mr. Comeaux thought that the current statute would accommodate Senator Coffin’s suggestion, as it was written. The rainy day fund could be accessed if the Governor and the legislature agreed that a fiscal emergency existed. Based on expenditure projections made in December, he thought there was the possibility that expenditures in the Medicaid budget would be $15 million less for FY 2000 than what they had forecast for that year.

He then related that the department had over-budgeted Medicaid for three years in a row. The budget office had not done so in a vacuum, but had worked with the Department of Human Resources (HR) on those forecasts. Mr. Comeaux added HR was not enthusiastic about over-budgeting Medicaid. Thus, he felt that over the last few months, the option to over-budget Medicaid had looked less and less reasonable.

Mr. Comeaux was not prepared to approach the legislature and admit the department had made a mistake and needed to fund the agency’s budget at a higher level. He wanted to wait to receive the latest caseload figures and the MPP. After that information had been received, the administration had planned to ask for the authority to move money in that budget from one year to the other, should the situation look like too much of a gamble. If the administration experienced problems in the first year, money could be taken from the second year and moved back. That way, unless something unusual happened, there would be enough money in that budget to get the administration firmly into the next legislative session. Mr. Comeaux did not want to enter into the next biennium planning on dealing with the budget problem. He maintained that it was the administration’s commitment to recommend a way to fix a problem should one arise. He contended that there were a number of options, including the rainy day fund, with which the Economic Forum could identify making budget cuts and balance the budget.

Senator Coffin said when the legislature set the guidelines for using the rainy day fund, there was an amount the committee had in mind, as there were certain budgets that could not be fixed in any other way. A 5 or 10 percent shortfall would be an amount that would justify utilizing the rainy day fund. Senator Coffin thought that this would avoid having to hold a special session should the agency encounter greater problems.

Mr. Goldwater said the Governor had been quoted as saying that there was
an extra $33 million in revenue projections, which would be used to increase state salary or retirement benefits. Mr. Goldwater thought that priorities needed to be established and he wondered if the administration would consider a re-insurance policy. Often, very large companies re-insured against the risk over-budgeting. Mr. Goldwater asked if any other states adopted or bought those types of re-insurance policies.

Ms. Wright replied that she was not familiar with what other states did in terms of re-insurance policies, however she promised to explore that option.

Mr. Goldwater said re-insurance policies set a ceiling, for which a premium was paid if anything went over that ceiling. That was a risk-sharing arrangement and it seemed appropriate for the situation at hand.

Chair Evans said the committee needed a plan from the agencies. The other concern impacting the budget had to do with the rate allocation for the University Medical Center (UMC) going back to 1994. If UMC received the funds they had requested, it would be $23 million over the figure the committee had discussed so far. The committee did not have a contingency in the budget to address the additional $23 million that UMC would be awarded should a settlement be arrived at. There was a potential liability of great magnitude, thereby rendering the issue a monstrous problem.

Ms. Wright stated that the agency was in front of the settlement judge at that time. A determination as to what that liability might be had not yet been made. She projected that there could be a $23 million impact as a result of the settlement. As soon as a determination was made, the agency would be able to provide more specifics to the committee.

Charlotte Crawford, Director of the Department of Human Resources, added that she had an appointment with the settlement judge in one week. She was not wholly optimistic that the division would reach a settlement and she did not envision a settlement would trigger a reversal. Furthermore, she felt that there was no way for the division to eliminate the possibility of going to court without the other side prevailing.

Chair Evans wanted to know how soon the division could report back concerning the potential shortfall.

Ms. Crawford answered the division needed to obtain caseload data, run the MPP, and look at the budget. The division was planning to get that information to the committee during the latter part of April.

Chair Evans said the committee wanted the plan and the MPP at the same time.

Ms. Crawford replied the division understood the committee’s time frame and pledged to address those issues as early as possible. She added the Budget Division and the department knew that budget needed to be watched very carefully.

Chair Evans asked Ms. Wright to comment on rates, particularly those in the pharmacy section of Medicaid. Along with that, the committee was concerned that rate increase for Medicaid Managed Care were not included even though the rates were actuarially determined. Ms. Wright answered the only rate increase built into the budget was a 9.97 percent increase for pharmacy providers. There were no other rate increases provided for in the governor’s budget. The division had provided the committee a recommendation that if there were to be adjustments made for rate increases, the resulting cost if the rates were increased by one, two and three percentage points. The increases were very expensive, and the division had originally built into the agency budget a 2½ percent increase. That would cost $22 million in FY 2000 and $35 million in FY 2001.

Within those categories there were specific areas in which the division looked at deviations. One such deviation was apparent in regard to personal care attendant amounts where the rate increase was 55 percent. Currently, the division paid $9.25 per hour to personal care attendants, which subsequently was the lowest of any of the other state agencies that paid attendants between $13 and $14 per hour. She reported that the division was having difficulty providing personal care attendants because the reimbursement rate was so low. She felt this was an area that deserved attention in terms of altering The Executive Budget.

Chair Evans asked if the division had identified the critical care providers most in need of a rate increase. Ms. Wright replied the Medicaid Division had originally requested a $5 million discretionary amount in the first year of the biennium and a $10 million amount in FY 2001. The discretionary amounts would be used provide adequate access to specific providers. Without adequate access the services provider’s offered were useless. Sometimes the industry changed, and in some instances there were certain categories of providers that were experiencing difficulties. Market rates were increasing and the Medicaid rates were not.

She thought the dental care issue, which came up in the 1997 legislature, was a perfect example. At that point in time the division would have liked to prepare and present a prioritization of all of the categories that would have been subject to the rate increases. She recalled that that Medicaid staff had tried to pinpoint the areas, which were most in need of funds in terms of providing access.

Chair Evans asked what impact on Medicaid Managed Care the division anticipated without a rate increase.

Ms. Wright replied there were no rate increases built in for the Health Maintenance Organizations (HMOs) in managed care. This was a contractual term the division needed to address.

Chair Evans said the committee needed a detailed breakdown of such information. To the degree the division could display those individual factors, she thought that it would help the committee to address the issue.

Ms. Wright answered the division had broken down figures by provider type, but stated would work further with fiscal staff to provide more detail.

Chair Evans then returned to the issue of the budget for the Intensive Care for the Mentally Retarded (ICFMR) small beds. She added that when the committee last met with the Division of Mental Health and Mental Retardation (MHMR), they had heard testimony on two different options addressing waiting lists. One option was exceedingly expensive, and while the other was an improvement, the committee was distressed by the length of the waiting list, which was estimated to be 8 to 14 months. The committee felt a 90-day wait was a more reasonable length for the waiting period. The Chair then asked how the 90-day waiting period could be implemented.

Ms. Wright replied that when the division had built the Medicaid budget for MHMR, they used a figure of 54 new ICF/MR beds. She related that MHMR might only need 30 beds and thought that they could apply the additional number of beds to the waiting list as a reduction. The division was working with MHMR, Aging and DCFS to make sure that by Friday the division would have the final figures on potential adjustments for the Medicaid Budget.

Ms. Crawford added that she had asked the Division of Mental Health and Mental Retardation (MHMR) to provide a comprehensive evaluation of the mental retardation clients so that the division might be able to thoroughly assess the spectrum of proposed residential services. As a result, the division could determine the type of system needed in order to have the appropriate composition of available residential housing. Also, the division would be able to address the future of the system, not only the waiting lists and lengths of time. Ms. Crawford said the division needed to look at the system in a much more holistic way.

Chair Evans said the Business Process Re-engineering (BPR) contractor made three recommendations:

1. To acquire a federally certified Medicaid Management Information System (MMIS),
2. To outsource most of the MMIS function, and
3. To acquire a point-of-sale pharmacy system.

Chair Evans then asked what action the division had taken concerning those recommendations.

Ms. Wright answered the division had been working with the vendor to finalize the cost benefit analysis report and had the options contained in the report available at present to the committee. The point-of-sale pharmacy program could be done either as a stand-alone or part of the MMIS system. The only difference lay with the funding mechanism and the drawn down matching dollars. If the division did operated the program as part of the MMIS, it would receive a 90 percent federal match. However, if the division operated the program as a stand-alone point-of-sale pharmacy program, it would receive funding through a 50 percent state match and 50 percent federal match. The total expense for the stand-alone portion would be $111,000 in General Fund monies and $111,000 in federal funds. The total amount of the program was projected at $222,000 for the first year of the biennium.

She reiterated that if the division chose the point-of-sale pharmacy mechanism as part of the MMIS system, the program would receive a 90 percent federal match. The total cost of the program would remain the same, although the split would be different, as the state portion would be $22,000 and the federal portion would be $200,000. Ms. Wright said she would give the committee staff a spreadsheet with all of the options outlined.

Ms. Wright explained that if the division chose the MMIS system, the total cost for the first year of the biennium would be $579,000, of which the state portion would be $57,900 and the federal $521,000. Those were three different options with which the state could proceed.

The Chair wondered how outsourcing would affect the cost of the program.

Ms. Wright answered that outsourcing was suggested because the vendor did not believe there were sufficient resources within the current state of the department to provide for MMIS. Outsourcing the program meant that the only in-house staff that would be needed would be those required to perform administrative functions. That would amount to two Full Time Equivalents for the point-of-sale stand-alone or two FTEs for the point-of-sale included in the MMIS, and a total of five FTEs for the MMIS system. The positions would be designed to replace the existing four BPR positions. Those positions would be eliminated at the end of June 1999. The entire function then would be outsourced using the new positions as the administrative infrastructure.

Mr. Hettrick asked if the $25 million was to purchase the system or if it was for the outsourcing.

Ms. Wright said that was basically for outsourcing, or having someone else come in and set up the system. What would end up being purchased would be state property, and would include hardware and software that would reside at the state level. A contractor would be retained for the acquisition process, customize the system, train staff, and maintain the operation of the system.

Mr. Hettrick asked if there was any way that the state could have a contract with someone who already had that type of facility in place so the state would not have to buy the equipment at all.

Ms. Wright replied she would have to take a closer look at that option.

Mr. Hettrick thought that it might be more expedient and cost effective to buy time on a third party’s system than it was to set up a new one.

Ms. Wright stated she was not sure if the vendor had evaluated that option but she would find out and provide an answer to the committee.

Chair Evans felt part of the problem was the difference in the definitions of outsourcing. She thought of outsourcing as a hybrid of definitions and wondered what would happen to the federal match funds if the division outsourced. Chair Evans also wondered how outsourcing would work on the point-of-sale for pharmacy. She inquired if there was a way the division could commence the point-of-sale for pharmacy program and to later roll it into the MMIS system. Furthermore, she questioned that should the decision to roll that system over be followed, at what percentage would the federal match be set.

Ms. Wright replied the division was trying to achieve a 90 percent federal funding level because drawing the maximum amount of federal revenue would provide the state with the most benefit. Ms. Wright felt confident the division could draw the maximum of federal money if the division designed the system using MMIS as the first step. Nevertheless, Ms. Wright was experiencing difficulty in doing so, as she did not have the final report from the vendors.

Mr. Hettrick then asked when the final report would be presented to the committee.

Ms. Wright responded she would work with the vendors to make sure that report was in right away.

Chair Evans next wanted to address the subject of the Independent Choices Waiver.

Ms. Wright said she had met with the committee, Department of Employment, Training and Rehabilitation (DETR), Medicaid and Budget Division staffs concerning the issue. She related that DETR had prepared a presentation on the waiver for submission to the Health Care Financing Administration (HCFA). The presentation illustrated the anticipated costs and savings, and concluded that there were revisions that had not yet been included in the document. After those adjustments were made, the division reviewed the waiver and made final determinations before moving forward. She articulated that the division had decided that it could submit the waiver to HCFA without the funding mechanism in place. That way the division could make a determination as to whether or not the waiver would be approved by HCFA.

Ms. Wright noted that the waiver’s approval would be considered even though the division was uncertain about how the waiver would be funded. It was a reasonable expectation that the division would get the final draft of the waiver within the next few weeks.

Senator Rawson said he was not comfortable with the uncertainty of the waiver’s outcome. He recalled the committee had fought with this same issue in the last legislative session. As a result of those hearings, he thought he committee had decided to enact policy changes in support of the waiver, yet because of money issues, changes had not been implemented. Senator Rawson did not want to end the current discussion without making a firm decision concerning the future of the waiver.

Senator Rawson then indicated his desire to direct the dialogue and recognized that there were concerns the waiver might be considered an open-ended expense in which the state paid more into than the waiver actually paid out. If beds in the nursing homes could be located, they would be used to alleviate the waiting list.

Senator Rawson thought that although those were possibilities, the state had a significant population that would remain underserved. Even those individuals who were being served by the current waiver, often lost their independence as well as their reasons to live. He stressed that the decision at hand was a fundamental one, in which the senator wanted to finalize in the current session.

He hoped the money could be rolled forward into the next biennium or that a new appropriation could be made to continue the program. The committee approved of his suggestion, funds for the waiver could be authorized by the Interim Finance Committee. Regardless, Senator Rawson thought the program could re-start as a limited pilot program. In that manner, the waiver program would improve the quality of life for a significant number of citizens. He then suggested that closing documents be prepared.

Ms. Wright responded she agreed with the senator, as she believed the waiver was a much more humane way to provide services to the disabled community. She explained the division’s Medicaid staff had worked over 1,000 hours on the waiver and had tried to develop a viable program. The division recognized the waiver was a positive program and it promised to work diligently in order to make sure the program was workable. The division also understood the current fiscal constraints on The Executive Budget; it was difficult to take funds out of the Medicaid budget in order to be able to fund the Independent Choices Waiver. Nevertheless, the overall goal remained to provide quality services for the disabled community.

To date, Ms. Wright reported 11,111 children had applied to the program had, of which 6,138 children had been approved. Of those approved, the division anticipated the number of children enrolled to reach 5,846. Ms. Wright said she had provided committee staff with a spreadsheet that addressed the effect of additional General Fund support to the Nevada Check-Up program. The division had calculated it could serve an additional 1,000 to 5,000 children. The division had determined that with the incremental increase of state funding for each of those additional children, the federal government would provide a 65 percent match from Title XXI funds.

Ms. Wright explained if the division were to serve an additional 1,000 eligible children, it would cost $455,000 in General Fund dollars for FY 2000. She also explained there was an additional expense for staff, of which the total General Fund contribution for the first two years would be $962,162. That money would allow the division to draw in federal funds in the amount of $1.9 million in order to match the state’s appropriation.

On the other hand, if the division served an additional 4,500 children, the first year costs would amount to $2 million, while the second year would cost $2.1 million, equaling a $4.1 million General Fund contribution. Taking staff and premium revenue into account, Ms. Wright stated administrative costs could be offset first. Afterwards, the division would be able to utilize $4.1 million in General Fund monies and to draw $8.4 million in federal Title XXI dollars.

Chair Evans asked if staffing had been included in those figures.

Ms. Wright answered it had. She reiterated that if the division were to add 1,000 eligible children, one management analyst III position would be needed. She explained costs would be offset by the premium contribution from the 1,000 eligible children added to the program. The division would then need $962,000 in General Fund monies and $1.9 million in Title XXI funds.

Chair Evans inquired how the staffing levels for those 1,000-children increments were determined.

Ms. Wright responded that 15 positions had already been approved by IFC, and of those 15 positions, the division had hired five individuals. The division used contract help and staff from other programs to support those positions. Based on the division’s expectations for the 4,500 additional eligible children, it had determined that four additional positions would be required in order to provide additional marketing, outreach, contract oversight and certification work. Those calculations were similar to the division’s initial projections, which were made to IFC. Since then, the division had eliminated two of the Governor’s recommendations and had tried to add staff positions that were absolutely necessary.

Chair Evans thought the division was pushing an enrollment of 6,000, assuming that it would soon reach the 10,000 children threshold of the program. Looking at the division’s numbers, the Chair then inquired what outcomes they projected.

Ms. Wright said the division originally anticipated that it would reach the threshold limit by October of 1999. Enrollment had slowed, however, and the division predicted that it might take until January of 2000 to reach the 10,000 eligible children threshold. Typically, she noted a slow down in enrollment occurred during the summer, and then increased in September when children began to enroll in school. Thus, the division anticipated a slight increase in enrollment in the fall and a decline in enrollment during the holiday season.

Senator Rawson maintained the trouble was the state did not really know how many uninsured children there were. The estimates ranged from 30,000 to 80,000 children. At the rate children enrolled for Nevada Check-Up, it was clear the state had not met the need. So if the state hit the 10,000-child limit in January 2000, it would leave 1 year in which the state could do nothing.

Chair Evans indicated that when the committee worked on the closing sheets they would need to discuss the continuation of the program. The division was two years old and had been scheduled to sunset, unless the legislature voted for its continuance. She cited the other issue of concern in the budget was the elimination of the Billed Charge Master program, which was scheduled to sunset. She asked if the committee wished to extend the program that would need to be addressed during budget closings.

Chair Evans indicated that when the homemaking services budget as well as elder protective services were scheduled to move over to the Aging Services division, there were some costs involved which would be addressed during closing.

Chair Evans said the key issue related to a budget amendment that recommended removing one-time funding from the Maternal Child Health (MCH) account. The amendment did not identify an alternative use of those MCH funds, therefore the committee needed to determine how to use the unobligated funds.

Yvonne Sylva, Administrator of the State Health Division, said the one-time funds were utilized for a children’s dental program. The advent of the Nevada Check-Up created a situation where children covered by the dental services became eligible for the Nevada Check-Up Program , so they would no longer be served by Budget Account 3222. The division expended around $230,000 for the dental program and those funds could be budgeted elsewhere. It was suggested during the previous hearing that those funds be carried into the next biennium for use in the future. The division had traditionally carried far more forward, however, those were funds that could only be used as one-time expenditures which would not be guaranteed for the following year.

Chair Evans said it appears that Ms. Sylva was not recommending any particular use for the funds. Ms. Sylva said she was not recommending any particular use for the $230,000. The dental program was a special augmentation that occurred over the current biennium. The Maternal Child Health Advisory Board would determine what happened to those funds, after the dental needs assessments was finished.

Chair Evans asked what might be included in a dental prevention program. Ms. Sylva said one of the major initiatives being considered across the country was public health education, including the distribution of materials and getting information to schools and families. A dental sealant program was an example of the national initiatives. There were a variety of programs that were available and tested nationwide, including pilot projects the division might be able to expand upon if they were identified as priorities of the MCH Advisory Board.

Senator Rawson said there were many good dental programs developing, and it would be nice to coordinate some of the dollars as well as the effort. He added the dental sealant program was almost off the ground in southern Nevada. There was also a dental residency program which would take its first residents July 1, 1999, in Las Vegas, and shortly after that in Reno. Senator Rawson said all of those programs had the potential to reach the children. Ms. Sylva said the MCH Advisory Board would be looking at all of those options, and how the division could coordinate and collaborate their efforts.

Chair Evans asked if there was any prohibition against using those funds in other ways, for example, for the special children’s clinic and the backlog. Ms. Sylva said the MCH block grant required certain funds be expended in certain categories and at certain expenditure levels. The children’s dental program was included in component B, which was services for children and adolescents. The division, in order to retain those federal monies, must expend those funds within that same category. The funds, specific to dental, would not be available for reallocation to special children’s clinics or for anything other than services for children and adolescents.

Chair Evans asked when the division anticipated the MCH Advisory Board would come forth with recommendations. Ms. Sylva said the next meeting of the Board was in June. Component C of the MCH block grant was dedicated for children with special health care needs and that population was served at the special children’s clinic. Chair Evans said the committee was interested in exploring some of the other items in the budget with Ms. Sylva. She added the committee did not object to the suggestion regarding dental prevention, although they were interested in hearing some other proposals regarding the use of the funds.

Ms. Sylva addressed the backlog at the special children’s clinic, and added that budget would be impacted by Nevada Check-Up. The division indicated their intent at that time was to utilize any savings that might occur in that budget to offset any waiting lists that were occurring at special children’s clinics. When the division submitted the agency budget, there was a waiting list of 71 children at the Reno clinic, a waiting list for an initial appointment of one week, and a treatment waiting list at 4 months average waiting time. In Las Vegas the division had 72 children on the waiting list, a six-week initial appointment wait, and a six-month appointment waiting list. Currently, in Reno, there had been a slight reduction in the numbers. There were 65 children on the waiting list, which included a 1-week wait for an initial visit, and a four-month wait for treatment. For Las Vegas, the current wait was far worse, with 102 children on the list. The waiting time for initial consultation was eight weeks and the wait for treatment was eight months. The division was currently reviewing the children with special health care needs budget, caseloads, and staff workload.

Ms. Sylva said if the current trend continued, the division would probably only require four and a half full-time equivalents (FTE) positions in that program. That meant the division would have seven FTE positions to reclassify and reassign to the Special Children’s Clinics in Las Vegas and in Reno. The division had been proactive, and had identified two positions which would be affected by the caseload change. The personnel office was working to transition those employees to other positions available within the division, and it was committed to accommodating those employees. The division felt if the seven positions were assigned to Las Vegas, along with associated reductions in the medical payments category, it would allow the division to provide for the additional staff and operating expenses needed in Las Vegas. That action would reduce the number of children waiting from 102 to 62, and reduce the treatment waiting list from eight months to three months. That would be a step in the right direction. The division would also be able to place two and a half FTE positions and additional federal monies in the Reno clinic to reduce their waiting times as well. In the event additional monies did materialize it would be the division’s intent to place additional staff in the Las Vegas clinic. The Reno clinic was better off at that time, and the Vegas office needed at least three FTE positions focusing on treatment and reducing the waiting time.

Ms. Sylva said the division was trying to take advantage of an anomaly that occurred by using funds internally and not by requesting General Funds. She added in the event the clinics were able to generate additional revenue than the amount they had budgeted, the committee might allow the clinics to utilize those funds specifically to reduce the waiting list. This would assist the division in reducing waiting lists as opposed to waiting until the next biennium to come before the legislature. Ms. Sylva said the division was projecting it would have somewhere around $80,000 in excess of what the division had authorized in the budget. Although this was true, the division had some creative ways to deal with the space issues. Chair Evans noted the discussion had segued to the Special Children’s Clinics Budget 3208.

Senator Rawson asked when the division would anticipate needing more space in Las Vegas. As the committee knew, the clinic site in Las Vegas was built specifically for that purpose, and that clinic was already bulging at the seams. Ms. Sylva indicated the division would be able to accommodate the additional seven staff but would need more room if the division added additional staff. Senator Rawson asked if the location of the clinic was on West Charleston. The senator asked if the cranio-facial clinic was operated out of those same facilities. Ms. Sylva answered that cranio-facial clinic was operated out of some facilities and was very successful. Senator Rawson said if a dental school was built, he wondered if it would be helpful to the division to move into the space occupied by the cranio-facial clinic. Ms. Sylva said any space would be helpful. The senator said the committee could look into that.

Chair Evans asked how the eligibility for children with special health care needs lined up with Nevada Check-Up children. She wanted to know if the division was moving children from the division’s program to Nevada Check-Up. Ms. Sylva said the MCH program and the children with special health care needs program had always had the requirement that they were the payer of last resort. The division screened for eligibility, and admitted children up to 300 percent of poverty. The division had a sliding scale in which parents participated with the division in the funding. Those children who were at or below 200 percent of poverty were being affected. The one difference was the division allowed a family to have insurance and would deduct medical payments the family had to make. Therefore the division would keep those children on the division’s program. Those children who had no insurance and met the requirements of Nevada Check-Up were automatically referred to the program. The division had referred 296 children to the Nevada Check-Up program, and those children would be enrolled as the applications were received. Fewer children were eligible for the Nevada Check-Up program than the division originally thought. The question was how many children would continue to remain in the categories the division had.

Chair Evans said the committee would make note of the suggestion to include a letter of intent between the two budgets and programs. She asked if the division had been able to determine why the clinics experienced a shortfall in medical service charge fees. Ms. Sylva answered it was an anomaly, and there were many factors which played into the shortfall, but she did not have an answer to why medical service charge fees were reduced.

Chair Evans queried about the progress made in terms of working under the new Medicaid managed care program. She asked if the division had received any referrals from that program. Ms. Sylva said the division continued to serve those children whether they were on the Medicaid managed care program or not. By law, under the Individuals with Disabilities Education Act (IDEA), the division was required to serve those children. The real question was whether or not the division was being reimbursed for those services. In Las Vegas the division was receiving reimbursement from at least one of the health plans, while the other two were questionable as to whether they were paying on a regular basis. Ms. Sylva said the division would be working internally with their sister agency, DCFS, as well as the HMOs to determine who had the responsibility to pay for those services.

Chair Evans asked if the division had put in any kind of a plan to focus on the collection of funds needed to address the previous shortfall question. Ms. Sylva said the division had made some changes in its internal policy in terms of how it followed up on client billing. The biggest change was the division followed up on families to make sure their insurance policy had not changed. If the policy had changed, the client might then be qualified for Medicaid or some other type of insurance, to which the division could refer them.

Chair Evans noted a handout for the Northern Nevada Center for Independent Living, and one discussing health care priorities and urged the committee to examine them.

Ginny Wiswell, Program Analyst, summarized the important issues concerning Budget Account 3223. She said the office of health administration supported the entire health division, including accounting and personnel functions. Funding was provided through state appropriations, federal grants, and the division’s cost allocation plan. There were numerous technical corrections in the budget, and Ms. Wiswell advised the committee the corrections had been reviewed by the Health Division’s staff. Ms. Wiswell said the prices for computer software were adjusted to agree with the new state purchasing prices. Also, there would be retroactive adjustments which would correct various allocated costs such as the statewide cost allocation, the attorney general’s cost allocation and the division’s indirect allocation.

In closing the budgets the subcommittee would need to determine whether to approve two decision units. The first was the E-125 decision unit, which recommended the new auditor position, and was funded entirely through the division’s cost allocation plan. There was no General Fund appropriation required. The position would be used to examine both the in-house grants and the sub-grants throughout the division. The position would also work very closely with the Administrative Services Officer to improve cost control within the entire division. The second recommendation was in the E-710 decision unit, which also recommended indirect costs to purchase desktop computers, a new printer, modems and some replacement software to support the new integrated financial system.

Ms. Wiswell indicated that the vital statistics budget was responsible for registering birth and death records and submitting the data to the National Center for Health Statistics. The operations of the office were funded through state appropriations, reimbursement from the Social Security Administration, a federal grant, as well as MCH block grant funds.

There were several technical corrections in the account. The first technical correction increased the reimbursement rate from the Social Security Administration to agree with the 1999 actual rate. In addition, the correction provided for the increase in population. The second correction was based upon information provided by the division. The trauma registry function was transferred from the EMS budget to the vital statistics budget, who assumed the supervisory and financial oversight for that function. All of the General Fund revenue and the associated expenditures were moved in their entirety to the Vital Statistics budget. The third correction removed $5,300 for the purchase of death certificate paper which is purchased every other year. The fourth correction was an adjustment for fringe benefits, which occurred throughout all of the Health Division budgets. In this account the entire amount of the additional fringe benefits were funded through state appropriation. The adjustment reassigned a portion of the costs to the fees and grants. Aside from the inflation and fringe benefit adjustments, there were no other decision units in the account.

Ms. Wiswell noted the subcommittee had requested information on the fees charged by the vital statistics office. Nevada’s fee’s were in the middle range of the neighboring states in terms of rate structure.

Senator Rawson asked what the fee was for birth and death certificates. Ms. Wiswell said a copy of a birth certificate was $11 and a death certificate $8. Senator Rawson questioned whether the rate could be increased to $10. It was noted that staff was not recommending the committee raise the fees for birth or death certificates. Mr. Hettrick said he would have trouble increasing the fees. Often a person had to get multiple copies of death certificates, and Mr. Hettrick could not support raising the price that substantially. Senator Coffin said he agreed with Mr. Hettrick. Senator Rawson recommended closing the budget as recommended. He suggested placing the fee increase on a list of things that needed to be changed.

Ms. Wiswell said the budget reported cases of cancer and made the reports available for use by health professionals. Since 1993 more of the health facilities were performing their own abstractions. More of the program staff’s time was being dedicated to the quality assurance function of the program. There were several technical corrections in the budget. First was the redistribution of the fringe benefit adjustments. Second was the potential for retroactive adjustments for various allocated expenses. In addition to those decision units, M-200 would true up the cancer registry grant based on the known population growth. The additional receipts would be used to pay for staff travel to complete the various abstractions as well as to perform quality control.

Senator Coffin said he would support the recommendations as long as he could be reassured that an increase in fees would not reduce the number of reports issued. He noted the importance of the data.

Ms. Wiswell assured him the fee was not a disincentive for health facilities to report information.

THE MOTION PASSED UNANIMOUSLY.

Ms. Wiswell said the budget provided pass-through funding to Clark and Washoe Counties. The funds were used by the counties to provide a variety of public health services. A combination of General Funds and a transfer from the Department of Motor Vehicles (DMV) funded the program. A technical correction applied the DMV transfer amount to the anticipated population growth. The Governor recommended state support for both counties at the
55-cent per capita rate that was implemented back in the early 1990s. The current mix between Clark and Washoe counties was an 80/20 mix. During the initial hearing, as well as during the February 11, 1999 hearing, the subcommittee requested additional information concerning the impact on the state General Fund to restore the funding to previous per capita rate of $1.10. If the rate were increased 25 cents, which would provide an 80-cent per capita rate, approximately $450,000 in additional state funds would be required during each year of the biennium.

Mr. Hettrick asked if the counties had expressed a hardship by not receiving the funding at the earlier levels. David Rolls, Director of Administrative Services Clark County Health District, said because of the advent of Medicaid managed care county revenues had declined by $300,000. The county requested a portion of those funds be restored, anticipating the county’s voluntary reduction to the state would be recognized.

Senator Rawson asked what would happen if the committee incrementally increased the per capita rate in the second half of the biennium. The increase would allow the counties to start planning.

Chair Evans asked the counties what percentage of their funding came from the state to the counties.

Mr. Rolls said the state contribution represented less than 1 percent of the county’s budget.

Chair Evans asked what the total budget was for the counties.

Mr. Rolls answered it was approximately $34 million.

Senator Coffin remarked that he liked Senator Rawson’s idea of making a list of programs that might best use any additional funding that might become available.

Chair Evans included an increase to the aid to counties on the list for consideration to receive additional funding, if available.

Chair Evans asked Ms. Sylva if there were some additional funds that passed through to the counties, in addition to funds provided to this budget. Ms. Sylva said there were, and she would provide staff with information on direct monies received by the counties.

Ms. Sylva said those monies amounted to approximately $3 million per year. In addition, there were staff who provided services in both Clark and Washoe counties as well as the Women, Infant and Children program.

Ms. Wiswell said the budget program was responsible for public health, engineering and sanitation. The program was funded through state funds, several grants and licensing fees. There were numerous technical corrections in the budget. First, The Executive Budget had double accounted for the loss of revenue from the department of environmental protection and the licensing of drug manufacturers. The funding was double accounted for in the adjusted base budget as well as in the E-130 decision unit. The first part of the technical correction restored the funding in the adjusted base, to allow the decision unit to remove the revenue. The second part of the technical correction to the budget account also corrected the E-130 decision unit. According to information provided by the agency after The Executive Budget was put together, it was realized the Department of Environmental Protection would be able to reimburse the division for the landfill inspection. The need to backfill General Fund monies for that component of the decision unit was not necessary.

The second correction had two parts as well. The first part adjusted and corrected the rent expense that was overstated. The second part revised the safe drinking water grant authority to be in line with the agency’s projection and allow the unobligated funds to carry forward. The third correction was also in two parts. The correction adjusted various licensing and fee revenues in the budget account.

The first element provided for an increase in revenue for the licensing of food establishments. Ms. Wiswell noted the fees for food establishments were increased during the last legislative session. The second element provided for a reduction in the plan review fees. Ms. Wiswell noted what was included in the base year was somewhat of an anomaly since the reorganization of the Las Vegas water system that caused an increase in the workload. The fourth correction showed the net effect on the General Fund of the above three corrections. It provided a small decrease to the state General Fund. The fifth correction redistributed the fringe benefits to the grant-funded positions. The sixth correction redistributed the cost for the computers recommended in the E-710 decision unit. The agency estimated about 50 percent of the cost for computers would be supported by the licensing fees. The last correction was the potential for retroactive technical corrections for allocated costs.

In closing the budget, the subcommittee would need to determine whether to approve two decision units. The first was the E-130 decision unit, which provided state funds to backfill the loss of revenue that would have been derived from licensing a manufacturer of the drug Gerovital. That revenue was not anticipated to be collected. The second unit was E-710, which recommended the replacement of 10 computers to assist with scheduling, inspections and building computer data bases.

Ms. Wiswell said the primary function of the budget was to license and regulate health facilities. There were no state funds in the account and the operations were funded through fees and medical reimbursements. As with other non-General Fund budgets throughout the Health Division, there might be retroactive technical adjustments to correct the various allocated costs. In addition to the inflation and fringe benefits decision units, there were no other decision units recommended in that particular budget. Ms. Wiswell said in previous hearings this session there were discussions for additional surveyor staff. Those additional positions were not going to be pursued during the 1999 legislative session. The division had indicated they were in the process of reviewing their caseload. At the time, they were fully staffed, and the vacancies that contributed to the backlog had been filled. Ms. Wiswell advised the committee that the division was reviewing their staffing needs, and based on the review of that analysis, the request for additional staff might be pursued during the interim.

Ms. Wiswell said the community health services program provided a variety of preventive health care services and health education to the residents of all Nevada counties, with the exception of Clark and Washoe. The operations were funded through the state General Fund, a variety of federal grants, and medical reimbursements. In addition, there was also direct support from the counties who received support from the nurses who were based in the communities.

There were numerous technical corrections in the budget. First, medical service charge reimbursements were corrected to agree with the division’s most current revenue projections. Second, the county participation revenues were corrected to agree with the division’s most current projections, which would cover the cost of the existing positions based in the communities. Contracts for the community-based positions were in the process of being negotiated. The existing contracts totaled $430,000 during fiscal year 1999. Approximately $25,000 to $30,000 of additional funding would be needed in the upcoming biennium by the counties to support the positions. The division believed that was achievable based on the population growth and the information they had received. The third correction redistributed the fringe benefit adjustments. The fourth provided for the retroactive adjustments, which might be necessary to correct the account.

In closing the budget the Governor recommended additional medical charges to pay for a 20 percent increase in vaccine costs. The agency had indicated the primary reason was the increased cost for pneumonia and hepatitis vaccines. In addition to the inflation and fringe benefits decision units, the subcommittee would need to determine whether or not to approve two additional decision units for the budget account. The first was in the M-200 decision unit that recommended a full-time community health nurse for Pahrump in Nye County. The new position was recommended to replace an existing contract, and due to the cost increases, converting the contract to a state employee would provide more hours of service to that community.

Ms. Wiswell said the program implemented a variety of programs to prevent the spread of communicable disease, and coordinated the early detection cancer screening services. The operations were funded through the state General Fund and various federal grants. There were several technical corrections. The first redistributed the fringe benefits, and the second provided for retroactive technical corrections for a variety of allocated costs. In closing the budget the Governor recommended additional state funds to continue direct assistance to indigent tuberculosis (TB) patients, which represented a status quo budget as projected by the division. The division also indicated they projected approximately 120 new cases of TB that year. Not all of the clients would be requiring the lodging or residential care. In addition the Governor recommended, in the M200 decision unit, an adjustment of the federal grant authority for the early detection screening services made available to the Breast and Cervical Cancer federal grant. In total, for the upcoming biennium, $2 million would be available to provide screening services to uninsured and underinsured women over 40 years old. The goal was to be able to screen 2,500 women per year. Being able to achieve that goal was dependent on two factors; the number of women who sought the service, and the number of provider contracts that were available to provide the service. At that time the division indicated the number of contracts appeared adequate to provide the services to women.

Chair Evans asked Ms. Sylva to describe how the program worked. For example if someone was diagnosed with a positive pap smear or a lump, the Chair wondered what would happen in terms of treatment since these people were under-insured. Ms. Sylva answered the program was designed to diagnose women early, and did not include a treatment program. However, the division was required to make every effort to link that woman up to treatment services within the communities. The division did look at other resources for the woman as well, but the program did not have any treatment dollars. Chair Evans asked what percentage of the women diagnosed with a cancer went without care.

Ms. Sylva said she did not have data on how many women received treatment. Ms. Sylva said there were no women who had been a part of the program who had not been linked up to treatment services. Chair Evans said she speculated there would be some women that would not be treated, if the program grew as it was projected to grow.

Ms. Wiswell said the budget focused on programs to reduce the spread of all sexually transmitted diseases in Nevada. Operations were funded through a variety of federal grants and state funds were used to purchase AIDS medications for the account. There were three technical corrections to the budget. The first corrected the Adjusted Base Budget for the increase in federal distribution of the Ryan White Funds. In the initial budget hearings the division testified approximately $800,000 in additional federal funds might be available during the upcoming biennium. The additional funding would be used to provide for the traditional AIDS medication regimen. The budget was adjusted to record the additional federal grant and provided a corresponding adjustment to increase the expenditures for medications.

Mr. Goldwater asked if it was wise to put the Ryan White money in the base budget. Ms. Sylva said it would all roll together. Ms. Wiswell said there were two technical corrections in the budget, reflecting the redistribution of the fringe benefits and the potential for the retroactive technical corrections in the allocated expenditures. In closing the budget the Governor recommended maintaining the state funds to purchase AIDS medications.

Ms. Wiswell said the purpose of the immunization program was to provide immunizations and prevent disease in Nevada. Funding was provided by the state General Fund and the federal Direct Assistance grant. Ms. Wiswell noted the potential for retroactive technical corrections for the allocated costs. In closing the budget, the Governor recommended state funds for purchasing vaccines for the state’s immunization program. It should be noted, the entire amount of the appropriation would be used for purchasing vaccines. There were no new vaccines contemplated in the recommended budget, however, there were two new vaccines: the Rhotavirus and the Phneumo-7 vaccine that were being reviewed by the division. In addition, Ms. Wiswell said it was the extent to which the federal direct assistance grant would cover the existing immunizations for the upcoming biennium. In light of those issues the subcommittee might wish to consider a letter of intent to accompany the budget closing to provide the money committees the knowledge of changes that might need to happen in the program.

Ms. Wiswell said the program provided supplemental food packages to low income women, infants and children. The program was 100 percent funded through the USDA grant award. There were several technical corrections in the account. The first, corrected the adjusted base as well as the M-200 decision unit for caseload. The adjusted base had mistakenly increased position 32 to full-time status, thus overstating the legislatively-approved number of positions for the budget. The
M-200 decision unit also increased the position to full-time status. Ms. Wiswell noted potential for retroactive technical adjustments for the allocated costs.

In closing the budget the Governor recommended a status quo budget for the account. The division had confirmed the additional clients that would be served could be served for approximately the same level of funding. This was due to the fact the division was using more store and generic brands to provide services to the clients.

Senator Coffin said he was uncomfortable with the flat funding. He remembered in previous sessions the committee recognized that money expended on WIC saved money "down the road". He wondered if the committee was comfortable with the flat funding scheme and noted he was not. He wanted to know if there was any interest in adding WIC to the "wish list" of programs which deserved more funding if money became available.

Ms. Sylva said the division was serving approximately 38,000 women, infants and children on a monthly basis, which represented about 64 percent of the total eligible population. The budget for the upcoming biennium did include funding to serve up to 41,800 women, which would represent 77.5 percent of the eligible population. Ms. Sylva said the budget as submitted would be adequate since it did include some growth. She was not sure what would happen in the future, but thought the division would accommodate the caseload in the first year of the biennium, but was unsure about the second year of the biennium.

Senator Coffin said he could not totally accept that, since there was such a great deal of uncertainty. He added there were increases in that program’s caseload, in particular because there were so many people moving to Las Vegas as a result of a number of hotels opening and people looking for jobs.

Chair Evans recalled state money was approved for the program in 1991. That was the only time, the program was funded with federal dollars, and no state contribution was involved. The division was serving 64 percent of the eligible population, meaning that one-third of those eligible did not apply for services. One of the things that made it difficult was the substantial funding in the program. It would be helpful to the committee if the division could indicate whether waiting lists for services existed, and if so what would be needed to eliminate the waiting list of those eligible but not receiving aide.

Mr. Dini asked how the division saved by using more store brand foods. Ms. Sylva answered there was a prescribed list that delineated what items could be purchased by the client. The store brand of goods was cheaper than name brands, and that was saving the division money.

Ms. Wiswell said the EMS program implemented standards for EMS training. The program licensed ambulance attendants, emergency medical technicians, inspected emergency vehicles and was 100 percent funded by the General Fund. There were several technical corrections. In August of FY98 the supervisory and financial oversight of the trauma registry was transferred to the vital statistics budget. A technical correction affected that transfer for the two budget accounts. The second technical correction separated and clearly identified the $5 incremental certification fee revenue and the corresponding grant expenditures from the state-supported EMS training. The correction was based on discussion with the division and a recommendation from the subcommittee. Aside from the inflation and fringe benefits corrections, there were no other corrections in the budget.

Mr. Dini said he understood the training budget was not adequate. In rural areas, the agencies could not send all of their employees to training at once, since there would be no one left to respond to emergencies.

Senator Rawson asked if the account was eligible to receive funding from the Office of Traffic Safety that could be used for training of rural fire departments. He asked whether there was money available for training and supplies.

Chair Evans said she had made note of the same concern. She noted the budget provided over $12,000 per year for training. The Chair asked if the committee were to consider increasing the training budget, what the estimate would be in terms of funds needed to augment the budget. Ms. Sylva said that given the fact the division just started the program, she did not have a track record or a history from which to make an accurate estimate.

Chair Evans recommended holding the budget until the committee could clarify those issues and obtain an estimate for additional training funds from the division.

Mr. Dini said he was interested in the self-supported training fund revenues. He wanted to know how people would be paying into that fund. Ms. Sylva answered about 3,000 people contributed to that fund on an annual basis. She said that amounted to $15,000 per year.

With no further business to come before the committee, the committee adjourned at 11:45 a.m.

RESPECTFULLY SUBMITTED:

________________________________

Cynthia M. Cendagorta

Committee Secretary

APPROVED BY:

_____________________________

Jan Evans, Chairman

DATE: _______________________