The Senate Committee on Commerce and Labor was called to order by Chairman Randolph J. Townsend, at 7:00 a.m., on Tuesday, March 23, 1999, in Room 2135 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau. This meeting was videoconferenced to the Grant Sawyer State Office Building at 555 E. Washington Avenue, Room 4401, Las Vegas, Nevada.

COMMITTEE MEMBERS PRESENT:

Senator Randolph J. Townsend, Chairman

Senator Ann O’Connell, Vice Chairman

Senator Mark Amodei

Senator Raymond C. Shaffer

Senator Michael A. (Mike) Schneider

Senator Maggie Carlton

Senator Dean A. Rhoads, (Excused)

GUEST LEGISLATORS PRESENT:

Assemblywoman Sheila Leslie, Washoe County Assembly District No. 27

STAFF MEMBERS PRESENT:

Scott Young, Committee Policy Analyst

John L. Meder, Committee Policy Analyst

Beverly Willis, Committee Secretary

OTHERS PRESENT:

Alfredo Alonso, Lobbyist, Nevada Resort Association

Charles McChesney, President, Nevada Investigator’s Association

David L. Howard, Lobbyist, Northern Nevada Apartment Association, and Silver Sate Apartment Association

Harvey Whittemore, Lobbyist, Nevada Resort Association

Patricia van Betten, Registered Nurse

Vic Davis, President, Nevada Association Mentally Ill of Southern Nevada

Chairman Townsend explained passing this legislation was in the nature of a housekeeping item and asked for action.

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Carol-Widmer Hannah, Executive Director, Private Investigator’s Licensing Board, stated a discussion had been held by those in the industry to reach an agreement on this legislation. Alfredo Alonso, Lobbyist, Nevada Resort Association, explained several problems his organization still had with this legislation. He asserted mystery shoppers entering the state should be required to have a business license and a sheriff’s card. Mr. Alonso maintained his organization essentially disagreed with a large portion of this legislation.

Charles McChesney, President, Nevada Investigator’s Association, offered a proposed amendment to S.B. 334 (Exhibit C). Ms. Widmer-Hannah and Senator Townsend discussed various items pertaining to this legislation, with Ms. Widmer-Hannah noting those she could not accept. Mr. McChesney offered comments on Exhibit C pointing out differences with Mr. Alonso. David L. Howard, Lobbyist, Northern Nevada Apartment Association and Silver State Apartment Association noted his organizations would support the amendment to subsection 10, to S.B. 334.

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Senator Townsend offered comments to Ms. Widmer-Hannah by stating, "I have a question for you. Having done a little research with regard to your board, shall we say your board is substantially different than every other board that comes in front of this committee? You have a deputy attorney general, that is your chairman."

Ms. Widmer-Hannah replied, "We have a deputy attorney general who is assigned by the attorney general to act as chairman, when the attorney general is not here." Senator Townsend continued, "You as executive director are not employed by the board, but are, in fact, employed by the attorney general. Is that correct?" Ms. Widmer-Hannah replied, "Yes, that is correct. The board employs me; I am an unclassified employee. I work at the will of whoever the attorney general appoints." Senator Townsend indicated his understanding. He stated, "Is there historical perspective this committee needs to know about, before I offer an amendment to the way you are structured?"

Ms. Widmer-Hannah indicated she was puzzled by the question posed by Senator Townsend. Senator Townsend inquired "How did you get to be different from the rest of the world?" An exchange followed, with Ms. Widmer-Hannah stating she was not aware of any differences. Senator Townsend claimed, "You are entirely different." Once again, Ms. Widmer-Hannah declared she was not aware of any differences. Senator Townsend reiterated his statement that this particular board was structured differently. Senator O’Connell joined the conversation by agreeing with Senator Townsend that the board was different. Senator Townsend directed the committee’s attention to S.B. 178.

Senator Townsend, referring to a proposed amendment to S.B. 178 (Exhibit D), stated:

Senator Townsend proceeded to read Exhibit D into the record. He declared, "That brings you exactly to the same level that every other board is. Do you have any reason why you should not change it that way."

Ms. Widmer-Hannah replied, ". . . I would have to talk to the attorney general; the attorney general historically has always been the chairman of this licensing board." Senator Townsend questioned Ms. Widmer-Hannah as to how many times the attorney general had attended these meetings as chairperson. Ms. Widmer-Hannah stated to the best of her knowledge a number of times. Further discussion was held pertaining to the number of meetings an attorney general had acted as chairperson at meetings of the Private Investigator’s Licensing Board. Senator Townsend stated, ". . . with all due respect to any attorney general, they are not licensed private investigators. . .. I feel very strongly that no elected official, unless they are duly licensed, should sit on a board."

Ms. Widmer-Hannah and Senator Townsend commented on additions to the motion. He stated:

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Senator Townsend opened the hearing on S.B. 461.

Harvey Whittemore, Lobbyist, Nevada Resort Association, spoke in support of this legislation and presented his testimony (Exhibit E), which he read into the record.

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Chairman Townsend then opened the hearing on S.B. 465

Karen Dennison, Executive Committee, Business Law Section, State Bar of Nevada, was next to testify. Senator Townsend disclosed that Ms. Dennison and the law firm, with which she is associated, had done a substantial amount of work for him and his family over a long period of time.

Ms. Dennison introduced John P. Fowler, Chairman, Executive Committee, Business Law Section, State Bar of Nevada, who stated his organization had initiated this legislation. Mr. Fowler presented testimony containing proposed amendments for S.B. 465 (Exhibit F) with an explanation of the reasoning for this legislation. Mr. Fowler proceeded to present an explanation of these amendments. He claimed the present legislation governing a trust is badly out of date and needed to be revised. Senator O’Connell posed questions on pending legislation concerning the licensing of "state banks" and wanted to know if this pending legislation were to be voted into law, would it have any impact on S.B. 465.

Douglas E. Walther, Senior Deputy Attorney General, Office of the Attorney General, noted state banks, if treated as a Nevada State charted bank, are currently exempt from requirements noted in S.B. 465.

Senator O’Connell disclosed her husband is the chairman of a bank. Senator Townsend noted he sits on the board of a bank.

Mr. Fowler continued his explanation asserting major provisions of the bill are powers the Financial Institutions Division should have there in statute regulating financial institutions. Senator Townsend questioned Mr. Walther concerning the fiscal note on S.B. 465. Mr. Walther claimed he was surprised to see the fiscal note indicated. Senator Townsend questioned L. Scott Walshaw, Commissioner, Division of Financial Institutions, Department of Business and Industry, whether the fiscal note would be needed for additional personnel, computers, etc., due to this legislation. Mr. Walshaw replied, "No." Referring to Exhibit F, Mr. Fowler resumed his explanation, pointing out pertinent sections, some never having been required before; i.e., requirements for granting a license along with new and specific qualifications for directors and officers of trust companies. Ms. Dennison and Mr. Fowler discussed further points of clarification.

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The next item to be addressed was S.B. 356.

Senator Townsend continued noting a proposal had been prepared. He stated:

Senator Townsend noted the committee’s jurisdiction was over insurance He stated, "This effort is merely one that would require policies of health insurance, sold in the private market, to mirror what our largest employers do; that is to make some major coverage with regard to inpatient/outpatient services.

Senator Townsend introduced Assemblywoman Sheila Leslie, Washoe County Assembly District No. 27, who gave an overview of federal mental health parity (Exhibit G). Assemblywoman Leslie noted the issue is about treating mental illness the same as physical disease. She continued reading her remarks into the record. Assemblywoman Leslie claimed mental health parity is the correct thing to do to for our citizens, for business and for moral reasons.

Ronald Sturm, Ph.D., Director, Economic and Policy Research, UCLA/RAND Center on Managed Care for Psychiatric Disorders, was next to speak. Dr. Sturm noted he was not advocating any particular opinion; he was just presenting facts based on research. Dr. Sturm offered a slide presentation as well as "The Costs of Covering Mental Health Care at the Same Level as Medical Care" (Exhibit H. Original is on file in the Research Library.). He noted insurance benefits for mental health care are limited; are decreasing and are not at parity with benefits for medical care. Dr. Sturm continued his slide presentation along with referring to the material in Exhibit H. Touching on the role of state legislation and the use of mandates, he maintained bad mandates could be costly and inefficient. Dr. Sturm noted Nevada has not been aggressive in the use of mandates. He asserted insurance mandates might reduce social costs. Dr. Sturm summarized by noting new managed care companies can administer full parity benefits for relatively low costs and these managed care arrangements would be the model type of coverage in the private sector.

Senator Townsend posed questions concerning individuals who work, have insurance; however, do not receive help from insurance companies, or who exceed coverage limits. Dr. Sturm claimed the main group to be affected would be families of the employee. Dr. Sturm asserted limits of coverage for many are surpassed very quickly and are then referred to the public sector.

Carlos Brandenburg, Ph.D., Administrator, Mental Hygiene and Mental Retardation Division, Department of Human Resources, noted during fiscal year 1998, his division spent $42 million for mental health services. He noted there are still a number of uninsured individuals currently being treated by his division.

Richard Siegel, Professor Political Science, University of Nevada Reno, Community Unity Coalition; Lobbyist, American Civil Liberties Union of Nevada, noted he had been involved with this organization for several years. He furnished an incident from his family experience, noting all may be impacted by discrimination. Mr. Siegel noted there is emotional devastation as well as financial devastation because of inadequate and/or discriminatory insurance coverage.

George Wolf, Pastor, Holy Cross Church, Executive Board, Religious Alliance in Nevada (RAIN), stated his support for S.B. 356. Father Wolf read a statement from a colleague, Father Charles Durante:

Father Wolf continued these comments by noting, at times, ethical responsibilities are eroded in the interest of economics.

Juliann K. Jenson, Senior Research Analyst, Research Division, Legislative Counsel Bureau, noted as an employee of the Legislative Counsel Bureau she would not advocate or oppose this proposed legislation. Ms. Jenson presented a background paper, "Mental Health Parity of Insurance Coverage" (Exhibit I. Original is on file in the Research Library.). She noted Exhibit I covered the federal Mental Health Parity Act of 1996; cost benefits of implementing mental health parity, along with arguments for and against and what other states are doing in this area. Ms. Jenson reviewed Exhibit I in detail.

Anna Uptergrove, President, Nevada Alliance For Mentally Ill (NAMI), declared her support of S.B. 356. She thanked all those who had offered their support of this legislation. Ms. Uptergrove noted many other states have already passed mental parity legislation. She presented her written remarks (Exhibit J) which she then read into the record.

At this time, Senator Townsend suspended the hearing on S.B. 356 in order to accommodate those who came to testify on Assembly Bill (A. B.) 113.

Richard J. Panelli, Chief, Bureau of Licensure and Certification, Health Division, Department of Human Resources: and John Yacenda, Ph.D., Deputy Director, Department of Human Resources, testified on A.B. 113. Mr. Panelli clarified matters pertaining to patient records and investigations required. Mr. Panelli presented his explanation (Exhibit K) which he read into the record. He indicated his opposition to A.B. 113. Dr. Yacenda asserted any amendment might jeopardize the investigative functions that need to be maintained.

David Horton, Lobbyist, Nevada Homeopathic Medical Association, presented a proposed amendment (Exhibit L) for A.B. 113. Mr. Horton indicated his reasons for this amendment, asserting homeopathic practitioners might possibly be targeted for investigation unfairly. Senator Townsend, Mr. Panelli, and Mr. Horton conferred on various aspects of this proposed amendment. Robert E. Barengo, Lobbyist, Nevada State Board of Medical Examiners, joined this discussion, claiming, if an investigation were in progress, his organization would check a number of cases in order to divert attention from any particular person/organization. Mr. Horton and Senator Townsend continued their perusal of this proposed amendment, with Senator Townsend pointing out salient facts pertaining to the jurisdiction and protection offered by all state boards. Senator Townsend maintained the proposed amendment would change the concept of investigations. As no solution could be reached, Chairman Townsend closed the hearing on A.B. 113.

Chairman Townsend reopened the hearing on S.B. 356. Rosetta Johnson, President, Alliance for the Mentally Ill of Nevada (AMI), testified noting she was the parent of a mentally ill son. Ms. Johnson presented her testimony, along with various types of information for the committee’s perusal (Exhibit M. Original is on file in the Research Library.). She commented on medicines being developed and noted her support of S.B. 356. Ms. Johnson proceeded with her testimony, reading it into the record.

Next to testify, Jennifer Ruhberg, Alliance for the Mentally Ill, presented her written testimony (Exhibit N) proceeding to read it into the record. Ms. Ruhberg urged passage of S.B. 356.

Tom Wood, Lobbyist, Manager, State Government Affairs, Wyeth-Ayerst Laboratory, Division of American Home Products, noted his organization, along with others, was developing medications for help with mental health. He introduced his stepdaughter, Pam Hawkins, Family Coordinator, Sacramento County Division of Mental Health, Mental Health Association. Mr. Wood stated his support for S.B. 356 and the concept of mental health parity. He cited several companies in the process of upgrading insurance to cover mental health issues and presented "One Company’s Experience" (Exhibit O) as authentication of what has already been accomplished in this field. Mr. Wood mentioned methods and solutions as experienced by the company noted in Exhibit O. Mr. Wood deferred to Ms. Hawkins, who presented a personal instance of mental health illness; namely, noting her daughter had been diagnosed with bipolar disorder at the age of 15. Ms. Hawkins offered instances of problems and frustrations encountered with obtaining mental health services for her daughter.

Pam M. Broughton, Chief Executive Officer, West Hills Hospital, presented several cases of discrimination and inequities associated with the treatment and access of health insurance for mental illness (Exhibit P).

Darryl S. Dubroca, Chief Executive Officer, Montevista Hospital, thanked the committee for offering S.B. 356. Mr. Dubroca noted his support for this legislation, stating it was badly needed. He concurred with others on their views on cost, claiming most studies he had read estimated the cost of full parity to be less than 1 percent. Mr. Dubroca presented "Cost of Mental Health Parity, Executive Summary" (Exhibit Q) and proceeded with his testimony. He asserted there are many patients the hospital is not able to treat because of limitations in benefits. Mr. Dubroca stated, "We would like to go on record for our industry, as being advocates of this bill."

Senator Townsend posed questions pertaining to the number of patients currently covered by private pay coverage as opposed to self-insured. Mr. Dubroca noted about 40 to 50 percent of the patients have private insurance. He claimed, almost 100 percent of these are managed, in some way.

Thomas E. Bittkor, M.D., Medical Director, West Hills Hospital, Nevada Association of Psychiatric Physicians, offered a list of his qualifications in dealing with mental health issues. Dr. Bittkor introduced Philip Rich, M.D., Psychiatrist, Nevada Psychiatric Association. Dr. Bittker presented two items (Exhibit R and Exhibit S) pertaining to discrimination and inequities relating to health insurance coverage for mental health parity. Dr. Bittkor cited several cases illustrating his point. Dr. Rich presented his testimony in written form (Exhibit T) and read it to the committee. He emphasized statistics, pointing out twice as many Americans are affected by depression, on an annual basis, as are affected by coronary artery disease. Dr. Rich maintained, by passing this legislation, Nevada could actually decrease the amount of money spent on mental health services while increasing access to these services.

Charles Rice, M.D., Psychiatry Residency Program, claimed depression and other mental illness has a huge economic impact on the small businessperson. He asserted only 25 percent of depression is recognized and treated. He cited several instances of this problem.

Dorothy Riley, President-elect, Nevada Nurses Association, stated her organization fully supports S.B. 356. Ms. Riley noted her concurrence with others who offered statements concerning discrimination and inequity of health insurance for mental illness and presented her testimony (Exhibit U).

Vicki LoSasso, Steering Committee, Nevada Women’s Lobby, expressed her support of mental health parity, noting her organization believes this is an important issue.

Nancy Podewils, Licensed Clinical Social Worker/Certified Alcohol & Drug Counselor, Concerned Citizen, presented her written testimony (Exhibit V). Ms. Podewils cited a number of cases where having mental health insurance coverage would have made a great difference in whether or not patients could have received proper help. Ms. Podewils claimed many times that this help would have made the difference between life and death. She commended the committee and encouraged passage of S.B. 356.

Guy A. Perkins, Supervisor, Life and Health, Division of Insurance, Department of Business and Industry, presented a "Survey of Average Coverage/Self-Funded Entities" (Exhibit W). Mr. Perkins, proceeding with his explanation, noted this information had been gleaned from those connected with the gaming industry.

Marie H. Soldo, Lobbyist, Executive Vice President, Government Affairs, Sierra Health Services, and Behavioral Healthcare Options, introduced Michael R. Adams, President/Chief Executive Officer, Behavioral Healthcare Options. Mr. Adams presented "An Overview of Mental Health Parity" (Exhibit X). He claimed there was a misconception regarding mental health parity; namely that parity will provide universal mental health and substance abuse coverage. However, he claimed parity legislation will affect less than 10 percent of the insured population. Mr. Adams maintained, in most states, employer groups of less than 50 people are exempt from parity requirement. Referring to Exhibit X he noted there are national statistics indicating that for each percentage of increase in insurance premium, a certain number of people lose insurance coverage. Mr. Adams asserted another misconception was that parity costs very little. He stated there had been statements, in testimony today, that claimed parity represents less than a 1-percent increase in current health insurance premiums. According to Mr. Adams, this is only true for compliance with the federal Mental Health Parity Act of 1996. He continued his explanation of Exhibit X.

Fred L. Hillerby, Lobbyist, Hometown Health Plan, noted there seemed to be a huge demand for mental health coverage, noting his concern for those with problems pertaining to finding resources for their problem. He did indicate, however, ultimately business would be responsible. Senator O’Connell commented, "We have a very low rate, as far as employment goes; employees are very tough to find, in this state. The one thing that usually lures them away from employers, who cannot furnish, is a benefit package by another employer who can." According to Senator O’Connell, a benefit package is tremendously important to an employee; therefore, most employers work very hard to try to find ways to provide benefits to their employees, with insurance a high-priority item. Senator O’Connell continued, "Having affordable insurance to an employer is very important, so I hope we do not take our eyes off that fact."

Robert A. Ostrovsky, Lobbyist, Nevadans for Affordable Health Care, indicated his organization would be happy to become involved with determining what employers are able to do pertaining to obtaining affordable health insurance. Mr. Ostrovsky noted it would be important to find what the employees are able to afford and want; i.e., cost sharing of health insurance. He indicated one goal of his group would be to reduce the number of uninsureds. Mr. Ostrovsky pointed out that insurance companies do not pay for insurance; employers pay premiums; individuals buy policies and pay premiums. He emphasized insurance companies would not absorb the cost of mental health parity; claiming it would be passed along to small employers and by individual policyholders.

Once again, Dr. Yacenda offered testimony, stating:

Ray E. Bacon, Lobbyist, Nevada Manufacturers Association, stated he concurred with comments made by Mr. Ostrovsky.

Helen A. Foley, Lobbyist, Humana Healthcare Inc. claimed she was concerned about comments by Dr. Yacenda pertaining to the exclusion of Medicaid and children’s health insurance. She maintained these people need this type of coverage the most. Dr. Yacenda and Senator O’Connell perused the subject of the possible exclusion of Medicaid and those involved in children’s health insurance. Dr. Yacenda outlined the parameters of programs for children, noting these programs were not very well known, as yet.

Alicia Smalley, Lobbyist, President, National Association of Social Workers, Nevada Chapter, introduced Susan Dart, Legislative Chairman, Nevada Chapter, National Association of Social Workers, and offered support for S.B. 356. Ms. Dart maintained periodic treatment was necessary in order to facilitate a stable environment for those with the need.

Donna M. Shibovich, Consumer Representative and Greeter, National Alliance for the Mentally Ill, of Northern Nevada, presented her testimony (Exhibit Y). Ms. Shibovich read her testimony into the record. She explained she had been diagnosed with mental illness when she was a minor and had been able to be treated properly because her mother’s company had mental health insurance.

Gary Lenkeit, Ph.D., Licensed Psychologist, Nevada State Psychological Association, offered the support of his organization for S.B. 356. Dr. Lenkeit presented his remarks (Exhibit Z). He noted that in all health insurance, cost is a major factor, and claimed the care of those with mental illness is more expensive. He urged the passage of S.B. 356.

Patricia van Betten, Registered Nurse, spoke from Las Vegas. Ms. Van Betten stated she was speaking as a parent. She offered her testimony, (Exhibit AA) commending the committee for the clarity of coverage and the commitment to fairness. Ms. van Betten explained the circumstances of problems with her son and her wish he had been able to benefit from increased knowledge and treatment.

Vic Davis, President, National Alliance for the Mentally Ill of Southern Nevada, noted his support of S.B. 356. Mr. Davis asserted insurance coverage for those with mental illness had been lacking and was of great concern. He pointed out that medication is very expensive and insurance, if any, reached the limits in a very short period of time.

Richard Paso, Mental Health Consumer, gave background on his qualifications to speak on the mental health parity issue. Mr. Paso noted he had testified at a previous hearing, presenting several documents pertaining to mental health. He commented on differences of opinion he had with several of those testifying for the insurance industry.

Jill Smith, Concerned Citizen, commended Senator Townsend and others responsible for their support of this legislation. Ms. Smith concurred with remarks relating to the high cost of medication/treatment and, often, the lack of insurance coverage.

Senator Townsend noted S.B. 356 would be referred to a subcommittee and closed the hearing on this legislation.

Robert R. Barengo, Lobbyist, made further comments on items he considered important on S.B. 465. Senator Townsend thanked Mr. Barengo on his attention to detail.

As there was no further business, the meeting was adjourned at 11:55 a.m.

RESPECTFULLY SUBMITTED:

Beverly Willis,

Committee Secretary

APPROVED BY:

Senator Randolph J. Townsend, Chairman

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