The Senate Committee on Government Affairs was called to order by Chairman Ann O'Connell, at 2:10 p.m., on Wednesday, February 3, 1999, in Room 2149 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.

COMMITTEE MEMBERS PRESENT:

Senator Ann O'Connell, Chairman

Senator William J. Raggio, Vice Chairman

Senator William R. O’Donnell

Senator Jon C. Porter

Senator Joseph M. Neal, Jr.

Senator Dina Titus

Senator Terry Care

STAFF MEMBERS PRESENT:

Angela Culbert, Committee Secretary

OTHERS PRESENT:

Chairman O’Connell opened the meeting with introductions of new committee members and committee staff. The chairman introduced Senate Bill (S.B.) 2.

Mr. Ivan R. (Renny) Ashleman II, Lobbyist, Nevada Health Care Association (NHCA), indicated he was asked to testify on behalf of Winthrop S. Cashdollar, Lobbyist, Executive Director, NHCA, who had been active in the Legislative Committee on Health Care (Nevada Revised Statutes (NRS) 439B.200) and who had submitted the original request for legislation. Mr. Ashleman noted Mr. Cashdollar had submitted a letter to the committee (Exhibit C) expressing the NHCA’s support for S.B. 2.

Mr. Ashleman indicated the principle problem to be the reimbursement mechanism. He said the mechanism had been adopted to comply with the requirements of federal law which have since been repealed; therefore, he pointed out, the need for the mechanism no longer exists to meet federal standards. The current 60^th percentile (as referenced in Exhibit C) gives facilities every incentive to provide minimal staffing as financial success depends upon running an inadequate facility. He maintained the current system is full of disincentives to have a proper nursing facility.

Mr. Ashleman requested a study be undertaken to investigate whether staffing under the 60^th percentile is satisfactory. He emphasized a constant struggle exists to recruit, train, and maintain enough certified staff members to meet the minimum qualifications of the department. He stressed problems have been caused in keeping facilities open due to the difficulty of paying a satisfactory wage thus tempting people to the rural areas. Mr. Ashleman cited turnover of nurses and certified nurse aides is 100 to 150 percent per year per facility which, he declared, jeopardizes care. Due to current financial arrangements, he maintained, the industry is unable to correct the problem.

Mr. Ashleman pointed out S.B. 2 requests the state to study whether current health care staffing is satisfactory. Under the proposal, the state would be mandated to investigate whether the Nevada Medicaid reimbursement rates are satisfactory and whether those rates would prevail if the state were to use the same methods used by the federal government in setting Medicare reimbursement rates. He explained the federal method is known as Resource Utilization Groups III (RUGs III) which was studied in depth to include a quality-of-care component.

Mr. Ashleman mentioned the NHCA would suggest an amendment to S.B. 2 to allow the study be conducted in consultation with the NHCA.

Senator O’Connell questioned whether the regulators and the providers were currently working together. Mr. Ashleman explained these groups work well together on many issues, though he recognized, the regulators and the group dealing with salary payment and staffing are separate. He noted these groups have been cooperative in recent years, consulting the NHCA on various problems to find solutions.

Senator O’Connell remarked she had looked at committee minutes in which there had been indication the groups should expand the scope of issues on which they worked together. Mr. Ashleman said the groups had met on reimbursement-mechanism issues, but no resolution had been reached due to issues other than lack of cooperation. He indicated this was the reason the issue had been brought before the administration for results.

Mr. Ashleman commented upon a second amendment suggesting the study should explicitly address the adequacy of Nevada Medicaid reimbursement for nursing facility residents with special needs. He emphasized the difficulty of specific areas of special needs, explaining nursing homes are much cheaper than hospitals and therefore looking at the expansion of adequate care for special need patients in a nursing home setting would be valuable.

John Yacenda, Ph.D., Member, Advisory Committee, Legislative Committee on Health Care, (Former Executive Director, Great Basin Primary Care Association) indicated he was testifying on behalf of Senator Raymond D. Rawson, Clark County Senatorial District No. 6; the chairman for the Legislative Committee on Health Care. He indicated the committee had heard much testimony related to long-term care particularly to staffing issues including turnover and reliability. He said the intention of the study was to investigate current procedures in the way staffing issues affect planning for long-term care, what can be anticipated as the population ages, and how Nevada can best address these issues.

Dr. Yacenda recognized a fiscal concern of long-term care providers is the estimated 3 million dollars per year lost in unpaid claims due to stale-dating. While submitting a Medicaid claim, if the paperwork is delayed and exceeds the 120 day submission limit, the bill becomes stale-dated, and therefore will not be paid. He stated it was ethically indefensible that care provided by Nevada providers to Nevada citizens qualified under Medicaid would not be reimbursed. The time limit should be removed so stale-dating could not occur, he maintained, particularly when the paperwork is delayed due to insignificant details. He suggested a study could clear up these issues so compensation can be provided for care given.

Senator O’Donnell clarified claims unpaid within the time limit means providers lose the money permanently. Mr. Ashleman indicated Nevada is one of the few states in which providers qualify people for Medicaid eligibility. He emphasized the difficulty of this process with the influx of population, noting financial and other records must be complete though the providers do not have the powers and resources of the state; the standard entity for processing this information in other states.

Antiquated computer systems, Mr. Ashleman explained, make it difficult to process claims with more than one flaw as claims are returned upon detection of the first flaw. He pointed out the difficulty of resubmitting a claim within the allotted time frame. A flaw, he noted, only has to be missing a middle initial for the claim to be returned, emphasizing turnaround on claims is a problem because of the lack of people available for processing. He stated one facility in Nevada has lost so much money on stale-dating that they must close. Due to current requirements, he said, a large percentage of the facilities are operating at a cost above the reimbursement if all the money was obtained.

Mr. Ashleman explained Nevada is the only state with this short claim time limit and with these mechanical problems involved. Federal law, he commented, has a 1- to 2-year claim time limit.

Chairman O’Connell inquired into the current data collected on these issues. Mr. Ashleman explained the state has elaborate reporting systems on staffing patterns.

Chairman O’Connell recognized long-term care service is a major factor in keeping hospitals in smaller counties open. Mr. Ashleman agreed, explaining rural facilities get an enhanced, preferential rate.

Chairman O’Connell questioned the language in section 1, paragraph (a) of S.B. 2, stating "a study to determine." She pointed out Medicaid is designed to serve those with a limited income and without assets. She asked what specifically would be determined as it relates to recipients of Medicaid.

Dr. Yacenda indicated guidelines for Medicaid recipients exist although people receiving long-term care are often on Medicaid because their resources have been exhausted. He noted these recipients must fully exhaust resources to reach the point of being covered under Medicaid. The study, he maintained, is intended to review the many factors in relation to one another as opposed to tracking these factors on an individual basis. He expressed the necessity of planning ahead to begin to bring the different streams of activity and expenditure together to see the way each affects the other.

Chairman O’Connell explained the committee would be hearing future issues regarding long-term care as it relates to the different counties. She questioned the length of time it would it take to qualify a person determined to be a long-term care case in order to obtain state aid. She noted the counties pick up the costs in the interim until the person becomes qualified, and if they do not qualify, the county is again responsible for the costs. She stressed the detrimental effect this has on county budgets. The chairman questioned the reason the determination of qualification is such a lengthy process.

Mr. Ashleman indicated this process could take a few weeks to many months, noting it must be shown applicants meet the financial requirements. This information, he noted, is gathered by personnel who do not have the coercive power of the state which is often necessary in its finding. The people from whom the information must by gathered often have medical problems and cannot offer the needed help. Mr. Ashleman noted this to be independent of the 120-day time-limit problem.

Chairman O’Connell inquired as to the way in which the results of the study would be used. Mr. Ashleman replied the goal of S.B. 2 is to help develop a reimbursement mechanism having incentives to properly handle and review these qualifications. He pointed out Nevada is not required to have the stringent qualifications which do not serve the intended purpose. He suggested the possibility of greater state cooperation with facilities in helping to qualify or disqualify people so the counties can adjust budgets accordingly.

Chairman O’Connell inquired whether the state would be depended upon to help with the funding. Mr. Ashleman clarified the funding would come from the state, emphasizing the study proposed in S.B. 2 would find the current method of reimbursement is no longer working to provide quality care. He furthered the current system may cost more and the study would show the facilities are not just trying to make more money. He maintained the NHCA is convinced the state will have a crisis under the current system if a change is not made. He emphasized the importance of making the expenditure for providing proper care.

Senator Neal questioned the reason the funding for S.B. 2 is not coming from the federal government. Mr. Ashleman indicated the federal government has conducted a study (RUG’s III) and made recommendations, but these are not the methods used by Nevada. The federal government puts the administrative burden on the states in this particular area, though it matches the money put forth by the state.

Senator Neal questioned whether the study proposed would be used to "show up" the federal government study. Mr. Ashleman assured the senator the study would be used to decide whether or not the state should move to the federal methodology. The primary purpose of the study, he noted, would be to improve the quality of care in Nevada. He expressed concern regarding the difficulty of recruiting staffing, and explained the ultimate problem would be to have facilities shut down in rural areas where no other health care alternative facilities exist thereby depriving the people of the facility they do have regardless of quality. He stressed the study will show something must be done financially to improve the process.

Dr. Yacenda explained this to be an administrative function and part of the cost for the study would be billable to the federal government. He stated the intent of S.B. 2 would be to provide information to the interim health committee for examination and clarification of these issues. It would, he maintained, help identify the actions which would need to be taken or proposed to the next Legislature.

Janice Wright, Deputy Administrator, Division of Health Care Financing and Policy, Department of Human Resources (DHR), testified to the fiscal aspect of S.B. 2, stating that currently the Division of Health Care Financing and Policy does not have sufficient resources to be able to conduct the study as there is not existing staff nor revenue. In the fiscal note, she explained, two individuals would be provided for a 6-month period of time to study the staffing of facilities for long-term care and to study the reimbursement rates. Ms. Wright indicated DHR was unfamiliar with the RUG’s III method used by the federal government. She clarified the fiscal impact would be shared, as the federal government would pay half of the expenses.

Prompted by Chairman O’Connell, Ms. Wright stated the fiscal impact would be in total, $62,657, of which, half would be paid from Title 19 federal sources and half from the state General Fund. She referred to information explaining the fiscal note (Exhibit D). Ms. Wright stressed the necessary staff and resources are not currently provided for in the budget.

Chairman O’Connell read remarks submitted by Senator Rawson for the committee members (Exhibit E) which note long-term health care issues and difficulties addressed by the Interim Committee on Health Care.

With no further testimony before the committee, the chairman closed the hearing on S.B. 2 and opened the hearing on S.B. 3. Senator Rawson’s prepared testimony (Exhibit F) was submitted for the record in support of the measure.

Mr. Ashleman began his testimony on S.B. 3 by referring to the letter submitted by Winthrop Cashdollar (Exhibit C), explaining the measure would require the Department of Human Resources to study the feasibility of expanding eligibility for Medicaid by including "persons who are medically needy." He indicated the State of Nevada currently takes care of the medical needs of people through Medicaid through a very narrowly defined category. People who are aged, blind, and disabled, he explained, can receive Medicaid only if they do not have any money. He stated many people cannot pay for medical care and thereby do not receive medical care as they are not poor enough to qualify for Medicaid. These people cannot get the proper care until they exhaust all resources. He said the study proposed in S.B. 3 would investigate the size of this group of people and the cost for expanding care. Mr. Ashleman told the committee the current problem is determined according to the county standards and local hospitals, which, he noted, fluctuates. With the change in welfare the counties will pick up more of this expense and will not have the money to deal with the "medically needy" category of people. He emphasized the importance of finding what expansion would cost the state.

Jon L. Sasser, Lobbyist, Washoe Legal Services, indicated he had served on the interim health committee and was involved with the recommendation. He clarified "medically needy" as a definition under the federal Medicaid Act. He furthered people are either "medically needy" or "categorically needy," the latter describes people fitting certain financial or other eligibility requirements required by the Medicaid program. Mr. Sasser explained states are given options on top of the requirements on who can be covered at a 50 percent shared cost with the federal government. One of the options is the "medically needy" group which means people are categorized upon more than just income and assets to determine whether governmental help with medical care is necessary. For instance, a person may not qualify under the "categorically needy" requirements due to level of income, but the medical bills are high enough that once subtracted from his or her income they are below requirement levels, and are able to qualify for the Medicaid program.

Mr. Sasser explained within the "medically needy" set of options for states, focus groups of people can be covered, thereby narrowing or broadening the "medically needy" category. The purpose of S.B. 3 is to have DHR research these various groups, evaluate the fiscal impact of covering them under Medicaid, and propose recommendations as to who should be covered. He noted these people would currently not receive any state assistance with medical bills and it may fall upon the hospital or county to pay the bill without the 50-percent shared cost offered by Medicaid. He explained this would reduce the amount of uninsured residents who are now at the burden of the county or the hospitals.

Chairman O’Connell questioned whether any guarantees exist in the program so if the state should expand the population covered by Medicaid, the federal government would not withdraw funding. Mr. Sasser stated as long as there is a Medicaid program and the "medically needy" is a covered group, it remains an entitlement program to states, explaining the federal government is obligated to put up 50 percent for every new recipient added to the program.

Ms. Wright referred to a fiscal note (Exhibit G), noting someone would need to be hired to perform the study proposed by S.B. 3 and to provide the information to the interim study on health care. She stated the cost would be $44,390 which is a split share between the federal government Title 19 funds and the state. Currently, she emphasized, there is not sufficient staff or resources to perform the study. The national Health Care Financing Administration, she noted, provided information indicating upwards of 3.5 million people in the "medically needy" category. She recognized the anticipated expense for Nevada has not been determined. The study would have to determine, who would qualify for these requirement, the definition Nevada would choose, with services required and the cost of the services.

Senator Titus suggested the money coming to the state from the tobacco industry could be used toward funding these health care problems. Mr. Sasser agreed there is a logical nexus between the money and the proposed health care studies.

Chairman O’Connell recessed the hearing on S.B. 3 until later in the meeting and opened the hearing on S.B. 4. Senator Rawson’s prepared remarks have been submitted for the record (Exhibit H) in support of the measure.

Dr. Yacenda summarized from a prepared statement (Exhibit I) which established the history and mission of the legislation. He indicated the intent of the legislation was to create an entity which would have the ability to become self-sustaining and revenue neutral. He explained a summary of a feasibility study for the creation of an office of minority health for Nevada was submitted to the interim health care committee which began the process of developing S.B. 4. He emphasized successful minority health entities have leaders with a strong and clear commitment to minority health and are able to integrate their activities with those of the health department and other state agency programs. An important aspect to the development of the legislation, he maintained, is the broad reach of the entity with the ability to impact the many agencies that were acting to serve minorities through publicly funded programs.

Dr. Yacenda explained the three major purposes identified as the mission of the division were set forward in section 7 of S.B. 4. He called attention to section 8 of S.B. 4 which describes the way in which the proposal has set forth to fulfill the established mission. He emphasized the importance of providing training concerning cultural diversity in the workplace for public and private entities. He mentioned the ability to train state employees and private individuals, staff, and agencies to be sensitive and diverse in their appropriate treatment of minorities has been a key function of all minority health entities.

Dr. Yacenda pointed out the proposed division may cooperate with and seek assistance from a public or private entity. He continued explaining the bill, stressing the importance of accountability, and drew attention to reporting requirements. He noted the division would be aided by an advisory committee to ensure all of the major minority groups in Nevada would have appropriate representation, to assist the administrator, and to ensure reporting appropriately represents the sentiments of the minority population.

Dr. Yacenda cited language approved by the Governor’s Maternal and Child Health Advisory Board as set forth in Exhibit I, recognizing Nevada’s minority populations risk for adverse health outcomes.

Senator Care asked for data on the lack of quality and available health care for minorities. Dr. Yacenda confirmed disparities exist in terms of lack of access and unusually high incidences of disease in minority populations and indicated further testimony would present specific data.

Chairman O’Connell questioned whether any other organizations in Nevada serve minority health care needs. Dr. Yacenda responded several organizations do exist currently which have consolidated around special interests, addressing social and health issues on the fringe. A formal entity which would respond to the issues developed in the proposed legislation, he noted, does not exist.

Elena Lopez-Bowlan, Member, Northern Nevada Multicultural Minority Health Coalition, referred to two handouts (Exhibit J and Exhibit K) both regarding historical perspectives, demographics, and data collection on minority health subjects. She read from Exhibit J regarding the history of minority health offices, emphasizing this is not a new concept.

Ms. Lopez-Bowlan continued reading from Exhibit J, pointing out Nevada’s growth and reliance on service industries result in high growth rates of minority populations when compared with other states. She indicated federal funds have been appropriated to examine health disparities among minorities, noting Nevada is in a good position to receive some of these funds though the eventual goal is for the division to be self-sustaining.

Ms. Lopez-Bowlan spoke of the disproportionate rate of teen pregnancy in the minority community. She pointed out that although funding was designated to address the reduction of teen pregnancy rates in Nevada, no minority programs were created. She cited statistics related to teen pregnancy as set forth in Exhibit J.

Continuing her summary of Exhibit J, Ms. Lopez-Bowlan went on to discuss prenatal care, AIDS, hypertension, homicide, and flu shots as they relate to minorities, stressing that despite statistics, funding for minority programs have decreased tremendously. She expressed concern that data collection in Nevada is inconclusive concerning minorities and she cited examples from Exhibit J as they relate to adult risk-behavior surveys, diabetes, and youth risk-behavior surveys. She emphasized how important specific data on minorities is in planning for health care.

Ms. Lopez-Bowlan concluded her statement (Exhibit K), stressing a stronger commitment needs to be made on behalf of the state to develop a division of minority health with a strong emphasis on community input in and access to the planning of programs.

Senator Porter questioned whether the Governor’s Office had been consulted regarding the creation of a minority health division and whether this request was accounted for in the Governor’s budget.

Dr. Yacenda indicated the proposal had not been discussed with the Governor with regards to accounting for the proposed division in the budget. He pointed out the effort to ensure other means to generate revenue for the creation of the division.

Carla Freeman, Member, Southern Nevada Minority Health Steering Committee, expressed the need for a state agency to look at the advocacy for those minorities in need of health services. She stressed the importance of minority health issues, noting the significance of minorities addressing and educating people of the same ethnicity on health issues specific to their culture. She recognized the need for a commitment from the state as minorities represent 30 percent of the current population and pay taxes. She referenced a packet of information (Exhibit L. Original is on file in the Research Library.) containing articles and national data regarding minority health issues as well as a position paper from the Southern Nevada Minority Health Steering Committee. She reasserted the need for action in this area, emphasizing the problems regarding minority health are increasing at a rate of 2 percent a year with more chronic diseases.

Ms. Freeman indicated most minorities go to the emergency rooms more than to primary care physicians, without the necessary benefits. She noted the lack of awareness of preventative care with issues as simple as immunization for children. The division of minority health, she explained, would investigate the reasons for the lack of information community members have on minority health issues. This would be addressed in the proper arena rather than on an individual basis. Community members, she stressed, want the simple facts regarding obtaining proper health care. Ms. Freeman stated the issue will not go away despite budget concerns, declaring the importance of looking for a solution to the problem.

Chairman O’Connell questioned the lack of information provided to new mothers in hospitals regarding immunization programs. Ms. Freeman said she did not know if the information was given to new mothers as there is no data broken down by race concerning this issue and nor did she know if the programs are being utilized.

Dr. Yacenda stated S.B. 4 represents an acknowledgement of the increasing minority population in the state and a commitment to planning for the future. The proposed division, he explained, would monitor the status of minorities being served by the various entities and programs and organize all of the information. It would give the state, he noted, a better forecasting ability to produce results when new programs are created and to keep appropriate data so the state will be benefited.

Jacqueline F. Webb, Member, Northern Nevada Minority Health Steering Committee, expressed support for S.B. 4. She noted data on the disparities in minority health issues was not new. She stated in the year 2035 over 25 percent of the population will be of minority heritage, and stressed a cooperative effort at the state level is crucial for the gathering of information from all available studies. This compilation of information, she said, would benefit all citizens as the proposed division would serve as a clearinghouse of information which would then be available to citizens as well as state agencies.

Ms. Webb acknowledged the limited resources and the consequential cutting of programs. She maintained the importance of the proposed division’s ability to offer technical assistance for research in the developing of programs to effectively reach target populations. The proposed division, she stated, would provide financial resources for research studies. At the federal level, the Office of Minority Health has become increasingly engaged in managed care initiatives due to their impact on ethnic and minority populations. Consumer information has been identified as an area needing improvement in a managed care arena, and studies at the state and federal level are demonstrating the crucial need to include culturally competent educational programs to decrease health care costs and increase the health of citizens. The division of minority health, she maintained, can provide the mechanism by which managed care companies are given the assistance to incorporate these programs for purposes of availability.

Dr. Yacenda clarified the urgency for S.B. 4 is based on the requirements of federal funding programs which will only be made available to states if there is an official entity for minority health. He pointed out there are 24 federal agencies that have funding for minority health initiatives and activities. In order to qualify, Nevada needs to have an official entity.

Yvonne Sylva, M.P.A., Administrator, Health Division, Department of Human Resources, read from a prepared statement (Exhibit M). She noted the funding for S.B. 4 is not included in the Governor’s budget. She expressed support for the concept of the measure, emphasizing the disparities in minority health status do exist. She described current programs the Health Division has in place to address the disparities as set forth in Exhibit M. Although percentages of improvement are not ideal, she said, inroads have been made in some of the health status of the minorities in Nevada. Ms. Sylva mentioned the budget for the state WIC (Women, Infants & Children) program has a budget of $25 million. She emphasized all families are provided immunization information at the hospital.

Ms. Sylva stressed she was unaware of federal funding available for creating state offices of minority health at this time. She noted current grants are used to maintain existing infrastructure. She pointed out the estimated $500,000 would be needed over the biennium to support the creation of a new division as outlined in S.B. 4.

For the record Ms. Sylva stated the Department of Human Resources will "continue to extend a hand to work with minority communities to continue our efforts to improve access to services, improve health status, and ultimately to improve the quality of life of all Nevadans."

Senator Raggio pointed out the areas of concern regarding minority health are currently being addressed through the programs set forth in Exhibit M and he questioned the need for a separate division of minority health to do so. He recognized testimony from Dr. Yacenda indicated federal money was available only if the state has the equivalent of a division of minority health despite testimony from Ms. Sylva. He stressed the need for clarification in this area.

Senator Raggio said the fiscal note for operating the proposed division over a biennium would indicate S.B. 4 has more in it than the structuring of a division. He expressed concern regarding section 14 of the bill in which the division would be allowed to award grants of money, voicing his assumption the fiscal note would not include appropriations for this provision. He questioned whether the federal grants would cover the creation of the division, the operation of the division, or the distribution of grants. He further asked whether the federal grants would be matching or pass through, requesting additional information be provided to the committee members.

Ms. Sylva explained research had been conducted as to the finding of available federal dollars, but funds had not been found dedicated solely to the purpose of creating a minority health division. The fiscal note, she indicated, does include operating costs but not funding for grants or pass through.

Senator Raggio posed the question if a division is required for federal grants, would it be possible to carve out a division of minority health within the existing department, without the additional cost of creating a new division.

Ms. Sylva indicated grants received and programs initiated in Exhibit M provide for specific activities. She noted DHR does not separate out services to minorities as the entire population is targeted. It is not as simple as it seems to put current staff in positions so as to create a division of minority health, she said, as the existing staff serves everyone.

Chairman O’Connell questioned whether a representative from the DHR was present at the interim health care meetings. Ms. Sylva indicated Charlotte Crawford, Director, Department of Human Resources, served on the advisory committee.

Chairman O’Connell questioned whether Ms. Crawford had substantial input as to the current programs of the division and to the available funds with the requested proposals. Ms. Sylva said she believed Dr. Yacenda would have been in the position to have communicated and worked with Ms. Crawford. Dr. Yacenda indicated the DHR offered neither opposition nor support during the discussions.

Dr. Yacenda clarified federal funding did not exist to establish an office of minority health, but certain money is only available to entities established in the state as offices of minority health. Dr. Yacenda agreed to provide the committee with further information regarding federal funding to offices of minority health. He stressed there was a clear link between having the official office and the ability to use available federal funds. He commented further on the ways in which federal funding could be used to aid in minority health issues by means of a central and official entity. He noted foundation money can also have an official office for minority health requirement for awarding grants.

Chairman O’Connell requested more information be provided to the committee.

Senator Titus stated although the current state department provides services to all of the people of Nevada, it does not negate the special problems associated with the minority population which, she voiced, needs special attention, focus and action. The senator suggested this may come about in a more concentrated way with a division specifically directed towards the needs of minorities. Ms. Sylva agreed, noting it would be easier with targeted funds towards specific populations.

Senator Porter questioned whether money, if available, would be better used to perform treatment through existing agencies rather than to create another administrative level. Ms. Sylva concurred without a division, more funds could go directly into services, though additional staff would be needed to target the effort.

Senator Neal questioned whether funds were available for this purpose and asked whether these funds could go to entities outside of the proposed structure. Ms. Sylva indicated she was unaware of the availability of federal funds to specifically create an office of minority health though, she mentioned, testimony reflected funding possibilities to sustain an office. She stated DHR has been successful in receiving funds to target specific services to minority populations.

Dr. Yacenda indicated specific federal programs target only community-based organizations serving minorities for special initiative funding which is separate from funding for a state level office of minority health. There are funds, he explained, limited only to state entity offices of minority health and the office in turn may be able to pass on money to community-based organizations. Opportunities for funding, he noted, are increasing both through federal programs and private foundations.

Responding to Senator Porter’s earlier question regarding the directing of money towards health care rather than administration, Dr. Yacenda suggested this overlooks the importance and necessity of planning, prevention, and organization to maximize resources and to reverse disparities. He stressed the state lacks synergism and focus with concerns to minority health issues.

Senator Raggio restated his inquiry as to whether a division could be created within the existing structure. Again, it was agreed upon that additional information would be required. Dr. Yacenda maintained an office of minority health, whether newly established or created from within the existing agency, is a priority.

With no further testimony on S.B. 4, Chairman O’Connell asked for additional information on S.B. 3.

Mary C. Walker, Lobbyist, Carson City, Douglas County, Lyon County, Carson Tahoe Hospital, testified to the discussions regarding implementing the medically needy program without first studying the possible impact on the counties. She indicated the University Medical Center commissioned a study to investigate the way in which the medically needy program would affect rural counties, using Carson City and Lyon County as models, and the way it would affect hospitals, using Carson Tahoe Hospital as a model. The study is in the process of being completed.

Ms. Walker noted Nevada is in the minority of not having a medically needy program. She pointed out the rising indigent costs for rural counties, explaining available welfare dollars pay for long-term care. Long-term care money paid out means less money available for rural hospitals. She indicated 9 out of 10 rural hospitals experienced operating deficits in fiscal year 98, emphasizing the problem in keeping these hospitals open. She cited an example in which the Department of Taxation is recommending closure of Nye Regional Hospital, noting other rural hospitals in significant financial trouble.

Ms. Walker explained in order to attract physicians to rural hospitals, a premium must be paid at 10 to 20 percent higher than in urban communities despite low revenues due to Medicaid payments and fluctuations in population resulting from mining. She explained the way in which declines in assessed valuation effect the revenues of rural hospitals, noting 6 rural counties in the past 4 years have had declining assessed valuation. She stressed the benefit of matching federal dollars to the counties, noting issues of uncompensated care were evaluated in the Carson Tahoe Hospital finding 4 percent could qualify for funding. A medically needy program, she pointed out, will also pay for physicians unpaid by county funds resulting in less subsidy from the hospitals and from the counties. She cited the example in White Pine County in which operating losses could potentially close down the hospital, leaving the responsibility of keeping the facility open to the county. She gave Nye County as an example of a county paying to keep its hospital open.

Chairman O’Connell referred to a chart of the counties in Nevada (Exhibit N) as prepared by the Legislative Counsel Bureau which lists budgets of counties, noting the impact of subsidizing hospitals on rural counties.

Ms. Walker reiterated the importance of having an operating hospital in rural areas. She explained several rural hospitals have high percentages of uncompensated care versus total bill charges, pointing out the difficulty of operating a business when almost 20 percent of revenues are never received. She listed several rural counties and their high percentages of uncompensated care. She stated a medically needy program could assist rural hospitals and counties in their indigent accident funds because the people with high medical bills bring income levels down so hospitals would benefit from matching funds.

Ms. Walker stressed the necessity of a medically needy program and studying of welfare systems prior to implementation for success. She indicated it would not be beneficial to have a long-term care program in which county funding was necessary because of budgetary uncertainties such as a decline in assessed valuation. Ms. Walker suggested the study review all the counties separately as different types of programs and problems vary from communities. She restated county budges need to be taken under consideration if the medically needy program is implemented so as not to be a burden.

Chairman O’Connell recognized a bill to study long-term care had been introduced in the Senate Committee on Legislative Affairs and Operations. She questioned whether it would be able to take the place of S.B. 2. Senator Porter indicated the referenced proposal had come out of the same interim study as S.B. 2, expressing uncertainty of the reason for two separate bills. Chairman O’Connell requested he investigate the differences in the proposals.

Ms. Walker indicated the medically needy program is different than the long-term care issue, noting reviewing both issues together would be beneficial to the counties.

Senator Raggio questioned whether the cost to the state had been determined. He said Nevada was one of the few states which embarked on the costly class size reduction issue, noting priorities needed to be established. He remarked the cost of implementing the medically needy program would be substantial to the state.

Ms. Walker indicated her model study was not statewide as it looked at the actual files of Lyon County, Carson City, and Carson Tahoe Hospital. She noted limitations on the income levels for qualifications, emphasizing the strictness of current federal regulations.

Senator Raggio said the state would have to pay for half of the study proposed by S.B. 3. He questioned the cost of implementing the medically needy program. Prior to embarking on the study, he voiced, the ultimate cost to the state of Nevada and to the counties should be known.

Ms. Walker agreed, stating the study would determine the ultimate costs by investigating caseloads and hospital uncompensated-care populations. Prompted by the senator, Ms. Walker indicated the study to be necessary in order to find the ultimate cost. She stated the counties do not want another program in which the counties are burdened without the resources.

Senator Raggio pointed out Nye County’s high budget as noted in Exhibit N and questioned the reason the Nye County Hospital was in jeopardy.

Robert S. Hadfield, Lobbyist, Nevada Association of Counties (NACO), said that Nye County has a "payment equal to taxes" (PET) agreement with the federal government which would inflate the budget due to double-counted money. coming in as one revenue and then transferred to other funds. It would then get double counted in the state budget process. He pinpointed the problem to be "one shot" congressional appropriations spent on specific problems rather than working within the normal budget of revenues to accommodate the solution. He noted Nye County’s attempt to wean themselves off of "one-shot" money to solve problems.

Senator Titus noted Nye County did not want any state or federal intervention nor money from either entity. Mr. Hadfield confirmed Nye County’s arrangement with federal agencies, recognizing the general acknowledgement of the importance of providing certain services to a community regardless of the funding avenues.

Chairman O’Connell asked for comment on the fiscal status of the counties on the information presented.

Mr. Hadfield indicated NACO appointed a task force when the issue came up before the board at the annual meeting in November. He stated counties are naturally cautious and while they have benefited federal matching funds, money needs to be secured for those counties that are unable to match funds. He stressed this money needs to be budgeted. Matching programs, he noted, require the payment of more things than were previously being paid so that the 50 percent in matching funds turns in to approximately 45 percent in matching funds. The federal government, he stated, has no guarantee regarding reduction of payments made for medical care reimbursement. He concurred with the ideal of studying these issues on a holistic rather than an individual basis. He noted the medically needy program may bring in more federal money, but the decline in assessed valuation is not going to help counties. He stressed the magnitude of the problem.

Mr. Hadfield legitimated Senator Raggio’s concern regarding state funding, pointing out requirements which go along with matching funds must be studied as well. Mr. Hadfield explained the importance of county individuality in regards to standards, reiterating the importance of a holistic approach as the way in which each element affects the others. He stressed the necessity of understanding the potential costs to state and local governments.

Tom Grady, Lobbyist, Executive Director, Nevada League of Cities, indicated when the county is affected the city and the state are thereby affected as well. He recognized a limited amount of dollars are available, noting the cities try and support county efforts. When a rural hospital closes, he noted, the economic development efforts are lost as businesses will not come to an area which cannot offer medical services. He reiterated the need for hospitals despite the expenses involved. He expressed support cities have for NACO to keep the hospitals active.

Chairman O’Connell explained the government affairs committee would be looking at many issues which are enveloped in larger pictures. She stressed the importance of understanding the hospitals’ impact on development and diversification. She noted many rural counties have great financial problems, explaining issues must be viewed as interrelated as to how the counties and thereby the state is affected. She suggested the state needs to take an across-the-board approach to addressing these issues.

Chairman O’Connell closed the hearing on S.B. 3 and S.B. 4. She requested the committee review the Government Affairs Rules for the 1999 session (Exhibit O).

SENATOR O’DONNELL MOVED TO ADOPT THE RULES FOR THE 1999 LEGISLATIVE SESSION.

SENATOR RAGGIO SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

*****

Chairman O’Connell called attention to the committee briefs (Exhibit P and Exhibit Q) prepared by the research analyst, Juliann Jensen, Committee Policy Analyst, Research Division, Legislative Counsel Bureau. She noted the briefs and the chart of the counties (Exhibit N) would be referred to on a regular basis with the bills in committee.

With no further business to be discussed, Chairman O’Connell adjourned the meeting at 4:35 p.m.

RESPECTFULLY SUBMITTED:

Angela Culbert,

Committee Secretary

APPROVED BY:

Senator Ann O'Connell, Chairman

DATE: