MINUTES OF THE meeting

of the

ASSEMBLY Subcommittee on Commerce and Labor

 

Seventy-First Session

May 16, 2001

 

 

The Subcommittee on Commerce and Labor was called to order at 3:21 p.m. on Wednesday, May 16, 2001.  Chairman David Parks presided in Room 4100 of the Legislative Building, Carson City, Nevada.  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.

 

 

SUBCOMMITTEE MEMBERS PRESENT:

 

Mr.                     David Parks, Chairman

Mr.                     Lynn Hettrick

 

SUBCOMMITTEE MEMBERS ABSENT:

 

Mr. David Goldwater

 

STAFF MEMBERS PRESENT:

 

Vance Hughey, Committee Policy Analyst

Crystal McGee, Committee Policy Analyst

Dawn Lee, Committee Secretary

 

OTHERS PRESENT:

 

Jack Jeffrey, Legislative Representative, Southern Nevada Building and Construction Trades Council, and Southern Nevada Central Labor Council, Henderson, Nevada

Charles Duarte, Administrator, Division of Health Care Financing and Policy, State of Nevada, Carson City, Nevada

Nancy Angres, Chief Deputy Attorney General, Human Resources Division, State of Nevada, Carson City, Nevada

Lawrence Matheis, Executive Director, Nevada State Medical Association, Las Vegas, Nevada

Guy A. Perkins, Jr., Chief Insurance Examiner, Supervisor, Life and Health, Division of Insurance, Carson City, Nevada

Barbara Gruenewald, Legislative Representative, Nevada Trial Lawyers Association, Reno, Nevada

Robert Ostrovsky, Legislative Representative, Nevada Resort Association, Las Vegas, Nevada

Nancyann Leeder, Nevada Attorney for Injured Workers, State of Nevada, Carson City, Nevada

Donald Jayne, Legislative Representative, Nevada Self-Insured Association #200, Gardnerville, Nevada

 

Chairman Parks called the subcommittee meeting on S.B. 99 to order.  Mr. Goldwater was not present but was expected to arrive shortly.

 

Senate Bill 99:  Makes various changes to provisions governing health insurance. (BDR 57-132)

 

Jack Jeffrey, Legislative Representative, Southern Nevada Building and Construction Trades Council, and Southern Nevada Central Labor Council, stated the amendment he proposed was taken from S.B. 209 and he indicated Crystal McGee prepared the amendment in writing. 

 

Crystal McGee, Committee Policy Analyst, provided the subcommittee with a subcommittee worksheet on S.B. 99 (Exhibit C), and indicated pages 2 through 4 of that document utilized sections from S.B. 209 pertaining to the Uninsured Employers Claim Fund.  The suggested amendment modified Nevada Revised Statute (NRS) 616C.220 to strike the words “in this state,” and additionally amended NRS 617.401 by striking the provision which provided that in order to qualify for a claim under the Uninsured Employers Claim Fund an employee must have performed work in the state of Nevada. 

 

Mr. Hettrick wondered whether Robert Ostrovsky opposed the amendment.  Ms. McGee stated she contacted Mr. Ostrovsky while preparing the worksheet document and Mr. Ostrovsky indicated he was withdrawing his proposal.

 

Charles Duarte, Administrator, Division of Health Care Financing and Policy, State of Nevada, provided his prepared testimony for the record, and expressed concern as to the impact S.B. 99 would have on the Division of Health Care Financing and Policy (DHCFP) (Exhibit D).  Mr. Duarte indicated Medicaid HMOs were exempt, through NRS 695C.050, from the prompt payment standards articulated in Title 57 of the NRS, and removal of the exemption would subject Medicaid-contracted HMOs to the payment standards of both federal and state law, which Mr. Duarte felt was problematic for several reasons (Exhibit D, pages 1-2).  Mr. Duarte noted the remainder of his testimony was previously given to the full committee, and introduced Nancy Angres and David Grove who were available to answer any questions of the subcommittee.

 

Nancy Angres, Chief Deputy Attorney General, Human Resources Division, State of Nevada, stated the amendment simply maintained the status quo already contained in statute, as Medicaid and Health Care Financing were currently exempt, and she requested that the subcommittee include the amendment to avoid any fiscal impact to the DHCFP.

 

Chairman Parks inquired where the language was contained in the bill that would remove the current status quo.  Ms. Angres responded that page 8, Section 12, subsection 4, listed the statutes that did not apply to HMOs that contracted with Medicaid.  She stated the amendment would delete the italicized language contained in Section 12, subsection 4, so the provisions of NRS 695C.110, 695C.170 to 695C.200 inclusive, 695C.250 and 695C.265 did not apply to HMOs that provided services to Medicaid.

 

Mr. Hettrick confirmed for the record that the amendment proposed by Ms. Angres would only affect the DHCFP.

 

Chairman Parks asked whether the DHCFP gave similar testimony at the hearing on S.B. 99 in the Senate.  Mr. Duarte responded the revision that the DHCFP opposed only appeared in the first reprint of the bill.

 

Mr. Duarte indicated he understood the concerns expressed by the physician community regarding prompt payment as it related to Medicaid programs, and noted the DHCFP had a contractual obligation to ensure contractors were abiding by the federal rules as stipulated in their agreements.  He stated the DHCFP could and should do more to ensure prompt payments and were committed to their obligations.

 

Lawrence Matheis, Executive Director, Nevada State Medical Association, indicated his belief that statutory authority existed for Medicaid to punish its contractors and he did not feel there was a remedy for the provider.  He stated the bill did not make an action by providers against the Medicaid program, but he noted the bill made an action against licensed Nevada HMOs that had a Medicaid contract and had been paid by Medicaid to coordinate services, and after the services were provided by subcontractors the HMO did not pay the subcontractors in a timely way.  Mr. Matheis pointed out that a sanction against a contractor did not provide compensation or interest payments to the provider that was wronged.  Mr. Matheis wanted to standardize the expectation that anyone who was claiming to provide coverage should pay a bill in a timely manner when an appropriate coverage service was provided.  He felt the problem with the amendment suggested by the DHCFP was that the HMOs would not be held accountable for their actions and the Division of Insurance needed to impose sanctions.  As to the proposal submitted by Mr. Jeffrey, Mr. Matheis indicated as long as there was no overall problem with the proposal, it was not an issue and would not object.

 

Mr. Hettrick asked whether there was any innovative way to combine the two approaches, and noted DHCFP was stuck with federal regulation requiring payment of 90 percent of all clean claims in 30 days and now they were going to get stuck with the provisions of S.B. 99.  Mr. Hettrick realized it was not possible to change federal law and hoped there was a way to fix the problem.  Mr. Duarte believed the way to make the two provisions mesh was to augment existing contracts with language that reflected the disincentives proposed by Mr. Matheis.

 

Ms. Angres noted part of the concern was that the federal and state definitions for timely claims processing were different and she noted that to the extent the federal law was more restrictive, federal law would preempt the state law as it applied to Medicaid.  However, Ms. Angres noted that to the extent state law was more stringent, state law would take precedence as to Medicaid, and would force the DHCFP to figure out which time frame for claims processing applied in any specific instance.  She noted HMOs would have to upgrade or change their systems to be able to decide whether federal law or state law processing requirements were necessary and felt HMOs would pass on the cost of a system change or upgrade to the DHCFP, which would result in a fiscal impact.

 

Mr. Duarte felt the remedy might be to have the DHCFP work with the Nevada State Medical Association to develop contract language, specifically reviewing issues of prior authorization, claims payment and quality standards.

 

Mr. Hettrick asked what the difference was if, in the end, the DHCFP included in its contract language the same provisions suggested by the amendment.  Mr. Duarte explained the difference was that putting the provision in statute created two different jurisdictional areas which oversaw claims payment processing, using different standards and different approaches, which created a fiscal impact for the DHCFP.

 

Mr. Hettrick did not understand why putting the provisions into statute created two standards.  He noted the DHCFP was paying the HMO according to federal law, but he stated the issue was whether or not the HMO was paying the doctor in a timely manner.  Mr. Duarte explained the DHCFP prepaid the HMO on a monthly basis and contract requirements required the HMO to meet prompt payment standards to the physician as defined by federal law.  He stated the state law would create a second tier of standards for prompt payment, and would create some potential fiscal impacts to the state.

 

Mr. Hettrick asked whether a solution would be to make the same penalties as proposed in the amendment apply to the federal rules, and wondered whether that would motivate an HMO with multiple complaints, who had to be sanctioned before it would provide payment despite contract requirements.  Mr. Duarte indicated the timeliness standards were different under federal and state law.  Mr. Hettrick suggested adopting the federal standards and applying the more stringent state law penalties, and stated the object was to raise the penalty so that HMOs paid in a timely manner. 

 

Ms. Angres confirmed that Mr. Hettrick’s suggestion would be put in Section 12, subsection 4.  Ms. Angres felt the suggestion was workable, but noted contracts were already in place with the HMOs and, accordingly, the provision could not take effect until the contract was renegotiated.  Mr. Hettrick indicated his agreement and noted his belief that tougher penalties would create more willingness to pay promptly.

 

Guy A. Perkins, Jr., Chief Insurance Examiner, Supervisor, Life and Health, Division of Insurance, indicated he was in favor of the amendment proposed by Mr. Duarte; however, he noted a basic disagreement as to whether or not the Division of Insurance was responsible for enforcing any part of Medicaid law.

 

Mr. Hettrick confirmed that if the amendment that he suggested was adopted, the Division of Insurance would not be involved.  Mr. Perkins agreed.

 

Chairman Parks asked Ms. Angres to draft a provision for Section 12, subsection 4, which was consistent with the discussion, and indicated his intent to recess the committee to the call of the Chair pending completion of the draft.

 

Barbara Gruenewald, Legislative Representative, Nevada Trial Lawyers Association, provided the committee with a suggested amendment to Section 20 of S.B. 99 to clarify the intent of that section (Exhibit E).  Ms. Gruenewald noted Section 18 applied to time frames within which to pay workers’ compensation bills for accident benefits and, in Section 20, the insurer was worried that the three times penalty would apply to the payment of the bills for accident benefits while the insurer was determining whether to pay the bill.  Ms. Gruenewald stated the purpose of the amendment was to delete existing language and add a sentence at the end of the paragraph to clarify the intent.

 

Mr. Hettrick confirmed that the intent of the paragraph was not changed and that language was amended only to clarify the original intent.  He asked whether Ms. Gruenewald would accept language prepared by the Legislative Counsel Bureau (LCB), as long as the intent was clarified.  Ms. Gruenewald indicated that would be satisfactory.

 

Robert Ostrovsky, Legislative Representative, Nevada Resort Association, indicated S.B. 99 attempted to “put a round peg in a square hole,” which was why there were so many problems and amendments.  He stated his belief that the previous system for payment of workers’ compensation worked very well and the payment schedule created for the health care arena should not be applied to workers’ compensation.  Mr. Ostrovsky urged the subcommittee to consider whether all sections of the bill were appropriate for workers’ compensation.  He indicated he was willing to accept the proposal suggested by Mr. Jeffrey.

 

Mr. Jeffrey stated for the record he supported the amendment proposed by the Nevada Trial Lawyers Association.

 

Nancyann Leeder, Nevada Attorney for Injured Workers, State of Nevada, stated her belief that the amendment offered by the Nevada Trial Lawyers Association would clarify the language and intent of Section 20.  Ms. Leeder noted her clients had experienced problems with slow payments and no payment in the workers’ compensation arena.

 

Donald Jayne, Legislative Representative, Nevada Self-Insured Association #200, indicated he would like to see the sections dealing with workers’ compensation removed from S.B. 99 and believed there were other recourses available, which were not being utilized.  He felt there were other avenues that should be pursued and expressed his opposition to the sections involving workers’ compensation.

 

Chairman Parks recessed the subcommittee to the call of the Chair at 3:57 p.m. 

 

The subcommittee was never reconvened.

 

RESPECTFULLY SUBMITTED:

 

 

Rebekah Langhoff

Transcribing Secretary

Dawn Lee

Recording Secretary

APPROVED BY:

 

 

 

                       

Assemblyman David Parks, Chairman

 

 

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