MINUTES OF THE meeting
of the
ASSEMBLY Committee on Health and Human Services
Seventy-First Session
April 30, 2001
The Committee on Health and Human Serviceswas called to order at 1:45 p.m., on Monday, April 30, 2001. Chairman Ellen Koivisto presided in Room 3138 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.
COMMITTEE MEMBERS PRESENT:
Mrs. Ellen Koivisto, Chairman
Ms. Kathy McClain, Vice Chairman
Mrs. Sharron Angle
Ms. Merle Berman
Mrs. Dawn Gibbons
Ms. Sheila Leslie
Mr. Mark Manendo
Mrs. Debbie Smith
Ms. Sandra Tiffany
Mr. Wendell Williams
COMMITTEE MEMBERS ABSENT:
Mrs. Vivian Freeman
Ms. Bonnie Parnell
GUEST LEGISLATORS PRESENT:
Assemblywoman Barbara Buckley, District 8
Assemblyman Greg Brower, District 37
Senator Mark Amodei, Capital District
STAFF MEMBERS PRESENT:
Marla McDade Williams, Committee Policy Analyst
Darlene Rubin, Committee Secretary
OTHERS PRESENT:
Carlos Brandenburg, Ph.D., Administrator, Division of Mental Health and Developmental Services
Betsy Neighbors, Ph.D., Director, Lake’s Crossing Center for the Mentally Disordered Offender
Yvonne Sylva, Administrator, Administrator, State Health Division
Kari Demetras, Director, Step 2
Ed Everson, Administrator, Carson-Tahoe Hospital
Mary Walker, Carson-Tahoe Hospital
Ed Epperson, Carson-Tahoe Hospital
Joan Lapham, Executive Director, Carson Ambulatory Surgical Center, Inc.
Robin Keith, Nevada Rural Hospital Project
Chairman Koivisto announced the meeting would start with a subcommittee, and she opened the hearing on S.B. 116.
Senate Bill 116: Clarifies and revises certain provisions governing use of restraints and interventions by facilities for mental health. (BDR 39-346)
Carlos Brandenburg, Ph.D., Administrator, Division of Mental Health and Developmental Services (MHDS), accompanied by Betsy Neighbors, Ph.D., Director of Lake’s Crossing Center, voiced support for S.B. 116. Dr. Brandenburg noted that Assemblywoman Buckley introduced A.B. 280 in the Seventieth Session, which provided standards, guidelines, restrictions, and prohibitions on the use of restraint procedures for individuals in certain treatment facilities. The provisions of that bill did not apply to correctional or juvenile detention facilities.
However, Dr. Brandenburg advised, Lake’s Crossing was a maximum security forensic facility for the treatment of the mentally disordered offender that inadvertently fell within the bill’s definition of “facility.” The facility housed a population with a high risk for aggressive and assaultive behavior. Ms. Buckley had confirmed it had not been her intent to include Lake’s Crossing within the provisions of her bill. The proposed legislation, S. B. 116, would exempt Lake’s Crossing from the provisions of that earlier bill. Dr. Brandenburg said he had consulted with Assemblywoman Buckley and she expressed support for the proposed legislation.
Assemblywoman Leslie asked if Lake’s Crossing was the only forensic facility in the state that would be affected by the legislation. Dr. Brandenburg said it was. Ms. Leslie then asked if the restraints mentioned in the bill; physical, mechanical, and chemical, were all used at Lake’s Crossing. Dr. Brandenburg said only the mechanical restraint was used at the facility. She wondered then why the other two types of restraints were mentioned, and Dr. Brandenburg said it was because those were listed in that earlier bill. Dr. Brandenburg added that the MHDS Division did not use any form of chemical restraints, but did deny the client’s right to refuse medication; but that was not considered chemical restraint. Dr. Betsy Neighbors, Director at Lake’s Crossing, explained that a sedative would be a chemical restraint.
Chairman Koivisto asked for an example of a mechanical restraint. Dr. Neighbors responded that a four-point restraint would be the most restrictive form of physical restraint. Occasionally a two-point restraint was used. She added the facility adhered to a very detailed policy to use those kinds of restraints only as a last resort to protect the person from endangering self or others.
Dr. Brandenburg wanted the committee to be aware that any form of restraint involved a denial of rights, which meant that it had to be ordered by a physician and reviewed by the Attorney General, by Dr. Brandenburg, and by the seven‑member commission appointed by the Governor to oversee the division. There were numerous safeguards and oversights with any form of denial.
Chairman Koivisto asked what effect S.B. 116 would have on Assemblywoman Buckley’s bill. Dr. Brandenburg said it would have no effect. Her bill addressed the issues within the school system and any division agency that had not fallen within the Medicaid guidelines or did not have national accreditation would not be affected. Lake’s Crossing was a facility that just happened to fall outside those guidelines and as a result was included within Assemblywoman Buckley’s earlier bill. S.B. 116 provided the necessary language to exclude Lake’s Crossing. Dr. Brandenburg added that he had conferred with Assemblywoman Buckley to obtain her approval before he introduced the current legislation.
Assemblywoman Barbara Buckley, District 8, noted she had sponsored A.B. 280 in the Seventieth Session, which provided standards, guidelines, restrictions, and prohibitions on the use of restraint procedures for individuals in certain treatment facilities. In the interim, Dr. Brandenburg asked for her support for legislation that would exclude Lake’s Crossing. She shared his request with some of the sponsors of the bill and requested information on the use of restraints at Lake’s Crossing. She thanked Dr. Brandenburg for coming to her first and supplying data that allowed the sponsors to draft the legislation. She remarked that if all state agency administrators operated similarly, the legislative sessions would be much smoother. Accordingly, after consideration of the facts, she had agreed to support the exclusion for Lake’s Crossing because of the type of facility it was. She added that Lake’s Crossing housed some of the more violent individuals with mental problems, and it was an entirely different situation than found in schools, state facilities operated by Department of Child and Family Services, regional centers, and so on. The law enacted targeted outmoded treatment modalities.
Assemblywoman Buckley said she wanted to make sure S.B. 116 excluded only Lake’s Crossing; however, after reading the bill as written, she was not sure that was the case. She noted that “forensic facility” was defined in Section 4 to mean a facility operated by the division for the provision of forensic services; that definition was not completely clear. For example, what were “forensic services?” Furthermore, could it be construed that any other state facility offered those services? She asked if the Legal Division, or Dr. Brandenburg, would clarify that for her.
Dr. Brandenburg said “forensic facility” meant only Lake’s Crossing. He explained that “forensic” meant involvement with the criminal justice system and Lake’s Crossing was the only facility where the individuals sent there were mentally disordered offenders, either pursuant to the Nevada Revised Statute (NRS) 178, incompetent to stand trial, or for an evaluation. It was his intent to have only Lake’s Crossing listed as a forensic facility. He offered to work with staff on any language they felt needed to be clarified.
Assemblywoman Leslie returned to her earlier question regarding the mechanical and chemical restraints, and Dr. Neighbors’ example of a sedative as a chemical restraint. She asked if mace would be a chemical restraint and was mace ever used. Dr. Brandenburg responded that they were prohibited from using any form of chemical restraint in any of the division’s facilities. They did not and could not use mace. Ms. Leslie said the proposed legislation would authorize them to use chemical restraints. Dr. Brandenburg did not believe that was correct. Ms. Leslie read page 2, Section 6, subsection 2, “except as otherwise provided, a forensic facility may use or authorize the use of any reasonable physical restraint, mechanical restraint, or chemical restraint.” Dr. Brandenburg said that was the language in the earlier bill and he had used that language to make S.B. 116 consistent. Ms. Leslie felt there might be a conflict with the division’s current procedures if the proposed legislation passed into law. Dr. Brandenburg disagreed, because it was the division’s intent not to use any form of aversive treatment or chemical restraint on any client; they did use the restraint procedures pursuant to NRS 433 as a denial of rights. He reiterated that he would gladly work with staff on language. Further, it had been Mrs. Buckley’s intent to make sure that those aversive procedures were not the modus operandiwithin state agencies. Nevertheless, Ms. Leslie pressed for a change in the language because it still appeared to her as though such aversive procedures were being authorized.
Chairman Koivisto requested clarification from the Legal Division, as she also had some concern that the language was not specific to Lake’s Crossing.
Assemblywoman Tiffany asked what the testimony and concerns were when the bill was heard in the Senate. Dr. Brandenburg recalled the only testimony in opposition was a man who had been concerned that the division might utilize some type of restraint without oversight. However, he and Dr. Neighbors explained to him the explicit policies and procedures regarding the prohibitions and oversight required and necessary when using restraints. Dr. Brandenburg explained that the man had once been restrained and secluded without the necessary oversight and he wanted to make sure the state was not doing the same thing. Ms. Tiffany then asked if the bill had been amended in the Senate, and Dr. Brandenburg said it had not been. Ms. Tiffany asked why the bill had not specifically named Lake’s Crossing. Dr. Brandenburg said he had worked with staff at the inception and that had been his intent, but he did not know why Lake’s Crossing was not named. Ms. Tiffany asked if naming Lake’s Crossing was prohibited for any reason. Dr. Brandenburg said it was not prohibited, however, as Lake’s Crossing was the only forensic facility in the state, that was the language they had chosen to use. Dr. Brandenburg also provided his written testimony (Exhibit C).
Chairman Koivisto stated the bill would be held for a work session pending clarification of some of the terms, to make sure the language was consistent with the intent. She said the parties would be notified of the date. She then closed the hearing on S.B. 116 and opened the hearing on S.B. 300.
Senate Bill 300: Abolishes bureau of alcohol and drug abuse of department of human resources and transfers powers and duties of bureau to health division of department of human resources. (BDR 40-538)
Yvonne Sylva, Administrator, State Health Division, spoke in support of S.B. 300. The bill had been introduced at the request of the State Health Division and would formalize the transfer of the Bureau of Alcohol and Drug Abuse (BADA) into the Health Division (HD). She reported that when the bill came out and the summary read: “this is a bill to abolish the Bureau of Alcohol and Drug Abuse,” the agency received countless phone calls. Ms. Sylva assured the callers it was not a bill to abolish BADA, instead it was to transfer BADA into the State Health Division and remove it from statute only.
The transfer of BADA into the Department of Human Resources became effective on July 1, 1999 and was based upon the passage of Assemblywoman Jan Evans’ bill, A.B. 181 of the Seventieth Session, which made various changes relating to the provision of services relating to substance abuse and mental health. The Director of the Department of Human Resources (DHR), Mrs. Crawford, then transferred the responsibilities for the bureau into the HD. BADA was statutorily created in NRS 458, and the bureau chief was also established as an appointed unclassified position. S.B. 300 accomplished three principal actions, housekeeping in nature, and would provide for stability of the functions of BADA:
Ms. Sylva introduced Maria Canfield, the current bureau chief for BADA, who had been in the position for a year and one-half. Ms. Sylva hoped that once the position was moved to classified service Ms. Canfield would be in that position for a long time. Ms. Sylva also introduced Kari Demetras, the Director for Step 2, one of the agencies for which the HD provided funding. Ms. Demetras would advise what had transpired since the transfer of BADA to the HD.
Chairman Koivisto asked if the bill’s purpose was merely to formalize what had already taken place. Ms. Sylva said that was correct; it would put the Bureau of Alcohol and Drug Abuse on the same level as the other bureaus within the Health Division.
Assemblywoman Leslie asked about the amendment that had been done in the Senate. Ms. Sylva said it was an amendment necessary because a bill had already passed in the current session that would have an impact on S.B. 300, a housekeeping-type amendment. Ms. Leslie then asked her to comment on the provisions of the bill related to “halfway houses.” Ms. Sylva said NRS 458 had never been amended from last session when halfway house legislation had passed. It was another housekeeping situation, she added, because some things were changed and others were not. It also addressed some items related to the certification board for alcohol and drug counselors, which had not been changed. Ms. Leslie said now that it was in the HD, if the HD became its own department in the future or moved to a different department from Human Resources, would BADA move with the HD. Ms. Sylva said “absolutely.”
Assemblywoman Tiffany asked if S.B. 300 was the transfer authority, or was there another bill. Ms. Sylva said there was no other bill.
Kari Demetras, Executive Director of Step 2, and a member of the advisory committee formed approximately two years ago when BADA came under the purview of the Health Division, reported on the improvements that had taken place in that time. She said she had been concerned at the start about the potential implications and had great confidence in the way the HD had worked with the provider network in the state specifically, not only soliciting her agency’s feedback during a significant change process, but also acting on its recommendations consistently. They had facilitated improvement in the way the Bureau of Licensure and Certification regulated residential facilities and transitional housing, and through S.B. 300 soliciting her agency’s concerns. She added both Ms. Sylva and Ms. Canfield had been very supportive in making sure that as her agency came under the Board of Health there would be representation on the board that was knowledgeable of her field. She stated she was appearing on behalf of the advisory board in full support of the bill.
Chairman Koivisto expressed concern about the “halfway house” language. On page 6, line 36, subsection 4, was that something new that was being done by the HD or by BADA, or was it simply new language to describe something that had already been one of the responsibilities? Ms. Sylva recalled that was language that had been passed in the last legislative session that never made its way into statute. She added there were two bills now pending that related to halfway houses. It would likely change again and be transferred out of the present section that dealt with alcohol and drugs, and into the appropriate section, the Bureau of Licensure and Certification, where she believed it should have been initially. Ms. Sylva pointed out that the language was from last session and there would be changes and it would be deleted. Chairman Koivisto said that made her feel better.
Vice Chairman McClain was not sure knowing that made her feel better. She asked who was in charge of certifying and regulating halfway houses currently.
Ms. Sylva said the Bureau of Alcohol and Drug Abuse had responsibility from legislation passed last session to review halfway houses. There were definition problems with what a “halfway house” was and many misconceptions in the community. One piece of legislation in the current session changed the words from “halfway house” to a “recovery center,” to clarify that individuals who resided in those facilities were not there to receive any form of formalized treatment. It was a facility where persons who were generally unrelated lived and who had a common disease such as some type of an addiction. Ms. McClain said that was part of the problem seen in southern Nevada; there were halfway houses springing up that were basically boarding houses, where people were brought in to live and no one appeared to have any authority over them, and, according to residents, they “ruined” neighborhoods. No one at the county or state levels had known if they had jurisdiction, and that might explain the number of bills now pending.
Assemblywoman Tiffany recalled a great deal of work had been done on group homes in the past several sessions. She said group homes could not be regulated because they fell under the federal Fair Housing Act, and the county health division was the only agency that could have oversight. She asked if the definition of “halfway house” was different than “group home.” Ms. Sylva said there was a difference, because in a residential facility for groups, persons who resided had some common problem and received supervision. In a halfway house, the persons residing there usually worked outside the facility, did not require supervision, and lived there primarily to maintain their sobriety through peer support.
Chairman Koivisto remarked that even if the bill was passed out of committee there might be conflict amendments later on. Ms. Sylva stated the other legislation was not as far along as the current bill, and she thought those amendments would come naturally in the end.
There were no further comments or questions on S.B. 300 and the Chairman asked the committee’s wishes.
VICE CHAIRMAN MCCLAIN MOVED TO DO PASS S.B. 300.
ASSEMBLYWOMAN TIFFANY SECONDED THE MOTION.
Chairman Koivisto noted there were enough members present to vote.
THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT.
Vice Chairman McClain asked if the bill mentioned earlier by Ms. Sylva was stalled in the Senate Finance Committee. If the bill did not come out and if S.B. 300 passed as written, would Ms. Sylva need to do the regulations? Ms. Sylva answered that the regulations were currently in place for the halfway house through BADA. They were not taking any action pending the outcome of S.B. 319 and A.B. 295, one of which was related to the square footage, and the other bill was related to Bureau of Licensure and Certification regulations. Ms. McClain asked for a copy of those regulations.
Chairman Koivisto closed the hearing on S.B. 300 and opened the hearing on S.B. 406.
Senate Bill 406: Provides additional exception to prohibition against certain referrals of patients by health care practitioners. (BDR 40-596)
Chairman Koivisto noted the committee had received a letter (Exhibit D) from Assemblywoman Bonnie Parnell expressing support for S.B. 406.
Senator Mark Amodei, Capital District, explained that S. B. 406 sought to create another exception to the self-referral statute presently in law. He noted the first page of the bill was primarily existing law. On the second page, the bill added a subsection (g) to the already existing exemptions that would allow self‑referral to a surgical hospital, which was a 72-hour stay or less.
Senator Amodei noted the requested addition was the result of attempts from the beginning of his service on the Senate Human Resources and Facilities Committee, as well as Chairman Koivisto’s service on the Assembly Health and Human Services Committee since 1997, and on the Governor’s Task Force on Access to Public Health Services, to “think outside the box” in terms of trying to generate some non-government supported infrastructure money for rural areas in Nevada. The proposed legislation created restrictions to the new exemptions which had been extracted from Health Care Financing and Administration (HCFA), Stark Act, and over-utilization policies seen in federal government law, and inserted in the bill as restrictions before a physician could make a referral if he had an ownership in a surgical hospital. That was important, Senator Amodei explained, because they applied only to referrals to surgical hospitals in which a physician might have an interest. On page 2, from line 4 to line 42, the restrictions included having the governing body of other area hospitals provide written consent to the referral, geographical separation requirements, disclosure, and so on. In other words, many safeguards had been built in to address the stereotypical concerns associated with the self-referral issue.
Senator Amodei stated his intention was to afford care providers in under-served settings the opportunity to put their money to work providing limited infrastructure resources. It would be another tool or option for those trying to create infrastructure in rural areas.
Chairman Koivisto asked about the limitation by county size. Senator Amodei said there was a 100,000 population cap, indicated on page 4, page 2.
Assemblywoman Leslie understood the need for such a tool in the frontier rural communities; however, as Carson City was included in the areas provided for in the bill, she asked if there had been a problem attracting and retaining physicians. Senator Amodei deferred to the representative from Carson-Tahoe Hospital.
Ed Epperson, Administrator, Carson-Tahoe Hospital, reported there were some problems recruiting physicians, particularly when attempting to bring specialists to the area. Although it was not as challenging a problem as experienced in the more rural areas, there was still some difficulty.
Assemblywoman Tiffany noted that physician ownership and referral privileges had been reversed in past sessions and she found it difficult to accept that the privilege could be extended to some physicians while excluding others. She did not like the bill. She asked, however, about page 2, line 11, where it appeared to her that a physician could make a referral to the surgical clinic as well as perform the same services there. She offered an example of a doctor who was an internist but who also assisted in surgery. He could collect a fee as an internist, refer the patient for surgery, then assist in that surgical procedure, thus derive a benefit from both the initial services and the surgical services. She questioned if that was allowable under the bill at the section cited. Senator Amodei said the bill added an exemption to the already existing exemptions. The exemptions on page 1, lines through 23 already existed in statute; self‑referral existed in all those areas indicated, and the proposed legislation merely added one more exemption. He added that he researched what had been done in the western states: Idaho, Montana, New Mexico, Oregon, and found no prohibition against self-referral. In Utah, South Dakota, Oklahoma, Wyoming, Texas, only disclosure was required. California and Colorado had some restrictions, but the restrictions in those states primarily involved disclosure, as well. Senator Amodei said that might not be the answer Assemblywoman Tiffany wanted. Her concern with the specific provision on line 2 could be alleviated by the fact that all that was being stated was: If a physician owned a surgical hospital, 72-hour stay or less, and if the other criteria were met, the patient was informed, and the physician was not compensated based on the volume of referrals but rather based on the investment in the facility; all of which had been extracted from other states’ or from the federal Stark Act or HCFA prohibitions, self-referral was allowed. He reiterated that Nevada had the most restrictive state law in the west and, although he was not certain, possibly the entire nation. Moreover, the restrictions in S.B. 406 exceeded what the federal government required.
Nevertheless, Senator Amodei added, that did not mean that the state prohibited physicians in a rural setting from making money in two or three different ways, if they chose to invest in a surgical hospital in a rural context, not only from their practice but also from their investment in that infrastructure.
Assemblywoman Tiffany returned to the question about page 2, lines 11 and 12, and asked if that meant a referring physician could receive a payment from an office call, from assisting in surgery, and from his investment in the facility. Senator Amodei said, “Yes,” unless that was prohibited by another chapter of NRS. Ms. Tiffany said if that was appropriate for physicians in rural areas why was it not appropriate for everyone. Senator Amodei responded that the infrastructure shortages were not an issue in urban areas. The areas where the need was pressing, which had been discussed every session, were: Elko, Tonopah, Ely, Lovelock, Humboldt County, Churchill County. What S.B. 406 provided was an opportunity to put another “arrow in the quiver” of the rurals without going to the Senate or Assembly to request a “bail out.” The bill simply allowed physicians to make money following the guidelines established, and improve the infrastructure at the same time.
Senator Amodei said he had a concern that the rural areas were in such condition that the bill would not help but it was worth trying, because there was no cost involved, and the safeguards offered protection against abuse.
Assemblywoman Tiffany reiterated her feeling that it was “uneven, when we made other physicians sell their portion of surgery centers and labs.” Now, under certain circumstances, she said, the policy was being reversed because there was a shortage. She added she was not convinced there was a shortage or that this was a solution.
Assemblywoman Berman asked how many doctors and hospitals the bill would affect, and how many doctors would go to the rural areas as a result of the bill.
Senator Amodei said if he knew he would have brought them all in to testify. He saw the bill as another tool to attract doctors to the rural areas. Ms. Berman said she thought the bill was inequitable, that she, too, remembered when the ability to have an interest in a hospital or lab was taken away from physicians, and it bothered her that there was no doctor in person or on video from southern Nevada to testify in support of the bill. She added she had put a call in to some physicians, and before she could vote on it she needed their feedback. She noted, too, the medical society had taken no stand on the bill, but that was not good enough for her because she did not know how well the message had gone out with the particulars of the bill.
Senator Amodei said he would not expect anyone on the committee to do anything but vote their conscience after doing whatever homework they felt appropriate.
Assemblywoman Angle commented she was very glad Senator Amodei had brought the bill. She had lived in Ely, Winnemucca, and Tonopah and understood the problem. There was a need to attract physicians and had in the past attracted wonderful physicians to those areas but because the medical facility was in such deep financial trouble in the way it was funded, and because the doctors had no authority in how things were run or no stake in the future, they were forced to leave. In Tonopah, the doctor who was fifth in the nation in surgery brought in other physicians to that area who wanted to learn his expertise; it was almost a teaching hospital situation while Dr. Ostwinkle was there. However, he was forced to leave because there was not enough financial support for that hospital. She added that the hospital was an outpost, the only hospital between Reno and Las Vegas, and with the great numbers of people on the roads and highways involved in terrible accidents, it was imperative to have that kind of facility with physicians able to take care of those people. Another doctor in Tonopah diagnosed the first case of Hantavirus in Nevada, and if he had not been there that person would have died. In fact, she added, he diagnosed the patient, gave first treatment, and “care-flighted” the patient into Reno. Once there, the doctors took the patient off the prescribed medication and said there was no Hantavirus in Nevada. However, after going through the lab work they discovered it was Hantavirus. It was the first care he received in Tonopah, however, that allowed the patient to survive.
Mrs. Angle said she had lived 25 years in the rural areas, she saw the need in those areas, and had voted for giving physicians the opportunity to sit on the rural boards. The proposed legislation was simply another step in keeping the rural hospitals open and well staffed, and she supported the bill.
Senator Amodei said the proposed legislation also offered an opportunity for partnering in terms of facilities that could act as feeders, and in adjunct with existing rural facilities that were struggling, and thereby keep medical business in the community, as opposed to depending on Reno, Las Vegas, or Salt Lake City.
Assemblywoman Gibbons thanked Senator Amodei for bringing a “worthy piece of legislation” forward. She asked if he would be amenable to adding a small amendment, subject to the approval of Chairman Koivisto, to include two of his colleagues, Assemblywoman Parnell and Assemblyman Brower, who had really worked hard on the Assembly side to gather support for the bill. Senator Amodei said he welcomed the inclusion of Ms. Parnell and Mr. Brower to the bill’s list of sponsors.
Mary Walker, representing Carson-Tahoe Hospital and the Carson Ambulatory Surgery Center (CASCI), said Senator Amodei had done a great job presenting the bill to the committee. She reported that initially the bill had been a “Carson City only” bill because of the need to join into those partnerships. She said they needed to not only attract and maintain the physicians at the hospital, which had been a problem, but also provide investment into rural hospitals for which there were no funding sources. By having those types of partnerships, it was possible to bring in private investment from the physicians, and in most rural hospitals there was no money to upgrade facilities. In Carson City, for example, there was a bed shortage; the hospital was 90 to 100 percent full most of the time. The bill would enable more surgery beds to be added without any cost to Carson-Tahoe Hospital. Then it could get bonds to improve other aspects of the hospital. That partnership was vital in bringing the money into the hospital.
Ms. Walker continued, explaining that when she went to the Nevada Rural Hospital Project and talked to the Nevada Hospital Association, she heard comments, why would it not be available to other jurisdictions. That was absolutely correct, she said, what was good for Carson City was good for the rural areas, because there was a lack of infrastructure in facilities, medical equipment, and physicians. Therefore, the other areas were included and it was a rural bill. Ms. Walker said that as rural people they could not fight the battle in the big cities, and philosophically would not disapprove if the bill went statewide. However, there were many others in the urban communities who would not want that because of the competition factor with the present hospitals. In the rural communities, they added provisions that would protect the rural hospitals. If one entered into that type partnership, the hospital had to concur with it, or it went to the Board of County Commissioners who would make a determination that there was no detrimental financial impact. The situation in the rural communities was so fragile that one aspect of that medical service could not be taken away; there were seven hospitals on the edge of bankruptcy. She noted that the CASCI in Carson City had become a role model for those types of surgical centers and, with the partnership between the physicians and the hospitals it would be a good model to add to the rural communities as it provided an important service.
Ms. Walker reported the bill had been passed in the Senate Human Resources and Facilities Committee unanimously, and on the Senate floor it was passed unanimously, 20 yeas and 1 absentee vote.
Vice Chairman McClain took over the committee in order for Chairman Koivisto to testify in another committee.
Assemblywoman Leslie said she was still having problems with Carson City in the bill, however, could be easily convinced on the need for it in Ely, Tonopah, and Fallon. She asked what Ms. Walker or Mr. Epperson could tell her about Carson City that would be convincing. Senator Amodei referred Ms. Leslie to page 1 of the bill where the distance requirement in existing law was 30 miles, a federal requirement, and the first example Carson City had of accessing that provision in federal law was with the CASCI, which was physician-owned. That entity had been a “resounding” success in terms of its operation and its operation in conjunction with the community owned Carson-Tahoe Hospital. It was, he added, a quirk of nature that Carson-Tahoe Hospital and Washoe Medical Center were 31 miles apart, a fact that complied with the federal 30‑mile requirement.
Mr. Epperson, who testified earlier, said the hospital had supported the bill from the beginning. It was originally a local bill and was based on long-term success with CASCI, which shared space in the hospital but was owned and operated by the physicians. He believed that health care was a local decision and the local belief was that working with their physicians was by far the most cost effective way to deliver good care and keep the prices down. He felt having the physicians involved in decisions made good sense. The state of the art currently was to move toward the three-day or short-stay surgical hospitals. He would like to see that become an opportunity to partner with physicians. It had worked well for 15 years and he wanted to be able to continue that program.
Senator Amodei commented to Assemblywoman Leslie that on page 2, line 7, it stated the hospital was licensed as a surgical hospital and not as a medical hospital, obstetrical hospital, combined categories hospital, general hospital or center for the treatment of trauma. The bill would allow physicians to do what all the existing hospitals in the region or the state could already do in their own capabilities. He noted there were many physicians in Washoe County practicing primarily out of Washoe Med who went out to the rurals and provided services. If the bill passed would it create a tool for those physicians if they wanted to invest? In terms of competition, there was a Carson City flavor to it, but the reality in western and northern Nevada currently was the main medical center asset-wise was clearly in Washoe County. Many of the physicians involved were providing services in rural Nevada and it would be open to them, too.
Assemblywoman Gibbons recalled that Assemblywoman Parnell had brought a bill earlier in the session, A B. 13, that dealt with the trustees, and information had come out in testimony that there was a shortage of physicians. The chief of staff of Carson-Tahoe Hospital had also testified that a physician who was a chief of staff could serve as a voting member of the board of trustees. Ms. Parnell had made a strong case for the shortage and the importance of providing incentives when she presented that bill.
Next to speak was Joan Lapham, Executive Director, Carson Ambulatory Surgical Center, Inc. She reported it was an era of increasing costs and decreasing Medicare and Medicaid reimbursement, and they had recognized the benefit that established partnerships between the hospital and local physicians had brought to the communities they served. The intent of the bill was to provide an option to expand the partnership to the surgical hospital model. Ten to 15 years ago there had been a severe shortage of physicians in Carson City, and through a variety of recruitment efforts, some of which included partnerships in various medical services provided in Carson City, had helped to recruit a significant number of physicians to the community who were committed both philosophically and financially to the success of the hospital and services provided.
Ms. Lapham stated the physician ownership in ambulatory surgery centers, in particular, had been encouraged by the federal government and also by many state governments as a means of attracting capital to add health care resources not otherwise available in the community, subject to stringent safeguards against improper over-utilization or abuse. Specifically, that would be the Stark Act exceptions, and also those concepts derived from the anti-kickback “safe harbor,” that required a physician-investor’s financial benefit not be tied to the amount of referrals the physician made to the facility; it was based more on a standard investment procedure.
She added it had been her experience that physician-ownership in surgery centers resulted in customer-oriented, customer-centered, and cost-effective quality health care, and she believed that passage of the bill would provide an opportunity to extend the successful outpatient model that had been developed over the last 15 years for developing surgical services to the inpatient population of Carson City and surrounding communities. Similarly, the bill did provide an opportunity for the rural communities to recruit and retain physicians by engaging them in a partnership that encouraged ownership and long-term commitment to the community. Ms. Lapham noted that she was accompanied by Robin Keith, with whom she had worked the previous six months as the representative for the Nevada Rural Hospital Project, and they had given unanimous support for the legislation. She added the chairman of her board of directors, Dr. James Colgan, had intended to be present but had been delayed in surgery. However, he would say the same thing she had said.
Robin Keith, President, Nevada Rural Hospital Project, a consortium of all of Nevada’s small and rural, public and not-for-profit hospitals, expressed support for the bill. Her board of directors voted unanimously to support the bill. She reported that when first approached by CASCI and Carson-Tahoe Hospital, she had some reservations about the bill. After much thought, she came to the conclusion her reservations were coming out of a rather traditional mind-set that said that hospitals and physicians usually were in competitive relationships rather than cooperative ones. In Elko, the medical staff in the hospital had not had cooperative relationships. There was a need for a surgical center in Elko, the hospital tried to develop a relationship with the medical staff that ultimately failed. The physicians got together and built the ambulatory surgical center and now competed with the hospital to the detriment of both. She noted that was the kind of difficulty that could occur in the smaller marketplaces when the relationship between the medical staff and the hospital was not cooperative. However, four things changed her mind and brought her to a very supportive position.
First, the success seen in Carson City between the hospital and their medical staff; ten or more years ago Carson-Tahoe Hospital had been in poor financial condition, there were not enough physicians in the community. Residents had to go elsewhere to get care. By virtue of changing the mind-set from competition to collaboration, the hospital had been able to recruit and now there were over 100 physicians in the community, and they had been able to establish what was highly unusual in the medical field; a very cooperative and collaborative working relationship, each understanding that they were invested in the success of the other. Second, the requirement in the bill that physicians involved in a surgical center or surgical hospital as defined in the bill, took care of Medicare and Medicaid patients. She was very concerned that facilities not be put into rural communities that “creamed” or “skimmed” the patients that could pay and left indigent patients to the existing facilities. Third, the safeguards that were built into the bill, particularly those listed on page 2, lines 32 through 42, as mentioned earlier, helped gain her support. Finally, the mechanism as a tool for bringing capital and professionals into rural Nevada, added to her feeling of strong support for the bill.
In closing, she said the bill provided opportunities for genuine collaboration and cooperation between the medical staffs and the hospitals.
There were no further questions for witnesses. Vice Chairman McClain closed the hearing on S.B. 406.
With no further business before the committee, Vice Chairman McClain adjourned the meeting at 2:57 p.m.
RESPECTFULLY SUBMITTED:
Darlene Rubin
Committee Secretary
APPROVED BY:
Assemblywoman Ellen Koivisto, Chairman
DATE: