MINUTES OF THE meeting
of the
ASSEMBLY Committee on Health and Human Services
Seventy-First Session
May 16, 2001
The Committee on Health and Human Serviceswas called to order at 2:00 p.m., on Wednesday, May 16, 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
Ms. Sheila Leslie
Mr. Mark Manendo
Ms. Bonnie Parnell
Mrs. Debbie Smith
Ms. Sandra Tiffany
Mr. Wendell Williams
COMMITTEE MEMBERS ABSENT:
Mrs. Vivian Freeman
Mrs. Dawn Gibbons
GUEST LEGISLATORS PRESENT:
Senator Terry Care, Senate District 7
STAFF MEMBERS PRESENT:
Marla McDade Williams, Committee Policy Analyst
Darlene Rubin, Committee Secretary
OTHERS PRESENT:
John Wiles, Counsel, Nevada Division of Industrial Relations
William Stanley, International Union Elevator Constructors
Danny Thompson, Nevada AFL-CIO
Robert Ostrovsky, Lake Mead Hospital
Judy Nagle, Director, Sheet Metal and Air Conditioning Association
Richard Lisle, Executive Director, Mechanical Contractors Association
Jack Kim, Director of Legislative Programs, Sierra Health Service
Robert Barengo, Sunrise Hospital and the Nevada State Contractors’ Board
Marie Soldo, Vice President, Government Affairs, Sierra Health Services
Bill Welch, President, Nevada Hospital Association
Denell Hahn, Sunrise Hospital
Ann Lynch, Vice President, Sunrise Hospital
John Smith, Nevada Rural Hospital Project
Sue Pacult, Program Administrator, Clark County Social Services
Mike Alastuey, Assistant County Manager, Clark County
Jon Sasser, Washoe Legal Services
May Shelton, Washoe County
Janice Pine, Saint Mary’s Health Network
Maryanne Dawicki, SEIU, Nevada Service Employees’ Union
Chairman Koivisto announced the meeting would start as a subcommittee, and she opened the hearing on S.B. 337.
Senate Bill 337: Provides for regulation of boilers, elevators, pressure vessels, boiler inspectors and elevator mechanics. (BDR 40-1033)
John Wiles, Division Counsel, Nevada Division of Industrial Relations, stated the primary sponsor of the bill, Senator Care, would speak shortly. Mr. Wiles offered to provide some background information on the measure.
Mr. Wiles reported the Division of Industrial Relations had just been approached with some issues related to mechanical contractors and the installation of chillers. He had not had the opportunity to address them, and although he believed he could satisfy their concerns, they might present testimony in opposition to the bill.
Mr. Wiles stated it was a simple, straightforward bill. It allowed the Division to proceed on a regulatory effort for which they already had authority, but it allowed them to do so more directly by defining boilers, elevators, and elevator mechanics, a feature not in current law. The Division believed that it would improve public and employee safety. There was an existing regulatory scheme they intended to implement under S.B. 337.
Senator Terry Care, District 7, stated the intent of the bill was to ensure that elevators were as safe as possible, that the people who worked on elevators knew what they were doing, and that those people had continuing education on changing technology. He said there were approximately 17,000 injuries annually to people riding or working on elevators, and he added there might be testimony to the fact that 30 deaths had also occurred.
Senator Care said while most were conscious of automobile and airline safety efforts, little thought was given to elevator safety; however, he was glad to sponsor the bill. He believed there might be some opposition to the bill; however, he was confident the problems could be worked out.
Mr. Wiles pointed out one feature of S.B. 337 that might cause some members concern, namely, the bill called for a two-thirds majority, which was easily achieved in the Senate. Under Section 12, page 2, starting at line 44, it called for fees to be prescribed that were necessary to carry out the provisions of the chapter. A new chapter in the Nevada Revised Statutes (NRS) would be created to deal with the issue. Those fees were an offset to an existing system to fund the operation. Currently, the boiler-elevator program was funded through assessments on workers’ compensation insurance. The bill provided a mechanism so that the assessments could be lowered and bring the fees up to the level to cover the cost of the program. No costs were being increased.
Chairman Koivisto asked about the fee assessments. Mr. Wiles said the bill would authorize the Industrial Relations Division to go to a user-based system for fees. When a boiler, elevator, or pressure vessel was inspected, there would be a fee associated with that inspection process. The overwhelming majority of states had adopted a similar mechanism to fund activity that was essential to public safety. Nothing new was being created; rather, Nevada was getting in step with other jurisdictions. The workers’ compensation insurance assessment that currently funded the program would decrease because the fees would be designed, as stated in the bill, to reduce the assessments.
Vice Chairman McClain asked who paid the fees, the company or the person who needed to be certified. Mr. Wiles replied the fee would be paid based upon the inspection process. Generally, the fee would be paid by the owner of the facility where the elevator, the boiler, or pressure vessel was located.
William Stanley, representing the International Union of Elevator Constructors, expressed support for the bill. He provided his written testimony (Exhibit C) and a booklet entitled Deaths and Injuries Involving Elevators or Escalators (Exhibit D). Highlights of that testimony were as follows:
The proposed legislation would ensure that in Nevada, elevators and other related equipment would remain one of the safest forms of transportation. The bill addressed public safety through sound public policy and would deliver a strong message to the citizens of Nevada that we not only believed in safety, but were acting in a very responsible way to ensure that health and safety were protected.
The bill also provided a measurable standard by which all employees who were assigned the task of constructing, repairing, and maintaining an elevator had achieved a level of competency. That would assure the general public and other employees that all who used elevators during their workday that the equipment was safe. Some might ask why the need was recognized now, when we have had elevators in the state for a long time without that type of regulation. Senator Care responded the day he had on one the darkest days in Nevada history: November 1980, the day the MGM Grand Hotel burned. That tragedy altered the way the state chose to deal with the construction of all new buildings and the minimum requirements that all existing buildings had to meet.
The building regulations enacted because of the MGM tragedy also included a standard for elevators through a newly enacted life safety standard. Just as circumstances of that situation demanded a change in how business was conducted, so did the new circumstances arising today. Nevada’s inventory of elevators and escalators had proliferated in the past 20 plus years. Urban sprawl combined with increased land prices necessitated that developers build up rather than out. The proliferation of elevator equipment in Nevada and its impact on tourist-based economics required that the highest standards were implemented.
Mr. Stanley urged support and passage of S.B. 337.
Chairman Koivisto noted there were no questions about elevators; however, she wanted to know if someone would address boilers and pressure vessels.
Mr. Wiles responded that the boiler sections of the bill had caused some concerns. The Occupational Safety and Health Enforcement section of the Industrial Relations Division already had regulatory oversight over the installation and permitting processes for boilers, elevators, and pressure vessels. The bill had put them together because they needed to be regulated as a package. The public safety concerns related to elevators were different than concerns related to boilers and pressure vessels. There was a provision under Section 11, line 27, page 2, concerning the requirements for the certificate of a boiler inspector. That included a person either employed by the Division or by an insurance company who would inspect the installed boilers and pressure vessels and an elevator mechanic, as defined in the bill, whose qualifications would be reviewed by the Division. There seemed to be some confusion that the Division was trying to regulate areas of activity that were more properly regulated by the State Contractors’ Board. That Board issued licenses to contractors who installed boilers and pressure vessels and who also employed elevator mechanics. It was not the Division’s intention to step over the line into an area regulated by the State Contractors’ Board.
Regarding the specific issues related to the boilers and pressure vessels, there were nationally recognized codes of the Society of Mechanical Engineers the Division had already adopted. Those standards described how the installation process was to be achieved and recommendations for safety devices. The regulatory landscape would change very little for boilers, pressure vessels, or for chillers.
Assemblywoman Parnell asked if it was common for a group such as the elevator workers to be regulated by Occupational Safety and Health Administration (OSHA), the Contractors’ Board, and Industrial Relations. Mr. Wiles responded that in some states it was under an industrial relations-type division, as it was in Nevada. It would be uncommon to have it regulated by the Occupational Safety and Health Administration (OSHA) Enforcement Section. That decision was made long ago in Nevada. Whether it was common or uncommon would depend upon the state system involved.
Ms. Parnell asked if S.B. 337 was passed, would those three groups have that multiple oversight. Mr. Wiles said the structure would remain much the same as it was presently. The Division of Industrial Relations, administered by Roger Bremner, would oversee the operations of its sections, and one of those sections was the Occupational Safety and Health Administration Enforcement Section. Tom Czehowski was the Chief Administrative Officer in charge of the boiler-elevator program and the OSHA Enforcement program.
Chairman Koivisto voiced concern over the issue and felt there should be testimony from the plumbers’ union or other trades involved in the work covered by the bill.
Danny Thompson, representing the Nevada State AFL-CIO, voiced wholehearted support for the bill. He said it was truly a public safety issue, and the general public did not realize the danger if one of those pieces of equipment was repaired by a non-qualified worker. The intent of the bill was to set up a procedure to ensure quality standards. Elevator constructors under the AFL-CIO served the longest apprenticeship, five years, for good reason; it was considered highly specialized work. Regarding the boilers, if they were not properly maintained, they could blow up an entire building. Initially, the Division of Industrial Relations was authorized to be the “cop” and to enforce those standards and rules, and Mr. Thompson felt it was proper for them to do that.
Mr. Thompson reported S.B. 337 was passed following a lengthy hearing in the Senate, and he urged the committee to pass it also. He added there had been some concern about a jurisdictional issue, and he had feedback from everyone he represented. All were in agreement to support the bill.
Assemblyman Manendo referenced letters from Mr. Russell, Operating Engineers Local 501, and from Mr. Mathews, International Alliance of Theatrical Stage Employees, Moving Picture Technicians, Artists, and Allied Crafts (IATSE), requesting that language be included to cover stage lifts.
Mr. Stanley of the International Union of Elevator contractors said that was correct. The bill should be amended at page 2, Section, line 3, to include stage lifts as regulated equipment. He recalled there had been concern in the Senate whether IATSE and Operating Engineers Local 501 were in agreement with that, and the letters referenced above (Exhibit E) indicated those unions were in agreement. The stage lift, Mr. Stanley explained, was no more than an elevator that ran up and down, and it should be regulated under the bill.
Chairman Koivisto asked Mr. Stanley to make sure committee members had copies of those letters. She then asked if that amendment had been presented to the Senate. Mr. Stanley said the language was in the bill and was amended out in the Senate, with the understanding that once the parties came together, the language would be restored in the Assembly hearing.
Robert Barengo, representing the State of Nevada Contractors’ Board, stated the bill had been heard in the Senate, and there was extensive discussion and amendments. The Contractors’ Board wanted to make it clear they also licensed contractors in that area, and they wanted to ensure there was no preemption of their jurisdiction. The bill cleared that up, and Mr. Barengo voiced his support of the bill. There had been a lengthy discussion about lifts in the Senate, and Mr. Barengo also supported the amendment.
Chairman Koivisto asked if the amendment had been written out.
Robert Ostrovsky, representing the Nevada Resort Association, clarified that it was at his request the words “stage lift” were removed in the Senate. That was because he had not heard from the IATSE, which worked in nearly all the hotels and operated those stage lifts. He had seen a copy of their letter (Exhibit E) that indicated they wanted that wording included in the bill. Mr. Ostrovsky noted the bill allowed for stagehands and others to become qualified as elevator mechanics to do repairs and alterations. If the union was satisfied, so was Mr. Ostrovsky.
The next witness to testify was Judy Nagle, representing the Sheet Metal and Air Conditioning Contractors of Southern Nevada. She voiced partial opposition to the bill, specifically to the fact that chillers were included in the pressure vessels. Chillers, for their industry, worked on a vacuum system and did not use hot water. As such, there was no chance of the pressure from the hot water building up and causing a chiller to explode. In the history of Nevada, a chiller had never exploded for any reason. Ms. Nagle added they did install per code and received their permits from the building departments.
Chairman Koivisto asked where chillers were referenced in S.B. 337. Ms. Nagle said they were not specifically listed in the bill; however, chillers could be considered as pressure vessels. As such, every time they installed a chiller, it would be necessary for another inspection, duplicating the effort of the building departments.
Vice Chairman McClain asked if a chiller required an application of heat. Ms. Nagle said “no.” Ms. McClain declared they would not be covered under the bill. She read from the definition in the bill that stated, “A vessel in which pressure is obtained from an external source or by the application of heat from a direct or indirect source.”
Richard Lisle, Mechanical Contractors Association of Southern Nevada, stated he was a journeyman pipe fitter who had served a five-year apprenticeship, and he worked for the contractors who installed those systems. In response to the question, the external source would be a huge compressor that compressed freon and created cold water for circulation through large hotels. If it exploded or ruptured, freon went up a pipe into the atmosphere. A refrigeration machine did not blow up like a boiler. He supported boiler and elevator inspections; however, he was concerned about refrigeration equipment being included under an interpretation of a pressure vessel. He wanted to delete language on page 2, line 10, where it stated “direct or indirect source” and add the words “except chillers” to resolve the problem.
Chairman Koivisto asked if that amendment had been offered in the Senate. Mr. Lisle said it had not. He thought the bill was “dead” and only recently realized it was not.
Mr. Thompson said he thought Mr. Wiles would confirm that the Industrial Relations Division already regulated those types of pressure vessels. A chiller was just as had been described, but it was a pressure vessel. He recalled the incident in Henderson, Nevada, where chlorine leaked into the atmosphere, and the city was evacuated. That accident was the result of a chiller failure at the Stauffer Chemical Company, where chlorine was manufactured and then liquefied through a chiller process. The gas went through the liquefier, a big chiller with calcium brine in the outer tubes. There was a failure of a tube, and the mixture of chlorine and brine produced acid that went down the line into a storage tank and “ate” a valve and it could not be turned off. That had been the result of a chiller failure, and that was the reason the Division was interested in including that equipment.
Mr. Wiles confirmed the Division did currently regulate the installation of chillers. Primarily, the recent focus had been in applying the codes that provided a separation between boiler installations and the chillers. Because of the presence of freon gas, the updated codes provided for certain separations and barriers. Historically that had not been done, and they believed that constituted a public hazard, especially to children in a school. The Division judged it to be an area that needed attention. If one looked at a stand-alone chiller, there were no records of any accidents; however, when put together as a system with a heat source and a cooling source using freon, there was an issue of public concern and safety. His agency wanted to continue to regulate those types of installations to ensure safety.
Ms. Nagle, representing the Sheet Metal and Air Conditioning Association, said she fully understood Mr. Wiles’ position; however, they did install their systems adhering closely to the codes of the state, the city, and the county. Inspectors came to review the operation of the systems and check for safety. She did not feel they needed another agency on the job site repeating the process, or that they should have to obtain another permit and pay another fee in order to install a chiller.
Chairman Koivisto commented that the issues raised should have been handled before the hearing. Accordingly, in order to proceed with moving the bill, she asked the parties to work together and reach agreement. If the bill needed to be amended, she asked them to return with language upon which the committee could take action. She advised there would be a work session on Monday, May 21, 2001, and it would be the last meeting of the session. If the amendment could be completed by Friday, May 18, by 5:00 p.m., it should be given to Marla McDade Williams, Committee Policy Analyst.
The Chairman closed the hearing on S.B. 337 and opened the hearing on S.B. 484.
Senate Bill 484: Requires Legislative Committee on Health Care to study diversion of patients in need of emergency services and care from hospitals that lack sufficient resources to provide needed services and care. (BDR S-1233)
Jack Kim, Director of Legislative Programs, Sierra Health Services, Inc., made introductory remarks and stated S.B. 484 was a study bill. It began in the Senate Human Resources and Facilities Committee as a bill to address the “divert” situation, especially in the Clark County area. The hospitals in Clark County would “divert” clients in emergency situations and transfer them from one hospital to another.
The bill provided for the conduct of an interim study of the diversion issue to determine why did the situation existed and what could be done to resolve those problems. Questions included the need for more hospital staff, the effect on the quality of treatment, and the impact on employees. Those issues needed to be addressed in the interim study.
Assemblywoman Tiffany was under the impression the study of those issues was being handled by a coalition in Clark County. She asked why an interim committee needed to duplicate that effort. Mr. Kim responded that it was a problem of significant magnitude that would continue to worsen in the coming years. He felt it was essential to address all the factors causing the problem, rather than trying to do it in piecemeal fashion. When they drafted the bill, they had tried to address only one of the symptoms; however, as discussions ensued, they discovered more issues. The only way to address the problem was to have a legislative body examine the situation and bring the parties together. An official interim study would guarantee a comprehensive approach. Ms. Tiffany asked why the legislature would have any authority over that issue, unless it would be to change a statute. Mr. Kim acknowledged that changing statutes might be necessary. There might be a requirement for more nursing programs or incentives to get more hospital beds. He felt that only by taking a critical look at the situation could it be known what changes were needed.
Chairman Koivisto recalled that A.C.R. 7, passed out by the committee, authorized an interim study by the Legislative Committee on Health Care on a different issue. She asked Mr. Kim who would be on the committee, as that was not stated in the bill. She assumed it would be the Committee on Health Care that would conduct the study. Mr. Kim confirmed it would be the members of that committee.
Assemblywoman Parnell remarked that the committee had recently passed a resolution urging the Committee on Health Care to study an issue; however, it was a Senate bill, not a concurrent resolution, using the word “requiring.” She asked for some clarification as to the difference between those two issues.
Marla McDade Williams, Committee Policy Analyst, stated in previous sessions there had been two types of bills that had either required or urged members of the Legislative Committee on Health Care to study different issues. In the 1997 session, the committee had two bills that mandated action. Other times, they just voluntarily took up activities as they saw fit. During one session there were approximately 20 meetings, and they were divided into technical advisory groups as determined by the chairman. It really depended on how the chairman selected issues for study; however, if the committee was directed to study an issue, then that responsibility was undertaken.
Ms. Parnell assumed that being directed or required to study an issue took precedence over anything that used the term “urging.” Ms. Williams said it would. Further, she said the bill had already come out of the Senate Human Resources and Facilities Committee, and there were members on that committee that served on the Legislative Committee on Health Care in the past. The chairmanship alternated between the Assembly and the Senate each session. In the coming interim it would be a Senate chairman.
Danny Thompson, of the Nevada State AFL-CIO, stated the union represented health care workers all over the state. They felt strongly about the issue of “hospital client diversions,” and they were aware the committee had dealt with the issue for a number of years; however, there were other reasons to study the “divert” situation. Mr. Thompson remarked that prior to the session he had watched a television program about how much time the hospitals in southern Nevada were on “divert”; it was “shocking.” On the face of it, there were obvious reasons, but in reality there were multiple factors connected to the problem. In his judgment, an interim study would afford the committee the ability to make better decisions on those issues and benefit everyone in the state.
Robert Barengo, Sunrise Hospital, voiced support for the study. He said it had been debated in the Senate, and the resulting bill emerged with a variety of issues. Because of the complexity, it was determined that an interim study was needed.
Chairman Koivisto remarked that another study had come out of the committee for the Legislative Health Care Committee. The participants would not be all the members of the committee. There would be outside, public members of that group.
Assemblywoman Tiffany said she was trying to be cautious with the time they had as a committee and the issues they needed to study in depth. She was motivated to distinguish what could really be addressed by the legislature with the current bill and what the community could solve. She was not convinced the issue warranted a legislative solution. The need for a change of statute differed from having the committee involved as a mediator. Nurse staffing was usually a subject that came before the legislature; however, hospital emergency rooms accepting people with or without appropriate health care insurance was a different matter.
Marie Soldo, Vice President, Government Affairs, Sierra Health Services, Inc., stated the issue addressed by S.B. 484 dealt solely with diverted admissions. Typically, a person was picked up by an ambulance, and, instead of being taken to the nearest hospital, they were diverted to another facility. In so doing, the insured population was on constant divert. Over $5 million would be expended on billed charges because patients were being diverted to non-contracted hospitals. She did not want to debate that, but only wished to provide a better explanation. When the bill was crafted, the remedy included the establishment of rates for hospitals for those diverted cases. In the Senate hearing, there was no appetite to take such an extreme course in terms of a legislative remedy. Alternatively, it was suggested that perhaps the best way to deal with it would be to have some public discourse, to talk about the cost impacts of those diversions, and how intermediate remedies could be designed until there were more hospital beds in southern Nevada. That could be a legislative remedy. Alternatives needed to be considered to assist in keeping costs down because there were not enough beds and sometimes not enough staff.
Bill Welch, President, Nevada Hospital Association, stated several issues had arisen which motivated him to testify on the bill. There were two reasons patients were put in a “divert” situation from a hospital. It was because there were not enough beds, or there was not enough staff to take care of the patient. It was a very difficult challenge and not under the control of any one individual or component of the health care delivery system. With respect to legislative initiatives, there were some things the legislature could do. Mr. Welch supported the study that would determine the driving factors of the “divert” situation. In his view, the primary factor was the rapid growth of the state. He had testified about the growth and provided statistics to demonstrate that in testimony regarding another piece of legislation. The health care industry, hospitals, and other entities had done their best to try to keep pace, but it was a great challenge. The issues the legislature could study and support on an ongoing basis included:
Mr. Welch reported the possibility of four additional hospitals in Las Vegas in the next three to four years. Unless the staffing problem was addressed, the “divert” situation was predicted to worsen, despite the addition of hospital beds. Moreover, because beds would be spread out over the entire valley, ambulance services would be trying to figure out who had the staff, not which facility had the beds. Mr. Welch urged the committee to remember the two driving components as they studied the problem. There were negative consequences that affected everyone. Hospitals did not control “divert.” The public was dealing with the consequences of having to be on a “divert” situation.
He stated it was important to talk about the reimbursement rates and expanding the educational programs to help provide the licensed health care professionals needed to meet Nevada’s health care needs.
There were no further questions and Chairman Koivisto asked the committee’s wishes.
VICE CHAIRMAN MCCLAIN MOVED TO DO PASS S.B. 484.
ASSEMBLYMAN MANENDO SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT.
Chairman Koivisto opened the hearing on S.B. 302.
Senate Bill 302: Revises provisions governing payment of hospitals for serving indigent patients. (BDR 40-962)
Robert Barengo, Sunrise Hospital, stated that S.B. 302, originally requested by Sunrise Hospital, had been severely amended by the Senate so that it no longer resembled the bill Sunrise requested. Mr. Barengo was accompanied by Denell Hahn and Ann Lynch, also representing Sunrise Hospital.
Mr. Barengo provided background information on S.B. 302 (Exhibit F). The legislation related to the bill was enacted in 1987, part of the cost containment program set forth by then-Governor Bryan. The Senate and Assembly took what had been passed out by the administration and reviewed it at great length and came up with the present bill. The legislature added the .06 percent net revenue requirement found in NRS 439B.320, which was being repealed by S.B. 302. The purpose of that net revenue requirement was to be an incentive to hospitals of over 100 beds to begin to treat indigent patients. If they did not treat them, they had to pay. That was the last provision of that 1987 bill that remained. Over the years the legislature had rightfully determined the other provisions were not needed.
The provision affected the two hospitals in Washoe County and hospitals located in Clark County; University Medical Center (UMC), Sunrise, Lake Mead, Valley, Desert Springs, St. Rose, and Summerlin.
Mr. Barengo reported that the Senate, after hearing his bill that included a definition section, decided that provision was outdated and no longer necessary. Many would ask why they made that decision and if the provision would actually have the disastrous effects that some present would claim. The opponents testified about Safety Net hospitals, with only UMC meeting that definition. They did not believe any other hospitals in the valley accepted indigents. They would claim it would have a disastrous impact on the budget of Clark County Social Services and that indigents would no longer be treated.
Mr. Barengo referenced the federal Emergency Medical Treatment and Labor Act, also called the “Anti-Dumping Act,” that stated what hospitals could or could not do when a patient arrived at their facility. One of the things a hospital must do was treat the patient within the capabilities of the hospital. That did not mean “put a band-aid on them and send them out the door.” Further, at the state level, NRS 439B.410 stated what hospitals must do to treat emergency care patients, and the statute used the same language, “within the capabilities of the hospital.” Additionally, in Nevada there were a variety of other measures, such as the rights of patients and the standard of care that ensured patients would not go untreated. The key problem the Senate saw with the bill was that the patients in Clark County no longer resided in a single jurisdiction and could no longer easily get to one hospital for care. The provision, in essence, stated that patients would be cared for in any hospital, and Clark County Social Services, within their budget, would pay the hospitals. That served to “mainstream” the indigent patient, which was not happening presently. Except for a couple of hospitals in the valley that treated more than their indigent requirements, the bulk of the patients were being sent to UMC, Lake Mead, and Sunrise.
Mr. Barengo did not believe S.B. 302 would hurt indigent care. He pointed out the following changes in the bill:
Mr. Barengo stated it was a very simple bill, the intent being the repeal of a 14‑year-old public policy provision set by the committee. He did not believe it would bankrupt the counties. The committee, in 1992 through 1995, abrogated that provision, because, at that time, there was a different form of the disproportionate share federal program. All hospitals paid a tax, and they were refunded that tax; however, the program had changed over the years. In 1995, the federal government changed the federal disproportionate share and outlawed the hospital tax as it stood and re-implemented the program currently being followed. The Senate had since made another determination that it should come out, and Mr. Barengo urged the committee to follow what they had said.
Continuing, Mr. Barengo commented there were those who thought Sunrise Hospital should be happy to take care of its indigents. It had become an issue of competition. The county would be required to pay Sunrise for treating indigent patients. He noted in Washoe County the procedure differed, and there was an amendment to exclude Washoe County. Sunrise Hospital had put $49 million into the hospital in the last five years and had paid $53 million in taxes in the same period. In contrast, UMC, a county hospital was not required to pay taxes. In contrast, Sunrise did pay a great deal of money into the system in Clark County and in the state of Nevada, and accordingly, Mr. Barengo felt that Sunrise should have some competitive “leveling of the playing field” through the removal of the tax, as it was a “sick” tax on the hospital.
Assemblyman Manendo asked for confirmation that Sunrise treated a great many indigent patients. Mr. Barengo said Sunrise was the second largest provider of indigent-care Medicaid days in the state of Nevada. Mr. Manendo asked how many patients that represented. Mr. Barengo said in 1999, UMC provided about 37,500 Medicaid days, and Sunrise provided 21,000.
Assemblywoman Leslie said it was a confusing subject and commented that just because the Senate had passed a bill did not mean the Assembly should simply go along. Mr. Barengo countered he was not implying that; rather, it was a weighty issue that needed to be re-examined. Ms. Leslie remarked if Washoe County was not removed, she would not support the bill. She said she thought it was an incentive for hospitals to provide care, and they had not been doing that because they had to pay the counties every year. If the tax was removed, she asked what assurance Mr. Barengo could give that the hospitals across the state would continue to provide care.
In response, Mr. Barengo said the reason he talked about the Senate passage was because they amended his original bill, and now he was trying to defend what they had done. It was an awkward position; however, he could support it if the tax was levied as a penalty and not an incentive. By repealing the tax and letting the hospitals get paid, it then became an incentive. Ms. Leslie replied that was “hard to swallow.” Mr. Barengo countered if one was ”in the business of providing care and there was no incentive to provide the care other than monetary, it may be more effective to pay the amount.” Sunrise, as the second largest provider, had obviously chosen to go after the indigent patient population.
Assemblywoman Tiffany remarked every time she looked at her property tax bill, she saw a line item for “indigent care.” She asked what happened to that money. Mr. Barengo deferred to Ms. Hahn.
Denell Hahn, Sunrise Hospital, stated there were a few indigent taxes on the property tax bill; however, of all the money Clark County provided toward health care, 97 percent went to UMC during the last year. There were also other ways that UMC received money from Clark County. Ms. Tiffany asked if she could assume that if Sunrise wished to be reimbursed, those would be the funds for reimbursement. Mr. Barengo stated that within the budget of that fund, the hospital would be able to be reimbursed for patients who qualified as Clark County indigent patients. Ms. Tiffany asked for a specific amount of that fund. Mr. Barengo did not know for certain, because they had a current obligation of $1.7 million, and they submitted $1.8 million in what they believed were qualified patients before they got paid for that. Their acceptance rate of bills was much lower than UMC’s acceptance rate, so it was difficult to determine how much they would be paid out of that fund. The question was, by their not treating the million patients, would that deplete the fund faster. He did not believe that to be the case because he thought the fund was growing at about 13 percent a year.
Assemblywoman Tiffany assumed those patients probably did not qualify for Medicaid or SSI and were therefore called “indigent.”
Continuing, Ms. Hahn said she believed the property tax bill also had categories entitled “indigent accident fund” and “state supplemental fund,” which were statewide funds administered by NACO and serving different populations than the county. She added there were also the indigent for which there was a 10‑cent levy in Clark County. There was a projected cost to Clark County of $4.8 million, but the indigent medical fund had grown by $13.7 million in just one year. She referred to a newspaper article and the budget sheet contained in the packet of information (Exhibit F) and said she had requested more information from Clark County on three occasions, but had not received it. Additionally, it was hard to decide what numbers were going to be scrutinized and what they meant.
Ms. Hahn explained in charity care, various providers talked about it, but it meant something different to each of them. She added there might not be a good way to have consistent definition; for example, the Department of Health Care Financing and Policy had information on cost data trends for Nevada hospitals. That cost data trend information was self-reported by hospitals and not audited, so every hospital might use a vastly different definition of charity care. For example, UMC in their audited financial report for fiscal year ending June 1, 2000, reported $33,700,000 in charity care, but their self-reporting to the Health Care Financing and Policy reflected $40,671,000 in charity care.
Continuing, Ms. Hahn explained charity care might also differ because public hospitals had a tendency to report more charity care and less bad debt, and private hospitals had a tendency to report the reverse. One of the policy issues raised by the Legislative Counsel Bureau staff was whether the county hospital should maintain its monopoly on all the county indigent funds. The current law did not seem to be evenly applied, in that some hospitals had the privilege of paying for a shortfall, while two other hospitals had to account for free care in the same way as others. Since 1987 when the legislation was enacted, UMC never had to provide the free care while the private hospitals in Clark County had to do that consistently.
Chairman Koivisto wanted to clarify that UMC did not have to provide free care. Ms. Hahn said that was correct. They had a statutory requirement, but the Board of County Commissioners could determine if they saw a lot of low-income people. They might be compensated for clients they would not otherwise be compensated for; therefore, they were actually paid for their free care requirement. Chairman Koivisto asked if that came out of the indigent fund that was shown on the tax statement. Ms. Hahn believed the tax statement showed the 10-cent additional taxes. She believed they had the automatic General Fund Budget for indigent medical care and then they levied another 10 cents.
Mr. Barengo referred to language on page 4, line 16, of the bill “the county commissioners may, if it determines that a hospital from the county is serving a disproportionately large share of low income patients,” and he noted each county could make that determination. In 1987, the Director of Human Resources decided to use that term “disproportionate share,” and that was where the confusion began. The Director used that word to convey the hospital was seeing a large number of indigent patients. That section of the law was the only place where “disproportionate share of low income patients” was used, and it was not defined. Elsewhere in the law the term was “indigent patients,” and that was defined. Therefore, if the county determined that a hospital was seeing a disproportionate share, they could pay a higher rate to the hospitals, or they could pay a higher rate and relieve the hospital of the obligation, as they did in Clark County.
Vice Chairman McClain believed they were two different “pots of money.” Disproportionate share and the indigent property tax were not commingled. Mr. Barengo stated the property tax related to that particular phrase in the above section.
Chairman Koivisto announced that she wanted to give witnesses opposing S.B. 302 the same opportunity to be heard. Therefore, due to time constraints, the next bill scheduled, S.B. 377, would be heard on Monday.
Ann Lynch, Vice President and longtime employee of Sunrise Hospital, offered an historical perspective to the committee and wanted to dispel some perceptions that seemed to persist. One of the perceptions was that Sunrise did not take care of indigent patients. She stated emphatically that was untrue. She offered the example that 27 years ago, there was no neonatal unit in the southwest until California. Sunrise Hospital, a private facility, built a southwest neonatal unit, and any child in the county or from other states was treated. A great number of those children had no money because they came from young families who had no insurance. Previously, children with cancer were sent out of state, but ten years ago, Sunrise established Children’s Hospital and brought in pediatric oncologists. After that point, children did not have to leave the state.
Ms. Lynch stated that Sunrise felt a heavy obligation to the community. She cited the following:
Assemblywoman Leslie commended Sunrise on their accomplishments. She asked what Ms. Lynch could tell the committee to convince them to create such a huge unfunded mandate for the counties. Ms. Lynch did not believe it would be unfunded, but she said that it was increasingly difficult for people to get to community hospitals. Sunrise was once in an affluent neighborhood, but that had now become the poorest neighborhood. She added that the number of gunshot and knifing victims, as well as “drop off” cases and homeless in the emergency room, had grown tremendously. Their physicians, who were privately contracted, got nothing for taking care of those patients, nor did the intensive care units. She believed her tax dollars should follow the patient. If the patient chose to go to Lake Mead, Valley, or a closer hospital, that was where they should be treated.
Ms. Leslie asked if it was her position that the counties should make up the difference, supplementing the money they would not get through their regular budgeting process. Ms. Lynch responded that with the tremendous growth, she did not believe the money going into those funds was sufficient. UMC was making money in other endeavors and had done a good job. Ms. Leslie pointed out the rest of the state was not growing. Ms. Lynch felt Washoe County should be excluded.
Ms. Hahn interjected that emergency room care that Sunrise or any hospital provided was not counted toward their free care requirement. With the shift from inpatient services to ER and outpatient care, it was a huge responsibility to provide all that care free of charge. In Washoe County, the county program paid for clinic and ER, but in Clark County it did not.
John Smith, representing the Nevada Rural Hospital Project, stated that although they did not represent the large hospitals that were affected by the bill, as a matter of public policy they did support S.B. 302.
Susan Pacult, Program Administrator, Clark County Social Services, spoke in opposition to S.B. 302. She provided her written testimony (Exhibit G), and summarized the highlights. One of the primary mandates was to provide medical assistance to persons without access to federal, state, or community programs. The bulk of their client population was comprised of the working poor who had no private insurance. Those clients, for example adult men and women without children, earned too much income to qualify for Medicaid or were ineligible for Medicaid and had nowhere else to obtain medical care.
Ms. Pacult stated they had uniform standards to determine indigent status. Those standards were applied to cases submitted to them by all Clark County hospitals. The cases certified by her agency constituted the county indigent caseload for each hospital. While hospitals submitted indigent bills to meet their uncompensated care requirement, the accepted bills were credited at the higher of Medicaid or per diem rates, as outlined in the agreement between Clark County Social Service and University Medical Center. When private hospitals met their uncompensated care requirement, they were paid for all other indigent accounts at Medicaid rates. A resolution was recently adopted by the Board of County Commissioners to enhance the reimbursement schedule for hospitals that met their uncompensated care requirements in the first three quarters of each county fiscal year.
S.B. 302, as currently written, would eliminate the uncompensated care requirement of approximately $4 million per year and require Social Services to pay for certified indigent accounts at a level not less than Medicaid rates. That amount would be based upon the level of indigent care provided and could be in the millions of dollars if similar amounts of indigent care continued to be provided by private hospitals.
In closing, Ms. Pacult stated Social Services also paid for indigent long-term care and other medically necessary services for other indigent and low-income populations. That group included Medicare beneficiaries who could not afford prescriptions and treatment and medical equipment for persons with HIV-AIDS. The likelihood was that the bill would compromise the ability of Social Services to pay for medical treatment for indigent persons in future years, because its revenues were capped by statute, per NRS 428.050.
Michael Alastuey, Assistant County Manager, Clark County, voiced his opposition to S.B. 302. Their goal had to be to provide easy access to quality health care for all residents, regardless of their ability to pay. The prior testimony alluded to different levels of disproportionate share finding and several different sources of funds. He clarified by explaining the various sources of funding:
(1) Medicaid disproportionate share that was federally funded and distributed;
(2) Medicaid disproportionate share that was the subject of S.B. 377, to be heard at a later date, and was a federally enabled program but the funding was distributed by the state; and
(3) County disproportionate share that was funded by county tax dollars and was distributed under the supervision of the County Commissioners. That was the category impacted by S.B. 302.
The uncompensated care requirement provided a form of support to Safety Net hospitals by requiring all hospitals to provide care to county indigents at a level representing .6 percent of the net revenue of the previous year. Mr. Alastuey recalled a statement made earlier that University Medical Center did not have that requirement which was set forth in NRS 439B. In a case where the County Commission found under NRS 439B that a hospital treated a disproportionate share of county indigents, that finding could enable the waiver of the uncompensated care requirement. Such was the case with UMC and, more recently, with Lake Mead Hospital in Clark County.
Mr. Alastuey believed S.B. 302 would create unfavorable health care policy in several ways:
Mr. Alastuey, in reference to the resolution mentioned by Ms. Pacult, suggested it opened up an avenue for some additional compensation, even for those hospitals that might not qualify for county disproportionate share status. He also felt S.B. 302 would effectively nullify the ability of Clark County taxpayers, through their County Commission, to direct their local tax dollars to those hospitals expending the most effort to treat indigent patients. The $4 million outlay instantly required by the passage of the bill would give approximately $2 million to what was already one of the more profitable hospitals known. It was a gift, entirely taxpayer funded, and without a guarantee of increased access to health care for the needy.
Continuing, Mr. Alastuey stated those entities who supported S.B. 302 might or might not provide a large percentage of county indigent care. The bill addressed only county indigent care. In answer to earlier questioning, Mr. Barengo stated Sunrise treated a great many Medicaid indigents. The bill did not relate specifically to Medicaid; the primary concern was county indigents. In a review of the percentage of total patient days of care provided to county indigents, as a proportion of the total of all patient days of care for a recently completed year, they found that UMC provided the largest percentage of its patient days to county indigents. Lake Mead was the next highest provider, followed by St. Rose. Despite their location in a changing neighborhood, Sunrise Hospital, respected as an outstanding corporate citizen in Clark County, did not provide the percentage of total patient days of care as others did in Clark County. Lake Mead treated twice the volume measured using any criteria.
In conclusion, Mr. Alastuey remarked that Clark County wanted to provide an incentive not only for hospitals to continue treating county indigents, but to increase that number. Mr. Alastuey proposed that the County Commission be enabled to provide a partial payment of .6 percent requirement if the County Commission set up a special incentive program as an inducement to treat additional indigent clients. The Clark County Commission had proposed such a program and had implemented one by resolution, contingent upon the passage of an amendment to NRS 439B. Mr. Alastuey said if the committee wished to consider that, he would provide language to implement it. The simple deletion of the .6 percent indigent care requirement would only support the existing level of treatment now being provided, and it did not offer an inducement to treat more patients.
Assemblywoman Tiffany asked what year the policy was enacted. Mr. Alastuey replied the health care cost-containment statutes arose in the late 1980s. Ms. Tiffany commented there had been a conspicuous trend in the last five to eight years toward “managed care.” That changed the financial model for a private hospital drastically. If the hospitals needed to deliver a certain standard of care, and they had been hit with HMO or managed care contracts, it was fair for them to look at that. Mr. Alastuey said that was true. The financial health of hospitals and all providers in the health care community as a result of managed care was of concern to all. The county was not abandoning any search for alternative methods of reimbursement.
Assemblywoman Tiffany asked if UMC’s business was also impacted. Mr. Alastuey responded that every enterprise had to deal with the conditions at hand. One of the concerns he had attempted to address over time was the burden upon the taxpayers and the responsibility to provide health care to all who fell ill in the county. UMC had found a variety of enterprising ways to provide care.
Chairman Koivisto said she believed that a study had been requested on the Senate side to study competition between UMC Quick Cares and others. Ms. Tiffany said she was just trying to clarify that changes had taken place.
John Sasser, Washoe Legal Services, provided written testimony (Exhibit H). He said it was an important public policy debate; however, that debate, unfortunately, had not taken place in the Senate. Mr. Barengo proposed a bill that in essence raised the issue of whether Sunrise Hospital should be entitled to disproportionate share status in Clark County and be allowed to shed its free care obligation. UMC opposed that bill, and there was a debate between the two hospitals. Senator Rawson had declared, since the law had been on the books for 14 years, maybe it was time to remove it. Mr. Sasser said he hoped not, and nothing more was said. There was no public debate, but at the work session a document emerged that repealed the 1987 statute; however, there was never any debate, and that repeal was currently alive in the Senate in a different bill.
Continuing, Mr. Sasser stated, as a matter of public policy, it was wise to keep the 1987 law in place. First, it was an unfunded mandate, and there was no way around that. Basically, $4.3 million of care in Clark County must be provided free by hospitals. If it did not have to be provided free, it had to be paid for. If it was paid for by the county, it came out of the county medically indigent fund, which was the property tax collections Ms. Tiffany had referenced earlier. In Washoe County, the amount was about $760,000. The response from Sunrise seemed to be that because property values were increasing in Clark County, and property tax collections were anticipated to grow rapidly over the next few years, there would be plenty of money to absorb that $4.3 million.
In conclusion, Mr. Sasser said the debate between UMC and Sunrise was complicated. Both made a number of logical points about whether Sunrise should be exempt from the “free care” obligation. That discussion was totally different, however, from whether the “free care” obligation should be repealed. The need for the county medically indigent fund remained as strong as ever. Moreover, it remained good public policy to treat low-income people in their own neighborhoods instead of making them travel to one central location. Mr. Sasser urged the committee not to repeal the “free care” obligation.
Assemblywoman Leslie thanked Mr. Sasser for that clarification and apologized to Mr. Barengo for not understanding his points about the Senate hearing. Unfortunately for him, however, she was even more certain about why she opposed the bill. She did understand why representatives from Clark County would want to repeal that obligation, however she represented Washoe County.
May Shelton, representing Washoe County, explained that at the Senate hearing she had asked to have Washoe County carved out, but that proposed amendment was not accepted. She felt Mr. Sasser was right about not wanting Washoe County carved out and agreed it was a larger policy issue. It seemed to her to be a debate between Clark County providers, but it was complicated. In S.B. 377 they had proposed a study, because in the interim the issue deserved a study. Just eliminating the “free care” obligation would not solve the problem.
Maryann Dawicki, representing the Nevada Service Employees Union, Local 1107, stated her organization was comprised of approximately 7,000 health care workers in southern Nevada. Those employees worked at both UMC and Sunrise. For her union, it was a public health issue. She opposed the elimination of the “free care” obligation. She said it was necessary to think about the people who would be affected by the bill.
Danny Thompson, representing the Nevada State AFL-CIO, voiced his opposition to the bill.
Janice Pine, representing Saint Mary’s Health Network, stated S.B. 302 was a major policy issue. The provision of medical care to the uninsured was growing as the population shifted, and she doubted there would be a decrease. Therefore, the hospitals were seeing more uninsured patients than in 1987 when the law was created. In an earlier discussion, Ms. Shelton claimed that Washoe County would be happy to work with the hospitals, and the study proposed in S.B. 377 would encompass all of the hospitals in the state. Regardless of how the committee dealt with that bill, she would not want the study proposed in S.B. 377 to only be for Clark County; it needed to be for the entire state. “It needed to be a state policy as to how we, as a state, would fund health care for our citizens, particularly those who were less advantaged.” Ms. Shelton offered to work with Washoe County on the issue.
Chairman Koivisto announced the bill would be held over for a work session scheduled for Monday, May 21.
With no further business before the committee, the Chairman adjourned the meeting at 4:00 p.m.
Darlene Rubin
Committee Secretary
APPROVED BY:
Assemblywoman Ellen Koivisto, Chairman
DATE: