MINUTES OF THE meeting

of the

ASSEMBLY Committee on Ways and Means

and senate committee on finance

joint subcommittee on k-12/HUMAN RESOURCES

 

Seventy-First Session

February 27, 2001

 

 

The Assembly Committee on Ways and Means and the Senate Committee on Finance Joint Subcommittee on K-12/Human Resources was called to order at 8:18 a.m. on Tuesday, February 27, 2001.  Chairwoman Chris Giunchigliani presided in Room 3137 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.

 

 

ASSEMBLY COMMITTEE MEMBERS PRESENT:

 

Ms.                     Chris Giunchigliani, Chairwoman

Mrs.                     Barbara Cegavske

Mr.                     Joseph Dini, Jr.

Ms.                     Sheila Leslie

Ms.                     Sandra Tiffany

 

SENATE COMMITTEE MEMBERS PRESENT:

 

            Senator Raymond D. Rawson, Chairman

            Senator Bob Coffin

            Senator Bernice Mathews

            Senator William J. Raggio

 

COMMITTEE MEMBERS ABSENT:

 

Mr.                     David Goldwater (Excused)

 

STAFF MEMBERS PRESENT:

 

Mark Stevens, Fiscal Analyst

Steve Abba, Principal Deputy Fiscal Analyst

Lila Clark, Committee Secretary

 

Chairwoman Giunchigliani recognized Charles Duarte, Medicaid Administrator, Division of Health Care Financing and Policy.  Ms. Giunchigliani asked Mr. Duarte to present a brief overview of the budgets so the subcommittee could discuss the proposed Benefit Administration model and the MAXIMUS study and how it affected the Medicaid Management Information System (MMIS). 

 

Health Care Financing and Policy (101 – 3158)

HCF&P 1 – Volume II

 

Mr. Duarte referred to Exhibit C and discussed the value purchasing model.  He said he believed that would build into a discussion of the division’s systems requirements.  According to Mr. Duarte, the division was moving in a new, good direction that other Medicaid programs across the nation, as well as major employers, had taken over the last decade.  He said the direction was toward value purchasing and the direction was an appropriate one for the program.  Consumers practiced value purchasing whenever they did not buy the cheapest product.  In addition to cost, other values were considered such as, how the product worked.  In health care, value purchasing referred to the ways in which value entered into purchasing decisions.  Today, cost was often the dominant value in health care purchasing.  However, employers, labor unions, and other private purchasing groups were increasingly demanding higher quality for the dollars spent on health care.  Mr. Duarte quoted GTE officials who had said that they thought improved quality inherently cost less.  If the quality of health care was improved, the quality of life would also be improved. 

 

Mr. Duarte continued that state Medicaid agencies had also turned to value purchasing as the method of providing health care services to beneficiaries.  Medicaid health plans served over 56 percent of all Medicaid beneficiaries through a variety of financing and delivery models.  States were shedding their regulatory mentality toward Medicaid services and were learning to implement policy through the contracting process.  Value standards of cost and quality were included in those contracts.  That relieved the state and service providers of a difficult, micro-managerial relationship with the state, and it created a single point of accountability through the contractor.

 

Mr. Duarte explained that in order to fulfill its mission as a health care purchaser, the division must change its overall approach.  Consistent with the 1998 recommendation in the Business Process Reengineering study, the division must change from a reactive payer of bills to an active practitioner of value purchasing in every aspect of health care delivery.  In practice, purchasing health care had meant using a variety of managed care contracting approaches.  That led to more predictable rates and reduced rates of expenditure growth.  However, value purchasing did not always require the use of a full-risk comprehensive health maintenance organization (HMO).  For example, the division purchased personal care attendant (PCA) services through provider service agencies rather than continue as a direct contractor with each attendant.  Agency contracts included quality, training, access, backup, and other specifications essential to provide the best quality personal care services to individuals with disabilities.  That was one example of the potential of value purchasing.  Currently, the division was evaluating other potential value purchasing opportunities including transplant services and primary care case management services. 

 

Mr. Duarte claimed that the mechanics of value purchasing were well documented.  One strategy commonly used by public and private health care purchasers was selective contracting.  Through selective contracting, purchasers incorporated quality standards into their requests for proposals (RFPs), thereby insuring a minimum level of performance of all health plans that placed bids.  Purchasers placed conditions for continuing the contract from one period to the next based on the contractor’s ability to meet the standards.  Other tools used by purchasers included: 

 

• Requiring accreditation.  Requiring health plans to be accredited by nationally recognized accreditation organizations had often been used as a purchasing standard.  Purchasers could also require that the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) accredit hospitals or health care networks that contracted or subcontracted to provide health care services to recipients.  Achieving accreditation would take time and could not be expected of the health care system overnight.  However, that type of standard would need to be built into the purchaser’s long-term plans.

 

• Empower enrollees.  Use of quality report cards to inform and educate potential enrollees would help them make better choices.  It would also create an incentive for the health plan to improve performance.

 

• Financial incentives.  Holding plans at financial risk to achieve certain performance standards or providing bonuses to high-achievers would help move performance closer to the target as well.

 

Mr. Duarte pointed out that there were many other potential approaches to value purchasing the state could pursue.  A growing trend was the use of health care intermediaries.  Primary care case managers, disease management companies, mental health care managers, and other management organizations were common components of Medicaid programs across the nation.  Those entities saved money by substituting preventive care for acute care episodes.  The division planned to assess other states for examples of the best purchasing practices.  Rather than just considering HMO models, the division would consider contracting services to specialized providers to meet the needs of special needs populations.  Through thoughtful planning with the community, providers, and payers, the division intended to exert leadership to move the health care system forward and to obtain higher quality health care for the tax dollars spent. 

 

Mr. Duarte continued that value purchasing was not inexpensive and required oversight of contractors to assure fiscal viability and the quality of health services provided to recipients.  The key to achieving that level of oversight was attracting and retaining staff with good credentials and having technology appropriate for the task.  The infrastructure changes necessary to enable the division to become a better purchaser of health care for recipients were included in the proposed budget.  Those included:

 

• Medicaid Management Information System (MMIS) design, development and implementation;

 

• Organizational and operational conversion to a value purchaser model; and

 

• Improved rate-setting methodologies.

 

Chairwoman Giunchigliani stated that the proposed budget had 26 new positions proposed but 13 existing positions were eliminated.  It appeared to her that more managers were requested, the nurse positions would be eliminated and the work they were accomplishing would be contracted out.  She asked Mr. Duarte to discuss the staffing issues.

 

Mr. Duarte answered that the division had actually requested seven new positions with new money.  The other positions requested in the budget were funded through changes in other personnel areas.  Of the seven positions, two were in the management area.  Those were one Administrative Services Officer II (ASO II) and one Administrative Services Officer III.  They had also requested an ASO I that would handle contracts. 

 

Chairwoman Giunchigliani asked Mr. Duarte to clarify whether decision unit E‑278 had six or seven new positions.  Mr. Duarte introduced Rebecca Ward, the division’s new fiscal deputy administrator.  Ms. Ward said that in Budget Account 3158, there were actually nine new positions.  They were:  an ASO I, II, and III and six other positions that met the division’s infrastructure needs including accounting, personnel, contracting, rate setting, and facilities management.  She described those areas as the division’s infrastructure needs that currently the division was lacking to perform an adequate job. 

 

Senator Rawson said that he had gone through the division’s budget carefully and he asked the division’s representatives to refer to the organizational chart.  Under the deputy administrator on the chart, there was a vacant ASO position.  He stated that the division was setting up a structure where there would be two ASOs and he wondered if one of the positions was filled would the other position be necessary.  He said that on the rate development side of the chart, there were three positions now and he wanted to know why that number needed to be doubled.  On the budget side of the chart, there were two new positions requested and he wondered if the work could not be completed with one position.  He said that on the organizational chart he was only able to see seven of the nine positions that would be gained. 

 

Mr. Duarte responded that with respect to the rate and reimbursement area, the division had been seriously lacking in the ability to oversee the methodologies currently employed.  Those were rate methodologies that were specific to hospitals, vendors of durable medical equipment, intermediate care facilities, skilled nursing facilities, and a host of other facility-based providers that had very challenging rate methods.  The division was in the process of revising those but he believed they would end up with a rate methodology that would require significant oversight.  As a result of some of the division’s previous staffing problems, they were not able to appropriately increase rates in FY2000.  That resulted in the division having to do a retroactive rate adjustment.  The notification requirements that the federal government put on the division were not met and the division had to correct that by retroactively adjusting the rates.  He said the division did not want to see that happen again.  They had had other problems with rate adjustments getting delayed due to lack of staff and he believed that having appropriate numbers of staff would help.  The justification for the increased staffing had been made apparent to him by the difficulties the division had experienced in keeping up with rate adjustments.  Having the appropriate number of staff in the unit would help assure that providers not only got appropriate rate increases but got them in a timely manner in order to avoid problems experienced in the past.  Mr. Duarte continued that with respect to the budgeting area, the division struggled through the first six months of his tenure with the division attempting to put together a budget.  They had experienced significant staff turnover and they only had two people running a $1.6 billion budget and he did not believe that was an appropriate level of staffing for the type of dollars involved and the complexity of the program.  He felt very strongly that the division not only needed management in each of those fiscal areas, management at the ASO II or III level, but they also needed appropriate staff to man those areas.  Each of the major areas of the division, including rate setting, budgeting, planning and accounting, needed good fiscal management in order to control costs and manage the program appropriately.  Within the budget area specifically, the ASO I, contract facility administration’s person, would help manage a number of contracts and also deal with procurement issues. 

 

Ms. Ward added that the division needed better oversight over the accounting processes in order to update internal control procedures that were very outdated.  The highest-level accountants on the staff dealing with federal reporting requirements, and other matters that required the attention of an accountant, were a grade 34 and they had not been provided with the level of oversight needed to ensure that the accounting processes were correct. 

 

Senator Rawson asked how long the ASO III position had been vacant.  Ms. Ward said the position would be filled within a week and Mr. Duarte added that it had been vacant for approximately four months. 

 

Ms. Tiffany asked how many contracts the division had and how many were renegotiated in a given period of time.  She was attempting to discern how many contracts the division would have and how many of the management analysts would be handling the contracts.  She asked Mr. Duarte to specify how many contracts each management analyst would handle, and were they ongoing or only at certain periods of the year.  Mr. Duarte said that currently there were approximately 5,000 providers that the division contracted with as well as other vendors.  The contracts that underwent recurring negotiations, most often on an annual basis, were limited to some of the larger facilities that the division dealt with.  He was not able to say how many of those were renegotiated yearly; it would depend upon whether the facility would appeal a rate or request a rate adjustment.  Ms. Tiffany asked Mr. Duarte to explain how he came up with the formula to add three positions other than just the division was understaffed.  Mr. Duarte said the division was grossly understaffed but the number was not determined by a formula.  He believed that given the number of contracts the division dealt with, they needed the three additional staff supporting the budget process.  He said he wished he could provide more detail but he was not able to do so.  Ms. Tiffany said that normally when an agency wanted to add staff it was not just that they were understaffed but they would explain the amount of work to be performed by the staff. 

 

Ms. Ward said that the division needed someone that understood the contracting rules who would be able to review a contract to make sure that the division dotted all the i’s and crossed all the t’s so they would not be constantly correcting contracts.  There was no one in the office that understood the Board of Examiner’s rules on how to prepare contract summaries and what needed to be included as well as the signature requirements, what should go into the contract, etc.  Ms. Tiffany asked if the division would be hiring contract experts or would the expertise be at the management level.  Ms. Ward explained that the position would be more like a contract monitor.  All the contracts done in the agency would be reviewed to ensure that they complied with the state rules.  Ms. Tiffany asked if each individual hired would have that expertise.  Ms. Ward related that the employees had the expertise on a certain level but there had not been one person to make sure that everything was correct before the contract went to the Budget office.  Ms. Tiffany asked if the division would be looking for contract experience and expertise in the three positions requested. 

 

Mr. Duarte went on to say that in addition to the contract expertise required, the persons filling the requested positions would need to learn the federal requirements and the Medicaid state plan requirements for major areas of contracting in Medicaid.  Those included hospitals that had unique payment methodologies and rules, long-term care facilities that included intermediate care facilities, and skilled nursing and intermediate care facilities for the mentally retarded.  Ms. Tiffany asked if there was a job description that would be unique to the three requested positions and different from the four existing positions.  Mr. Duarte said the job description had been provided.

 

Chairwoman Giunchigliani asked the division to clarify whether the existing positions were filled with people with the expertise needed and it was the division’s desire to add four more positions with contract management expertise.  She said that the positions to be added would be the ASO III as the overall manager and under Rate Development there were currently three management analysts and the proposal was to add three additional management analyst positions.  Ms. Ward answered that of the three existing management analysts, two were involved primarily in the Disproportionate Share (DSH) program and they were already on staff.  There was one Management Analyst II that currently worked on rate setting.  Chairwoman Giunchigliani said the subcommittee’s frustration was that they had not seen the justification for or understood the need for the additional positions.  She asked Mr. Duarte to provide the needed justifications.

 

Mr. Duarte pointed out that the three management analyst positions were not new positions.  The division wanted to move functions from one area of the administrative area into the rate setting area.  The only new position in rate setting was the ASO III.  Chairwoman Giunchigliani asked where the three positions would come from.  Mr. Duarte said that they had been working in planning and cost containment functions.  Mr. Duarte said those functions would be eliminated and the division would be reorganized.  He reiterated that the only new positions would be the three ASOs, the ASO II for rate and reimbursement, the ASO I for contract and facility administration and the ASO II for accounting.  Chairwoman Giunchigliani interjected that the funding for the three that would be realigned would come from the General Fund.  Mr. Duarte responded, “Yes.”  Chairwoman Giunchigliani said that was part of the subcommittee’s concern and asked why that decision had been made.  Mr. Duarte said part of the reason for doing it was that the positions identified to be used to staff the reorganization had the expertise needed but the primary reason the unit had been moved was that the positions were needed in rate setting.  In addition, some of the functions that were being done currently were unnecessary or did not need to continue at the level they were being done.  Cost containment for hospitals was given as an example.  Mr. Duarte said that the division needed to look at other kinds of cost containment plans, for example, plans for long-term care facilities.  Moving the positions into the rate setting area would allow those staff with facilities experience to work with the rate setters in order to come up with good rate setting methodologies for the industries under discussion.  Chairwoman Giunchigliani said the subcommittee would not argue that the division needed a good understanding of the rate setting but she believed that the division had not justified the need for the additional positions.  The subcommittee did not have a good understanding of exactly what duties they would assume and what drove the increased need for the additional staff.  This would apply whether they were being moved from another area or being requested as new positions.  Chairwoman Giunchigliani asked Mr. Duarte to provide a prioritized listing of positions that were being requested. 

 

Senator Coffin asked Mr. Duarte to define the term “value purchasing” in a fashion that would differentiate it from managed care.  Mr. Duarte said that he did not believe that managed care had done a good job of managing health care and the division needed to do a better job in that area.  In order to do that, they needed to make their contracts reflect quality standards that were important for the Medicaid program and its recipients.  He said they needed people that understood what kinds of quality standards were important to be able to monitor those standards against contractor performance.  For example, having a standard of minimizing the number of low birth weight babies was a quality standard for the program.  Mr. Duarte said that he had seen a recent actuarial report that indicated the division was heading toward achieving that goal.  The state of Nevada currently had a low birth weight percentage of 7.7 percent.  That was not very good compared to national standards according to Mr. Duarte.  The division’s managed care plans reflected a 6.3 percent low birth weight average.  He believed that meant that the division was heading in the right direction.  Senator Coffin said that it sounded to him like the division was heading in the direction of managed care.  Mr. Duarte said that including those kinds of standards in all their contracts, including the managed care contracts, would help achieve a better health care system for everyone.  Managed care was one way of doing that but there were other ways as well.  Senator Coffin said that it appeared to him that the division was heading in the direction of becoming a third party administrator.  Mr. Duarte explained that that was exactly what the division was attempting to do.  Senator Coffin wished that Mr. Duarte could explain the division’s plans in terms the subcommittee could understand and was used to working with.  Senator Coffin continued that there was a policy question to be answered as to whether the subcommittee believed the division should be a third party administrator or something else and whether or not that would get the division better providers.  He said that in Nevada, 99 to 100 percent of the employers went for the best price assuming that the quality was there because the providers were licensed. 

 

Chairwoman Giunchigliani said when she looked at the division’s numbers versus narratives nothing quite jived.  Of the 13 positions that were to be moved, 11 were nursing.  Of the three positions that were going from Medicaid over to rate setting, if they were the nursing positions, what expertise would they have in rate setting.  She said that Mr. Duarte had earlier said the employees to be moved had the rate setting experience and, therefore, she was confused on what positions were being moved.  Mr. Duarte informed the subcommittee that one of the division’s roles was to be a third party administrator and that was done in the Medicaid fee-for-service program.  The division had a larger role because they were now moving much of the administrative work into the private sector to have organizations, agencies, health maintenance organizations (HMOs) help administer the program more effectively.  In their role as a third party administrator for the fee-for-service program, the division was responsible not just for paying claims but also for assuring the claims payments were appropriate and the rates used were appropriate.  Mr. Duarte said that the division needed some basic control functions in order to operate like a third party administrator or an insurance company.  One of those functions was rate setting.  The division had federal, as well as state guidelines, required for many different types of providers – hospitals, long-term care facilities, etc.  The expertise needed in those areas was familiarity with federal laws, common rate-setting methodologies, as well as the specific rate-setting methodologies used in the program.  Another skill that a third party administrator had to possess was a strong accounting background because they dealt with many dollars and the division dealt with many dollars and the control functions must be adequate.  That was the reason the division wanted to set up a separate accounting function under the direct leadership of an ASO II.  Budgeting was also an important factor.  Budgeting was not necessarily a huge third party administrator function but it was important when dealing with federal and state tax dollars.  He said they needed to be certain that they were spending the dollars appropriately and that they were on track in terms of expenditures versus appropriation authority.  All three of those fiscal control functions were essential whether you were talking about an agency or a third party administrator. 

 

Senator Coffin said that he wanted to try to help Mr. Duarte build a framework or have him translate some of his language into something the subcommittee could understand and that the staff could then use as a further tool for analysis of what the program was supposed to accomplish.

 

Mr. Duarte continued by discussing the nursing staff.  He said the agency had been dealing with its providers and recipients on a transaction level basis.  Specifically, the division had been having nursing staff and social workers going into facilities and touching patients.  Some of that needed to occur in order to assure that the appropriate amount of dollars were being paid for the services provided.  The agency, however, was neither a social service agency nor a medical provider agency.  He described the agency as a payer.  In looking at the organization, there was a large number of personnel actually duplicating functions, going into facilities, evaluating all the patients in that facility and duplicating functions of other agencies in the state.  For example, the division paid the Bureau of Licensing and Certification to see patients.  The division felt that the role they played as a social service agency, as well as a medical assurance program, was not necessarily critical for them as a Medicaid agency.  The division needed to make sure there were enough providers so that recipients could get access to health care and they were doing that by paying the correct rates in a timely manner.  Many of the staff of the division, especially those in the district offices, were very much involved over the years in that type of work.  Mr. Duarte said the division was attempting to change that by moving out of that role and moving into the role of a third party administrator or a payer.  Mr. Duarte said they realized they could not request a lot of new staff but they wanted to use the resources they had available.  They looked at personnel within the division and proposed moving them around into areas where they thought they needed stronger controls and better management capacity so the program could be managed more effectively.  That was the reason they had reduced the number of personnel actually involved in direct patient contact because that was not a role they needed to fill and there were many agencies that could do that for them more effectively with access to technology unavailable to the division.  Those agencies could provide the division with data that it could not get now.  As an example, Mr. Duarte said that people were processing, on a transaction level, 8,000 requests a month for payment authorization.  That was being done with paper and pencil.  As a third party administrator, that would be an ineffective way of managing payments.  The division felt that it would be much more effective if they were to get that staff out of the business of handling 8,000 pieces of paper monthly and into the business of helping the division set some payment policies that made sense for the Medicaid program.  Those were trained, licensed professionals who had expertise in health care who could help set policy.  In order to do that, they would need to get out from under the paper and had to be able to look at data and evaluate it.  That was the explanation for why the division wanted to move the contracts into the private sector where the capacity to produce the data was available and for them to process those authorizations in a much more timely manner.  The division would use that data to change its payment policies.  They currently had payment policies that could not be changed because he did not know what the data said.  Moving people out of that role into a policy level role, a contract-monitoring role, was the best way Mr. Duarte knew of for the division to achieve the goals of becoming a better third party administrator and a better value purchaser. 

 

Chairwoman Giunchigliani asked Mr. Duarte to provide a list to the subcommittee of the services that the division would like to contract out.  She was unsure how the subcommittee would ultimately feel about the value purchasing model or moving into the third party administrator model, but she was not sure that the subcommittee had enough information to make the decision on the appropriate role of the division.  She said that her initial reading of the plan was that the division was adding a bureaucracy and more managers but the nurses’ duties would still need to be completed.  Further, the General Fund would be impacted and the subcommittee would need to consider where the dollars would come from.

 

Ms. Tiffany asked Mr. Duarte if he served as a third party administrator when he worked in Hawaii.  Mr. Duarte said that the agency in Hawaii was both a value purchaser and a third party administrator.  Ms. Tiffany asked Mr. Duarte to confirm whether this proposed plan was recommended by the Business Process Reengineering study (BPR) and whether Mr. Duarte agreed with it.  Mr. Duarte said he agreed with the proposals set in the BPR when he read it before he came to Nevada.  Ms. Tiffany asked if the proposed structure would be similar to what Hawaii had.  Mr. Duarte said it was quite different than the structure in Hawaii but the basic functions were all there.  Ms. Tiffany asked if Nevada had the infrastructure and the components, including the computer system, actually needed to implement the new system.  Mr. Duarte responded that before he came to Nevada he looked at the BPR and the staffing levels and he believed then, and still believed now, that with some minimal adjustments such as the requested positions, that the division could achieve within its appropriation levels the kind of transition discussed.  He believed that the staff was there although some of them might choose not to stay with the agency, some of them had been doing the same thing for many, many years and there might be an opportunity for them either within the agency or within the department or within the state.  Ms. Tiffany asked if the third party administrator concept could be accomplished now with the antiquated computer system and if not, when would the medical management system be on-line.  Mr. Duarte responded that he could not start the third party administration with the current system.  He said that at the present time the division was in the functional requirements analysis stage and he believed that they could have components of the system up sometime in early 2002, particularly the point-of-sale (POS) for pharmacies and the remainder of the system up by early 2004.  Ms. Tiffany said the reason she had asked those questions was that Nevada had a tendency to staff up as if a program could happen today and then they waited for one, two, or three years for the technology or the infrastructure to catch up with the staffing.  She would hate to see the division act like it was possible today, staff up for it and then not have the necessary infrastructure in place.  She wondered whether a portion of the staff should be added in the second year of the biennium or whether the positions should not be added now and reconsidered for the next biennium.  Ms. Tiffany said that it appeared that the program was in transition but that it was being staffed at 100 percent.  Mr. Duarte said that there were some things that could be done now to become better value purchasers and better third party administrators.  That could be done by dropping some of the duplicative functions they were performing now and move those resources to the types of things he had described.  To do that, it would be necessary to contract out some of the services until a system came on board; for example, the contract to handle the 8,000 a month payment authorizations.  That would be an automated function when the MMIS system was developed.  In the meantime, the division dealt with 8,000 sheets of paper a month and had no way to obtain data so he could better care for recipients.  He described that as a huge problem on a daily basis.  He went on to say that the problem would be alleviated with a contract and by adjusting some staff.  Mr. Duarte asked the subcommittee to keep in mind that the division was only asking for three positions in the administrative area and four positions using new dollars associated with the MMIS system.  The MMIS system would use one-shot funding.  Those four positions would start as soon as the functional requirements had been completed because they would help the division develop the RFP, go through the procurement, and bring the vendor on board.  All of those duties were a very time-consuming process but required staff. 

 

Chairwoman Giunchigliani asked the status of the pharmacy point-of-sale (POS) system.  According to Mr. Duarte, the point-of-sale system would help pay claims automatically to pharmacies.  Through electronic transaction the pharmacy could adjudicate a claim for a prescription on-line and get paid on-line.  It could also verify eligibility on-line.  All the major payers used that type of system and the division used paper and pencil.  The pharmacy point-of-sale system was a component of MMIS and it would be maintained as a component of MMIS but it would be built as a priority component.  Basically, it would be built first.  The division believed that if it could get the RFP out early in the next fiscal year that the MMIS system could be up and running by the first quarter of calendar year 2002.  Chairwoman Giunchigliani said that in 1999 the division received funding for the study for the MMIS and for the POS system to actually go on-line.  She asked Mr. Duarte to clarify whether the point-of-sale system was on-line.  Mr. Duarte said that the system was still not on-line and that the funding would revert.  Chairwoman Giunchigliani asked why the POS system had not gone on-line.  Mr. Duarte said that the need to revise the scope of the requirements analysis had been viewed as critical.  The division believed that the original scope of the functional requirements contract needed to be augmented so that greater detail of the functional requirements would be built in than had originally been projected.  That resulted in the bid coming back at a much higher rate and the division had to go back for additional funding.  As a result of the change, the division had delayed the implementation of POS until a clear picture was obtained on all of the functional needs for systems technology.  Chairwoman Giunchigliani asked Mr. Duarte to provide a very tight time line and functional requirements for the program to be up and running.  She said she believed that at the Interim Finance Committee meeting the statement was made that the MMIS project would still be within the original cost estimate and she asked if that was still a correct statement.  Mr. Duarte answered, “Yes, that is correct.” 

 

Chairwoman Giunchigliani said that MAXIMUS was the firm that helped put together the POS and she asked whether they would assist with the design of the MMIS.  Mr. Duarte said that MAXIMUS was assisting the state in functional requirements analysis.  They had been working with staff since early August and had spent several thousand man-hours developing requirements and he believed that by May 2001 the requirements would be complete.  Chairwoman Giunchigliani asked Mr. Duarte if he had a comfort level that MAXIMUS was guiding the division in the right direction for implementation.  Mr. Duarte responded in the affirmative. 

 

Chairwoman Giunchigliani asked when the BPR unit was targeted for possible elimination because once the BPR had been completed there would be no need for the staff.  Mr. Duarte said the BPR unit was part and parcel of the division’s information systems office.  Ms. Rebecca Ward addressed the subcommittee to state that the four positions were currently working on functional requirements for MMIS but they were also merged in and actually were the information services section within the division.  They dealt with setting up personal computers for all users, providing information systems services to the entire division.  Chairwoman Giunchigliani asked when that blending of jobs came about.  Mr. Duarte said he was unsure when it had come about.  When he started with the division in August 2000, those staff were already involved in functional requirements as well as maintaining the local area networks and some of the systems support.  Chairwoman Giunchigliani asked Mr. Duarte to backtrack to determine who was doing what and when because usually once a BPR had been completed and the functions implemented the positions would normally go away and she had a concern if an agency then also started having them pick up other duties simply to keep those positions going. 

 

Chairwoman Giunchigliani asked Mr. Duarte what was driving the significant increase shown in decision unit M-100 and she wondered if it had anything to do with the MMIS project.  Mr. Duarte said he was not as familiar with the M‑100 unit because it had been developed outside the agency.  He said that his understanding was that the Budget office would be meeting with DoIT on the allocation and after that, DoIT would meet with the division to explain the allocation.  Chairwoman Giunchigliani said that was another of those budgets that the subcommittee had seen a 50 percent to 60 percent increase but it had not been driven by the division.  She said it had been driven by DoIT just for the purposes of having a budget put together.  Mr. Duarte said he was unsure what DoIT’s justification was.  Chairwoman Giunchigliani said the subcommittee had seen sudden huge increases in several other budgets as well and she thought it seemed more like DoIT was unsure what to request so they just stuck a huge number in.  She said the subcommittee would need to do some “grinding” in that area. 

 

Chairwoman Giunchigliani said that decision unit E-900 appeared to be the Health Resources and Cost Review budget and she did not have any questions on that unit. 

 

Chairwoman Giunchigliani said she had heard Mr. Duarte use the terms third party administrator and value purchasing model interchangeably and she asked if they were one and the same.  Mr. Duarte said they were not the same and Chairwoman Giunchigliani said maybe the subcommittee needed a flow chart or a diagram of the value purchasing model overlaid on the third party administrator diagram and then Mr. Duarte could show functional duties that went along with each.  She believed that might help the subcommittee to understand the proposed transition. 

 

Senator Mathews asked for an outline on what would happen to the nurses and the costs involved.  Chairwoman Giunchigliani said that if the proposal was implemented the subcommittee wanted to make sure the nurses were helped and protected, especially since many of them had probably been lifelong employees. 

 

Nevada Medicaid, Title XIX (101 - 3243)

HCF&P 8 - Volume II

 

Chairwoman Giunchigliani asked Mr. Duarte to discuss the measures the division was taking to attract an additional managed care provider for northern Nevada.  Mr. Duarte said that approximately one year ago the division had a mandatory Medicaid program in Clark and Washoe Counties.  With the departure of Hometown Health from the Medicaid program and its retraction from a number of other lines of business, the division lost a player in northern Nevada.  As a result, there was only one HMO and that was Nevada Care.  The division had to change its program from a mandatory managed care program for Temporary Assistance to Needy Families (TANF) and Child Health Assurance Program (CHAP) to an optional program.  The reasons for the loss and the continued difficulty in attracting a managed care contractor to northern Nevada were multi-variant but it boiled down to two factors.  One was the available Medicaid population that would be enrolled in a mandatory program.  That was currently around 6,000 or 7,000 individuals.  The second factor was the cost structure for care in northern Nevada.  It was significantly different than in Clark County.  It was difficult for the division’s previous contractor to stay in business and at the same time maintain appropriate rates for facilities and engage them in managed care contracting. 

 

Mr. Duarte said there were certain marketplace power dynamics going on in northern Nevada.  Northern Nevada had a very large, capable facility in Washoe Medical Center who had done a great job but because of its size and marketplace strength it had significant leverage over any managed care contractor that came into town.  Mr. Duarte said the division would like to combine the Nevada Check Up and Medicaid managed care contracts using the same set of standards for both programs and combining those into one contract.  That would create a larger pool of eligible enrollees that would, hopefully, attract a managed care program.  The division also hoped to be able to bid out the managed care contracts in the next year to year and one-half and link Clark and Washoe Counties so that there would be a very large pool of recipients for both Medicaid and Nevada Check Up in one set of contracts.  That would provide a point of leverage for the state in its purchasing decisions to be able to attract two players to northern Nevada and maintain a mandatory program.  He said there were other options that could be considered in lieu of a mandatory managed care program to help do a better job in managing care for recipients but the initial goal would be to try to get a mandatory program going. 

 

Senator Rawson said that approximately 70 percent of the population of Nevada was in Clark County and he was unsure what percentage of the Medicaid population was in Clark County.  He asked Mr. Duarte what the numbers were in Washoe County.  Mr. Duarte said that in the next year there would be 16,000 recipients eligible for a managed care program.  They would be Nevada Check Up, TANF and CHAP recipients.  Senator Rawson asked for a breakdown of the recipients in Clark County and Mr. Duarte said the number was probably about 32,000.  Senator Rawson said those numbers did not seem to be the correct proportion of the population.  He asked if the numbers Mr. Duarte gave represented all Medicaid managed care or just CHAP.  Mr. Duarte said that actually he was talking about TANF and CHAP.  The number he had given for Washoe County, 16,000, was a projected number for the future year.  The number he gave for Clark County was about 32,000 and he had not done a projection of what that might be in the next fiscal biennium.  He said it certainly would grow and probably grow in the same proportion that Clark County was to Washoe County now.  Mr. Duarte said there were approximately 125,000 recipients.  Senator Rawson was unclear on the figures and said he did not believe many of them could be in the rural areas.  Mr. Duarte answered that there were not too many in the rural parts of the state but there was a large number of recipients in the fee-for-service programs.  Mr. Duarte said that he would provide better figures on the eligible counts and Senator Rawson said that the numbers “did not square” and he had a concern that by requiring Clark County to join with Washoe County, there could be a radical disruption to the existing providers.  He believed they seemed to be doing an adequate job and unless the division was dissatisfied with them, some of those providers could be lost because they would be forced to go into Washoe County.  Senator Rawson asked Mr. Duarte to explain his thinking on the issue.  Mr. Duarte said that the division would certainly be talking with the managed care industry before any decisions were made.  They had started some discussions as a result of the division’s new contract that stipulated that the contract could be re-bid using a competitive bid methodology.  Mr. Duarte said the division understood the concerns of the industry and he would not jeopardize a mandatory program that covered the majority of the TANF and CHAP populations in order to bring the same type of program to northern Nevada that would cover a significantly smaller population.  Mr. Duarte continued by saying that if the division was able to create business opportunities for quality managed care organizations to move into northern Nevada he thought they should do that.  An effective tool for the state to use was its purchasing power and the number of recipients the programs paid for.  The division would not take the step if it felt that it would jeopardize the entire program, as that would be foolish on his part.

 

Senator Rawson asked if that discussion was basically regarding the 40 percent of the Medicaid population that was in managed care.  Mr. Duarte said that was the group being discussed plus Nevada Check Up.  Senator Rawson asked if there had been any attempt to bring the aged, blind, or disabled into the managed care program.  Mr. Duarte said it was incumbent upon the division to “get it right” with the current population.  He said that in his opinion, Nevada had an immature Medicaid managed care program and it needed work.  They needed better data, better management oversight of the programs, and before he would consider moving a special needs population into managed care, he would like to see the division do a much better job in the current populations they were serving through managed care.  Some states had attempted to move the aged, blind, disabled or SSI eligible into managed care, however, it was fraught with difficulties and the division would want to make sure that any plan that attempted to do that had experience with that population and sound rate methodologies so the plans would not be underpaid and forced to undercut services. 

 

Senator Rawson commented for the record that there had been established over a four-year period essentially a policy decision that the dental part of the managed care programs would be provided by the dental programs in the university system.  As this had been put out to bid there had been a caveat to the bids that the dental programs would be the providers on that managed care program.  That worked for the state because the state set the rates through actuarial services; it was not the university that set the rates.  It was important that as the division talked about going into a bidding system for managed care, the policy decisions that had been made not be disrupted.  Senator Rawson said he was not sure whether Mr. Duarte had all the history of the dental program and he did not want to start over on some of the funding measures.  Mr. Duarte said that he understood and he did not want to reinvent the wheel.  He believed that Nevada had a critical problem in the dental program and he was looking to augment the services available, not harm them. 

 

Chairwoman Giunchigliani said she had a concern that the reimbursement rate for Nevada Check Up was about 17 percent higher than Medicaid reimbursements and she asked where that fit in the pooling of programs idea.  Mr. Duarte said the rates had been initially established on actuarial assumptions of what the costs might be for that population assuming that they had been used to accessing the mainstream medical system and could more readily access care.  Their utilization was projected to be higher.  No actuarial data was available yet from the Nevada Check Up program in order to evaluate rates and as a part of their next contract proposals, they would be looking at the encounter data.  Chairwoman Giunchigliani asked when Mr. Duarte anticipated receiving the actuarial data.  Mr. Duarte said he had received parts of the data but anticipated receiving all of it within the next three to four months.  He wanted to put it into better shape before any reporting was done from the data. 

 

Ms. Leslie asked if the managed care provider for Medicaid in northern Nevada was St. Mary’s and Mr. Duarte said that it was Nevada Care.  Ms. Leslie asked if Nevada Care provided family planning services through the managed care contract.  Mr. Duarte responded in the affirmative.

 

Ms. Tiffany asked if the managed care percentage had grown or was Mr. Duarte projecting growth in that area as compared to the fee-for-service.  The managed care percentage had declined due primarily to the loss of the mandatory program in Washoe County.  The division was starting to see it build again as the growth in the TANF and CHAP caseloads and Nevada Check Up programs increased.  Ms. Tiffany asked if the division’s intent was to move as many people as possible into managed care and off of the fee-for-service program and if so, what was the strategy to regain the lost caseload.  Mr. Duarte said the pooling of programs was one strategy to increase the caseload.  Further, the intent was not to move everyone into managed care.  Managed care could work where there was a significant pool of individuals where it made sense to do that type of contracting.  According to Mr. Duarte, it was not a “one size fits all” type of approach.  The pooling was one strategy that could be used to attract contractors in the north as well as to maintain the program in the south.  Ms. Tiffany asked if Mr. Duarte could ever envision rolling the SSI eligibles into the program as that would skew the actuarials in a managed care program.  Mr. Duarte responded that it would skew the actuarials if the rates were not correct and if the types of stop loss protections were not in place for the provider.  As an example, there were currently stop loss protections for the HMO that protected them from high-cost cases.  The current level of stop loss insurance was $50,000.  Above that, the state assumed 75 percent of the risk of the case and the HMO maintained 25 percent of the risk so the HMO was a risk partner with the state.  The state assumed that there were adverse circumstances and created those kinds of fixed risk adjusters as well as variable risk adjusters in order to make sure that the HMO was not adversely impacted.  Ms. Tiffany asked Mr. Duarte whether the rate would go up if the SSI eligibles were added to the mix and he responded, “Absolutely.”  She asked if the state then really wanted to blend the SSI eligibles into the larger pool of managed care and asked if that was the agency’s intent.  Mr. Duarte said that he did not see those as being blended into the pool as an additional cohort.  He said he did not see that the division would want to use that population for economic leverage for anyone.  He could see instead the need to develop specialized programs for that population that would assure better access to care and better care management.  In the fee-for-service world unless the physician was willing and able to help coordinate all the services an individual needed, many of them having multiple diseases or conditions, it would be very difficult for them to get access to the correct types of services.  Ms. Tiffany wondered what the impact would be if children were blended into the existing managed care program.  Mr. Duarte said the children were already included in the managed care group.  The groups included now in the managed care programs were predominantly low-income mothers and children.  The groups were the Temporary Aid to Needy Families group, the Child Health Assistance Program that was a Medicaid child program that also included pregnant women, and the Nevada Check Up Program.  Mr. Duarte said the groups were all in the same pool but the rates were varied by age, gender, and aid category. 

 

Ms. Tiffany asked Mr. Duarte to clarify an earlier statement he had made that there were 125,000 people eligible for Medicaid.  Mr. Duarte said that number was currently in either the Medicaid or Nevada Check Up programs.  Ms. Tiffany then asked Mr. Duarte how many people in the state of Nevada he believed were eligible for Medicaid and if that figure was unknown, how had the number been calculated for budgeting.  Mr. Duarte responded that he did not know the number of people eligible but not receiving Medicaid in the state.  He said the budgeting was done based on caseload growth projections and a variety of projection models were used to project the caseload for the next biennium.  Ms. Tiffany asked if the proposed budget would be adequate if the legislature enacted legislation that would expand the access to Medicaid.  Mr. Duarte stated that the division had looked at demographic information for the state and understood that it had some problems with respect to Nevada’s aging population, the growth in the disabled population, and the growth in low-income families.  The information received from the demographic data was not built into the current projection models.  Ms. Tiffany continued by saying that reaching out and aggressively campaigning to make certain people eligible might not be what the state should do.  Mr. Duarte said that would depend upon what the policy decision was and that he walked a fine line as a Medicaid administrator because he was given a budget and appropriation authority and beyond that were dollars that he did not have available for health care.  He said outreach was an important component of the division’s programs and should be provided so that every eligible child was included in the program.  Mr. Duarte said that the division had budgeted for significant caseload growth for that population as well as for the Nevada Check Up program. 

 

Chairwoman Giunchigliani asked Mr. Duarte to discuss decision units E-278 and E-279 that were the decision units that recommended eliminating 11 nurses, 1 social worker and 1 clerical position.  She said that there was some cost savings but then with the contract services in E-278 there was approximately $1.6 million in FY2002 and approximately $1.5 million in FY2003 and that appeared to be greater than the amount generated in the savings.  She asked how the division arrived at the dollar amounts and what they were tied to.  Mr. Duarte referred the question to Mr. Steve Kepp, Administrative Services Officer.  Mr. Kepp said that in decision unit E-278 the division proposed to modify the contracting methods for the personal care aides (PCA) for the prior authorization requests and Pre-Admission Screening and Annual Resident Review (PASARR) activities.  He anticipated savings for the PCA program of $1.4 million per year and that would be done without any reduction in services to Medicaid recipients. 

 

Mr. Duarte introduced Ms. Mary Wherry, Deputy Administrator for Programs.  He said she had been very much involved in the transition toward contracting out a number of services and could explain how the division got the dollars to contract out the functions.  Ms. Wherry said she started with Medicaid approximately one year before and one of the things that became apparent was that in the PCA program the division was paying home health agencies a rate of approximately $30 per hour to send out a Certified Nurse Assistant (CNA) to perform a PCA function.  A CNA was someone who was certified and had specific skill sets that were not needed to provide a PCA function, which was basically attending to the activities of daily living for an individual.  The division had worked with its advocacy groups and looked at issues that the recipients had with backup problems when working with independent contractors out of the district offices and experienced difficulties with staffing.  The division did a national review of what was happening with PCA programs and had begun to develop a provider service agency.  That was a new provider group for Medicaid that started January 1, 2001, and essentially they hired and staffed for PCA services.  The division encouraged home health agencies to create an umbrella organization for that provider service agency so that they could cost shift some of their dollars but the division had gone from paying $30 per hour, and with the 20 percent rate increase effective July 2000 for home health agencies, it became $34 per hour, to paying $17 per hour to the provider service agency for a PCA to go out and provide a PCA service.  That was how the division found the $1.4 million savings.  Chairwoman Giunchigliani asked if the PCAs would still be readily accessible to the community that needed their assistance.  Ms. Wherry said that part of the contract with the provider service agency was that they would be available for backup so issues that were problems that could not be handled from the district office would now be the responsibility of the provider service agency.  Chairwoman Giunchigliani asked if the recipients complained or had they felt that it was working.  Ms. Wherry said the conversion was difficult because they also went to using a functional assessment tool to determine how many hours of care a recipient needed.  The division took some uniform assessment tools and worked with the recipient population to figure out which one they thought was the best product and they used that as the implementation process for determining the number of hours of care a recipient would need.  Ms. Wherry’s perception was that prior to that it was fairly arbitrary, that it had not been based on a sound tool to develop the assessment need that a recipient might have.  Most recipients received more hours of care at a lower dollar amount with the change and only ten or so recipients experienced a reduction in level or hours of care. 

 

Chairwoman Giunchigliani asked for clarification that the $1.4 million to $1.5 million within the budget was generated or based on the savings from moving to the contract services for the PCAs and Ms. Wherry answered in the affirmative.  Chairwoman Giunchigliani stated that the agency had reported that there were anticipated benefits from better management of utilization and the potential for long-term savings that could not be quantified at that time that might be realized through contracting out the services and she asked for justification of what could not be quantified to help the subcommittee make the decision of whether or not to go to contracting services.  Ms. Wherry said they used Health Insight to handle payment authorization requests (PAR) processing and certification for inpatient utilization and for residential treatment centers.  She explained that Health Insight was a peer review program that was contracted with Medicare.  Because they had the Medicare contract and were Medicare certified, the division was able to draw down a 75 percent federal match for services contracted to Health Insight.  Since they were already performing many of the PAR functions for many of their providers, the division tried to look at how they could free up staff, that were processing 8,000 to 9,000 PARs a month, to develop necessary policies to satisfy the recipients and providers.  Because of the 75 percent match, the decision thought process was that if the payment authorization requests were contracted out for home health, durable medical equipment, outpatient services and pharmacy, they would get a 75 percent match from Health Insight, and data collection, because Health Insight would be building the data in a computerized system.  Ms. Wherry said that would be a great help because at the current time it was very difficult to make policy decisions or change policies because there had been no data gathered.  For example, recipients were allowed access to three prescriptions per month before they had to obtain a payment authorization request.  That was very cumbersome, especially for recipients with chronic conditions.  Chairwoman Giunchigliani asked if that was a state or federal requirement and Ms. Wherry said that it was a state requirement.  Ms. Wherry said that it would be very difficult to lift that bar when she had no data.  She went on to say that it was very difficult to manage an organization when you had no data.  By contracting out the services with Health Insight, the division would be able to get the necessary data to make policy decisions in order to know what groups were being talked about and what prescriptions were being talked about.  Chairwoman Giunchigliani asked if there were protocols to be taken into consideration when they did their utilization reviews.  Ms. Wherry stated that she had policy manuals that were dated 1986 that had not been updated.  Chairwoman Giunchigliani opined that too often the subcommittee heard that something was a requirement and assumed that it was a federal requirement when it was actually a state requirement that had been “pulled out of the air.”  Those requirements could be changed.  Ms. Wherry said that the staff was attempting to get the data to be able to make sound business decisions that probably would offer more services to recipients than were currently offered.  Chairwoman Giunchigliani asked if the division had the ability to include in the contract a provision to assure that a certain level of quality of care was maintained and would be equal to at least what the division staff had previously offered.  Ms. Wherry said the division had worked with Nevada State Purchasing and the Attorney General’s office to determine that because the division had an existing contract with Health Insight and they were able to amend that contract through 2002.  In June 2002 the contract would be up for renewal and prior to that, the division would go out to bid for all of the utilization review services for the current, inpatient residential treatment centers, as well as for the other four areas the division wanted to contract out. 

 

Ms. Wherry commented that she was a nurse so she had her own biases in having been a manager of nurses and social workers for years, but the division did not intend to lose any staff; there had been staff retirements and staff had sought positions in other areas because of growth or promotional opportunities.  She said the existing vacant positions had been frozen so that staff whose functions would be eliminated by contracting out some of the paper intensive functions could be accommodated.  She did not anticipate any disruptions in service for the nurses who would change functions.

 

Senator Mathews said in looking at the budget she was unsure where the frozen positions were and so it was critical that the subcommittee understand the division’s plans.  She continued that she did not understand why it would be necessary to contract out to obtain good data, as she believed there was enough staff in-house to calculate the data.  Ms. Wherry answered that the division had staff that still did not have dependable, reliable computers.  Senator Mathews said that problem had nothing to do with gathering data.  She said that data had been gathered by hand long before computers were available.  Mr. Duarte clarified that the issue was really one of volume.  When the population was small those types of practices were appropriate and they were able to gather data.  Senator Mathews said the state was still not very large.  Mr. Duarte went on to say that the best place to obtain the data was from the contractor who had the technology to gather the data.  Chairwoman Giunchigliani said she believed Senator Mathews wanted to be certain that the division would make sure that the functions that the nursing staff was performing would continue and would not be neglected and that personal contact with the client would still be provided.  Ms. Wherry said that for example, the division had a position for targeted case management that was frozen in the prior three months so that when the services could be contracted out, the division could move a nurse or a social worker into the oversight of the targeted case management program.  There had been a doubling of expenditures in that program in the prior two years and the division had not had the ability to update policy, to do any kind of review, or to oversee the federal regulation requirements for that program.  She continued that the division had not had the staff to oversee many of the programs they had and by contracting out the paper processing functions and using the knowledge, skill, and ability of a professional for something that was far better tuned to the recipients and their needs would be a value for the state.  Chairwoman Giunchigliani said that when the division provided the overlay of the programs to the subcommittee it would be helpful to show what positions had been frozen, what jobs they did, and where they wound up.  It sounded to Chairwoman Giunchigliani that some of the individuals had additional skills besides being a nurse and, therefore, they were moved into other areas.  Ms. Wherry said the division had held off moving the staff until the services were contracted out but they had targeted staff for specific functions that would be in alignment with their professional knowledge, skills, and abilities. 

 

Senator Mathews asked what would happen if the division did not get the approval to contract out services.  Ms. Wherry said the division would continue to be unable to update policies, to look at medical standards that existed in the community and to develop policies based on those, and they would continue to be unable to oversee programs and expenditures. 

 

Mr. Duarte pointed out that the current functions provided by many of the nursing staff in the medical review team were found to be duplicative in the functional review performed by the Bureau of Licensure and Certification, who the division paid to provide that service.  Actually, some of the positions under discussion came about as a result of eliminating the duplicative functions.  Chairwoman Giunchigliani asked Mr. Duarte to indicate that on the listing or overlay the division would provide to assist the division in understanding the proposed changes in staffing. 

 

Chairwoman Giunchigliani said that decision unit E-279 eliminated five existing positions but then added five positions.  Chairwoman Giunchigliani asked if those positions were frozen.  She said the 1997 legislature approved two new positions for the managed care unit to perform the same type of functions for which the division was now requesting two more new people.  She asked Mr. Duarte to explain the division’s plans.  Senator Rawson added that the number of HMOs was stable and he wanted to know if the division could accomplish what was needed with the positions previously assigned to the division.  Ms. Wherry said that one of the things that had occurred within the division was similar to what had occurred in other state agencies and that was people got into groups and then started to function within what they knew within their group.  An example for managed care was that they were managing and overseeing the contracts but much of that had happened without the feedback and input from the fee-for-service staff.  There had been isolation in policy development and provider networking and oversight that had been exclusionary from either fee-for-service or Nevada Check Up or for managed care.  It was very confusing for the providers and the recipients.  With limited resources, when you had, for example, transportation issues with the managed care population, but you had transportation staff on the fee-for-service side who had always developed and maintained the transportation policy, the Medicaid managed care staff might interpret their knowledge about how a function should occur for the contractor without realizing they needed to consult and work with the fee-for-service staff to develop that program.  When you had limited resources people did not have time to really seek out the most knowledgeable in the division.  The staff was even physically separated so it made it even more complex to develop cohesive policies and programs across all of the division’s lines of business and it impacted the providers. 

 

Chairwoman Giunchigliani said Ms. Wherry’s comments made good sense but the division had not shown what was driving the workload for the need for the additional positions and that was what the subcommittee needed to deal with.  Mr. Duarte answered that he would address the issues.  Mr. Duarte said that Mr. Rawson was correct that the number of HMOs had been stable but the division’s ability to manage them appropriately had never been adequate and to oversee the contracts, fiscal, contract and medical expertise was needed.  The division had some of the needed expertise but not all of it and in order to get what was needed the division asked for some additional positions in that area.  Those were not new positions; they were positions that would be moved within the organization to better support the managed care office.  When the division went forward, it would incorporate many of the functions of Nevada Check Up into other areas of the division.  Mr. Duarte said he and his staff had talked in previous hearings about synergies and he said the division had tremendous synergies available in the fee-for-service program and managed care that could support Nevada Check Up.  Additionally, there were staff in the fee-for-service program that could help support the managed care office but the division needed personnel to do the right kind of job in the managed care program. 

 

Ms. Wherry commented on the positions requested.  In provider enrollment, the Health Care Financing Administration (HCFA) had come out to the division several times in the prior year to look at different Medicaid programs.  She said the HCFA would make several more site visits in 2001.  In the provider enrollment area the division had had a number of deficits that it needed to correct in order to come into compliance with the HCFA.  For example, historically the division had not had provider contracts with the out-of-state providers, however, because of the population growth in the state the division required services that were not available instate.  Therefore, the division had done a lot of out-of-state contracting.  The division had never had contracts with out-of-state providers and the division had many areas for correction and compliance with HCFA.  The division had also modified a number of policies in the provider enrollment area to impose limits and restrictions on what providers would need to demonstrate in order to become a provider.  The division had not had the staff to do good oversight of the provider groups.  Chairwoman Giunchigliani asked if the position for this area was a social welfare program specialist and Ms. Wherry replied in the affirmative.  Chairwoman Giunchigliani said that the division’s documentation indicated that the position required more onerous credentialing and the subcommittee had no idea what that meant.  Ms. Wherry said she would answer the question by giving a very specific example.  For durable medical equipment ((DME), the division had a chief signing off on provider contracts who noticed duplications of signatures amongst different provider contract requests.  In looking at them, it appeared that the same signature with a different name was probably going on four different provider contracts for durable medical equipment.  When the division contacted California, it learned that California had had billions of dollars of abuse in the DME program and that people were starting to move across the state line because California had tightened up its requirements for DME.  The division looked at the California policies, worked with the deputy attorney general and had resigned themselves that they would need to require more data from providers before they would be recognized by the division.  The division had also worked with the pharmacy board and its requirements were very similar to the division’s requirements so that the fraud and abuse that had occurred could be reduced or eliminated.  Chairwoman Giunchigliani asked if those individuals had been referred to the fraud unit.  Ms. Wherry pointed out that if the providers had never been approved for the program they could not be referred for fraud.  Ms. Wherry went on to say that part of the division’s goals was to find the problems before the abuse of dollars could occur. 

 

Chairwoman Giunchigliani asked if there was any additional Title XXI funding available to build synergies between Nevada Check Up and the others although they were reimbursed at different rates.  Mr. Duarte said that the allocation to Title XXI was what the division was looking at for some of the functions. 

 

Ms. Tiffany asked whether the division ever had management meetings where everyone sat down and discussed blending the services that the people under managed care were still eligible for.  She wondered if there was communication among the staff of the various programs.  Mr. Duarte said that the division held scheduled management meetings every other week where administrative staff and program personnel from all areas were brought together.  At the meetings, specific topics were discussed and the meetings were used as a forum to educate one another about what was done in each program.  Ms. Tiffany asked if action items were ever created and Mr. Duarte replied, “Absolutely.”  Ms. Tiffany said the crossover to contracting was very complex and complicated and was much larger than just a TPA.  She was concerned that lower level staff would continue to be added when she was wondering what was happening at the management level and how much communication was taking place.  Mr. Duarte said that he appreciated the question but the division was not really adding new personnel.  Rather, personnel were being moved into different areas using the existing personnel budget authority.  There had been improved communication and the division had established meetings between different areas of the program.  Those types of meetings had not occurred for quite some time and they had been reestablished.  With the addition of Rebecca Ward in the fiscal area, leadership in the administrative service and fiscal service areas had been provided and she had brought a wealth of experience to those areas.  Mr. Duarte continued that the division was making serious efforts to bring groups together because there were people now in the fee-for-service program with a wealth of experience in long-term care, in transportation services, in dental services, and in a host of other services that were not available elsewhere in the organization.  He said that the division did not need to recreate much of the expertise in managed care or Nevada Check Up.  Staff in those areas needed to do their core job and that was to monitor the contracts and that was why the division had requested the ability to move people around.  The division would take advantage of all the expertise it had currently in the division to deal with multiple lines of business. 

 

Ms. Tiffany asked if the division would do some team building or take some training.  Ms. Wherry said when she came into the state she had been very surprised at the lack of resources or lack of direction of the agency.  She said there had been turnover in the administrator position and the deputy administrator positions and the division had not been stabilized to really look at team development or performance review indicators.  It appeared that health care knowledge in the 1990s passed over Medicaid.  Ms. Wherry continued that many of the things done in the private sector, including grooming and training staff to keep up with the health care delivery system, had not happened in the division.  The staff was struggling to come up to speed as well as to maintain their day-to-day functions to meet the needs of the providers and the recipients.  Ms. Tiffany said that she had always wondered whether the health component should be split off from health and human services.  She said she thought the agency was too big and that had created complications for communications and good management skills.  Better communications could be achieved with smaller working units. 

 

Mr. Duarte stated that when he came on board, the number one staff concern was the lack of communication between different areas and programs and between the physically separated offices.  He said communication was important and also the training component was critical.  Mr. Duarte divulged that the division was going to bring to the division, through the Robert Wood Johnson Foundation Center for Health Care Purchasing, a training program in April 2001 on health care value purchasing.  This training would provide “under the hood stuff” including the components and how value purchasing was translated into appropriate contract monitoring and oversight.  The training through the Robert Wood Johnson Foundation Center for Health Care Purchasing would be provided free of charge. 

 

Chairwoman Giunchigliani reported that in the MMIS contract there was a training component called the cultural change of management.  Chairwoman Giunchigliani said that she believed Nevada had an inherent weakness in state personnel in that Nevada did not train pools of individuals with various skills that divisions and departments could then recruit from.  She said that was unfortunate because agencies sat with vacancy savings for vacant positions for a great deal of time.  She said that maybe the general government subcommittee could take it under consideration.  Mr. Duarte said that the component of the MAXIMUS contract for functional requirements analysis included the cultural change component and that had been taken advantage of by the division.  He said that when moving toward a new information technology it was not wise to bring in an information system on top of a dysfunctional organization so he thought it was critical that the division move that piece of the contract forward from where it stood at the back end of the requirements analysis to assist the division in looking at organizational change and the type of structure that should be developed.  He pointed out that what the subcommittee saw before them was a step toward that goal toward organizational change.  The division worked through MAXIMUS and a subcontractor, called the Forethought Group, that had been working with management staff in order to develop a better organizational model.  That was a step toward the organizational change but he believed in the next month he would have a final document that showed where the division ultimately wanted to go as an organization. 

 

Chairwoman Giunchigliani asked about decision unit E-300.  She said the 1999 legislature approved an information systems specialist position to provide technical oversight for the MMIS project.  She asked if that position would be needed if the four positions recommended in E-300 were approved.  Mr. Duarte responded that the position was needed.  He said that one of the items identified in the Business Process Reengineering Study (BPR) was a need to oversee many of the data base issues.  The division would like to develop the technology and the systems in-house so that data would be readily available to query.  In order to manage data bases and to migrate them from stand-alone personal computers to the larger MMIS, and ultimately to manage the MMIS data bases, the division needed someone that could translate into a technical query a question for a program specialist such as a nurse or social worker. 

 

Senator Rawson pursued that issue further.  He asked why the BPR positions could not assume the responsibility for the contract oversight.  Mr. Duarte said the BPR positions made up the division’s systems office.  He went on to say that the division did not have adequate support from DoIT to maintain basic technology functions in their office.  Many of the division’s personnel did not have adequate PCs on their desks.  They did not have access to basic Internet capabilities or e-mail communication capabilities across the division.  Senator Rawson asked whether the division had requested the appropriate equipment in the budget and Mr. Duarte responded that it had been included in the MMIS budget. 

 

Senator Rawson asked Mr. Duarte if the computer functions should be centralized within the division versus leaving them with DoIT.  Mr. Duarte said that he believed much of the information technology resource needed to be located in the agency.  He said that DoIT made efforts to try to support the division and had done much better in the last several months in meeting the needs of the division.  He said that DoIT worked under budget constraints with multiple priorities that often resulted in the division not having the systems resources available so that it could make timely changes in its programs.  The best example, according to Mr. Duarte, was the transition of the Nevada Operations Multi-Automated Data Systems (NOMADS) data base from the old welfare system into NOMADS.  It ended up that there were some serious problems with the interface between the claims system and NOMADS.  There were a tremendous number of problems with individuals showing as ineligible when providers queried the claims system.  If a claim was submitted it would be denied in error.  That took thousands of person hours in working with DoIT and the NOMADS programming staff to fix the problem.  He said it was still not fully fixed.  Mr. Duarte said that the division was billed for slightly less than two full-time equivalent programmers for a billion dollar program.  It was difficult for the division to get personnel to staff the positions because the system was an old system and people were not anxious to program in the COBOL programming language so it was difficult to recruit.  Senator Rawson said that he anticipated more of that type of difficulties in the future.  Mr. Duarte said that as the division went forward in the implementation of MMIS, it had been made very clear to Terry Savage and the other staff of DoIT that the division needed experienced individuals to assist with the transition to a new system.  He hoped that the new system would be based in a language that was not ancient and for which personnel could be recruited.  Most of the operations would be managed by a fiscal agent because he believed most of the operations would be contracted out.  Mr. Duarte said that core functions would still need to be maintained in the agency.  Some of the position requests included in the budget were the positions the division needed to translate program needs into technical language in order to query the system and modify the system as necessary. 

 

Senator Rawson asked Mr. Duarte where the division was physically located.  Mr. Duarte responded that the offices were located in the Capitol Plaza at 1100 East Williams Street, Carson City, Nevada.  Ms. Wherry was located in an office below the Welfare offices in the Northgate Theater Plaza on North Carson Street, Carson City, Nevada.  Mr. Rawson said he could understand the communication problems with the division not all housed in the same building.  Mr. Duarte said the problem was compounded by the fact that the division did not have a good local or wide area network and could not readily communicate because the division often had failures in its networks.  Senator Rawson said he would like to see the division’s facilities in the next week or so.  Chairwoman Giunchigliani said she believed a few subcommittee members might be interested so she would help coordinate the visit.

 

Ms. Tiffany asked if the staff that would be hired would be “Web site savvy” because she anticipated most of today’s applications to be Web enabled.  Mr. Duarte said that was a good point and there were some people in the division who had expressed interest in developing the technical expertise.  Ms. Tiffany asked if the employees had the expertise now and Mr. Duarte said they had some expertise but the division would like them to have formal training in that area.  Ms. Tiffany said that the mistakes made in NOMADS were that too many functions were automated at one time and there was no way to bring the system into the current technology so whatever was done on the division’s system, the Web had to be involved.  She continued that the division would need to get its local and wide area networks up to speed.  Mr. Duarte said that the division had a steering subcommittee for MMIS with a wealth of experience from the provider community, the technical community, and also from Assemblyman Beers, the Chairman. 

 

Chairwoman Giunchigliani said that when the division provided to the subcommittee the justification for all staff by division, the subcommittee would like a prioritized justification for the four BPR positions.  She said that it sounded like the division needed equipment almost more than some staffing and that this was part of what the subcommittee was considering.  Chairwoman Giunchigliani said that it was important that since the division wanted to get rid of duplicative efforts within the division that it also get rid of duplicative staffing. 

 

Ms. Wherry said she thought it was important to understand that the division had two distinct offices for the administrative functions and the program functions.  The division also had a district office in Carson City, a district office in Fallon, one in Reno, one in Elko, and one in Las Vegas.  There were very limited resources in the existing BPR staff to try to staff and respond to any of the problems that were experienced with servers or desktop computers. 

 

Chairwoman Giunchigliani asked if the results of the Myers and Stauffer LC contract were scheduled for completion in April 2001.  Mr. Duarte said Myers and Stauffer LC was the contractor who would evaluate acute hospital rates, intermediate care facility rates, skilled nursing, general medical education, and durable medical equipment rates.  The time line for that was that they were currently meeting with the provider community, they were surveying several hundred providers and working with associations to get feedback on proposals for new rate methodologies.  The preliminary results of the study were expected in early April and the contractor would likely continue working with the division through August 2001 in order to prepare state plan amendments that must be submitted to HICFA for approval before the new rate methods could be implemented.  Chairwoman Giunchigliani asked when the subcommittee would be able to make adjustments to the budget based on the new rate recommendations.  Mr. Duarte said he should be able to submit information to the subcommittee by early April.  However, the division attempted in the budget to recognize what it believed to be medical inflation for each of the provider groups.  The division’s intent was to try to create a ceiling under which the rate studies would come in and then the subcommittee could make some decisions based on the information provided by the contractor.  Chairwoman Giunchigliani asked for confirmation that there was some inflation built-in or anticipated in some parts of the budget.  Mr. Duarte confirmed that there was inflation built-in to provider rate increases using the All Urban Index for medical care and they had increased many of the different provider type rates by those types of indices.  They had also subsequently looked at other indices to ensure that the All Urban Index was an appropriate index for the division to use.  Chairwoman Giunchigliani said in the past the subcommittee had massaged the caseload assumptions and the cost rate analysis with the division’s assistance. 

 

Chairwoman Giunchigliani asked Mr. Duarte to discuss the Olmstead decision.  Mr. Duarte communicated that the issue of the Olmstead case impressed on states that they needed to assure they were taking proper steps to move people out of institutional care and into community settings or the least restrictive setting.  As a part of that, there was significant focus on home and community-based services.  Those were alternative services to institutional care and long-term care facilities.  The division requested significant increases in the budget in order to accommodate what the division interpreted as the current waiting list and potential for anything that might come out of the woodwork when the public became aware there would be additional slots for the programs.  In the Home and Community Based Waiver Program the division saw an increase in federal allotments up to the level where the division was currently of 205 unduplicated slots.  In July, the division was budgeted at 145 slots and had filled approximately 130 unduplicated slots.  The additional slots became available in increments in August and January.  The division was currently at 162 slots and quickly filling the available slots.  The division believed that by the end of the fiscal year the 205 slots would be filled.  Chairwoman Giunchigliani recalled that people waited for months to fill the slots because of the way the federal slots were allocated.  Mr. Duarte said that was  part of the problem.  If someone left the program, left the state or expired, the slot could not be filled.  He said the division was attempting to seek a waiver to that but he believed much of the problem had been with the division.  It had not overseen the waiver program appropriately.  Ms. Wherry had moved some of the resources in the medical review team and refocused their time on that population in determining the level of care, their functional needs, and making sure they were facilitated through the eligibility process so they could be added to the waiver.  Chairwoman Giunchigliani asked Mr. Duarte if he felt confident that some of the division’s internal policies had been loosened up enough to provide the recipients the services they needed more quickly.  Mr. Duarte repeated that the division had gone from 130 to 162 individuals on the program. 

 

 

Ms. Wherry added that two weeks before, the division had signed up nine people in one week between all the district offices because the resources had been refocused.  Ms. Wherry felt fairly confident that by the end of April all the available slots would be filled. 

 

Ms. Leslie said it was very refreshing to hear that the problem with filling the slots was with the division and she thanked Mr. Duarte for stating so.  She went on to say that for years it had been known in the community that there was a problem and that was the first time she had heard the division acknowledge the problem.  She congratulated the division for not becoming defensive about the problem and taking action to fully implement the waiver.  She questioned whether the state would have an Olmstead plan, was the division preparing one, and was it part of the $2.4 million strategic plan that the division was working on.  She said she thought the division was making great strides in the proposed budget because the budget included money that would help comply with Olmstead but she said she wanted to see a written Olmstead plan that included input from the community.  Mr. Duarte said the budget for the director’s office included funding for the long-term care needs of individuals in order to make sure the state provided appropriate services now and in the future.  Mr. Duarte said the director’s plan did include what people referred to as an Olmstead plan although he did not believe the division’s plan would be called an Olmstead plan.  However, it would incorporate the features of what some states had called Olmstead plans, including engaging the community in a discussion of need and working with the community to identify the types of services and service providers that were needed.  Mr. Duarte said that Ms. Wherry and her staff had been working with the long-term care community and the disabilities community to gather information in advance of the planning effort and that had been more narrowly focused on some particular issues.  Ms. Leslie said that she would like to see a written outline showing where the division was headed with the Olmstead plan and she stated that she believed it was also important to call the plan an Olmstead plan.  She believed that would help clarify for everyone what the issues were and she did not understand why it had been so difficult to get the division to acknowledge that an Olmstead plan was needed.  She said the plan should show how the community would be engaged as the division had received criticism in the past for not involving the community. 

 

Mrs. Cegavske asked for clarification on the adult group care waiver.  She wanted to know if patients with Alzheimer’s disease were included in the plan.  Ms. Wherry said that was managed by the Division of Aging Services and she would be very surprised if there were many people with dementia in a group care setting depending upon the security involved in that group care setting.  Her experience in Nevada had not demonstrated that there were many providers who were skilled and devoted directly to the level of care for dementia-related diseases.  Mrs. Cegavske continued by asking if dementia would qualify for the adult care waiver.  Ms. Wherry said that off the top of her head she would be surprised because oftentimes those living environments required people to have the ability to safely exit from a fire situation and dementia patients required a higher level of care.  Mrs. Cegavske said she was puzzled by Ms. Wherry’s responses and that maybe she was confusing disabled individuals and those with dementia.  Ms. Wherry said that the division had testified regarding the definition of assisted living because there were gaps in the system and one of the things the division was attempting to define were the gaps in the system for specific patient types based on their diagnoses.  She believed there were gaps in the system for people with dementia, special needs children, and a number of other categories of clients.  Once the gaps were identified, the division could determine the best setting for individuals, the best provider type, and the best rate. 

 

Mrs. Cegavske asked how the division would solve the problems.  Ms. Wherry said that as an example, on the Olmstead plan, the division was retraining the staff that was doing MRT to actually be case managers so that they could go into nursing facilities and look at which of the recipients could move out of the facility into the community.  Unfortunately, there would be gaps in the system such as affordable or safe housing.  The staff would be collecting data as they went through the process to look at how many could not be moved out because of the gaps in the system.  She said with the information gathered, the division could evaluate whether the division could afford to establish rates and create a provider type for those populations.  Mrs. Cegavske asked how long it would take the division to gather the information and form an opinion.  Ms. Wherry said that the minimum data set (MDS) data  was recently given by the division to the Bureau of Licensure and Certification for analysis.  The Bureau of Licensure and Certification would electronically fine-tune the data to within 10 to 20 percent of recipients currently in a nursing facility; those that would be most likely to be ready to be released into the community.  Ms. Wherry said the division also planned to begin the use of an intake tool that would be used by the district office staff in the facilities to evaluate those people on site.  They would then work with the families, the community, and the facility to determine what was available.  That program would be started in the next three months and she believed it would take six months to a year of gathering data to develop confidence in the knowledge of what the gaps were. 

 

Senator Rawson said that there were a number of veterans on the subcommittee and he did not have a level of confidence or appreciation for the lack of progress on the development of an Olmstead plan.  He said that the appetite in the legislature in the current session would be to move into that process a little more.  He said he wanted to see a community planning effort; not a division-directed effort and the division should be expecting action from the legislature.  Senator Rawson said there had been a very limited organ transplant policy because it was expensive, the door would be opened and could bankrupt the program.  He said that he had read that the division was considering moving ahead and recognized some of the new cancer methodologies and bone marrow transplantation for breast cancer was an important but controversial issue.  He said bone marrow transplants were probably $250,000 apiece and if they became eligible for payment, 100,000 people on Medicaid would have access.  He said maybe Nevada should look at the way Oregon had prioritized some of its conditions but in any event, should move ahead very cautiously because it was conceivable there could be costs beyond the program’s ability to pay.  Mr. Duarte said that the division had seen increasing requests for a number of different types of transplants and bone marrow transplants were covered in the state plan.  The division had not defined exactly what diagnoses would be accepted but the transplant services had been limited to what was covered under Medicare.  Increasingly, Medicare was covering the use of peripheral stem cell transplantation for a variety of disease conditions including certain types of leukemia, lymphoma, and breast cancer.  Mr. Duarte explained that the use of peripheral stem cell transplantation for breast cancer had fallen in and out of favor and it seemed to him that there was a resurgence back into favor but he believed there would be a number of women in the program who could qualify for bone marrow transplantation as a treatment for metastatic stage four breast cancer.  The division approached the issue by recognizing those treatment modalities were becoming standard practice across the nation.  He believed that bone marrow transplants could be done on an outpatient basis in the future.  Senator Rawson interjected that doing bone marrow transplants on an outpatient basis might reduce the cost from $250,000 to $200,000.  Mr. Duarte said that there were other ways of mitigating the costs and the division was looking at them.  For example, now the division was “held hostage” when a physician referred a patient to a particular transplantation center that might be the best in the nation but with whom the division did not have a contract.  The division would then end up paying a very high percentage of the bill charged.  Senator Rawson said that he believed those types of problems could be dealt with and Mr. Duarte agreed.  He said the division would look at a reinsurance program for the expenses.  Senator Rawson said that he personally believed that cancer was a condition like end-stage renal disease; it should be covered by Medicare or qualified for Medicaid.  He continued that maybe the way to get into that on a national level was to start pressing for that and doing more.  Mr. Duarte said that the division believed the fiscal risk to the state could be mitigated by using a transplant reinsurer that covered probably five or six million lives and could negotiate with the treatment centers on the state’s behalf using the leverage possessed by having five or six million enrollees. 

 

Chairwoman Giunchigliani asked if the Medicaid budget contained a provision for some of those treatment costs.  Mr. Duarte responded in the affirmative and Chairwoman Giunchigliani asked Mr. Duarte what amount had been included in the budget for transplants.  Mr. Duarte said the dollars in the budget were not identified specifically by treatment program or treatment modality.  It was in the rate that was paid per recipient and based on historical claims experience.  The division did not get into the level of looking at specific disease conditions.  Chairwoman Giunchigliani said that when the division had calculated the numbers required for the rate allocations the subcommittee would have a better idea of costs.  Mr. Duarte explained that the division still would not have an idea of transplant costs specifically.  Mr. Duarte said that the division was working with the provider community to identify some of the disease incidence rates and costs associated with different types of treatment modalities in the Breast and Cervical Cancer Treatment component enhancement of the budget.  Chairwoman Giunchigliani said that the subcommittee would need to work with the division to be certain that the funding was properly allocated. 

 

Nevada Check Up Program (101 – 3178)

HCF&P 24 – Volume II

 

Chairwoman Giunchigliani said that it appeared that the caseload had begun to grow with a monthly average of approximately 15,000.  Mr. Duarte said the division had budgeted for an average caseload of 15,000 in the current fiscal year but by FY2003 the division anticipated an annual average caseload of 25,000 individuals.  Chairwoman Giunchigliani said there was approximately a 40 percent increase in 2002 and a 17 percent increase in 2003.  She asked what factors drove the increase in projections.  Mr. Duarte said the division looked at the current enrollment growth that was increasing by leaps and bounds, month-to-month.  The division averaged about 800 applications per month and they had not seen a slowdown yet.  He said they believed they would see a slowdown at some point in FY2003 but the increased estimates of caseload were driven primarily by the division’s recent experience with enrollment.  Chairwoman Giunchigliani asked if the increased enrollment was due to the outreach efforts.  Mr. Duarte stated that he believed it had a lot to do with outreach, provider education, and the community had been working with agencies educating parents, etc.  Mr. Duarte said the program had finally picked up momentum in the community and had gained name recognition. 

 

Chairwoman Giunchigliani pointed out that in decision unit E-425 the division had requested a program operations manager.  She asked Mr. Duarte to justify the need for the position.  Mr. Duarte said the need for that position was to help manage the current services administered in the Nevada Check Up office.  Some of the control functions that must be maintained were the premium payment program as well as the eligibility processes.  The position would also serve as a liaison to many of the offices in the division that could support Nevada Check Up.  Mr. Duarte said he had previously referred to synergies and the position was needed to help bridge gaps across programs and bring in expertise to the office.  Chairwoman Giunchigliani asked if it was a managerial position and Mr. Duarte replied that it was.  Chairwoman Giunchigliani told Mr. Duarte that the subcommittee might look at it again when the division provided its prioritized listing of positions.  She said there were some needs for administrative positions but the subcommittee did not want to build a top-heavy organization. 

 

Chairwoman Giunchigliani was curious as to why the recommended postage expenditures were considerably increased.  Mr. Duarte said that the increased caseload probably drove up the postage costs because most of the postage costs were to mail information to recipients.  Chairwoman Giunchigliani asked Mr. Duarte to report back to the subcommittee the factors that caused the increases.

 

Chairwoman Giunchigliani asked Mr. Duarte to discuss the issues of the severely emotionally disturbed children (SED) and the severely mentally ill children (SMI).  Chairwoman Giunchigliani asked how the disparity in rates was concluded to be sound when the division’s actuary had not conducted an actuarial study to determine the validity of the disparity in rates.  Mr. Duarte was unsure what Chairwoman Giunchigliani was referring to but he said that if she was referring to managed care rates, the division had eliminated from its next contract a capitation rate for SEDs and SMIs.  The contract was currently up for renewal and he expected it to be effective April 1, 2001.  Once the diagnosis of SED or SMI was made, the services related to mental health would be paid as a pass-through from the health plan.  The HMO would basically give the division its claims and they would be reimbursed so there would be no fiscal risk.  Chairwoman Giunchigliani asked if the Nevada Check Up program would no longer be a higher cost impact.  Mr. Duarte said the overall capitation rates in Nevada Check Up would still be higher until the data could be obtained to analyze.  He said the division did not have the encounter data to justify change.  Chairwoman Giunchigliani asked Mr. Duarte when the division would receive the actuarial study.  Mr. Duarte said his hope was to get some encounter data and the actuarial analysis sometime in the next three to four months.  Chairwoman Giunchigliani said there was $50,000 allocated in each fiscal year to conduct the actuarial study for managed care rates and she asked if that was something different than the study under discussion.  Mr. Duarte said they were one and the same study that was conducted yearly by the actuary. 

 

Chairwoman Giunchigliani said The Executive Budget also recommended  $38,775 for FY2002 and $45,398 for FY2003 to reimburse University Medical Center (UMC) and Clark County Social Services (CCSS) for eligibility services provided in support of the Check Up program.  According to information provided by the division, UMC and CCSS staff had been trained and 10 completed applications were received from UMC in mid-February 2001.  With that slow start of the pilot program, Chairwoman Giunchigliani asked the division how many applications UMC and CCSS might ultimately process on a monthly basis.  Mr. Duarte said that his understanding was that the number would be approximately 200 – 300 per month.  Mr. Duarte said he would need to go back and check the numbers and the division did not have good information yet on the current year’s experience with the outreach contract.  Chairwoman Giunchigliani asked if the division should continue the outreach and Mr. Duarte said he believed it was a good method of putting the eligibility service into the community and he thought it was a good start for both Nevada Check Up and Medicaid.  Chairwoman Giunchigliani asked Mr. Duarte to provide justification for the estimated 200 – 300 applications per month. 

 

Chairwoman Giunchigliani asked Mr. Duarte to discuss the division’s request for a $5 million one-time appropriation for the Health Fund for Uninsured Families.  Mr. Duarte said the department had requested the $5 million one-shot appropriation and his division had been requested to look at the feasibility of using two new program policies that the federal government had allowed states to use for Title XXI.  The two programs covered the parents of low-income children as well as the children in the family unit with Title XXI coverage and looked at subsidizing the premiums paid to employers for the children in employer group coverage.  The two required the division to put in a waiver request to the federal government.  The waiver was called a 1115 Waiver.  Some states had begun to get the waivers approved and he believed the Bush administration would make it simpler to get that type of waiver.  That would facilitate the division in covering additional people using the $5 million fund.  With the federal financial participation rate in Nevada Check Up, Mr. Duarte believed the $5 million could be translated into approximately $14.2 million in overall funding for health care.  Chairwoman Giunchigliani asked if all of the funding would be administered through the Nevada Check Up program and Mr. Duarte replied in the affirmative.  Chairwoman Giunchigliani said that it appeared that the request would mean that a one-shot appropriation would be used for an ongoing program.  Mr. Duarte responded in the affirmative and said that the division would prefer to consider this a demonstration.  If the funding was not available, the division would have to look at reducing coverage at some point in the next biennium.  Chairwoman Giunchigliani said a subcommittee would need to deal with that because it was a very different shift of funds, as one legislature was not allowed to obligate a future legislative session. 

 

Ms. Leslie asked whether the division had looked at the new Robert Wood Johnson grants that recently became available for that type of program.  Mr. Duarte said he had seen the announcement and Ms. Leslie asked if Mr. Duarte would take a closer look because there might be a way to secure some federal funding.  Ms. Leslie said she thought the program would be an appropriate use of federal grant funding. 

 

Chairwoman Giunchigliani commented that she had sent a letter the day before to Director Charlotte Crawford regarding how she anticipated using the funding.  She said she hoped Ms. Crawford would contact Mr. Duarte for the information.

 

Mrs. Cegavske questioned Mr. Duarte regarding the needs of the children.  She wondered if the division had done any type of study or documentation on what was needed, what the costs might be, and what the health issues were of the children in the state.  She asked if children were suffering health problems because of tooth decay or malnutrition or any other disease.  She thought documentation of the types of problems was needed in order to know what types of problems should be covered in the future.  Mr. Duarte responded that most of the planning efforts that funding had been requested for in the director’s budget dealt with long-term care services and the gaps in the service needs for those individuals.  However, the division had received information from a variety of sources on an ongoing basis that pointed to the need for children’s health care in Nevada.  The Great Basin Primary Care Association had funded surveys on the uninsurance rate on low-income children in Nevada and the division agreed with the methodology they developed for assessing the rate of uninsurance amongst individuals in Nevada.  The division planned to work with the Association on a go-forward basis to fine-tune some of the numbers.  Mr. Duarte felt that the most urgent needs in the state currently were in the area of primary care access and dental access.  Both of those were seriously lacking in the state and the division was attempting to address those issues on an ongoing basis. 

 

Mrs. Cegavske said she would like to see the assessment that the Great Basin Primary Care Association had developed.  Mr. Duarte said he would contact Mr. Volker, the Executive Director, to see if the report could be obtained. 

 

Mr. Dini said that he had listened to the testimony and the word “rural” had not come up often in the discussion.  He went on to say that people in the rural counties were worried about their programs and the quality of service available.  He asked if the division was going to do better outreach to the rural counties or would the concentration be in Clark and Washoe Counties.  Mr. Duarte said the division needed to develop specialized programs for rural communities.  He said the options were much more limited because the provider capacity in the rural communities was much more limited.  Mr. Duarte said the division had made some adjustments.  For example, in the home health rates, the division had implemented a rate that was higher in the rural areas than it was in the urban areas but on a go-forward basis the division was looking at funding opportunities that were presented through the Disproportionate Share Hospital Program to bring hospitals into that program and provide some funding.  He believed three hospitals would qualify and he thought there might be additional services that could be funded through other types of federal opportunities to pay rates that would attract and keep services in the rural areas.  Mr. Duarte agreed with Mr. Dini that the lack of services available in the rural communities was a serious problem that the division should address.  He said the issues of lack of primary care access and dental access were particularly prevalent in the rural communities and the division should pay particular attention to those.

 

Mr. Dini said the lack of access to dental services was serious.  In the depression the federal government had dentists that went out in trailers and provided dental care to children.  He said there was no dental Medicaid provider in rural Nevada.  Mr. Duarte said that was true although there had been significant progress through the dental school in bringing dental practitioners into the Nevada Check Up and Medicaid programs.  Mr. Duarte said that some states had actually built facilities but he was not suggesting that be done in Nevada.  Rates alone would not attract providers in the rural communities to take Medicaid patients.  The providers did not need to do it now and he did not think they would do it even if the rates were increased.  He also stated that the rates would be increased.  Mr. Duarte said it was a complicated issue that he did not have all the answers to but it needed to be addressed.

 

Chairwoman Giunchigliani thanked Mr. Dini for his input and said that the rural counties were just as important as the larger counties and could not be left out of the picture.  She said they produced different problems but definitely needed to be part of the program. 

 

Senator Rawson said there were a number of projects that had not really come out in the budget discussions but he wanted to assure Mr. Dini that in his opinion this would be the last session that the lack of dental service in the rural areas would need to be discussed.  He thought that in the next two years the problem would disappear.  He felt that he had made a bold statement but there were many things in progress and they were actually working well. 

 

Intergovernmental Transfer Program (101 – 3157)

HCF&P 30 – Volume II

 

Senator Rawson said he wanted to be certain that the division looked at the intergovernmental transfer program to possibly make it fairer to some of the hospitals that had a significant disproportionate share and were not receiving much payment.  That would particularly affect some of the rural areas and he knew progress had been made there but the discussion needed to continue. 

 

Mr. Dini said that he was familiar with the Yerington Hospital and he had concerns that there was no surgeon so no babies could be delivered there and appropriate care for younger people could not be provided.  He said that occasionally a migrant laborer would show up and it would become necessary to deliver a baby although the hospital was not prepared to do that.  He said no one, not the medical school nor the state, had done anything about helping provide a surgeon in an area such as Yerington.  He said that no deliveries could be made in Yerington because it was the law that a surgeon be available to perform a caesarian section within a prescribed amount of time.  No one had seemed to grasp the problem and the suggested answer was to fly the patient to Carson City or Reno in a helicopter at a cost of $5,000.  He said no one had made a long-range plan to help provide services to rural areas and it was time to start doing it.  Mr. Dini said that this problem had been under discussion with state agencies and the medical school for 15 years and the problem had not yet been resolved.  Mr. Dini said he did not have the answer but the state needed to start moving toward a solution.  Mr. Duarte agreed and said that the director’s budget contained funding for evaluating the health care needs in rural communities and he intended to pursue that review.  He said the needs were readily apparent to many people and the division should concentrate on finding the solutions to the problem.  Mr. Duarte said that he believed there would be significant progress in the dental area in the near future through the dental school.  He also said there were some funding vehicles in place such as the Rural Hospital Project under the leadership of Robin Keith.  Ms. Keith had pushed initiatives to bring additional federal dollars and Medicaid dollars to rural communities.  An example was the Critical Access Hospital Program.  There were other ways to bring dollars either through the DSH program or through some new federal regulations that dealt with upper payment limits.  He believed that could work in concert with DSH to bring dollars to facilities that currently were not receiving DSH or to bring additional Medicaid reimbursement to facilities that were not receiving adequate reimbursement.  Both new federal policies presented opportunities for the division to look at the distribution of Medicaid dollars through DSH and Medicaid funding so that a greater amount of services could be funded in the rural communities.  Chairwoman Giunchigliani said that she appreciated that the director had a budget for a study plan but it was not very well thought-out, in her opinion.  She said she thought the problems were known and some of the solutions needed to be funded. 

 

Chairwoman Giunchigliani said that the subcommittee would like Mr. Duarte to provide information on how much revenue would be transferred from the Intergovernmental Transfer budget to the Medicaid budget for FY2001.  If the division transferred less than the $95.4 million that was budgeted to be transferred, would there be additional intergovernmental transfer revenue that could be used to offset Medicaid costs for the 2001-03 biennium.  She said it appeared that as of February 21, 2001, the division had transferred approximately $21.5 million from the Intergovernmental Transfer budget to the Medicaid budget and she asked if that was correct.  Mr. Duarte said that he believed that was correct.  She said that the subcommittee would need to know if it needed to replenish that fund because it appeared to have a $300,000 shortfall. 

 

Mr. Steve Abba said that the subcommittee wanted to know what the division anticipated transferring from the Intergovernmental Transfer account to the Medicaid budget for FY2001.  There was a significant disparity in terms of what had been transferred so far compared to what had been budgeted.  He said he was aware that that might change over the next several months.  He also asked what the department’s plan was to replenish the Institutional Care Fund.  It appeared that a number of counties came forward and requested monies from the fund that had been approved and it appeared there would be a number of counties that would be requesting or had requested aid but the funding was still pending and he wanted to know what the department’s plan was in that area.  Mr. Duarte said that the expenditures the division had incurred so far totaled about $100,000 out of the $300,000 in the Indigent Fund.  The division understood that there might be requests for additional funding and the information the division had received to date would probably result in expenditures of $200,000 out of the $300,000 total.  If additional funding for services was requested, which the division had not yet heard, he still believed that the $300,000 was adequate. 

 

Mr. Dini asked if the new budget provided for the funding for the Indigent Fund.  Mr. Duarte said he did not know and Mr. Dini said that if there was no funding and one of the counties withdrew, millions of dollars would be lost.  Mr. Duarte said that the fund was not replenished through the division’s budget, it was done through a legislative bill. 

 

Mr. Mark Stevens said that was true except that the money had to come from somewhere.  He said that if all of the intergovernmental transfer money had been allocated elsewhere the only source of funding that would be available would be to take intergovernmental transfer money from the Medicaid program or the IGT budget and replace that with General Funds so that intergovernmental transfer monies would be available from the Institutional Care Fund.  While it would be done by the legislative process, if there was no funding available to provide for it, it became a net General Fund cost that the legislature had to come up with when all of the General Fund monies had already been allocated or at least recommended by the Governor.  Mr. Duarte said that the division believed there were adequate reserves in IGT to fund the $300,000 pool.  Chairman Giunchigliani said the subcommittee would be taking a look at that because they did not agree and they wanted to talk to the Budget Division about it.

 

Chairwoman Giunchigliani thanked the division for its testimony and said that although the subcommittee had asked the division for a great deal of information, it was not a criticism; it was just the subcommittee trying to get a true picture of the direction the division wanted to go.  She also said there was some understanding, and perhaps support, from the subcommittee but the subcommittee needed more information. 

 

Chairwoman Giunchigliani asked the audience if there was any public testimony.

 

Chairwoman Giunchigliani recognized Brian Lahren, Ph.D., Executive Director of Washoe Association for Retarded Citizens.  Dr. Lahren said he worked with a number of disability groups in the state.  He thanked the subcommittee for raising the issue of the Olmstead planning process.  He said he had tried repeatedly and unsuccessfully to engage in a discussion about the very great need for a community-based process of planning and assessing the needs of persons with disabilities in the state.  He said he had been rebuffed at every juncture by the Department of Human Resources.  Dr. Lahren said he wanted to make it clear that he had met with Mr. Duarte and Mr. Duarte had been most candid and forthcoming in terms of allowing access to his office and his thinking about Medicaid issues and that was not the problem.  He said he intended to take full advantage of the subcommittee’s encouragement of the process and his group would have a very succinct but powerful, focused, and detailed testimony at an upcoming hearing regarding the Olmstead process. 

 

Dr. Lahren raised the issue of rate adjustments.  The Medicaid program had a significant amount of money, approximately $76 million, essentially set aside for addressing the needs of the rate study that was discussed earlier in the hearing.  He said he hoped it was clear to the subcommittee that a significant part of the disability community had been left out of that rate assessment process and that was the entire service system associated with people with developmental disabilities and some of the physical disability community.  He said his group was significantly upset about that as they had tried very hard and were rebuffed at every juncture at the Department of Human Resources when they tried to acquaint the department with a crisis that was currently occurring.  He went on to state that there were huge rates of turnover, 240 percent per year, in the provider community.  This meant total lack of continuity of care and inadequate services.  He said more was spent on recruitment of positions to replace lost staff because the pay was not enough to hire people minimally qualified to provide services.  That was totally ignored and it should be addressed as part of the rate commission.  Dr. Lahren said 80 percent of the people in his programs were Medicaid eligible so there was a significant gap in the planning to address the crisis.  He said he would have solutions for that problem and he thought the solutions he would propose would be less costly, more focused, and would work for all concerned. 

 

Chairwoman Giunchigliani asked Dr. Lahren to send to the subcommittee the names of the groups and the providers he was referring to.  She said the subcommittee did not have a good handle on that issue.  She went on that the subcommittee was quite aware that the community had not been involved and that would be the message to the director’s office this session.  Dr. Lahren said he would provide the requested information to the subcommittee.

 

Chairwoman Giunchigliani recognized Mr. Jon Sasser, Washoe Legal Services, who said he would like to list for the subcommittee some items he wanted to go into more depth on in public testimony at later hearings.  On behalf of the Covering Kids Coalition, looking at the Nevada Check Up program and its interrelationship with the Medicaid program, he thought it was important for the subcommittee to understand some of the policy decisions there.  He was concerned about the recommendation for the elimination of the assets test, what impact that would have on the caseload, why that was important in terms of the red tape between the two programs and understanding that.  The Covering Kids Coalition highly supported what the Governor had proposed but believed the subcommittee really needed to understand it.  He would also like to have some discussion on the recommendations that came out of the interim committee on the reduction and period of uninsurance from six months down to three months and have some numbers calculated by the division about what that might mean.  The interim committee was created by S.B. 556 of the Seventieth Session that created a task force on the policy of the state of Nevada concerning access to public health services.  He felt that it would be quite inexpensive but would be a very nice addition to the program.  On the disabled community issues, there was an interesting tension there.  On the one hand, the community had felt left out of the formal process of developing an Olmstead plan and on the other hand, some had forced their way in the door and had some discussions with Ms. Wherry, Mr. Duarte, and others, and they felt that they had made some progress on some issues.  He said they did not want to wait two years while they planned when there were solutions in some areas that were readily apparent at the current time.  He said he wanted to offer those solutions to the subcommittee.  Also, in the new move to contract out there had been some discussion in the new PCA provider agencies and among many people in the community about some of the good things in that area and some of the problems that had arisen that remained to be solved.  Finally, there was a proposal for a two-year study of the resources that would be needed to allow the disabled to go back into the community and keep their Medicaid under the new federal Ticket to Work Act.  On the other hand, there were people who were ready, willing, and able to do that today if the door could be opened.  He believed that also could be done in a very neutral manner.  Chairwoman Giunchigliani said there was an interest, especially in the Ticket to Work.  She said she commended a lot of the departments within the division but she thought that there was a stranglehold on communication with the management out of the director’s office and that she thought that would be dealt with.

 

There being no further business, the subcommittee adjourned at 10:59 a.m.

 

 

RESPECTFULLY SUBMITTED:

 

 

 

Lila Clark

Committee Secretary

 

 

APPROVED BY:

 

 

 

                       

Assemblywoman Chris Giunchigliani, Chairwoman

 

 

DATE: