MINUTES OF THE
SENATE Committee on Commerce and Labor
Seventy-First Session
March 6, 2001
The Senate Committee on Commerce and Laborwas called to order by Chairman Randolph J. Townsend, at 8:06 a.m., on Tuesday, March 6, 2001, in Room 2135 of the Legislative Building, Carson City, Nevada. The meeting was video conferenced to the Grant Sawyer Office Building, Room 4406, Las Vegas, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Senator Randolph J. Townsend, Chairman
Senator Ann O’Connell, Vice Chairman
Senator Dean A. Rhoads
Senator Mark Amodei
Senator Raymond C. Shaffer
Senator Michael A. (Mike) Schneider
Senator Maggie Carlton
STAFF MEMBERS PRESENT:
Scott Young, Committee Policy Analyst
Laura Adler, Committee Secretary
OTHERS PRESENT:
Samuel Sorich, Lobbyist, National Association of Independent Insurers
Fred L. Hillerby, Lobbyist, American Council of Life Insurers
Alice A. Molasky-Arman, Commissioner, Division of Insurance, Department of Business and Industry
Roger Bremner, Administrator, Division of Industrial Relations, Department of Business and Industry
Matthew Sharp, Lobbyist, Nevada Trial Lawyers Association
C. Joseph Guild III, Lobbyist, State Farm Insurance Companies
Robert Barengo, Lobbyist, Nevada State Board of Medical Examiners
Larry D. Lessly, J.D., Executive Director, Board of Medical Examiners
Michael Garcia, President, Nevada Society for Respiratory Care
Carlton R. Insley III, Program Director, Cardiorespiratory Sciences Program, Community College of Southern Nevada
Joni Moss, Chairperson, Nevada Association of Medical Products Suppliers
Arthur Little, Director, Cardiopulmonary Services, Mountain View Hospital, and President-elect, Nevada Society of Respiratory Care
Chris Ferrari, Lobbyist, Nevada Association of Nurse Anesthetists
Dana Bennett, Lobbyist, Nevada State Medical Association
James L. Wadhams, Lobbyist, Nevada Hospital Association, Nevada Rural Hospital Project Foundation, and Nevada Association of Health Underwriters
Steven E. Kessinger, Lobbyist
Gordon DePaoli, Counsel, Nevada Life and Health Insurance Guaranty Association, and Nevada Association of Health Underwriters
Robert A. Ostrovsky, Lobbyist, Nevadans for Affordable Health Care
Richard L. Siegel, Lobbyist, American Civil Liberties Union of Nevada, and Community Unity Coalition of Nevada
Mylan Barren-Hawkins, Executive Director, Nevada Diabetes Association for Children and Adults
Danny L. Thompson, Lobbyist, Nevada State AFL-CIO
Alison Gaulden, Lobbyist, Vice President of Public Affairs, Planned Parenthood Mar Monte, and Planned Parenthood of Southern Nevada
Marilyn Morrical, Consultant, Substance Abuse
Denise Duarte, Steering Committee Member, Nevada Women’s Lobby
Martin Gallagher, Registered Nurse, Concerned Citizen
Tom Wood, Lobbyist, Wyeth-Ayerst Laboratories, Division of American Home Products Corporation
Barry Lovgren, Concerned Citizen
Greg Myers, Concerned Citizen
David England, Nevada Coalition of Life and Health Care Providers, and Nevada Pharmacists Alliance
Denise Everett, Executive Director, SageWind
Lynn Maguire, Nevada Physical Therapy Association
Kevin M. Quint, Lobbyist, Nevada Substance Abuse Prevention Council
Senator Townsend opened the hearing on Senate Bill (S.B.) 213.
SENATE BILL 213: Provides privilege of confidentiality for certain information obtained during insurance compliance audits. (BDR 57-943)
Samuel Sorich, Lobbyist, National Association of Independent Insurers (NAII), said NAII is an insurance trade association and the members write about one-third of all the property/casualty insurance premiums in Nevada. He stated NAII supports the bill and believes it is good public policy, because it encourages insurance companies to implement programs to ensure they are in compliance with insurance statutes and regulations. Mr. Sorich conveyed a compliance audit is a tool insurance companies use to evaluate compliance with their legal obligations. He explained, to be effective, a compliance audit must be candid and forthright in reviewing insurance company practices.
He stressed without some protection from disclosure, there would be a chilling effect on the self-criticism, which makes compliance audits so helpful. He said S.B. 213 provides a limited degree of protection from disclosure. Subjecting compliance audits to unlimited disclosure discourages insurance companies from conducting these audits and does not help consumers. Mr. Sorich maintained consumers are best served when insurance companies are encouraged to make a thorough evaluation of their operation so the problems are identified and corrected.
Mr. Sorich insisted the bill does not prevent regulators from obtaining audit documents, but does restrict action against an insurer based on information in the audit. Additionally, S.B. 213 does not prevent compliance audits from being disclosed in all lawsuits. He stated if the insurer fails to petition the court within 30 days after requesting the document, the privilege does not apply. He voiced even after petitioning, the insurance company has the burden of proving protection from disclosure. And, the bill authorizes the court to order disclosure of the audit if the insurer is acting fraudulently.
Mr. Sorich pointed out the bill’s disclosure protection only applies to documents prepared in connection with the audit. He stressed the bill expressly states it does not apply to information obtained from a source independent from the insurance company audit. He clarified the bill only protects documents generated in the course of conducting an insurance compliance audit. Mr. Sorich stated, NAII believes S.B. 213 strikes a proper balance between the interest of heavy information subject to discovery and the public’s interest in encouraging insurance companies to evaluate how they are meeting their obligations to consumers.
Fred L. Hillerby, Lobbyist, American Council of Life Insurers (ACLI), stated they are in support of S.B. 213. He iterated it is good public policy to encourage corporations to conduct self-evaluations of their existing practices to identify and remedy instances of noncompliance with statutes and regulations.
Alice A. Molasky-Arman, Commissioner, Division of Insurance, Department of Business and Industry, stated commissioners nationwide support self-audits as she does. She said S.B. 213 would correct the problems encountered with the bill from the last session that did not allow the administrator or commissioner access to the compliance audit reports. She added there are several instances where the customers have benefited from self-audits, and she supports S.B. 213.
In response to Senator Townsend’s query, Mr. Sorich stated Illinois, North Dakota and New Jersey, and he could not remember the other state, have laws addressing insurance company compliance audits. He said last session’s bill was based on the Illinois law, which does not allow the commissioner access to the self-audit document. He noted S.B. 213 is based on the North Dakota law, which balances the interests of both parties.
Senator Townsend asked for insight on what was preventing companies from doing the audits now, since they are asking for and paying for them. He sought confirmation if the audits were being used in other actions, such as section 11.
Mr. Sorich replied the purpose of the bill is to provide a degree of protection so the audit documents are not discoverable in some lawsuits. He pointed out, because of heavy state regulations, there is a great need for companies to audit for compliance. He claimed there are times the audits are sought as evidence in lawsuits, and too much access would cause the companies to be less candid. He opined this could result in harm to the public.
Senator O'Connell wanted confirmation on whether the Division of Insurance also did audits. Ms. Molasky-Arman affirmed they conduct what is termed “market-conduct examinations,” and are public records.
Senator O'Connell asked whether there was a marked difference between the division audits and company audits. Ms. Molasky-Arman responded there are no comparisons at this time, since it is a new concept, however, she added that some of their own audits occasionally find violations or discrepancies.
Senator O'Connell inquired if the audits were in-house or if someone from the company’s home office did the audit. Mr. Sorich clarified audits were done both ways, and even by a third party. He said it was primarily the third-party audits raising the most concern, because of the information being used in lawsuits. He noted it is one of the issues S.B. 213 addresses to provide more security for the audit process.
Senator O'Connell expressed concern primarily regarding in-house audits, where it is possible that familiarity with the information might not cause a bell to ring when something is a little off. She said she was looking for objectivity in the audits.
Ms. Molasky-Arman stated she particularly liked the provision in the bill where if the company has not taken corrective action, then the commissioner may enforce corrective action. She elaborated, for example, there was a time many companies had race-based rate policies. She said in the 1960s a federal law was passed to stop the practice. She elucidated a few companies continued the practice and were later unwittingly purchased by other insurance companies who are now finding out and making arrangements for reimbursements. She explained compliance audits would have discovered this situation a long time ago.
Roger Bremner, Administrator, Division of Industrial Relations, Department of Business and Industry, stated they are in agreement with the concept of S.B. 213. He pointed out one concern was the language would not prevent the assessment of benefit penalties for injured workers who might be entitled to them, and requested the committee allow time for them to prepare a clarifying amendment.
Senator Townsend observed it was not easy to understand the bill and relate it to existing statutes regarding corresponding language.
Scott Young, Committee Policy Analyst, stated he had seen similar programs in environmental law, and he would research for self-audit provisions.
Matthew Sharp, Lobbyist, Nevada Trial Lawyers Association (NTLA), stated the NTLA oppose S.B. 213, because it is bad public policy. He said the primary dispute is the public’s right to know if their insurance company is engaging in inappropriate behavior. He emphasized insurance companies should not need a law to make them comply with the law. He conveyed the bill would not only allow insurance companies to engage in inappropriate behavior, but determine what remedy they provide and keep it secret from the public. Mr. Sharp commented the litigation process provides protection for insurance companies in that they are not required to disclose anything not relevant to the litigation.
C. Joseph Guild III, Lobbyist, State Farm Insurance Companies, stated all the bill does is provide protection from discovery of the audit an insurance company conducts on its own, internally, to make itself better. He noted all of the protections provided by the insurance commissioner and statutes would remain.
Senator Townsend closed the hearing on S.B. 213 and opened the hearing on S.B. 91.
SENATE BILL 91: Makes various changes to provisions governing practice of medicine and respiratory care. (BDR 54-290)
Robert Barengo, Lobbyist, Nevada State Board of Medical Examiners, introduced Larry D. Lessly, J.D., Executive Director, Board of Medical Examiners, and Richard J. Legarza, J.D., General Counsel, Board of Medical Examiners, and said they would go through the bill and answer the committee’s questions.
Larry D. Lessly, J.D., Executive Director, Board of Medical Examiners (BME), introduced members of the Board of Medical Examiners, and stated S.B. 91 does three things: it provides for licensure of respiratory therapists (RT), it makes changes to grounds for disciplinary action against physicians, and it makes changes in educational and training requirements of physicians seeking licensure in Nevada. He said chapter 630 of Nevada Revised Statutes (NRS), commonly referred to as the medical practice act, underwent major revisions in 1985. He emphasized he thinks Nevada has the model medical practice act of any state. He opined the proposals in this bill would make that act better.
Mr. Lessly noted the board was not advocating licensure of RTs, as they have their own bill advocating a board through which there would be licensure. He elucidated the RTs did approach the board regarding administrating licensure and disciplinary action, and the board decided to leave it up to the Legislature.
Mr. Lessly continued, in 1985 the board began licensing physician assistants (PA) with minimal statutes and authority to adopt regulations to govern the profession. He pointed out the bill primarily addresses chapter 640B of NRS, which presently governs the practice of respiratory care, with the anticipation that the Legislature would give the board regulatory powers to carry out the process of licensing and regulation. He expounded the regulation provisions would empower the board to deal with duration of licenses, grounds and procedures for disciplinary action, and requirements for licensure.
Mr. Lessly quoted section 5 of the bill, “For the purposes of this chapter, any act that constitutes the practice of medicine shall be deemed to occur at the place where the patient is located at the time the act is performed.” He communicated the provision is for situations such as telemedicine, where an out-of-state physician treats a Nevada patient. He clarified, this provision is being advocated nationwide.
Mr. Lessly voiced S.B. 91 would assist the board in moving towards licensing physician assistants in the same manner as physicians are now licensed. He said section 17 of the bill would change the requirement of 3 years of post-graduate education to require 3 consecutive years (36 months). He explained the problem was with physicians who may, for example, take a 1-year residency in family practice, and not doing well, then move on to a 1-year residency in surgery at another institution, and perhaps a 1-year residency in psychiatry at still another institution. The physician now claims 3 years of postgraduate education. He stated, however, in the board’s opinion that is not considered 3 years of postgraduate education, but only one level of postgraduate education in three different specialties. He emphasized it did not preclude a physician from changing studies within a specialty; it only ensures progressive training through the levels.
Mr. Lessly said section 18 removes the University of Nevada School of Medicine rural health officer from making the determination of what areas in rural Nevada are underserved. He pointed out the rural health officer gets his figures for making a determination from the board in the first place, and the board regularly compiles its figures from several sources. He averred the board is already in the position to determine the issuance of temporary licenses for physicians to get them more quickly into underserved areas. He stated another change in the bill is the provision of receiving a license to practice in rural Nevada without 3 years of postgraduate education. He said a physician would have to practice in a rural area for 3 years to become eligible for full licensure. Mr. Lessly stated the board interprets the 3 years to mean full-time, 40 hours a week. He explained there are physicians with a practice in another state who also practice only on weekends in rural Nevada over a 3-year period, and consider themselves eligible for unrestricted licensure to practice in Nevada.
Mr. Lessly stated section 21 makes changes in requirements for locum tenens license and for temporary licenses. He said not many of these licenses are issued, but so long as the out-of-state physician meets the regular basic requirements, they should be eligible for the locum tenens license. Mr. Lessly called attention to the provision covering telemedicine in section 21, in which the board wants to create a special purpose license for physicians in another state who want to treat a Nevada patient via telemedicine, to provide protection for the Nevada patient. He said, for example, a patient’s X rays sent to Los Angeles for evaluation, the Nevada board has no control over the outside physician’s qualifications and the results of the diagnosis.
Mr. Lessly stated Nevada is one of the few states licensing residents who come to the state for University of Nevada medical school training. He expounded that provision in the bill would allow the board to continue licensing the resident the second year of training based upon previous standing. He said revising the PA license where their area of authority is not spelled out on the back of the license, but now makes them subject to the direction of the supervising physician who is fully accountable for the actions of a PA, would allow for better movement of the PA between physicians.
Mr. Lessly stated section 27 of S.B. 91 addresses fees. He said the board would like to only address fee schedules with the legislature once every 10 years. He explained for instance, the biennium registration for a physician is capped at $800, but they only charge $600; the biennium PA registration is capped at $800, but the board does not charge that amount. He claimed the board receives no money from the General Fund; they are a self-supporting, self-sustaining board. He clarified the fees are based on what it costs to regulate the profession and calculate the fees accordingly. He expounded, initially the board was told there are about 400 RTs in Nevada; subsequent investigation turned up figures of 700, and 1000 to 1100 practicing in the state. Mr. Lessly conveyed the more RTs there are, the lower the fee. He said, assuming there are 700 RTs or less, then the annual fee would be $100 and the biennium fee would be $200, but that figure cannot be guaranteed until they can accurately determine how many RTs there are practicing. He pointed out the fee would also be based on legal fees and cost of disciplinary actions.
In response to Senator Townsend’s request, Mr. Lessly recited the proposed maximum fees the board would collect. He said the application to practice as a physician is $600, the board presently charges $400. The special purpose license is $400. He added the telemedicine license would be determined pending passage of the bill. Renewal of a limited or restricted license is $400, the board presently charges $50. The application for a license as a physician’s assistant is $400, currently the fee is $300. Biennial registration of a physician’s assistant is $800, comparable to a physician and a respiratory therapist, present charge is $300. The biennial registration of a physician is $800, there is no change, present charge is $600. The application for practitioner of respiratory care and biennial registration, currently those categories do not exist, but they are asking for the same rate of limitations as for a PA or physician. Registration for a physician on inactive status is $400, the present charge is $200. Mr. Lessly continued, verification licensure is $50, present charge is $25. Duplicate identification card is $25, present charge is $15. Computer printouts or labels are $500, he added, the amount varies greatly, depending on the nature of the printout. He noted those lists are usually requested by organizations for commercial purposes, and presently the amount is capped at $300, and furnishing a list of new physicians is $100, the present charge is $25.
Mr. Lessly pointed out, in the past the set fees were not reached. He also mentioned the respiratory fees were based on the potential maximum for a long term. He stated once the fees were determined, the board did not want to come back to the legislature the next session asking for an increase. He said he sees it as a waste of time for all concerned.
Senator O'Connell noted the board could now go up to $200 for limited, restricted, or special license, but was only asking $50 at this time. She wanted to know the rationale for the increase to $400. Mr. Lessly replied the board was getting more aggressive in handling those applications by doing more investigation and looking at malpractice. He claimed they are spending more staff time each biennial registration period.
Mr. Lessly continued, section 28 of S.B. 91 particularly addresses disruptive behavior on the part of a physician which directly or indirectly interferes with the quality of care rendered to the patient. He said people in managed care have questioned this section as not specific enough. He maintained providers and physicians know what constitutes disruptive behavior. He pointed out the Nevada Supreme Court drafts and adopts its own regulations for disciplinary action against attorneys. He recited Rule 203 of the Nevada Supreme Court Rules, “It is professional misconduct for a lawyer to: . . . Engage in conduct that is prejudicial to the administration of justice.” He noted it does not get into defining each and every act of conduct that could be prejudicial to the administration of justice.
Mr. Lessly commented on reports of a physician who got into an argument with a nurse in front of a patient, and shoved a gurney into the nurse. Another report was of a physician who thought he was too important to follow the Centers for Disease Control and Prevention (CDC) requirements on isolation of patients, and barged into an isolation unit without following those controls, with obvious detrimental effects on the patient in isolation. And, then there was the physician who threw a temper tantrum in an operating room prior to surgery because he did not like the way things were going, and proceeded to throw surgical instruments around the operating room. Mr. Lessly conveyed the area of disruptive behavior by physicians has been studied on a national basis. He emphasized inappropriate actions and comments made by physicians, in the presence of patients, undermines the patient’s trust in the care they receive. Such actions are detrimental to the patient’s participation in his or her own care. Mr. Lessly stated many entities, boards, commissions, institutions, and individuals have looked at this section and think it is defensible.
Senator Shaffer asked for an explanation of line 28 on page 11, “. . . refer a patient to an appropriate provider.” Mr. Lessly responded there were a number of prohibitions in that section, because in the opinion of the board, there are a number of providers and insurers whose sole purpose is to influence their own financial well-being over that of the patient. He opined there are provisions in contracts with physicians employed by managed care organizations around the country that are detrimental to patients. Some of them provide economic advantages to physicians who deny services or deny referrals. Some of them offer bonuses to physicians based on economic performance. Some denials are based on cost rather than need. He emphasized the whole point to subsection 8 of section 28, is that the obligation and responsibility of the treating physician is paramount to the patient, and not to the employer based on cost.
Mr. Lessly called attention to subsection 7 of section 28 of S.B. 91 as also addressing the issue that a physician’s loyalties lie with the patient and should not violate the patient’s trust for financial or other personal gain. He also pointed out subsection 9 and the issue of ethics, stating the board receives 600 to 700 complaints a year from patients, many of them regard issues the board is not authorized to deal with, such as rudeness by office staff, which reflect back on the physician even though he was not the one being rude. Mr. Lessly noted a statute already exists regarding sexual contact with a patient, and stated subsection 10 takes into consideration the sphere of influence around a patient by others who may be engaging in sexual relations with the attending physician, and the health of and decision by the patient. Mr. Lessly acknowledged there was no overwhelming need for subsection 10 of section 28, but it is the national standard, which is why the board wanted it included.
Senator Shaffer expressed concern regarding the overutilization of physician’s assistants by physicians. Mr. Lessly replied the board’s regulation states a maximum of three at any one time. He said an application is required, and it is made clear to the physicians they are subject to disciplinary action for exceeding the maximum, however, there is no way to be 100 percent sure.
Mr. Barengo stated audits are also conducted of the physician’s practice.
Mr. Lessly continued section 30 deals with an issue regarding prescriptions for certain medications, which is not relevant in this day and age, and he would like to have that section removed. He said the remainder of the bill cleans up areas to make the statutes more workable, and the Legislative Counsel Bureau deems these changes are appropriate and compatible.
Mr. Lessly called attention to retired physicians’ status. He said a retired physician cannot even recommend an aspirin to a friend, and many retired physicians have not understood the retirement status as it presently exists. He voiced changing the statute would change a retired physician to inactive status, which would aid in understanding by the physician.
Mr. Lessly added the board thinks a PA should be able to give orders to a nurse, and recommends deletion of prohibition of that status, as well as removal of the prohibition of a PA working for an osteopath, since the board is currently licensing them to do so.
Senator Carlton said there was a lot of testimony from physicians regarding the prompt-pay bill and how hard it was to receive payment in some cases. She wanted to know whether line 30, page 11 would inhibit them speaking out. Mr. Lessly responded, “No.”
Michael Garcia, President, Nevada Society for Respiratory Care (NSRC), stated a recent statute took a step forward in respiratory care in Nevada by requiring a nationally recognized credential prior to providing patient care. He said, unfortunately, the statute did not go far enough in providing a mechanism for monitoring the flow of respiratory therapists into Nevada, for continuing-education standards, and establishing disciplinary action for unsafe practitioners. He pointed out only six states do not have RT licensure laws, and Nevada is one. He insisted this situation has raised concerns that Nevada has become a prime target for practitioners who have failed to meet minimum standards of performance in states requiring licensing.
Mr. Garcia articulated it is a natural fit to work with the BME for their guidance, supervision, and regulation in licensure. He said over time the profession will evolve and there will be a need for regulatory changes. The NSRC would prefer to be allowed to work with the BME to address those concerns and changes now rather than have them written into statute. He noted pages 1 through 5 were drafted from chapter 640B of NRS, and the recognized national model as advised by the national association to fit with health care in Nevada. He asked the committee to vote in favor of S.B. 91.
In response to Senator Townsend’s inquiry, Mr. Garcia said there were RTs who preferred their own board, but costs and other factors indicated joining the BME was the best way to go. He said the practitioners understand the need to set the license fee at around $100 to cover the costs of administration and regulation.
Carlton R. Insley III, Program Director, Cardiorespiratory Sciences Program, Community College of Southern Nevada, stated he is in full and unconditional support of S.B. 91. He expounded during his time in practice in Maryland, it was found that regulation improved patient care and relationships with physicians.
Joni Moss, Chairperson, Nevada Association of Medical Products Suppliers (NAMPS), said she is also a registered nurse and NAMPS supports regulating respiratory therapy licensure. She said the NAMPS represents over 30 home medical equipment companies with multiple branches throughout the state. She expounded many of the companies employ respiratory therapists to explain and use complicated equipment in a patient’s home, often without supervision. She iterated licensing would provide regulation, disciplinary action and/or removal of licensure in cases of malpractice, negligence, or inappropriate conduct.
Arthur Little, Director, Cardiopulmonary Services, Mountain View Hospital, and President-elect, Nevada Society of Respiratory Care, stated the American Association of Respiratory Care and the NSRC support S.B. 91.
Chris Ferrari, Lobbyist, Nevada Association of Nurse Anesthetists (NANA), stated the NANA has a proposed amendment to S.B. 91 (Exhibit C) to ensure the language in the bill comports with existing statute. He said the amendment is to add the words “certified registered nurse anesthetist” to section 2, subsection 6, page 1, lines 13 and 14. The proposed amendment is, “Carrying out the written orders of a physician, physician assistant, certified registered nurse anesthetist or an advanced practitioner of nursing relating to respiratory care.” He said he was provided with a copy of the Nevada Administrative Code (NAC), that defines the role of a nurse anesthetist, which explains why the need for the amendment.
Dana Bennett, Lobbyist, Nevada State Medical Association (NSMA), stated Lawrence P. Matheis, executive director of the NSMA, had to be in Washington, D.C., and left a prepared statement for the committee (Exhibit D). She summarized his statement pointing out the change from 3 years of graduate education to 36 months of progressive post-graduate is not interpreted to mean a single post-graduate program lasting 36 consecutive months or that it is restricted to a single-specialty area. She said medical internship may be discontinuous, but if cumulative is what is intended, then the language should be changed. Referring to section 28, she said there is already a proliferation of specific statutory grounds for disciplinary action. She conveyed the NSMA agrees with the language addressing disruptive behavior by physicians. Ms. Bennett questioned the wording in subsection 9 “. . . calculated to bring, or having the effort of bringing . . .” as difficult to enforce. And, she recommended replacing it with “which brings” and removing the words “without limitation,” because “including” means the following clause is not used exclusively. She concluded subsection 10 was already covered in NRS 630.304, subsection 5, which prohibits “Influencing a patient in order to engage in sexual activity with the patient or with others.”
James L. Wadhams, Lobbyist, Nevada Hospital Association (NHA), Nevada Rural Hospital Project Foundation (NRHP), and Nevada Association of Health Underwriters (NAHU), said he had letters from both organization for the committee in support of S.B. 91 (Exhibit E), but with some concerns. He stated the concerns are a need for a grandfather clause for those RTs currently practicing in Nevada with credentials through the National Board of Respiratory Care, and the proposed fee structure. He noted the initial fee and renewal fee are more than double the rate of the highest state of New York.
Steven E. Kessinger, Lobbyist; and Director, Cardiopulmonary Services, Churchill Community Hospital (CSCCH), stated he opposes S.B. 91 because of concerns, but is a proponent of licensing RTs. He pointed out if no one is sure of the number of RTs in the state, then no one knows in which direction costs will go. He told the committee he has 10 therapists on staff, and knows there are concerns about the fee structure. He stated most rural hospitals require the therapist to apply for a license to draw and analyze arterial blood gases through the Nevada department of health. He said there is a $75 initial fee and $50 every subsequent 2 years. He voiced the total fees would now be $275, and stressed for rural RTs that sum would be a “reach.”
Mr. Kessinger insisted it would be helpful if the bill would also include the temporary license fee. He brought to the committee’s attention there is a huge shortage of respiratory therapists in the country. In fact, he said he saw one industry magazine with 50 pages advertising for RTs. He claimed many facilities are operating with insufficient RT staff, and the proposed high-fee structure for RTs would discourage many from considering coming to Nevada. He emphasized facility managers and CEOs (Chief Executive Officers) would have to deal with the aftermath of losing RTs should set fees increase, because of such a high cap. He said this proposed fee structure is just the tip of the iceberg of the effect on communities and continued education requirements. He concluded he would like the bill amended to show the fees reduced to be more competitive with surrounding states, and temporary licensing.
Senator Townsend referred S.B. 91 to Senator Carlton’s subcommittee, and opened the hearing on Senate Bill (S.B.) 212.
SENATE BILL 212: Repeals provisions that require policy of individual health insurance to include certain coverage and benefits. (BDR 57-127)
Gordon DePaoli, Counsel, Nevada Life and Health Insurance Guaranty Association (NLHIGA), and Nevada Association of Health Underwriters (NAHU), stated he is pinch-hitting and is not overly familiar with the bill.
Senator Townsend offered to hear his testimony after others have spoken to give him time to review the language.
James L. Wadhams, Lobbyist, Nevada Association of Health Underwriters (NAHU), said the NAHU is comprised of individual agents licensed to sell and find places for people to buy insurance. He pointed out S.B. 212 deals with individual insurance not group insurance or third parties. He stated the premise of the bill is individuals retain the right in Nevada to make their own purchasing decisions when it comes to insurance, and removes those restrictions applying primarily to employers and group-insurance considerations. He noted the present statute mandates certain minimums that put the cost of insurance out of the reach of many individuals and families, and this bill would remove that barrier.
Senator O'Connell inquired if the bill was modeled after one from another state. Mr. Wadhams responded the bill was a result of bill drafting based on eliminating additional mandates added over the years for group policies.
Senator O'Connell asked if Mr. Wadhams was aware of any other states providing this type of insurance. Mr. Wadhams said he did not, but would do the research.
Senator O'Connell wanted to know what companies were prepared to sell the type of insurance proposed in the bill. Mr. Wadhams replied there are many carriers who already sell individual insurance, and will respond to the market. He emphasized this insurance was for individuals only and not available to any kind of a group.
Robert A. Ostrovsky, Lobbyist, Nevadans for Affordable Health Care (NAHC), stated NAHC regularly hears from individuals shopping for affordable health care who discover they have no choice but to purchase benefits intended for groups, thus raising the cost of insurance or putting them out of the market. Many only want catastrophic insurance and cannot get it without all the accessories. He said the NAHC strongly supports S.B. 212.
Senator O'Connell stated she recently received information on the mandated benefits (of medical care) the state covers, and wanted to know how many benefits are there.
Scott Young, Committee Policy Analyst, answered in the Blue Cross-Blue Shield list published December 2000, Nevada lists 42 benefits. However, several of those are providers, as opposed to benefits.
Mr. Ostrovsky responded the Task Force on the Policy of the State of Nevada Concerning Public Health Services, on which he served, identified 27 mandated benefits, which were agreed and voted on to indicate they were mandates, but needed to be reviewed. He said some mandates were for services, and some were not to discriminate between different types of services. He added those 27 mandates were part of a report submitted to the Governor.
Ms. Molasky-Arman stated the Division of Insurance has a history of supporting the policy of choice by consumers. She said S.B. 212 would remove all the mandated benefits from individual health insurance policies. She stated objections to the bill are those areas to be repealed that are mandated under Health Insurance Portability and Accountability Act of 1997 (HIPAA) federal law. One mandate is in NRS 689A.041, which is coverage for mastectomies and related reconstructive surgery. She said the other mandate is in NRS 689A.0425, which establishes minimum hospital stays after childbirth for maternity and pediatric care. She claimed deletion of the mandates would endanger Nevada’s standing as a HIPAA state, and the effect would be to transfer deregulation to the federal government.
Senator Townsend inquired whether there would be any other problem with the bill if the two federal mandates were removed from the bill. Ms. Molasky-Arman stated there are other mandates. One requires a policy provide certain benefits, and another mandate states the insurer must offer a particular kind of coverage. She maintained she has reservations about repealing these mandates in all forms, because consumers may no longer have a choice.
In response to Senator O'Connell, Ms. Molasky-Arman said some coverages, such as alcohol, drug abuse, and cancer treatment are very expensive, and insurers may not offer them, even to consumers who are willing to pay for those benefits.
Richard L. Siegel, Lobbyist, American Civil Liberties Union of Nevada (ACLU), and Community Unity Coalition of Nevada (CUCN), conveyed in his experience insurance companies did not make benefits clear, but mainly emphasized the cost difference between competitors’ policies. He expounded some of the biggest health issues for Nevada are alcohol, substance abuse, mental illness and several other problems that are the core issue, and he thinks the average person cannot anticipate the probability or possibility of these illnesses over a long period of time, especially for older children. He insisted mental illness is not any different than an illness to any other part of the body, and is dealt with by medication and hospitalization. He stated mental illness can be just as catastrophic as a physical illness. He remarked people purchasing individual insurance may be less likely to have other resources and still become a burden on state facilities, which are already overburdened.
Mylan Barren-Hawkins, Executive Director, Nevada Diabetes Association for Children and Adults (NDACA), stated she represents 5.9 percent of the known diagnosed diabetics in Nevada. She said there is approximately another 5.9 percent who have diabetes but have yet to be diagnosed. She stressed S.B. 212 would effectively destroy a mandate put into effect 4 years ago, which mandated coverage of diabetes education and supplies. She voiced Assembly Bill (A.B.) 477 of the Sixty-ninth Session provided many people in Nevada, who theretofore did not have that service with a much better quality of care and life.
ASSEMBLY BILL 477 OF THE SIXTY-NINTH SESSION: Requires certain policies of health insurance to include coverage for management and treatment of diabetes. (BDR 57-1703)
Ms. Barren-Hawkins pointed out that many of those people were not covered by group insurance; the Employee Retirement Income Security Act of 1974 (ERISA), is not mandated to provide diabetic services. These people have hard times finding insurance and now the policies they count on to keep them healthy can deny them the needed coverage. She continued diabetes is a leading contributor to heart disease, blindness, lower-extremity amputations, and the leading cause of end-stage renal failure. Diabetes costs the state $678 million annually as a disease in morbidity and mortality. She insisted the bill would cripple those seeking assistance through clinics, emergency rooms, and other resources, who are unable to pay hospital bills. She said that focuses on every Nevada citizen. She asserted that S.B. 212 is extremely poor legislation because it does not really serve anyone well.
Danny L. Thompson, Lobbyist, Nevada State AFL-CIO, stated the people who will not buy this coverage would not solve their medical problems, and then become the problem and burden of the rest of Nevadans. He pointed out people who do not purchase certain kinds of coverage may yet have the problem and then do not have resources to pay for expensive care, hospitalization and treatment, which is why there is insurance. He saw S.B. 212 creating more problems than it would solve.
Alison Gaulden, Lobbyist, Vice President of Public Affairs, Planned Parenthood Mar Monte, and Planned Parenthood of Southern Nevada, stated her organizations meet the reproductive health needs of uninsured and underinsured. She said the majority of patients are 20- to 29-year-old women who have jobs, but have little or no insurance. She said the bill would actually benefit Planned Parenthood because it primarily serves women with no insurance, but that is a road no one wants to travel. She said this issue has come up before and it is an issue of parity in health care. Further, it is known women in their reproductive years of 15 to 44 have unique health care needs that lead them to seek medical services far more often than men. As for parity, most insurance companies cover Viagra 100 percent, and prostate cancer, but policies do not cover contraception or direct access to obstetric gynecologists, and 75 percent of a woman’s health care is through an obstetric gynecologist. She said, in view of these concerns and many others, Planned Parenthood is against the bill.
Marilyn Morrical, Consultant, Substance Abuse, stated she specifically opposes S.B. 212 for not mandating benefits for substance abuse and mental health treatment. She said people with mental health and substance abuse issues do not know they are ill. They have a disease that tells them they are well, so they would most likely not buy insurance for those illnesses. She expounded maintaining the mandate to provide insurance coverage for mental health and substance abuse problems is not only the right thing to do, but it is also cost-effective. She pointed out nationwide studies show people who receive appropriate substance abuse treatment reduce their hospital stay utilization and ER visits by 50 percent. Commenting further, Ms. Morrical stated that while she was with St. Mary’s Regional Medical Center, their statistics bore out the national statistics for treatment and cost of a 62 percent reduction in follow-up illnesses and 73 percent fewer hospital days for a person completing the detoxification and substance abuse programs.
Denise Duarte, Steering Committee Member, Nevada Women’s Lobby (NWL), stated she had been an insurance agent and in insurance management for 18 years. She conveyed S.B. 212 unfairly targets insurance health care for women and children. She said it is an unfortunate commentary on our society that these coverages had to be legislated to be included in health care policies. She pointed out women of a child-bearing age have to spend 64 percent more than men in out-of-pocket health care costs, with reproductive health care services, accounting for much of the difference. She noted many of the health care services targeted by this bill were originally enacted to end discrimination in women’s health care. She emphasized breast cancer is a leading cause of death among women and mammograms are the best tool for early, life-saving detection. She concluded preventive medicine is much more cost-effective for insurers and society, and is health efficient. It does not make sense to remove services that will help a large segment of Nevada’s population, and the Nevada Women’s Lobby is vehemently opposed to the bill.
Martin Gallagher, Registered Nurse, Concerned Citizen, said he is representing himself. He said he and a few of his peers came to see their Legislature in action and came across this bill, which troubled him. He expressed the sections proposed to be repealed bother him as a registered nurse (R.N.), a father, and a husband. He said the bill does nothing but discriminate against women, newborns, adoptees, and the socially challenged both mentally and through alcoholism. He said he is opposed to S.B. 212.
Tom Wood, Lobbyist, Wyeth-Ayerst Laboratories (WAL), Division of American Home Products Corporation (DAHPC), stated he was in opposition to this bill. He declared S.B. 212 essentially deletes all of the work done in 1999, in which this committee unanimously passed on the off-label drug treatment for cancers via Medicare, and Medicaid guidelines. The hope of the pharmaceutical research and manufacturers of America is that pharmaceutical products bring quality of life, longevity, and other good things to people, and they think this bill would severely impact availability to pharmaceuticals for Nevadans.
Barry Lovgren, Concerned Citizen, said he is a single man in good health, not married, has no children, and no addictions, so why would he want to pay for coverage for women and children and for services he does not need. He said the answer is insurance spreads the cost around thus reducing the expense to all. In this bill, the smaller the pool, the higher the costs to the individual who needs the benefit. He pointed out if only women with the potential of breast cancer buy policies in case of the need for a mastectomy, and only diabetics buy coverage for the management and treatment of diabetes, then very few people are going to be able to afford the needed coverage. He said there is a certain mean-spirited, “I’m-all-right quality to this bill,” where the attitude seems to be, “What do I care if some woman cannot get reconstructive surgery after having a mastectomy? What do I care if diabetics cannot get treatment, I’m all right and my premiums have gone down!” He continued repealing those mandates creates a market environment that is going to drive the responsible company out of business. Those that sell as-needed policies will undersell the responsible insurance company. He pointed out current law keeps this from happening by making sure the responsible insurance companies have a level playing field, that they only have to compete with other insurance companies whose policies will cover the patient population protected by the mandates.
Mr. Lovgren noted another problem with the bill, there is no fiscal note, it has no appropriations. He said the bill pretends there will be no cost to the state. For example, he said, if persons with substance abuse disorders can no longer get treatment through private health insurance, then they will have to rely on the Bureau of Alcohol and Drug Abuse (BADA) for affordable treatment. If persons with severe mental disorders can no longer get treatment through private health insurance, they will have to rely on the Commission on Mental Health and Developmental Services to get affordable treatment, but there are no appropriations to those agencies to provide the needed treatment. He opined S.B. 212 only benefits insurance companies that want to sell policies with as-needed coverage. He asserted the bill harms everyone with health concerns related to this bill with the taxpayers picking up the slack.
Greg Myers, Concerned Citizen, said he is representing his family, and most importantly his son, Luke. He said his son has a genetic metabolic disorder, phenylketonuria (PKU), which is very rare. His son’s body cannot process any type of protein. He said if PKU had not been caught during newborn screening, he would already be severely mentally retarded. But since the PKU was caught, and is being treated metabolically, mostly through diet and a special medical food made for metabolic disorders like his son’s, otherwise he would not be able to get any nutrients, he would not survive very long. He told the committee, just looking at him now, he is a very healthy 2-year-old boy, and you would never know there was anything wrong with him.
Mr. Myers stated his specific concern is NRS 689A.0423, coverage for treatment of certain inherited metabolic diseases, that, if he understands correctly, the bill would eliminate. He averred he and his family are vehemently opposed to S.B. 212, and many friends and acquaintances called to record their opposition to this bill. He remarked, based on the testimony, he sees this bill as a whitewash so the insurance companies can save money by posing it as a means for individuals to save money. He stated his insurance company is supposed to help with the very expensive metabolic food powder that comes in a case of six at nearly $200 a case. His son goes through a case of this food in less than a month. Mr. Myers explained his deductible is $2600 before the insurance kicks in. He concluded if bills like this one are allowed to pass, then needed services will disappear.
Responding to Senator Townsend’s question, Mr. Myers said the $2600 deductible was on a group plan that is primarily for major medical. He added he has aspirations of starting his own business, which would put him in the individual category and the bill would affect him.
Senator Townsend suggested Mr. Myers check with Commissioner Molasky-Arman, who could research to see if the plan is doing what it is supposed to and if his employer is getting the program he purchased. Mr. Myers said that would be helpful as they are constantly fighting with the insurance company over kicked-back claims, which are basically the same each time.
David England, Nevada Coalition of Life and Health Care Providers, and Nevada Pharmacists Alliance (NCLHCP (NPA), testifying from Las Vegas, stated there seems to be a paradox in that the bill was introduced as a freedom-of-choice issue, but posited that the group needs to reflect the needs of the individual. He remarked S.B. 212 seems to circumvent the needs of the individual. He compared the bill’s premise to buying a car for a lot less cost if it did not have wheels, an engine or seats, it would not do anyone a lot of good. He maintained the way the bill appears to work is you could go to your physician or the hospital and receive recommendations for treatment, but you could not have the treatment because you had no means to pay.
Denise Everett, Executive Director, SageWind, told the committee SageWind is a nonprofit treatment center in Reno for adolescents with drug, alcohol, and mental health problems. She stated many of the mandated services to be eliminated by the bill are not mandated coverage, but mandated provisions available, and not that the insurer has to cover them. She elucidated a person who is later diagnosed with an illness not covered would have a miniscule chance of getting coverage once diagnosed. She expounded she needed the coverage herself at one time, and without that insurance, she could have lost her job, gone on welfare, and used public resources. She concurred with previous testimony that a fiscal note should have accompanied the bill. She expounded not having some of the mandates would severely impact the health services and budgets of the state. She urged no passage of S.B. 212.
Kevin M. Quint, Lobbyist, Nevada Substance Abuse Prevention Council (SAPC), stated he agrees with previous testimony opposed to the bill. He said the bill is basically a take-away, and in the future, group plans will be next.
Lynn Maguire, Nevada Physical Therapy Association, testifying from Las Vegas, stated, from her experience working with children, she passionately opposes the bill.
Senator Townsend closed the hearing on S.B. 212, and noted Mr. DePaoli’s testimony would be heard another day as he is still studying the bill.
There being no further business, the meeting was adjourned at 10:57 a.m.
RESPECTFULLY SUBMITTED:
Laura Adler,
Committee Secretary
APPROVED BY:
Senator Randolph J. Townsend, Chairman
DATE: