MINUTES OF THE
SENATE Committee on Commerce and Labor
Seventy-First Session
April 10, 2001
The Senate Committee on Commerce and Laborwas called to order by Chairman Randolph J. Townsend, at 7:00 a.m., on Tuesday, April 10, 2001, in Room 2135 of the Legislative Building, Carson City, 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
Crystal M. McGee, Committee Policy Analyst
Laura Adler, Committee Secretary
OTHERS PRESENT:
Lawrence P. Matheis, Lobbyist, Nevada State Medical Association
Guy A. Perkins, Jr., Chief Insurance Examiner, Division of Insurance, Department of Business and Industry
Marie H. Soldo, Lobbyist, Sierra Health Services
James L. Wadhams, Lobbyist, Anthem Blue Cross and Blue Shield
Barbara J. Gruenewald, Lobbyist, Nevada Trial Lawyers Association
Gordon DePaoli, Attorney
Reese Perkins, Commissioner, Commission of Appraisers of Real Estate, Department of Business and Industry
Joan Buchanan, Administrator, Real Estate Division, Department of Business and Industry
Robert Barengo, Lobbyist, Nevada Consumer Finance Association, Nevada State Contractors’ Board, and Nevada State Board of Medical Examiners
Robert V. Taylor, Senior Vice President, Mortgage Services and Technology, Greater Nevada Credit Union
Marsha R. Burgess, Lobbyist, Greater Nevada Credit Union
L. Scott Walshaw, Commissioner, Division of Financial Institutions, Department of Business and Industry
Charles W. Joerg, Lobbyist, Nevada Manufactured Housing Association
Julie A. Wilcox, Lobbyist, Las Vegas Valley Water District
Helen A. Foley, Lobbyist, PacificCare/SecureHorizons
Pete G. Ernaut, Lobbyist, Concerned Physicians of Nevada
Alice A. Molasky-Arman, Commissioner, Division of Insurance, Department of Business and Industry
Fred L. Hillerby, Lobbyist, Nevada Association of Health Plans, Nevada State Board of Dental Examiners, Nevada State Board of Nursing, and Nevada State Board of Pharmacy
Jack Kim, Lobbyist, Sierra Health Services
Bill Bradley, Lobbyist, Nevada Trial Lawyers Association
Larry D. Lessley, J.D., Executive Director, Board of Medical Examiners
Kathy Apple, R.N., M.S., Lobbyist, Executive Director, Administration, Nursing Practice, Discipline and Monitoring
Janice C. Pine, Lobbyist, Saint Mary’s Health Network
K. Neena Laxalt, Lobbyist, Nevada Podiatric Medical Association
Mark Rawson, D.P.M., President, Nevada Podiatric Medical Association
Cathy A. Bax, D.P.M., Vice President, State Board of Podiatry
Michael D. Kirk, D.V.M., Vice President, Nevada State Board of Veterinary Medical Examiners
Danny L. Burress, D.C., Concerned Citizen
Debbie Machen, Executive Director, Nevada State Board of Veterinary Medical Examiners
James T. Russell, Lobbyist, Nevada State Board of Accountancy
Daniel C. Musgrove, Lobbyist, City of Las Vegas
Louis Ling, General Counsel, State Board of Pharmacy
Doug Walther, Chief, Office of Business Finance and Planning, Department of Business and Industry
Kent F. Lauer, Lobbyist, Nevada Press Association
Mary Lau, Lobbyist, Retail Association of Nevada
Samuel P. McMullen, Lobbyist, Retail Association of Nevada
Senator Townsend opened the hearing on Senate Bill (S.B.) 28.
SENATE BILL 28: Authorizes formation of associations of self-insured private employers to provide health coverage. (BDR 57-590)
Senator Amodei stated he had a proposed amendment to the bill that was worked out with the insurance commissioner’s office. He said the amendment reduces the scope of the bill to one pilot program of 51 or more individuals. This measure is designed to see who would take advantage of the program. The bill would allow the insurance commissioner to closely monitor those who do participate in the program, to gather information for future expansion. The program, he said, has also been coordinated to address the concerns with the federal counterparts.
SENATOR O’CONNELL MOVED TO AMEND AND DO PASS S.B. 28.
SENATOR AMODEI SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS SCHNEIDER AND SHAFFER WERE ABSENT FOR THE VOTE.)
*****
Senator Townsend 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)
Senator Carlton stated both parties have agreed on the amendments dealing with the certified nurse anesthetist, and everything is ready to go.
SENATOR O’CONNELL MOVED TO AMEND AND DO PASS S.B. 91.
SENATOR AMODEI SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS SCHNEIDER AND SHAFFER WERE ABSENT FOR THE VOTE.)
Senator Townsend opened the hearing on S.B. 99.
SENATE BILL 99: Makes various changes to provisions relating to prompt payment of claims to providers of health care. (BDR 57-132)
Lawrence P. Matheis, Lobbyist, Nevada State Medical Association, explained the amendment restores the language in the current statute with reference that the current fee must not exceed the reasonable costs incurred. He expounded the previous fees were removed because it was felt they were deleterious.
Guy A. Perkins, Jr., Chief Insurance Examiner, Division of Insurance, Department of Business and Industry, stated the division not only tracked costs, but conducted a survey. He said all but one company in the survey reported the cost for joining a network was relatively minimal. He added, in many cases the cost was zero, and in other cases it was only $50. He noted the one company’s fees were rather high, and the division was not pleased with the way the fees were charged.
Marie H. Soldo, Lobbyist, Sierra Health Services, stated a flat fee is charged to cover the administrative changes and cost of materials involved to publish and provide the information to the members. She stated the amendment caps the fee at a maximum $250, which is negotiable with physicians during contract signing. She claimed the fee was fair considering the service being provided.
James L. Wadhams, Lobbyist, Anthem Blue Cross and Blue Shield, stated that requiring somebody to perform service at less than an actual, reasonable cost constitutes a host of other problems.
Senator Townsend asked him to name an industry that charges its employees a fee for processing their employment application. Senator Carlton interjected, by offering the example of workcards.
Mr. Wadhams commented the fees are not to employees, but to outside vendors. He explained the statutes require insureds to be informed of the most current list of providers, which involves a timely printing and mailing process.
Senator Townsend insisted he understood about administrative costs, but he still had a hard time with a fee set so high.
Mr. Wadhams responded it would be comparable to credit facilities charging a fee to set up an account with them to process credit applications. It is an anomaly of the managed care business where there are contracts. He said in the traditional indemnity insurance business there are no contracts. He stressed the people receiving the service are not employees, they are outside vendors, and there are outside facilities that are under contract, similar to a credit facility, using an outside detailing facility or repair facility.
Senator Townsend contended he does not charge his outside vendors a fee to sign up with his organization in order to do business with him.
Mr. Matheis expounded it is a fee in addition to the discounted contract arrangement. He said it comes very close to the line that is prohibited by federal law, which is to pay for referrals. He claimed it is a policy that is not followed in most states. He elucidated they tried to be fair in previous legislation, but the situation was abused. These were not real costs, but extortionist rates for the fact the physician had to be listed on the panel. He conveyed there is no other recourse than to revisit the statutory language and suggest that a panel fee is inappropriate. Indeed, he said, over half of the health insurers and health plans charge nothing, and, he concluded, zero was reasonable.
Senator Townsend queried as to whether the language in the new section 18, was acceptable to everyone. Senator O'Connell voiced she thought everyone was in agreement with most everything. She added there was a question on the percentile on the interest.
Barbara J. Gruenewald, Lobbyist, Nevada Trial Lawyers Association (NTLA), stated there is an objection to both sections 17 and 18. She said the objection is not because of payments of bill, but because it further extends the delay, the time limit in which a decision must be made in accepting a claim. She explained it extends the delay beyond the 30 days to 18 months. She expressed opposition to allowing the extension of time to accept a claim. She added regret that a prior meeting conflict prevented her attendance on the bill discussion where she would have voiced the objection.
Ms. Gruenewald insisted section 17 wording, about approving or denying a claim for compensation within 30 days after insurer receives the claim, is to be left that way, and opposed any amendments to that section. She pointed out that adding proposed language would extend the time the insurer had to accept the claim beyond the 30-day limit.
Senator Townsend stated he wanted to conclude the discussion on panel fees before continuing discussion on workers’ compensation.
Ms. Soldo, conveyed the original intent of the tiered interest rates was not to change the days or extend the payment claims. She continued, in the deliberations, the case was made the difficulties health plans and doctors have are not all one-sided. She said there are just as many problems with physicians and the types of claims they submit to Sierra Health Services (SHS). She maintained their expectation is that health plans should be paying their claims on a timely basis when they are clean. She explained what was being asked in the proposal is extraordinarily difficult for SHS from a systems tracking methodology. She said she thinks it would also be difficult for physicians to manage their accounts receivable, as they would have to do when dealing with the three tiers of the 31st day, 61st day, and 91st day. She defined the counter proposal would establish a definition for a clean claim so everybody would have one point of view. Further, she stated, the provider must submit the claims within 30 days after the date of service, because this would answer the question of when does a clean claim count. Continuing, Ms. Soldo explained interest rates could best be dealt with by a flat rate starting from the 31st day, and going through whatever period of time the claim is left unpaid. But, she said, there should also be enough opportunity for physicians to complain to the insurance division so they could take action against the insurer, making this a fair compromise.
She expounded the proposal seeks a flat rate in the amendment by stating if a clean claim is not paid within that period, the insurer shall pay the interest on the claim at the rate of interest established pursuant to Nevada Revised Statutes (NRS) 99.040, unless a different rate of interest is established pursuant to a written contract between the insurer and the provider. But, it could not be lower than the Medicare rate. She clarified the interest floor would be the Medicare rate, and the ceiling would be the NRS interest rates. She appealed to the committee that the program would set things up for failure if everyone has to deal with three-tiered interest rates. She said there is no objection to some form of penalty, but the proposed structure is so punitive it makes it impossible to comply in any reasonable manner. She concluded right now the Medicare rate is 6.375 percent, and it changes every 6 months.
Mr. Matheis mentioned the prime rate plus two has now been in effect for 18 months. He explained the reason to impose a more punitive approach was because it appeared not to be taken serious by a number of the major insurers. It is viewed as a good floating of a loan.
Senator Townsend acknowledged the three-tiered problem because of the accounting difficulties. However, he said, he recognized the point that right now the system is not getting anyone’s attention. He communicated it is important to give everyone the opportunity to play by the rules, and if that fails, then take action.
Ms. Soldo concurred most health plans do play by the rules. She voiced she thinks the physicians are not exercising their right to seek out assistance from the insurance commissioner. She pointed out this was a two-way street in which they are getting thousands of claims on a routine basis that SHS does not cover. She claimed she was not submitting they should not be charged an interest rate when they are not paying clean claims on time. On the other hand, she contended, there is no action going in the opposite direction, making it very one-sided. She surmised if a fair, flat rate going forward could be found, then she could not see why an interim rate would make that much difference, and this would give more strength to the insurance commissioner. She remarked the goal is to find a fair way to treat both sides, and a flat rate, from a systems point of view, is critical to SHS.
Senator Townsend wanted to know whether there was any unintended activity with regard to changing the dates as addressed in the new amendment.
Crystal M. McGee, Senior Research Analyst, Workers’ Compensation, Research Division, Legislative Counsel Bureau, responded there were problems with drafting some of the language in section 17. She said, at the direction of the chairman, section 17 was deleted and new sections 18 and 19 were added in its place. She explained the intent was to match the concept provided in other sections of the bill to mesh with workers’ compensation. She stated to some extent that was difficult, because in chapter 616 of NRS, there is a claim for compensation, which includes payment for indemnity and medical benefits. So, they tried to pull out, from a claim for compensation being indemnity and medical, just the accident benefits piece of that being a bill from a health care provider for medical bills related to an injured employee’s accident. To that extent, the amendment attempts to line up with other areas of the bill that all accident benefits must be paid within a certain period of time, and are subject to the same interest rates provided for in the bill.
Senator Townsend reiterated the goal was not to change any of the workers’ benefits; it was simply to deal with how providers get paid. He surmised if the intent was not what happened, then it needs to be corrected. He clarified S.B. 99 was a prompt-pay bill, not a change in workers’ compensation bill.
Ms. Gruenewald acknowledged the clarification on section 17 of the proposed amendment, and stated there were a few things in section 18 also needing attention. She noted paragraph 3 of section 18 regarding the term, “accident benefits.” She explained the term has been defined by the appeals officers as including temporary total disability (TTD); therefore, a further definition is needed. She pointed out subsections 1 and 2 use the term, “provider health care bill.” She asserted if that wording could be used throughout section 18, then it would help define the intended concept.
Senator Townsend suggested everyone involved in S.B. 99 get together to work out an agreement on the language, and the bill would be taken up again in about an hour and a half. He cautioned if the parties could not come to a full agreement, then he would ask the author of the bill to decide.
Senator Townsend opened the hearing on S.B. 252.
SENATE BILL 252: Makes changes concerning Nevada Life and Health Insurance Guaranty Association Act. (BDR 57-683)
Gordon DePaoli, Lawyer, representing Nevada Life and Health Guaranty Association (NLHGA), stated he reviewed Amendment No. 176 to S.B. 252, and it is fine (Exhibit C).
SENATOR RHOADS MOVED TO AMEND AND DO PASS S.B. 252.
SENATOR O’CONNELL SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR AMODEI WAS ABSENT FOR THE VOTE.)
*****
Senator Townsend opened the hearing on S.B. 271.
SENATE BILL 271: Provides for issuance of special volunteer medical license to retired physician to treat indigent persons. (BDR 54-884)
Senator Carlton remarked Amendment No. 74 does all the things the subcommittee discussed. She said the word “retired,” was deleted, and that was one of the main issues. She noted the volunteer medical license is subject to all the provisions governing disciplinary actions as set forth in the chapter. She averred there are no objections.
SENATOR O’CONNELL MOVED TO AMEND AND DO PASS S.B. 271.
SENATOR SCHNEIDER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR AMODEI WAS ABSENT FOR THE VOTE.)
*****
Senator Townsend opened the hearing on S.B. 307.
SENATE BILL 307: Provides for employment of special investigator to assist commission of appraisers of real estate and for increase in certain fees of real estate division of department of business and industry. (BDR 54‑1062)
Reese Perkins, Commissioner, Commission of Appraisers of Real Estate (CARE), Department of Business and Industry, stated he has additional information in support of the bill. He referred to a letter from the appraisal subcommittee stating the bill would assist the commission in meeting its obligations under “Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989” (Exhibit D). He also referenced a memorandum from the Office of the Attorney General, which said the bill also meets the requirements of the “Appraisal Subcommittee (ASC) of the Federal Financial Institutions Examination Council” (Exhibit E).
Senator Townsend said the case had been made, but the question still remains about the funding of a new position at $120,000. He asked for an explanation of how the money was broken out.
Mr. R. Perkins answered the division currently has an appraisal officer who conducts investigations, is responsible for education, and oversees licensing applications. There is also a part-time assistant who would become full-time upon the effective date of the bill. He expounded the funding was also for an additional appraiser who would, most likely, be a grade 37, which is a salary of about $50,000 including benefits. He added the funding would also cover operating costs of approximately $82,150. He clarified both appraisal institute chapters in Las Vegas and Reno are in support of the bill, and realized there would be an increase in licensing fees to cover the additional costs.
Senator O'Connell inquired whether the bill could be amended to increase the needed funding, and dedicate the funds to this particular purpose, so they would not have to go to the General Fund. She wanted to know how much more would the license fee be to have a dedicated fund.
Joan Buchanan, Administrator, Real Estate Division, Department of Business and Industry, responded the current fees are $250 for residential, and general certified is $350, of which $50 from each fee goes to the federal government. She estimated that of approximately 800 appraisers, the additional fee increase would be around $125 each. She added, just to fund the appraiser, the increase could be kept around $100.
Senator O'Connell queried whether the price of an appraisal could be increased for additional revenue to cover costs. Ms. Buchanan replied that was a marketplace issue over which the commission had no say. Senator O'Connell explained she wanted to known what effect the increased license fee would have on the market. Mr. R. Perkins interjected, most likely, the appraisers would add the increase to their fee to the consumer.
Senator Townsend asked how many average appraisals per appraiser are done a year. Mr. R. Perkins responded a residential appraiser might do 500 to 600 appraisals a year at an average cost of $300 to $350 each. He explained commercial appraisers may do only 10 or 12 appraisals a year, but their fees are substantially higher.
Senator Townsend inquired whether there would be a quantity of e-mail if a fee increase were built into the bill, because the committee did not want to send the bill for General Fund consideration. He offered the opportunity for the representatives to return to the industry for general consensus of a license fee increase, then have an amendment drafted to that effect, and hear the bill next week. He also emphasized to setting a cap on fees. Ms. Buchanan remarked the fixed-rate fees are set by NRS 645C.450.
Senator Townsend again suggested adding a fee to mitigate expenses and a cap based on the new fee, and subsequently holding a preliminary hearing with representatives of the industry on the fee and the cap. Then, adjusting those amounts as needed, keeping in mind the needs and expenses the fee increase would cover.
Ms. Buchanan commented there were also other categories, such as interns, and they would look at all categories when considering the fee increase amounts.
Senator Townsend closed the hearing on S.B. 307, and opened the hearing on S.B. 330.
SENATE BILL 330: Makes various changes relating to financial businesses. (BDR 54-748)
Senator Townsend articulated two amendments were proposed for the bill, which were combined into one amendment.
Senator Shaffer pointed out the bill was to benefit the Household Finance Corporation, the requester of the bill. They stated they did not want the credit union amendment included in their bill, because of the possible effect it could have on its passage through the process.
Robert Barengo, Lobbyist, Nevada Consumer Finance Association, stated he had talked with the representative for the bill requester, who was very concerned about the potential baggage the credit union amendment would add to the bill. He insisted he did not know where the lending institutions were on the amendment. He expounded this amendment was a major change that deviated substantially from chapter 645 of NRS and chapter 675 of NRS, which is what the bill is limited to.
Robert V. Taylor, Senior Vice President, Mortgage Services and Technology, Greater Nevada Credit Union, stated they introduced the amendment because of processes the credit union had to go through in getting the buy-in from the state credit unions. He said they had to go through the Governor-appointed committee for the Credit Union Advisory Council. He continued, during the meeting last week, the advisory council approved clarifying NRS 678.460, concerning the additional powers and privileges of state-chartered credit unions. He explained the amendment would codify existing procedures and practices by the existing commissioner.
Senator O'Connell inquired why they waited so long, and why the credit unions did not have their own bill. Mr. Taylor responded it was not by choice. He explained they had to go through the Credit Union Advisory Council, which had a waiting period, because it had to be publicly noticed and acted upon. He noted, without acting now, it would be 2 more years before they could do anything again. He pointed out the amendment does not grant any additional powers or privileges the state-chartered credit unions do not currently enjoy. What the amendment does do is codify the existing practices and procedures.
Senator Townsend asked whether anyone knew of an Assembly bill the amendment might fit into better. Marsha R. Burgess, Lobbyist, Greater Nevada Credit Union, stated they were not aware of any bill from the Assembly that would accommodate the amendment. Responding to Senator Townsend, Ms. Burgess replied she would make further inquiries about a more compatible bill for the amendment.
Senator Townsend commented the content of a bill is left entirely up to the sponsor of a bill. He inquired whether there was a really good reason the credit union was so late.
Ms. Burgess responded a meeting was scheduled for February, but had to be cancelled for lack of a meeting place.
Senator Townsend inquired of Senator Shaffer how he would prefer to handle the bill, with or without an amendment. He continued noting the first amendment expands the existing language to cover subsidiaries and affiliates, and the second amendment authorizes the commissioner to charge an audit fee for check cashing and deferred deposit entities, which are regulated pursuant to chapter 604 of NRS.
L. Scott Walshaw, Commissioner, Division of Financial Institutions, Department of Business and Industry, stated he had previously discussed the first amendment with the industries affected, and they agreed to make the changes. He explained the bill drafter’s language was different from what was originally intended, and the amendment would change the language to the original intent with chapter 604 of NRS. He said the legislation would, specifically, enable his office to levy an hourly examination charge for the purpose of doing proactive examinations of check-cashing firms.
SENATOR SHAFFER MOVED TO AMEND AND DO PASS S.B. 330 WITH AMENDMENT NO. 120.
SENATOR O’CONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator Townsend opened the hearing on S.B. 345.
SENATE BILL 345: Revises provisions relating to provision of water service in certain mobile home parks. (BDR 40-957)
Charles W. Joerg, Lobbyist, Nevada Manufactured Housing Association, outlined the purpose of the bill was to amend an earlier statute for purposes of conservation to which the industry agreed. He claimed, immediately upon the effective date of the earlier bill, the Las Vegas Valley Water District used that statute as an excuse to raise the rates. For example, he said the water fees for a mobile home park developed before the legislation went in to effect were $98,000. He elucidated, immediately after the legislation was enacted, the water fees were raised to $2.45 million, although nothing had changed at the mobile home park. He conveyed the fees were subsequently reduced a year later to $1.6 million. He posited if the same size development were an apartment unit, the fees would only be approximately $375,000 in today’s market. He emphasized the bill is to bring fees into alignment with reality. He insisted if the disparity in fees continues, then the mobile home park type of housing would cease. He contended, it is issues like this one, fostered primarily by local governments, that prevent the development of new parks, and, therefore, causes the other parks to raise rents because of a lack of competition. He expressed to the water district, for the purpose of rental communities, that the fees should be roughly equivalent to a similar-sized apartment unit.
Julie A. Wilcox, Lobbyist, Las Vegas Valley Water District (LVVWD), pointed out the original legislation was drafted by working with the individual mobile home owners, not the park developers. She articulated, back in the era of the more water used the less was paid; there was a law that said mobile homes had to be master-metered. She expounded, as growth increased, serious water resource planning became necessary, out of which came the tiered water rates. She explained tiered water rates meant those using the most water paid the higher rates, and a master meter, obviously, would register a lot of water passing through. She said individually-metered mobile home parks would most likely qualify for the life-line rate of the LVVWD and with other purveyors of a subsistence amount of around 5000 gallons a month at the lowest rate of about 98 cents. She stated individual meters usually produce a substantial decrease in water usage, because the user is more aware. Commenting further, Ms. Wilcox said there was a lot of discussion with mobile home owners associations who stated they wanted to be treated like owners of stick houses so they could individually control the use of their water for the purpose of equity.
Ms. Wilcox stated, at the time, the water district went through a long process that included citizen committees looking at the equity of how the water district does connection charges, and how they make growth pay for growth, which is part of the equation. She acknowledged, at the time, Mr. Joerg was correct, apartments were paying less; however, that has been changed and it appears on the LVVWD Website. She maintained they have initiated a 5-year phase-in to bring apartments into equity with everybody else. She explained, just like the connection charges, a phase-in period was worked out so as not to stun the community with rate shock. She opined she had a lot of empathy for the need of affordable housing, but begged the question of who would pay the difference. She questioned where the best place was to make up the difference incurred by affordable housing rates, noting it had to be paid somewhere. She emphasized the board of directors strived for equity, as much as possible, while looking at conservation. She communicated, several years ago the water district agreed to convert three mobile home parks to individual meters as a test to see if people were conserving, and to see if there was a significant reduction in water usage. She qualified the study is still ongoing to establish the basis for the financial reason to convert the parks. She added the mobile home owners would not be charged because they already paid through the charge for the master meter.
Mr. Joerg stated he agrees with most of what Ms. Wilcox said regarding conservation, but the bill does not change that aspect of water usage or eliminate individual meters, or change the monthly payment method for water service. He emphasized the only thing the bill is intended to do is address the issue of hookup fees.
Senator Townsend pointed out, as chairman of government affairs, Senator O'Connell has dealt with these local issues. He said, as the maker of the bill, Senator O'Connell has incorporated many of those issues into the bill. Qualifying his statement, Senator Townsend stated the committee has debated for 20 years the issue of conservation on the electric side. He noted there are several bills addressing what is known as “demand-side management (DSM).” He commented it has always been a question of how the cost of conservation methods provided to residents gets paid. He surmised, given the extreme demand in the West, there would eventually be a Western policy everyone agrees to, because the demand-side management issues have to be improved. Therefore, he said, he would encourage those present to be consistent, because a meter in a mobile home park is just that. It is a means of DSM, and now a function of who will pay for it. He proposed it would be consistent to find a way that meters, based on the earlier legislation, be funded through the savings realized, and not make growth pay for growth. Concluding his remarks, Senator Townsend averred one thing the committee could not be faulted on was inconsistency. He stated if it was good for one, it was applied to all.
Senator O'Connell asked for clarification of language in the bill where it says, may charge a fee of a master meter to the water service of a mobile home park. But, in another place it says, it shall not charge a fee for the connection of the individual meter to the water service of a mobile home park. She queried if a fee was already charged for a master meter, why is it necessary to charge a connection fee.
Ms. Wilcox explained there is a current provision that requires all new mobile home parks to be individually metered, meaning there will be two types of meters in any given mobile home park. She said the parks that have been converted now have two types of meters. She conveyed the master meter goes only to common areas, and the bill goes to the park owner. She stated the individual meter goes to each individual resident. She explained that would be the same for condominiums where each individual residence would pay a hookup charge to bring the water in. She said the master meter is just for the common areas.
Senator O'Connell commented the way she reads the language in the bill, it looks like the water district is double dipping. The water district is charging twice for the same connections as far as the lines go.
Senator Townsend elucidated in a new park there would be payment for the transmission system and payment for the distribution system. He explained the transmission system is the main meter, and the distribution system is the individual meter for each residence in the park, but the lines are already paid for. He wanted to know what the little “pig-like” meter cost.
Ms. Wilcox responded the meter itself costs about $100. She clarified it was not the meter, but the facilities and labor to bring the lines to the meter. She explained the lines to the master meter are not the same lines that bring water to the individual meters. She elucidated the whole process of bringing the water from its source to the park and the individuals is what is prorated to be the fair share of installation and service.
Mr. Joerg commented the way it works is the developer pays for everything, including the meter, which is approximately $145, and then there is the cost of labor and installation. He iterated the developer has to pay for the cost of taking the water from Lake Mead, or wherever it comes from, and get it to the property line. He said after that process, the water district does not pay for anything; the developer pays. He contended it was never intended, nor does the bill propose, that the individual meter service cannot be charged. He explained all the bill is about is the initial upfront fee that was charged on a master meter basis has suddenly increased a hundredfold. He stressed, perhaps, everyone was losing sight of the purpose of the bill.
Senator O'Connell stated for her to not oppose the bill she would have to see exactly where that charge is equated to. She claimed she could not see where the extra charge was coming in. She asked for specifics to support the premise of the other charge.
Senator Townsend inquired about how many units would it take to build a mobile home park in today’s economy and make them feasible.
Mr. Joerg replied it would be difficult to answer because of the many factors involved. However, there was one built recently with 200 units that was feasible only because of the low cost of land. He surmised most of the parks would have to have about 400 units to make it economically feasible.
Senator Townsend assured everyone the committee is very familiar with DSM thinking. He said no one disagrees on what they want to do; the problem is how it is allocated in terms of cost. He expounded, with the increase in all utilities, it is even more imperative to be consistent in their actions.
Senator Townsend closed the hearing on S.B. 345, and reopened the hearing on S.B. 99.
Mr. Matheis stated everyone agreed on a compromise to the three tiers of penalties and that a single penalty is okay. He remarked they did not come to an agreement on what that single penalty should be. He elucidated that several of the parties indicated a preference for prime plus 4 percent, plus the commissioner’s ability to assess fines. He explained the current statute fixes the rate at prime plus 2 percent.
Helen A. Foley, Lobbyist, PacificCare/SecureHorizons, responded Mr. Wadhams had said the current rate is 9.5 percent prime plus 4 percent. She added she favors prime plus 4 percent, because there is that punitive element to encourage prompter payment. She requested that actual numbers not be used, because of past problems.
Pete G. Ernaut, Lobbyist, Concerned Physicians of Nevada, testified the majority of the parties agreed: no panel fees, a flat interest rate of prime plus 4 percent, the time-frame language in the original bill, and the $10,000 fine at the discretion of the commissioner stay in force.
Mr. Matheis commented the only thing everyone is not sure about is the plus 4 percent, whether that will prove to be enough. If not, they would have to come back in 2 years.
Senator Townsend counseled that the plus percent is fixed, so they need to consider that figure carefully; whereas, the prime rate goes up and down.
Senator O'Connell suggested the committee would consider a plus 6 percent. Mr. Matheis responded they could agree to that amount.
Ms. Gruenewald stated they want the time frames presently in statute. She said to accomplish that “section 18, subsection 3, subparagraph (3)” in the proposed amendment should be deleted.
Senator Townsend cautioned when changes are made in one area of a bill, then that action must be checked against other parts of the bill to make sure nothing else is affected. He queried how to best handle the change so benefits for workers are not affected.
Ms. McGee responded with subsection 3 of section 18 of Amendment No. 19 deleted, section 18 dealt with approved bills for accident benefits, only. So, to the extent claims for compensation and bills for accident benefits are approved, the bills would have to be paid within 30 days of receipt of the bill for accident benefits. She clarified under current state law, chapter 616C of NRS, an insurer must pay or deny a bill for accident benefits within 60 days of receipt. Therefore, by deleting subsection 3, the time frame for an approved claim is being shortened.
Senator Townsend expounded, as he remembers, for medical benefits only, bills had to be paid in 30 days, which was the goal of the prompt pay. He said this bill is medical, and it has nothing to do with anything else. He maintained no one wants to create a problem for any of the other potential benefits or allow a loophole to delay any of those benefits, particularly TTD benefits. He noted section 18 has been removed in its entirety, and that means there will be rewording, relative to what happens if no payment is made. He asked if everyone thinks they can accomplish the medical payment portion of the bill, and not affect the benefits portion of the bill. He counseled those in attendance to consider answers to such questions as, Is transitory language needed? Do chapter 616 of NRS and chapter 617 of NRS need something specific that differentiates the two medical payments to a provider, independent of rulings on TTD and other benefits?
Ms. McGee stated the amendment is clear now with respect to the fact that it is a bill for accident benefits. Referring to Ms. Gruenewald’s earlier testimony, Ms. McGee noted it was indicated in subsection 3, line 2, with respect to the payment of a bill for accident benefits from a health care provider, a clarification was needed. She conveyed changes could easily be made, however, going to the extent of deciding to delete subsection 3 would not be necessary. She averred it could be clearly stated in the amendment that timely payment is intended to deal with bills for accident benefits from health care providers.
There was general discussion between the committee and testifiers regarding a clear understanding of how the 30 days to accept or deny after receipt of a clean claim would work. It was understood and agreed to by all, when additional information is requested by the insurer of the health care provider to clarify the claim, the 30 days begins upon receipt of the requested information. Further, it was understood the health care provider has an obligation to respond to requests in a timely manner in order to promote prompt payment by the insurer within 30 days of receipt of the requested information, in order to ensure the patient receives the needed services in a timely manner.
Ms. Foley stressed one of the most important issues is the insurance commissioner can review all health plans, and every one of them has to comply 95 percent of the time in fulfilling their obligations in paying those bills within 30 days. If the insurer does not do that, the commissioner can fine the insurer $10,000. She stated these fines are very strict, very punitive; so, all the insurers will pledge to get those claims paid.
Senator Townsend inquired of the commissioner how many times she has used the ability to fine an insurer $10,000.
Alice A. Molasky-Arman, Commissioner, Division of Insurance, Department of Business and Industry, responded she did not have any figures with her on the number of times insurers have been fined. However, presently, the unfair trade practices act is used, which calls for up to $5000 per act, or per violation. She emphasized she did not want a cap, because the number of times a violation occurs is considered, and they do not have a maximum that they are subject to fining. She stated in one instance the fine was $125,000 to the insurer. She added that fine got its attention and caused the insurer to change its behavior regarding prompt payments.
Mr. Matheis pointed out the reason for two types of penalties is because they are looking at two levels of behavior. He noted the insurance commissioner’s punishment should have a very salutary effect, and it has in the past. But that does not necessarily make whole the physician who is owed the money. That is the reason for a sufficient interest penalty, to encourage the proper behavior in the first place.
Senator Townsend stated language would be prepared, and the interested parties would review it carefully, so there is no misunderstanding about the intent to get everything aligned appropriately.
Senator Carlton asked if a definition of what constitutes a clean claim has been resolved.
Mr. Matheis answered there is a working definition. He said the agreement is the insurance commissioner’s task force will develop that by regulation, and adopt it so it can be flexible over time, because it is subject to change and is more appropriate for regulation than for statute.
Ms. Soldo mentioned there was one other issue to be addressed, that of the effective date of the bill. She explained some time would be needed to change the systems to meet the requirements in the bill, and asked that the bill become affective in October 2001.
Senator Townsend suggested the phrasing of the motion for the benefit of all concerned on S.B. 99: There would be a prohibition against panel fees; the penalty for not paying a clean claim in the appropriate time would be prime plus 6 percent; the time frame would remain the same, and include the consideration of workers’ compensation not being affected whatsoever in its current time frame or shorter, the cap would be removed on the insurance commissioner’s ability to assess fines, and the bill would become affective October 1, 2001.
SENATOR O’CONNELL MOVED TO AMEND AND DO PASS S.B. 99.
SENATOR SCHNEIDER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR RHOADS WAS ABSENT FOR THE VOTE.)
*****
Scott Young, Committee Policy Analyst, asked for clarification. He stated the original bill had three time periods, the tiered positions for the interest rates. He said he is assuming that when the prime plus 6 percent was added, that begins to accrue after the thirty-first day, and the other two tiers disappear from the bill. Referencing section 17, subsection 6, which relates to the commissioner’s ability to fine, he queried if that section was going away, and the commissioner would be allowed to fine as she normally would under her existing authority.
Senator Townsend responded in the affirmative to Mr. Young’s inquiry.
Mr. Matheis responded he thinks the decision was to remove the cap, but to make it an explicit issue for the commissioner’s review and action.
Senator Townsend opened the hearing on S.B. 320.
SENATE BILL 320: Requires managed care organizations to establish system for independent review of final adverse determinations concerning allocations of health care resources and services. (BDR 57-676)
Fred L. Hillerby, Lobbyist, Nevada Association of Health Plans, stated, originally, the bill had allowed access to an external review organization only for medical necessity denial. In section 20 of the proposed amendment, experimental or investigational has been added in agreement with other parties interested in this legislation. Referring to section 24 of the proposed amendment, he said the methodology in determining medical necessity has been modified to generally accepted standards of medical practice. He noted “clinical” was added to verify, in fact, that they are looking at clinical evidence as much as possible. He explained to address concerns about verification of independent review organizations, guidelines have been built into the bill for the commissioner’s use by which to grant certificates to do external reviews in Nevada. In support of that, section 25 of the proposed amendment requires insurers to file the standards they will accept to be used by the independent reviewers. For example, one standard that is required is a signed statement that there is no conflict of interest on the part of any of the parties. He reported section 26 of the proposed amendment lowers the minimum claim from $1000 to $500, and drops filing fees. The bill also sets a maximum of 15 days for the external review organization to make a final decision. He concluded the bill’s effective date has been changed to July 1, 2002, to allow the insurance commissioner to put things in place to administer the program.
Jack Kim, Lobbyist, Sierra Health Services, responded with a thank you to Senators Townsend and O’Connell’s compliment on the work he did on the bill.
Bill Bradley, Lobbyist, Nevada Trial Lawyers Association, reiterated the medical association’s preference in section 30 of the proposed amendment on the binding effect of the decision, only if it is in favor of the insured. He conveyed if it is in favor of the insurer, there should still be the right to proceed to a jury trial, as relates to the bill.
Mr. Hillerby contended it was never intended to be binding on the patient, and it needs to be made clear.
Mr. Bradley agreed the language could be clearer. Senator O'Connell inquired about suggested language. Mr. Bradley requested a few minutes to prepare clearer language for the bill.
Senator Townsend voiced he was ready for a motion to include the amendments (Exhibit F), and the clearer language on the policy for section 20.
SENATOR O’CONNELL MOVED TO AMEND AND DO PASS S.B. 320.
SENATOR AMODEI SECONDED THE MOTION.
Mr. Bradley stated the language he would propose is, “If the decision of an external review organization on a request for external review is in favor of the insured, the decision is final, conclusive, and binding on the managed care organization.”
Mr. Hillerby stated the intention of the bill is to give this protection of external review to people insured under a host of arrangements, and this particular section talks only about managed care. It might be better to say “insurer,” instead of “managed care organization.”
Senator Townsend clarified that was what he understood Mr. Bradley had said.
THE MOTION CARRIED. (SENATOR SCHNEIDER WAS ABSENT FOR THE VOTE.)
*****
Senator Townsend opened the hearing on S.B. 378.
SENATE BILL 378: Revises provisions relating to dentistry and dental hygiene. (BDR 54-1230)
Fred L. Hillerby, Lobbyist, Nevada State Board of Dental Examiners, referencing Amendment No. 215 to the bill, pointed out in section 1, line 2, that “member of the public,” was added for clarity regarding who could obtain information about the board’s actions. He said in section 2, lines 15 and 16 have been deleted; again, for clarity. He claimed there have been questions about section 3, and it was the board’s intention, in discussions with a dentist over a complaint, to enter into stipulations so as not to have to go all the way to a hearing. He explained the board is finding in many cases insurance companies’ attorneys are nervous about the stipulation, because it might come up later in a malpractice case. He averred the board has tried to make a distinction between poor workmanship and malpractice. He maintained there is nothing in the bill that prohibits a patient from going to civil court. He said the point is, the board entering into a stipulation is not admissible, because that is a different standard to prove.
Senator Townsend stated they want to be consistent about provisions with all boards, and inquired of other boards’ representatives whether they had that provision.
Larry D. Lessley, J.D., Executive Director, Board of Medical Examiners, stated they do not have that provision in the law.
Responding to Senator O'Connell, Mr. Young explained the concept is a little like allowing a defendant in a drunk driving charge, to plead no contest. It allows the defendant to enter a guilty plea, but does not automatically establish the defendant’s civil liability in a subsequent suit brought by an accident victim. He surmised that is what the language is trying to accomplish.
Senator Townsend reiterated he is concerned with consistency throughout all the boards. So, if approved for one, it must be considered for all. That is what the committee would have to agree on.
Mr. Hillerby remarked he had not talked with Mr. Bradley regarding the proposed amendment, but assumed he would be on top of things, as usual.
Senator Townsend called for a break, and encouraged the various parties to consider the issue after the break. The committee recessed at 9:35 a.m.
Senator Townsend reconvened the hearing on S.B. 378 at 9:57 a.m.
Mr. Hillerby testified the other boards present like the new language; however, the NTLA thinks a judge should be given this information to determine whether it is admissible, and, therefore, opposed the language.
Senator Townsend proposed the bill be passed without the language, and take up the language regarding admissible evidence as proposed in Amendment No. 215 next week.
Mr. Hillerby agreed to include the other sections of the amendment in the bill, and take up the other language of encouraging early settlements through stipulations at a later time.
SENATOR O’CONNELL MOVED TO AMEND AND DO PASS S.B. 378 WITHOUT THE AMENDING LANGUAGE IN SECTION 3.
SENATOR CARLTON SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR AMODEI WAS ABSENT FOR THE VOTE.)
*****
Senator Townsend opened the hearing on S.B. 394.
SENATE BILL 394: Revises provisions relating to practice of nursing. (BDR 54‑1136)
Fred L. Hillerby, Lobbyist, Nevada State Board of Nursing, stated, attached to the amendment is a letter from the executive director for the board stating their compliance with the bill (Exhibit G). He recited the basics of the bill were nurses and employers shall cooperate with the board by providing full names and other identification when responding to a complaint. Further, he requested that NRS 632.125 be amended to keep staffing lists confidential; otherwise, it becomes a gap in the law that defeats the purpose of the bill.
Kathy Apple, R.N., M.S., Lobbyist, Executive Director, Administration, Nursing Practice, Discipline and Monitoring, State Board of Nursing, stated the board is in complete agreement with the bill and the proposed amendment.
Janice C. Pine, Lobbyist, Saint Mary’s Health Network, stated they concur with the language, and others are also in agreement.
SENATOR O’CONNELL MOVED TO AMEND AND DO PASS S.B. 394.
SENATOR SCHNEIDER SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator Townsend opened the hearing on S.B. 405.
SENATE BILL 405: Makes various changes relating to practice of podiatry. (BDR 54-38)
Senator Carlton explained Senator Rawson’s amendment (Exhibit H) is to “true up” language in the bill regarding the definition of physician. He stated the amendment from the Nevada State Medical Association (Exhibit I) is new, and should be opened for discussion.
K. Neena Laxalt, Lobbyist, Nevada Podiatric Medical Association, introduced testifiers Dr. Mark Rawson in Las Vegas, and Dr. Cathy Bax in Carson City to answer the committee’s questions.
Mr. Matheis stated the amendments were the two proposals in which surgery-amputation should meet the same scope of practice as a physician who would be performing that service, and should affect the definition of medical malpractice in chapter 41A of NRS. He noted the other amendment addresses hospitals adding podiatric physicians to their medical staff, which the hospitals stated would cause a problem.
Ms. Laxalt stated she had not seen the proposed amendments.
Mark Rawson, D.P.M., President, Nevada Podiatric Medical Association (NPMA), stated he has not seen the proposed amendments, but from the testimony, he would oppose the amendments for several reasons. He explained the NPMA had their own statutes that cover the same basic standards for physicians, and considered it redundant. He pointed out in NRS 450.006, it states that podiatrists are allied health professionals, and in NRS 635.087, it states they are physicians and surgeons. He noted an allied health professional is not a physician, therefore, the reason for Senator Rawson’s amendment.
Senator Carlton commented that NRS 630.014 is physician defined and limited. It refers to subsection 2 that further defines types of physicians, including podiatric physician, as used in chapters 630, 630A, 633 of NRS. She thinks the confusion is the podiatric physician is also listed in the allied health professional section. She contended it was an oversight in truing up the different statutes. She opined addressing the allied section of statute would resolve the current problem.
Senator O'Connell clarified adopting Senator Rawson’s amendment would clear up the discrepancy in statute.
Mr. Matheis asserted the real issue is what standard of care should be applied in case of negligence. He said they are proposing the standard of care should be the same as surgical physicians are currently held to.
Senator Carlton noted the standard of care is already defined in NRS 630.014.
Mr. Matheis countered the first sentence only defines physician, and the second sentence allows for the two-word designation. He insisted it is in the licensing chapter that they are allowed the terms chiropractic physician, podiatric physician, homeopathic physicians, and so on, for what they are allowed to do within the scope of practice of that chapter. He explained the NSMA is addressing the standard of care that is not, specifically, a licensing issue; it is an issue that arises when there might be liability or negligence.
Cathy A. Bax, D.P.M., Vice President, State Board of Podiatry, stated the standard of care guidelines are already in place. She said when podiatric physicians apply for privileges at hospitals, and receive them, every physician goes through a process of being accepted as a surgeon. They are also proctored by orthopedists, internists, and general surgeons. She averred everyone shares in the proctoring process to evaluate the performance of surgeons, and already have guidelines regarding the issue of malpractice.
Mr. Matheis asserted he did not agree; that is why there are the other statutory provisions. He emphasized the expansion of the various professions is exceeding the accountability the court system tends to put in, and does not travel with the growth and scope of the medical practice. He explained a problem case referred to another physician could then be associated and followed by the second physician when that person was not initially present.
Senator Townsend reviewed the testimony for clarification. He said, assuming the podiatrists meet the qualifications as physicians to perform amputations, then the one objection is podiatrists do not have to live up to the standard that would have to be met by surgeons in a similar situation.
Mr. Matheis responded that unless it is specifically stated they must meet that standard of care, then it is arguable they do not have to meet that standard of care. He expounded whatever a licensing board says is the standard of care, that becomes the standard of care. He emphasized the standard of care should actually be the same for anyone who is performing the same types of procedures.
Dr. Rawson stated all physicians and surgeons live under the same standard of care as any other medical doctor who would perform the same surgery. He stated, although he has not read everything in the amendment, he thinks the amendment confuses the issue, because you have to be licensed and credentialed in order to perform surgery. He reiterated the malpractice procedures in the amendment are already in place, and the amendment is not necessary.
Mr. Matheis stated the point is covering this significant expansion, so if the standards already in the community are not met or alleged to be not met, it is covered. It is about allowing someone to do something that previously only a licensed physician could do, and assuring they meet the same standard of care.
Dr. Bax pointed out, through hospital privileges, the podiatric physician meets exactly the same standard of care, and exactly the same guidelines. She surmised the amendment would just add to the confusion.
Senator Carlton stated she was uncomfortable with the amendment at this time. She said she still supports Senator Rawson’s proposal, but would like more information from Mr. Matheis, and would like to have him bring that information back to the committee.
Senator Townsend closed the hearing on S.B. 405, and opened the hearing on S.B. 420.
SENATE BILL 420: Requires occupational licensing boards to submit quarterly summaries of disciplinary actions and biennial reports of activities to director of legislative counsel bureau. (BDR 54-451)
Senator Carlton announced, once the bill was explained to all the parties, it gained statewide bipartisan support, and Amendment No. 196 only changes filing dates to make it easier, and changes from the calendar year to the fiscal year for consistency.
SENATOR O’CONNELL MOVED TO AMEND AND DO PASS S.B. 420.
SENATOR CARLTON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator Townsend opened the hearing on S.B. 510.
SENATE BILL 510: Authorizes certain chiropractors to engage in practice of animal chiropractic. (BDR 54-1209)
Michael D. Kirk, D.V.M., Vice President, Nevada State Board of Veterinary Medical Examiners (SBVME), stated the parties followed Senator Townsend’s recommendation to compromise on the regulations. He stated on April 3, 2001, he met with Dr. Danny Burress and Dr. Bill Bailey, and they worked out some proposed changes that were outlined for the board meeting on May 31, 2001. He explained at that meeting Dr. Burress would have the opportunity to address the board regarding solutions to the regulations. He maintained the board is still opposed to S.B. 510, in maintaining its mandate to protect the public, which is the board’s primary concern.
Danny L. Burress, D.C., Concerned Citizen, testified that as a result of the meeting, the proposals by Dr. Kirk were acceptable. He outlined the proposals that would be registered with the veterinary board, and would fall under their direction. He said there would also be specific wording included in chiropractic regulations which would ensure any action taken against him by the veterinary board would also roll over to the chiropractic board, so that his license would be in jeopardy, the same as it would for a veterinarian. Further, he would have to meet continuing education requirements, and would have to notify the veterinarian of record within 48 hours of treating an animal. He conveyed that in exchange, the board would drop the mandatory referral and mandatory presence of a veterinarian. He claimed he agreed with those conditions; however, he was apprehensive there could be no assurance those regulations would be adopted, since Dr. Kirk could not speak for the entire board. He pointed out since the board meeting is not until May 31, 2001, and if the proposed regulations are not adopted, then he could be left in the lurch for another 2 years. Dr. Burress explained he hesitated to make the recommendation that these regulations be adopted as part of S.B. 510, because the veterinary board does have legitimate concern regarding establishing a precedent that would preclude them from stemming an invasion by a multitude of disciplines. He concluded he was not sure of what recommendation to make under the circumstances, because, otherwise, he had no assurance the board would adopt the regulations.
Responding to Senator Townsend’s question about moving up the date of the board meeting, Debbie Machen, Executive Director, Nevada State Board of Veterinary Medical Examiners, stated there was a possibility of a telephone meeting to consider the proposed regulations.
Senator Townsend encouraged the telephone meeting on just the proposed regulations to allow time should there be a lot of discussion on some of the details.
Senator O'Connell stated she recalled a comment, in earlier testimony, that some states had a crossover-license arrangement. Dr. Burress articulated Oklahoma passed a bill that provided for the issue of chiropractors rendering care to animals, which was covered by inter-cooperation between the two boards. He clarified the chiropractic and veterinary boards worked out the details on how to handle licensing and discipline.
Senator O'Connell asked Dr. Kirk if Dr. Burress was being asked to comply with the same standards and regulations currently required of veterinarians, and if he would be putting his license on the line as well. Dr. Kirk affirmed that was correct. He explained if Dr. Burress wants to work in the veterinarian’s capacity, he should follow the same regulations that veterinarians have to follow.
Senator O'Connell surmised language could be developed that would allow Dr. Burress to continue his practice, especially since he is in agreement to comply with the same standards and criteria required of veterinarians. She asked if there were other chiropractors interested in practicing on animals.
Dr. Burress replied, currently, he is the only one with direct interest, but two others have made inquiries pending the outcome. Senator O'Connell opined she did not understand the objections, considering Dr. Burress would have to meet the same regulations.
Senator Townsend said the question is, Does the board have the statutory authority to draft that type of regulation?
Ms. Machen acknowledged the veterinary board does have the authority to draft regulations to allow other professionals, who are licensed with other boards, to work in the veterinary field. She added there is current regulation to allow Dr. Burress to practice under the supervision of a veterinarian.
Senator Shaffer stated he would like Ms. Machen to poll the board and bring the results back to the committee. Ms. Machen remarked she did not think it would be in violation, but she would have to check to be sure.
Senator O'Connell commented there is a representative from the attorney general’s office in the audience who is indicating that such a poll would be in violation of the open meeting law.
Senator Townsend encouraged the noticing for a telephone meeting of the veterinary board just for these proposed regulations. He added, if needed, they would try to find an Assembly bill on which to attach the amendments.
Mr. Young stated he did not know of any related Assembly bills at the moment, but suggested it would be best to include the amendment in a bill related to veterinary.
Dr. Kirk surmised the board would prefer to work through issues from a regulation point of view. He expounded that way it would give the board more freedom to work future considerations as this moves along. He explained animal chiropractic is all new territory, and the board has no idea what the future of this practice will be. He said he thinks it would be easier for the board to make the necessary adjustments through regulations, rather than through statute, because the board could be more responsive to change.
Ms. Machen conveyed she has already drafted the proposed changes to regulations and could have a meeting notice out in time for a May 14, 2001, board meeting, and could report back to the committee right after that meeting.
Senator Townsend thanked both the chiropractic and veterinary boards for their cooperation in working together for a resolution. He closed the hearing on S.B. 510, and opened the hearing on S.B. 512.
SENATE BILL 512: Revises provisions relating to accountants. (BDR 54-1208)
James T. Russell, Lobbyist, Nevada State Board of Accountancy, explained the bill was a housekeeping bill, but came out of the Legislative Counsel Bureau with a few differences that were not correct, and they have since made those corrections. He requested the bill be passed with Amendment No. 145.
SENATOR O’CONNELL MOVED TO AMEND AND DO PASS S.B. 512 WITH AMENDMENT NO. 145.
SENATOR SCHNEIDER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR AMODEI WAS ABSENT FOR THE VOTE.)
*****
Senator Townsend opened the hearing on S.B. 416.
SENATE BILL 416: Exempts certain persons and governmental entities from provisions governing licensure of private investigators. (BDR 54-933)
Daniel C. Musgrove, Lobbyist, City of Las Vegas, stated he had asked for a friendly amendment to allow the city to come under the provisions of this bill, and he has it now. He articulated, anywhere the words “customer” or “business” appeared, it adds “constituent and/or governmental entity.”
Responding to Senator Townsend’s inquiry as to where the idea for the bill originated, Mr. Musgrove explained a member of the city manager’s staff had seen it at a “best practices in business” seminar, where the University of Georgia presented their results on local shopping of governments. He said that Las Vegas wanted to be a part of the expansion of shopping governments. He stated the city council was positive on the program, but no one could do anything because of existing statutes.
SENATOR O’CONNELL MOVED TO AMEND AND DO PASS S.B. 416.
SENATOR SCHNEIDER SECONDED THE MOTION.
Senator Carlton reminded the committee of previous testimony regarding mystery shoppers who are not on payrolls, not paid, do not pay taxes, do not contribute to workers’ compensation, and other areas. She stated it makes her uncomfortable that mystery shoppers are not held accountable and not available to answer to charges or repercussions that might occur against Nevada workers. She asserted, for those reasons, she opposes the bill.
THE MOTION CARRIED. (SENATORS AMODEI AND CARLTON VOTED NO.)
*****
Senator Townsend opened the hearing on S.B. 513.
SENATE BILL 513: Makes various changes to provisions relating to investigations and proceedings for disciplinary action by regulatory bodies who regulate certain professions, occupations and businesses. (BDR 54‑81)
Robert Barengo, Lobbyist, Nevada State Contractors’ Board, and Nevada State Board of Medical Examiners, stated the amendment in section 7 did not capture the essence of the previous discussion.
Mr. Lessley stated section 7, subsection 1, line 12 of the proposed amendment, deals with keeping confidential investigations and records of investigations. He suggested, “except as otherwise provided in section 9 of this act,” be deleted. Referring to subsection 2, he said the discussion revolved around making sure that what happened after a complaint filed by a licensing board was public. He expounded it would include the complaint, the testimony, the transcript of the testimony, the evidence introduced, the documentary evidence introduced, and the hearing would all be public along with the final order. He suggested new wording for subsection 2: “The complaint or other document filed by the board to initiate disciplinary action and all documents and information considered by the board in making a determination regarding whether to impose discipline are public records.” He claimed the new wording would eliminate the need for paragraphs (a) and (b) of the proposed amendment.
Mr. Barengo told the committee the suggested wording would be workable for both of the boards he represents. He explained they would investigate for merit, and then proceed with filing a complaint with the board, which would then make it public.
Louis Ling, General Counsel, State Board of Pharmacy, articulated the proposed amendment is straightforward and tracks with the way the board is already functioning. He explained the reference to public records crosses over to the public records act, which would allow confidentiality for the purpose of investigations. He also pointed out the amendment covers the confidentiality of medical records.
Doug Walther, Chief, Office of Business Finance and Planning, Department of Business and Industry, stated he agrees with the proposed amendments. He expressed his concern about section 5 regarding the requirement for approval of consent agreements at a public hearing. He stated his issue is how that applies to one-person regulatory agencies having to conduct a public hearing to discuss it with themselves. He voiced his concern for the issue of the real estate and appraisers commissions. He elucidated his concern was that the diversion program, which would require all the diversion agreements to go to the full commissions, is unfounded, because the procedure requires the administrator to make those decisions, leaving that administrator with the same problem a single-person regulatory agency would have. The administrator would have to have a hearing, which would consist of just the administrator and a court reporter. He expressed his preference was for an exception for single-person regulatory agencies in section 5. He opined an alternative would be an amendment to allow single-person regulatory agencies to simply post a notice and provide an opportunity to request a hearing, because in the vast majority of cases, there would not be anyone in attendance. He explained this method would inform the public, while saving the cost of a court reporter and the time of opposing counsel, should there be no public interest.
Kent F. Lauer, Lobbyist, Nevada Press Association, acknowledged Mr. Walther brought up a good point. He stated the key language to the provision is that the consent agreement is made public.
Senator Townsend reviewed the proposed amendments with slight changes proposed by the makers of the amendment, and to make reference to a regulator as opposed to a regulatory body.
SENATOR O’CONNELL MOVED TO AMEND AND DO PASS S.B. 513.
SENATOR SCHNEIDER SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Mr. Young requested Mr. Lessley write out the amendment to the bill for accuracy of intent.
Senator Townsend opened the hearing on S.B. 544.
SENATE BILL 544: Makes various changes to provisions governing practice of pharmacy. (BDR 40-400)
Fred L. Hillerby, Lobbyist, Nevada State Board of Pharmacy, stated in previous discussion it was agreed to delete the word, “immediately,” and indicate the board would set the time according to what “immediately” meant by regulation. He noted the amendment to section 11, line 26, is correcting a bill-drafting error. He pointed out at the time the bill was drafted, the federal government prohibited electronic transmission of controlled substances, and now the government allows it; that is, therefore, the reason for deleting lines 13 and 14 in section 11.
Senator O'Connell queried how often the current fine is imposed. Mr. Ling stated the board regularly imposes fines. He said the most common cases are misfills, and the board has established a matrix for first, second, and third offenses. He asserted that, occasionally, the board has serious cases, such as, economic fraud, and the board thinks a $1000 fine is not making the point with the perpetrators. He stated the need for the $10,000 fining authority is to address the more serious cases. For example, he said, patient counseling is not being done by many pharmacies on a regular basis, and it is known that is the biggest factor in reducing errors. He expounded many states are imposing $5000 fines on pharmacies that are not counseling. He insisted a $1000 fine is not getting the message across. He explained a $10,000 fine applied to economic fraud would take away the profit incentive, and get the perpetrator’s attention.
Mary Lau, Lobbyist, Retail Association of Nevada, averred she surveyed the National Association of Chain Drug Stores, and it appears $10,000 fines have been imposed, but not very often. She said the survey showed the general fine range is $1000, $3000 and $5000, with some states having fines up to $250,000 for controlled substance violations, diversion of drugs, and other similar actions. She elaborated fines can build among companies who consistently violate the regulations, but each fine is still at a low rate.
Mr. Hillerby remarked with problems of diversion and other areas, the ability to fine gives the board some teeth to enforce compliance. He pointed out there is no threshold on fines for nonpayment of claims on time; yet, the board is asking for only $10,000 to deal with the very serious issues of diversion of drugs, economic fraud, and others. He emphasized the fine cap has not been changed in years.
Senator O'Connell commented the scheduling of fines seems to be more apropos to the needs of the board, as opposed to a flat $10,000, because of the seriousness of the crime. She inquired, on a national basis, were more fines staggered depending on the how onerous the crime was.
Ms. Lau answered most of the fines were staggered, and strongly agreed with the pharmacy board on the diversion techniques, et cetera, and their need for a tiered system of fining.
Mr. Ling commented what needs to be considered is the number of times for the same offense, and a scale to determine the amount of harm done to the patient, from relatively no harm all the way up to patient death. He pointed out the board already has a matrix in place.
Senator O'Connell suggested the board could work with the industry to determine a matrix by which a progression of fines could be developed. She clarified, from testimony and information she has gathered, it appears the board could use more than $10,000 to appropriately address the most egregious violations by using a more flexible tiered system.
Mr. Hillerby summarized statutory language would say the board would develop by regulation a tiered system with the maximum fine, “not to exceed.”
Senator O'Connell said, for example, if it is a drug-related violation, it should be more than $10,000, and the lesser violation should not be more than $1000. She expounded previous testimony told of cases involving hundreds of thousands of dollars, and a $10,000 fine would have very little effect on that sort of violation. Mr. Hillerby agreed to return with a developed schedule.
Senator Townsend suggested they identify the violations, then set the maximum fines, so the board has flexibility on those occasions when it really needs to make a point. He stated it would not be appropriate to put things into statute, and then have to draft another regulation.
Samuel P. McMullen, Lobbyist, Retail Association of Nevada (RAN), stated all that is necessary now is to work with the board to determine the violation categories to attach the rate of fines. He stated the RAN would like the opportunity to establish a limit on fines, when a business has made every effort to comply with regulations, and something still happens. He explained this would work as an incentive program in the form of a reward for conducting extra training, and making other efforts towards positive performance.
Senator Townsend said the pharmacy board’s proposed matrix would be heard next week, and closed the hearing on S.B. 544. There being no further testimony, the hearing was adjourned at 11:26 a.m.
RESPECTFULLY SUBMITTED:
Laura Adler,
Committee Secretary
APPROVED BY:
Senator Randolph J. Townsend, Chairman
DATE: