MINUTES OF THE
SENATE Committee on Human Resources and Facilities
Seventy-First Session
March 21, 2001
The Senate Committee on Human Resources and Facilitieswas called to order by Chairman Raymond D. Rawson, at 2:16 p.m., on Wednesday, March 21, 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 Raymond D. Rawson, Chairman
Senator Maurice Washington, Vice Chairman
Senator Randolph J. Townsend
Senator Mark Amodei
Senator Bernice Mathews
Senator Michael Schneider
Senator Valerie Wiener
STAFF MEMBERS PRESENT:
H. Pepper Sturm, Committee Policy Analyst
Patricia Di Domenico, Committee Secretary
OTHERS PRESENT:
Dr. Jane A. Nichols, Chancellor, System Administration Office, University and Community College System of Nevada
William R. Hale, Chief Executive Officer, University Medical Center
Charles Duarte, Medicaid Administrator, Division of Health Care Financing and Policy, Department of Human Resources
Guy A. Perkins, Jr., Chief Insurance Examiner, Division of Insurance, Department of Business and Industry
Yvonne Sylva, M.P.A., Administrator, Health Division, Department of Human Resources
Dorothy B. North, Lobbyist, Board of Examiners for Alcohol and Drug Abuse Counselors
Robert Barengo, Lobbyist, Sunrise Hospital and Medical Center
A. Allan Stipe, President and Chief Executive Officer, Sunrise Hospital and Medical Center
Denelle A. Hahn, Lobbyist, Sunrise Hospital and Medical Center
Peter S. Tibone, Cost Reimbursement Manager, Fiscal Services, University Medical Center
May S. Shelton, Lobbyist, Washoe County
Janice C. Pine, Lobbyist, Saint Mary’s Health Network
Jon L. Sasser, Lobbyist, Washoe Legal Services Inc.
Chairman Rawson opened the meeting with a work session and introduced Senate Bill (S.B.) 113.
SENATE BILL 113: Increases amount of millennium scholarship for upper division courses at community colleges and authorizes award of millennium scholarship to student enrolled in state college established by University and Community College System of Nevada. (BDR 34-433)
Chairman Rawson asked for any additional amendments to the Work Session Document (Exhibit C).
Dr. Jane A. Nichols, Chancellor, System Administration Office, University and Community College System of Nevada (UCCSN), recommended the Nevada high school equivalency test not be excluded from S.B. 113 as previously suggested in the amendments submitted by UCCSN.
Chairman Rawson referred to page 4, of Exhibit C, and explained the new section. He asked the committee for a motion on the amendment.
SENATOR TOWNSEND MOVED TO INCLUDE THE HIGH SCHOOL EQUIVALENCY TEST IN THE AMENDMENT TO S.B. 113.
SENATOR AMODEI SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR WASHINGTON WAS ABSENT FOR THE VOTE.)
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Chairman Rawson pointed out the next amendment on page 5, of Exhibit C, would exclude adult high school diploma recipients, but would allow recipients of the Nevada high school equivalency certificate to be eligible for Millennium Scholarships.
SENATOR TOWNSEND MOVED TO INCLUDE THE NEW MILLENNIUM SCHOLARSHIP ELIGIBILITY IN THE AMENDMENT TO S.B. 113.
SENATOR MATHEWS SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR WASHINGTON WAS ABSENT FOR THE VOTE.)
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Chairman Rawson clarified the last amendment to S.B. 113 deleted the repayment provision from the existing law.
SENATOR TOWNSEND MOVED TO INCLUDE THE DELETION OF THE REPAYMENT PROVISION IN THE AMENDMENT TO S.B. 113.
SENATOR SCHNEIDER SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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Dr. Nichols also asked the committee to consider setting the rate for non-sectarian, private institutions at $80 per credit scholarship amount. Chairman Rawson asked for a motion.
SENATOR TOWNSEND MOVED TO INCLUDE THE PER CREDIT SCHOLARSHIP AMOUNT IN THE AMENDMENT TO S.B. 113.
SENATOR MATHEWS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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Chairman Rawson asked for a motion amending S.B. 113 .
SENATOR WIENER MOVED TO AMEND AND DO PASS AS AMENDED S.B. 113.
SENATOR SCHNEIDER SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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Chairman Rawson closed the hearing on S.B. 113 and opened the hearing, inviting testimony on Senate Bill (S.B.) 290.
SENATE BILL 290: Creates public corporation to establish and operate program of services for medically indigent population of Clark County. (BDR S-182)
William R. Hale, Chief Executive Officer, University Medical Center (UMC), testified S.B. 290 would be the first step in a process toward unifying a system of care for the medically indigent population in Clark County. He recommended the committee move forward with the theory of a county organized health system.
Senator Wiener asked how S.B. 290 would impact other hospitals providing care to the indigent population. Mr. Hale answered that any provider is eligible to participate in the program. Senator Wiener questioned what the financial compensation would be for participating in this network of providers. Mr. Hale explained UMC would not be the controlling entity, but there would be a private corporation made up of people from the community who would develop the program, and adjudicate any issue that would arise.
Senator Mathews queried whether this corporation would be like the Regional Emergency Medical Services Authority (REMSA) in Washoe County. Mr. Hale responded S.B. 290 was written specifically not to give any special consideration to UMC.
Chairman Rawson stated, under existing law the county has responsibility for the indigent. He asked if the purpose of S.B. 290 was to negotiate rates, or would all monies be funneled through the corporation and under their control. Mr. Hale explained indigent people are very transient, moving between various programs within the social system. He stressed the need for a unified system, regardless of who the provider would be, for the indigent person. Chairman Rawson queried whether it would be a single payer system for the indigent population. Mr. Hale responded in the affirmative, and said the corporation would have the financial responsibility for administering the program. Chairman Rawson asked if participants would have a card. Mr. Hale said they would have some form of identification.
Chairman Rawson questioned whether there is legal precedence to establish such a corporation. Mr. Hale stated, at present, there were none approved, and indicated there may be some problems implementing this system at the federal level.
Senator Mathews questioned whether the administrative costs of this program would be born by the indigent population. Responding to the question, Mr. Hale said, currently, administrative costs are expended at all levels in the social program, therefore this system would eliminate that duplication.
Senator Wiener asked what financial impact this would have on the county hospital. Mr. Hale maintained there would be a minimal amount of financial impact.
Charles Duarte, Medicaid Administrator, Division of Health Care Financing and Policy, Department of Human Resources, read from prepared testimony (Exhibit D) expressing the Division’s regulatory and fiscal concerns, regarding having such an entity establish and operate a Medicaid waiver program. He stated S.B. 290 would create an adverse fiscal impact because additional staff would be needed to oversee the waiver and monitor the public corporation. And, additional annual staffing costs of $450,000 would also be needed.
Mr. Duarte said the term “medically indigent” is not clearly defined in S.B. 290, therefore, there may be additional general fund requirements. He also pointed out that “carving out” Clark County from the state’s Medicaid program would diminish the state’s ability to attract and retain health maintenance organizations, or other providers, for the rest of the state, which could result in increases in cost for those areas.
Senator Mathews asked if the funding would be channeled through the state. Mr. Duarte answered in the affirmative. Senator Mathews questioned the administrative cost for the state to be involved. Mr. Duarte replied he had not studied the administrative structure of what S.B. 290 proposed.
Senator Washington queried whether S.B. 290 would be “carving out” Clark County from the state. Mr. Duarte responded that the Division interpreted S. B. 290 in that manner.
Chairman Rawson asked if S.B. 290 were enacted, would Clark County receive more Medicaid money. Mr. Duarte replied that some states use their disproportionate-share hospital funding to match federal dollars, and put them into section 1115, of the Social Security Act, waivers to expand eligibility, using those dollars to pay for health insurance as opposed to paying for a subsidy for the uninsured. Chairman Rawson questioned whether S.B. 290 would affect the disproportionate share. Mr. Duarte opined it would have an affect on the federal disproportionate share allotment.
Guy A. Perkins, Jr., Chief Insurance Examiner, Division of Insurance, Department of Business and Industry, stated a clarification would be necessary because the system established in section 3, of S.B. 290, is “risk bearing” and must be licensed as a Health Maintenance Organization (HMO) based on the Nevada Revised Statutes. In addition, if the system established by S.B. 290, would contract with an organization to perform the managed care Medicaid services in Clark County, then, the contracted organization must also become licensed as an HMO.
Chairman Rawson questioned whether it would be a conflict of interest if the county owned the insurance company and the provider units, such as a hospital. Mr. Perkins replied that the proposal would need to be studied. Senator Mathews questioned the presence of existing hospitals that have HMOs. Answering the question, Mr. Perkins said that Washoe Medical Center and Saint Mary’s have HMOs, but have separate entities.
Chairman Rawson stated the HMOs would need to bill the same rates to all parties. Mr. Perkins responded in the affirmative, and said all rules, regulations, and financial requirements would have to be met.
Chairman Rawson closed the hearing on S.B. 290 and opened the hearing on Senate Bill (S.B.) 300.
SENATE BILL 300: Abolishes bureau of alcohol and drug abuse of department of human resources and transfers powers and duties of bureau to health division of department of human resources. (BDR 40-538)
Yvonne Sylva, M.P.A., Administrator, Health Division, Department of Human Resources, said S.B. 300 formalizes the transfer of the Bureau of Alcohol and Drug Abuse (BADA) to the Health Division.
Ms. Sylva said Assembly Bill (A.B.) 181 of the Seventieth Session transferred the responsibilities of BADA to the Department of Human Resources and S.B. 300 will formally transfer the functions to the Health Division.
ASSEMBLY BILL 181 OF THE SEVENTIETH SESSION: Makes various changes relating to provision of services relating to substance abuse and mental health. (BDR 40-1059)
She pointed out BADA has had a history of problems, and the transfer will stabilize that entity within the Health Division. Concluding her remarks, Ms. Sylva called the committee’s attention to the other “housekeeping” changes within S.B. 300.
Chairman Rawson asked about the changes affecting people in this community. Ms. Sylva responded that the first action taken was to form an advisory board of providers.
Senator Wiener commented on the focus of BADA getting diluted under the Health Division. Ms. Sylva emphasized the Health Division has seven bureaus; one will be the bureau of alcohol and drug abuse, and BADA will have its own identity. Senator Mathews asked what the consequences would be if this was not changed statutorily. Ms. Sylva replied this is not just a name change this is an organizational change. She noted BADA would only operate a second system within the Health Division without this change, and will be at the will of the director of the Department of Human Resources. In addition, BADA will have its own method of adopting regulations and will not report to the board of health; therefore, there will be two totally different systems within the Health Division.
Senator Washington referred to line 38 on page 5, and lines 43 through 47, and asked if the language meant the board of health shall adopt regulations for BADA. Ms. Sylva confirmed it was one board, the State Board of Health.
There was further discussion pertaining to the advisory board of providers that was formed, and Ms. Sylva clarified this board was not a policy-making entity.
Senator Wiener asked about the future of the Drug Commission. Ms. Sylva replied the drug commission is not under the purview of the Health Division, it is under the auspices of the Department of Motor Vehicles.
Senator Washington requested clarity on the issue. Ms. Sylva explained the state board of health would promulgate the regulations, and the agency would implement the regulations.
Dorothy B. North, Lobbyist, Board of Examiners for Alcohol and Drug Abuse Counselors, spoke in support of S.B. 300, but recommended an amendment, which would insure the bureau of alcohol and drug abuse would continue in its role of enforcing regulations, monitoring, and certifying programs, as well as performing the functions that support quality of care, and protect the public health and safety. Chairman Rawson acknowledged the legislative intent of the continued function of the bureau.
Chairman Rawson closed the hearing on S.B. 300, and opened the hearing on Senate Bill (S.B.) 302.
SENATE BILL 302: Revises certain provisions governing payment of hospital for serving disproportionately large share of low-income patients. (BDR 40-962)
Robert Barengo, Lobbyist, Sunrise Hospital and Medical Center, gave a history of S.B. 302 explaining hospitals of 100 beds or more have the obligation to provide, without cost, care for indigent patients in an amount that represents 0.6 percent of the net revenue. He said the county might pay hospitals a higher rate, or pay them for all of the care from the start.
Mr. Barengo stated S.B. 302 “sets an objective standard established by a third party that all hospitals could rely upon,” because the existing law has become outdated.
Chairman Rawson asked for a clarification of “the standard” referred to by Mr. Barengo. In response Mr. Barengo said, the law states “the board of county commissioners may if it determines a hospital within the county is serving a disproportionate large share of low income patients.” Chairman Rawson asked for a definition of “disproportionate large share of low income patients.” Mr. Barengo explained 20 percent of Clark County’s patient volume is indigent. Chairman Rawson asked for the federal rate. Mr. Barengo replied there is no exact federal definition, but the one proposed in S.B. 302 is the closest to a federal definition.
Chairman Rawson questioned what percent of indigent patients are treated by hospitals other than the county hospital.
A. Allan Stipe, President and Chief Executive Officer, Sunrise Hospital and Medical Center, said he did not have that information. He said, in 1987, the standard set was computed as a sum of utilization of low-income patient types by payer of the total patient population, plus the percent of indigent patient days as a percent of the total, and add to that figure, Social Security Insurance (SSI) percentage of patients days. Chairman Rawson asked whether Sunrise Hospital meets the definition. Mr. Stipe responded in the affirmative.
Mr. Stipe explained to the committee a letter was sent to the county requesting Sunrise Hospital be designated as a hospital serving a disproportionate share of low-income patients. He stated the county responded they were reassessing the definition and raising the threshold, therefore, Sunrise Hospital would not qualify. Mr. Stipe said the problem is there is no common definition for a disproportionate-share hospital at the county level. He noted there is an established Medicare definition: “It is the percent of your hospital patient days that are Medicaid, adding the percent of hospital patient days that are SSI, and if that amount, for as an urban hospital of over 100 beds, exceeds 15 percent of the total patient population, then it qualifies as a Medicare-disproportionate hospital.”
Denelle A. Hahn, Lobbyist, Sunrise Hospital and Medical Center, iterated that since 1987, the population demographics of Nevada has changed dramatically.
Chairman Rawson questioned whether S.B. 302 accomplishes the hospital’s needs. Mr. Stipe answered S.B. 302 would establish a level playing field with regards to the definition of achieving the status of a disproportionate-share hospital.
Mr. Barengo asserted if the county finds for one hospital they must find for all. Chairman Rawson surmised the circumstance then would set a legal standard. Mr. Barengo reiterated, “If they find for one, then all people similarly situated would be treated the same way.”
Senator Washington voiced concern over the word “may” and replacing it with “shall.” Chairman Rawson explained, by making that proposed change, they would be establishing a state policy. Chairman Rawson suggested the committee discuss S.B. 302.
Mr. Hale claimed this issue is a local not a state matter. He said the county indigent program is a mandate from the state, and the University Medical Center uses mechanism to provide such services. Mr. Hale informed the committee that the issue is still under review by the county commission. He pointed out there was a federal definition for indigent patients that recognizes uncompensated care costs by the federal government under the disproportionate share program.
Mr. Hale stated he supported Senate Bill (S.B.) 333 because it contains the federal definition of a hospital that provides indigent care at a disproportionate level. He elucidate Sunrise Hospital was the only hospital in the county asking the legislature for this provision.
SENATE BILL 333: Revises provisions governing payment of hospitals for treating disproportionate share of Medicaid patients, indigent patients or other low-income patients. (BDR 38-1237)
Peter S. Tibone, Cost Reimbursement Manager, Fiscal Services, University Medical Center, testified to the appropriateness of S.B. 302. He referred to “Med-Manual, HCFA-Manuals” from the (Health Care Financing Administration, U.S. Health and Human Services Administration),(Exhibit E), page 1; section A, explaining the regular calculation of disproportionate percentage. Mr. Tibone pointed out to the committee there was no mention of local indigent or charity care patients in that section. He emphasized section A has little relevance to care at the county level. Mr. Tibone said the provision was adopted to meet the objectives of the Medicare program, and for its ease of administration. He stated the language in section A is biased toward rural hospitals. Mr. Tibone noted, “At least 15 percent for an urban hospital with 100 or more beds, or a rural hospital with 500 or more beds,” and for a rural hospital to qualify at 100 beds, it must have a higher percentage, 40 or 45 percent, based on community status.
Chairman Rawson questioned Mr. Tibone’s concern. Mr. Tibone replied, by adopting this standard, once a hospital qualifies for Medicare disproportionate share, they would be paid at a higher rate for county indigents. He stressed there is no correlation between this provision and the county program. Mr. Tibone opined the standard should not be used for the basis of the county indigent program.
Chairman Rawson commented on hospitals treating more than 0.6 percent of indigent patients and questioned whether or not it should be a county responsibility. Mr. Hale clarified that once a hospital reaches its minimum amount of charity care patients, it is reimbursed for eligible Clark County social service patients.
Chairman Rawson queried the reimbursement of hospitals by the county for indigent patients. Mr. Tibone remarked that if qualified, it allows the hospital to waive the minimum obligation, and provides for enhanced rates, therefore, providing more income to the hospital. Continuing his remarks, Mr. Tibone said no hospital is excluded if they provide the care for an indigent patient who is covered by the county indigent program.
Senator Townsend asked the representatives of the University Medical Center whether UMC would lose money if S.B. 302 is passed. Mr. Hale replied there could be an effect to UMC if other hospitals received additional funding. Chairman Rawson asked whether UMC received a fixed subsidy and what was the rate. Mr. Hale answered the average rate for a Clark County social service patient is approximately $1800. Mr. Hale reiterated when a hospital provides a disproportionate amount of care, they should be recognized, but it should be based on the federal definition for indigent care, not the definition for Medicare purposes only.
Senator Wiener questioned whether the other hospitals that provide care for the indigent patients get paid, if the money designated for indigent patients has been used. Mr. Hale answered that once a hospital has meet the 0.6 percent threshold, all the hospitals costs are paid for providing care to indigent patients. But, they do not receive the enhanced payments, and the 0.6 percent must be met. Senator Wiener asked for further clarification. Mr. Tibone explained the internal auditors of Clark County found a problem with the data provided by Sunrise Hospital, so a private accounting firm was brought in to review, and will make the decision. He said during this process, it became apparent the current standard is not adequate, and every hospital in Clark County would be able to qualify for a disproportionate share. Mr. Tibone defined the process Clark County is establishing: first, the county would take the average for the community, and then, the hospitals exceeding a percentage amount above the average would qualify.
Senator Amodei pointed out there is another hospital treating a fair number of indigent patients, but, UMC wants exclusive rights to the indigent money. Mr. Hale explained the intention is to have a fair definition of eligibility for the indigent program.
Chairman Rawson asked for that definition. Mr. Tibone referred to the “INTERIM STATE MEDICAID MANUAL INSTRUCTIONS” (Exhibit F) in response to the Chairman’s request. He noted, based on the criteria in section A of Exhibit F, Sunrise Hospital was close to the standard. Chairman Rawson asked if Lake Mead Hospital would meet that standard. Mr. Tibone answered in the affirmative. Chairman Rawson questioned whether any hospitals in the northern part of the state would qualify. Mr. Tibone opined Washoe Medical Center might qualify. Senator Mathews disputed whether Washoe Medical Center would qualify since it is a “for profit” facility.
Senator Washington asked for a clarification of the language “. . . low-income inpatient utilization rate exceeding 25 percent. . . “ in section A, number 1 of Exhibit F. Mr. Tibone said in response, there were two percentages that could be met. He explained the first definition is: “the total of all the hospital’s Medicaid percent; the Medicaid days as a percent of the total days; lines them up and takes a statistical mean, then calculates one standard deviation above that mean, and ranks all the hospitals that fall above that mean.” Mr. Tibone noted the second criteria “takes the percentage of the hospital’s inpatient charity care charges, over the hospital’s total charges, and adds to that figure the hospital’s percentage of the hospital’s revenue from the local indigent program as a percent of the total.”
Senator Washington asked whether Sunrise Hospital would qualify as a disproportionate-share hospital based on that criterion. Mr. Tibone answered Sunrise Hospital’s data is very close to qualifying.
May S. Shelton, Lobbyist, Washoe County, submitted, for the committee’s review, proposed amendments (Exhibit G) to S.B. 302. Senator Mathews questioned whether the proposed amendments were not the same as suggested by Sunrise Hospital. Ms. Shelton responded the proposed amendments for populations of 400,000 or less would maintain the current practice. She explained Washoe Medical Center served more than 80 percent of Washoe County’s indigent, Medicaid, and uncompensated care patients. Ms. Shelton stressed the current statute holds Washoe County harmless under the intergovernmental transfer program, therefore, Washoe County does not pay any inpatient bills because they receive money from the disproportionate share program.
Chairman Rawson queried whether Saint Mary’s Hospital is treated differently. Ms. Shelton answered Saint Mary’s Hospital is treated differently because they must meet the free care obligation. She said, by statute, Washoe Medical Center is exempt. Ms. Shelton commented Washoe County pays for inpatient care at the Medicare rate. Chairman Rawson clarified Washoe County pays the Medicare rate to any hospital, after it meets the free care obligation. Ms. Shelton answered in the affirmative, and mentioned hospitals are also paid for emergency room service and clinic care.
Chairman Rawson asked Mr. Barengo to explain the reimbursements to hospitals in Clark County once they have met their indigent care obligation. Mr. Barengo responded hospitals are paid a contracted rate of $1500 a day, which is less than the $1800 a day that is paid to UMC. He continued, explaining the issue was created by the legislature in 1987. Chairman Rawson commented the legislature’s concern, in 1987, was indigent patients were “dumped on” the county hospital, but conditions have changed. Mr. Barengo pointed out the problem is the existing language of “disproportionately large share of low income” because the intent of the language was to be broad in scope but has become narrower.
Chairman Rawson asked if S.B. 302 would affect Washoe County as written. Ms. Shelton replied, with the statute on intergovernmental transfer, the state paying Washoe Medical Center, and the county being held harmless, it would not be of concern.
Janice C. Pine, Lobbyist, Saint Mary’s Health Network, supported Washoe County’s amendments. She said the demographics in the state are changing and said she thought the care for indigent people would not diminish. Ms. Pine stated Saint Mary’s Health Network would work with Washoe County, Washoe Medical Center, and Northern Nevada Medical Center, to do what would be appropriate.
Chairman Rawson queried whether the state would tie the county indigent rate to the Medicaid rate. Ms. Shelton replied the inpatient rate is currently “no less than the Medicaid rate,” but the county could not go higher.
Mr. Hale said Medicaid pays physicians for services rendered, but Clark County Social Services does not.
Jon L. Sasser, Lobbyist, Washoe Legal Services Incorporated, intimated the issue should be postponed until those affected would have an opportunity to testify.
Senator Townsend suggested a work session document be prepared, taking into account what the legislature established as “the social rent,” which is what a hospital pays to a community for being in the community. Continuing, he said a rate needs to be established for hospitals to recover their costs for treating the indigent patient; otherwise, the cost will be passed on to other patients. Senator Townsend insisted first a policy needs to be established, and then the language can be developed.
Chairman Rawson recommended working with staff to develop a policy and come to some conclusions on this issue.
Chairman Rawson requested an introduction for Bill Draft Request (BDR) S-228.
SENATOR TOWNSEND MOVED TO INTRODUCE BDR S-228.
SENATOR AMODEI SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
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Chairman Rawson adjourned the meeting at 4:18 p.m.
RESPECTFULLY SUBMITTED:
Patricia Di Domenico,
Committee Secretary
APPROVED BY:
Senator Raymond D. Rawson, Chairman
DATE: