MINUTES OF THE
SENATE Committee on Human Resources and Facilities
Seventy-First Session
April 4, 2001
The Senate Committee on Human Resources and Facilitieswas called to order by Chairman Raymond D. Rawson, at 2:12 p.m., on Wednesday, April 4, 2001, in Room 2135 of the Legislative Building, Carson City, Nevada. The meeting was video conferenced to the Grant Sawyer Office Building, Room 4406, Las Vegas, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Senator 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 Vardakis, Committee Secretary
OTHERS PRESENT:
John Ellerton, M.D., Vice Chief of Staff, University Medical Center
Robert H. Miller, M.D., M.B.A., Dean, Professor of Surgery, University of Nevada School of Medicine
Robert A. Ostrovsky, Lobbyist, Lake Mead Hospital
William P. Moore, Chief Executive Officer, Lake Mead Hospital
Michael Alastuey, Lobbyist, Clark County
Susan Pacult, Program Administrator, Social Services, Clark County
Robert Barengo, Lobbyist, Sunrise Hospital and Medical Center
A. Allen Stipe, President/CEO, Sunrise Hospital and Medical Center
Charles Duarte, Medicaid Administrator, Division of Health Care Financing and Policy, Department of Human Resources
Chris Thompson, Consultant, Division of Health Care Financing and Policy, Department of Human Resources
Danny L. Thompson, Lobbyist, Nevada State AFL-CIO
May S. Shelton, Lobbyist, Washoe County
William Hale, Chief Executive Officer, University Medical Center
Richard J. Legarza, J.D., General Counsel, Board of Medical Examiners
Louis Ling, General Counsel, State Board of Pharmacy
Lawrence P. Matheis, Lobbyist, Nevada State Medical Association
Robin L. Titus, M.D., Board of Medical Examiners
Shane A. Zide, Lobbyist, McMullen Strategic Group
Kevin C. Powers, Senior Deputy Legislative Counsel, Legal Division, Legislative Counsel Bureau
Kevin Higgins, Chief Deputy Attorney General, Fraud Control Unit for Industrial Insurance, Office of the Attorney General
Keith W. Macdonald, Executive Secretary, State Board of Pharmacy
Tom Wood, Lobbyist, Pharmaceutical Research and Manufacturers of America
Gerald Ackerman, Director, Northeastern Nevada Health Center, University of Nevada School of Medicine
Robin Keith, Lobbyist, Nevada Rural Hospital Project Foundation
Chairman Rawson opened the hearing on Senate Bill (S.B.) 371, and invited testimony from Las Vegas.
SENATE BILL 371: Revises provisions governing authority of certain physicians to possess, prescribe, dispense and administer controlled substances, dangerous drugs and other drugs. (BDR 40-1242)
John Ellerton, M.D., Vice Chief of Staff, University Medical Center, voiced opposition to S.B. 371. He stated S.B. 371 is called the “morphine retail act of 2001.” Dr. Ellerton claimed the provisions of S.B. 371 are “dangerous and remove substantial ability to protect the public, patients, and the physicians in the circumstances that it describes.” He stressed S.B. 371 would remove the power of the various existing regulatory boards of medical practice, and the medical staff of the hospitals. Dr. Ellerton stated physicians have a duty to protect patients and the public from unscrupulous behavior. He urged the committee to reject S.B. 371.
Chairman Rawson suspended the hearing on S.B. 371, and opened the hearing on S.B. 542.
SENATE BILL 542: Creates fund for residency programs of University of Nevada School of Medicine. (BDR 34-1449)
Robert H. Miller, M.D., M.B.A., Dean, Professor of Surgery, University of Nevada School of Medicine (UNSOM), provided a Microsoft PowerPoint presentation titled “University of Nevada School of Medicine, Status Report” (Exhibit C). Referring to the first slide, he outlined the requirements for becoming a physician. Dr. Miller explained slide 2 shows the various sources of residency funding. He pointed out the residency accreditation process on slide 3 to the committee, and noted the accreditation options on the slide 4. Next, Dr. Miller listed the Reno residencies on slide 4, and Las Vegas residencies on slide 5, commenting the Las Vegas area has a greater patient population.
Chairman Rawson asked whether the resident physician is impeded from taking the medical board examinations when a residency closes. Dr. Miller replied a resident can “sit for the boards” if the residency is on probation; however, if the residency program closes, there is a grace period to finish the program. Chairman Rawson questioned whether that would cause a financial liability for the state.
Continuing, Dr. Miller explained slide 6 titled, “UNSOM Residents completing Training in 2000” lists the department, the number of residents who have completed their residencies, the number, and percentage of residents who remained in Nevada to practice. He said 40 percent of the UNSOM graduates stay in Nevada, and residency programs are an excellent way to keep them in the state.
Dr. Miller explained slide 7 contained information about the continuing education of the medical school’s graduates. He pointed out 40 percent of the medical school graduates have chosen specialties not available in Nevada, and the probability is these graduates will stay in the state where they are doing residency training. Commenting further, Dr. Miller enumerated upon the various departments in the school such as: obstetrics/ gynecology, family medicine, pediatrics, and the dean’s office.
Dr. Miller expounded on how valuable a resource the University of Nevada School of Medicine is to Nevada. He listed education, service, and research as assets to the state. Concluding the presentation, Dr. Miller spoke of the future plans of UNSOM, and presented statistics comparing Las Vegas to Salt Lake City and the number of physicians per 100,000 people.
Chairman Rawson commented Salt Lake City has one of the lowest disease rates in the country, but has more physicians; Las Vegas, the highest disease rate, but less physicians. Dr. Miller agreed, and mentioned Las Vegas has very high incidences of heart disease, cancer, and suicide.
Chairman Rawson asked whether the cost of a subspecialty residency program would be approximately $1 million or $2 million. Dr. Miller answered in the affirmative to the approximate cost of $1 million or $2 million.
Chairman Rawson questioned whether the rural areas could be included in the residency program. Dr. Miller responded residency training in the rural areas would not be available, but pointed out there is a telemedicine program the rural out-reach department has been developing. Chairman Rawson queried as to the possibility of doing a 3-, 5-, or 6-station rotation through the rural areas. Dr. Miller replied it would be possible to provide such a program.
Chairman Rawson closed the hearing on S.B. 542, and opened the hearing on S.B. 333.
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)
Robert A. Ostrovsky, Lobbyist, Lake Mead Hospital, told the committee the history of the disproportionate share hospital (DSH) program. He said the important part of S.B. 333 is on lines 28 through 31, on page 2, and explained the purpose of the language.
Mr. Ostrovsky claimed, the state Medicaid plan must provide a DSH payment to public hospitals as addressed on lines 16 through 22, of S.B. 333, and is existing law. He pointed out lines 23 through 27 provide for DSH payments to private hospitals providing the largest volume of medical care to Medicaid patients in a county whose population is less than 400,000.
Mr. Ostrovsky stressed the issue arising from S.B. 333 is found on lines 36 through 40, on page 2, and is the method the state should use to make payments to private hospitals in Clark County. He stated S.B. 333 proposes the state Medicaid plan be directed to only make payments to hospitals meeting the federal disproportionate share definition.
Mr. Ostrovsky stated S.B. 333 does not affect funding for University Medical Center, Washoe Medical Center, or any other rural hospital. He iterated the intent of S.B. 333 is to permit hospitals in Clark County, which qualify under the federal definition, to receive funding. Mr. Ostrovsky said the state has a plan for the distribution of additional DSH funds to Clark County hospitals at a much lower standard than S.B. 333. Speaking on behalf of Lake Mead Hospital, he told the committee the state plan is inappropriate.
Mr. Ostrovsky explained there are two ways to meet the federal standard:
One: Twenty-five percent low-income rate is a specific measure of a hospital’s net Medicaid and charity-care patient load, divided by the hospital’s total patient load. Hospitals that exceed the 25 percent low-income utilization rate threshold must be qualified under this standard, ensuring DSH dollars are spent serving the poor.
Two: Medicaid inpatient utilization rate calculates the portion of hospitals’ inpatient days that are provided to Medicaid patients. States must qualify each hospital whose Medicaid utilization rate is one standard deviation above the mean.
Senator Wiener stated the committee has heard testimony concerning a 20 percent threshold and, when that was met, the threshold was increased to 25 percent; therefore, prohibiting the hospital from qualifying as a disproportionate share hospital.
William P. Moore, Chief Executive Officer, Lake Mead Hospital, in response, pointed out Clark County funding and the Clark County indigent fund are separate issues.
Chairman Rawson asked a clarification of the disproportionate share programs be given to the committee. Mr. Moore explained there is Clark County indigent fund and a state Medicaid fund.
Chairman Rawson pointed out if a hospital is treating a disproportionate share for the Clark County fund then it triggers a payment for indigent patients from the intergovernmental transfer (IGT) program. He noted there is also a federal disproportionate share definition and that is what S.B. 333 is addressing.
Mr. Moore provided a document of 1998 data (Exhibit D) to the committee, which showed the current disproportionate share per Medicaid day of various hospitals in Nevada. He emphasized the inequity in the distribution of the DSH payment: Lake Mead Hospital’s amount of $8.61 per Medicaid day, compared to South Lyon Medical Center’s $9,768.57 per Medicaid day. Mr. Moore reiterated S.B. 333 does not attack any hospital currently qualifying for DSH funding. He said S.B. 333 would set a standard that either: the hospital is a county hospital, or the hospital serves the highest level of Medicaid population within a county not served by a county hospital, and they meet the federal definition under one criterion. Referring to page 2 of Exhibit D, Mr. Moore related the financial facts and figures for Lake Mead Hospital for the years 1998, 1999, and 2000. He explained “charity” refers to those individuals who meet the federal poverty guidelines and do not have any type of insurance. Chairman Rawson asked whether the “charity” figure was at a Medicaid rate or a bill-charge rate. Mr. Moore replied the rate is at the bill-charge rate. He said the “bad-debt” rate is for patients who have chosen not to pay their bills.
Chairman Rawson questioned whether the “bad debt” charges were the difference between uninsured bill charges and bill charges. Mr. Moore responded the contractual adjustment is not factored into that number. He said the true “bad debt” and true ”charitable” care for the year 1998 for Lake Mead Hospital was $12.4 million, which escalated to $15.5 million in 1999, and $24 million in the year 2000, and is projected to be $28 million in the year 2001.
Chairman Rawson questioned the percentage rate of patients paying their full bill charge. Mr. Moore opined no hospital receives full bill charges on any account.
Mr. Moore told the committee Lake Mead Hospital has not invested millions of dollars in expansion or renovation because of the level of indigent care the hospital provides. In addition, he pointed out Lake Mead Hospital has the third busiest emergency department in the county, but is the smallest in size. Mr. Moore claimed 65 percent of Lake Mead’s admissions are derived from the emergency department. He stressed out of 24,000 admissions originating from Lake Mead’s primary service area, 6000 were actually admitted to Lake Mead Hospital. Mr. Moore stated Lake Mead Hospital treated 42 percent of the uninsured population. He noted, of the insured population, only 14.2 percent were treated by Lake Mead Hospital.
Senator Mathews questioned the number of “divert” patients Lake Mead handled. Mr. Moore answered Lake Mead Hospital was on critical care “divert” 65 percent of the time, and the emergency department was on “diverts” 70 percent of the time.
Mr. Ostrovsky reiterated S.B. 333 is the appropriate way to direct the disproportionate share funds to the hospitals serving the patients in most need. Chairman Rawson elucidated S.B. 333 allows a nonpublic hospital to receive disproportionate share payments. Mr. Ostrovsky emphasized S.B. 333 should be the only standard to determine disproportionate share funds.
Michael Alastuey, Lobbyist, Clark County, spoke in support of S.B. 333. He stated S.B. 333 does not address the allocation of money to the various hospitals throughout the state. Chairman Rawson said S.B. 377 would address that issue.
SENATE BILL 377: Revises provisions governing payment of hospitals for treating disproportionate share of Medicaid patients, indigent patients or other low-income patients. (BDR 38-316)
Mr. Alastuey addressed two supportable concepts, lines 10 through 15 and lines 28 through 30, on page 2, of S.B. 333.
Susan Pacult, Program Administrator, Social Services, Clark County, voiced support of S.B. 333 because hospitals providing the bulk of medically indigent care would be appropriately compensated.
Chairman Rawson closed the hearing on S.B. 333 and opened the hearing by inviting testimony on S.B. 377.
Robert Barengo, Lobbyist, Sunrise Hospital and Medical Center, provided the committee with the “Disproportionate Share Study Committee Report (Exhibit E). He said the committee held numerous meetings, conducted studies, and had the power to use the staff of the human resources department to obtain statistics from the hospitals.
Mr. Barengo said the next document, “S.B. 377, Summary” (Exhibit F), is sponsored by Sunrise Hospital and Medical Center. He explained S.B. 377 is the result of a recommendation proposed by the committee. Mr. Barengo claimed S.B. 377 is necessary to open the debate on the disproportionate share issue.
A. Allen Stipe, President/CEO, Sunrise Hospital and Medical Center, testified the issue of disproportionate share is complicated and has many facets to be considered. Referring to page 13 of Exhibit E, he pointed out University Medical Center has $30 million in uncompensated costs and the most Medicaid days. Mr. Stipe emphasized Sunrise Hospital and Medical Center is the second largest server of indigent patients in the state. He stated the DSH study committee could not decide on one resolution but decided on a variety of resolutions. Mr. Stipe referred to the “S.B. 377, Summary” (Exhibit F), and remarked the definition issue was a key point in the discussions of the committee, and the summary is the culmination of those discussions.
Mr. Barengo pointed out S.B. 377 increases the disproportionate share funding for rural hospitals. He told the committee the Department of Human Resources would be proposing an amendment to S.B. 377, which Sunrise Hospital and Medical Center supports.
Charles Duarte, Medicaid Administrator, Division of Health Care Financing and Policy, Department of Human Resources, referred to pages 4 and 5 of his written testimony and proposed amendments (Exhibit G) to S.B. 377, explaining the recommendations of the DSH study committee are implemented in the amendments. He pointed out the amendments address the issues concerning: improving the net benefit to rural facilities; methods to provide a fair methodology to private hospitals; and a definition for disproportionate share.
Mr. Duarte said the proposed amendment language clarifies the intent of S.B. 377. He noted there were minor amendments to the portion of S.B. 377 dealing with rural hospitals, and there is an amendment to pay $50,000 to each public hospital that is the sole hospital in a county, if the hospital is not eligible for disproportionate share payments.
Mr. Duarte mentioned the key part of the amendments is, “to pay up to $200 per day per uncompensated care day to any private hospital in the county with a public hospital that has Medicaid utilization above the statewide average for all hospitals.” Chairman Rawson questioned the determining factor of the amount. Mr. Duarte answered the goal was to provide the maximum net benefit to the private facilities participating in DSH, without harming the University Medical Center or Clark County.
Chris Thompson, Consultant, Division of Health Care Financing and Policy, Department of Human Resources, reviewed the amendments with the committee highlighting the impacting provisions of S.B. 377. He said the proposal to amend section 1, of S.B. 377, is intended to clarify the payment to a private hospital if the legislature does not establish an amount. The amendment provides the county shall transfer an amount equal to 75 percent of the disproportionate share payment made to the hospital for the fiscal year.
Mr. Thompson stated the primary change is in section 2 of S.B. 377. He said the proposal is for payment of “not less than $150, or more than $200 per uncompensated day to any private hospital that has a Medicaid utilization above the statewide average, and is located in a county with a public hospital.” Mr. Thompson explained the purpose of the next proposal was for the payment of $50,000 to hospitals not eligible for the disproportionate share. He stated “Medicaid utilization percentage,” and “uncompensated day” are definitions used throughout the disproportionate share committee study, and include Medicaid benefits through a health maintenance organization (HMO).
Mr. Thompson pointed out the proposed new section 3 is a requirement to establish the intergovernmental transfer for Washoe and Elko Counties, and the new section 4 establishes the amount of disproportionate share that would be paid to those private hospitals.
In addition to the amendments, Mr. Duarte suggested conducting a study to look at various programs used in the state for the provision of indigent care, including methodologies used for determining the amount and distribution of payments made to public and private hospitals. Chairman Rawson asked whether the funding for this study would come out of the intergovernmental transfers. Mr. Duarte answered in the affirmative. Chairman Rawson urged Mr. Duarte to follow the progress of S.B. 377 as it is processed to assure a proper closing of the budget to accommodate the proposed study.
Mr. Thompson referred to a spreadsheet titled “State of Nevada Division of Health Care Financing and Policy Disproportionate Share/Intergovernmental Transfer Program” (Exhibit H), explaining a federal law was passed late in the year 2000 escalating the disproportionate share allotment from $74,000,000 to $76,590,000 in the year 2001 and there are inflationary increases of 3 percent each year for 2002, and 2003.
Using University Medical Center (UMC) as an example, Mr. Thompson showed the committee how the various hospitals would fare based on the proposed amendments.
Senator Mathews asked for a clarification of the $57 million figure in the first column under fiscal year 2000 of (Exhibit H). Mr. Thompson explained the $57 million figure is the amount of disproportionate share the state pays to UMC alone; UMC makes an intergovernmental transfer (IGT) back to the state of almost $43 million, resulting in a net benefit to UMC of approximately $14 million.
Senator Amodei commented Washoe Medical Center’s net benefit is very low. Mr. Thompson pointed out Washoe Medical Center is a private hospital in a county that does not have a public hospital; therefore, it presented a difficult situation in creating this program. He noted a private hospital cannot make an IGT; therefore, the county cannot receive the money back. Mr. Thompson elaborated on the method of funding for Washoe Medical Center:
Based on the fact that there was going to be a substantial additional amount of federal revenue coming in, we decreased the intergovernmental transfer for Washoe County by $50,000 to at least allow Washoe County, in some manner, to share in the benefit of these additional federal dollars.
Chairman Rawson asked whether the proposal was a transitional plan.
Mr. Duarte responded the general consensus among the major facilities was the proposed plan was an acceptable alternative.
Chairman Rawson suggested additional language to S.B. 377, “in 2 years there will be a reformulation, after the proposed study has been completed.” Mr. Duarte agreed and said the proposed language was the department’s intent.
Mr. Alastuey stated strong opposition to S.B. 377 as originally written. Chairman Rawson asked if he had reviewed the amendments. Mr. Alastuey agreed with the amendment to remove section 2 from S.B. 377, but voiced concerns with the information on the spreadsheet (Exhibit H). He noted there was an excess of $3 million of additional benefit through the Medicaid DSH program to be distributed throughout the state. Mr. Alastuey stated, from the county’s viewpoint, UMC and Clark County will share a “disproportionately” small part of the funding, and the State of Nevada will retain a “disproportionately” large portion of that funding. He further expressed concern regarding the concept, “IGTs [intergovernmental transfers] would be provided by some mechanism in Clark County, in order to enable the drawing of Medicaid DSH by hospitals that have not, in any point in time, been publicly owned, as might be the case in some other counties.”
Mr. Moore refuted part of the testimony given by Mr. Stipe on S.B. 333 concerning “taking the ‘rurals’ out of the equation.” He said the intent was not to take any hospital receiving DSH out of the equation. Mr. Moore stated opposition to lines 23 through 30 of S.B. 377 because of the inclusion of those hospitals above the state average. He emphasized S.B. 333 keeps the county and rural hospitals whole, and includes those facilities that provide either 25 percent minimum utilization threshold, or one standard deviation above the mean.
Danny L. Thompson, Lobbyist, Nevada State AFL-CIO, voiced concern about the issue of disproportionate share and the viability of UMC. He requested he be included in any further discussions concerning the issue.
May S. Shelton, Lobbyist, Washoe County, stated Washoe County supported S.B. 377 with the proposed amendments.
William Hale, Chief Executive Officer, University Medical Center, said indigent care is often confused with Medicaid versus uncompensated costs. He explained the actual cost of care, minus Medicaid payments, equals uncompensated costs at certain hospitals, and the State of Nevada is eligible for federal funding because of uncompensated costs. Chairman Rawson added there is a federal definition for disproportionate share.
Mr. Hale elucidated the amendments to S.B. 377 hold UMC harmless, but it does not resolve the problem of high indigent caseloads.
Senator Mathews questioned whether there was data concerning hospital losses due to indigent care. Mr. Hale said an accounting report of uncompensated costs for participating hospitals is done each year by the state.
Chairman Rawson acknowledged UMC has a significant problem because of the numbers of indigent patients treated. Mr. Hale stated UMC had a loss of $77 million due to charity care (the difference between Medicaid payments and Medicaid costs, and the Clark County social service costs).
Chairman Rawson asked what the reimbursement was to UMC. In response, Mr. Hale said UMC would be made whole by subsidies through the county, the DSH program, and federal Medicare DSH money.
Chairman Rawson closed the hearing on S.B. 377, and opened the hearing on S.B. 371.
SENATE BILL 371: Revises provisions governing authority of certain physicians to possess, prescribe, dispense and administer controlled substances, dangerous drugs and other drugs. (BDR 40-1242)
Senator Michael (Mike) A. Schneider, Clark County Senatorial District No. 8, testified S.B. 371 has become controversial. He said the language on lines 9 through 27 on page 3 of S.B. 371 is causing the concern. Senator Schneider stated the intent of S.B. 371 is “to allow the citizens to get whatever medications they need to help them with pain management and, also, medication for experimental drugs.” He told the committee talking with constituents in his district has prompted his awareness of people’s need to have access to drugs that may save their lives. Senator Schneider explained people have gone to Mexico, Holland, and other places to obtain experimental drugs not attainable in this country.
Senator Schneider suggested working with Nevada’s United States senator at the federal level to ensure access to experimental drugs. He remarked the pharmacy board has taken an opposing position to S.B. 371 because physicians would sell prescriptions for the most “abused” drugs, at a great profit, and a great danger to patients. Senator Schneider opined physicians would not endanger their patients in that manner.
Senator Schneider commented an area designated for clinics and special doctors to disperse treatments, as well as partnerships with Duke University or Stanford, could be an option. He declared most people with the knowledge of imminent death would take a chance.
Richard J. Legarza, J.D., General Counsel, Board of Medical Examiners, voiced opposition to S.B. 371. He expressed the board’s concern S.B. 371 will allow physicians to prescribe medications and suffer no consequences. Mr. Legarza stated S.B. 371 does not address any problem pertaining to over-prescribing, or under-prescribing medications for patients in Nevada.
Mr. Legarza said, in 1998, the Nevada Board of Medical Examiners put together a task force, which formulated regulations addressing under-prescribing of medications for patients with chronic and intractable pain, and the perception the regulators were putting a “chill” on the prescribing practices of physicians.
Mr. Legarza told the committee the physicians of Nevada petitioned to have the regulations amended and to adopt the Federation of State Medical Boards of the United States, Incorporated, guidelines (Exhibit I). He opined the adopted regulations are appropriate and address both the problems of the regulators and the public having access to adequate medical care.
Louis Ling, General Counsel, State Board of Pharmacy, referred to a document titled “Nevada State Board of Pharmacy” (Exhibit J), which stated points in opposition to S.B. 371. He said S.B. 371 would no longer make physicians accountable. Mr. Ling emphasized large numbers of controlled substances are presently being prescribed in a regulated environment. He opined S.B. 371 would promote abuse of controlled substances.
Mr. Ling commented if S.B. 371 were passed, the Board of Medical Examiners would have no recourse if a bottle of water was labeled as medication and sold.
Chairman Rawson commented about the “white paper on marijuana.” He asked whether the concept of S.B. 371 could be amended to be beneficial to people in need of medical marijuana. Mr. Ling answered Nevada was in the forefront of alternative medicine. Chairman Rawson suggested a subcommittee be formed to discuss S.B. 371.
Lawrence P. Matheis, Lobbyist, Nevada State Medical Association, stated Senator Schneider and S.B. 317 have touched on one of the most important issues facing the health care system in the future. He said, because of the growth in Nevada, concern for chronic illnesses, lengthy terminal illnesses, and the options becoming available through technology, it would be wise to take this issue step-by-step. Mr. Matheis stressed the language in S.B. 371 raises concerns, but the heart of the issue is one the profession has tried to address for some time. Chairman Rawson invited Mr. Matheis to work on a subcommittee on this issue.
Robin L. Titus, M.D., Board of Medical Examiners, testified S.B. 371 directly conflicts with the function of the Board of Medical Examiners, which is to protect the public. She emphasized S.B. 371 would eliminate the board’s ability to scrutinize the physician who may be less than honorable. Dr. Titus stressed the patients that would try alternate types of treatment or medications are desperate and will try anything.
Shane A. Zide, Lobbyist, McMullen Strategic Group, spoke in favor of S.B. 371 testifying, in the last stages of his grandfather’s life, pain management with morphine was his grandfather’s only saving grace.
Chairman Rawson closed the hearing on S.B. 371, and opened the hearing on S.B. 397.
SENATE BILL 397: Prohibits certain acts related to drugs and Internet pharmacies. (BDR 40-102)
Senator Valerie Wiener, Clark County Senatorial District No. 3, read from prepared testimony (Exhibit K) and gave a description of how legitimate, rogue, and foreign pharmacies conduct business. She told the committee about a February 2001, Consumers Reports article entitled ”Prescription for Trouble,” and a research-writer’s experiences placing orders on suspicious websites.
Senator Wiener briefly explained S.B. 397:
Sections 3 through 7 define key terms used throughout the bill. These are: dangerous drug, imitation controlled substance, Internet, Internet pharmacy, and prescription drug. Section 8 explains the legal expectations and implications associated with “reasonable cause to believe” as this applies to circumstances described in the bill. Section 9 explains who is exempt from this bill. Section 10 explains who is liable for the filling/refilling of a prescription or the delivery of a controlled substance and imitation controlled substance, or a counterfeit substance, under the provisions of this bill. Penalties for violations of these provisions are delineated as Category C felonies; however, they are Category B felonies when the delivered drug is a Schedule 1 drug or proximately causes substantial death or bodily harm.
Section 11 requires a practitioner, located within this state, to examine the prescription purchaser within 6 months immediately preceding the date of issue of the prescription and when the practitioner knows, or should reasonably know, an Internet pharmacy will fill the prescription or otherwise cause or aid in the delivery of the prescription. Section 11 also applies to practitioners outside the state, who know or have reason to know the prescription purchaser is located within Nevada. Violation of these requirements constitutes a Category C felony; however, they are Category B felonies if the substance is a Schedule 1 or proximately cause substantial bodily harm or death. In any case, the county shall not grant probation or suspend the sentence of someone who commits one of these Category B felonies.
Section 12 grants the Attorney General concurrent jurisdiction with the district attorneys in Nevada to prosecute violators. Section 2, subsection 11, allows for the imposition of civil penalties, up to $350,000 for each violation described in sections 2 through 12 of this legislation (unless greater penalties are allowed under another provision of section 34). Section 23, subsection 4, allows for the imposition of civil penalties, up to $350, 000 for each violation described in sections 2 through 12 of this legislation (unless greater penalties are allowed under another provision of section 34).
Section 43 delineates an Internet pharmacy located within this state cannot fill or refill a prescription or engage in the practice of pharmacy for persons located inside or outside this state, unless the pharmacy is certified by the State Board of Pharmacy. An Internet pharmacy located outside this state shall not fill or refill a prescription or engage in the practice of pharmacy for a person located within this state unless the State Board of Pharmacy certifies the pharmacy. Section 43 also gives the pharmacy board authority to adopt regulations prescribing standards for certification, including those that may be modeled after national standards. The pharmacy board shall also post, on its Web site or other Internet site operated by or on behalf of the board, a list of Internet pharmacies. Section 47 relates to pharmacies located outside the state of Nevada that provide mail services to residents of Nevada who have a prescription. It also applies to those pharmacies outside the state that solicit or advertise for orders for prescription drugs from a resident of Nevada. It requires these pharmacies be certified in the same as an Internet pharmacy.
Senator Wiener urged the committee to support S.B. 397 because it is the first step for consumer protection for those people who make purchases on the Internet in good faith.
Chairman Rawson asked about the Internet pharmacy domiciled in Nevada. Senator Wiener answered S.B. 397 addresses those pharmacies domiciled in Nevada and doing business with people inside and outside of Nevada as well as those pharmacies outside of Nevada doing business with people in Nevada.
Chairman Rawson questioned the method of dealing with a felon outside of the state. Kevin C. Powers, Senior Deputy Legislative Counsel, Legal Division, Legislative Counsel Bureau, responded a felon outside the state would fall under the parameters of the uniform extradition act.
Chairman Rawson queried whether there should be a presumption of fraud, damages, or criminal intent in the civil penalties portion of S.B 397.
Kevin Higgins, Chief Deputy Attorney General, Fraud Control Unit for Industrial Insurance, Office of the Attorney General, testified the attorney general’s office would have the authority to prosecute someone outside Nevada who has committed a crime which affects the people of Nevada. He said people are arrested, extradited, and brought back to Nevada for felonies. Mr. Higgins explained handling felonies outside the country is difficult, but there are extradition treaties throughout the world.
Mr. Higgins reflected on the past history of telemarketing in southern Nevada. He told the committee, since the laws have become stringent and technology has progressed, telemarketers have moved onto the Internet. Mr. Higgins stated passing S.B. 397 would be a timely action to get a hold on the issue.
Chairman Rawson asked Mr. Higgins to explain section 34 of S.B. 397. Mr. Higgins replied it is a civil penalty, which is separate from a criminal penalty. Chairman Rawson questioned whether S.B. 397 creates a different standard for legitimate pharmacies by including the civil penalty.
Mr. Powers responded section 34 relates to a civil action brought by the state, and not a “private cause of action.” Chairman Rawson further queried whether section 34 of S.B. 397 would create problems for legitimate pharmacies. Mr. Powers opined legitimate pharmacies were exposed to existing civil fines if they engage in activity which violates the controlled substances chapter. Chairman Rawson questioned whether the fines were higher. Mr. Powers referred to lines 16 through 20 on page 14 of S.B. 397, and emphasized the fine was the lowest amount.
Senator Mathews questioned the reason there was not a fiscal note attached to S.B. 397. Mr. Higgins explained the pharmacy board would be setting up the regulations; therefore, many of the problems will be resolved before the criminal chapters would come into existence.
Senator Washington queried the language of lines 23 through 30 on page 3 of S.B. 397. Mr. Powers replied, “There is still availability under the probation statute for certain Category B felonies to have probation, and there is a limited list of felonies where probation is not available, but the list does not include all Category B felonies.” This would preclude probation for these types of Category B felonies.” Senator Washington asked to be provided with a list of the Category B felonies. Mr. Powers agreed to provide such a list.
Senator Mathews questioned where the rogue pharmacies obtain the drugs. Keith W. Macdonald, Executive Secretary, State Board of Pharmacy, testified there are various ways: reimportation, cultural markets prescribing medications through clinicians, and from people who disperse medications not controlled by the State Board of Pharmacy. Continuing, he said there are systems called the “secondary source market system, the gray market drug system, and the opportunity buying market system.” He said these systems have put small pharmacies that purchase discount drugs through the group purchasing organizations, into the business of providing discount drugs for long-term care and nursing homes. Mr. Macdonald explained when the pharmacies obtain the drugs, they sell them into the secondary source market. He opined there are approximately 20 wholesalers conducting business in a “disreputable and immoral manner” in Nevada.
Chairman Rawson questioned whether the State Board of Pharmacy was pursuing those wholesalers. Mr. Macdonald answered in the affirmative. He mentioned there was a wholesaler in Gardnerville, who moved $34-million worth of drugs in a year. Mr. Macdonald commented the wholesalers do a “bust-out,” which means they move on, and then the State Board of Pharmacy must pursue them. He related an incident concerning the mother of an autistic child who paid $1600 for four ampoules with labels written in a foreign language and whose contents could not be verified; therefore, could not be used.
Mr. Macdonald pointed out the owner of “prescriptionsonline.com” had been previously arrested and convicted in Louisiana for selling excessive numbers of drugs. He stressed S.B. 397 is important because of the rapid advances in technology.
Mr. Ling presented the committee with a document titled, “Points in Support of S.B. 397” (Exhibit L). He said page 3 of Exhibit L was taken directly from the Internet. Mr. Ling explained drugstore.com was a “good” pharmacy because the insignia “VIPPS” shown on page 4 of Exhibit L means a certified pharmacy that has passed a 16-point check through the National Association of Boards of Pharmacy. Chairman Rawson opined an unscrupulous pharmacy could copy the insignia and have it linked to its computers. Mr. Ling replied no one has accomplished that feat to date. Continuing, Mr. Ling listed the requirements a legitimate pharmacy needs to fill a prescription on-line as indicated on page 5 of Exhibit L.
Referring to pages 7 and 8 of Exhibit L, Mr. Ling pointed out how a “good” pharmacy contrasted with a “bad” pharmacy. He commented “bad” pharmacies would promote popular drugs and make access easy. Mr. Ling called attention to pages 8 through 14 of Exhibit L to demonstrate the unscrupulous tactics of the “bad “ pharmacies. He referred to pages 15 and 16 of Exhibit L as “your doctor visit” for these unscrupulous pharmacies, and the 14 questions on pages 16 through 18 of the “Patient Responsibility Statement,” as removing all liability from them. Mr. Ling said, upon investigation, the information on pages 20 through 22 of Exhibit L proved to not be legitimate.
Mr. Ling proposed an amendment (Exhibit M) to S.B. 397, which will assure the definition of “Internet pharmacy” only encompasses those pharmacies that are not properly licensed and certified, and this amendment will not affect existing telemedicine being practice in Nevada. Chairman Rawson asked the issue of a fiscal note be addressed. Mr. Ling responded the anticipation was to use existing staff. Therefore a fiscal note was not necessary.
Mr. Legarza stated the Board of Medical Examiners was in full support of S.B. 397.
Tom Wood, Lobbyist, Pharmaceutical Research and Manufacturers of America, voiced support of S.B. 397. He submitted technical amendments (Exhibit N), for the committee’s review. Chairman Rawson asked whether the amendments have been shared with the State Board of Pharmacy. Mr. Wood answered in the affirmative, and said the State Board of Pharmacy was in concurrence.
Gerald Ackerman, Director, Northeastern Nevada Health Center, University of Nevada School of Medicine, stated support of S.B. 397, but voiced concern for the language on lines 34 through 36 on page 3 of S.B. 397.
Robin Keith, Lobbyist, Nevada Rural Hospital Project Foundation, commended the sponsors of S.B. 397 for taking a proactive approach to the telemedicine issue. She reiterated concern for the requirement of physical examinations within 6 months. Chairman Rawson suggested language be drafted with the intent that nothing in S.B. 397 be construed to operate against the practices of the Nevada Rural Hospital Project Foundation and the University of Nevada School of Medicine. Mr. Ling stated the issue was addressed in the proposed amendment (Exhibit M).
Chairman Rawson closed the hearing on S.B. 397 and opened a work session on S.B.397, S.B. 542, S.B. 377 and S.B. 333.
SENATOR WIENER MOVED TO AMEND AND DO PASS AS AMENDED S.B. 397.
SENATOR AMODEI SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS SCHNEIDER AND TOWNSEND WERE ABSENT FOR THE VOTE.)
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SENATOR MATHEWS MOVED TO DO PASS S.B. 542 AND RE-REFER TO THE SENATE COMMITTEE ON FINANCE.
SENATOR WASHINGTON SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS SCHNEIDER AND TOWNSEND WERE ABSENT FOR THE VOTE.)
*****
Senator Wiener asked what benefit S.B. 377 has over the other bills concerning disproportionate share. Chairman Rawson responded S.B. 377 has a beneficial effect on the hospitals in Clark County that have no access to disproportionate share. He said it brings $1 million to Sunrise Hospital and $500,000 to Lake Mead Hospital.
Senator Amodei stated S.B. 377 encourages resolution to the issue of disproportionate share.
SENATOR AMODEI MOVED TO AMEND AND DO PASS AS AMENDED S.B. 377.
SENATOR WASHINGTON SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS SCHNEIDER AND TOWNSEND WERE ABSENT FOR THE VOTE.)
*****
Mr. Duarte stated the Division of Health Care Financing and Policy, Department of Human Resources, has some concerns with S.B. 333. He said the division cannot support a bill that differentiates the criteria for disproportionate hospitals based on demographic factors such as population. Mr. Duarte explained the payment and other criteria needed to be established statewide. Chairman Rawson commented S.B. 333 would bring in hospitals presently not eligible. Mr. Duarte noted S.B. 333 establishes criteria the division cannot support. Chairman Rawson suggested S.B. 333 be included in a future work document.
Chairman Rawson introduced H. Pepper Sturm, Committee Policy Analyst, to explain the “Work Session Document” (Exhibit O).
Mr. Sturm opened the work session with Senate Bill 116.
SENATE BILL 116: Clarifies and revises certain provisions governing use of restraints and interventions by facilities for mental health. (BDR 39-346)
Mr. Sturm said there were no proposed amendments, but the American Civil Liberties Union (ACLU) and others have asked the current policy at Lake’s Crossing be codified.
SENATOR WASHINGTON MOVED TO DO PASS S.B. 116.
SENATOR AMODEI SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS SCHNEIDER AND TOWNSEND WERE ABSENT FOR THE VOTE.)
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Mr. Sturm presented Senate Bill 165.
SENATE BILL 165: Makes various changes regarding education. (BDR 34-218)
Mr. Sturm said Senator Raggio proposed amendments 1 and 2; amendment 3 was proposed by the Department of Education, amendment 4 was suggested by Lucille Lusk, Lobbyist for Nevada Concerned Citizens, and amendment 5 was suggested by Ed Gobel of the Council of Nevada Veterans Organizations.
SENATOR WASHINGTON MOVED TO AMEND S.B. 165 WITH PROPOSED AMENDMENT 1.
SENATOR AMODEI SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS SCHNEIDER AND TOWNSEND WERE ABSENT FOR THE VOTE.)
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SENATOR WASHINGTON MOVED TO AMEND S.B. 165 WITH PROPOSED AMENDMENT 2.
SENATOR AMODEI SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS SCHNEIDER AND TOWNSEND WERE ABSENT FOR THE VOTE.)
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Chairman Rawson stated concern with the deletions suggested by the Nevada Department of Education. There was a general discussion among the committee and consensus not to approve the amendment proposed by the Nevada Department of Education.
SENATOR WASHINGTON MOVED TO AMEND S.B. 165 WITH PROPOSED AMENDMENT 4.
SENATOR AMODEI SECONDED THE MOTION.
THE MOTIONED CARRIED. (SENATORS SCHNEIDER AND TOWNSEND WERE ABSENT FOR THE VOTE.)
*****
In an exchange between Chairman Rawson, Senator Wiener, and Senator Washington concerning the “essence of the Federalist Papers, Senator Mathews suggested omitting the language concerning the “Bill of Rights” and the “essence of the Federalist Papers.”
SENATOR MATHEWS MOVED TO AMEND S.B. 165 WITH PROPOSED AMENDMENT 5 AND DO PASS AS AMENDED.
SENATOR AMODEI SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS SCHNEIDER AND TOWNSEND WERE ABSENT FOR THE VOTE.)
*****
After further discussion, Senator Mathews rescinded her original motion and modified her motion to omit the language “essence of the Federalist Papers.”
SENATOR MATHEWS MOVED TO RESCIND PREVIOUS ACTION TAKEN ON S.B. 165.
SENATOR AMODEI SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS SCHNEIDER AND TOWNSEND WERE ABSENT FOR THE VOTE.)
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SENATOR MATHEWS MOVED TO AMEND AND DO PASS AS AMENDED S.B. 165 WITH THE OMISSION OF THE “ESSENCE OF THE FEDERALIST PAPERS” IN PROPOSED AMENDMENT 5.
SENATOR AMODEI SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS SCHNEIDER AND TOWNSEND WERE ABSENT FOR THE VOTE.)
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Chairman Rawson called for a motion on S.B. 165 with the amendments 1, 2, 4, and modified 5.
SENATOR WASHINGTON MOVED TO AMEND AND DO PASS AS AMENDED S.B. 165.
SENATOR AMODEI SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS SCHNEIDER AND TOWNSEND WERE ABSENT FOR THE VOTE.)
*****
Continuing, Mr. Sturm presented Senate Bill 167.
SENATE BILL 167: Expands program of subsidies for provision of prescription drugs and pharmaceutical services to senior citizens to include persons with disabilities who have modest incomes. (BDR 40-827)
He explained there were no proposed amendments but various senior citizens groups opposed S.B. 167. Mr. Sturm said the disabled community supported S.B. 167, but the Department of Human Resources cautioned the funding would provide for fewer total individuals served due to the higher costs of disabled individuals. Also, the current contract would have to be renegotiated if disabled individuals were included.
Chairman Rawson commented the issues of the disabled community need to be addressed but suggested not taking any action at this time.
Mr. Sturm referred to tab C of Exhibit O, and explained the proposed amendments to S.B. 205.
SENATE BILL 205: Authorizes consideration of certain criminal proceedings and sealed records for purpose of licensing, employment or discipline of school personnel. (BDR 34-383)
Chairman Rawson stated S.B. 205 was a complicated bill. Senator Wiener requested a history of the issue. Chairman Rawson reflected on past instances of teacher misconduct. He stated the legislature has an obligation to protect the young people of Nevada. Senator Washington voiced concern the issue of professional misconduct be treated equally.
Senator Amodei suggested talking with the Legislative Council Bureau and asking, “If you entered this sort of mechanism in a judicial proceeding, can it be considered?” He said another consideration would be: “Would this present a constitutional problem with exercising an option in the judicial context that is supposed to carry with it no stigma or ramifications, and then treating the exercise of that option as a stigmatizing event for personnel purposes?”
Chairman Rawson asked the committee to hold S.B. 205 for further consideration.
Mr. Sturm addressed the various proposed amendments to S.B. 243 (Exhibit O).
SENATE BILL 243: Makes various changes concerning charter schools. (BDR 34-348)
SENATOR MATHEWS MOVED TO REVISE S.B. 243 WITH PROPOSED AMENDMENT 1 AND RETURN IT TO THE COMMITTEE FOR A VOTE.
SENATOR TOWNSEND SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR AMODEI WAS ABSENT FOR THE VOTE.)
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Mr. Sturm presented and explained the proposed amendments to S.B. 319 (Exhibit O).
SENATE BILL 319: Provides for licensing and regulation of halfway houses for alcohol and drug abusers as facilities for dependent and repeals requirements for certification of operators of such halfway houses. (BDR 40-1211)
Senator Wiener suggested eliminating the stigma attached to “halfway houses,” by renaming them “recovery houses” or using a “gentler” term.
Senator Mathews agreed to the “softer” terminology, but objected to the “clustering” of this type of facility in the neighborhood. Senator Washington commented “halfway house” is a legal term.
SENATOR WASHINGTON MOVED TO DO PASS AND RE-REFER S.B. 319 TO THE SENATE COMMITTEE ON FINANCE.
SENATOR AMODEI SECONDED THE MOTION.
After a discussion concerning the fiscal note attached to S.B. 319, Chairman Rawson suggested talking with Senator O’Donnell and Senator O’Connell concerning the financial aspect of the bill.
SENATOR WASHINGTON MOVED TO RESCIND THE PREVIOUS MOTION ON S.B. 319.
SENATOR TOWNSEND SECONDED THE MOTION.
THE VOTE CARRIED UNANIMOUSLY.
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Mr. Sturm explained the amendments and purpose of S.B. 328, (Exhibit O).
SENATE BILL 328: Revises provisions regarding requirement to obtain prior approval of certain expenditures for new construction by or on behalf of health facilities in certain counties. (BDR 40-408)
He said the amendments proposed by Mary Walker, representing Carson City and Carson-Tahoe Hospital, would create a pilot program for Carson City, which would set requirements for county commissioners to review projects, establish application fees, and require rules and regulations no less stringent than those of the state. In addition, Mr. Sturm told the committee, S.B. 328 would include a sunset of July 1, 2005, require a report to each legislative session, and have an effective date of July 1, 2001.
SENATOR AMODEI MOVED TO AMEND AND DO PASS AS AMENDED S.B. 328.
SENATOR SCHNEIDER SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY.
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Mr. Sturm presented Assembly Bill (A.B.) 12.
ASSEMBLY BILL 12: Revises provisions governing issuance of supplementary certificates of birth by state registrar of vital statistics. (BDR 40-458)
Mr. Sturm said there were no amendments or opposition to A.B. 12.
SENATOR AMODEI MOVED TO DO PASS A.B. 12.
SENATOR SCHNEIDER SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY.
*****
Concluding, Mr. Sturm presented Assembly Bill 14.
ASSEMBLY BILL 14: Increases compensation of members of certain boards of hospital trustees for rural county hospitals. (BDR 40-845)
SENATOR AMODEI MOVED TO DO PASS A.B. 14.
SENATOR WASHINGTON SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY.
*****
Chairman Rawson adjourned the meeting at 6:36 p.m.
RESPECTFULLY SUBMITTED:
Patricia Vardakis,
Committee Secretary
APPROVED BY:
Senator Raymond D. Rawson, Chairman
DATE: