MINUTES OF THE
BUDGET SUBCOMMITTEE
OF THE LEGISLATIVE COMMISSION
Seventy-second Session
January 29, 2003
The Budget Subcommittee of the Legislative Commission was called to order by Chairman William J. Raggio at 8:41 a.m. on Wednesday, January 29, 2003, in Room 4100 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.
SENATE COMMITTEE MEMBERS PRESENT:
Senator William J. Raggio, Chairman
Senator Raymond D. Rawson, Vice Chairman
Senator Dean A. Rhoads
Senator Barbara K. Cegavske
Senator Sandra J. Tiffany
Senator Bob Coffin
Senator Bernice Mathews
ASSEMBLY COMMITTEE MEMBERS PRESENT:
Mr. Morse Arberry Jr., Chairman
Mr. Bob Beers
Mrs. Vonne Stout Chowning
Mrs. Dawn Gibbons
Mr. Lynn C. Hettrick
Ms. Sheila Leslie
Mr. John W. Marvel
Ms. KathyrnA. McClain
Mr. David R. Parks
Mr. Richard D. Perkins
COMMITTEE MEMBERS ABSENT:
Ms. Christina R. Giunchigliani, Vice Chairwoman (Excused)
Mr. Walter Andonov (Excused)
Mr. David E. Goldwater (Excused)
Mr. Joshua B. Griffin (Excused)
STAFF MEMBERS PRESENT:
Gary L. Ghiggeri, Senate Fiscal Analyst
Mark W. Stevens, Assembly Fiscal Analyst
Steven J. Abba, Principal Deputy Fiscal Analyst
Mark Krmpotic, Senior Program Analyst
Tracy Raxter, Program Analyst
Denise Davis, Committee Secretary
OTHERS PRESENT:
Charles Duarte, Administrator, Division of Health Care Financing and Policy, Department of Human Resources
Debbra J. King, Administrative Officer IV, Division of Health Care Financing and Policy, Department of Human Resources
Michael Torvinen, Administrative Services Officer IV, Director’s Office, Department of Human Resources
Mary Wherry, Deputy Administrator, Division of Health Care Financing and Policy, Department of Human Resources
Michael J. Willden, Director, Department of Human Resources
Richard Kirkland, Director, Department of Public Safety
Dave Hosmer, Chief, Nevada Highway Patrol, Department of Public Safety
Philip H. Brown, Acting Chief, Investigation Division, Department of Public Safety
Brad Valladon, Acting Chief, Capital Police Division, Department of Public Safety
Doyle G. Sutton, State Fire Marshal, State Fire Marshal Division, Department of Public Safety
Alan Rogers, Data Processing Manager, Technology Division, Department of Public Safety
Frank Siracusa, Chief, Division of Emergency Management, Department of Public Safety
Jackie Crawford, Director, Department of Corrections
Darrel Rexwinkel, Assistant Director, Support Services, Department of Corrections
Rex Reed, Administrator, Offender Management Division, Department of Corrections
Wendy P. Naro, Senior Research Scientist/Forecasting Specialist, The Institute on Crime, Justice, and Corrections, George Washington University
Glen Whorton, Assistant Director, Operations, Department of Corrections
Dorothy Nash Holmes, Mental Health Programs Administrator, Department of Corrections
Chuck Schardin, Medical Administrator, Department of Corrections
Howard Skolnik, Assistant Director, Prison Industries, Department of Corrections
Dorla M. Salling, Chairman, State Board of Parole Commissioners, Department of Public Safety
Amy Wright, Chief, Division of Parole and Probation, Department of Public Safety
DIVISION OF HEALTH CARE FINANCING AND POLICY - OVERVIEW
Charles Duarte, Administrator, Division of Health Care Financing and Policy, Department of Human Resources:
In response to staff requests regarding assumptions used in developing this presentation, we have included supplemental material at the end of the “Budget Presentation to Legislative Commission’s Budget Subcommittee” (Exhibit C. Original is on file in the Research Library.).
Senator Rawson:
We are receiving many e-mails, letters, and calls telling us to cut the budget instead of raising revenue. They mention dropping unessential services. My understanding is we are in last place in terms of Medicaid spending per capita. We need to know in relative terms what we are putting into this. My sense is we are not being wasteful, but I would like to confirm that.
Mr. Duarte:
I believe the benefits we provide are essential, which is one of the reasons we provided the “Medicaid White Paper on Optional Program Expenditure and Cost Savings Implementation” (Exhibit D. Original is on file in the Research Library.). I believe national surveys place us near the bottom of national spending per capita on Medicaid. I do not think this budget is going to move us up a number of notches, or even get us close to the middle. This budget represents a mix of a few enhancements and a number of cost saving initiatives.
I would like to direct your attention to the first page of the presentation (Exhibit C). I would also note we have had an increase in our federal medical assistance percentage (FMAP), which is included in this budget. This is the amount the federal government matches against state dollars to pay for medical services. Every 1‑percent increase in FMAP is approximately a $10 million increase in federal fund support. For fiscal year (FY) 2004, we have used 54.30 percent for the FMAP, and for FY 2005 we have used 56.03 percent.
Page 2 of the presentation is an update of our activities since the last Legislative session.
Senator Raggio:
What is the “value purchasing model”?
Mr. Duarte:
The “value purchasing model” is an approach to operating the division and its programs as benefit plans instead of line-item transactions. Historically, a lot of our staff were involved in processing transactions. As an example, we processed 8000 payment authorizations a month. Rather than manage things at the paper level, the transaction level, this business process re-engineering (BPR) study told us to take a step back, create business plans, purchase health care services from organizations, and manage those purchased services. Two primary recommendations came out of the BPR. One recommendation was change the organization structure so we could more effectively manage these benefit plans, and the other was build a Medicaid management information system. We have completed the organizational changes and we are on our way to developing our Medicaid management information system (MMIS).
Senator Raggio:
When will it be operational?
Mr. Duarte:
The MMIS is targeted for full operations on October 1, 2003. Our pharmacy point-of-sale (POS) system is coming online February 1, 2003, at 7:01 a.m. All test results have been positive. I understand the providers are quite enthused about this because it will result in quicker payments for them and better information so they can get their claims paid more promptly.
Continuing on page 2, we did not eliminate the Children’s Health Assurance Program (CHAP) asset test, which is in the budget for the coming biennium. We implemented the breast and cervical cancer prevention and treatment program, which is a Medicaid option for women who are screened by the Women’s Health Connection for breast and cervical cancer and pre‑cancerous conditions. To date, we have spent approximately $61,000 from the General Fund and about $182,000 in total.
Senator Raggio:
Did the number of recipients meet expectations?
Mr. Duarte:
To date, I believe so.
Senator Raggio:
It was implemented late, so I am curious whether the numbers were what you had anticipated.
Mr. Duarte:
We are anticipating 100 recipients for a full year.
Finishing page 2, we have partially implemented some rate increases for providers. We have deferred any further rate increases after October 1, 2001.
Page 3 details how many home and community based waivers were authorized and filled as of December 31, 2002. Three divisions administer the waivers: Division of Health Care Financing and Policy, Aging Services Division, and Division of Mental Health and Developmental Services. The hiring freeze has affected our ability to fill slots.
Current challenges are also addressed on page 3. High caseloads are our primary issue. The only good news is this is a fairly low-cost caseload because it is primarily Temporary Aid to Needy Families (TANF) recipients, and those recipients who would otherwise qualify for TANF but do not receive cash assistance. They cost about $170 a month. Nevada Check Up also saw increases, but they were not as dramatic as in Medicaid.
Senator Raggio:
Your current projection for Nevada Medicaid caseloads is 160,000 for FY 2003. I believe I saw a chart showing over 203,000 cases projected for FY 2005. That is a startling amount because it is almost 10 percent of the population. In a State of a little over two million people, that means 10 percent of the population is anticipated to be receiving Medicaid by FY 2005, and then we have other recipients under other programs. Is one out of ten people in the State an unusually high projection?
Mr. Duarte:
I do not believe it is very high relative to other states. I have seen statistics where 14 to 15 percent of residents are covered.
Senator Raggio:
To determine eligibility, what is the poverty level now? What is it anticipated to be?
Mr. Duarte:
Currently, 100 percent of poverty for a family of two is around $11,600 a year.
Senator Raggio:
What is the qualification for Medicaid?
Mr. Duarte:
The qualification varies depending on groups. If we are talking about low‑income children or pregnant women, for example, the qualification is actually a little higher than 100 percent; it is 133 percent of poverty and $15,442 per year for a family of two. Our standards for covering children and pregnant women are probably some of the lowest in the nation at 133 percent of poverty.
Senator Raggio:
It seems very high that 10 percent of the population will qualify for Medicaid.
Mr. Duarte:
I can get additional statistics for you to confirm that, but I do not believe it is high relative to other states.
Returning to page 3, we have noted additional challenges facing us such as our Medicaid and Nevada Check Up shortfalls, our declining reserves, and the implementation of a major information system during a Legislative session. Our top two priorities right now are the Legislature and our system implementation. We are also working with rural counties concerning their inability to fund the county match program, where they pay for institutional care for residents who are above 156 percent of the social security payment level. We are including additional funds in our supplemental request to assist those counties.
Page 4 introduces our requests for the budget, which we believe includes a balanced mix of decision units to address mandates, improve services, and reduce costs. We have something in here for everyone. Page 5 shows projected caseloads graphically. It is evident from the chart the growth is in the area of low-income families, what we call “TANF Med” or “TANF-related Med.” These people look like TANF families, but only receive Medicaid and not cash assistance. Page 6 shows the Nevada Check Up projections for average monthly caseloads in FY 2004 and FY 2005.
Page 7 discusses additional budget items. We have some discretionary provider rate increases included in the budget, but much less than were requested in the last biennial budget. These are detailed under enhancement unit 350 (E-350) and E-351 in budget account (BA) 101‑3243.
There are a number of service improvement decision units. The first is an implementation of a Medicaid buy-in program for employed, disabled Nevadans. The community advisory committee has named this program Health Insurance for Work Advancement (HIWA). We propose implementation in the next biennium. Other units include home and community based waiver slots, improved community based services through expanded adult day health care and assisted living options, and the previously mentioned county match program. To maximize efficiencies and increased federal revenues, we are going to move the Division of Child and Family Services medical budget into our division to administer it through our programs. We are also doing significant work in cost-allocation between units in our division, which will generate additional federal revenue.
Page 8 lists our budget reduction and cost containment initiatives, which are referenced in more detail in E-600 and E-601. Our focus is going to be on pharmacy, because it is where costs are growing. We have implemented prior authorizations for certain types of high cost drugs, such as gastric acid drugs and arthritis medications, which are widely advertised on television. We are not denying them to anyone; we are just making sure less expensive, equally effective medications are utilized first. This is called step therapy. Service limitations will be imposed based on the needs of individuals, but we do not believe these will impact anyone in terms of their ability to stay in the community.
Other forces affect us, including federal mandates and the Health Insurance Portability and Accountability Act (HIPAA). Accelerated implementation of MMIS meets HIPAA deadlines, but causes payments to begin sooner. To address program mandates, we are moving the personal care aid (PCA) services to our covered State plan service. We cannot duplicate what is in the State plan in a waiver. There is a cost to this, however, primarily because we use different tools to assess recipients for PCA services.
Page 9 explains the proposed rework of the division chart of accounts because MMIS does not accommodate the type of presentation that we normally do. We will present the change in September, prior to implementation of MMIS in October. Dollar figures and intentions are not going to change, but the representation will change in the chart of accounts.
Health Care Financing and Policy - Budget Page HCF & P-1 (Volume 2)
Budget Account 101-3158
Page 10 introduces our administrative budget. We are trying to maximize efficiencies so we bring in the maximum amount of federal revenue, and we are trying to be cost-effective in terms of meeting the goals of the division. We are less than satisfied in terms of our performance measurements for all of our budget accounts. We have had significant difficulty compiling data we are confident in for the performance indicators. We believe the performance indicators are good, but the data sources currently available to us make it a challenge to gather information from multiple sources and disparate information systems, and then put the data into the performance measures. Our MMIS will help tremendously on a perspective basis, but we are less than satisfied, not with our performance, but with our ability to develop numerators and denominators for the performance indicators.
On page 11, maintenance unit 501 (M-501) adds a management analyst IV position, the HIPAA privacy officer. The decision units on page 12 reflect changes in staff budgeting. By moving them from programs to administration, we are able to bring in additional federal funds through cost-allocation and reduce our expenditures. Decision unit E-909 shows the net impact of those changes.
Senator Raggio:
What are the advantages and benefits of moving 26.5 positions in Medicaid and Nevada Check Up into the administrative budget?
Debbra J. King, Administrative Officer IV, Division of Health Care Financing and Policy, Department of Human Resources:
By moving positions that support multiple programs, such as information technology staff, clerical support staff, and the deputy administrator, into the administrative budget account, we are able to cost-allocate those positions to programs. For instance, Nevada Check Up receives an enhanced FMAP rate, so we get approximately 68 percent federal funding for the portion of their time and associated costs. If they are charged solely to Medicaid, we only get a 50 percent federal match. By reorganizing, we are able to maximize federal funds and reduce the General Fund appropriation.
Senator Raggio:
We keep hearing about the need for HIPAA privacy officers during presentations. I have lost count, but staff tells me there are eight requests. Sometimes, it is questionable whether you actually need a separate privacy officer for each budget. Why can we not meet the HIPAA requirements without hiring eight new people? Is there some way this function can be spread across budgets? What is the reason?
Mr. Duarte:
I cannot speak for the department or other divisions; the only thing I can speak to is the need within our division.
Senator Raggio:
How many HIPAA compliance officers are included in your budgets?
Mr. Duarte:
We have a HIPAA position requested for a privacy officer. Perhaps the best way to think of it is privacy deals with health care matters from the keyboard forward. We also have staff involved in security, which is really the integrity of the information systems that we administer, and we maintain paper documents. The easiest way to think of that is from the keyboard backwards. What we are requesting is one new position, primarily for privacy, which are the keyboard forward matters in my analogy.
Senator Raggio:
How many HIPAA compliance officers are in your total budget?
Mr. Duarte:
We have three positions dedicated to HIPAA. We have an administrative services officer (ASO) III who is on loan to the department for managing the April 1 deadlines for HIPAA privacy and security implementation. We have the new management analyst IV position requested for privacy, and we have a security officer that would be responsible for the keyboard back.
Senator Raggio:
Are any of these existing positions?
Mr. Duarte:
Two of them are.
Assemblywoman Leslie:
This might be better directed to Mr. Willden. I am also concerned about how all the HIPAA positions fit together. It seems there might be some duplication. I do not have a problem with your agency having three positions because I am sure you have more than enough work for three people. It seems to me we are going to get up to eight positions and every division will have one. Does the department have a plan for a lead person to coordinate the HIPAA items and avoid duplication? You have existing positions that obviously have more experience in this than some of the other divisions. Is there going to be something forthcoming to the subcommittee that outlines the leadership of HIPAA and what all these positions will be doing?
Michael Torvinen, Administrative Services Officer IV, Director’s Office, Department of Human Resources:
We are preparing a presentation for you, but it boils down to this: the federal regulations require a privacy officer for every covered entity. In the presentation, we will have regulatory citations. We have taken the position that each division is a covered entity, as defined by the act. Therefore, each division should have a privacy officer.
Assemblywoman Leslie:
That is exactly what I am interested in. I am not sure I agree with your interpretation, but I will wait to see what you present. The Welfare Division is not a covered entity, is it?
Mr. Torvinen:
They have decided it is not, and we are working with the attorney general’s office to confirm that. Employees of the division are still attending all the meetings, working through the HIPAA process, so they have not just decided, “No, we are not a covered entity,” and gone away.
Assemblywoman Leslie:
So there is some controversy within the divisions about who is covered and who is not. We will want to see the information and decide for ourselves. Also, I do not think a full-time position is required just because an entity is covered. I think the other issue we are all concerned about is duties. Does the Aging Services Division really need one full-time person to comply with federal requirements? I will look forward to hearing your presentation.
Mr. Torvinen:
The scope of what they have to do is daunting. It can cover things you would never think of. There is a variety of information out there, and we are just trying to sort through it and do the best we can.
HR, HCF&P, Nevada Medicaid, Title XIX - Budget Page HCF & P-11 (Volume 2)
Budget Account 101-3243
Mr. Duarte:
Page 14 introduces BA 3243, Nevada Medicaid.
Senator Raggio:
I think staff had a concern, which you can clarify, regarding the cost-allocation. What assumptions were used to develop the cost-allocation plan? Does it somehow reduce General Fund support?
Mr. Duarte:
Yes, but I will have Ms. King address that.
Ms. King:
The assumptions were allocations of support positions used for multiple programs, based on a variety of factors. Personnel-related functions were allocated based on the number of employees in each budget account. For the clerical staff, it was based on the number of staff in each program. Chuck, Mary, and I, the upper administration, were allocated 60 percent to Medicaid, 20 percent to Nevada Check Up, and 20 percent to cost containment. We assumed some of the rate-setting and cost-containment initiatives would be more appropriately charged to cost containment. Information technology staff was allocated based on number of staff. Costs relating to medical processing were based on the relative medical expense claims expense. The accounting staff was based on overall total budget. Overall, the cost-allocation is currently projected to save $319,000 in General Fund monies in FY 2004 and $303,000 in FY 2005.
Senator Raggio:
That is helpful, thank you.
Mr. Duarte:
On page 15, we describe new programs included in this budget. Decision unit E‑425 is HIWA, the Medicaid buy-in program I mentioned earlier. We will be implementing it January 2004. Projections for participants and General Fund costs are indicated.
Senator Raggio:
What will be the eligibility for those who would want to participate in the buy-in program?
Mr. Duarte:
There are two general levels of eligibility. The first, which we are recommending at this point, is based on their Supplemental Security Income (SSI) payment level. We are tagging eligibility of unearned income, SSI income, at $699 a month. Additionally, there is a 250 percent of federal poverty limit on earned income, calculated after a number of work-related disregards. Taking those disregards into consideration, we will be imposing the same 250 percent of earned income limit as well.
Senator Raggio:
That is a little hard to follow. Give us an example of an individual who would be eligible, what earned income is, and what the disregards are for computing it. We have had a lot of interest expressed in this, so I think we really need to understand who is going to benefit.
Mary Wherry, Deputy Administrator, Division of Health Care Financing and Policy, Department of Human Resources:
I will first qualify that I am not an eligibility specialist; welfare handles eligibility. An advisory committee worked to construct a ticket-to-work program for the state of Nevada. It used the same rules the federal government uses for earned and unearned income. The recommendation was to use the 250 percent of federal poverty level rules versus the 450 percent of federal poverty level rules. Basically, that means someone can earn up to 250 percent of the federal poverty level, which Mr. Duarte previously stated is $11,000 for a two‑person family, and be eligible for the program. If they earn more, they would not be eligible for the program. They can have unearned income.
Senator Raggio:
What is an example of unearned income?
Ms. Wherry:
A Social Security Disability Insurance check or a trust fund. Some may have other sources of revenue they would not consider to be part of the value they could obtain.
Senator Raggio:
Is there a cap on unearned income?
Ms. Wherry:
In this budget, we are recommending a conservative cap of $699. The federal government does not require a cap and the advisory committee is recommending no cap.
Senator Raggio:
How much earned income can they have?
Ms. Wherry:
A family of two can earn $29,000 at the 250 percent of federal poverty limit.
Senator Raggio:
What are the disregards in computing that?
Ms. Wherry:
Actually, there are not many. The advisory group recommends a resource standard of $15,000. The earned-income disregards would be employment‑related work expenses including transportation, work‑related PCA, special clothing, laundry needs, educational expenses to enhance employability, service animal expenses, residential utility allowances, translation or adaptive expenses, 50 percent of out-of-pocket dental care costs, and child care expenses with a limit of 15 percent. For resource exclusions, the group recommends approved accounts less than $15,000, special needs trusts, retirement accounts recognized by the Internal Revenue Service, Social Security Administration death benefit payments, medical savings accounts, tax refunds, and life insurance policies with cash surrender values.
Senator Raggio:
This primarily comes from Title XIX funding?
Ms. Wherry:
Yes.
Senator Raggio:
How much General Fund money are we projecting in the budget for this program?
Mr. Duarte:
For FY 2004, we are requesting $1.27 million. For FY 2005, we are requesting $3.21 million.
Senator Raggio:
What is the total cost of the program over the biennium? How much is General Fund money? How much will that provide for the total program? Is it $10.3 million?
Mr. Duarte:
Yes, it is.
Senator Raggio:
So, about $6 or $7 million comes from Title XIX?
Mr. Duarte:
Correct.
Senator Raggio:
Does some of it come from co-payments of some kind?
Mr. Duarte:
There is a premium that people have to pay in.
Senator Raggio:
I am trying to understand the whole program. Are you projecting it will serve about 555 people in the first year and 654 people in the second year?
Mr. Duarte:
That is correct.
Senator Raggio:
What is the projection for growth? Once we institute this program, is it not likely to have a significant increase in applicants?
Mr. Duarte:
We do not believe there will be a rapid expansion in this caseload. The number of people in Nevada who are disabled, but are interested in and able to work is somewhat limited. We expect there will be some natural progression of people interested in this, but not a significant number.
Senator Raggio:
Is the number of applicants going to be limited by the amount appropriated? Is there a cap on this?
Mr. Duarte:
I do not believe we can impose a cap on this program.
Senator Raggio:
What happens if you get to the second year of the biennium and you have 850 applicants?
Mr. Duarte:
We may have to make some decisions about eligibility at that time, but it is not a program we can cap. We are anticipating caseload growth of around 2 percent a year once it is fully operational.
Decision unit E-432 is the reintroduction of an item approved during the last session, the elimination of the CHAP asset test. It is basically the same proposal we provided to you last session. Children who are in Nevada Check Up because their family has assets will migrate to Medicaid. Keep in mind we will still get a 65 percent match for those children. This proposal will also enhance the ability of pregnant women to qualify for Medicaid much more quickly and enter into prenatal care, hopefully before their second trimester. We are excited about the opportunity this provides us to improve prenatal access. There has been a lot of talk about women being unable to enter prenatal care, primarily in regard to the health maintenance organization (HMO) program we operate. It is not true. It takes a while for individuals to get information together, present it to the eligibility worker, and for the eligibility worker to validate the resource information. Eliminating the resource requirement will expedite eligibility and make it easier for women to get into coverage earlier. The requested dollar amount is $1.16 million in FY 2004 and $2.77 million in FY 2005.
Turning to page 16, Section 5 presents budget reduction initiatives. Decision unit E‑600 reduces costs and reimbursement rates to comply with the Governor’s 3‑percent budget-reduction request in FY 2003. We are continuing those reductions to FY 2004 and FY 2005. Some of the items have been discussed previously. In October 2001, we exempted unemployment insurance benefits in Medicaid, Nevada Check Up, and TANF in response to the Governor’s request. We rescinded the exemption in October 2002.
Senator Raggio:
Are the amounts following the items their estimated savings?
Mr. Duarte:
I believe they represent total savings, not the General Fund component. Total General Fund savings from E-600 initiatives are shown.
The next set of initiatives deal with cost containment. In the PCA program, we are limiting ancillary items we pay for. These are not the primary activities of daily living, the major things an individual needs to stay in the community; these are supplemental things, called instrumental activities of daily living (IADL). We know of a number of people that are receiving additional IADL and ADL (Activities of Daily Living) services, which goes against the intent of PCA. We are adjusting authorizations for IADL activities. The majority of these people are not at risk of institutionalization.
Senator Mathews:
Could you give us an example of an IADL?
Mr. Duarte:
An IADL is something like grocery shopping.
Senator Mathews:
You mean they cannot eat? You can give them a bath but you do not want them to eat?
Mr. Duarte:
We are not suggesting they cannot eat. We are limiting the amount of time we pay for grocery shopping. We are not eliminating that activity from payment. We are reducing the amount of time for certain individuals who are receiving an excessive amount of IADL support.
Senator Mathews:
Give me some idea of what they do.
Ms. Wherry:
I think one of the important variables in the recommendation is we will be assessing the functional deficits an individual has. For example, if an individual has four functional deficits, he or she would probably be allotted more ADL and IADL. If an individual has one functional deficit, then he or she would need very limited IADL. We had some people who were able to grocery shop and do light housekeeping, but they were allowed more services than they needed because the standardized uniform assessment tool we adopted from the state of Montana increased the time. We propose stepping back to the essentials people need. Someone may need assistance bathing, but he or she can go to the market.
Senator Mathews:
I realize you are a nurse, and I realize that I am probably going to jump all over you as a nurse, but I am concerned we will start cutting time for people who really cannot help themselves. I am going to need to consider further the decision that giving a bath is more important than grocery shopping. When we come to committee, I will, and I will have read more about what you are doing.
Ms. Wherry:
I want to clarify our goal has been, and will continue to be, to keep people at the lowest level of care in their homes and in their community. We would never cut back a service, as long as we have the funding for it, which would put people in a situation where they may need a greater level of care. We would only do it in a situation where their functional deficits correspond to the actual care needs they have. S.B. No 174 of the 71st Session was an initiative requested by the Senate 2 years ago, and through that study the recommendation was made to provide up to 6 hours a day of PCA for people who are the most severely disabled. Our current plan, including our recommendations, would still allow more than that for ADLs, and on top of that, the IADLs. What we would continue to provide is greater than the recommendations from the study.
Senator Mathews:
I appreciate that. We will get into more details when we get to committee.
Mr. Duarte:
The next area of reductions is the life skills training (LST) program. We will be assessing the clients who currently receive LST with a functional assessment tool in order to determine their levels of need. We believe in most cases these individuals will respond well and stay in the community with only PCA services. If they do need LST, we will certainly see that they try to get into our home- and community-based waivers. The problem is we have been providing this as a State plan service and it is not in our State plan, so we have to make a fairly significant change. It affects some providers in Clark County, particularly Accessible Space Incorporated. We have been in communication with them about this change, and we will help them through this transition.
We considered additional changes to physician reimbursements, continuing to align our physician reimbursement schedules with Medicare. A study conducted by The Lewin Group for the California Medicaid program in June 2001 indicates we have the second highest reimbursement rates for physician services for any Medicaid program in the nation. The only state higher than Nevada is Alaska. We pay more than Medicare. There is a general principle in the Medicaid program that we not pay more than Medicare for the same services Medicare provides. This change will not take us near the bottom, but it will probably take us down to about the first one-third of states in terms of physician reimbursement. We are closely monitoring the changes going on in Congress with respect to physician reimbursement and Medicare, but we are proposing that our methodology, which is quite outdated, be aligned with Medicare’s.
Senator Raggio:
Is the proposal to establish a reimbursement level at 90 percent of Medicare reimbursement except for obstetric and prenatal services? What are you going to do with those two groups? That is the problem, particularly in southern Nevada. What are you proposing?
Mr. Duarte:
We will try to maintain the obstetrical service reimbursements close to the 100 percent level. For some of the other services, some of the technical specialties, it will be less than 90 percent. For some of the preventive and medicine codes, things we routinely pay for when someone goes to the doctor, it will be higher than the technical specialties. Approximately 90 percent of Medicare is our proposal.
Senator Tiffany:
The obstetricians came up to me with the Governor and asked for a Medicaid “carve out.” Can you tell me what the difference is between that request and what you are offering?
Mr. Duarte:
The “carve out” that a few of the obstetrician/gynecologists in Clark County have requested is to take them outside of the mandatory Medicaid HMO program. We do not believe it is necessary or practical. As a matter of practicality, an obstetrician/gynecologist cannot carve himself or herself out of a health system.
Senator Tiffany:
My understanding is the north is “carved out,” but the south is not.
Mr. Duarte:
The north does not have a “carve out,” per se; the north does not have a mandatory Medicaid HMO program. It is our intent with the current request for proposal (RFP), which we hope to implement in July, to address the concerns the obstetricians in Clark County have raised. There are two primary concerns that I am aware of. One is reimbursement level. Health maintenance organizations negotiate rates that could be below the Medicaid fee-for-service program. What we have in our current RFP is a requirement that, for routine obstetrical care, the HMO pays the contracted HMO obstetrician the same rate as would be paid in the fee‑for‑service Medicaid program. I believe that eliminates the concern. It is a “carve in” program instead of a “carve out” program, in other words.
Senator Tiffany:
What would they have been reimbursed if they had been “carved out” as opposed to requiring the HMOs to pay at the same rate as Medicaid fee‑for‑service? What would the difference have been?
Mr. Duarte:
The current difference is rather small for routine obstetrical care because the HMOs have raised their rates. It is my understanding one health plan offers negotiated rates between 90 percent and 100 percent of Medicaid fee‑for‑service rates for routine obstetrical care. The other HMO pays approximately 90 percent of the reimbursement rate of Medicaid fee‑for‑service.
Senator Tiffany:
Give me an example for delivering a baby. What would the difference be if they were “carved out” or “carved in?”
Mr. Duarte:
For one of the HMOs, it is the same, approximately $1800. For the other, I believe it is approximately $1700 versus the $1800 paid fee-for-service.
Senator Tiffany:
What would the difference be between the north and the south, where the north does not have to have a mandatory HMO?
Mr. Duarte:
It would be $100 for one of the HMOs, but that is going to change with the next contract.
Senator Tiffany:
That is not what the obstetricians are saying.
Mr. Duarte:
I do not know where they get their information, but we often do not agree.
Senator Tiffany:
I think their reimbursement is probably where they get their information.
Mr. Duarte:
We have audited what they get reimbursed, and our information appears to be correct. I do not want to argue with them.
Senator Tiffany:
They will probably be more involved in the subcommittee. I understand there are a number of them who are just not taking Medicaid any more.
Mr. Duarte:
But there are also a large number of physicians and obstetricians who still see Medicaid clients and continue to meet the adequacy requirements for HMO coverage.
Senator Tiffany:
There is a difference of opinion and we will discuss this more in the subcommittee.
Senator Cegavske:
What is the timeline now for reimbursement for the doctors?
Mr. Duarte:
In terms of the changes we have proposed here, we actually are moving ahead with changing our Medicaid State plan as soon as possible.
Senator Cegavske:
What is the exact number of days?
Mr. Duarte:
I do not have the exact number of days. The general process is to develop something called a state plan amendment, then send it to the federal Centers for Medicare and Medicaid Services. They have up to 90 days to engage us in questions and responses. Prior to that, the proposed change needs to go through a public hearing, for which we have to give advance notice. There is a timeline here. I would estimate 4 months before the change is actually effective. April is our anticipated date.
Senator Cegavske:
Are you saying it currently takes 4 months for the doctors to get reimbursed?
Mr. Duarte:
I misunderstood the question. The last information we got was 33 days. That is an average from date of claim submission, not date of service. It is the date we receive the claim in-house.
Senator Cegavske:
That is a little different from what the doctors are telling us. Have you seen a decline, based on the questions that were asked before, of doctors that are willing to take Medicaid patients?
Mr. Duarte:
Initially, after the medical malpractice situation hit, when St. Paul Companies pulled out of Nevada, we saw a fairly rapid decline. The decline was not only in our program, in both fee-for-service and HMO in terms of obstetricians willing to take pregnant Medicaid clients; there was also a decline in the Baby Your Baby Program, which serves as a feeder to the Medicaid program.
Senator Cegavske:
I heard the most complaints from doctors about the Baby Your Baby Program, especially those trying to help ladies in Pahrump. The doctors indicated sometimes it was 9 months before they were reimbursed.
Mr. Duarte:
I would have to look at their specific information. We have been dealing with some providers in eastern Nevada concerned about reimbursements. There is often another side to this story when you get down to the claims level, how and what they are billing. We often find we can provide valuable technical assistance to them to expedite their payments.
Senator Cegavske:
Have you been able to help their staffs with billing?
Mr. Duarte:
Whenever these kinds of issues come to our attention, the first approach we take is technical assistance in billing.
Senator Rawson:
Could you discuss the changes in graduate medical education payments?
Mr. Duarte:
We currently pay graduate medical education (GME) primarily to one facility, the University Medical Center (UMC). Our reimbursement rates pay for indirect GME costs, the administrative support required for GME. We were sued in 1998 by UMC for inadequate reimbursement for direct GME costs. The settlement resulted in a requirement that we pay them up to $2.3 million a year in direct GME payments. We have continued to do that. That provision was to stay in place until we actually implemented a new State plan for GME. This budget proposes an amount we believe will be in the State plan proposal, which is approximately $800,000.
Senator Raggio:
Is this stipend for interns, residents, or what?
Mr. Duarte:
The GME payments are intended to reimburse hospitals for the additional costs of supporting teaching programs, be it in the amount of attending physician time, assistant physician time, or teaching physician time required, and for the reduced productivity of a resident physician in the institution. Medicare and Medicaid both pay direct GME payments to teaching hospitals.
Senator Rawson:
The interim health care committee has gone into this issue a little bit and has a bill draft to add some elements to try to stimulate residency training in obstetrics. It is important we coordinate the hearing on that bill with our budget discussions on this.
Mr. Duarte:
Finally, in E-601, we have some pharmacy changes. I mentioned the preferred drug list and a maximum allowable cost price list for medications. The overall savings for these reductions are shown at the bottom of page 16. On page 17, E‑605 proposes the elimination of two positions.
Our biggest maintenance decision unit, M-200, is caseload related. We have already discussed our caseload growth projections. Six staff positions are requested. M-501, which is a HIPAA-related decision unit, helps us make accelerated payments resulting from the implementation of the MMIS. We believe the system will be much more efficient in terms of paying all our providers and we will see a reduction in our current claims inventory, the number of days that physicians, hospitals, and the rest have to wait to get paid. The immediate reduction in claims inventory will result in a bolus of payments, which we estimate at $7.4 million. Operationally, MMIS will result in significant savings to us on an ongoing basis.
Maintenance unit M-592 is a mandated decision unit. It moves PCA services from the Aging Services Division waiver to the Medicaid program to our State plan. As I mentioned previously, you cannot have a waiver service that duplicates a service in the State plan, so we need to move the waiver service from the Aging Services Division budget to our budget. While we do this, we will also be changing the functional assessment and actually increasing the number of hours some of these recipients on the waiver receive. There is a net cost to this, which is shown at the top of page 18.
Decision unit E-350 relates to the strategic health care plan. We were not able to do everything the strategic health care plan requested, but we have two general areas where we are increasing general reimbursement rates. The first area is in therapy services, which primarily affect children with special needs. These are therapies such as speech therapy, physical therapy, and occupational therapy. In addition, we are recommending increases to home- and community‑based waiver services in the mental retardation and developmental disabilities waiver, which is administered by the Division of Mental Health and Developmental Services (MHDS). The General Fund portion for that component of this decision unit is in the MHDS budget. The figures on the middle of page 18 reflect the therapy rate increase.
Decision unit E-351 deals with some providers that were not included in the strategic health plan evaluation of provider rates. These are providers that are often overlooked but are essential to our program. These include things such as medical transportation, air ambulance, orthodontia, dental services, some of the group care waiver services, and PCA services under our disabilities waiver. The cost impacts are shown at the bottom of page 18.
Decision unit E-426 is a stop-loss program for the counties, primarily the rural counties. We will be presenting a supplemental payment request. One part will assist counties to pay indigent care obligations in the current fiscal year. This is a growing burden, particularly on rural counties that have limited ability to assess an ad valorum tax. For some of the counties, we are currently receiving up to or more than their 8‑cent ad valorum limit. The list of counties includes Carson, Esmeralda, Lincoln, Lyon, Mineral, Pershing, and White Pine. We anticipate we will see Lander County added to the list next year. The county pays up to its 8‑cent limit, but if it is unable to pay more than that, we will provide from the General Fund to help pay for indigent care obligations for the county match program. The costs are indicated at the top of page 19.
Senator Raggio:
Is this the program where all counties are required to participate?
Mr. Duarte:
Yes.
Senator Raggio:
Are they ineligible for the federal funding if they do not participate?
Mr. Duarte:
That is correct. It is all or nothing.
Senator Raggio:
Are those counties unable to make the match required to have the 8-cent levy or be at their maximum statutory rate?
Mr. Duarte:
In order to access the funds that we are proposing, they will have to be at their 8‑cent limit.
Senator Rhoads:
What if they are up to the cap, $3.64, and they cannot increase to an 8‑cent ad valorum levy? What happens then?
Ms. King:
In the counties mentioned, they are all at least at the 8‑cent limit. Many of them are significantly over the 8-cent limit. This is a reduction for those counties.
Senator Raggio:
But the 8-cent levy does not raise the amount they are required to match.
Ms. King:
Exactly.
Senator Raggio:
If they are not up to the $3.64 rate, do they have to go up to that rate?
Ms. King:
We are looking at just the 8 cents, not the $3.64.
Senator Raggio:
What is so magical about 8 cents?
Ms. King:
That is the amount determined as the portion of the 10-cent tax rate which counties levy for health care.
Senator Raggio:
If 8 cents does not raise the required match, then why not require them to go to 10 cents or 12 cents?
Mr. Duarte:
This was a negotiated item with the counties, particularly the rural counties.
Michael J. Willden, Director, Department of Human Resources:
As I understand the current taxing procedure, within the $3.64 the counties can tax, there is a 10-cent levy related to indigent care. Many counties are well beyond the 10-cent levy that, by statute, can be charged. I believe Mineral County is at 34 or 35 cents, so it not only levies 10 cents as the law provides, it goes way beyond that by 25 cents. In working with the rural counties, the 10 cents currently works as follows: they charge the 10 cents and give a penny of the 10 cents to the bailout fund, which is managed by the Nevada Association of Counties. When necessary, the counties that cannot raise revenues for the county match program can go to the bailout fund. This has not worked because that penny does not generate enough money to bail them out.
During this biennium, we used the entire bailout in 2002 and there is no more bailout money for 2003. The counties and Mary Walker, their consultant, indicated they would like to retain a couple of cents of the 10 cents to make indigent care payments to local hospitals. That money does not come to Nevada Medicaid, it just provides indigent care payments. The counties suggest the best thing to do is require all have to get their 8 cents in, and after that, the stop‑loss mechanism would come into place. There would not be a bailout fund moving forward, and the State will step in after the 8 cents has been charged. There will be benefit to those counties like Mineral County that are at 34 cents because they will be able to redirect that taxing levy to police, fire, roads, and other things the counties do.
Mr. Duarte:
Decision unit E-451 is an adjustment. It represents both the federal and General Fund portion for the waiver slots that Aging Services Division has in its enhancement decision units. The amounts are shown on page 19.
Decision unit E-452 adds several levels of care to adult day health care. We believe this is going to be fairly cost-neutral. We do not see significant costs, even when it is fully operational in 2005.
Senator Raggio:
Will this reduce skilled nursing costs?
Mr. Duarte:
That is how we offset the costs.
Decision unit E-455 requests additional home- and community-based waiver slots for physical disabilities waivers, and 2 case managers to manage the caseload. The General Fund requests are at the bottom of page 19.
Senator Raggio:
How will this impact the waiting lists?
Mr. Duarte:
The next decision unit addresses the waiting lists. Decision unit E-456 requests an additional 90 slots to assist in removing people from the waiting lists. The associated costs are shown near the top of the page 20. Our intent is to use the 70 slots first for some of the most functionally-needy people on the waiting list, and use the 90 after that to address the remainder of the waiting list and people who need services who are currently in the community.
Senator Raggio:
Overall, with the two unit modules, are we looking at a couple of million dollars, and will that have a major impact on the waiting lists?
Mr. Duarte:
Yes, it will.
Senator Raggio:
These are extremely needy people, and I would think that is important.
Mr. Duarte:
It is important to us also.
Senator Cegavske:
Did you give us the numbers of people on the waiting lists?
Mr. Duarte:
I did not, but I have the numbers available. We currently have 83 recipients on the physical disabilities waiting list, and we have 13 more individuals who are in the intake process. We were routinely running around 50 on the waiting list and moving that list along fairly aggressively until we had a hiring freeze. We have had to slow down activity and increase caseloads per worker. We are still getting people on, but certainly not at the pace we did before.
Decision unit E-457 is an assisted-living expansion for the group care waiver in the Aging Services Division’s home- and community-based waiver program. This will enable us to allow people to stay in the waiver, to stay in their apartments or homes, and age in place. They will not have to go to institutions if they exceed the service availability through the waiver because they can get additional services. We believe this does have some cost offsets in terms of institutional care, but there are still costs, which are indicated on the middle of page 20.
The next item, E-500, is a revenue adjustment account. It adjusts our budget to some of our sister agencies. The next group of decision units on page 20 is related to the reallocation and cost-allocation activities I previously described. The associated amounts are shown at the top of page 21.
Decision units E-910, E-911, and E-912 represent the transfer of medical payment accounts from the Division of Child and Family Services to the Medicaid program. Payments will come through us and through our information systems, which will, hopefully, reduce some of the administrative burden we currently have in reconciling accounts between divisions. On page 21, E‑910 represents the base amount, E-911 represents inflation adjustments, and E‑912 represents caseload increases.
Section 8 is a supplemental appropriation request, which I mentioned previously. It requests about $15 million for the projected shortfall for Medicaid and Nevada Check Up. If we are able to get back the 3-percent revision from this fiscal year, the supplement can be reduced to approximately $7.6 million.
Senator Raggio:
When will you know that?
Ms. King:
The Executive Budget anticipates it will be coming back and our budget includes only the $7.6 million supplement.
HR, HCF&P, Nevada Check Up Program - Budget Page HCF & P-31 (Volume 2)
Budget Account 101-3178
Mr. Duarte:
Moving ahead to page 22, BA 3178 deals with the Nevada Check Up Program. It provides health insurance coverage to children who are uninsured, and who otherwise do not qualify for the Medicaid program. These are children who have family incomes below 200 percent of the federal poverty limit. We do have an enhanced federal medical assistance percentage (FMAP) that is being provided to us for this program. It is being further augmented by the changes in FMAP that I discussed for the Medicaid program. We are using 68.01 percent as the federal match for FY 2004 and 69.22 percent for FY 2005. Basically, just 30 percent of the dollars to support these activities are General Fund. Currently, Nevada Check Up is not an entitlement program. We use Medicaid policy in terms of what we pay for, the types of services that are covered, but it is not an entitlement. Families are assessed a quarterly premium based on family size and income. On page 22, the section entitled “Public Purpose and Critical Need” explains the need for the program.
Assemblyman Beers:
Do you attribute the fact these children may not do as well in school to whether they do or do not have access to insurance? I suppose there are some parents involved in that equation, too.
Mr. Duarte:
Certainly parents are involved, but if parents cannot afford to send children to physicians, and they do not receive the types of treatment and medication they need for simple, preventable conditions, they will be out of school. That not only takes children out of the educational equation, but it often takes parents out of the work equation, because parents become caretakers for the children at home. Those combinations of factors are one of the reasons Congress passed the State Children’s Health Insurance Program (S-CHIP) in 1997.
Assemblyman Beers:
Did this study attempt to correlate whether or not children with or without insurance did or did not do well in school with whether they were read to every day by their parents?
Mr. Duarte:
No.
Section 5 on page 23 explains budget reductions. We were paying a lower rate for Medicaid and a higher rate for Nevada Check Up. Looking at actual utilization statistics, we found utilization for Nevada Check Up children was actually lower than Medicaid, so we were able to reduce our HMO payments accordingly. You see the budget savings on the middle of page 23.
We have no material decision units for maintenance in Section 6. In Section 7, the largest enhancement requested is to accommodate caseload growth. We anticipate about 1 percent growth per month in the next biennium. The General Fund component to accommodate that caseload growth is shown at the top of page 24. This is a fairly inexpensive program because of the federal match, and the children are fairly inexpensive to cover.
Senator Raggio:
In the major counties, is Nevada Check Up handled by a capitation program with insurers? Where that is not available, in the rural counties, do they pay a fee for service? Is that how it operates?
Mr. Duarte:
Yes.
Senator Rhoads:
Where do you get the 1 percent per month? I believe I just heard yesterday that the State population grew at 2.3 percent. That is 12 percent a year.
Mr. Duarte:
That was from historical and current data we have. The trend has been about 1 percent a month.
Senator Rawson:
This was a relatively new program and there was a pent-up demand. Essentially, you had 18,000 to 20,000 kids out there that had none of these services. As the program came on, they were added to the program faster than the population growth.
Assemblyman Beers:
Presumably, with that level of growth, at some point soon we would have 100 percent of the children in Nevada covered.
Mr. Duarte:
We would like to think that would be the case.
Assemblyman Beers:
So, I would not have to have coverage for my children any more.
Mr. Duarte:
Actually, this program is intended for uninsured children. There is a “crowd‑out” provision, which is required by the federal government. When this program was initially implemented at the federal level, the concern was it would potentially crowd out children from getting coverage from employer groups. The Congress put in a requirement that a state that implements a program like this must demonstrate it has a provision to protect against “crowd-out” from commercial health coverage. We have one of the stricter requirements in the nation. We ensure the child is uninsured for at least 6 months prior to applying for the service.
Assemblyman Beers:
Is there a maximum number? Have we identified what the maximum eligible population is for this? So far, we have just seen it grow and grow at rates that are exponentially greater than the growth of the State.
Mr. Duarte:
The Great Basin Primary Care Association has done a good job of studying the uninsured rate by age demographic and income demographic across the State. It has worked with a well-known firm, Mathematica Inc., to develop the methodology. My understanding is the association just updated its uninsured statistics for 2002 and will release that report shortly. Previously, using 2001 estimates of uninsured children, there were approximately 35,000 children in the study who were uninsured, neither in Medicaid nor Nevada Check Up.
Assemblyman Beers:
How many of those children are now covered?
Mr. Duarte:
We have covered a significant portion of those, and intend to cover up to an average of 32,000 by FY 2005.
Assemblyman Beers:
Do you anticipate the growth rate in this program would end after 2005?
Mr. Duarte:
No. I think the growth rate in uninsured children will continue to outpace our ability to cover them.
Assemblyman Beers:
Is there a limit to the demand for this program?
Mr. Duarte:
There is a limit in terms of what the federal government appropriates for the federal match. If a state exceeds the federal allotment for the Title XXI program, in our case, Nevada Check Up, the state is on the hook for the whole cost of care for the child. That is why this is a nonentitlement program, so states can put some limits on coverage.
Assemblyman Beers:
What sort of limits are states that are capping this putting on?
Mr. Duarte:
States are taking a number of steps, depending on their fiscal situations and their philosophies of health coverage. A number of states have put caps on enrollment, some have controlled the benefit package more aggressively than in Medicaid, offering a more limited benefit package. Frankly, the vast majority of states have used this as an opportunity to expand health coverage to their needy residents, primarily those who do not have access to health coverage through employer-sponsored programs. A number of states have expanded it because of the enhanced federal match. In some cases, they have taken state‑run programs and put them into this federal program, federalized the program, or, in some instances, greatly expanded eligibility to adults through this program to working parents of S-CHIP children and Medicaid children who otherwise do not have health coverage through their employers. They have also helped pay for employer-sponsored insurance, so that small businesses that would otherwise be unable to afford coverage for all their employees would be able to offer this coverage through a subsidy. There have been a number of very creative initiatives allowed by the current federal administration that states have taken advantage of. Of course, we still need a General Fund match, which the State’s fiscal crisis has curtailed. Up until last year, states were still aggressively pursuing waivers to expand S-CHIP.
Assemblyman Beers:
Are other states cutting this back now?
Mr. Duarte:
States are certainly looking at curtailing expansion of this program any further.
Assemblywoman McClain:
Have any of the states tried to expand this specifically to seniors?
Mr. Duarte:
No, it is precluded, not allowed, under Title XXI of the Social Security Act, to expand this to seniors. The Centers for Medicare and Medicaid Services have allowed expansion to parents, and in some cases to single adults, but there has to be a clear benefit to the child.
Assemblywoman Leslie:
Where does Nevada rank in numbers of uninsured children? Are we at the top, the bottom, or where?
Mr. Duarte:
I do not know the relative rank in terms of uninsured children. I am very anxious to see the study that Great Basin Primary Care Association is going to produce for 2002. I have heard some good news regarding the number of individuals who are receiving health coverage.
Assemblywoman Leslie:
We can wait for the report. I think we have been pretty high for a number of years in terms of uninsured children. Do you know if the study is going to correlate the cost of providing that kind of care to the children? For example, I understand the number one reason for emergency visits to hospitals by children is ear infections. Does your office have a study that correlates the cost of providing that kind of care in emergency rooms versus providing this kind of health insurance?
Mr. Duarte:
The Great Basin study will not be doing that type of correlation, but there are studies of preventable conditions being treated in inappropriate settings such as emergency rooms.
Assemblywoman Leslie:
That statistic would be a good one for the subcommittee to have.
HCF&P Intergovernmental Transfer Program - Budget Page HCF & P-38
(Volume 2) Budget Account 101-3157
Mr. Duarte:
Page 25 contains an explanation of the Intergovernmental Transfer Program (IGT). The program generates about $16 million in State funds that we use to offset the cost of Medicaid. In the past, this fund has had a significant reserve, but we have been using the reserve over the last several years in lieu of the General Fund. The reserve is almost entirely spent.
Assemblyman Beers:
So, if I understand you correctly, we have basically blown through all our savings, creating ongoing costs in doing so.
Mr. Duarte:
That is correct.
Page 26 gives the history of the reserve account.
Senator Rawson:
During the last session, we recognized the need to either put more money in or spend down our reserve. The budget decision we made last time was not to put more money in. We knew last session we would go through the reserve.
Mr. Duarte:
I failed to mention that. There were decisions made to actually use these funds in lieu of General Fund and we have done that. On page 26, at the bottom of the columns of numbers, you see the reserve fund projections. They will change. They do not include work programs for an initiative we implemented at the request of the University Medical Center (UMC) called the upper payment limit, in which we can pay them more than their costs for care. It gives us a small benefit at the State level, so we intend to bring a work program to the Interim Finance Committee in February to account for that. It will bring in additional revenues, but we intend to use those dollars to help pay partially for the projected Medicaid shortfall.
Senator Raggio:
Could you explain a little about the potential for the upper payment limit?
Mr. Duarte:
I would like Ms. King to answer that, but I will give you an overview. The Centers for Medicare and Medicaid Services, the federal oversight authority, allows state Medicaid agencies to pay public hospitals up to 100 percent of their costs. There was a provision in place during the last administration in which public hospitals were allowed payments up to 150 percent of their costs. That ended May 14, 2002. It gave us an opportunity to supplement reimbursements to public hospitals in the State at the 150-percent level between January 1, 2002, and May 14, 2002. After that, we would pay 100 percent of their costs. There are costs, and there are costs. The ways you can calculate Medicare costs differ. What we have done in working with UMC is calculate the cost in a manner that is most beneficial to it and to the State using a perspective payment methodology. It has allowed us to bring in more than their costs. At the next Interim Finance Committee, a request will be presented for a work program that will bring federal dollars into the IGT account, bring in intergovernmental transfers to support those federal dollars, and also allow us to pay out the increased reimbursements, not just to UMC, but to a number of rural public hospitals as well.
Senator Raggio:
Will we be hearing this at the February 18 Interim Finance Committee meeting? Will the participating hospitals, primarily UMC, be paying money in, then receiving a larger amount back?
Mr. Duarte:
Correct.
Senator Raggio:
Is there a proposal to do something like this in the long-term care industry, going back to the provider tax?
Mr. Duarte:
We are not proposing it in the Governor’s recommended budget. We have had discussions with Charles Perry from the Nevada Health Care Association, as well as his consultants, to actually impose an allowable provider tax on freestanding nursing facilities.
Senator Raggio:
Would the money come from them again?
Mr. Duarte:
The money would come from the tax.
Senator Raggio:
Is Title XIX funding available on a similar basis? Is there any General Fund money involved in that?
Mr. Duarte:
We have not had any confirmed discussions about what our commitment is going to be for that. We do have some concerns.
Senator Raggio:
Can it be done without General Fund money?
Mr. Duarte:
Initially it can. What they are intending to do is raise reimbursement rates, thus establishing a higher base of reimbursement using the tax.
Senator Raggio:
Did we hear some of that proposed rate?
Mr. Duarte:
Yes. They wish to take it beyond what we had proposed. We have concerns that it would create a larger reimbursement base for us to build from, that the tax could go away and federal regulations could change.
Senator Raggio:
We always have to be concerned about that.
Senator Rawson:
The interim health care committee has contracted with a consultant to help us maximize federal funds. There is a potential of $42 million that could be brought in through these mechanisms. It is not likely we will bring in the full $42 million, but we are striving for as much as we can bring into this budget. It will be March before we are able to take any action, but the committee should be aware of it.
Assemblywoman Leslie:
I would like you to provide more information about the cost‑containment measure for the preferred drug list, how you intend to implement it, and whether there is going to be a clinical oversight. How is that going to work?
Senator Raggio:
We will discuss that at the subcommittee meeting. I would like to compliment you, Mr. Duarte, on the presentation. It is a difficult area to understand, and I think it was well presented.
DEPARTMENT OF PUBLIC SAFETY - OVERVIEW
Richard Kirkland, Director, Department of Public Safety:
The department has compiled a presentation notebook for the committee (Exhibit E. Original is on file in the Research Library.). I would like to direct your attention to my prepared statement (Exhibit F). On page 5, you will note that one of the problems listed concerns our data processing system. As an example, it took 160 hours and three individuals to hand count essential data for this presentation.
To end on a positive note, our smallest agency, the State Board of Parole Commissioners, is confronted with the very challenging problem of traveling up to 40,000 miles every year. Chief Dorla Salling came up with a way to expand our videoconferencing, saving 25,000 miles and almost 700 hours of time the first year. It is this kind of effort to address the problems we have that we are most proud of. I would like to point out that, with the exception of Frank Siracusa, all 13 of our chiefs have been replaced in the last 18 months for a variety of reasons.
Dave Hosmer, Chief, Nevada Highway Patrol, Department of Public Safety:
I have prepared a statement for today’s presentation (Exhibit G). The totals for our three budget accounts are shown on page 1. The budget account for the Criminal History Repository (CHR) will be covered separately. Increases in the budget totals are primarily due to salary, benefits, and insurance adjustments, which account for $4.3 million in FY 2004 and $5.3 million in FY 2005.
Our staffing numbers are also shown on page 1. I will address this issue later, but these numbers include 10 new dispatch positions for the Las Vegas area. To help pay for those positions, we gave up 8 trooper positions for the State.
Senator Raggio:
What effort is being made to fill vacancies, if any?
Mr. Hosmer:
We have identified some problems with our training academy. We looked at the existing training curriculum and found we were training city police officers. There was no concentrated focus on highway patrol traffic enforcement, commercial vehicle enforcement, or accident reduction. We have called a time out, even though we understand the problems this causes for the southern command. We are completely reengineering our field training program. We are considering a complete reengineering of our first-line supervision program and a basic academy redo. We also found some notable problem areas with our background investigation process.
Senator Raggio:
Are there candidates in the pipeline?
Mr. Hosmer:
Yes. We have applications on file, and as soon as those things are fixed to our satisfaction, we will start the hiring process.
Senator Raggio:
Is salary differential still a major problem?
Mr. Hosmer:
Absolutely. I am losing that core group of 3- to 7-year veterans that are well trained. The Henderson Police Department has hired a few away. North Las Vegas sweetened its deal by offering our motor officers the option of coming straight over and riding their motorcycles for 20 percent more money.
Senator Raggio:
Things are still the same. Local governments and major counties are able to pay significantly higher salaries for these positions.
Mr. Hosmer:
There is no single spot more critical right now than in dispatch. Our highest‑paid dispatchers receive less than Las Vegas Metropolitan Police Department entry‑level call‑takers. They can go over to Las Vegas Metro and start at higher salaries than they would top out at in the Nevada Highway Patrol (NHP).
Senator Raggio:
How much higher?
Mr. Hosmer:
I do not have those exact figures with me, but we have a staff study showing that information. Currently, we are scheduling 252 hours of overtime in our dispatch center every month to meet minimum staffing levels.
Senator Raggio:
We do not see this only in law enforcement; we see it in every other aspect of State government. Evidently, at least major counties have a better revenue stream than the State does and are able to do these things. We had better keep that in mind.
Mr. Hosmer:
When our new NHP facility comes on line in Las Vegas, it will help the retention rate. Right now, we have a very small dispatch center. Obviously, money is not everything or we would have lost all our employees down there.
Senator Raggio:
I believe I recently saw a report that, in one county, the new salary for justices of the peace will exceed that of the Governor. Something is not quite level here.
Mr. Hosmer:
Returning to my statement, page 2 discusses performance measures. Commercial enforcement is tracked on the federal fiscal year because, under BA 4721 Highway Safety Grants Account, it is commercial and has federal funding. It is still for a 12‑month period, however. We entered into some new programs with the Department of Motor Vehicles to help recover lost revenue. At the request of the Federal Bureau of Investigation, we increased oversight of hazardous materials and operated round-the-clock guard of Hoover Dam for 10 weeks. We were reimbursed approximately $88,000, some of the cost, from the federal government for guarding Hoover Dam.
Continuing on to page 3, staff does not believe the current work performance indicators are reflective of whether we are being effective and efficient. We are moving to a new reporting system and have recommended changes to the indicators. Thanks to the help of this committee, we converted two trooper positions to programmer positions and developed a system that allows us to retrieve information in real time. On a daily basis, we are able to see what each person has done. We are trying to be efficient and effective, identifying problem areas in enforcement right away so we can address them.
Yesterday, I received the final racial profiling report from Professor McCorkle for the entire year. The NHP was well within the demographics for the State, except we were 10 percent high in stopping whites. Initially, this indicates we do not have a systemic problem of racial profiling within the NHP.
The Nevada Citation Accident Tracking System is addressed at the bottom of page 3. The two trooper reclassifications that I spoke of earlier are discussed on page 4. Hiring is on hold for approximately 1 week while we determine whether there will be other changes in personnel. We may be able to fill those positions with people that would have been laid off.
The 10 new dispatchers for the southern command are critical, as you can see from the numbers on page 4. I would also like to point out the recent turnover statistics on page 4.
Senator Raggio:
Could you tell us about the handheld radio problem down there?
Mr. Hosmer:
There is an $800,000 enhancement in our budget for mobile extenders. I am not convinced that will fix the problem. There are certain areas where the portable radio is not reaching the repeaters we have in place so they can get into dispatch. My staff and Motorola came up with a $3.2 million fix, but when we really started looking at it, we found that was outrageous.
Mr. Kirkland:
We went back and looked at the bidding sheets. We think there are some serious problems here and this is going to take some investigation and different reporting to you. We are not going to be asking for the $800,000 or anything else until we have this thoroughly investigated and reported on.
Assemblyman Arberry:
Are these the radios where we had the concern when, years ago, one of your officers got killed because he did not have a radio or it was not reaching the repeater?
Mr. Hosmer:
Are you referring to Carlos Borland out by Lovelock?
Assemblyman Arberry:
I think so.
Mr. Hosmer:
My understanding is he never called out on his traffic stop. A portable would not have made a difference. My belief has always been there are ten deadly errors that get you killed or hurt out on the road. Use of a radio is not one of them.
Assemblyman Arberry:
My biggest concern is your safety. If this is something your officers need to make sure they are not placed in an unsafe position because they have no way of communicating, we need to take care of that. I know there is a cost, but there is no cost on a person’s life. They are risking their lives and we want to make sure they have some way of communicating with dispatch. If we have to raise things to make sure there is no loss of life, then it is worth it.
Mr. Kirkland:
We appreciate that. We just want to make sure the next time we tell you there is a fix, it is a legitimate fix. We have come here twice and said that; the truth is, they were not fixes. We spent money I am not sure we should have spent. I do not think it was effective.
The next budget to review is the Investigation Division. Mr. Brown was recently promoted to chief of the Nevada Division of Investigation (NDI), but he has worked in the department for a number of years. I will give a brief overview. As you know, NDI has been reduced substantially and we need to talk about that.
Referring to the prepared statement (Exhibit H), the authority and purpose of the division are outlined on the first page. Duties are almost evenly split between narcotics and controlled-substances enforcement, and conducting investigations into major crimes for the smaller counties. Occasionally, services are provided to major population areas.
Senator Raggio:
I think the major issue here is the reduction of staff down to 40. You have 81 staff authorized and 71 filled, so you are going to be reducing staff significantly. It is our understanding this is a result of local authorities taking over duties. How will that otherwise impact the State?
Mr. Kirkland:
I think the major impact in the State is going to be to the rural counties. About 40 percent of the resources of NDI are used to provide services to all of the rural counties in a variety of narcotic enforcement task forces. The service is provided through a Byrne Grant of about $1.4 million over the biennium. NDI provides resources and matches federal funding with seizure funds. When the Governor and the department looked at the potential severe reduction in the amount of funding that will be available to the department, and the size of our agency in the General Fund area, the challenge was where to reduce our share. We really only have two General Fund agencies, NDI and the Division of Parole and Probation. A conscious decision was made that the required reductions in our organization would be made in each agency. Those reductions are in the task forces in NDI. This would be the last year we could fund our match, which is $400,000 a year. We provide that match from the seizure funds. The seizure funds have all but dried up for two reasons. The narcotics violators are wise to the American system of seizing their ill‑gotten gains so they hide them very well, and State law changed so that anything over $100,000 goes to the school funds. Also, for the first time, the Senate has not passed the Byrne Grant funds this year. It was an inevitable but difficult decision.
Assemblyman Marvel:
I, and I am sure Senator Rhoads has also, have had a lot of concern expressed about how local agencies are going to handle drug enforcement. Is there anything we can do to work out some sort of solution for them?
Mr. Kirkland:
I think the solution is beyond my ability to decide. This is an assessment of the prioritization of funds. Faced with that requirement, this is the best we can do. There is nothing else we can reprioritize in our General Fund monies to do anything.
I think the NDI staff has done an outstanding job and we have included statistics on the third and fourth pages of this statement.
Philip H. Brown, Acting Chief, Investigation Division, Department of Public Safety:
We will be preparing a book to answer additional questions in much greater detail.
Senator Raggio:
We understand you are going to be charged with a difficult situation and we appreciate your effort.
Mr. Kirkland:
Due to the uncertainty of the budget and the way the budget for the Capitol Police Division is funded on a cost-allocated basis through all agencies receiving their service, we do not have flexibility with this agency. We have prepared a statement (Exhibit I) detailing the mission, supporting data, and problems we are facing.
Brad Valladon, Acting Chief, Capital Police Division, Department of Public Safety:
I have nothing to add to the written statement.
Mr. Kirkland:
We lured our new fire marshal out of retirement to take on an extremely difficult job. He has done an excellent job.
Doyle G. Sutton, State Fire Marshal, State Fire Marshal Division, Department of Public Safety:
A description of our programs is included in the expanded program narrative for BA 3816 (Exhibit J). The budget for the fire marshal’s office is shown on the first page of my remarks (Exhibit K). Our budget is funded 100 percent by fees, and we are facing a declining revenue base.
Senator Raggio:
Which revenues are declining, the fees?
Mr. Sutton:
Yes. Fees are declining because of the economic impact of building. Building is on the decline, so plan fees are down. We are also giving up some of our responsibility and authority through interlocal agreements with local entities, which contributes to declining revenues.
Assemblyman Marvel:
What were the recommendations from the “blue ribbon” committee?
Mr. Sutton:
The “blue ribbon” committee was formed prior to my arrival. I participated in all committee meetings. The outcome was a recommendation by the committee to support the fire marshal’s office in a new funding stream coming out of the General Fund to increase some positions and support training and volunteer services in the State.
Senator Raggio:
What are the enhancements recommended in this budget, and are they in response to the recommendations?
Mr. Sutton:
The enhancement is the 22 positions: 1 grants analyst; 8 deputy state fire marshals Grade I, which are hazardous materials inspectors; 3 deputy state fire marshals Grade II, which are arson investigators to support the smaller counties; 1 supply technician; 4 administrative assistants; 3 training officers Grade I; 1 training officer Grade II; and 1 accounting assistant Grade I.
Senator Raggio:
Are there some grants available out there? Is that why we are putting a grants analyst on here?
Mr. Sutton:
We believe there are grants to which we do not have access, or the people or resources to go after them. Many times we do not have the expertise. One of the reasons for this position is to create a total program. A grants analyst could help us obtain fire grants so we can assist the smaller counties that do not have the resources to get grants. We have introduced a “helping-hand” bill for volunteer departments that will transfer surplus equipment from large municipal departments to smaller fire departments without any liability issues. We are looking for the grants person to help bring in those funds. The equipment manager will help us take a look at the equipment to make sure it is tested, serviced, and ready to put out to the volunteer departments.
Senator Raggio:
The budget also proposes bringing in the hazardous materials training center budget with the fire marshal’s office. What is the purpose of that?
Mr. Sutton:
The purpose is to streamline the process, to take our limited resources and make them more efficient and easier to control both budgets.
Mr. Kirkland:
To explain further, when the State fire commission met, we learned that we do not have the necessary fire safety equipment, backpacks, or hazardous materials equipment for the people we currently have. I can provide the committee’s detailed recommendations, which will explain many of the issues.
Senator Raggio:
With the new staffing, how will the mandatory inspection program be impacted?
Mr. Sutton:
It will increase the program.
Senator Raggio:
I believe your material said you were only up to 38 percent of the required number of life safety inspections. Will this enable you to bring that to full bore? What will this allow you to do?
Mr. Sutton:
We will get closer. Statistics for annual inspections are at the bottom of page 1.
Senator Raggio:
How many will you be able to inspect with the new staffing?
Mr. Sutton:
I do not have that information with me, but I can provide it.
Senator Cegavske:
To clarify the scope of the hazardous materials we are talking about, is this every hazardous material that is brought into our State?
Mr. Sutton:
This has to do with any facility that handles or uses hazardous materials in a reportable quantity according to the National Fire Protection Association schedule.
Mr. Kirkland:
The hazardous materials that are transported by motor carriers are a different problem, and NHP deals with those issues.
Senator Cegavske:
Are you looking for grants because you get no federal money? If local forces are taking over some of your duties, does that not reduce the work that your department needs to do?
Mr. Sutton:
No, we have only been able to do a portion of what we should because we have been underfunded and over-mandated for so long. What will happen now is we will be able to increase our inspections and move into a different role where, when we turn things over to the local authorities, we can move into an auditing function, making sure appropriate documentation is submitted.
Senator Cegavske:
I would like to talk more about this later.
Mr. Kirkland:
There are a couple of bills being proposed regarding what we can do to help local agencies. The State fire commission chiefs, especially in the major populations, acknowledge there are duplications already taking place, but no one has the data to determine what that is. Once we determine that, it will have an impact, because we will no longer duplicate what they are doing. On the other hand, they look to us for funding, so the matter has to be discussed.
Senator Cegavske:
If you find anyone illegally storing anything hazardous, and you impound vehicles or other things, can they go into your seizure fund?
Mr. Sutton:
We do not have the authority to seize anything. When we investigate, if we find someone is not reporting properly, we issue a citation and take him or her into court. The court can impose fines.
Senator Cegavske:
That might be another area to look at.
Senator Raggio:
A big concern seems to be hazardous materials inspections. According to your information, 25,000 inspections are mandated. What does that mean when you can only conduct 720, or 3 percent? Who mandates this?
Mr. Sutton:
Under Nevada Revised Statutes, we are required to certify every facility that handles or stores hazardous materials.
Senator Raggio:
What is included?
Mr. Sutton:
That includes everything in the State, any facility or business that handles or stores a reportable quantity.
Senator Raggio:
If 25,000 inspections are mandated, how do you decide which ones to inspect?
Mr. Kirkland:
The problem is we do not even know if it is 25,000; we are estimating. Each county is different, and we get the information from business licenses. Some businesses do not have business licenses. Some that have licenses do not report hazardous materials. Some reports are incorrect or incomplete. It is a serious mess. The trouble is, when we have a situation that we may or may not know about, and it blows or burns up and hurts or kills people, then people ask why the State did not investigate. We reply we did not know it was there. There are two or three touchy issues: the issue of how many inspections, how to prioritize, how to get all city and county governments to report. I think we calculated we would need 170 inspectors to do all the work. Clearly, we need reports, and some should be handed over to the locals. The locals are not going to like that, but I do not envision having 170 inspectors.
Mr. Sutton:
One of the ways we go about that is by sharing resources such as dealers’ lists with other State agencies.
Senator Raggio:
How about local agencies? Do they cooperate?
Mr. Sutton:
Yes. We are sharing information with Clark County. After an inquiry to all departments, I learned there was only one other computerized database, and it was in the developmental stage. Most people are still working off of hard copies to get the information.
Assemblyman Marvel:
Do you work with the Department of Taxation? They have the index on business activity taxes.
Mr. Sutton:
We have asked all State agencies to share their databases, and we have incorporated them into ours. We try to prioritize and sort by areas, by ZIP codes, and by standard industrial codes, which gives us the hazard of the business. We then go out to a geographic area and perform inspections.
Alan Rogers, Data Processing Manager, Technology Division, Department of Public Safety:
I would like to read the statement I have prepared (Exhibit L).
Frank Siracusa, Chief, Division of Emergency Management, Department of Public Safety:
My remarks are contained in my prepared statement (Exhibit M).
Senator Raggio:
How does your division coordinate with the new State officer for homeland security?
Mr. Siracusa:
We work closely with Mr. Bussell, the Governor’s special advisor. We are involved in the operational end. We do all hazard planning, training, and exercises. Mr. Bussell advises the Governor as to the State’s readiness and capabilities in dealing with a terrorist event.
Senator Raggio:
Is there a new center proposed? Where will it be?
Mr. Siracusa:
The proposed new State emergency operation center will be located at the new National Guard facility on East Fairview Drive.
Senator Raggio:
Is it in the capital improvement budget? Is it full funding or just planning?
Mr. Siracusa:
The capital improvement budget includes full funding for a complete facility.
Senator Raggio:
Are federal funds available?
Mr. Siracusa:
There are funds, and we will actively and aggressively seek them, but I cannot say with certainty we will receive any. I understand most of the federal funds available for State emergency operation centers will be on a competitive basis. We will be lobbying for those funds.
Senator Raggio:
Are there any federal mandates because of the security situation?
Mr. Siracusa:
There are numerous requirements coming down to the states, and the states are the points of contact for all federal funds. The State emergency management agency is required to meet those requirements in order to receive money, then we manage that money and subgrant it to local governments.
Senator Raggio:
We will need to see a breakout in the subcommittee.
Senator Coffin:
Is the Kinder-Morgan company doing any security for the Clark County and Washoe County pipelines? Are we getting federal help?
Mr. Siracusa:
Kinder-Morgan Energy Partners, along with most utilities, is considered critical infrastructure. We have been working with all utilities to upgrade and enhance their policies, procedures, and security plans.
Senator Coffin:
Because they are critical, are there enough reserves in Clark and Washoe counties to withstand what would probably happen? A number of promises were made during the last session, and I would like to know if they were kept.
Mr. Siracusa:
There are reserves, but I would need more information to adequately answer that.
Mr. Kirkland:
Mr. Siracusa will be processing an extra $9 million to $11 million of grants this year, which is reflected in the budget.
Senator Raggio:
Is there anything else?
Assemblyman Marvel:
There was an audit on the Criminal History Repository. Are we catching up at all?
Mr. Kirkland:
Yes and no. Despite the fact we are down eleven employees and under new management, we have caught up substantially. There is no way to get that in balance until we get the employees in balance. It is a fee-based facility that is required by federal and State law to do many things. Without the $800,000 of court assessments, we are not going to be able to meet the needs of law enforcement.
Assemblyman Marvel:
How much are you going to be short on the assessments?
Mr. Kirkland:
Right now, we are short $800,000 just on the repository. As you know, court assessments are down across the State.
Senator Raggio:
Since time is short, we will discuss the remaining budgets in subcommittee unless you have something to add.
DIVISION OF CORRECTIONS – OVERVIEW:
Jackie Crawford, Director, Department of Corrections:
During the last session, we became the Department of Corrections. At workshops including employee associations, wardens, community leaders, central office staff, and the Governor’s office, we developed our mission, vision, values, and goals. These are listed on the second page of “Presentation to the 2003 Legislature” (Exhibit N. Original is on file in the Research Library.).
Moving to page 3, the Governor mandated a 3-percent reduction package in June. That amounted to $5.1 million for our department. We tightened our belts even further, through utilities and staff health services, and actually saved nearly $9 million. For FY 2004 and FY 2005, position reductions will total 124.94 full‑time employees. Of those reductions, 77 are custody positions.
Senator Raggio:
If you have a growing inmate population, how do you handle it while cutting custody positions? Are those positions currently filled?
Ms. Crawford:
No. They are vacant.
Senator Raggio:
The question remains, are you going to be adequately staffed?
Ms. Crawford:
We believe we can work through the process with some post management. There may be more overtime required.
Senator Raggio:
There is a point where overtime is more costly than adding staff. Do you pay time and a half for overtime?
Ms. Crawford:
Yes. Since our appearance at the Interim Finance Committee, we have reduced our overtime to $3.1 million for the last 6 months, as shown on page 4. Another accomplishment is the Southern Nevada Correctional Center (SNCC) remodel, which will be completed January 2004. I will not be asking for funding this session to open the medium security facility. It will have approximately 650 beds available.
Lawsuit payout totals are also shown on page 4. Reductions have been accomplished through changes in policy, procedure, and grievance resolution.
Senator Raggio:
Are we subject to any consent decrees?
Ms. Crawford:
No.
Senator Raggio:
What is the reason for the reduction of lawsuit payouts?
Ms. Crawford:
We partnered with the attorney general’s office, aggressively pursued some of these cases, and won. We think it sent a message to those filing lawsuits.
The Wyoming contract is currently providing revenue from 116 inmates. We have had two transfers without incident.
Senator Raggio:
Have revenues met projections?
Ms. Crawford:
It will slowly begin to meet projections. We will have possibly 150 more inmates transferring. Prisoners are being held at the High Desert State Prison (HDSP). We are pleased with the contract and believe we will meet projections.
Budget cutting continued by reducing the population at the women’s institution. Inmates were transferred to the Jean Conservation Camp and the Silver Springs Conservation Camp, resulting in a savings of $1.1 million.
Senator Raggio:
Is that the Corrections Corporation of America (CCA) contract in Las Vegas? Does that expire in 2004?
Ms. Crawford:
Yes.
Senator Raggio:
Is there a request for proposal (RFP) going out?
Ms. Crawford:
We did an RFP, but in light of the budget crisis, we chose to place it on hold.
Senator Raggio:
That is going to come up during this biennium.
Ms. Crawford:
We submitted a request to the budget office for the approximately $2 million additional it would cost. However, the office chose not to put it in the budget at this time.
Assemblyman Arberry:
Is the company pulling out from running the facility?
Darrel Rexwinkel, Assistant Director, Support Services, Department of Corrections:
We have a valid contract with CCA to operate the Southern Nevada Women’s Correctional Facility (SNWCF). The contract has an automatic 3-year renewal provision, so our current contract does not terminate in October 2004. CCA would continue with the contract unless they provided notice of non‑renewal. Since we have a valid contract, we did not put any additional funding requests in the budget. Our initial calculations indicate approximately $2 million would be required to operate the facility beyond September 30, 2004.
Assemblyman Arberry:
Would the $2 million go towards staff and anything else necessary to operate?
Mr. Rexwinkel:
The State could operate it, or we could contract with another company.
Assemblyman Arberry:
If there is no RFP, who would know we were interested?
Mr. Rexwinkel:
We have proposals in hand with waivers that allow us to look at the company’s information and discuss it.
Assemblyman Arberry:
What happens if CCA suddenly quits and leaves?
Mr. Rexwinkel:
We would have to immediately take over the institution.
Assemblyman Arberry:
Do we have a contingency plan? I am wondering what the department would do and how the State would pay for it if CCA unexpectedly left.
Ms. Crawford:
We have a contingency plan. We are capable of moving in and taking over the facility immediately.
Senator Raggio:
To clarify, the contract does not automatically expire unless the company gives advance notice they will not continue. When do they have to give notice?
Mr. Rexwinkel:
It is either 90 or 120 days.
Senator Raggio:
Is the extension on a year-to-year basis?
Mr. Rexwinkel:
It is every 3 years. October 2004 would be the next automatic renewal unless we receive advance notice of non-renewal.
Senator Raggio:
Is there an inflation adjustment in this contract?
Mr. Rexwinkel:
The current contract has a 3-percent inflation adjustment that applies throughout the life of the contract.
Senator Raggio:
Would you give our staff the background information you furnished to the budget office?
Ms. Crawford:
To continue on page 4, our savings include the closure of the inefficient cell house at the Nevada State Prison (NSP). We saved $1.4 million and deployed the inmates to other institutions in the northern region. We chose to close the facility instead of cut jobs.
Senator Raggio:
Is this the one we did a lot of remodeling in? Is this Block A and Block B?
Ms. Crawford:
Yes.
To save money, we also revised classification criteria and designated institutions accordingly. We realized some people were over-classified. We staffed institutions according to programs. We have found this has helped us better manage our inmates because classifications are not mixed.
Senator Raggio:
Is there a national classification standard, or do we have our own?
Ms. Crawford:
We comply with the national standards. We do not have problems with escapes, assaults, and riots because we have excellent classification. Our staff has honed it over many years.
Senator Raggio:
If we have excellent classification, why did we have a problem with over‑classification?
Ms. Crawford:
I believe there were some major incidents before my tenure. At that point, classifications were tightened. We should have become more flexible as the population shifted. We still stay within the parameters governed by statute.
Senator Raggio:
We do not want to classify people just to use available money. Can you classify someone as minimum or medium security because you only have enough money for that classification? This is not the only reason we changed classifications, is it?
Ms. Crawford:
Absolutely not. This department does not want to classify inmates as minimum for economic reasons. We cannot afford to jeopardize the safety of the community, our staff, or the other inmates.
Another component of the classification system is our youthful offender program for those under age 21. As you know, Nevada adjudicates juveniles as adults. When I began, juveniles were mixed with the adult population. There was a lot of disruption in the adult yard. This program prepares them to serve their sentences and removes the juveniles from the yard. Since the program began, there have been several inmates aged 14 to 15. We do not want them in the general population until they have been prepared. I invite you to visit the Las Vegas facility.
As noted on page 5, inmates participate in the drug court. We were funded for 150 prisoners to go through the program. The drug court is one of the best things that has happened to this department because it has diverted many people from prison, and we have been able to redirect some inmates. The program has been very successful.
Senator Raggio:
Have we looked at the methadone program?
Ms. Crawford:
We have been approached. I think it has been improved. It is effective with women who have heavy heroin addictions. Some believe this program just substitutes one addiction with another, while others think we can work on behaviors. I am not an expert, but I believe this has to be a prescriptive program, meaning it has to be tailored to meet an individual’s needs in order to be successful.
I appointed a committee to update and complete our revised administrative regulations (ARs) so they will be applicable to laws that have been passed by the State. The attorney general’s office was part of the committee. Progress is detailed on page 5. The ARs have also been placed on our Web site.
We expanded mental health at Northern Nevada Correctional Center (NNCC) and consolidated some long-term medical care. The regional medical facility at NNCC handles acute cases, and it works well. The National Institute of Corrections (NIC) provided $80,000 in services for the Governor’s Study Committee on Corrections. The NIC sees Nevada as moving forward and wants to support that effort. The NIC is a support service for professional services.
As you know, we do not have any monies for programming. We have partnered with a lot of community-based programs. Page 5 shows the results. I am most proud of the $75,000 grant to provide college tuition for staff. We believe we need to grow our staff and begin to prepare them to lead the department. We are looking at learning centers at each institution with online training. We are also working on a homeland security plan. We implemented a preventative maintenance system in response to previous concerns over our inability to prioritize maintenance projects. We established facilities-orientation training and have provided 96,000 hours of training. This has smoothed the transition from the classroom setting to the yard. This has increased the comfort level of the employee, which helps us retain employees, and the importance of safety issues are understood by new employees.
One of our greatest challenges is possible military duty for staff. As indicated on page 6, we currently have 12 staff on active duty and another 90 that could be called up immediately. We are preparing an action plan that will include increases in overtime and temporary employees. Some retired employees would be willing to work part-time. Our staffing and relief levels continue to be a problem. We estimate we have been using the same formula for 20 years. At the next session, I would like to present a new factor based on studies. We have done this with case managers and it has worked well. I would also like to study custody and noncustody staff. Later in the presentation, we will discuss staffing levels. Presently, Nevada has the highest inmate-to-staff ratio in the nation. The average is 5.1 inmates for each staffer.
Statistics on page 6 explain some of our services. Community work days includes Nevada Division of Forestry work. Emergencies are firefighting. We have built 16 Habitat For Humanity houses through our boot camp.
The Governor appointed a study committee to look at our department. The NIC brought in everyone from best practices from across the country. Specifically, the issues are how we can better manage our inmates and manage them at a lesser cost.
Rex Reed, Administrator, Offender Management Division, Department of Corrections:
I would like to present the department’s population projections, beginning on page 7. The term “current projection” refers to the projection tied to this biennium’s budget. The current projection for the male population is 10,133, and the actual population is 9311. The current female population projection is 925, while the actual population is 790.
The term “proposed projection” is tied to the Governor’s recommended budget. It projected 9415 male inmates and 791 female inmates.
From the graph on page 7, you can see our male population has grown approximately 5 percent a year and 62 percent over 10 years. The female population is shown on page 8. There is an increase of approximately 5.9 percent a year and 77.5 percent overall.
Growth is influenced by the ratio of intakes to releases each year. The graph on page 8 shows, on average, there were 4505 intakes per year and 4075 releases. The average difference between intakes and releases was 430 a year. In years 2001 and 2002, the number of releases is nearing the number of intakes, which indicates growth is beginning to slow down.
There are two types of releases. Discharges happen at the expiration of an inmate’s sentence or upon the death of an inmate. Prisoners returned to the committing authority or released on court order are also listed as discharged. Compared to current projections, discharges are higher than predicted by nearly 12.5 percent. Parole is the release of an inmate to finish his or her sentence in the community under the supervision of parole and probation, or inmates given a compassionate release. Parolees have numbered less than projections by 9.6 percent. Proposed projections are shown on page 9. Male population is estimated to be 12,564 by December 2012, which is an average yearly increase of almost 3 percent. Female population is projected to be 1083 in 2012, increasing at a yearly average rate of nearly 3.2 percent.
Page 10 shows our 10-year plan. Three new facilities are shown: Casa Grande, Northern Nevada Reentry Center, and Facility #8, a correctional facility. Current inmate offender profiles for males and females are shown at the bottom of the page. Females have a larger percentage of lower custody levels, and the male population does not turn over as quickly as the female. Geriatric inmates are also becoming an increasing population.
Senator Raggio: ]
Why is the rate of population increase declining?
Wendy P. Naro, Senior Research Scientist/Forecasting Specialist, The Institute on Crime, Justice, and Corrections, George Washington University:
I have been compiling the Nevada prison population forecast for the last 8 years. I do forecasts for more than 25 other states. You asked why the forecast is less now than it was before.
Senator Raggio:
I do not think it is less in numbers, but the rate of increase is less.
Ms. Naro:
The rate of increase is less and the forecast is actually less. We are forecasting fewer beds needed in the future.
The handout (Exhibit O) discusses the main assumptions we use to build our simulation model and compares the prior forecast to the current forecast. The model does not merely use past trends. We try to replicate sentence time served, parole grant rates, and all factors that influence the length an offender stays. Data from 2000 was used to produce the prior forecast, while 2002 data was used for the current forecast. Of the five main assumptions used to build the model, the number of projected new commitments to prison shows a significant difference between forecasts. When the forecast was made in 2000, admission rates to prison were still growing significantly. Admissions have leveled off since then, so we now estimate a lower rate of admissions increase for the next 10 years.
Senator Cegavske:
Do we have a chart that shows the ages of the male and female prisoners? In working with Ms. Crawford, it has been interesting to learn the statistics. Aging prisoners and their medical expenses are becoming important also. Do we have repeat offender rates?
Mr. Reed:
The average age for males is 37.1, and it is 36.6 for females. Of the inmates who come into our system, 51 percent have prior felonies of some sort.
Assemblyman Beers:
Does the prospect of war impact the population forecast for inmates?
Ms. Naro:
It is not currently built into our forecasts.
Assemblyman Beers:
What is your estimate?
Ms. Naro:
I think it would have a very minimal impact. Military personnel that would be leaving are not typically in the group at risk for committing crime.
Returning to the projections handout (Exhibit O), I want to point out that average maximum sentences for the different levels of felons are falling slightly. Inmates are being given shorter prison sentences, which translates to a lower population forecast.
Senator Cegavske:
Does Nevada release early to provide room for more violent offenders?
Mr. Reed:
No.
Mr. Rexwinkel:
I would like to direct your attention to the budget overview on page 11 (Exhibit N). Of the $24.6 million increase, $10.4 million represents increases to the base budget. The large increase in the base is due to salary increases. All decision units total $14,161,000, resulting in total Governor-recommended General Fund requests of $372,620,713. Of the $14.2 million increase over base, nearly $15 million of adjustments are outside our control, such as inflation, caseload growth, and fringe benefits. Except for the food inflation amount, which is included in a decision unit, the total of enhancement decision units results in a net reduction of $849,667. We also closed a couple of cell house units at NSP in FY 2003, which resulted in 24 additional staff reductions and savings of approximately $2.5 million.
The other funds include $3.4 million room and board revenue from the inmates, which they pay back by working. The inmate welfare fund supplies $1.9 million for inmate-on-inmate injuries and indigent inmates’ self-inflicted injuries. We also have some matching money from an Office of Criminal Justice Assistance grant for the OASIS (Offenders Acting in Solidarity to Insure Sobriety) and W.I.N.G.S. (Willing Inmates in Nevada Gaining Sobriety) programs. Inmate services provide $31,285,000 and prison industries contribute $17,800,000. We reduced staff by 12 in the inmate services budget due to shortfalls. The telephone commission from the inmate phone system was $500,000 short due to the WorldCom bankruptcy. There are a few decision units in prison industries, and no decision units in the inmate services budget.
Senator Raggio:
Why are the medical costs per inmate going to be substantially less in 2004 and 2005?
Mr. Rexwinkel:
Staff is being transferred from the medical budget to the new correctional programs budget, BA 3711. Other transfers to correctional programs include two chaplains who are currently in the administration budget, a third chaplain in Ely, and a fourth chaplain in Lovelock. The total cost per inmate in FY 2002 is $17,803 and $18,222 in FY 2004. Considering increases for utilities and cost‑of‑living adjustments, costs between years are similar. The per-day cost going into FY 2005 is $49.92, compared to $48.78 in FY 2002.
Inflation adjustments are shown on page 12. Medical inflation, M-101, ranges from around 6 percent for third party providers to 12 percent for prescription medications. Food inflation of 1.8 percent a year is based on the Producer Price Index determined by the U.S. Bureau of Labor Statistics. Costs associated with caseload growth are shown in the next table. The reductions shown for the Correctional Medical Services (CMS) contract are due to population decreases at the Ely State Prison and Ely Conservation Camp. Increases tied to the inmate‑driven schedule include food, clothing, operating supplies, consumable feeding supplies, and inmate labor. Reduced population projections at SNWCF are responsible for budget reductions to BA 3761.
Senator Raggio:
Is the CMS contract for Ely?
Mr. Rexwinkel:
Yes. The contract expires June 30, 2003. We have an RFP ready to release.
Senator Raggio:
Does the RFP provide for increases?
Mr. Rexwinkel:
That depends on the proposals we receive. We expect there will be increases.
Senator Raggio:
When will you receive responses on the RFP?
Mr. Rexwinkel:
As soon as possible, which is about 6 weeks after release.
Senator Raggio:
Does the current contract have an automatic renewal?
Mr. Rexwinkel:
No. Since it has been in effect for several years, it requires an RFP process.
Senator Raggio:
What is your expectation for responses?
Mr. Rexwinkel:
We hope to get some responses. If we do not, we have a contingency plan.
Looking at the reclassifications table on page 13 (Exhibit N), we have reclassified forensic specialists because of the difficulty we have hiring in that area. Of those reclassified to correctional officers, we transferred positions: 2 to Warm Springs Correctional Center (WSCC), 32 to NNCC, 2 to Lovelock Correctional Center (LCC), and 16 to HDSP. There were no physical relocations because staff were already at these facilities. The E-806 programs administrator was transferred to the new correctional programs budget.
The budget reductions table on page 13 shows staff reductions. In addition to those shown, we reduced staff by 24 due to the closure of the NSP cell house and 12 from the inmate services budget. Because we consolidated mental health services at NNCC, we were able to increase efficiency and reduce staffing. Savings from the elimination of 13 forensic specialist positions helped fund the reclassifications previously discussed.
Senator Raggio:
When you convert WSCC to minimum custody, together with Casa Grande, does that eliminate 500 medium custody beds? Why are we doing this? How many beds are we changing from one classification to another? Are we going from medium to minimum security?
Glen Whorton, Assistant Director, Operations, Department of Corrections:
The NSP cell house we closed had 200 medium security beds. We have Unit #8 at HDSP, which has over 300 medium security beds. Those are not going to be employed. Casa Grande is anticipated to have 200 minimum security beds. We are not going to populate the units with inmates, so we are not going to require staff.
Senator Raggio:
What is the net effect? How many more beds are you adding with this new program and eliminating in others?
Mr. Whorton:
I do not have that specific number, but I can tell you the beds are not going away. They will be there in the event we require them. Ultimately, they will be used.
Senator Raggio:
Are we still contemplating a net profit from the Wyoming contract? How much?
Mr. Whorton:
Yes, we are expecting a profit, but we are unsure how much. We initially anticipated more inmates than Wyoming provided because they overestimated the number of inmates they would be sending. At this point, the amount is $1.1 million.
Senator Raggio:
I think we had discussed $2 million. Is it still worth the effort?
Mr. Whorton:
Absolutely.
Ms. Crawford:
In April, we will be receiving approximately 150 additional inmates from Wyoming.
Senator Raggio:
How can you eliminate 14 positions at Ely?
Mr. Rexwinkel:
Two of the positions are associated with the canine program, which we are eliminating. Ely has always had a considerable number of vacancies. These reductions are not specific positions being cut, but a reduction in the total number of staff to the typical level. Continuing down the reductions table, eight of the positions for HDSP Unit 8 are cut because the unit is vacant.
Senator Raggio:
What is the overall effect of your enhancements, and what are you planning to do?
Mr. Rexwinkel:
As shown on page 14, the total is $4,971,205 for the biennium. Decision unit E‑276 asks for pre-employment psychological testing for all custody applicants, which all State public safety agencies are doing.
Senator Raggio:
Will that be contracted out?
Mr. Rexwinkel:
That is my understanding. Decision unit E-301 establishes digital communications throughout the department because not all of our facilities currently have e-mail and networking capabilities. Decision units E-351 and E‑501 were recommended to the Governor’s study committee.
Senator Raggio:
I would like to discuss Casa Grande.
Mr. Whorton:
Our mission is to protect the community, to correct criminal behavior, and to be sensitive to the needs and rights of victims. We do a good job of keeping inmates in prison, but we have a problem sending those inmates back out into the community. We have no way of knowing whether they are prepared to return to society or whether they are going to go back and cause problems. Our department is using a program emphasis to manage inmate behavior and prepare prisoners to return to the community. We are proposing to establish Casa Grande as a transition center in Clark County because 65 percent of inmates released return to Clark County. We want to open in October 2003 with 200 inmates. There will be no capital expense to the State because this facility will be built by a private non-profit organization in Clark County, Community Rehabilitation Services. They will build and operate the facility, and the State will staff it.
A large problem we currently face is the manner in which we release prisoners. We take them to the bus station, hand them a $21 check, and leave them with no personal identification or even a change of clothes. Inmates are disabled and handicapped because they are ex-felons with no jobs, no money, no place to live, and no clothes. This only creates more victims. We are setting them up to commit more crimes.
We are proposing to staff this facility similar to a conservation camp, with 13 staff for 200 inmates. We intend to integrate services into this facility by developing partnerships with the Division of Parole and Probation, Metro Police, the Workforce Investment Board, the school district, Nevada Job Connect, and the Health Division. We want this to be a community effort to help these people be successful in society. This is not a new concept for the State. We have had restitution centers in the past. The southern restitution center had to be abandoned because it was uninhabitable. We have a successful center in Reno that houses over 90 people. Twenty-seven other states have this type of transition center.
Casa Grande will be available to parolees 4 months prior to their release. For those being discharged and whose offenses include property crimes, drugs, driving under the influence (DUI), and specific other crimes, we want to start working with them 180 days before discharge. Sex offenders and violent offenders will not be eligible, as indicated on page 16. Cost comparisons between Department of Corrections and the proposed Casa Grande facility show Casa Grande at almost half the cost of our FY 2005 weighted institutional average. This includes inmate assessments for room and board and programming, which they will pay for.
Looking at last year’s data, we had 56 people a month discharged and 56 people a month paroled that fit our program criteria. We have a large pool of potential candidates to fill this program. In the past, several agencies limited our potential candidates, but we now have the statutory authority to make this program work. We have many people writing the parole board, requesting to abandon their parole due to lack of services that will make them suitable for release. We are proposing a second phase in November 2004 of 236 beds, with 36 of the beds for women. Earlier, Mr. Reed proposed 200 beds in Washoe County in November 2006, which would replace the Northern Nevada Restitution Center.
Senator Raggio:
Will the vendor build the facility? Is there an identified vendor, or will this go out on an RFP?
Ms. Crawford:
The vendor, a private non-profit group, has offered to build this facility, and it will be available to us if we choose to use it. The inmates will be renting rooms, which our department will pay for.
Senator Raggio:
Does this vendor have experience in doing this type of facility?
Ms. Crawford:
They have extensive experience.
Senator Tiffany:
Since we passed the statute last session, which allows you to release some of these prisoners early, have we actually released any people early?
Mr. Whorton:
Not at this time. The focus has been on utilizing the drug courts. None of the counties has developed a reentry court.
Senator Tiffany:
In the last year and a half, have we not released anyone that we could have released because we did not have the court system set up?
Mr. Whorton:
Not through the court system, but we have done it through drug court. We have not done it through the process that was legislated.
Senator Tiffany:
So the legislation has had no effect on savings. When do you think it will have an effect on savings? That is what we promised.
Mr. Whorton:
It is out of our hands. It rests with the courts to develop the process. We are the partner, but we cannot force them to do it.
Senator Tiffany:
In Clark and Washoe counties, the reentry and drug courts use the same judges and same processes. What is stopping them from doing this?
Mr. Whorton:
I am not sure. I know you will be receiving requests for money from the drug courts and the counties. When you increase that population, they have to have some seed money to make it work.
Senator Tiffany:
That is what it is.
Mr. Whorton:
Returning to staffing levels, most of our positions are filled. We have fewer positions than in previous years. In the western U.S., the average number of inmates per non-uniformed staff member is 5.31. Nevada averages 11.74 inmates. For uniformed staff, the western average is 4.23 inmates per uniformed staff. The Nevada average is 6.66 inmates. The State receives tremendous value for the money it spends on the Department of Corrections.
One recommendation of the study committee is to be more cost-effective in our management of non-violent offenders. One suggestion was to delay construction, which is why we are not pursuing phase 3 of HDSP. Population projections do not support completing this project. Another suggestion was to move towards community corrections. We are moving in that direction, but we are not making specific recommendations at this time. The committee also indicated there was insufficient prison programming and treatment. They recommend the creation of a separate programs division that will bring all the programs scattered throughout the organization together for increased efficiency and give them a unified voice. We have also discussed creating a corrections educational authority instead of dealing with separate school districts as we do now. This is addressed in Bill Draft Request (BDR) 34‑594.
BILL DRAFT REQUEST (BDR) 34-594: Create a corrections education authority within the Department of Education. (Later introduced as Senate Bill 317.)
Transition centers have already been explained. We have a task group working to develop intermediate sanctions to better handle people coming back into the department as parole violators.
In order to make better use of our resources, we are requesting the establishment of a grants and research unit under E-501, which is listed on page 17. We expect this position to justify itself by performance. We brought in over $5 million dollars in grants over the last biennium. We believe if an individual could focus daily on grants, we would be successful in bringing more money to the State. Victim services have been an extra duty in the offender‑management division and have not received the attention they are due. We are obligated to victims by statute, and we have a very confusing bureaucracy for them to deal with. Concerns regarding a public affairs unit have been expressed, but we will not address this due to the State’s budget situation.
Dorothy Nash Holmes, Mental Health Programs Administrator, Department of Corrections:
I would like to briefly update you on the programs listed on page 18 and discuss the corrections study committee’s request for BA 3711. The Youthful Offender Program at Southern Desert Correctional Center (SDCC) has had 70 participants and has 75 people currently enrolled. The program gives age-appropriate training for the correctional experience. Right now, six participants are 16 years of age or younger.
Senator Raggio:
Where are they coming from?
Ms. Holmes:
Everywhere. We are taking all prisoners new to the adult corrections system straight from intake. At the beginning of the program, we pulled everyone under age 18, but some of those inmates had been in prison too long for the program to be effective for them. We now take all prison newcomers under age 21 and some newcomers who are just a bit older than 21. We wish we could expand the program because we have almost 600 inmates under 21 years of age.
Job training is important, because 65 percent of Nevada’s inmates have no job skills, training, or experience. We have a partnership with Nevada Business Services, the Community College of Southern Nevada’s Hospitality Institute, and the Las Vegas Pre-apprenticeship Center to teach inmates culinary, horticulture, and preconstruction skills at HDSP and SDCC. The boot camp inmates have built 16 houses in Las Vegas for Habitat For Humanity, along with other public service projects. We received a workforce investment grant for our women’s job training program, Project REACH (Responsibility, Education, Accountability, Children and Home). Our partner is the Community College of Southern Nevada. We have had 105 women go through the program, with the last 51 currently enrolled. Fourteen different employers have hired graduates. Specific job training has included auto emissions testing, computers, commercial driver’s licensing, and sewing. We hope to continue the program through additional grant funds.
We started a sex offender treatment program because we have over 1700 sex offenders in our system. We received a sub grant from the Health Division from the Centers for Disease Control, and we now have 275 prisoners at 5 facilities participating in the yearlong program. We made changes in the psychological review panel process as recommended by the legislative audit. We are now doing videoconference hearings and the same three panel members are hearing all the panel hearings throughout the State.
At this time, we have four chaplains and organized religious services throughout the year. We have 400 active volunteers out of 1100 total volunteers, and we offer more than 700 services each month. People representing 23 different faith groups are involved in the program and over 90 percent of our inmates are attending some type of religious service or event every month. We would like to move four chaplain positions out of three different budget accounts into BA 3711.
Substance abuse affects 60 to 90 percent of our inmates. OASIS is funded 75 percent through federal grant and 25 percent by a cash match from the inmate welfare fund. We started the program at SDCC with 400 prisoners. In December, we had to cut back to 200 inmates because we only have 6 substance abuse counselors and 1 officer.
The W.I.N.G.S. program started in 1997 in Carson City and moved to NNCC in December to increase the capacity of the program from 104 to 172. Over 500 inmates have gone through the program, and the recidivism rate is never greater than 20 percent. Decision unit E-950 transfers substance abuse programs and the federal Residential Substance Abuse Treatment (RSAT) grants into BA 3711. We are also requesting $8400 dollars a year in E-400 to start intake assessments. Most facilities use the level of service inventory – revised (LSIR) assessment instrument to determine programming for the inmate. Decision unit E‑954 transfers some of the counseling and therapy positions from medical.
At the present time, our prison education program is run by four separate school districts. They run their own programs their own way. We have no control over this and there is no central person or office focused on education in corrections. BDR 34-594 requests a correctional education authority, which will designate someone in the Department of Education as responsible for corrections education. On page 19, the table showing high school diplomas and general education diplomas (GEDs) earned indicates a low completion percentage. There is little incentive for prisoners to finish either course of study because they earn merit credit while studying. BDR 34-594 will award equal merit time for either program and will limit a prisoner to one course of study. We are asking that 4 literacy teachers be moved from the inmate welfare fund into BA 3711. Because nearly half of our inmates cannot read at an eighth grade level, they cannot take high school classes or work. Currently, we have almost 3000 prisoners functioning below eighth grade level. The grant we have used for our literacy program will expire in August. If we lose the positions and cannot continue the literacy program, one-third of our prison population will be unable to continue their education or receive job training. This is a critical security risk and a threat to the department.
Senator Raggio:
How much is in the budget for this?
Ms. Holmes:
For the biennium, there is $575,000 from the General Fund.
Senator Raggio:
Is there a possibility of another grant?
Ms. Holmes:
No, it was time specific. We have had it for 4 years.
Senator Cegavske:
Is there any possibility of special education money from the federal government or the school districts?
Ms. Holmes:
There is some Title I money that could be available to us, but the school districts have not pursued it for us.
Senator Cegavske:
I am referring to Public Law 94-142 (S. 6); Nov. 29, 1975. If learning disabilities are the diagnosis, why are we not pursuing special education funding?
Ms. Holmes:
We cannot go after the money ourselves because the school districts are designated as the educational authorities. Currently, we have four different groups in charge, and only the lead educational authority in each state can apply for funds. We want them to start focusing on getting this money. We need someone to focus on this.
Senator Cegavske:
Do you know of any other states that have applied for or received special education funds?
Ms. Holmes:
Information was presented to the Governor’s study committee detailing tactics other states have used. I can provide it to you.
Senator Cegavske:
Maybe we need to share that information with the school districts and the Department of Education.
Senator Rawson:
Can the Department of Education request these funds?
Ms. Holmes:
The Department of Education or the school districts can.
Senator Rawson:
We will pursue that in the Senate Committee on Human Resources.
Ms. Holmes:
Assuming we get what we request for BA 3711, there will be 55.51 positions. These positions already exist. We want to transfer them from medical and other budgets to BA 3711. The only new money requests are for literacy and assessment instruments.
Chuck Schardin, Medical Administrator, Department of Corrections:
Looking at medical services on page 20, we bring specialists on-site for a fixed fee. This has reduced costs for outside consultations, transportation, and custody officers. We share costs for the four-bed inmate ward at UMC with Clark County. Consolidation of lab panels has reduced costs. In conjunction with public health, we are providing HIV (Human Immunodeficiency Virus) treatment and drugs at a reduced cost. We are evaluating RFPs for a mail-order pharmacy arrangement.
Senator Raggio:
By transferring all these positions out of the medical division, are you still going to be able to meet the needs of the system? Are you also doing reclassifications?
Mr. Schardin:
The positions are classified as forensics, but they are actually performing custody duties as well. This will benefit the department and will not impact care.
Assemblyman Arberry:
How much are you going to save by converting to a mail order pharmacy system?
Mr. Schardin:
We are still in the evaluation process, but it could potentially be about $300,000 a year.
Assemblyman Arberry:
What brought this about? Is this a nationwide trend?
Mr. Schardin:
It is currently used by many facilities. Prescriptions are faxed to a large central pharmacy and delivered the next day. The medications come packaged in punch cards, which helps us with control.
Assemblyman Arberry:
When will this be finalized?
Mr. Schardin:
The committee meets again in early February.
Assemblyman Arberry:
Please keep us informed as you get closer to a decision.
Howard Skolnik, Assistant Director, Prison Industries, Department of Corrections:
The prison industries program expanded by 89 percent in the last 2 years and achieved the first accreditation in Nevada from the American Correctional Association. Only five other State industry programs have accomplished this.
Senator Raggio:
How many inmates are involved?
Mr. Skolnik:
Approximately 725 today. There were 405 just 2 years ago. We anticipate substantial increases due to the new building at HDSP. We will be pursuing partnerships with the private sector. We anticipate 85 additional jobs at the SDCC expansion.
Senator Raggio:
Are any new programs being contemplated?
Mr. Skolnik:
We are currently negotiating with two trailer companies for trailer construction. Swift is interested in refurbishing trailers. Approximately 4000 tractors need to be reupholstered. We expect to get both contracts.
Assemblyman Marvel:
Could you tell us about the clothing factory in Lovelock?
Mr. Skolnik:
It occupies one 10,000-foot bay and employs 79 prisoners manufacturing inmate clothing. We have contacted other clothing distributors in the State and some retail outlets regarding manufacturing, and we have received one response requesting samples.
DEPARTMENT OF PUBLIC SAFETY - OVERVIEW
Dorla M. Salling, Chairman, State Board of Parole Commissioners, Department of Public Safety:
I would like to read my prepared statement (Exhibit P).
Assemblyman Arberry:
In regards to videoconferencing, why do you need your own system? Why not continue to use existing systems?
Ms. Salling:
We do, but our reservations are being cancelled more frequently. As other agencies trim their budgets, they are utilizing their systems more and down time has become scarce. The prison has its own equipment, so they are able to videoconference, but we often cannot use a facility.
Assemblyman Arberry:
Where would this equipment be set up?
Ms. Salling:
The parole board’s office in Las Vegas will have one set of equipment and the Carson City office will have the other set. I have included an explanation of the situation we face regarding videoconferencing, cost comparisons, and graphs showing hours and mileage saved using the video system in my memo (Exhibit Q). The savings in hours will allow us to delay hiring another commissioner for at least 2 years.
Assemblyman Arberry:
Do you want to wait to hire another board member?
Ms. Salling:
We are not asking for any more commissioners at this time. If we take the money we would have spent on travel and the hearing representatives we used in the past, we could purchase the video equipment. We estimate it will cost $55,000 over the biennium to implement, then $19,000 a year for line charges to maintain.
Amy Wright, Chief, Division of Parole and Probation, Department of Public Safety:
My comments are contained in the parole and probation handout (Exhibit R) you have. Our authorized staffing for FY 2003 is 469. Our current actual staffing is 408. In FY 2004 and FY 2005, we show staff of 450. Sworn staff retention has improved significantly since FY 2001. It is holding steady at 94 percent. We attribute this to the increase in pay grades for sworn personnel and State employee raises approved in 2001. Due to the budget crisis and hiring freeze, the vacancy rate for civilian support positions has increased by 70 percent. We know it is likely these positions will remain vacant indefinitely.
Assemblywoman McClain:
Are you eliminating the funding for the community service contract in Washoe County? What about Clark County?
Ms. Wright:
For Washoe County, yes. Clark County was scheduled to be cut, but it was not.
Senator Coffin:
The success of the Clark County program spurred us to start one in Washoe County. The dollar amount for the program in Washoe County is small, so why are we stopping the program in Washoe County? It seems like a cost‑effective program in southern Nevada.
Ms. Wright:
We had to make cuts in almost every category. Originally, we were going to make cuts in both county programs. The Clark County program did not get cut because the $50,000 had already been paid for the year.
Mr. Kirkland:
This is not something we wanted to do, but we had no choice. Every area suffered cuts.
Assemblywoman Leslie:
I am distressed about the cuts in drug testing. Since I work at the courthouse, I can tell you about the morale among the officers in regards to drug testing. I do not want Mr. Kirkland to go back and cause trouble for anyone, but I have heard officers tell judges when the box of drug test kits is used up, they cannot order any more. They are rationing drug tests for parolees. I do not think that is a good way to protect the public.
Mr. Kirkland:
I agree, but if something is not done in 30 days, we will be laying off hundreds of people. These were across‑the‑board cuts.
Assemblywoman Leslie:
I am not in favor of cutting drug testing. We have to find some other way. Why have parole officers if they cannot perform drug tests when necessary?
Mr. Kirkland:
We do not disagree. We would be happy to review each item.
Assemblywoman Leslie:
We need to do that. We cannot cut drug testing.
Ms. Wright:
We are also pursuing federal grants to provide drug testing.
Assemblywoman Leslie:
I think this is an obligation of the State. We should not be depending on federal grants to do basic drug testing of parolees.
Assemblywoman McClain:
To clarify, is HELP of Southern Nevada going to retain its contract over the next biennium?
Ms. Wright:
Yes.
Assemblywoman Leslie:
I want to disclose that I work in the drug court field. The first page of your “Expanded Program Narrative” (Exhibit S) states federal funds will be received for the drug courts. I was not aware this was federally funded. I thought General Fund money was used.
Ms. Wright:
That statement is incorrect. It is not federally funded.
Senator Raggio:
How much of this goes to the Second Judicial District Court and how much goes to the Eighth Judicial District Court?
Ms. Wright:
I do not have that information with me, but I will provide it to you.
Senator Raggio:
Are you only cutting $10,000 for drug testing? How much was cut from drug testing in Washoe County?
Mr. Kirkland:
As I recall, it was $10,000.
Senator Raggio:
Could some of this drug court money be used for drug testing?
Mr. Kirkland:
At the last minute, the money from this contract was moved from the Bureau of Alcohol and Drug Abuse (BADA). We have not had a chance to go through it all.
Senator Raggio:
Since we have no further business, we are adjourned at 4:25 pm.
RESPECTFULLY SUBMITTED:
Denise Davis,
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE:
Assemblyman Morse Arberry Jr., Chairman
DATE: