NAC: CHAPTER 439B - RESTRAINING COSTS OF HEALTH CARE

[Rev. 11/21/2013 4:33:05 PM--2013]

[NAC-439B Revised Date: 11-94]

CHAPTER 439B - RESTRAINING COSTS OF HEALTH CARE

GENERAL PROVISIONS

439B.010 Definitions.

439B.030 “Billed charge” defined.

439B.040 “Department” defined.

439B.050 “Director” defined.

439B.080 “Fiscal year” defined.

439B.090 “Health facility” defined.

439B.100 “Hospital” defined.

439B.110 “Hospital fiscal year” defined.

439B.120 “Indigent” defined.

439B.130 “Inpatient” defined.

439B.140 “Inpatient billed charges” defined.

439B.150 “Inpatient net revenue” defined.

439B.155 “Major hospital” defined.

439B.160 “Medicaid” defined.

439B.170 “Medicare” defined.

439B.180 “Net revenue” defined.

439B.185 “Operating budget” defined.

439B.190 “Practitioner” defined.

FINANCIAL PRACTICES OF HOSPITALS

439B.220 Submission of quarterly reports.

439B.230 Submission of annual financial reports.

439B.240 Certification of financial reports; penalty for failure to submit information; request for extension of time.

439B.250 Submission of copy of audit.

439B.260 Independent audits; penalty for failure to cooperate.

MAJOR HOSPITALS

439B.325 Major hospital to provide disclosure to patient who does not have medical insurance; effect of discount on prior arrangement to pay; circumstances entitling hospital to recover discount.

439B.330 Determination of reasonableness of arrangement for payment; hospital to provide written notice of terms of arrangement and respective rights and obligations to patient; adjustment of monthly payments.

439B.335 Initial payment from patient upon admittance to hospital.

439B.340 Determination of annual rate of interest on unpaid balance of total billed charge; effect of delinquent account; sale, assignment or transfer of right to balance due on account.

CARE OF INDIGENT PATIENTS

General Requirements

439B.390 Applicability of certain provisions of NRS and NAC.

439B.410 Submission of copy of Medicare Cost Report and estimate of inpatient net revenue.

439B.420 Determination of minimum obligation.

439B.430 Reports on actual and estimated minimum obligation; notification to board of county commissioners.

439B.435 Delivery to hospitals of reports on indigent patients treated.

Appeal of Determination of Indigent Status

439B.441 Applicability.

439B.442 Exhaustion of administrative procedures.

439B.443 Filing and contents of appeal; submission of additional material upon request.

439B.444 Determination to hold hearing or to issue decision denying appeal without hearing.

439B.446 Scheduling and notice of hearing.

439B.447 Presentation of evidence at hearing.

439B.448 Issuance of decision after hearing.

439B.449 Contents of decision issued after hearing; effect of decision issued without or after hearing.

PROHIBITED CONTRACTS AND TRANSACTIONS

439B.455 Disclosure required of financial interest in facility or service to which patient referred.

439B.470 Procedure to determine whether prohibited contract between hospital and practitioner exists.

439B.480 Contracts and agreements which must be listed and submitted to department.

439B.490 Preliminary procedure to determine whether prohibited transaction between hospital and related entity has occurred.

439B.500 Determination by director of whether prohibited transaction between hospital and related entity has occurred.

439B.510 Reasonable cause to believe that prohibited transaction between hospital and related entity has occurred.

439B.520 Hearing required before imposition of penalty.

REFERRALS BY PRACTITIONERS

439B.5205 Definitions.

439B.5207 “Commercial establishment” defined.

439B.530 “Financial interest” defined.

439B.5302 “Group practice” defined.

439B.5304 “Medical laboratory” defined.

439B.5306 “One parcel of land” defined.

439B.5308 “Patient” defined.

439B.540 “Refer” defined.

439B.5402 Prohibited referral of patients by agent, employee or independent contractor of practitioner.

439B.5404 Authorized referrals.

439B.5406 Authorized referrals to facilities in which practitioner has financial interest.

439B.5408 Investigation of possible prohibited referral by practitioner; determination by director after investigation.

EDUCATIONAL PROGRAM TO PROMOTE WELLNESS, PHYSICAL FITNESS AND PREVENTION OF DISEASE AND ACCIDENTS

439B.550 Development and implementation of program.

439B.555 Description of program: Submission to director; contents.

439B.560 Description of program: Accompanying statement.

439B.565 Notification by director of decision regarding program; opportunity to make corrections.

PETITION FOR DECLARATORY ORDER OR ADVISORY OPINION

439B.600 Applicability.

439B.610 Contents of petition.

439B.620 Powers of director: Designation of person to issue declaratory order or advisory opinion; consolidation of petitions for advisory opinions.

439B.630 Issuance of declaratory order or advisory opinion: Time for issuance; tolling of time for issuance; consolidated petitions.

439B.640 Copy of declaratory order or advisory opinion to be mailed to petitioner and made available to public.

REVISER’S NOTE.

The regulation of the Director of the Department of Human Resources (now the Department of Health and Human Services) filed with the Secretary of State on December 31, 1991, LCB File No. R168-91, contains several provisions not included in NAC. Those provisions:

1. Require each major hospital to submit to the Department within 5 days after the beginning of each calendar quarter a complete charge master that was in effect on the first day of the quarter;

2. Describe the required contents of the charge master;

3. Prohibit a major hospital from charging a patient for an item that is not included on its charge master or its supplemental listing for miscellaneous items, and from charging a higher amount than the amount shown on the charge master, without the approval of the Director; and

4. Establish procedures regarding the approval and disapproval of billed charges for items not included in the supplemental listing for miscellaneous items.

GENERAL PROVISIONS

NAC 439B.010 Definitions. As used in this chapter, unless the context otherwise requires, the words and terms defined in NAC 439B.030 to 439B.190, inclusive, have the meanings ascribed to them in those sections.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88; A 1-2-90; 12-31-91; 10-20-93)

NAC 439B.030 “Billed charge” defined. “Billed charge” has the meaning ascribed to it in NRS 439B.030.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88)

NAC 439B.040 “Department” defined. “Department” has the meaning ascribed to it in NRS 439B.050.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88)

NAC 439B.050 “Director” defined. “Director” has the meaning ascribed to it in NRS 439B.060.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88)

NAC 439B.080 “Fiscal year” defined. “Fiscal year” has the meaning ascribed to it in NRS 439B.090.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88)

NAC 439B.090 “Health facility” defined. “Health facility” has the meaning ascribed to it in NRS 439A.015.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88)

NAC 439B.100 “Hospital” defined. “Hospital” has the meaning ascribed to it in NRS 439B.110.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88)

NAC 439B.110 “Hospital fiscal year” defined. “Hospital fiscal year” has the meaning ascribed to it in subsection 2 of NRS 439B.090.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88)

NAC 439B.120 “Indigent” defined. “Indigent” has the meaning ascribed to it in NRS 439B.310.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88)

NAC 439B.130 “Inpatient” defined. “Inpatient” means a patient who:

1. Is formally admitted to a hospital;

2. Is assigned to a regularly maintained inpatient bed; and

3. Has an inpatient medical chart initiated by the hospital.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88)

NAC 439B.140 “Inpatient billed charges” defined. “Inpatient billed charges” means those billed charges which are attributable to the provision of inpatient care by a hospital.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88)

NAC 439B.150 “Inpatient net revenue” defined. “Inpatient net revenue” means the net revenue which is attributable to the provision of inpatient care by a hospital.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88)

NAC 439B.155 “Major hospital” defined. “Major hospital” has the meaning ascribed to it in NRS 439B.115.

(Added to NAC by Dep’t of Human Resources, eff. 12-31-91)

NAC 439B.160 “Medicaid” defined. “Medicaid” has the meaning ascribed to it in NRS 439B.120.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88)

NAC 439B.170 “Medicare” defined. “Medicare” has the meaning ascribed to it in NRS 439B.130.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88)

NAC 439B.180 “Net revenue” defined. “Net revenue” has the meaning ascribed to it in NRS 439B.140.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88)

NAC 439B.185 “Operating budget” defined. “Operating budget” means a plan of financial operations embodying an estimate of proposed expenditures for a given period and the proposed means of financing such expenditures, and generally including at least the following information:

1. The period of the budget (inclusive dates);

2. Forecasted patient days;

3. Percentage of rate increase to be implemented;

4. Forecasted gross revenues;

5. Forecasted contractual allowances, bad debt and discounts;

6. Forecasted operating expense;

7. Forecasted income from hospital operations;

8. Forecasted nonoperating revenues;

9. Forecasted nonoperating expense; and

10. Forecasted total income or loss.

(Added to NAC by Dep’t of Human Resources, eff. 10-20-93)

NAC 439B.190 “Practitioner” defined. “Practitioner” has the meaning ascribed to it in NRS 439B.150.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88)

FINANCIAL PRACTICES OF HOSPITALS

NAC 439B.220 Submission of quarterly reports.

1. Each hospital shall submit the following information not later than 30 days after each quarter:

(a) Financial reports in the form prescribed by the department;

(b) Utilization reports in the form prescribed by the department; and

2. The department shall adopt forms and instructions for the quarterly financial and utilization reports to be filed pursuant to subsection 1.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88; A 1-2-90; 10-20-93)

NAC 439B.230 Submission of annual financial reports. Each year a hospital shall file with the department:

1. A copy of the report required to be submitted by the hospital to the Health Care Financing Administration for the purpose of Medicare payments, commonly known as the Medicare Cost Report within 120 days after the end of the hospital’s Medicare fiscal year.

2. At least 30 days after the beginning of each hospital fiscal year, a proposed operating budget for the hospital for the hospital’s fiscal year.

3. Within 30 days of receipt by the hospital, a copy of any report by an independent auditor concerning a financial audit of the hospital’s operations.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88; A 10-20-93)

NAC 439B.240 Certification of financial reports; penalty for failure to submit information; request for extension of time.

1. The officers of a hospital shall certify that the financial reports required to be submitted by a hospital to the department are, to the best of their knowledge and belief, accurate and complete.

2. Except as otherwise provided in subsection 3, any person who fails to submit information required pursuant to this chapter on the date for submission is subject to an administrative fine of up to $1,000 for each day the information is not submitted. The fine will be imposed after notice and a hearing pursuant to NAC 439B.520.

3. A person may request an extension to submit information required by this chapter if the request:

(a) Is received by the department before the information is due; and

(b) Sets forth an adequate justification of the reasons for the delay and a proposed submission date.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88; A 10-20-93)

NAC 439B.250 Submission of copy of audit. Each hospital in this state with not more than 200 beds or which is subject to the provisions of chapter 450 of NRS shall submit to the department a copy of its audit. The audit must be conducted by an independent auditor at least annually. The hospital shall submit a copy of the audit within 30 days after receipt by the hospital of the audit from its auditor.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88)

NAC 439B.260 Independent audits; penalty for failure to cooperate.

1. The director shall contract at least biennially with an independent auditing firm to conduct an examination of each hospital in this state with more than 200 beds which is not subject to the provisions of chapter 450 of NRS to ensure compliance with this chapter. The director shall determine the scope of the examination for each hospital.

2. The auditor shall conduct the examination to determine whether the hospital is in full compliance with this chapter.

3. The auditor shall maintain separate accounts of the costs of the audit for each hospital. Each hospital subject to the audit shall pay the costs of the audit.

4. A hospital may contract with the auditing firm appointed by the department for other work in the hospital in connection with the audit.

5. Any person who fails to submit information to the auditor upon request or who fails to submit to the audit is subject to an administrative fine of up to $1,000 for each day the person fails to submit the information or submit to the audit. The director may impose the fine after notice and a hearing pursuant to NAC 439B.520.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88; A 10-20-93)

MAJOR HOSPITALS

NAC 439B.325 Major hospital to provide disclosure to patient who does not have medical insurance; effect of discount on prior arrangement to pay; circumstances entitling hospital to recover discount.

1. A major hospital which is required to reduce or discount the total billed charge for hospital services provided to an inpatient pursuant to NRS 439B.260 shall provide each patient who informs the hospital that he does not have medical insurance or other coverage to pay for inpatient services with a written disclosure approved by the director explaining:

(a) That the patient may be entitled to receive a reduction or discount on his total billed charge; and

(b) How to apply for such a reduction or discount.

2. For the purposes of NRS 439B.260:

(a) A person who “has no insurance or other contractual provision for the payment of the charge” includes a person who discovers after he is discharged from the hospital that he has no insurance or other contractual provision for the payment of the charge.

(b) “Total billed charge” means the itemized billing required pursuant to NRS 449.243 for each stay of a patient and any additional charges for inpatient hospital services for that stay which are discovered after the submission of the itemized billing.

3. A patient who qualifies for a discount must receive the discount regardless of any prior arrangement to pay, unless the prior arrangement would result in a lower total cost to the patient.

4. A major hospital may require a patient who requests a discount to sign an agreement which assigns to the hospital all benefits that are payable to the patient from medical insurance or other coverage with regard to the total billed charge. Regardless of whether the patient signs such an agreement, if either the hospital or the patient receives payment from a payer with regard to the total billed charge, the discount becomes void and the hospital is entitled to recover the amount of the discount from the patient or payer according to the terms of the coverage.

5. In addition to the right of recovery pursuant to subsection 4, if a patient fraudulently represents to a hospital that he does not have a payer, the hospital is entitled to any additional remedies provided by law.

6. For the purposes of this section, “payer” means an insurance company or other third-party organization which has a contractual obligation to pay for hospital services provided to a patient, including, without limitation, a program of public assistance provided by an agency of the local, state or Federal Government.

(Added to NAC by Dep’t of Human Resources, eff. 8-1-94)

NAC 439B.330 Determination of reasonableness of arrangement for payment; hospital to provide written notice of terms of arrangement and respective rights and obligations to patient; adjustment of monthly payments.

1. Except as otherwise provided in subsection 2, to be deemed reasonable, the arrangement for payment required pursuant to paragraph (c) of subsection 1 of NRS 439B.260 must include at least a monthly payment which is the greater of:

(a) Twenty-five dollars; or

(b) Five percent of the monthly gross income of the patient’s household, exclusive of income which is not paid in cash, or 25 percent of the monthly gross income of the patient’s household which exceeds 200 percent of the federal poverty level, whichever is less.

2. An arrangement for payment which is different than the arrangement set forth in subsection 1 will be deemed reasonable if it is mutually agreed upon by the hospital and the patient.

3. At the time an arrangement for payment is made, the hospital shall provide written notice to the patient disclosing the terms of the arrangement and the respective rights and obligations of the patient and the hospital. The notice must provide a space for the patient’s signature. The hospital shall require the patient to sign in the provided space as acknowledgment that he understands and agrees to the arrangement for payment. If the hospital is not able to obtain the signature of the patient, it must maintain a record of its good faith effort to obtain his signature.

4. A major hospital may review the financial situation of a patient and adjust his monthly payments not more than one time per year.

(Added to NAC by Dep’t of Human Resources, eff. 8-1-94)

NAC 439B.335 Initial payment from patient upon admittance to hospital.

1. A major hospital may require an initial payment from a patient who is admitted to the hospital.

2. If a patient elects to be admitted to a major hospital, the hospital may require an initial payment in addition to any other preadmission deposits or payments.

3. A major hospital shall not require an initial payment towards the total billed charge which exceeds:

(a) Two and one-half times the monthly payment determined pursuant to subsection 1 of NAC 439B.330; or

(b) Fifty percent of the unencumbered liquid assets of the household of the patient.

(Added to NAC by Dep’t of Human Resources, eff. 8-1-94)

NAC 439B.340 Determination of annual rate of interest on unpaid balance of total billed charge; effect of delinquent account; sale, assignment or transfer of right to balance due on account.

1. If a major hospital charges interest on the unpaid balance of the total billed charge of a patient, the annual rate of interest must be based on the balance due after any reductions or discounts. The interest rate must not exceed the statutory interest rate in effect on the date that the arrangement for payment is agreed upon.

2. If the account of a patient becomes delinquent by 30 days or more:

(a) Upon the first and second occurrences, the hospital shall provide written notice of the delinquency to the patient. If the delinquency is not cured within 10 days after the patient receives the notice, the hospital may revoke any discount that was provided to the patient and seek to accelerate payment on the account.

(b) Upon the third and subsequent occurrences, the hospital may revoke the discount and seek to accelerate payment without allowing the patient 10 days to cure the delinquency.

3. The sale, assignment or transfer of the right to the uncollected amount of the balance due on the account of a patient with a major hospital is subject to the terms and conditions of any agreement between the hospital and the patient. Any such sale, assignment or transfer is also subject to the provisions of subsection 2.

(Added to NAC by Dep’t of Human Resources, eff. 8-1-94)

CARE OF INDIGENT PATIENTS

General Requirements

NAC 439B.390 Applicability of certain provisions of NRS and NAC.

1. The provisions of NRS 439B.300 to 439B.340, inclusive, and NAC 439B.410 apply to any hospital with 100 or more beds.

2. If the number of licensed beds of a hospital expands to 100 or more, it becomes subject to the provisions of NRS 439B.300 to 439B.340, inclusive, and NAC 439B.410.

3. As of July 1, 1992, the provisions of NRS 439B.300 to 439B.340, inclusive, and NAC 439B.410 apply to the following hospitals:

(a) In Clark County:

(1) Desert Springs Hospital;

(2) Sunrise Hospital and Medical Center;

(3) Lake Mead Hospital and Medical Center;

(4) University Medical Center;

(5) Valley Hospital Medical Center; and

(6) Saint Rose Dominican Hospital; and

(b) In Washoe County:

(1) Saint Mary’s Regional Medical Center;

(2) Sparks Family Hospital; and

(3) Washoe Medical Center.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88; A 1-2-90; 10-20-93)

NAC 439B.410 Submission of copy of Medicare Cost Report and estimate of inpatient net revenue.

1. Each hospital shall, within 120 days after the end of the hospital’s Medicare fiscal year, submit to the department a copy of the report required to be submitted to the Health Care Financing Administration for the purpose of Medicare payments, commonly known as the Medicare Cost Report, for each hospital fiscal year.

2. Each such hospital whose hospital fiscal year ends June 30, shall submit to the department an estimate of its inpatient net revenue for its current hospital fiscal year not later than June 30 of each year.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88; A 10-20-93)

NAC 439B.420 Determination of minimum obligation.

1. The department shall:

(a) For the purposes of determining 0.6 percent of a hospital’s inpatient net revenue for the hospital’s previous fiscal year pursuant to NRS 439B.320, use the report required to be submitted by the hospital pursuant to NAC 439B.410 for the most recent hospital fiscal year ending before July 1 in any year.

(b) Determine the amount of the hospital’s minimum obligation by:

(1) Dividing the amount shown as inpatient total patient revenues on line 25 of Worksheet G-2 of the 2552-89 Medicare Cost Report or comparable line on a subsequent Medicare Cost Report by the amount shown as the total of all total patient revenues on the same line;

(2) Multiplying the result of paragraph (a) by the amount reported as Net Patient Revenues on line 3 of Worksheet G-3 of that report to determine the hospital’s total inpatient net revenue; and

(3) Multiplying the result of paragraph (b) by 0.006.

2. The amount determined pursuant to paragraph (b) of subsection 1 is subject to an adjustment by the department based upon the receipt of subsequent information or an audit or examination of the hospital. The adjustment must be made to the current or following year of the hospital’s obligation pursuant to this section.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88; A 10-20-93)

NAC 439B.430 Reports on actual and estimated minimum obligation; notification to board of county commissioners.

1. On or before July 31 of each fiscal year, the department shall report to the affected hospitals and the boards of county commissioners of Clark and Washoe counties:

(a) The actual minimum obligation for indigent care for each hospital located in the county with a hospital fiscal year ending on a date other than June 30; and

(b) The estimated minimum obligation for indigent care for each hospital located in the county with a hospital fiscal year ending on June 30.

2. Within 30 days after receipt of the report required to be submitted by NAC 439B.410 for each hospital with a hospital fiscal year ending June 30, the department shall notify the board of county commissioners of the county in which the hospital is located of the hospital’s actual minimum obligation for indigent care as determined pursuant to NAC 439B.420. The department shall notify the board of county commissioners of any adjustments made pursuant to subsection 2 of NAC 439B.420 within 30 days after the adjustment.

3. For the purposes of the determinations and reports which are required to be made by the department pursuant to NRS 439B.420, the department shall use the information provided in the report submitted to the department by the county pursuant to that section.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88; A 10-20-93)

NAC 439B.435 Delivery to hospitals of reports on indigent patients treated. Each county that is subject to the provisions of NRS 439B.340 shall, at the time it provides the department with the report required by that section, deliver a copy of the report to each hospital affected thereby.

(Added to NAC by Dep’t of Human Resources, eff. 1-9-89; A 10-20-93)

Appeal of Determination of Indigent Status

NAC 439B.441 Applicability. A hospital appealing a determination of a county regarding the indigent status of an inpatient pursuant to subsection 4 of NRS 439B.330 shall comply with the provisions of NAC 439B.441 to 439B.449, inclusive.

(Added to NAC by Dep’t of Human Resources, eff. 9-16-92)

NAC 439B.442 Exhaustion of administrative procedures. A hospital must exhaust all available administrative procedures with a county before filing an appeal of a determination of a county regarding the indigent status of an inpatient with the director or the person designated by the director to hear such an appeal.

(Added to NAC by Dep’t of Human Resources, eff. 9-16-92)

NAC 439B.443 Filing and contents of appeal; submission of additional material upon request.

1. An appeal of a determination of a county regarding the indigent status of an inpatient must be in writing and must be filed with the director within 30 calendar days after the date the hospital receives written notification of the county’s final determination.

2. An appeal must include the following information and documentation:

(a) The name of the patient;

(b) The date or dates of service;

(d) A listing of all determinations made by the county regarding the claim, including the date and the reason for rejection;

(e) All correspondence between the hospital and the county regarding the application for verification of indigent status of the patient;

(f) Any other information submitted by the hospital to the county for consideration in making its determination; and

(g) A written explanation of the basis for believing that the county’s decision was clearly erroneous, arbitrary, capricious or an abuse of discretion.

3. In addition to the information and documentation required by subsection 2, the director or his designee may request additional information or documentation from the hospital. An appeal may be dismissed if the director or his designee does not receive the additional information or documentation within 15 calendar days after the request is made.

(Added to NAC by Dep’t of Human Resources, eff. 9-16-92)

NAC 439B.444 Determination to hold hearing or to issue decision denying appeal without hearing. After considering the information and documentation specified in NAC 439B.443, the director or his designee will:

1. Hold a hearing; or

2. Based upon a finding that the county acted properly in rejecting the application, render a written decision that the appeal is without merit.

(Added to NAC by Dep’t of Human Resources, eff. 9-16-92)

NAC 439B.446 Scheduling and notice of hearing. If the director or his designee determines that a hearing on the indigent status of an inpatient is necessary, he will set a time and place for the hearing and send notice of the hearing to the hospital and the county by registered or certified mail. Unless all parties otherwise stipulate, the hearing must be held not less than 30 calendar days nor more than 60 calendar days after the date the appeal was received by the director or his designee.

(Added to NAC by Dep’t of Human Resources, eff. 9-16-92)

NAC 439B.447 Presentation of evidence at hearing. At a hearing held pursuant to NAC 439B.446:

1. Except as otherwise provided in subsection 3, the hospital and the county may present evidence in support of their positions.

2. The director or his designee may request any information or documentation that he deems necessary to render a decision on the appeal.

3. Except as otherwise provided in subsection 2, the hospital shall not present evidence other than the information and documentation specified in NAC 439B.443, unless it has shown to the satisfaction of the director or his designee that the evidence is material and there is good cause for its failure to present the evidence to the county. The director or his designee may consider the additional evidence or may order the hospital to submit the additional evidence to the county and remand the application to the county.

(Added to NAC by Dep’t of Human Resources, eff. 9-16-92)

NAC 439B.448 Issuance of decision after hearing. If a hearing is held pursuant to NAC 439B.446, the director or his designee will render a written decision within 30 calendar days after the date of the hearing, or if additional information or documentation is requested at the hearing, the director or his designee will render a written decision within 30 calendar days after receipt of such information.

(Added to NAC by Dep’t of Human Resources, eff. 9-16-92)

NAC 439B.449 Contents of decision issued after hearing; effect of decision issued without or after hearing.

1. The written decision of the director or his designee rendered pursuant to NAC 439B.448 must:

(a) Affirm the county’s decision; or

(b) Reverse or remand the county’s decision, in whole or in part, if substantial rights of a hospital have been prejudiced because the county’s decision was:

(1) Clearly erroneous;

(2) Arbitrary;

(3) Capricious; or

(4) An abuse of discretion.

2. A written decision rendered pursuant to subsection 2 of NAC 439B.444 or pursuant to NAC 439B.448 is final and may be appealed pursuant to subsection 4 of NRS 439B.340.

(Added to NAC by Dep’t of Human Resources, eff. 9-16-92)

PROHIBITED CONTRACTS AND TRANSACTIONS

NAC 439B.455 Disclosure required of financial interest in facility or service to which patient referred. A health facility shall not refer a patient to a health facility or service in which the referring party has a financial interest unless the health facility first provides the patient with a written statement disclosing that interest.

(Added to NAC by Dep’t of Human Resources, eff. 1-2-90; A 3-9-94)

NAC 439B.470 Procedure to determine whether prohibited contract between hospital and practitioner exists.

1. The department shall:

(a) Establish a schedule for the submission of a listing of all contracts between a hospital or a related entity and a practitioner. The listing must indicate with respect to each contract:

(1) The type of contract, such as for rent, for services as a medical director, or for some other purpose;

(2) The practitioner’s name and address;

(3) The effective date of the contract; and

(4) The term of the contract.

(b) Request by registered mail the submission of the listing from hospitals pursuant to paragraph (a). Each hospital which receives such a request shall submit the listing within 30 days after receipt of the written request.

(c) Within 30 days after receipt of the listing from a hospital, schedule with the hospital an on-site review of the actual contracts, agreements and records concerning the contracts between the hospital or related entities and the practitioners. The hospital must submit copies of any contracts or agreements which the department requests.

2. If a contract, agreement or record indicates that a violation of NRS 439B.420 may have occurred, the director shall allow the hospital or any other party to an agreement with the hospital who is under investigation to provide additional information. The hospital shall provide that information within 30 days after receipt of the written notice from the director informing the hospital or party that it may provide such additional information.

3. Within 30 days after receipt of the additional information or after the period for submitting the information has expired, the director shall:

(a) If he determines that there is reason to believe a violation of NRS 439B.420 has occurred, schedule and hold a hearing pursuant to NAC 439B.520; or

(b) If he determines that there is not a sufficient reason to believe that a violation of NRS 439B.420 has occurred, notify the hospital in writing of his determination.

4. The failure of the director to take action within the periods specified in subsection 2 or 3 of this section shall not be deemed an abandonment of the action or a determination that no violation occurred.

5. Unless a public hearing is held pursuant to subsection 3, all information submitted pursuant to this section is confidential. The department shall not disclose that information to any person.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88; A 10-20-93)

NAC 439B.480 Contracts and agreements which must be listed and submitted to department.

1. The following contracts and agreements must be included in the listing submitted to the department by a hospital pursuant to NAC 439B.470:

(a) All rental agreements between the hospital or a related entity and a physician or entity which employs physicians;

(b) All agreements between the hospital or related entity and a physician or entity which employs physicians concerning the subsidization of rent by the hospital or related entity;

(c) All agreements between the hospital or a related entity and a practitioner for the hospital or a related entity acting as the billing agent of the practitioner;

(d) All agreements for the selling of goods or services from the hospital or related entity to a physician; and

(e) Such other agreements and information as the director determines may be necessary to determine if a violation of NRS 439B.420 has occurred.

2. The hospital or related entity must submit to the department copies of any contract or agreement requested by the department.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88; A 10-20-93)

NAC 439B.490 Preliminary procedure to determine whether prohibited transaction between hospital and related entity has occurred.

1. The department shall:

(a) Establish a schedule for the submission of a listing of all contracts and agreements between the hospitals and related entities pursuant to NRS 439B.430. The schedule must require the submission of the listing from each hospital at least biennially.

(b) Notify each hospital in writing at least 30 days before the date for submission of the listing of contracts and agreements between the hospital and its related entities. The department shall specify in its notice the beginning and ending of the period for which the contracts and agreements will be reviewed.

2. A hospital shall, within 30 days after receipt of the written notice from the department or the date for submission contained in the notice, whichever is later, submit the requested information to the department. Unless an action is taken by the department against the hospital to determine if a violation of NRS 439B.430 has occurred, all information submitted pursuant to this section is confidential. The department shall not disclose the information to any person.

3. The department shall, within 30 days after receipt of the listing from the hospital, schedule with the hospital an on-site review of the actual contracts, agreements and records concerning the contracts and agreements between a hospital and its related entities. The department shall review the information and determine if there is reason to believe a violation of NRS 439B.430 has occurred.

4. If the department determines that:

(a) There is reason to believe that a violation has occurred, it shall forward the information and its determination to the director and notify the hospital in writing of its determination;

(b) There is no reason to believe a violation has occurred, it shall notify the hospital in writing of its determination; or

(c) Additional information is required to determine if a violation has occurred, it shall request the additional information from the hospital or its related entity. The hospital or its related entity shall provide the additional information within 30 days after receipt of the request therefor.

5. This section does not prohibit the director from conducting an examination pursuant to subsection 3 of NRS 439B.430 at any time.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88; A 10-20-93)

NAC 439B.500 Determination by director of whether prohibited transaction between hospital and related entity has occurred.

1. The department shall forward to the director any information which would support a determination that a violation of NRS 439B.430 has occurred.

2. Upon receipt of the information from any source which provides reason to believe that a violation of NRS 439B.430 has occurred, the director shall allow the hospital to submit additional information from the hospital or related entity or any other party to an agreement with the hospital or related entity being investigated.

3. If the director determines that there is:

(a) Reason to believe a violation of NRS 439B.430 has occurred, he shall schedule and hold a hearing pursuant to NAC 439B.520; or

(b) Not sufficient reason to believe that a violation of NRS 439B.430 has occurred, he shall notify the hospital of his determination in writing.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88; A 10-20-93)

NAC 439B.510 Reasonable cause to believe that prohibited transaction between hospital and related entity has occurred. Reasonable cause to believe that a violation of subsection 2 of NRS 439B.430 has occurred includes, but is not limited to:

1. The failure of a hospital or related entity to submit the copies required by NAC 439B.490 concerning an agreement, contract or transaction between the hospital and a related entity.

2. One or more related agreements, contracts or transactions between the hospital and its related entities resulting in:

(a) An increase in the hospital’s operating expenses;

(b) A decrease in the hospital’s net patient revenue; or

of more than 1 percent from the previous fiscal year.

3. The value of the goods, services or consideration which is the subject of an agreement, contract or transaction between the hospital and a related entity being found to be materially different from the fair market value for similar agreements, contracts or transactions between nonrelated entities in the same area.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88)

NAC 439B.520 Hearing required before imposition of penalty.

1. Before imposing any financial penalty or other penalty pursuant to this chapter, the director shall hold a hearing concerning the penalty.

2. The proceedings conducted pursuant to this section must be conducted pursuant to chapter 233B of NRS.

(Added to NAC by Dep’t of Human Resources, eff. 4-13-88; A 10-20-93)

REFERRALS BY PRACTITIONERS

NAC 439B.5205 Definitions. As used in NAC 439B.5205 to 439B.5408, inclusive, and for the purpose of enforcing the provisions of NRS 439B.425, unless the context otherwise requires, the words and terms defined in NAC 439B.5207 to 439B.540, inclusive, have the meanings ascribed to them in those sections.

(Added to NAC by Dep’t of Human Resources, eff. 3-9-94)

NAC 439B.5207 “Commercial establishment” defined. “Commercial establishment” means any business entity that provides goods or services other than a medical laboratory or a health facility.

(Added to NAC by Dep’t of Human Resources, eff. 3-9-94)

NAC 439B.530 “Financial interest” defined.

1. Except as otherwise provided in paragraph (f) of subsection 2 of NRS 439B.425, “financial interest” means an ownership or other interest:

(a) That provides compensation based, in whole or in part, upon the volume or value of goods or services provided as a result of referrals; and

(b) Which a practitioner or a person related to the practitioner within two degrees of consanguinity or affinity:

(1) Owns, in whole or in part; or

(2) Holds as a beneficiary of a trust.

2. The term includes, but is not limited to:

(a) A financial kickback, referral fee or finder’s fee.

(b) An income-sharing agreement, debt instrument, or lease or rental agreement that provides compensation based, in whole or in part, upon the volume or value of the goods or services provided as a result of referrals.

(Added to NAC by Dep’t of Human Resources, eff. 3-9-94)

NAC 439B.5302 “Group practice” defined. “Group practice” has the meaning ascribed to it in paragraph (a) of subsection 4 of NRS 439B.425.

(Added to NAC by Dep’t of Human Resources, eff. 3-9-94)

NAC 439B.5304 “Medical laboratory” defined. “Medical laboratory” has the meaning ascribed to it in NRS 652.060.

(Added to NAC by Dep’t of Human Resources, eff. 3-9-94)

NAC 439B.5306 “One parcel of land” defined. “One parcel of land” means one conveyable lot or parcel of land or multiple conveyable lots or parcels of land which are contiguous.

(Added to NAC by Dep’t of Human Resources, eff. 3-9-94)

NAC 439B.5308 “Patient” defined. “Patient” has the meaning ascribed to it in paragraph (b) of subsection 4 of NRS 439B.425.

(Added to NAC by Dep’t of Human Resources, eff. 3-9-94)

NAC 439B.540 “Refer” defined. “Refer” means sending or directing any person to another person or business entity for the purpose of obtaining, consuming or purchasing, for consideration, goods or services related to health care.

(Added to NAC by Dep’t of Human Resources, eff. 3-9-94)

NAC 439B.5402 Prohibited referral of patients by agent, employee or independent contractor of practitioner. The provision of subsection 1 of NRS 439B.425 prohibiting a practitioner from referring a patient, for a service or for goods related to health care, to a health facility, medical laboratory or commercial establishment in which the practitioner has a financial interest, must be construed as prohibiting any agent, employee or independent contractor of a practitioner from referring a patient of the practitioner, for a service or for goods related to health care, to a health facility, medical laboratory or commercial establishment in which the practitioner has a financial interest.

(Added to NAC by Dep’t of Human Resources, eff. 3-9-94)

NAC 439B.5404 Authorized referrals. The following referrals do not present a perception of a conflict of interest, are consistent with the overall purpose of chapter 439B of NRS and are not prohibited by the provisions of NRS 439B.425:

1. Any referral within one or more locations of a business entity if:

(a) The goods or services provided as a result of the referral are routinely provided to all patients of the referring practitioner based on their needs;

(b) The referring practitioner has the right to see regular patients for personal medical care, consultations, diagnoses and treatment at the same site and general location where the goods or services will be provided as a result of the referral;

(c) The goods and services provided as a result of the referral are billed as part of the bill provided by the referring practitioner or the business entity;

(d) The goods or services provided as a result of the referral are not provided at a facility operating under a different name; and

(e) The referral is not a referral by a licensed physician to a medical laboratory:

(1) In which the physician has a financial interest; and

(2) That is not operated solely in connection with the diagnosis or treatment of the physician’s patients.

2. Any referral within one or more locations of a business entity if:

(a) The goods or services provided as a result of the referral are not provided at a facility operating under a different name; and

(b) The referral does not result in any revenue for the referring practitioner, except in the form of additional net profit of a business:

(1) That is based upon a formula reflective of the referring practitioner’s percentage of ownership; and

(2) That is incidentally increased by the referral.

3. A referral made to a renal dialysis center for the treatment of end-stage renal disease.

4. A referral of a patient who is covered under a capitated insurance program, if the referral does not result in any additional revenue for either the referring practitioner or the business entity to which the patient is referred.

(Added to NAC by Dep’t of Human Resources, eff. 3-9-94; A 7-7-94)

NAC 439B.5406 Authorized referrals to facilities in which practitioner has financial interest.

1. The provisions of NRS 439B.425 do not prohibit a practitioner from referring a patient, for a service or for goods related to health care, to a health facility, medical laboratory or commercial establishment in which the practitioner has a financial interest if the referral is made on or before June 30, 1994, and:

(a) The financial interest existed on or before June 30, 1993;

(b) The practitioner files with the director, on or before December 31, 1993, a form provided by the department for the purpose of declaring a financial interest and requesting the authority to make the referral until June 30, 1994;

(c) The practitioner cures any defect in the form filed pursuant to paragraph (b) within 15 days from the date of postage of the notice of that defect provided by the director pursuant to subsection 4; and

(d) The practitioner provides to each referred patient a written notice of his financial interest in any goods or services to be provided as a result of the referral.

2. The provisions of NRS 439B.425 do not prohibit a practitioner who, pursuant to subsection 1, has the authority to make a referral until June 30, 1994, from referring a patient, for a service or for goods related to health care, to a health facility, medical laboratory or commercial establishment in which the practitioner has a financial interest if the referral is made on or before December 31, 1994, and:

(a) The practitioner files with the director, on or before May 31, 1994, a form provided by the department for the purpose of requesting the authority to make the referral until December 31, 1994;

(b) The practitioner cures any defect in the form filed pursuant to paragraph (a) within 15 days from the date of postage of the notice of that defect provided by the director pursuant to subsection 4;

(c) The practitioner submits an affidavit testifying that there has been a good faith effort to divest the financial interest or otherwise come into compliance with NRS 439B.425 and setting forth the practitioner’s plan to divest the financial interest; and

(d) The practitioner provides to each referred patient a written notice of his financial interest in any goods or services to be provided as a result of the referral.

3. For any request for the authority to make a referral pursuant to subsection 2, the director will notify the practitioner in writing of his decision on or before June 30, 1994.

4. If there is any defect in a form submitted pursuant to paragraph (b) of subsection 1 or paragraph (a) of subsection 2, the director will provide notice of the defect to the practitioner by mail.

(Added to NAC by Dep’t of Human Resources, eff. 3-9-94)

NAC 439B.5408 Investigation of possible prohibited referral by practitioner; determination by director after investigation.

1. If the department becomes aware of a possible violation of subsection 1 of NRS 439B.425, it may investigate the violation or forward the information to the applicable licensing board of the practitioner.

2. If, after an investigation is conducted pursuant to subsection 1, the director determines that there is:

(a) Sufficient reason to believe a violation of subsection 1 of NRS 439B.425 has occurred, he will schedule and hold a hearing pursuant to chapter 233B of NRS. If, at the hearing, it is found that a violation of subsection 1 of NRS 439B.425 has occurred, the director may impose a fine pursuant to subsection 2 of NRS 439B.450.

(b) Not sufficient reason to believe that a violation of subsection 1 of NRS 439B.425 has occurred, he will notify the practitioner of his determination in writing.

(Added to NAC by Dep’t of Human Resources, eff. 3-9-94)

EDUCATIONAL PROGRAM TO PROMOTE WELLNESS, PHYSICAL FITNESS AND PREVENTION OF DISEASE AND ACCIDENTS

NAC 439B.550 Development and implementation of program. An educational program developed pursuant to NRS 439B.280 must be designed to address problems or objectives related to health that are identified in National Health Promotion and Disease Prevention Objectives for the Year 2000, published by the United States Public Health Service. The major hospitals must determine the form and content of each program, but a program must be approved by the director before it is implemented.

(Added to NAC by Dep’t of Human Resources, eff. 12-31-91)

NAC 439B.555 Description of program: Submission to director; contents. At least 30 days before initiating an educational program pursuant to NRS 439B.280, the major hospitals shall submit to the director a description of the program, including:

1. The name of the person responsible for liaison with the director regarding the program;

2. Each problem or objective identified in National Health Promotion and Disease Prevention Objectives for the Year 2000 that the program is intended to address;

3. A syllabus or outline of the content of the program, indicating the major points to be conveyed, other significant points to be conveyed and the organization or sequence of presentation; and

4. Biographical sketches of the instructors, facilitators or leaders, indicating their professional competence to instruct in the relevant subject areas. If the instructors, facilitators or leaders for the program have not been selected at the time the plan is submitted to the director, a brief statement of required professional qualifications must be included.

(Added to NAC by Dep’t of Human Resources, eff. 12-31-91)

NAC 439B.560 Description of program: Accompanying statement. The description of an educational program submitted pursuant to NAC 439B.555 must be accompanied by a statement from the major hospitals that:

1. If participation in or benefit from any part of the program is contingent upon the payment of a fee or the purchase of goods or services from one of the major hospitals or a facility affiliated with a major hospital, no prospective participant will be denied such participation or benefit on the basis of failure or inability to pay the required fee or charges.

2. Prospective participants will not be discriminated against on the basis of race, color, religion, national origin, sex or sexual orientation except to the extent such discrimination is clearly directed against persons or classes of persons who would not benefit from the program.

(Added to NAC by Dep’t of Human Resources, eff. 12-31-91)

NAC 439B.565 Notification by director of decision regarding program; opportunity to make corrections. The director will notify the person designated as liaison for a proposed educational program of his decision within 15 days after his receipt of the description of the program. If the program is disapproved, the director’s notice will specify the required corrections and the hospitals will have an additional 15 days after the date of receipt of the notice of disapproval to make those corrections.

(Added to NAC by Dep’t of Human Resources, eff. 12-31-91)

PETITION FOR DECLARATORY ORDER OR ADVISORY OPINION

NAC 439B.600 Applicability. Any person or entity that is or may be subject to a provision of chapter 439B of NRS, or any regulation or prior decision of the Director adopted pursuant thereto, may file with the Director a petition, in letter form, for a declaratory order or advisory opinion as to the applicability and interpretation of the provision to the person or entity. The petition must be filed by mailing the petition to the State of Nevada, Director of the Department of Health and Human Services, Kinkead Building, Room 600, 505 East King Street, Carson City, Nevada 89710, by certified mail with a return receipt requested.

(Added to NAC by Dep’t of Human Resources, eff. 7-7-94)

NAC 439B.610 Contents of petition. A petition for a declaratory order or advisory opinion filed pursuant to NAC 439B.600 must include:

1. A statement of each issue upon which the petitioner is seeking a declaratory order or advisory opinion, including references to the provision of any statute, regulation or prior decision of the director which the petitioner believes is at issue.

2. A statement of the factual circumstances that relate to the issues upon which the petitioner is seeking a declaratory order or advisory opinion, including, but not limited to:

(a) The type of business involved and the goods and services delivered, if any;

(b) A list of persons and entities with an existing or proposed financial interest in the business involved, the type of financial interest held by these persons or entities, including any interest in an executed or proposed contract, agreement or arrangement and an explanation of the role of these persons or entities in the delivery of goods and services delivered; and

(c) A flow chart of the business involved that shows the existing and proposed ownership, structure of business operations, locations of major equipment or laboratories, names of each entity or facility and patterns of referral among each practitioner, entity or facility involved.

3. A statement of the factual circumstances demonstrating how the existing and proposed structure of the business involved:

(a) Promotes equal access to quality medical care at an affordable cost;

(b) Reduces the cost of medical care through an improved competitive market; and

(Added to NAC by Dep’t of Human Resources, eff. 7-7-94)

NAC 439B.620 Powers of director: Designation of person to issue declaratory order or advisory opinion; consolidation of petitions for advisory opinions.

1. The director may designate a person within the department to issue a declaratory order or advisory opinion pursuant to NAC 439B.600 to 439B.640, inclusive.

2. The director or his designee may issue a declaratory order that consolidates two or more petitions for an advisory opinion.

(Added to NAC by Dep’t of Human Resources, eff. 7-7-94)

NAC 439B.630 Issuance of declaratory order or advisory opinion: Time for issuance; tolling of time for issuance; consolidated petitions.

1. Except as otherwise provided in subsections 2 and 3, the director or his designee will issue a declaratory order or advisory opinion pursuant to NAC 439B.600 to 439B.640, inclusive, within 60 days after the date on which a petition for a declaratory order or petition for an advisory opinion is filed.

2. The running of the time period for the issuance of a declaratory order or advisory opinion provided in subsection 1 shall be deemed to be tolled under the following circumstances:

(a) If the director or his designee requests that the petitioner submit additional information to the director or his designee after the date the petition for a declaratory order or advisory opinion was filed. The running of the time period for the issuance of a declaratory order or advisory opinion provided in subsection 1 shall be deemed to be tolled from the date the director or his designee mails the request for additional information to the petitioner until 30 days after the date on which the director or his designee receives the additional information from the petitioner.

(b) If the petitioner, without receiving a request for additional information from the director or his designee, submits additional information to the director or his designee after the date the petition for a declaratory order or advisory opinion was filed. The running of the time period for the issuance of a declaratory order or advisory opinion provided in subsection 1 shall be deemed to be tolled from the date the additional information is received until 30 days after the date on which the director or his designee receives the additional information from the petitioner.

3. When the director or his designee decides to consolidate two or more petitions for an advisory opinion and issue a declaratory order, the director or his designee will set a date for the issuance of the declaratory order which will allow for proper consideration of the issues and which may reasonably exceed 60 days after the dates on which each petition for an advisory opinion to be consolidated was filed. The director or his designee will notify each petitioner by mail of the date set for the issuance of the declaratory order.

(Added to NAC by Dep’t of Human Resources, eff. 7-7-94)

NAC 439B.640 Copy of declaratory order or advisory opinion to be mailed to petitioner and made available to public. Upon the issuance of a declaratory order or advisory opinion pursuant to NAC 439B.600 to 439B.640, inclusive, the director or his designee will mail a copy of the declaratory order or advisory opinion to the petitioner and will make a copy of the declaratory order or advisory opinion available to the public for inspection.

(Added to NAC by Dep’t of Human Resources, eff. 7-7-94)