MINUTES OF THE MEETING OF THE JOINT SUBCOMMITTEE ON HUMAN RESOURCES/K-12 ASSEMBLY COMMITTEE ON WAYS AND MEANS AND SENATE COMMITTEE ON FINANCE Sixty-eighth Session March 17, 1995 The meeting of the Joint Subcommittee on Human Resources/K-12 of the Assembly Committee on Ways and Means and the Senate Committee on Finance was called to order at 7:38 a.m., on Friday, March 17, 1995, Chairman Evans presiding in Room 352 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. ASSEMBLY SUBCOMMITTEE MEMBERS PRESENT: Mrs. Jan Evans, Chairman Mr. Dennis L. Allard Mrs. Vonne Chowning Ms. Sandra Tiffany ASSEMBLY SUBCOMMITTEE MEMBERS ABSENT: Mr. Lynn Hettrick, Jr. (Excused) Mr. Joseph E. Dini, Jr. (Excused) SENATE SUBCOMMITTEE MEMBERS PRESENT: Senator Raymond D. Rawson Senator Bob Coffin Senator Dean A. Rhoads SENATE SUBCOMMITTEE MEMBERS ABSENT: Senator William J. Raggio (Excused) STAFF MEMBERS PRESENT: Mr. Mark Stevens, Fiscal Analyst Mr. Dan Miles, Fiscal Analyst Mr. Steve Abba, Program Analyst DEPARTMENT OF HUMAN RESOURCES - HEALTH DIVISION Ms. Yvonne Sylva, Administrator, Health Division, introduced Dr. Donald Kwalik, State Health Officer, and Mr. Ron Lange, Deputy Administrator. Ms. Sylva testified the Health Division's budget was approximately $44 million, of which 25 percent was General Fund revenue, 55 percent was federally funded, and 20 percent was generated from fees and other revenue sources. The division budget was comprised of 18 budget accounts, 42 grants, and over 85 funding sources. Ms. Sylva explained the licensing and certification program (account number 101- 3216) was the program which was most influenced by Nevada's changing demographics. She said the bureau had responsibility for licensing and certifying medical facilities, facilities for the dependent, and laboratories for Medicare and CLIA. She noted the number of medical facilities to be licensed or certified has increased by more than 100 since 1993. The number of dependent care facilities and laboratories requiring licensure has grown by a like amount. The number of laboratory personnel requiring licensure has grown by nearly 3,000. Meanwhile staffing has not expanded to meet the workload demands. The bureau is currently 60 to 90 days in arrears for conducting surveys and was recently notified by the federal government that 18 laboratories must be reviewed by May 1, 1995, in order for those laboratories to continue to receive Medicare reimbursement. Ms. Sylva stated the workload was almost impossible to deal with. She reported surveys were 77 days behind for medical and dependent care facilities and 60 days behind for laboratory personnel. She explained there was a ripple effect from this backlog evidenced by an increasing number of complaints received by the agency. As a result of less oversight, staff was being placed in a more and more reactive mode. In 1994 20 percent of licensed adult day care facilities were surveyed, 57 percent of hospitals were surveyed, 33 percent of group care homes were surveyed, 65 percent of home health agencies were surveyed, 5 percent of alcohol and drug programs were surveyed, and 25 percent of ambulatory surgery centers were surveyed, each of which requires an annual survey to be licensed. Ms. Sylva stated the budget request for 12 positions over the coming biennium is minimal considering the rapidly changing demographics in Nevada. The positions would be paid for by fees generated from the industry. She pointed out only a small fee increase was required to fund the 12 positions. Ms. Sylva said from a financial standpoint the fastest growing programs within the division were Immunization, WIC, and HIV/AIDS. She noted all have been identified as priorities of the Clinton administration and have received increases in federal funding in the current biennium. WIC and the HIV/AIDS programs are solely federally funded. The Immunization program includes General Fund monies to purchase vaccines. The General Fund monies in the budget provide the agency with an opportunity to shop for the best price for vaccines, and in most cases, the agency could purchase more vaccine with state dollars than with federal dollars, allowing it to protect more children from vaccine-preventable disease. Ms. Sylva reported the division has received unofficial word that the HIV/AIDS program may receive a supplemental grant award of up to $1 million. In addition, $644,000 is available from HUD to augment the Ryan White fund for AIDS treatment services. The division was currently assessing the requirements for obtaining the HUD funds. Ms. Sylva stated funding for WIC had increased over $15 million over the past biennium. She informed the subcommittee the federal government was considering block grant funding. WIC is included in the Nutrition Block Grant along with nutrition programs administered by USDA. Funding will be based on previous funding levels rather than need. Because of Nevada's rapid growth there is a potential for reduction in future funding for WIC, which will adversely impact over 26,000 women, infants, and children per month who currently receive services. She noted the division would be tracking this issue. Ms. Sylva next addressed the issue of managed care. She said the division was working with the Welfare Division to draft Language for a request for information relating to the Special Children's Clinics. The Special Children's Clinics will hold a special status within Medicaid managed care and receive reimbursement from the health maintenance organization (HMO) on a fee-for-service basis for evaluation/diagnostic services provided to children. The amount of reimbursement is expected to be equal to current reimbursement levels. Successful HMO bidders will bear responsibility for implementation of the Individual Family Service Plan as developed by the clinics. It appears the clinics will be in a favorable position to negotiate a contract with the HMO and bill for treatment services as is the current procedure. Ms. Sylva reported the revenue projected in the Executive Budget was an accurate reflection of what the clinics would receive. The clinics would still be in a position to negotiate with the HMO for services which are currently being billed under the rehab option. It is uncertain what the rate of reimbursement would be. Chairman Evans asked how the agency would ensure Medicaid managed care would not jeopardize Health Division programs. Ms. Sylva said the division had been working extensively with the Welfare Division. It was also Medicaid's intent to ensure the Special Children's Clinics received protected status. She said it could be anticipated that those services would be included in the Individual Family Service Plan. OFFICE OF THE STATE HEALTH OFFICER - PAGE 1093 Ms. Sylva testified this account included the overall administration activities of the division, including personnel management, finance, health planning, and the tobacco grant. She explained Decision Unit M-200 covered the cost of an additional Personnel Technician position to provide assistance with personnel recruitment to meet increased workload. Decision Unit M-201 covered the cost of an Accounting Technician position needed for increased workload associated with program growth. Decision Unit E-912 reflected the transfer of an Information Specialist position to the Department of Information Services. Chairman Evans asked for a brief explanation of the request to abolish the State Health Coordinating Council (SHCC). Ms. Sylva answered the 1993 Legislature had made a determination to continue the Maternal Child Health Advisory Board in lieu of the SHCC. She explained there was no longer any federal or state requirement to maintain the SHCC. Chairman Evans inquired about the recommended supplemental appropriation to this account. Ms. Sylva responded the recommended $45,426 would allow for automation of the administrative offices, including personnel and financial management. The funds would also provide for a local area network to enhance communication within the office and the division. Chairman Evans noted the division had put substantial effort into developing its measurement indicators and would be held up as an example for other agencies to follow. Chairman Evans asked Mr. Lange to work with fiscal staff on some technical adjustments to this account. VITAL STATISTICS - PAGE 1099 Ms. Sylva explained this was the office where births, deaths, marriages, divorces, and other statistical data were recorded. Fees for this account were set by statute. Therefore, any changes in fee revenue in the budget would require corresponding legislation. She stated decision Unit M-200 reflected a request for funding to expand the permanent vault located within the office of vital records. The current vault no longer had enough room to store records projected to accumulate over the next few years. The proposed expansion would provide storage space for the next ten years. Chairman Evans asked if the space would be needed in the coming biennium. Ms. Sylva responded affirmatively. Ms. Sylva said Decision Unit M-201 reflected a request for an additional Account Clerk position in response to increased workload. She noted there had been no increase in accounting clerk staff in this budget in several years even though numbers of births had grown substantially. She added a legislative audit had noted the agency was having some difficulty tracking and maintaining adequate records. Senator Rawson asked how many years of records were stored. Mr. Lange said all historical records were maintained in storage. He noted original documents were backed up on microfiche which was stored in an underground vault at Lake Tahoe. Senator Rawson inquired how long it took from the time a record was generated until it was backed up on microfiche. Mr. Lange answered it took approximately 45 days to place a backup record in storage. Chairman Evans asked if there was a statutory requirement regarding the retention of original records. Mr. Bill Moell, former supervisor of vital statistics, answered NRS 440 provided that the Health Division should be the permanent custodian of original vital records. Nevada had a complete set of original records from 1935 to date. When records reach 100 years of age they are transferred to the State Archives. Chairman Evans asked what fees were currently and when they were last increased. Ms. Sylva responded the fee for a birth certificate is $11.00. The fee for a death certificate is $8.00. Fees were last increased in 1991. Chairman Evans inquired whether there was a schedule for increasing fees. Ms. Sylva responded the agency followed the advice of the Legislature regarding fee increases. CANCER CONTROL REGISTRY - PAGE 1103 Ms. Sylva stated the cancer registry was initiated in 1979. During the 1993 legislative session legislation was approved which allowed for the privatization of the abstracting of cancer records in Nevada. As a result, staffing needs were reduced by one full-time equivalent position, but cash flow problems had increased and it was more difficult to collect fees. She pointed out, however, the agency had received an additional grant for cancer registry activities and it was anticipated the state would transfer the responsibility for abstracting cancer records to the private sector and retain a quality assurance role. Chairman Evans asked how long the transfer would take. Ms. Sylva said 70 percent of the transition would take place over the coming biennium. She expected the transition to be complete within three years. Senator Rawson asked if regulations were being promulgated to assure complete reporting. Ms. Sylva replied the agency would prefer to wait until the 1997 legislative session to promulgate regulations. Senator Rawson noted the importance of this program in gathering statistical data for cancer research. He said it was crucial to maintain the program. Ms. Sylva said the data gathered over the past year had enabled Nevada to receive over $1 million in federal funds. Chairman Evans inquired whether the new federal grant required an in-kind match. Ms. Sylva responded that it did. Chairman Evans asked if the agency had assurances that the match would be available. Ms. Sylva answered in-kind matches were being provided from Washoe Medical Center and Sunrise Hospital. Ms. Tiffany asked where statistical data was maintained. Ms. Sylva responded Nevada, along with several other states, maintained its data with Rocky Mountain Data Systems at a cost of $1.55 per abstracted record. HEALTH FACILITIES - PAGE 1107 Ms. Sylva explained the Bureau of Licensure and Certification establishes regulations, conducts surveys of facilities to determine compliance with laws and regulations, investigates complaints, provides training, issues licenses for operation and certifies facilities for Medicare and CLIA. Ms. Sylva stated Decision Unit M-200 represented the most significant increase in this budget. The agency requested 12 new positions to keep up with caseload increases. Chairman Evans noted the number of medical and dependent care facilities was lower than originally projected and the number of laboratory personnel was slightly higher. She questioned whether the budget should be adjusted based on these projections. Ms. Sylva stated the original agency request had been for 17 positions. She said the agency would do its best to manage the workload if it was provided with the 12 positions recommended in the Executive Budget. She noted survey teams could be reconfigured to maximize work efforts. She advised the subcommittee changes in workload could necessitate the agency approaching the Interim Finance Committee for adjustments in funding. Senator Rawson stated he had received information from the Henderson Salvation Army day care center that compliance with regulations was proving an undue burden on facilities. He questioned whether the impact of regulations had been reviewed. Ms. Sylva said Senator Rawson was referring to an adult day care center in Henderson. She said the center was exempted from paying any fees in the biennium budget. She reiterated there was a ripple effect from staff shortages. When there was not enough staff to do surveys there was not enough staff to revise regulations on a regular basis to meet current needs. When the regulations were initially developed, they were adequate, but they had not been reviewed and revised regularly due to constraints on staff time. Senator Rawson said he would support new positions in the budget if he had the agency's assurance they would be utilized to systematically review regulations. Ms. Sylva said additional staffing was needed to handle the total workload, including the continual review of regulations. Senator Rawson noted regulations were a significant factor in driving up the cost of health care and while he did not want citizens to be at risk, he would like to see a fundamental review of regulations to see what requirements were unnecessary and could be eliminated. He said the Legislature would support a serious and worthwhile review. Ms. Tiffany suggested the possibility of an interim study to address the issue of regulations. She said she was in complete agreement with Senator Rawson. Ms. Sylva said it was not until this budget was being developed that the agency began to understand the potential impact of the failure to review and revise regulations. Ms. Tiffany questioned how the work could be done more efficiently rather than having to add staff to catch up. Mr. Lange pointed out changing regulations required a lengthy process. He added the agency was requesting the minimum number of staff needed to ensure the citizens of Nevada living in rest homes are taken care of. Chairman Evans noted the number of complaint investigations had increased. She asked for an explanation of the complaints and the reason for the increase. Ms. Sylva responded the increasing number of complaints was directly related to the lack of the agency's presence within facilities. When facilities were aware of the agency's frequent presence there tended to be better adherence to safety measures to protect patients. She noted the severity of complaints ranged from minimal to extreme. Ms. Tiffany questioned why reporting of conditions in facilities was not being handled by the health care system rather than by the state. She pointed out physicians were in facilities more frequently than state personnel. Ms. Sylva replied physicians were not reporting unsafe conditions. She said she did not know why. Mrs. Chowning asked where complaints originated. She noted the subcommittee had received two reports of number of complaints. She asked which number was accurate. Ms. Sylva stated 500 complaints were received per year. Formerly, multiple complaints against the same facility counted as only one complaint, which was the reason for the lower number reported previously. She explained complaints were received from various sources. Mrs. Chowning suggested there needed to be sanctions against facilities which received numerous complaints or were unsafe. Ms. Sylva stated sanctions had been issued against many facilities. Mrs. Chowning said the sanctions were not reflected in the measurement indicators. Ms. Sylva agreed to add information about sanctions in the measurement indicators. Mrs. Chowning said she would like to know as soon as possible the actions taken against facilities providing unsuitable care. Ms. Sylva responded she would provide the information currently on file about sanctions issued in the past year. Chairman Evans asked if the proposed move from the Belrose building in Las Vegas to a nonstate-owned building had been coordinated with Buildings and Grounds. Ms. Sylva stated the proposed move was directly tied to the number of full-time equivalent positions for which space was needed. She said once the proposal was finalized the agency would be coordinating with Buildings and Grounds. Chairman Evans inquired whether increased staff was the primary justification for moving to a different location. Ms. Sylva said there was no room in the current office space to accommodate additional staff. Mr. Lange added Buildings and Grounds was aware the agency planned to vacate the current space. MATERNAL CHILD HEALTH SERVICES - PAGE 1113 Ms. Sylva said this program included many services, such as services to children with special health care needs and the Baby Your Baby multimedia campaign. She said the issue of greatest concern in this budget was Decision Unit E-176, relating to the addition of a perinatal drug abuse program. The Governor recommended placement of this program in the Executive Budget based on the recommendation of the statewide committee on substance abuse. A study conducted by the former drug commission indicated 11 percent to 16 percent of all infants born in Nevada are drug affected in some way. Other state programs were required to provide services to those infants. It was the intent of the statewide committee for the state to become prevention oriented. Decision Unit E-176 included funding for a subcommittee of the Governor's Maternal and Child Health Advisory Board to deal with these issues and set policy related to prevention activities. Funding was also provided for two staff positions to coordinate the activities of the subcommittee and develop resources which may be available from the federal government to fund a comprehensive program. Chairman Evans asked how large the subcommittee would be. Ms. Sylva said the proposed membership was approximately 11 members, including members of the Maternal and Child Health Advisory Board and representatives of the Senate and Assembly. It was the intent of the agency to maximize resources, not create a duplicative committee. Chairman Evans pointed out the Executive Budget indicated the board would consist of three members. Mr. Lange stated the number in the Executive Budget should be 13, which was the initial proposal. Ms. Sylva explained the proposal was for 11 members plus the two elected officials from the Senate and Assembly. Chairman Evans stated she agreed with the need for early intervention and prevention. She asked if the agency's revised measurement indicators included goals for the subcommittee so the Legislature would have some means of measuring the success of the subcommittee's work. Ms. Sylva said a basic framework and time line had been developed but it was difficult at this point to predict the outcomes of new programs. The focus at this time was process rather than measurement indicators. Measurement indicators would be developed for the 1997-1999 biennium. Ms. Sylva noted Senator Rawson's committee had proposed legislation to amend NRS 442.013 to include a subcommittee. She expressed her understanding the statutes already included Language which would provide for creation of a subgroup of the Maternal and Child Health Advisory Board without new legislation. The agency would appreciate the subcommittee being developed without amending the statute. Senator Rawson said this issue could be discussed further. SPECIAL CHILDREN'S CLINICS - PAGE 1121 Ms. Sylva reiterated that managed care would have a potential impact on this budget. She introduced Ms. Peg Hellman, Manager of the Reno clinic and Ms. Karen Cummings, Manager of the Las Vegas clinic. Ms. Sylva explained the Special Children's Clinics are community-based family- centered clinics which provide evaluation and diagnostic and treatment services to children age zero to three years old. Services are specifically provided to children with suspected or known developmental delays in cognition, communication, physical development, and social, emotional, or adaptive skills. She explained the measurement indicators for this program had been revised. The primary diagnosis for children entering this program is prematurity or low birth weight. Therefore, this program could be tied closely to the Baby Your Baby program and other programs intended to improve the outcome of pregnancy, thereby reducing the number of children needing this program. Ms. Sylva reported Decision Unit M-200 represented a request for additional space in the Las Vegas office. She explained the Las Vegas office had experienced an increase of over 200 children over the last biennium, which significantly impacted both staffing and space requirements. The request was for an additional 1,746 square feet. Chairman Evans stated the subcommittee was concerned with the waiting lists for this program. Ms. Hellman testified data collected March 16, 1995, indicated 28 children were waiting for services at the Reno clinic. Ms. Cummings said in Las Vegas 30 children were on the waiting list as of March 16. Ms. Tiffany asked for an explanation of "waiting list." Ms. Cummings responded children entered the program after diagnosis and recommendation for intervention services by case managers. Frequently case managers could not add additional children to their caseloads. A normal caseload consisted of approximately 20 children. "Waiting list" referred to the children who had received diagnosis or evaluation but were waiting for intervention services. Ms. Tiffany inquired if the positions requested were medical positions. Ms. Hellman responded most staff was considered auxiliary medical personnel. She explained a child development specialist was someone with a degree in early childhood development or special education. The clinics took a multi-disciplinary approach to dealing with the children. Therefore, staff included child development specialists, speech pathologists, social workers, psychologists, contract occupational therapists and physical therapists. Pediatricians served as Medical Directors in both clinics. Ms. Tiffany asked how Nevada's waiting list compared to those of other states. Ms. Cummings replied the Special Children's Clinics were fairly unique to the state of Nevada in that Nevada's clinics provided both diagnosis and intervention. Programs in most other states included a diagnosis component which was tied to a hospital or university medical school environment. Intervention services were tied to private facilities. Senator Rawson asked how the transition to managed care would be accomplished. Ms. Hellman said the agency was optimistic the clinics could work well within the managed care system. It was anticipated diagnostic services would continue as usual, and families could access diagnosis without a referral from the managed care organization. It was hoped the clinics would be successful in contracting with the managed care organization since it would be to the advantage of the managed care organization to use clinic staff who were familiar with federal and state laws and regulations and policies regarding treatment of this population. Ms. Cummings concurred with Ms. Hellman's statements. Senator Rawson inquired whether the Reno and Las Vegas clinics were in frequent communication. Ms. Hellman and Ms. Cummings indicated they communicated with each other daily. Senator Rawson said the subcommittee would like to be kept apprised of the transition to managed care. Senator Rawson asked if it would be helpful to develop residency programs to train professionals such as speech pathologists to provide services associated with the program. Ms. Hellman said she worked closely with the universities in Reno and Las Vegas, providing opportunities for practicum students in a variety of disciplines, including speech pathology, social work, and child development. Occasionally medical students worked with the pediatricians. Ms. Cummings said it was difficult to recruit speech pathologists in Las Vegas. Senator Rawson inquired about the level of training required for speech pathologists. Ms. Cummings said speech pathologists were required to hold master's degrees. Additionally, they were required to complete a clinical fellowship year. Both clinics provided clinical fellowships for recent graduates. Ms. Hellman stated there was a need at the Reno clinic for pediatric occupational and physical therapists. She said there was no school in Nevada for those two disciplines. Ms. Cummings added there was no access in Nevada to professionals who worked with visually and hearing impaired children. Senator Rawson asked Ms. Hellman and Ms. Cummings to give some thought to other areas of need. He explained there was some capability to develop new programs within existing health care centers and those programs should be ones which would be most beneficial to the state. Chairman Evans asked how long children remained on waiting lists before receiving services and how long waits were projected to be in the coming biennium. Ms. Cummings responded it was important for the subcommittee to understand waiting lists were not simply the result of more children entering the system but of staff availability, number of cancellations and no-shows. She noted some children were receiving minimal treatment, e.g., group treatment rather than individual treatment, but they were not reflected on the waiting list. Ms. Hellman stated she predicted a wait of approximately two to three months. It was estimated the waiting lists could increase by 82 children per year in Las Vegas and 66 children per year in Reno. Chairman Evans asked the length of time of the typical wait in Las Vegas. Ms. Cummings said the wait could be from one to six months. Ms. Hellman noted the agency was attempting to bring children into the system as quickly as possible and to respond to federal law by avoiding having children on waiting lists. Creative family service plans were being developed to provide service earlier. Ms. Tiffany asked if funding for this program would be reimbursed through managed care or Title XIX. Ms. Hellman answered approximately 10 percent of the total budget came from third party reimbursement through private insurance and Medicaid. Those revenues had been increasing every year. Ms. Tiffany inquired how much third party reimbursement was anticipated to be over the coming biennium. Ms. Cummings said the agency had been concerned third party revenue would be lost with managed care; however, it was now anticipated revenue levels would remain flat. Chairman Evans noted Decision Unit E-225 represented the loss of federal funding which would have to be replaced from the General Fund. She asked if this was the result of a discontinuation of a federal grant. Ms. Sylva responded affirmatively. COMMUNITY HEALTH SERVICES - PAGE 1127 Ms. Sylva stated the community health nursing budget included a new clerical support position in Decision Unit M-200. She explained community health nurses were currently spending time doing paper work which could be done by clerical staff. The budget also included a one-time appropriation for specialized medical equipment, computer work stations, and lap top computers for nurses. Senator Rawson noted there had been attempts to increase the number of nurses in this budget in the past. He inquired whether the current level of staffing was adequate. Ms. Sylva answered there was adequate nursing staff but vacancies were frequent since nurses were taking positions in the private sector. Dr. Kwalik stated with the services being provided by staff and the increasing population, the agency was reaching the point where there were activities which existing staff was unable to perform. Services would have to be prioritized carefully in the coming biennium to keep up with the increased need and the increased population. LABORATORY AND RESEARCH - PAGE 1133 Ms. Sylva said Nevada needed to make a basic public policy decision about the future of the State Health Laboratory, i.e., whether or not General Fund dollars should be used to support the laboratory. She asked Dr. Kwalik to speak about this issue. Dr. Kwalik noted government exists to provide essential services to safeguard the health, welfare, and safety of its citizens. Public health services are primarily designed to protect the community-at-large from hazards and risks that individuals cannot prevent or control. The mission is prevention and the public health laboratory is an essential part of the public health system. Dr. Kwalik said the difference between a public health lab and a private lab was that private clinics and analytical laboratories serve individual patients and clients/ providers and are in business for profit. They concentrate their services on performing high volume tests to increase profit. Public health laboratories serve to protect the entire community through the early identification and control of the spread of a particular disease agent. Certain public health lab activities cannot be adequately addressed by private labs. These activities will not be addressed if the expertise and technical competencies of the public health lab personnel and the technological advances of laboratory equipment are not attained and maintained. Dr. Kwalik stated the activities that are unique to the public health laboratory are infectious disease control and environmental protection. He provided several examples of diseases for which testing is provided by the public health laboratory. He noted approximately one-half of the General Fund revenue expended in the laboratory was used to protect milk, food, and water from chemical and microbiological contamination. Increased life expectancy over the past century has been due to clean food and milk and pure drinking water. Dr. Kwalik reported the public health laboratory certifies private laboratories to provide various water analyses. In order to certify these private labs, the public health laboratory must have the competency to perform these tests. Without this capability, Nevada could not maintain primacy in safe drinking water and the Environmental Protection Agency could impose unacceptable and unrealistic timetables for compliance with federal regulations. He explained the State Public Health Laboratory is certified by the Environmental Protection Agency to test for more parameters than private labs. Dr. Kwalik said it was the government's responsibility, and therefore the public health laboratory's responsibility, to test for exotic, uncommon, emerging infections that occur in Nevada and to perform tests on food, water, and milk when outbreaks of disease occur and there is no "customer" to pay for these services. If the expertise, competence, and experience to perform these public health-related laboratory activities are not available and maintained on a continuous basis, then there will be no assurance the tests will be performed satisfactorily. Dr. Kwalik stated the public health laboratory was essential to safeguard the health of Nevada citizens and visitors to the state. He urged the subcommittee to show its support for the public health laboratory by providing funding for equipment and staff. Chairman Evans asked Dr. Kwalik to explain what he meant by "maintain primacy." Dr. Kwalik responded states could opt for primacy in order to be exempt from the regulations of the Environmental Protection Agency. In order to have primacy there had to be within the state a certifiable lab which also certified other labs to do various chemical analyses of water. Ms. Tiffany asked about the possibility of contracting for laboratory equipment as opposed to purchasing that equipment. Dr. Kwalik said the division had looked into contracting for equipment. He explained the kinds of tests performed by the state laboratory were low volume tests. Contracting with a private lab would not allow the flexibility to react to emergencies, and it was necessary to maintain competent staff trained in public health concepts within the state laboratory who would know what to do in the case of an emergency. Mr. Lange noted there was a contract in place with a private laboratory for certain testing activities in Clark County. Ms. Sylva invited members of the subcommittee to tour the state laboratory in Reno. Senator Rawson pointed out there was some testing done by the state laboratory which the private laboratories did not want to be involved in. Additionally, if private laboratories were forced to maintain the equipment to do this testing the costs would be shifted to consumers. Ms. Sylva said three positions were requested in this budget under Decision Unit M-200: one clerical position, one chemist, and one lab assistant. She stated Decision Unit E-425 reflected replacement of $45,784 in lost federal funds from the safe drinking water program and $20,000 transferred to Washoe and Clark Counties from the sexually transmitted disease (STD) program. Chairman Evans inquired about the transfer of funds to Washoe and Clark Counties. Mr. Lange explained the state was no longer allowed to place money directly into the laboratory budget. Funds in the STD budget would be transferred to Washoe and Clark Counties to cover the cost of testing programs. Ms. Sylva reported Decision Unit E-710 provided for $25,000 of General Fund support to replace equipment over the biennium. Additionally, the Executive Budget recommended a $1.1 million one-shot appropriation to fund the implementation of a computer reporting system and technical equipment to replace or enhance existing equipment. She explained $60,000 of the one-shot appropriation would fund the business process reengineering plan to be conducted by the Department of Information Services; $300,000 would be used to purchase software and hardware to implement automation in the laboratory. Chairman Evans asked whether funds advanced by the Interim Finance Committee to cover shortfalls resulting from cash flow problems would be repaid. Mr. Lange expressed concern about the agency's ability to repay the entire loan amount of $150,000. Reductions in General Fund revenue in Fiscal Years 1994 and 1995 created an inadequate cash flow to allow for billing. This budget would continue to face significant cash flow problems. He suggested a one-time appropriation to this budget could alleviate the cash flow problem by providing carry over funds. Chairman Evans asked how much the shortfall would be. Mr. Lange estimated the shortfall to be approximately $25,000. Chairman Evans inquired whether the agency would be requesting a supplemental appropriation. Mr. Lange responded it was too late to request a supplemental appropriation. Chairman Evans inquired about the possibility of raising fees to offset shortfalls. Mr. Lange replied the agency had considered raising fees. He noted fee increases could have an adverse impact by forcing users to seek services in California. He pointed out a fee increase would not impact the current year's shortfall. Senator Rawson stated this appeared to be a consequence of allowing commercial laboratories to do high volume testing, leaving the state laboratory to perform more expensive testing. He asked if a reserve fund should be added to this budget. Mr. Lange said he would like to receive a one-time appropriation of approximately $250,000 to fund a reserve which could be carried forward every year. Funds in excess of $250,000 could be reverted to the General Fund at the end of the fiscal year. Senator Rawson questioned whether not reverting funds at the end of the fiscal year would be a solution. Mr. Lange responded affirmatively. Senator Rawson asked Mr. Lange if he was planning to retire. Mr. Lange indicated he would be retiring. Senator Rawson inquired whether Mr. Lange was training a replacement. Mr. Lange indicated there was an individual on staff who had worked with him closely and had substantial knowledge about the agency. Senator Rawson said he wished all state employees had the integrity and sense of ethics that Mr. Lange had. He expressed appreciation for the agency's need for supplemental funding and indicated the subcommittee would look at this matter. Ms. Tiffany asked if it was true cash flow problems were the result of testing business being lost to commercial laboratories. She also inquired whether there had been an audit of the agency. Mr. Lange answered a legislative audit had been conducted and improvements had been made in accordance with the audit recommendations. He explained counties passed losses from uncollected testing fees to indigents to the state laboratory. Washoe County passed $30,000 in losses to the laboratory each year. He noted it was important for people to receive health tests, however, and the laboratory would have to absorb the costs. Ms. Tiffany suggested the agency could seek advice on how to operate more effectively. Ms. Sylva expressed the hope the business process reengineering plan and implementation of an automated billing system would allow the laboratory to maximize revenues. Ms. Tiffany inquired whether business process reengineering was included in the budget. Ms. Sylva answered the business process reengineering plan was covered by a one-shot appropriation in the laboratory budget. Senator Rawson noted HIV infection was predicted to increase in the teen and young adult population. He inquired whether this reflected a national trend or Nevada cases. Dr. Kwalik stated the projections reflected a national trend. He noted the pediatric population was the group which was experiencing the greatest increase in cases. Chairman Evans asked when the construction project was anticipated to be completed. Ms. Sylva said the new building would be complete in August 1995, but renovations to the old section of the building would not be complete until December 1995. Chairman Evans asked if new positions would be required July 1, 1995. Mr. Lange said he would review the question and meet with fiscal staff. Chairman Evans called for public testimony. Mr. Wayne Colwell, President, MPEL Inc., stated his concerns with the state laboratory were only in the area of water chemistry. He said the state laboratory should not be in business, and businesses should not have to pay business privilege tax to support a laboratory which was competing unfairly for the same business. He acknowledged the state laboratory should provide services to schools and nonprofit entities. Mr. Colwell noted there were approximately 14 commercial laboratories in Nevada which were capable of doing water testing. He contended the State of Nevada should not be in the business of commercial water testing. Allowing commercial laboratories to do this work would benefit the state in the form of increased business tax revenue and decreased staffing and equipment levels in the state health lab. He pointed out other states (e.g., Arizona, California, and Oregon) were statutorily prohibited from performing commercial laboratory work. Mr. Colwell also expressed concern the state laboratory would expand into other areas of testing and analysis which would be in direct competition with commercial laboratories. He expressed strong opposition to any General Fund appropriations to support such an expansion. Mr. John Sabatini, Great Basin Environmental Laboratories, concurred with Mr. Colwell's statements. He noted the Senate Committee on Commerce and Labor and Senator Sue Lowden supported the position of the commercial laboratories. He explained commercial laboratories were losing over $1 million per year in business to the state laboratory. SEXUALLY TRANSMITTED DISEASE CONTROL - PAGE 1139 Chairman Evans asked Ms. Sylva if she had anything further to add regarding the Sexually Transmitted Disease Control budget. Ms. Sylva noted there would be an increase in available federal funds for the HIV/AIDS program. Assemblyman David Goldwater, District 10, reported he had formerly appeared before this committee and requested a $200,000 appropriation to the HIV/AIDS Consortium. He noted the consortium had no administrative budget. All funding went directly to care. He read to the committee a letter from Herbert Perry (see Exhibit C), whose son had a difficult time accessing care prior to his death from AIDS. Mr. Goldwater said it was time for Nevada to take responsibility for helping its citizens suffering from HIV/AIDS. He urged the committee to provide funding of $200,000 to support the Nevada HIV Care Consortium. Chairman Evans asked if there was any uncertainty about receiving the federal funding mentioned previously. Ms. Sylva said she felt certain the federal funding would be received. Chairman Evans questioned how those funds would be spent. Ms. Sylva said the funds would be spent on prevention activities. She noted the funding Mr. Goldwater referred to was for treatment related to the Ryan White funds. She said she had not heard the Ryan White funds would be reduced. In fact, she had heard the opposite. She added Nevada would be eligible for HUD funding ($644,000) for housing for persons with AIDS and those funds could be used for the purposes addressed by Mr. Goldwater. Chairman Evans asked how much of that funding went to direct care. Ms. Sylva replied nearly all of the funding went to direct care. Senator Rawson noted counties had a responsibility for indigent health care. He asked if Mr. Perry's son had been ineligible to receive services from the University Medical Center AIDS unit. Mr. Goldwater responded the University Medical Center AIDS unit could provide care to persons with full-blown AIDS. There were no care options available to persons suffering from HIV which had not advanced to full- blown AIDS. He noted the waiting list for HUD housing assistance was eight months. Mr. Perry's son had AIDS for six months prior to his death. Senator Rawson said he understood University Medical Center was providing outpatient care. He said he would look into this matter. Mr. Goldwater said outpatient care providers were struggling for adequate funding. He said it was his understanding Ryan White funds would not be increasing and possibly would be decreasing. He said he had not reviewed the rescission proposal from the House of Representatives. Ms. Sylva stated no HIV/AIDS money was included in the rescission package. FAMILY PLANNING PROJECT - PAGE 1143 There was no testimony on this budget. COMMUNICABLE DISEASE CONTROL - PAGE 1147 Chairman Evans asked if recommended funding for tuberculosis suppression was adequate. Ms. Sylva said the agency had worked with Clark and Washoe Counties to project costs of residential treatment. She said the funding recommended by the Governor should be sufficient for the biennium. WIC FOOD SUPPLEMENT - PAGE 1151 HEALTH AID TO COUNTIES - PAGE 1157 There was no testimony on these budgets. IMMUNIZATION PROGRAM - PAGE 1159 Senator Rawson said he was astounded to learn Nevada had only a 50 percent immunization rate. Ms. Sylva explained the immunization rate was in the 90 percent range for children entering school or in day care. The rate was 59 percent for those children at age two. Chairman Evans indicated the subcommittee was concerned about being kept abreast of changes in the program. She said the Legislature needed to be kept informed--both during the legislative session and during the interim--as grants were received or new vaccines were added to the program. She inquired about the status of a new chicken pox vaccine. Ms. Sylva said the chicken pox vaccine was not recommended for the program at this time, but possibly would be in a year or two. She noted Hepatitis A vaccine was currently being considered but had not been recommended by the Advisory Committee for Immunization Practices. Hepatitis B vaccine was phased into the program beginning in 1991. She said the agency would keep the Legislature informed of any additions or changes to the program. Dr. Kwalik noted there could be a move in the Senate to amend immunization legislation. He explained immunizations had been effective in preventing disease and any exemptions from immunizations would be a mistake. Senator Rawson agreed to share this information with the Senate. EMERGENCY MEDICAL SERVICES - PAGE 1163 There was no testimony on this budget. CONSUMER PROTECTION - PAGE 1167 Ms. Sylva reported the Bureau of Health Protection Services provided regulatory and professional services in the area of public health, engineering plan review, public health sanitation, and radiological health. Budgeted funds are related to the inspection and enforcement of over 4,500 facilities. Ms. Sylva noted Nevada had accepted primacy from the federal government for the safe drinking water program. The agency was responsible for implementation of the federal water supervision program under a contractual arrangement with the Environmental Protection Agency. She noted this program was an unfunded mandate. Therefore, there could be some Congressional action regarding this program. She reiterated there were benefits to Nevada maintaining primacy in that the state could be flexible in enforcing federal requirements, thus saving the state and customers a substantial amount by not requiring unnecessary testing. Ms. Sylva stated three positions were requested in Decision Unit M-580. One position was a continuance of a Management Analyst position. One position was an Environmental Health Specialist to work on implementation of the lead and copper rule. One position was a Public Health Engineer to be located in southern Nevada with responsibility over the southern Nevada water systems which were previously monitored by Clark County. This position would also have responsibility for implementation of new Environmental Protection Agency regulations on arsenic, radon, ground water disinfection, and sulfates. Chairman Evans asked when the positions needed to be filled. Ms. Sylva said the positions needed to be on-line in October 1995. Mr. Lange noted Nevada's primacy in this program had resulted in savings of approximately $29 million. Chairman Evans asked how that figure was calculated. Mr. Lange said the number was based on the amount of savings for not performing unnecessary federally required testing on water systems statewide. Chairman Evans called for public testimony. There was none. RADIOLOGICAL HEALTH - PAGE 1173 RADIOACTIVE MATERIAL DISPOSAL TRUST FUND - PAGE 1179 There was no testimony on these budgets. There being no further business, the meeting was adjourned at 10:17 a.m. RESPECTFULLY SUBMITTED: Dale Gray, Committee Secretary Joint Subcommittee on Human Resources/K-12 Assembly Committee on Ways and Means and Senate Committee on Finance March 17, 1995 Page