MINUTES OF THE meeting
of the
ASSEMBLY Committee on Health and Human Services
Seventy-Second Session
April 9, 2003
The Committee on Health and Human Serviceswas called to order at 1:15 p.m., on Wednesday, April 9, 2003. Chairwoman Ellen Koivisto presided in Room 3138 of the Legislative Building, Carson City, Nevada, and, via simultaneous videoconference, in Room 4406 of the Grant Sawyer State Office Building, Las Vegas, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
Note: These minutes are compiled in the modified verbatim style. Bracketed material indicates language used to clarify and further describe testimony. Actions of the Committee are presented in the traditional legislative style.
COMMITTEE MEMBERS PRESENT:
Mrs. Ellen Koivisto, Chairwoman
Ms. Kathy McClain, Vice Chairwoman
Mrs. Sharron Angle
Mr. Joe Hardy
Mr. William Horne
Ms. Sheila Leslie
Mr. Garn Mabey
Ms. Peggy Pierce
Ms. Valerie Weber
Mr. Wendell P. Williams
COMMITTEE MEMBERS ABSENT:
None
GUEST LEGISLATORS PRESENT:
None
STAFF MEMBERS PRESENT:
Marla McDade Williams, Committee Policy Analyst
Terry Horgan, Committee Secretary
OTHERS PRESENT:
Jeffrey Artz, Records and Identification Bureau, Nevada Department of Public Safety
John Gancarek, Children’s Services Coordinator, Washoe County Department of Social Services
Mike Capello, Director, Washoe County Department of Social Services
Susan Klein-Rothschild, Director, Clark County Department of Family Services
Edward E. Cotton, Administrator, Division of Child and Family Services, Department of Human Resources
Judy New, Cochair, State Child Death Subcommittee; Coordinator, Clark County Child Death Review Team
Michelle Lucier, Washoe County Social Services; Chair, Washoe County Death Review Team; Cochair, State Child Death Subcommittee
Judith M. Wright, Chief, Family Health Services Bureau, State Health Division, Department of Human Resources
Pat Hedgecoth, Division of Child and Family Services, Nevada Department of Human Resources
Mike Alastuey, representing University Medical Center
Charles Duarte, Administrator, Division of Health Care Financing and Policy, Department of Human Resources
Chairwoman Koivisto:
The Committee on Health and Human Services will come to order, please. [Roll taken.] Mark the other members present as they arrive.
Could Ms. Leslie start with her bills?
Assembly Bill 378: Authorizes agencies which provide child welfare services to apply to Federal Government to obtain access to certain records of criminal history under certain circumstances. (BDR 38-1117)
Assemblywoman Sheila Leslie, Washoe County District No. 27:
[Introduced herself.] I do have two bills before the Committee this afternoon. The first one is Assembly Bill 378. I agreed to introduce this bill on behalf of the child protective services agencies in order to facilitate the safe emergency placement of children. The bill gives child protective services agencies the ability to obtain criminal history records for the purpose of placing abused and neglected children in emergency placements that are appropriate.
It looks like a simple, straightforward bill, but it’s actually a little complicated because of the coordination and cooperation that is needed with the FBI’s [Federal Bureau of Investigation] Criminal History Record Information System, which is run in our state by the Department of Public Safety. However, the good news is that we think all the problems have been worked out and there is an amendment (Exhibit C) that, hopefully, represents a consensus between all the involved parties about the best way to address the concerns of the FBI, the Central Repository [for Nevada Records of Criminal History], while enabling the child protective services agencies to fulfill their duties.
We have had input from the state CPS (Child Protective Services), Washoe County, Clark County, and they’re all here today to answer your questions, as well as folks from the Criminal History Repository. To speed things up, I’ll bring those representatives to the table and I’m sure they’ll do a better job than I could in answering your questions.
Jeff Artz, Program Manager, Criminal History Records Repository:
I have a brief statement to read from our manager who couldn’t be here today. He wanted me to relay this to the Committee: “I regret that I am not able to attend this important hearing this afternoon. At this very hour, I am attending an important meeting with the state budget director trying to find a way to stay in business despite the current budget problems that the Repository is encountering.
“In my stead, I have turned this testimony over to my most seasoned managers, both Jeff Artz and Suzie Carrillo. They can testify in more detail to the particulars of this bill draft. The Repository staff fully recognizes and appreciates the efforts underway. We recognize that this is a tricky matter, and that our Nevada Revised Statutes must be in complete compliance with federal law or else this effort will fail.”
Basically, I’m here today to answer any questions you may have of the Criminal History Repository and also explain to you what “Triple I” (Interstate Identification Index) is. There seems to be a misconception of what the FBI’s Triple I System is and we’d like to explain it to you. We are here in support of A.B. 378 and we can answer any questions, but we’d like to clarify Triple I.
[Mr. Artz, continued] Triple I is a criminal records system maintained by the FBI that 45 states are contributing members of, including Nevada. Triple I is an automated file containing criminal history record information, which may be accessed electronically by law enforcement and authorized users. Traditionally, Triple I has never been used for employment or licensing purposes. A fingerprint search is required to obtain FBI criminal history records for civil purposes pursuant to Public Law 92-544. Recognizing the importance of protecting children when placing children in another’s care, the FBI and National Crime Prevention and Privacy Compact Council established this new procedure whereby a name-based, Triple I check could be made of emergency childcare providers. A set of fingerprints is submitted later for more accurate background information and to establish positive identity.
With the exception of performing name-based checks for law enforcement personnel, this is the only other recognized use of Triple I for employment purposes. The compact council established certain requirements: a statute authorizing this type of emergency placement check, a specific purpose code must be used by the enquiring agency, and a fingerprint must follow the name check within 15 calendar days. When fingerprints are not sent on the childcare provider, the child should be removed immediately from the provider. The FBI has given the state of Nevada until January 9, 2004, to get this language in statute. After this date, Triple I checks will no longer be allowed. With the language being established [in statute], Social Services may perform the inquiries themselves.
We’re open to any questions about the Criminal History Repository or our involvement in this particular bill.
John Gancarek, Children’s Services Coordinator, Washoe County Department of Social Services:
I’m here to answer any questions as well. I wanted to let the Committee know that last year we were responsible for over 6,000 referrals involving child abuse and neglect and 2,800 investigations involving over 6,000 children. Potentially each one of those children faced the option of looking at relative care or the possibility of placement into a home. Our agency has the responsibility under ASFA (Adoption Safe Family Act), Public Law 105-89, to perform a background check prior to any placement of a child into relative care or into foster care. With [such high] demand it became exceedingly difficult for our agency to minimize the number of placements of children because [access to that information under] the current system is severely limited.
[Mr. Gancarek, continued] Law enforcement routinely will check background information on perpetrators of abuse and neglect, but will not authorize [such a] check for the [placement-with-a-relative] option. This law gives us the ability to comply with federal legislation and to [conduct] emergency placement background checks on individuals. It should reduce the number of placements that we have in shelter care. It should minimize the number of movements the children [make during] foster care, it should facilitate the reunification of children with non-custodial parents, and it definitely will ensure the continued health and safety of those children by allowing us to have background information on an emergency basis. I hope that you support this legislation.
Chairwoman Koivisto:
I understand from your testimony that, under ASFA, we should have been doing this?
John Gancarek:
Since 1997. I believe this should have been in place sooner; however, the Federal Bureau of Investigation (FBI) has not allowed access to the states until recent times. There has been increased pressure at the state level across the nation for this particular legislation to allow emergency placement resource access. I believe the federal government is actually responsible for offering up this legislation in response to that demand. Nevada is not unique in having that problem.
Mike Capello, Director, Washoe County Department of Social Services:
I want to also indicate that [working through all the channels to draft A.B. 378] has been very complicated. I really want to express my appreciation to Assemblywoman Leslie for taking this on, as well as the Department of Public Safety, who have been excellent to work with [and helped] work through all the technical issues to arrive at language that the federal government [would] approve.
It will really help us in meeting the very high standards that the Adoption Safe Family Act set for child welfare systems. I encourage you to please pass this bill.
Susan Klein-Rothschild, Director, Clark County Department of Family Services:
I want to lend my support for this bill. In child welfare services our focus, first and foremost, is on the safety of children. If a child must be removed from their parents because they’re not safe, we cannot risk putting them in another home that’s not safe. That’s just not conscionable. A criminal background check is a key factor in knowing that a child is safe and that we’re making a good assessment.
[Ms. Klein-Rothschild, continued] Due to the transient nature of our community we need a background check that includes states other than our own to make sure we’re making good decisions. In Clark County we’ve been working very closely with the Nevada Highway Patrol, the FBI, and others to assure that we’re doing things in concert with their regulations and rules and using this access for very limited and regulated purposes. We feel this legislation does support the access that keeps kids safe and we urge you to support it also.
Chairwoman Koivisto:
Questions from the Committee? [There were none.] Is there anyone else who wants to testify on A.B. 378, either for, against, or neutral? [There was no response.] We’ll bring A.B. 378 back to Committee.
ASSEMBLYWOMAN McCLAIN MOVED TO AMEND AND DO PASS A.B. 378.
ASSEMBLYMAN HORNE SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
Thank you, Ms. Leslie. You can do this one on the Floor? [Ms. Leslie agreed.]
Assemblywoman Leslie:
I do want to say for the record that I really didn’t do much of the work on the last bill. All the people who testified did and I think they did a great job and I’m proud of the bill. Now we’re moving on to A.B. 381.
Assembly Bill 381: Revises provisions governing purpose, membership and procedure of multidisciplinary team to review death of child. (BDR 38-208)
Assemblywoman Sheila Leslie, Washoe County District No. 27:
This is another Child Protective Services bill. First I would like to tell you a little bit about child death review teams, which exist in various forms in all 50 states.
Members of the child death review teams typically consist of staff from multiple agencies and entities that were involved with the child whose death is in question. Child death review teams are charged with determining the cause of death of the child and the team uses the cause of death to advise on and create policy that can lead to the prevention of future child deaths.
Prevention measures that have been recommended by child death review teams in the past often include public awareness campaigns. These campaigns typically concern issues such as child drowning, seat belts, proper restraints, SIDS [Sudden Infant Death Syndrome], Shaken Baby Syndrome, youth suicide, child abuse prevention, the need for smoke detectors in homes, and have been implemented across the country.
[Assemblywoman Leslie, continued] Child death review teams have the ability to gather, examine, and synthesize detailed information about the cause of death. Their information is useful in creating programs to prevent future deaths. Their studies lead to the development of distinct databases that track qualitative and quantitative information regarding child fatalities. This data is especially important in rural areas where small numbers complicate the interpretation of statistics on child death. The information that the teams gather leads to greater understanding of the circumstances that lead to child deaths, whether intentional or accidental. The teams are particularly valuable because they create collaboration and communication among various agencies, which in turn often leads to more effective policy.
The whole child death review team idea came to my attention last year. Unfortunately I had a child death in my own family, and I started paying even more attention to this whole issue. I discovered that, according to the National Center on Child Fatality Review, Nevada leads the nation in infant homicide data, followed by the District of Columbia, Missouri, Arkansas, and Oklahoma.
A.B. 381 is intended to strengthen our state’s child death review teams law, which is found in NRS 432B.405. It more clearly outlines the roles and responsibilities of the teams and creates a mechanism for better review of their reports and, hopefully, more action to prevent child deaths. Under A.B. 381, child death review teams will consist of a member of the law enforcement agency associated with the death in question, a representative of the local district attorney’s office, a representative of the child’s school, a representative of a child welfare agency, and a representative from the coroner’s office. Teams could also have members from other agencies that were associated with the deceased child.
Teams would have access to all records that are important to the case, including medical, school, criminal, and those from the welfare agency. The bill would also create a statewide executive committee to review the deaths of children. The executive committee would adopt statewide standards of practice and oversee statewide training of team members. The committee is also charged with creating a statewide annual report which is to include statistics and recommendations for regulatory and policy changes.
[Assemblywoman Leslie, continued] In developing this bill I worked very closely with the existing child death review teams in Nevada, and we have representatives from those teams here today and from the Division of Child and Family Services. I hope that we’ve ironed out all the details and, to my knowledge, there’s no amendment needed. Everybody’s happy with the bill. At this point, we can have those people come up and answer any technical questions. The bill does ask for a dollar increase [for a certified copy of a record of death] to be used to support any minor administrative expenses that are created by the bill, and Mr. Cotton can speak to that if you wish, and also to set aside some money for public awareness campaigns or for the work of the child death review teams. That’s the piece that’s really been missing, the analysis of the child deaths and what is really happening in our state. [Are] drownings in Las Vegas the concern or is it something else? [We need] to analyze [the data], put it in a statewide report, and then do something about it.
Coincidentally, in Ways and Means we happened to close a budget this week that did increase the fees for child death review, so the money for this bill has already been worked out. I hope after you hear the testimony today you’ll also support it.
Edward Cotton, Administrator, Division of Child and Family Services, Department of Human Resources:
[Introduced himself.] We have spent a lot of time working on this and we appreciate that Ms. Leslie and her group were able to pull it together and get everything in there because there were a lot of opinions.
We’re going to start with testimony from Judy New, who’s involved with the child death review teams that currently exist and will give an overview.
Judy New, State Child Death Subcommittee Co-Chair; Coordinator, Clark County Child Death Review Team:
[Introduced herself.] I have been involved with the child death review process in Nevada since its inception. We have been doing child death reviews in Nevada for the past ten years. For the past six years we have had a child death review team that covers the entire state of Nevada, and that’s five different teams.
We have been doing this review process strictly on a voluntary basis. It’s been a handshake among agencies and we’ve been fortunate agencies have volunteered their staff and participated, but there are some agencies that don’t participate. We have to share information. We have to keep it in a confidential manner and some agencies aren’t comfortable with that, so there are times when we have vital information that we need in order to thoroughly review a child death that we don’t have access to. [A.B. 381] will help mandate that we have access to those records and that we have participation from the people who are actually involved with the families, working with the families, even investigating the death of the child, so that we can thoroughly and completely review a child death to determine if there’s anything that needs to be changed within a system, within an agency, or throughout a community.
[Ms. New, continued] Historically, child death is viewed as a child protective services issue, but it really isn’t. We’ve worked hard for the last ten years to get people to understand that. It’s a community issue, and all community agencies need to be working together to determine how we can prevent child death from happening in the future. [A.B. 381] will help us do this. This bill will also help us provide training for our teams throughout the state [as well as] policy and procedure manuals, which are desperately needed so that everybody has a clear understanding of their role on a child death review team and of the things that we’re trying to accomplish.
The law also protects the team and the information gathered from civil and criminal litigation. It protects our records. We do not act as a grand jury. People hear the term “child death review team” and they think we’re a grand jury to determine culpability. That’s not our role. This will protect us from being seen and viewed and even used as a grand jury. To pass [A.B. 381] will only strengthen and give us the tools we need to thoroughly review all child deaths and to hopefully stop other senseless deaths from happening in the same way.
Michelle Lucier, Washoe County Social Services; Chair, Washoe County Death Review Team; Cochair State Child Death Subcommittee:
[Introduced herself.] What I’d like to do is give you a brief explanation of what the money generated by this bill would be used for. One of our biggest items would be the training. Our rural teams were just started within the last three to four years. They don’t have the support that we’ve been fortunate enough to have in Washoe County. We have traveled out there to do some training, but it’s been hit and miss. It’s real important that our rural teams have the training that they need and the support that they need to do the job that we need to have done in those communities to prevent further deaths of our children.
Our teams have identified a number of needs in the communities that would help prevent further deaths, but there’s not funding to support some of those changes. One of the things we have learned is that public awareness and education are key factors, and there’s proof of that in the child seat belt law. When I first started this, there were a high number of child deaths because we weren’t using the correct car seats and seat belts. Since the [public information] campaigns have started and we have our checkpoints and all the information [available to] the public, [child deaths have] dramatically decreased. That shows us that education is the key.
[Ms. Lucier continued.] Some of the funding we hope would be used to run some of those kinds of campaigns and get the information out [to the public]. One of the things we’re dealing with right now is teen suicides. We’d like to get information [on teen suicides] out to the parents. The parents don’t even know what to look for. They don’t have any idea what’s going on, and then it happens. These are just a couple of examples of what we could do if we had this kind of funding and it would strengthen our teams. I encourage you to pass A.B. 381. I believe it would help prevent further needless deaths.
Edward Cotton:
I just want to add a couple of things. A lot of the benefits of this bill have already been mentioned, but I also want to mention that this bill really puts the burden on [those of] us at this table from Clark County, Washoe County, and the rural counties to do a lot. It makes us accountable, it sets timelines, it pushes us, and it’s very much a burden we want.
We are all committed to lowering child deaths. This will drive it, whether it’s us in our positions or people [in our positions when we’re gone], it sets things very solidly that have to be done. It requires the formation of two oversight groups; first, an administrative committee that’s composed of both state and county officials knowledgeable in [the area of child deaths], who will get recommendations from each of the teams and provide a response within 90 days. This will require a response so you don’t get recommendations that just sit around and mean nothing. That committee will also be responsible for assuring that recommendations are implemented.
The executive committee that Ms. Leslie referred to consists of the chairs of the statewide teams and representatives from the Attorney General’s office and other agencies and will have several purposes. The group will develop and adopt a standardized protocol for child death reviews so that the reviews all happen in the same approved manner and will assure that the teams adhere to it. The executive committee will also be responsible for arranging the training you’ve been hearing about and will compile and distribute an annual report. The annual report will give statistics, but also detail recommendations received, what we did with them, how they were implemented, whether they were accepted, and, if any recommendations were not implemented, why. The document also includes proposals for legislative and regulatory changes based on the data.
[Mr. Cotton, continued] When I looked at the last death review report we had, from 2001, it reported that there were 144 child deaths reviewed by the teams, [and that] 55 percent of those were identified as preventable deaths. Another 6 percent were probably preventable, and 18 percent were definitely not preventable, so most of the deaths were seen as preventable. We’ve got to get the recommendations that would make those preventable [deaths] not happen, get those [recommendations] implemented within 90 days, and report back to you to show they’ve [been implemented].
Chairwoman Koivisto:
Questions from the Committee? [There were none.] Susan, did you want to add anything?
Susan Klein-Rothschild, Clark County Department of Family Services:
I also want to lend my support for A.B. 381. The death of a child is always a tragedy and I understand that in the year 2001, Nevada had approximately 17 children die due to child abuse, child neglect, or other violent means. It’s another tragedy if we don’t do everything possible to learn from the deaths and make systemic changes, when needed. This bill facilitates that happening. It allows us to use opportunities for improvement to prevent future deaths.
Chairwoman Koivisto:
Questions from the Committee? [There were none.] Is there anyone else who wants to testify on A.B. 381 either for, against, or neutral? [There was no response.] O. K., we’ll bring A.B. 381 back to Committee.
ASSEMBLYMAN HORNE MOVED DO PASS ON A.B. 381.
ASSEMBLYWOMAN MCCLAIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
Ms. Leslie, you can also [make the Floor statement on] this one.
Vice Chairwoman McClain:
We’ll open the hearing on A.B. 386.
Assembly Bill 386: Makes various changes relating to product safety for children. (BDR 38-53)
Assemblywoman Ellen Koivisto, Clark County District No. 14:
There’s a packet being handed out to everyone (Exhibit D) with information about this bill. This is the Children’s Product Safety Act, based on legislation that has passed in a number of other states. In essence, it prohibits the resale or the lease of unsafe children’s products, or their use in licensed childcare facilities. It establishes a system to track unsafe products and makes it illegal to use these products in certain situations.
[Assemblywoman Koivisto, continued] Section 1 of the bill establishes most of the provisions in Chapter 432 [of the Nevada Revised Statutes]. Section 2 is technical references for words and terms; Sections 3, 4, 5, 6, and 7 are definitions. Section 8 prohibits a commercial user from remanufacturing, retrofitting, selling, contracting to sell or resell, leasing, subletting, or otherwise placing in the stream of commerce, a children’s product that has been determined by the State Board of Health to be unsafe. This section requires the State Board of Health to create, maintain, and update a comprehensive list of children’s products that it determines to be unsafe. It sets forth the criteria the Board may use to determine that a children’s product is unsafe and whether a crib is unsafe.
Just a note for the Committee, most of this [information] is available on the Internet because these are products that have been recalled.
Section 9 establishes criteria for retrofitting a product that’s been determined to be unsafe, Section 10 specifies sanctions for a commercial user who violates the provisions of A.B. 386, and Section 11 adds a new section to Chapter 432A that prohibits a childcare facility from using, or having on its premises, a children’s product that has been determined to be unsafe by the State Board of Health. It requires the Bureau of Services for Childcare in the Division of Child and Family Services, in the Department of Human Resources, to notify childcare facilities on an ongoing basis of the provisions required by this section. Again, most recalls for children’s products, beds, cribs, toys, whatever, are on the Internet. I’m sorry, I don’t have the Internet address, it may be in the “Kids In Danger” Web site.
I understand that the fiscal note that’s been placed on A.B. 386 is $200,000. We checked with other states and found out that in Illinois there wasn’t one because they incorporated enforcement into their other enforcement activities. In Missouri it was $37,000 a year, and it was for mailing. I would assume that mailings to these childcare facilities are already been done to keep them updated on things that are happening. To me it’s a no-brainer; if there’s something that’s been recalled we certainly don’t want people to be using them in childcare facilities.
It’s a child protection bill to protect kids against unsafe, recalled children’s products.
Vice Chairwoman McClain:
It amazes me that recalled items are being sold on the Internet.
Assemblywoman Koivisto:
I suppose they probably are. They can sell almost anything on the Internet. Recalled items can be bought at a second-hand store. I just don’t want to see them used in childcare facilities. People are getting paid to take care of somebody’s children, and I don’t think it’s taking good care of their kids if they’re exposing them to unsafe, dangerous, recalled products.
Vice Chairwoman McClain:
I agree, and I tend to agree with you, too, on this fiscal note. It seems a little outrageous. I don’t know why you’d need a whole FTE [full-time equivalent employee] to do this.
Are there questions from other Committee members? [There were none.] Is there anyone else who would like to testify for A.B. 386? Do we have anybody against it? We have Jamie Burnett, is Jamie here? [The individual did not wish to appear.] How about Judy Wright from the State Health Division? She actually says “neutral.”
Judy Wright, Chief, Bureau of Family Health Services, State Health Division:
[Introduced herself.] I’m here to testify on A.B. 386. The Health Division recognizes and supports the need for the public to have access to timely information concerning unsafe children’s products. Currently the United States Consumer Product Safety Commission, along with the manufacturers through the Toy Industry Association, has the responsibility to alert the public about unsafe products. Those are the ones on the Internet, I think, that you were speaking of.
A.B. 386 requires the Health Division to put a similar system in place. The state Health Division is more than willing to work with interested parties to ensure the public is aware of unsafe children’s products. Unfortunately, we do not have the resources to implement A.B. 386 as it is written. I’ll be pleased to answer any questions you may have.
Vice Chairwoman McClain:
All the childcare facilities that you regulate probably have computers and e-mail, right?
Judy Wright:
We do not regulate them. That’s through the Division of Child and Family Services.
Vice Chairwoman McClain:
But you’re in contact with them on other things?
Judy Wright:
We are not, they are.
Vice Chairwoman McClain:
Do you have a Web site? [Ms. Wright confirmed they did.]
Vice Chairwoman McClain:
It seems like they could be notified through a computer system somehow.
Pat Hedgecoth, Division of Child and Family Services, Department of Human Resources:
You’re correct. A lot of the facilities do have computer access.
Vice Chairwoman McClain:
My point is, the fiscal note would be practically nothing if it was just electronically transferred to [the childcare facilities], like updates. Once you originally sent out the information and said, “You’re going to be getting updates every month or so. This is the kind of equipment you’re not allowed to have in your facility.” After that, I’d think it would be a real easy thing to do, just e‑mail them all.
Pat Hedgecoth:
It’s my understanding the fiscal note went with the Health Division for a staff member [who] would notify the Bureau in the Division to then notify those facilities. The fiscal note attached to the Bureau would be for mailing only and that was about $2,000.
Vice Chairwoman McClain:
Anyone else have any questions? [There was no response.] Do we have anyone else who wants to testify on this bill? [No one responded.] Then I’ll bring it back to Committee. Do we need to re-refer this, Marla? [Ms. McDade Williams indicated that the bill needed to be re-referred.] What’s the pleasure of the Committee?
ASSEMBLYMAN HORNE MOVED TO DO PASS A.B. 386 AND RE-REFER IT TO THE ASSEMBLY COMMITTEE ON WAYS AND MEANS.
ASSEMBLYWOMAN LESLIE SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
Marla McDade Williams, Committee Policy Analyst:
You all have a work session document dated April 9, 2003. Copies were provided for members of the public. We’re going to start with A.B. 297.
Assembly Bill 297: Revises provisions governing payment of hospitals for treating disproportionate share of Medicaid patients, indigent patients or other low-income patients. (BDR 38-885)
If you go to tab A (Exhibit E) [Mock-Up Proposed Amendment to Assembly Bill 297], that includes the amendment that was discussed on Monday when we had the initial hearing on this bill. The amendment incorporates language from Senate Bill 235 and subsequent amendments that were proposed for that measure by Michael Alastuey, who represents Clark County and the University Medical Center of Southern Nevada.
The first page after the tab actually describes the proposed changes to that bill and then on tab B (Exhibit F) there’s information that was requested by members of the Committee on Monday from Mr. Duarte, the administrator of the Division of Health Care Financing and Policy identifying the spreadsheets that have the disproportionate share funding issues. I understand that Mr. Alastuey is available to take members through the bill and Mr. Duarte would be available for questions on the fiscal impact for the spreadsheets.
Mike Alastuey, representing University Medical Center:
[Introduced himself.] I’m testifying for University Medical Center in favor of amending Assembly Bill 297. University Medical Center is a hospital now receiving disproportionate share hospital, or DSH, funding. A number of hospitals are represented who also want DSH funding, as does the state, to help balance its budget.
DSH is a federal program providing about $38 million annually in net benefit for the state of Nevada and qualifying hospitals. To pay this money, the federal government requires about $32 million in matching funds from sources within the state of Nevada; however, Nevada’s DSH statute requires hospitals and counties to pay a total of about $48 million into a state account called “intergovernmental transfer.” What happens to the extra $16 million? It’s our understanding that the state either keeps it in reserve or applies it to the Medicaid program in lieu of other state funds. From a state/local policy it’s not our preference, but it’s historical reality and we probably won’t do much to change that this session.
[Mr. Alastuey, continued] Committee members have already observed that the amount of match, or overmatch, coming from Clark County as opposed to other areas, is materially larger in proportion to the total than is Clark County’s population to the total population of the state. This too is not our preference, but also historical reality and we probably won’t do much to change that in the near term, either. Without intergovernmental transfer payments from Clark County, the entire DSH program would go away and either nobody, including the state, would get any DSH, or the state would have to come up with $32 million to bring in the federal funds.
Currently, and under all proposals, the state puts up no match but retains $16 million a year and proposes to retain $17-18 million a year over the next two years to help balance its budget. We could talk about these sorts of issues ad infinitum, but for this session the Legislature has some policy choices to make for the near term on bills, such as Assembly Bill 297, relating to DSH. Passage of a bill is needed. Without a bill, authorization for hospitals and the state to receive federal money expires.
We know we need a bill. The question for you is, should there be an Assembly bill? There is a Senate bill, S.B. 235, which has been amended and re-referred to [Senate] Finance that is similar to today’s mock-up of A.B. 297 but with different treatment for private hospitals in Clark County. If there is an Assembly bill, should it be based on the interim study or should it continue the current statute? This choice is a philosophical one, since a bill generally based on the study can be crafted to either favor the state or preserve UMC’s financial position on DSH.
If there is an Assembly bill based on the study, should it give more to the state than the state is now receiving in order to help balance the state budget, or should it keep the state’s and UMC’s share about the same? We support keeping UMC’s share of DSH about the same as it is now.
Another question: Should the allotment process be set in statute so that the issue does not have to be revisited every two years? We seek a more permanent solution to the DSH issue and believe that the bill that passes should not expire in two years, as is the case with current law.
Finally, in any bill, should there be a carve-out for a specific private hospital? The interim study did not provide for such a set aside but the Senate version of the bill does.
[Mr. Alastuey, continued] These are five policy points starting with [the question of whether there] should be an Assembly bill or not. From there, it’s a question of the nature of the Assembly bill and its major elements.
If I could refer to the work session document prepared by your staff, the document called “Mock-Up Proposed Amendment to Assembly Bill 297” [which] is in the second section of your work session document.
Marla McDade Williams:
I had said that there was an explanation of the differences in this packet and apparently it’s not there, so, Mike, they don’t have that in front of them. You’ll have to take them through it.
Mike Alastuey:
Is there a document called “proposed amendment?”
Marla McDade Williams:
The mock-up of the amendment is in here, but not the one-sheet summary of the differences between [the two bills.]
Mike Alastuey:
Page 2, of the mock-up at line 9, you’ll see the number $24 million stricken and the insertion of “thirty-three percent of such payments.”
Assemblywoman McClain:
I just need a little explanation of all this color-coding. The blue bold italics is new language in the original bill, but that’s all going to go away, right?
Marla McDade Williams:
I did a “cut and paste” job, brought in S.B. 235, so what you’ve got is basically S.B. 235. The blue language would be changes to existing statute. The green is the new language that Mike [Alastuey] is going to go through, that’s different from what is currently in S.B. 235. The red is what would be stricken in existing statute. So, it’s just the green that is the difference between S.B. 235 without any amendments and what’s being proposed for A.B. 297.
Assemblywoman McClain:
So, anything in blue is still part of the bill? [Ms. McDade Williams and Mr. Alastuey both agreed.]
Marla McDade Williams:
What we have in front of us is a mock-up for A.B. 297; the blue language would amend existing law. The green language is an amendment to S.B. 235. The red language is the deletion of language in current law. The only change between what we’re looking at and S.B. 235 is the green language.
Mike Alastuey:
If we focus on the areas that I think appear to you in green, that will also point to issues in the bill as a whole. The bill, at the mock-up, if you will, includes changes from both S.B. 235, as now proposed, and would be one option for the Committee for adoption as a composite.
The first point that I’ll address is on page 2, line 9, making an adjustment recognizing an increased amount of state share, slightly reduced amount for UMC based on what it would receive without any changes to DSH. What this means is that in earlier iterations of S.B. 235, and as suggested by the consultant to the interim committee, a fixed sum of $24 million was put in there as a limiter to the amount of intergovernmental transfer that would be due from UMC and/or Clark County into the intergovernmental transfer fund. At different levels of benefit, that $24 million limiter did constrain the amount of UMC contribution, so that UMC, had that language remained in there, would have actually received an increased contribution from today’s status quo. That feature, were it to go forward, would place yet additional burden on the state and bring additional benefit to University Medical Center. We understand the state’s issues in this regard.
In lieu of that, a deduction on the total of 33 percent of such payments would have the effect of flexing the University Medical Center’s lesser of two intergovernmental transfer payments and provide for a little bit more continuity in the computation.
On page 2, line 13 and line 36, there’s also a technical correction. There’s a deletion of a reference to paragraph (b) and insertion of paragraph (c). That is strictly a technical correction; there was an incorrect cross-reference in the bill.
On page 2, lines 20-22, there’s a clarification and a change to Washoe County’s intergovernmental transfer because what is happening, as we have learned that less federal money and less total benefit is available, Washoe County’s intergovernmental transfer was a fixed amount. The way the bill could have initially worked, it might have worked to Washoe County’s detriment, where they have a fixed amount of intergovernmental transfer, while at the same time the total amount and the pools of allocation could go down. In other words, that might have caused a discontinuity in the net benefit to Washoe.
On page 5, line 19, there’s a deletion of the word “may” and insertion of the word “shall” along with other language referring to each group of hospitals. As difficult as this issue is for the legislative committees and as vigorous as the debate is around the disproportionate share issue, we hope you can appreciate that if there is discretion left to an administrative official in the interim between legislative sessions, the word “may,” in effect, would give opportunity for other interpretation or for other persuasion perhaps to be exercised. If you pass a bill that contemplates one method of allocation and if the total amount of money actually comes in differently than anticipated during the session, I would strongly recommend to you that you would want to prescribe the method by which the allocations are adjusted proportionately up or down rather than to leave that to any question of chance.
[Mr. Alastuey, continued] We have every belief and faith that the Department of Human Resources and, particularly, [the Division of] Health Care Financing and Policy would be fair in their allocations but, none the less, their involvement here in the Legislature, just in terms of this debate, has stretched their resources and their ability to accommodate all requests. Certainly you’ve heard from all of those who have a stake in this issue and that’s certainly nothing you would want to leave to chance in the interim.
Finally, there’s some clarifying language on page 6, lines 42-44. The original language in the Senate bill was not completely clear in terms of how the pools were adjusted versus the base grants. This bill operates on a relationship between two sets of allocation: one is a pool, or in effect a regional set-aside of expected DSH benefit, and the other is base grants. If money comes in in excess of that necessary to fulfill the base grants, then there’s a reallocation of any excess money, not that there’s any on the table now, we don’t expect any in the near future, that goes back into pools and is reallocated to those hospitals deserving under the definitions in the bill that you see altogether now. That is strictly clarifying language.
There is one other area I would call to your attention and that is on page 6, lines 25-27. You’ll see there’s reference in there to base payments, referring to 2003-2004 fiscal year and 2004-2005 fiscal year. If this language stays as is, and there’s not italicized amendatory language yet shown here, you will be revisiting this issue in two years. We would propose, in addition to the italicized amendatory language here, direction from the Committee to your staff and others to produce language to amend lines 25-27 in effect to codify or set in statute a base grant mechanism that will survive from one biennium to another so we don’t have to go back to “square one” every two years.
Under the current situation, some sort of bill needs to pass and as a fall-back position, [as Mr. Duarte] termed it, one option would be to extend the current statutory provisions for another two years and revisit them again in two years. I would suggest there’s every opportunity to set something in statute that could, perhaps, survive more than one biennium.
[Mr. Alastuey, continued] One reference that I made earlier in the policy points that we recommended you consider, is that if this Committee wishes to give favorable consideration to a bill that is based on the outcome of the interim study, there are parameters that the Committee could introduce into this, or that another committee could introduce into this mathematically, that would have just about any outcome that you wanted. On the one hand, you have University Medical Center’s net benefit, on the other hand, you have the state of Nevada’s net benefit. The variations in formula calculations, it appears, either increase the one to the detriment of the other, or increase the other to the detriment of the one.
The extreme iterations and the iterations in between do not really affect the other hospitals that much, with the exception of the policy decision that you can either make or not make to provide for a carve-out for a private hospital in Clark County.
Those are the policy issues as we see them. I know that Mr. Duarte and his staff have produced some spreadsheets for your attention. I’ve looked at them and I think they provide, in fairly brief form, a pretty good summary of what the various entities are getting now in terms of net benefit, what the current statutes would produce, and what an amended version of A.B. 297 would produce in the event that it resembled S.B. 235.
I would hope that Mr. Duarte would refer to the second of the several spreadsheets that he and his staff have prepared because those are the ones that focus on the net benefit to hospitals and to the state.
Assemblywoman Leslie:
If I’m understanding this correctly, the mock legislation you just went over is the same as S.B. 235, except that the additional money for Sunrise Hospital was taken out. Is that essentially right?
Mike Alastuey:
Essentially that is the case. As staff pointed out, the blue amendatory language was the original amendatory language in S.B. 235, the green language is more recently added.
Assemblywoman Leslie:
When you talk about the carve-out of a private hospital, you’re referring to Sunrise Hospital? [Mr. Alastuey agreed.]
Charles Duarte, Administrator, Division of Health Care Financing and Policy:
Mr. Alastuey presented a very accurate summary of the policy and fiscal issues that are confronting the Committee today. Beside the balance points between the University Medical Center, Clark County, and the state, there’s an additional balance point that needs to be considered, which is a significant part of S.B. 235 and the study that went into developing that proposal and that is how funds are distributed to private hospitals in counties where there is an established public hospital, namely Clark County.
There are at least two balance points that need to be considered in terms of policy, one being the share of monies between Clark County and the state, and the second being the methodology for distributing funds to private facilities that serve a large number of Medicaid clients or indigent clients.
Assemblywoman McClain:
I would just like to make something real clear, and if I’m wrong, tell me. There’s a difference between Medicaid patients and indigent patients. Medicaid patients do get their bills paid, correct? [Mr. Duarte agreed.] Indigent do not. [Mr. Duarte concurred.]
Charles Duarte:
The top section of that spreadsheet describes the distribution of funds and the net benefit that hospitals currently receive through the current DSH program. As you can see, the total net benefit that accrues to hospitals statewide is approximately $21 million. For this fiscal year, the state net benefit is $16.6 million, and that’s at the bottom of the page. I think Mr. Alastuey wanted me to focus on the net benefit to hospitals and that’s why I was on page 1.
As Mr. Alastuey said, it’s probably more important to focus on the net benefit that accrues to hospitals, and this page describes it. Under current law you see how the funds are distributed to the different hospitals under current Disproportionate Share statutes. For the next fiscal year 2004 you see how the current law would apply the dollars [among the] hospitals. Under the base bill, S.B. 235, you see how that works out as well, followed in the third column by the amendment that’s been proposed by Mr. Alastuey and the University Medical Center. You can see how those funds are distributed.
Marla McDade Williams:
On that last section, the part where you’ve got $184,000 for Sunrise Hospital and $920,000 for Lake Mead Hospital, that is not included in the version we’re looking at, right? The $184,000 would actually [be added] into the $920,000.
Charles Duarte:
That total amount of approximately $1.2 million would be attributable to Lake Mead Hospital. I apologize for that error. There’s the policy issue right in front of you, or at least one of them—the distribution between those two private hospitals.
If you look down at the bottom of that page, you can see the changes that Mr. Alastuey was describing in terms of the impact on the state net benefit. And yes, we did receive, or are currently planning to receive, $16.6 million in this fiscal year in state net benefit. We have budgeted $17.5 million in fiscal year 2004 and $18.2 million in fiscal year 2005 in state net benefit. Again, [the state net benefit] goes to fund Medicaid services statewide, a large majority of which are services in Clark County.
The different scenarios would have a definite impact on our budget, and if you look at the proposed amendment, it still would result in approximately $1.2 million less going to our Intergovernmental Transfer [Account], our reserve fund, which in turn we use to transfer those dollars into funding for Medicaid services. We would be short $1.2 million for Medicaid services statewide in fiscal year 2004 and approximately $1 million in fiscal year 2005.
Do you have any questions about the distribution of those funds?
Assemblywoman Leslie:
This chart is really helpful. All this fighting is about $184,000? Tell me it’s not so.
Charles Duarte:
I believe that the discussion is not necessarily about money. I don’t want to mischaracterize the issues and concerns that some of the private hospitals have, but the way it’s been described to me is that [it’s an issue about] fairness and policy. How the policy is structured is actually more important, I believe, than the distribution of the dollars.
Assemblywoman Leslie:
That’s helpful to me because from a policy perspective, I’m more concerned about the Medicaid budget than I am about the hospitals. I know we couldn’t get DSH without them putting up the money to get the money back, but they couldn’t get the extra money without the state doing DSH. I know it looks like the state’s getting a lot of money, but [the state] needs to get its money and we put it all into Medicaid which [the hospitals] get back through taking care of Medicaid patients.
[Assemblywoman Leslie, continued] I’m about ready to put all the DSH money into Medicaid. I’m going to stay out of the Clark County fight between the two hospitals and just say I’m not going to support anything where the state’s net benefit is reduced and right now, S.B. 235 has that. We’re not voting on that today, but even with the amendment to this bill, the state net benefit goes down so I’m just going to vote no.
Assemblyman Mabey:
Assemblywoman Leslie, could you go over that again?
Assemblywoman Leslie:
I’m just looking at the bottom line on the page we’re working on, “State Net Benefit,” and if you look under fiscal year 2003 you can see what the state gets. In fiscal year 2004 you can see that the state gets $17.4 million. [Under] S.B. 235, which is in the Senate, we’d get $15.4 million. With Mr. Alastuey’s amendment that we’ve been working on today, that would rise to $16.2 million but it’s still less than the $17.4 million.
Charles Duarte:
There’s another policy issue that probably hasn’t been discussed or presented to you, and that’s the true purpose of DSH that was established under federal law approximately two decades ago. The purpose is to provide supplemental funding to hospitals that serve a predominant number of Medicaid patients but that also serve indigent patients. By providing supplementation to their income, they can relieve themselves of some of the burden of carrying the indigent patient load and keep their doors open to serve both Medicaid and Medicare patients. There’s actually a Medicare DSH program as well. There is a true purpose to DSH and it’s not just to spread federal money around, it’s to keep those hospitals viable. As we see now with our current economy, a larger number of hospitals, including private hospitals, are carrying the burden of indigent care to a greater degree. I just wanted to make sure that the Committee understood that there was a policy basis for this program that started a long time ago, and I think it’s still a reasonable policy issue.
Assemblywoman McClain:
That is the bottom line of this issue, and it’s not even so much Medicaid patients as it is indigent patients. If a public hospital is required to take both, it’s not going to make any money off Medicaid and it has very limited private-pay patients, but it has to take the indigent [patients]. This whole program is designed to protect hospitals from going under because they have to take patients who cannot pay for their services.
Charles Duarte:
To some degree that’s correct, Ms. McClain, but the private hospitals are taking a larger and larger share of indigent patients and that can’t be discounted.
Assemblywoman McClain:
I agree with you that this money should be funneled proportionately to hospitals that take care of indigent patients and don’t get reimbursed for those services. If UMC is doing 90 percent of indigent care, they should get 90 percent of the money. That’s the only fair way of looking at this. If Sunrise is doing 40 percent, then they should be getting the money. You need to look at the total package of indigent care, figure out who’s doing what, and they should be reimbursed on a case-by-case basis. It’s like a fee-for-service coming from the federal government through the state for the people [the hospitals] would not otherwise get paid for.
Chairwoman Koivisto:
I believe Committee members were provided this “Nevada Legislative Study Committee on Health Care: Report on Indigent Care Costs and Disproportionate Share” (Exhibit G). During the last interim we paid to have a study done by an outside consultant to recommend a way to go forward with our DSH funding so we wouldn’t have to come back every two years and go through this. S.B. 235 almost gets there, but not quite, and we have to put that in place or we’re going to be doing this every two years.
Did you have a response, Mr. Alastuey? [Mr. Alastuey indicated that copies of the study had been provided.]
Charles Duarte:
I don’t disagree that a fair and reasonable methodology that compensates public and private hospitals needs to be put in place so we don’t revisit this issue every year. At the same time, we’re obviously interested in preserving the state General Fund as it’s proposed in The Executive Budget and for today, that’s probably the biggest balance point you have to consider.
Chairwoman Koivisto:
I would like to make a recommendation that we pass this out to protect the Medicaid budget in The Executive Budget and also put into the statute that the methodology for distributing DSH money will be put into the statute from henceforth. Carving up the DSH money never works out for everybody and sometimes not for anybody. It’s a broken system the way it is now. It’s got to be fixed and that’s why we paid money for a study.
Charles Duarte:
We did some sensitivity analysis on the proposals and ran a number of calculations on spreadsheets to determine how this could work out dealing with the balance point between Clark County and the state General Fund, and notwithstanding the issues in terms of distributing funds for private hospitals. In the mock-up amendment, there was a figure of 33 percent. When we did our sensitivity analysis, for the state to be kept whole and the Governor’s recommended budget to be kept whole, the figure would be about 31.46 percent. That’s just a point of reference for you in terms of looking at this proposed methodology. That number would need to go down from 33 percent to 31.46 percent.
Assemblywoman McClain:
Thirty-three percent is what Medicaid would be getting?
Charles Duarte:
No, that would be the total amount of the intergovernmental transfer that would be required.
Mike Alastuey:
Mr. Duarte is referring to page 2, line 9, where there’s a limiter, or a “lesser of” feature, for the University Medical Center intergovernmental transfer. Mr. Duarte is suggesting that if it’s the will of the Committee to pass this out with the study-based methodology and try to break even with the Governor’s Budget, that that number would be about 31.46 percent. In addition, if it is also the will of the Committee to make an attempt to set the methodology in statute so that it need not be revisited, we would probably also have to work with whoever drafts the amendment on lines 25-27 on page 6, and if that is part of your motion or your suggestion for Committee discussion, we would also commend that to your attention.
Chairwoman Koivisto:
Using that percentage and that methodology, it is my understanding that [the amounts for] the rural hospitals listed here don’t change so this is only going to affect Clark County and the state. Is that correct?
Charles Duarte:
Yes, I believe that’s correct.
Chairwoman Koivisto:
Can you give me a ballpark estimate of what the net effect is going to be on the two entities if we do that?
Charles Duarte:
The net effect is basically that in fiscal year 2004, the state retains a net benefit of approximately $17.5 million and the UMC/Clark County benefit would drop commensurately about $1.2 million from what Mr. Alastuey proposed.
Mike Alastuey:
I believe UMC’s benefit, in order to balance to The Executive Budget, would be dropping by just about $1 million even. [Mr. Duarte stated that he would defer to Mr. Alastuey on the numbers.]
If it is the Committee’s intent to balance The Executive Budget, that would be a closer figure.
Chairwoman Koivisto:
I don’t think it’s our place to balance The Executive Budget, but I guess if we want to get this bill passed and put into statute, that’s what we’re going to have to do, balance it on the backs of the poor folks.
Assemblyman Hardy:
It almost feels good to me to keep this alive, however we do it, and recognize that we may not have the solution yet to make this “in perpetuity” decision. I would feel comfortable going whichever direction the Committee wants to go. I’m not sure it makes much difference right now which direction we go but we need to make sure that we have a vehicle to protect the ability to work through this. Whatever we pass may end up coming back to us in some way, but we do need to protect our ability to do that.
Chairwoman Koivisto:
In order to do that, we need to refer it to Ways and Means, is that where you’re going? So your suggestion is just to pass A.B. 297 the way it is and refer it to Ways and Means and let them fight out the amended part?
Assemblyman Hardy:
I am very flexible on that. I don’t have any strong feelings about how we do it, but we need to do it.
Assemblywoman Pierce:
Is it my understanding that, except for a couple of changes, this mock-up gets pretty close to the interim study?
Chairwoman Koivisto:
Yes, it does. It just needs a little bit of tweaking and it will go forward with the recommendations that came out of that study.
Assemblywoman Pierce:
One of the “tweakings” is on page 2, line 9, that “33 percent of such payments” changes to 31.46 percent. The other one is on page 6?
Mike Alastuey:
I was referring to lines 25-27 on page 6, if it’s the will of the Committee to try and set this in statute going forward.
Assemblywoman Pierce:
Lines 25-27 would have to change? [Mr. Alastuey agreed, adding that the changes would be subject to the bill drafter’s recommendation concerning any necessary collateral changes.]
What that would do to the number is what you described before and UMC would get about $1 million less than the UMC amendment? [Mr. Alastuey agreed.] But it still provides that there would be no carve-out for Sunrise Hospital. Is that correct? [Chairwoman Koivisto agreed that it was.]
We’d have a formula to go forward with and that would be the formula that the interim study suggested. I hate to have UMC get less money.
Chairwoman Koivisto:
It’s a case of “damned if you do, damned if you don’t.” One way or another, I think UMC is going to get less money.
Assemblywoman Pierce:
I think that’s the way to go to set it [in statute] and then we’ve got it.
Charles Duarte:
I’m sure that the Committee is not interested in affecting some of the rural hospitals that benefit from this program, and while the adjustments I suggested in the percentage amount deal with the issues between Clark County and UMC, some of that difference, the loss, would flow down to the other hospitals that currently benefit from DSH. Of course there’s still the issue of distribution of funds, the fairness issue between private hospitals. One suggestion might be that the bill just refer to the outcome of the study. Whatever is developed as a result of the negotiations on S.B. 235, I’m not sure how you would do that and reconcile with that bill, but there’s still a lot of work that needs to be done on S.B. 235 and coming up with a final methodology.
The hospital industry, the stakeholders in this, are very far from a conclusion on resolving the issues in that bill and in that proposed methodology.
Chairwoman Koivisto:
The dollars that go to the hospitals on this list, is that a percentage of the total dollars that go to all these hospitals? If so then the methodology to go forward would be that the percentage would be proportional depending on the amount allocated from DSH as time goes on.
Charles Duarte:
That is one possibility. Those are issues that still need to be hammered out, particularly on S.B. 235. We have meetings scheduled [with the stakeholders] to start dealing with that and discussing how we might resolve some of those issues.
Assemblywoman McClain:
I think Assemblywoman Pierce did a good job of explaining where we’re going, and I agree with Assemblyman Hardy that we definitely need an Assembly bill because we should have two points to talk from. The blanket amounts in S.B. 235 are not the way to go, but that’s for later discussion. I don’t think we want to start with base numbers. Looking at the scenarios on page 1, the spreadsheet, under S.B. 235 Sunrise Hospital isn’t included either.
Mike Alastuey:
State staff worked up this spreadsheet based on S.B. 235 as amendatory provisions were discussed on the Senate side and that did include a set-aside for Sunrise Hospital.
Assemblywoman McClain:
Is that because they were not included last time? Was there a set-aside last time?
Charles Duarte:
If you look at state fiscal year 2003 in the current law, look at that column and look at Sunrise Hospital and you can see that their net benefit is approximately $405,000. [Assemblywoman McClain stated Sunrise was not in the language.]
Our workup of Mr. Alastuey’s proposed amendment actually is in error. Sunrise should not be included in there.
Marla McDade Williams:
Senate Bill 235 was amended in the Senate Human Resources and Facilities Committee on Monday. The amendment that that Senate Committee went forward with included the $184,000 for Sunrise Hospital. The Division of Health Care Financing and Policy worked up the figures based on that amendment and wasn’t given the instruction that the amendment that was under consideration by our Committee did not include that amount for Sunrise Hospital. The $184,000 listed here under “UMC Amendment SFY 2004 Net Benefit” all gets put back into Lake Mead Hospital, and Sunrise Hospital is basically a zero.
Assemblywoman McClain:
For purposes of discussion down the road, could we keep Sunrise Hospital in here, even if it’s only $2.00, so that they’re not left out of the conversation when these two bills have to get resolved at the end of session?
Marla McDade Williams:
If you want to have essentially what the Senate adopted, leaving Sunrise Hospital at the $184,000, I’ve seen language worked up for that and I could get it in just a few minutes, if that was something the Committee wanted me to do.
Assemblywoman McClain:
What you could do is readjust some of those a few dollars each.
Marla McDade Williams:
As I understand it, it simply changes the language for those private hospitals. There are four pools that would get money under DSH and private hospitals are one pool.
ASSEMBLYWOMAN McCLAIN MOVED TO AMEND AND DO PASS A.B. 297 AND RE-REFER IT TO THE ASSEMBLY COMMITTEE ON WAYS AND MEANS WITH THE FOLLOWING AMENDMENTS:
· CHANGING THE 33 PERCENT ON PAGE 2, LINE 9, TO 31.46 PERCENT.
· CLARIFYING THE LANGUAGE FOR WASHOE COUNTY’S INTERGOVERNMENTAL TRANSFER.
· MAKING THOSE TECHNICAL CHANGES.
· ACCOMMODATING THE “MAY” TO “SHALL” ON PAGE 5, LINE 19, AND THE LANGUAGE FOR EACH GROUP OF HOSPITALS.
· ON PAGE 6, LINE 26, THE REFERENCES TO THE FISCAL YEARS WOULD BE STRICKEN AND THE BILL DRAFTERS WOULD BE INFORMED THAT WE’RE LOOKING FOR A WAY TO SET THE AMOUNTS THAT ARE LISTED AS THE BASE FOR FUTURE YEARS.
· ADDING THE LANGUAGE CONCERNING THE PRIVATE HOSPITALS THAT WAS ADOPTED IN THE SENATE BILL.
Marla McDade Williams:
That would include the proposed amendment for A.B. 297 [in the work session document], changing the 33 percent on page 2, line 9 to 31.46 percent, clarifying the language for Washoe County’s intergovernmental transfer, making those technical changes, accommodating the “may” to “shall” on page 5, line 19, and the language for each group of hospitals. On page 6, line 26, the references to the fiscal years would be stricken and the bill drafters would be informed that we’re looking for a way to set the amounts that are listed as the base for future years.
Assemblywoman McClain:
Or some sort of a percentage to do it from based on uncompensated care. Use these as base figures but then....
Marla McDade Williams:
For the discussion to move forward, adding the language concerning the private hospitals that was adopted in the Senate bill?
Assemblywoman McClain:
To have the conversation ongoing, we’d better keep everyone in the loop.
ASSEMBLYMAN HARDY SECONDED THE MOTION.
Assemblywoman Pierce:
I’m confused with the part about keeping the discussion alive. I’m not sure what that means.
Chairwoman Koivisto:
That means that the bill is going to go to Ways and Means. Otherwise it’ll just die and what happens in the Senate would determine [the outcome]. We don’t want to [take no action].
Assemblywoman Pierce:
I know that. I’m confused about the part about keeping the private hospitals in there to keep the discussion alive for future years. What does that mean?
Assemblywoman McClain:
Not for future years, just for the rest of the session.
Lynn Fulstone, representing Sunrise Hospital:
We have not been able to respond to some of your questions or contribute today but we are an interested party. We certainly appreciate everything the Committee said, including Assemblywoman McClain, and we would like to continue to work out some of the details of these bills. I believe we have a meeting set up with all interested parties this Friday to work out some of these issues, so we certainly would appreciate your not making any drastic decisions today until we have had time to meet and both the Senate and Assembly money Committees [have a chance to] take a closer look at this as well.
Chairwoman Koivisto:
We’re going to just move this into the [Ways and Means] Committee. It’s been moved and seconded.
Assemblywoman Pierce:
Does the way we’re talking about this now pretty much reflect the interim study? [Chairwoman Koivisto agreed that it did.]
Marla McDade Williams:
I believe it incorporates most of the provisions of the interim study [including] the adjustments to the $24 million and the 33 percent and the 31.46 percent. The $24 million was the recommendation of the interim study so the percentage we are changing is the only major change we’re making to the interim study.
Assemblywoman Pierce:
We don’t have to make it clear to anyone that we’re aiming at the interim study.
THE MOTION CARRIED UNANIMOUSLY.
Assembly Bill 384: Makes various changes concerning provision of prescription drugs by Department of Human Resources. (BDR 38-775)
The next bill is A.B. 384. We heard this bill on Monday, April 7. Tab D includes the proposed amendments (Exhibit H) [Mock-Up Proposed Amendment to Assembly Bill 384]. The amendments were offered by the bill’s sponsor and by a representative of the National Association of Chain Drug Stores. Additionally, tab D includes information that was provided by Mr. Duarte in response to the Monday hearing (Exhibit I). This response identifies issues associated with some of the proposed amendments and it concludes with a paragraph discussing supplemental rebates.
There is an incorrect reference in the work session document. In subsection 7 of Section 9—the work session document reads Section 8 but it should be Section 9—of A.B. 384 there’s a substantive conflict with A.B. 430, which is also on the work session.
[Ms. McDade Williams, continued] I will move through the amendments, then come back and discuss the conflicts.
Behind tab D is a mock-up of A.B. 384. The blue language is the amendatory language for the bill, the new language; the green language is the amendments. On page 1, lines 17-18, we’re making a change that says the prior authorization would be done “by a person who is prescribing the medication” before the prescription drug may be provided. The National Association of Chain Drug Stores notes that since the prescriber determines the drug to dispense, it seems logical that he be responsible for checking the PDL [preferred drug list] and requesting prior authorization when necessary. The pharmacist can then focus on counseling the patients on the use of the drug rather than spending time on the telephone trying to get approval.
For the sake of parity, the [change in Section 6 reduces] the membership of the [Pharmacy and Therapeutics] Committee [from six physician members] to four, [one of whom is] a psychiatrist, which was Assemblywoman Koivisto’s suggestion. To keep the membership at eleven, two members would be added to the members selected by the Governor based on recommendations from three interest groups, AARP American Association of Retired Persons], the Alliance for the Mentally Ill in Nevada, and the State Council for Independent Living.
The next major change is the cooling-off language and the response that Mr. Duarte provided. He did note that, as proposed, the cooling-off language would likely eliminate committee members because they do use Medicaid providers on their current Drug Utilization Review Board, and the cooling-off language would prohibit them from using Medicaid providers. It would also prohibit them from using agency staff who are knowledgeable about the needs of the population, so he has requested the amendment be revised to allow Medicaid providers to serve on the Pharmacy and Therapeutics Committee and to allow DHR [Department of Human Resources] staff providers to potentially serve in an advisory role to the Committee.
Charles Duarte:
A.B. 384 is consistent with what we need to do in the Medicaid program and have already proposed in the Governor’s budget. We agree with the intent of this bill with a few minor modifications I suggested here.
[Mr. Duarte, continued] The issue Ms. McDade Williams was describing is that providers who deal with our patient population are generally quite knowledgeable about the unique needs of Medicaid clients and their prescription drug needs. We believe it would be prudent for us to allow those providers, primarily physicians and pharmacists, or doctors of pharmacy who may be Medicaid providers or working in a pharmacy that serves Medicaid clients, to be allowed to be on this Committee because they understand the population. Additionally, we have very good clinical staff who are Department employees who work closely with this patient population, particularly in the area of mental health. They could serve as advisors to this Committee on the special needs of that population. I really believe that by excluding them we would diminish our ability to develop sound policy on this Committee.
We do have confidentiality agreements we would exercise that I believe would protect from clear conflicts of interest whenever those might be present.
Assemblywoman McClain:
To the sponsor of the bill: At one time when [the Pharmacy and Therapeutics] Committee was negotiating and working on agreements the cooling off period would have been all right, but do you really think it’s needed now?
Chairwoman Koivisto:
When we first started putting A.B. 384 together, the language was that at least one of the physicians would be a Medicaid provider and likewise for the pharmacists. Because there was so much language in the bill, those [got left out]. I agree that in an advisory role [agency personnel] would be essential.
Marla McDade Williams:
Do you want to make modifications to the language or eliminate it all together?
Assemblywoman McClain:
I don’t know that we need subsection 5 of Section 6 now.
Marla McDade Williams:
Continuing on down to line 40 on page 2, that’s the change that meetings take place at least quarterly from at least every six months. On page 3 we’re eliminating two sections there that dealt with what Ms. McClain just discussed. The last major change on that page actually gets to the responsibilities of the Committee in exempting drugs from the PDL and this is noted as being in conflict with A.B. 430. It makes other changes at the suggestion of the National Association of Chain Drug Stores [NACDS]. You can see the language that is stricken.
[Ms. McDade Williams, continued] The primary conflict is that under A.B. 384 the Committee is authorized with deciding what should be exempted. Under A.B. 430 the exemptions would go forward in statute and the Committee would therefore not have any discretion in determining what should be exempt.
Assemblywoman Leslie:
That would defeat the whole purpose of A.B. 430. I think I see what the conflict is and I would argue, when we got to that bill, that we mesh them since we have to go one way or the other. I was persuaded by the arguments the Department made on the antidepressants and the antianxiety drugs that those do need to be part of the PDL. I feel strongly that we ought to exempt the other two, so I would argue in favor of my bill, A.B. 430. I would like to see the antipsychotics, the HIV drugs, and the anticonvulsants, and the Department’s already agreed to exempt those. What would we have to do, Marla?
Marla McDade Williams:
We have two options: One is to move forward and, if the Committee chose to, you could adopt both bills and the first bill that gets out is the law. You then have to change the bill that is still here to accommodate the first bill. Or you could make your changes now and take this authority away from the [Pharmacy and Therapeutics] Committee. [Assemblywoman Leslie commented that the Committee could try to keep both bills alive.]
Charles Duarte:
In terms of the exemptions from the preferred drug list program that Ms. Leslie mentioned, we have already agreed with her as well as representatives from the pharmaceutical industry that we would, up front, exclude specific drug categories from consideration on the PDL. Those included typical and atypical antipsychotic drugs, anticonvulsive drugs, anti-HIV/AIDS drugs and several other, smaller categories of less utilized but important and very sensitive pharmaceutical drugs.
The Department is not opposed to any language that would mimic those exclusions because we’ve already agreed to exclude those and not have the P and T Committee move that under their consideration.
Marla McDade Williams:
As I understand it, we would amend [Section 9] to make it consistent with A.B. 430. We would have to structure language around the Pharmacy and Therapeutics Committee that [would] still give them the authority to decide additional drugs that would be exempt.
[Ms. McDade Williams, continued] Another deletion recommended by NACDS is [written in] orange. My understanding is that we may not be ready to delete this section and I don’t know if members want to discuss the difference. NACDS suggested deleting it because they didn’t feel it was the role of the [Pharmacy and Therapeutics] Committee to have to take public testimony. The benefit is that they do take public testimony.
Chairwoman Koivisto:
Even though I tend to agree with the NACDS position on this, I also have a concern that as we studied the Michigan plan, one of the major problems was that they went forward without enough public input. I think we should leave that in.
Assemblywoman Leslie:
I agree with you. We need to make sure there’s public input, that’s a concern I’ve heard, too. Is the concern about the word “investigations”? Is that the wrong word? It has a criminal sound to it. Would it help if we called it something else [such as] “hold hearings?” Is it really an investigation?
Charles Duarte:
In the context here it’s a scientific investigation and has a clinical connotation.
Marla McDade Williams:
What I will do is make the suggestion that [the language read] “conduct scientific investigations and hold hearings.”
There are no other changes except for the additions because this is a skeleton bill and other concepts that were proposed didn’t get carried forward in the bill. My additions aren’t included, either.
Charles Duarte:
While you’re waiting for copies, I would like to make a couple of comments. I would defer to the physicians on this Committee as to what the correct terminology is for “scientific investigation,” because I think that also has a connotation that there’s actually going to be some direct research conducted by the Pharmacy and Therapeutics Committee, and that’s not their role. They do searches of literature and may not even do that, just review literature provided to them. It’s a review of evidence-based information on these drugs.
The second point is possibly a technical one and maybe Marla can assist us, but if the Committee is going to amend this bill to reflect A.B. 430, my understanding is that A.B. 430 has not been amended yet.
Marla McDade Williams:
Everyone has the “Other Components To Be Added” sheet (Exhibit J), which has five points listed on it. The first point is that rebates received from manufacturers must be used to expand or offset the prescription drug costs of programs administered by the DHR and in accordance with federal law.
The second point would specify that the provisions of the Preferred Drug List and the prior authorization requirements apply to new patients, and only after these items are established for any particular class of drugs. The intent here is to ensure that no patient who is already on a specific drug regimen is subject to a new drug regimen. It further allows a transition to the Preferred Drug List and the prior authorization requirements for physicians, pharmacists, patients, and the Department.
I believe the Division expressed some concern about this section and as I understand it, the purpose of it is to essentially grandfather in patients. I don’t know if Mr. Duarte wants to address this point.
Charles Duarte:
We do have concerns about wholesale grandfathering of all current recipients in the Medicaid program. Under this provision it would significantly reduce the impact of implementing the PDL and any kind of cost-saving opportunities we might have during the interim. We share the concern that we’re spending too much on pharmaceuticals right now and want to achieve those savings without hurting people.
We are proposing two committees. We have one established under federal law called the Drug Utilization Review Board, which establishes prior authorization protocols and does a number of other functions for us. What we are proposing is that the Pharmacy and Therapeutics Committee serve solely as the Committee responsible for evaluating drugs within a therapeutic class to determine efficacy and keep that as their function. In both cases, what we’re suggesting is an independent function and organization with members made up of clinicians to make clinically based and evidence based evaluations of either drugs for the PDL, or drug prior authorization policy. What we have said in our discussions with Ms. Leslie and the pharmaceutical industry is that we believe those policies ought to be established by clinicians. Rather than wholesale blanket people in, that should be left to clinicians who serve on both these committees. That is our basic recommendation, that we give them that authority rather than grandfather everyone in initially.
Chairwoman Koivisto:
I agree with part of that. In the case where someone has already gone through the step therapy starting with the lower drugs and working their way up, and certainly their health care provider is going to be aware of that, in those cases I think they should be authorized to stay on their therapy.
Charles Duarte:
I don’t disagree with that, but I would suggest that rather than put those kinds of specific details into statute, and this is the discussion we had with Ms. Leslie as well as the pharmaceutical manufacturers, that we allow the clinicians on those committees to make decisions as to whether to grandfather in a whole therapeutic class of drugs or diagnoses, for example, schizophrenia, or even prescriptions written by specific specialty groups or medical sub-specialists like psychiatrists or pediatric psychiatrists.
There are nuances here that go well beyond my background and I would certainly prefer leaving those kinds of decisions to an independent clinical body.
Chairwoman Koivisto:
Can we get some input from our professional folks on the Committee?
Assemblyman Mabey:
I would agree with what Mr. Duarte just said.
Assemblyman Hardy:
I would agree with what Dr. Mabey just said.
Assemblywoman Leslie:
We argued about this for about an hour yesterday and I did become persuaded. I think the Department is entering into this in good faith and we’re going to have to trust, to a certain extent, and monitor [the situation]. [We need to] make sure they get the right clinical people on [the committees] and trust those clinical people to do their jobs. I’m willing to give in on this point at this time, especially now that the doctors agree.
Chairwoman Koivisto:
I just want to make sure that somebody who has already started out with aspirin, then gone to ibuprofen, then gone to Vioxx and Celebrex and on up the chain to Bextra, after they’ve tried all these things they’re not going to get told to go back to aspirin.
Charles Duarte:
I’ll go back to what I previously said. In my opinion, those decisions are best left to clinicians and that’s what we propose to do here. We currently have three-step therapy protocols in place and one of them deals with non-steroidal anti-inflammatories, or a class of drugs called COX-2s, for arthritis. It’s clearly not our intent to take those people who have gone through that process, and the physician who’s already received a prior authorization to provide that high level COX-2 antiarthritic drug to a patient, back to step one. I would again recommend that level of detail not be put into the statute but be left to the clinical judgment of the committee.
Chairwoman Koivisto:
You’ve convinced me.
Marla McDade Williams:
For my own clarification, Section 9 of the bill establishes the authorities of the [Pharmacy and Therapeutics] Committee. Do we want to add a new point there that says, “the Committee…,” everything that Mr. Duarte said?
Charles Duarte:
I’ll be happy to help with the language.
Marla McDade Williams:
That’ll be a new authority of the Committee and I’ll work with Mr. Duarte on the language.
The next point would establish minimum standards for prior authorization, if such standards are permissible pursuant to federal law. This is another point Mr. Duarte has offered some clarification on.
Charles Duarte:
It’s the same discussion we just had in terms of what we want to put in statute or leave to the clinical judgment of the members of the Pharmacy and Therapeutics and DUR Committees. In this case, prior authorization policies are established, and will be established, by our DUR Board and we believe we need to leave that to their judgment. They’ve done a very good job to date. We have a number of active members and they’ve worked very closely with the public on developing protocols as well as clinical subspecialties that are involved in establishing what we believe are sound evidence-based clinical programs. I would again propose leaving that to their judgment.
Chairwoman Koivisto:
Give us a little detail on how prior authorizations are done.
Charles Duarte:
The Medicaid program operates under federal rules established in 1991 that require us to offer an open formulary. The only way that we can manage utilization in our program—and this not only applies to pharmaceutical services but to a host of other services—is through prior authorizations, [which] basically establish the medical necessity of a drug or product, and have set standards as to when it’s appropriate to use that [drug or product].
The development of prior authorization policies are the responsibility of our DUR Board. [The Board] works with the public as well as a vendor who supports them and provides them with literature and evidence-based information so that they can look at best practices and make recommendations to the Division as to what they believe is an appropriate policy for prior authorization.
I’ve discussed two examples with some [Committee] members. One is COX-2 drugs and the other is the proton pump inhibiters, or anti-gastric acid drugs. In talking to physicians and members of the pharmaceutical industry, they believe that we have very sound criteria that was established and developed by our DUR. The DUR would be responsible for looking at additional step-therapy protocols or prior authorization programs and making their recommendations to the Division on what’s appropriate clinical policy. We take [their recommendations] to public hearings after that. All we’re suggesting is we leave that authority to the DUR and let them do their job.
Chairwoman Koivisto:
What I’m trying to get at is if someone is given a prescription and it’s not on the PDL and it needs to have prior authorization, you’re computerized. What if this happens on a weekend?
Charles Duarte:
Thank you for the clarification. I understand the concern. This has to do more specifically with a 24-hour turnaround you’re requesting. The 24-hour turnaround on authorizations would require us to have in place 24/7 service through our fiscal agent, which would be costly.
At the federal level instead of having that kind of requirement in place, if the drug requires emergency authorization, what happens is the pharmacy has authority to provide a 72-hour emergency supply of the medication without prior authorization. After that point, a prior authorization can be provided by our fiscal agent and the person can go back and get the extended prescription filled. So there already is provision in federal law and in our existing program to provide that 72-hour emergency prescription.
Marla McDade Williams:
Would we want to specify that the Committee should develop minimum standards for prior authorization or not address it at all in the bill and then it would just automatically fall back on federal law?
Assemblywoman McClain:
It also has a provision to require the yearly evaluation, too.
Marla McDade Williams:
Point three says that the standards would require the Department to develop a process for responding within 24 hours to physician authorization requests and to provide a 72-hour emergency supply of any drug on the prior authorization list when such situations warrant emergency approval; and would require the Department to conduct yearly evaluations concerning the efficacy and efficiency of the prior authorization process.
Charles Duarte:
The DUR does this already but we wouldn’t oppose retaining that provision if that’s the intent of the Committee.
Marla McDade Williams:
The yearly review?
Charles Duarte:
The yearly review, yes.
Marla McDade Williams:
The next point [is number] four: Require the Department to submit a Medicaid State Plan amendment seeking approval of the preferred drug list and the prior authorization requirements by July 1, 2004. Further, the Department is required to make regular reports to the Legislative Committee on Health Care and, I believe, to the Interim Finance Committee—we would add that, concerning its progress with developing the State Plan amendment. I don’t think the Division had a position on that in its response.
Charles Duarte:
In terms of the effective date, because we’re going to take our time and be prudent about implementation and we’re going through a procurement process, as we’ve testified before, the start date would probably be around January 2004. To establish a start date in July would be a challenge. We could submit a State Plan but we couldn’t implement [it].
Marla McDade Williams:
Ours is July 1, 2004, not July 1, 2003. [Mr. Duarte agreed it could be done.]
The final point is to require the Department of Administration to conduct a study to determine the feasibility of using the preferred drug list and prior authorization requirements for all state programs that provide prescription drug benefits. The study should consider prescription drug purchases for Nevada’s Department of Corrections for inmates, the prescription drug benefits of the Public Employees Benefits Plan, and any other state programs that provide for prescription drugs. I believe we wanted to make specific reference in [the bill] to the Purchasing Division, which is under the Department of Administration, I believe. The study should be completed by June 1, 2004, the results of which would be reported to the Legislative Committee on Health Care, the Legislative Commission and the Interim Finance Committee.
Charles Duarte:
I don’t want to speak for the Department of Administration, but I think they probably should be contacted and I apologize that they’re not here. I’m not sure if there would be an expense to that and I would hate for that issue to cloud this bill.
Marla McDade Williams:
We could also just request a separate resolution asking for the study and leave it out of the bill.
Assemblywoman Leslie:
I’d take it out of the bill, plus I have that Silver State Prescription Drug Commission bill that was heard in Elections, Procedures, and Ethics to study purchasing that [would] cover this. What they’re going to do is take that issue and put it in one of the interim studies because there are going to be several [studies] on health issues. Another alternative would be to get this language to the chairman of that committee and ask that they make sure this [language] gets included.
Marla McDade Williams:
That concludes all the amendments on A.B. 384.
Chairwoman Koivisto:
Any discussion from the Committee? [There was no response.]
ASSEMBLYMAN HARDY MOVED TO AMEND AND DO PASS A.B. 384.
ASSEMBLYWOMAN McCLAIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
Assembly Bill 430: Prohibits Department of Human Resources from taking certain actions to restrict access to prescription drugs for mental illness provided pursuant to Medicaid. (BDR 38-984)
Marla McDade Williams:
We’ve already had some basic discussions about A.B. 430. At tab E is the amendment proposed when we heard the bill back on March 31 (Exhibit K). The amendment would [exempt from the PDL] anti-retroviral prescription drugs that are prescribed for a person infected with the Human Immunodeficiency Virus.
Assemblywoman McClain:
We put this language in the other [bill], right?
Assemblywoman Leslie:
My suggestion would be to take the language that we worked out in the previous bill and use that, which is basically to drop the antidepressants and antianxiety medication and let this bill go forward just so we have both alive, and add the HIV [drugs].
Chairwoman Koivisto:
Discussion?
Assemblywoman Weber:
We’re keeping HIV in, is that correct?
Assemblywoman Leslie:
Yes, I want to use the same language that we agreed on in the previous bill which did include the HIV language.
ASSEMBLYMAN HARDY MOVED TO AMEND AND DO PASS A.B. 430.
ASSEMBLYWOMAN McCLAIN SECONDED THE MOTION.
THE MOTION CARRIED. (ASSEMBLYWOMAN WEBER VOTED NO.)
Chairwoman Koivisto:
Ladies and Gentlemen, we are through with our work and we don’t have to come back tonight. We may have to [take action] behind the Bar, and if that happens we’ll let you know. Anything else to come before the Committee? [There was no response.] We’re adjourned [at 3:42 p.m.].
Terry Horgan
Committee Secretary
APPROVED BY:
Assemblywoman Ellen Koivisto, Chairwoman
DATE: