MINUTES OF THE
SENATE Committee on Commerce and Labor
Seventy-second Session
April 16, 2003
The Senate Committee on Commerce and Labor was called to order by Chairman Randolph J. Townsend, at 7:07 a.m., on Wednesday, April 16, 2003, in Room 2135 of the Legislative Building, Carson City, Nevada. The meeting was videoconferenced to the Grant Sawyer State Office Building, Room 4401, 555 East Washington Avenue, Las Vegas, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Senator Randolph J. Townsend, Chairman
Senator Warren B. Hardy II, Vice Chairman
Senator Ann O'Connell
Senator Raymond C. Shaffer
Senator Joseph Neal
Senator Michael Schneider
Senator Maggie Carlton
STAFF MEMBERS PRESENT:
Scott Young, Committee Policy Analyst
Courtney Wise, Committee Policy Analyst
Kevin Powers, Committee Counsel
Maryann Elorreaga, Committee Secretary
Makita Schichtel, Committee Secretary
OTHERS PRESENT:
Fred L. Hillerby, Lobbyist, Nevada State Board of Dental Examiners, Nevada State Board of Nursing, and Nevada State Board of Pharmacy
Keith L. Lee, Lobbyist, State Board of Medical Examiners
Cheryl A. Hug-English, M.D., President, Board of Medical Examiners
Matthew L. Sharp, Lobbyist, Nevada Trial Lawyers Association
Lawrence P. Matheis, Lobbyist, Nevada State Medical Association
Scott M. Craigie, Lobbyist, Nevada State Medical Association
Chairman Townsend:
Today we will readdress the issues of medical malpractice, insurance reform, and boards. We will open the hearing on Senate Bill (S.B.) 364. In the staff‑prepared workbook titled “Discussion Information, Senate Committee on Commerce and Labor, Wednesday, April 16, 2003” (Exhibit C. Original is on file in the Research Library.) under tab A, there is a proposed amendment to S.B. 250 from the board of chiropractors. It is not the purpose of S.B. 364 to clean up the practices of every board. We are here to address technical changes only.
SENATE BILL 364: Makes various changes to provisions relating to investigations and proceedings for disciplinary action by regulatory bodies which regulate certain professions, occupations and businesses. (BDR 54‑707)
SENATE BILL 250: Revises various provisions relating to regulated businesses
and professions. (BDR 57-835)
Fred L. Hillerby, Lobbyist, Nevada State Board of Dental Examiners, Nevada State Board of Nursing, and Nevada State Board of Pharmacy:
We have two recommendations. Section 25 of S.B. 364 shows a deletion of language on lines 10 to 17. That deletion would allow frivolous cases to be made public. The new language on lines 18 to 21 states any complaint will be made public. We would like to add to lines 18 to 21, “if discipline is imposed,” so billing errors and other minor infractions would not become public record.
Chairman Townsend:
If a complaint is filed and the board takes any action, whether a reprimand, negotiated settlement, suspension, revocation, or fine; the information becomes public. If no action is taken, there is no public record.
What is protected under attorney-client privileges? Attorney-client privilege involves several parties, including the licensee’s attorney, the complainant’s attorney, and the board’s attorney.
Mr. Hillerby:
I believe various boards investigate in different manners. The dental board assigns one dentist to gather information on a complaint, who then gives those findings to an attorney. The attorney finds pertinent information from those findings to determine a case. The paperwork involved in this process should be protected under the attorney-client privilege. Any information the attorney found not to be pertinent to the case would be protected; the pertinent information involved in a future case would be public.
Kevin Powers, Committee Counsel:
Criminal defendants have a constitutional right to an attorney‑client privilege. An occupational licensing board, because it is a creature of statute and its powers and duties are prescribed by the Legislature, only has the right to an attorney‑client privilege to the extent the Legislature provides that right. How the legislation frames the language determines the extent of the attorney-client privilege. There are no legislative limitations dealing with an occupational licensing board, because there is no constitutional basis for the privilege. Under current statutes, there is no limitation on an occupational licensing board protecting its information through the attorney‑client privilege. Therefore, the standard rules of attorney-client privilege are currently applied to the occupational licensing board. Generally, communications between members of the occupational licensing board and their attorney are kept confidential between those parties. They do not have to be disclosed on public record. Only communication heard at a public meeting must be disclosed. Any information that is not communicated in the public meeting and is not otherwise required to be disclosed by statute can be kept confidential under the attorney-client privilege, unless or until the Legislature decides to change the process.
Senator O’Connell:
I think after the board has determined the complaint, it should be made public. I think it is important the public is made aware of complaints through the board agenda postings of scheduled disciplinary hearings. A non-substantial complaint should be identified as such on the agenda, so people are not alarmed. If the complaint has substance, it should be identified as a disciplinary hearing.
Mr. Hillerby:
If the complaint were a coding or billing issue, it would not result in a disciplinary hearing unless it was an extreme case of fraud. A patient’s complaint that he has been overcharged for a procedure is a minor one. Only complaints resulting in disciplinary action become public. We want to make sure that a complaint alone does not become public record.
Chairman Townsend:
All documents considered by the board in an investigation will become public if disciplinary action is taken.
Mr. Hillerby:
Mr. Hunt, a dental board attorney, is concerned that information would not be kept confidential until the investigation is complete.
Keith L. Lee, Lobbyist, State Board of Medical Examiners:
Often, in a disciplinary hearing over malpractice, patient records are part of the evidentiary record put before the board. There are federal privacy restrictions with respect to medical records. Because of the nature of the hearing, the records may be seen by the disciplinary board, but not by the public. A patient can waive confidentiality rights for a specific proceeding, but cannot agree to the entire records being made public.
Chairman Townsend:
Mr. Powers, can we be more specific in the language in section 25, subsection 2, which is also used throughout the bill? Does the federal medical privacy act supercede our language?
Mr. Powers:
Whether or not it is specified in State law if federal law controls, federal law still controls. Any State administrative body must comply with federal and State law. It makes the job of the administrative body easier if the language is clear in the statute that they must comply with federal law.
Mr. Lee:
I agree, if no other limiting language is placed in the statute. We would need to insert the fact that medical records are confidential to the general public.
Senator Neal:
What confidential records, if made public, would be harmful to the medical profession?
Mr. Lee:
We do not wish to keep information from the public, but the patient record, under federal law, belongs to the patient. We are not protecting the physician, but the patient and the patient’s rights.
Senator Neal:
If a doctor receives a complaint, the public should know.
Mr. Lee:
Yes. Once a complaint is filed and brought before the board, it becomes public record. We do not dispute this issue. We only wish to a protect patient’s records.
Senator Carlton:
I understand how the findings of fact would become public record. Are the disciplinary hearings done in executive session, or are they on the agenda for the public? I hope the board would keep the name of the complainant confidential.
Cheryl A. Hug-English, M.D., President, Board of Medical Examiners:
The issue of patient confidentiality is a complex issue, made more confusing by the Health Insurance Portability and Accountability Act of 1996 (HIPAA) law, which went into effect April 14, 2003. The HIPAA was designed to protect patients who own their medical records. It is even difficult for a physician to get medical records from the emergency room or another physician’s office. A medical record release would only apply to a specific entity and purpose. There is no blanket release to make these public.
To address Senator Carlton’s question about complaints being heard behind closed doors or in public, allow me to spell out the process. Once our investigative committee files a complaint, the board, in an open forum, adjudicates it. This adjudication is always done in open session. Deliberation about sanctions may be held in private. Any evidentiary questions or clarification for the board can be discussed in private.
Senator Townsend:
If the complaint is proved to lack merit, is the finding taken to the board, or does the investigative committee close the complaint?
Dr. Hug-English:
Once the investigative committee has met, they pass their recommendations, either “case closed” or “complaint filed,” to the board. If filed, it moves forward. Every case is seen by the board, even closed cases.
Chairman Townsend:
Are settlement conferences made public?
Dr. Hug-English:
Yes. If a physician agrees to surrender a license or agrees to a revocation, rather than go through an official hearing, the settlement would be made public.
Chairman Townsend:
Is this the same process your board goes through, Mr. Hillerby?
Mr. Hillerby:
I believe so. I believe any complaint, even if found to be without merit, is reported to the board.
Chairman Townsend:
The Governor appoints the licensing body. Every licensing body should mandate that all investigations be reported back to the board. The board should make the decision to dismiss a case without merit, not the investigative committee.
Although we do not want to spotlight frivolous complaints, there is a point where several small complaints become a bigger problem.
Dr. Hug-English:
I concur. We keep a record of every complaint filed. If a physician shows up more than once on the list for frivolous causes, we see a red flag. The investigative committee might then investigate.
Senator O’Connell:
We want to ensure the boards have the tools to identify problem behavior before an individual becomes a repeat offender. Do you feel you have the authority granted you from A.B. No. 1 of the 18th Special Session to be proactive in this area?
Dr. Hug-English:
Yes, we now feel we have the tools to deal with situations in a more timely manner. There are still some glitches once a case gets to the court level. Cases are not listed by categories, such as malpractice, so it is time consuming to identify these cases. Overall, we have what we need to move forward.
Mr. Hillerby:
We have not identified any barriers in the statute to keep us from assigning disciplinary actions.
Senator Neal:
When you receive a complaint, what happens next?
Dr. Hug-English:
Any complaint, whether from a patient, hospital, nurse, or another physician, comes to the board. Our investigative committee investigates every complaint.
Senator Neal:
Is it possible the investigative committee might extract some part of their finding from a medical record?
Dr. Hug-English:
The committee has all records deemed necessary to investigate, including medical records. If they determine a complaint should be filed, those records would go to the board.
Senator Neal:
What is the process followed by an investigative committee? If I filed a complaint against a doctor, would the committee then interview the doctor and write a report?
Dr. Hug-English:
It depends on the nature of the complaint. The committee may call the physician, obtain patient records, or call in a peer review. If a complaint is filed, a written report goes to the board.
Senator Neal:
I am confused between the complaint process and the investigative process.
Dr. Hug-English:
They are the same process. The complaint goes to the investigative committee, and then, if merited, the complaint goes to the board. At that point, the board will review all records.
Senator Neal:
Does the board make the actual finding?
Dr. Hug-English:
Correct. Once the board files a complaint, it goes to a hearing. The physician and attorney, along with the board and their attorney, normally attend. All evidence produced during the hearing goes to the adjudicating board. They read the evidence before deciding on the case.
Senator Neal:
If the board receives a complaint from the investigative committee, is that board meeting closed?
Dr. Hug-English:
No.
Senator Carlton:
Because those disciplinary meetings are public, are they on the agenda along with the physician’s name?
Dr. Hug-English:
Yes. If there is to be a hearing, it is posted on the agenda with the physician’s name.
Chairman Townsend:
The complaint process is a two-part process. The public files a complaint, and then the investigative committee files a complaint with merit. There are two separate complaints, the patient’s complaint, and the investigative committee’s complaint.
Mr. Hillerby:
I have another concern about confidentiality. The patient’s complaint is a personal one. The committee’s complaint is a formal one stating which part of the law is broken, and what disciplinary action is recommended.
A nurse can admit to a substance abuse problem, at which time that person can sign a contract agreeing to enter a program for help. In Nevada Revised Statutes (NRS) 632.307, this process is defined. There are 25,000 licensees, which are too many to provide with drug testing. We want our nurses to be able to voluntarily come forward and get help as needed.
My concern is the wording on page 18, lines 12 and 13, of the bill. It imposes discipline and orders any findings to become public. If a nurse volunteers for drug counseling, should this become a disciplinary act? If we do not encourage those with substance abuse problems to come forward, the addiction will make itself evident at some point, whether in the hospital, clinic, or doctor’s office. When this happens and a report is filed against a licensee, it then becomes a public process. I submit the volunteer should be protected from the public process.
Chairman Townsend:
What percentage of the 25,000 licensees have volunteered for this program?
Mr. Hillerby:
I will find the number. It is a small number, but it has been a successful program for those who participate.
Chairman Townsend:
The committee received a letter written by Debra Scott titled, “Testimony by Debra Scott, MS, RN, Executive Director, Nevada State Board of Nursing” (Exhibit D). I will read from her letter. “The agreements are listed on our board agenda and are formally accepted by the board, but are not reported with our disciplinary actions. The agreements are not necessarily confidential, but are ‘non-public’.” This does not make sense. Actions are either public or confidential. Mr. Hillerby, we would like clarification on her statement.
To the issue of whether the voluntary program should be public if the program is determined by law to be made public as a disciplinary action, it should. However, if the committee decides a voluntary action should be deemed nonpublic, we might consider making the first action private. Any additional transgressions will be made public.
Drug addiction is a serious issue. If a nurse has spent the time and money and commitment to complete schooling to practice medicine, and has devoted a passion and a commitment to the medical field, that person has also agreed to some restrictions in their lives.
Mr. Hillerby:
I will get an answer for you. The voluntary program is a one-shot program. If the problem reoccurs, a formal disciplinary action is inevitable.
Chairman Townsend:
You are describing the way your board operates. This committee deals with many boards. We want boards to be consistent. We feel consistent boards will help the patients.
I want to explore boards as they deal with disciplinary actions and fees. If a disciplinary meeting incurs costs, and fees are assessed to the person, those need to be actual costs. If a board is meeting anyway, they do not need to fine hotel bills, food, and other expenses to the complainant. Actual costs would include filing of documents, hours spent in preparation, and administrative costs.
Dr. Hug-English:
Our board fines the actual costs of the hearing.
Chairman Townsend:
I will recess the meeting at 8:13 a.m. I reconvene the meeting at 8:29 a.m.
Chairman Townsend:
We will open the hearing on S.B. 250.
Senator O’Connell:
I would like to look at section 28 of the bill.
Chairman Townsend:
In our work document (Exhibit C), there is a page of recommended revisions, one of which discuses one or more forms of discipline by the Medical Board if a physician is found to have committed malpractice rather than imposing the entire list of penalties.” Currently the bill states, “the Board shall by order” after which it lists six requirements. The amendment adds the words “one or more of the following actions as it deems appropriate.” This would give the board an option as to which sanctions to impose.
Another important change is in section 27. It changes the word “filed” to “served,” so a physician would have to be served a complaint, therefore would know a complaint had been filed against that person. The physician would then be able to report the complaint to the board.
Scott Young, Committee Policy Analyst:
The new section of the bill, outlined in the work session document, calls for an audit. This is imported from S.B. 389.
Back to section 28, there is a similar provision in section 40, which relates to osteopaths. The osteopathic board recommended we change language in section 40 to refer to a settlement, as well as a judgment. They do not wish to bring undue pressure on a physician to settle a case to avoid going through the procedure set out in section 40. They also recommended the board investigate rather than hear a formal hearing. If a physician had a settlement or judgment for malpractice, the board would be required to investigate and then choose the appropriate sanction. In addition, the board asked to strike the language “or negligence” and leave in the word “malpractice” instead.
Chairman Townsend:
Since the boards deal with both categories of physicians, they need to be consistent. What is the status of redefining the word “malpractice,” Mr. Powers?
Mr. Powers:
“We were going to remove from S.B. 250 those provisions that were already included or dealt with in S.B. 97, that went through the judiciary committee and involved the definition of malpractice and professional negligence. “
SENATE BILL 97: Makes various changes relating to certain actions against providers of health care. (BDR 1-248)
Senator O’Connell:
Is that provision in the original or amended S.B. 97?
Mr. Powers:
“The definitions for professional negligence and medical malpractice that are presently in S.B. 250 were in S.B. 97 as introduced. I am unaware of the contents of the amendment to S.B. 97.”
Senator Carlton:
Are those definitions the ones from the past 50 years, or are we creating new definitions in S.B. 97?
Mr. Powers:
“My recommendation to the committee would be, in S.B. 250; we develop our own definitions that are appropriate to the insurance context, that are not tied necessarily to tort law …. Senate Bill 97 could treat those tort law issues … .”
Senator Carlton:
Do the definitions in S.B. 97 still exist?
Matthew L. Sharp, Lobbyist, Nevada Trial Lawyers Association:
In A.B. No. 1 of the 18th Special Session, there is a definition of professional negligence and malpractice, which was based on years of common law. Senate Bill 97, patterned from California law, has different definitions than the existing law. Our previous proposal was to keep this bill consistent with existing law, as opposed to S.B. 97. The amendments passed last week by the Senate Committee on Judiciary to S.B. 250 would not change the definition of malpractice.
Chairman Townsend:
We need to keep sections 28 and 40 of the bill consistent regarding the process of the boards. The real issue in the board of osteopathic medicine’s amendment is opening an investigation versus a hearing. This is a policy issue. Currently in S.B. 250, a hearing is required. Mr. Lee, would your investigative board include the entire board, or just the disciplinary committee?
Mr. Lee:
It would include the entire board. I suggest we do not change the process. Even if you mandate we shall conduct a hearing upon a settlement or malpractice judgment, we must still develop our own investigative trial. Our staff must build a case against the physician. We cannot rely on the fact there is a judgment or settlement on the physician. As we need to do the initial investigation to get the matter ready for a hearing, we ask that you not change this process.
Senator O’Connell:
Does the osteopathic board’s process differ from the medical board?
Lawrence P. Matheis, Lobbyist, Nevada State Medical Association:
I believe the process is similar, except they assign one investigator rather than the three used by the medical board.
Chairman Townsend:
It is not our wish to interfere with the process. We want you to conduct hearings on valid complaints, then to continue the discipline process with the list of options written in the bill.
I believe we have addressed all proposed changes to S.B. 250 listed on page 2 of the work document, except for the last one dealing with reports being made public.
Scott M. Craigie, Lobbyist, Nevada State Medical Association:
I have a handout regarding that issue (Exhibit E). The last discussion item mentioned on page 2 of the work session document reads, “Amendment to require all reports of the Board investigations after a judgment or settlement of a malpractice claim, and peer review actions in hospital settings, to be public.” We suggest taking out the words “and peer review actions in hospital settings,” and replacing them with “sanctions reportable to the National Practitioner Data Bank.” Dr. Havins and Mr. Matheis agree with this preferred language.
Senator Carlton:
If we have gone through the investigative process, passed the findings to the board, noticed the disciplinary meeting on the board agenda, and reported the results to the National Practitioner Data Bank, it is already made public. How does your suggestion change anything?
Mr. Craigie:
We can take out the language, but I also want to remove the language about peer-review actions.
Mr. Powers:
Senator Carlton, I may be able to help clarify. We have moved into a different context. This is no longer items that have to be made public or that involve disciplinary action. This is a duty of the physician to report certain things to the board, and then the board has to respond to those reports with an investigation ... S.B. 250 says the physician has to report a judgment of malpractice to the board. The prior amendment was to include judgment or settlement of malpractice … Mr. Craigie’s [suggestion] is judgment or settlement of malpractice or sanctions that are reportable to the National Practitioner Data Bank. So, if the practitioner was sanctioned by a hospital internally through his own peer-review process, and that was reportable to the National Practitioner Data Bank, the physician would then have a duty to report that to the Board of Medical Examiners and the osteopathic board.
Chairman Townsend:
Let us turn to the next page of the work session document, regarding collection and trending of underpricing information and reporting to the Legislature, also found under tab B.
Mr. Powers:
“That is correct, it is under tab B. This proposed amendment was also included in S.B. 122, which was a part of the amendment.”
SENATE BILL 122: Makes various changes regarding malpractice insurance and actions. (BDR 57-265)
Chairman Townsend:
That has already been addressed. We have talked about including provisions from S.B. 364. We will open the hearing on S.B. 389. Committee, we will combine these bills into one working document.
SENATE BILL 389: Makes various changes regarding certain physicians and other regulated professions. (BDR 54-709)
Mr. Powers:
What this [bill] will be, Mr. Chairman, is a gut and replace, because we will be fusing together so many different bills. Again, it will be on 8½” by 11” paper. It will be the entire document, roughly 130 pages or so, and this committee will have an opportunity to see that, I hope not later than Monday … It will be an entire bill; it will be every provision in the bill …
Chairman Townsend:
What suggestions does the committee have on S.B. 389?
Senator O’Connell:
I would think the most important issue is the amount of money to subsidize doctors to keep them in the State.
Chairman Townsend:
This concept has been in progress for over a year to help specialty doctors with clean records and skyrocketing insurance. We want a short-term, 1- or 2-year resolution. Mr. Lee, at the end of the fiscal year, how much money will the Board of Medical Examiners have? What are your projected costs, and how much will be in your reserve account? Also, please explain the reduction in fees.
Mr. Lee:
At the end of June 2003, we will have approximately $3.3 million in the reserve fund. I have a budget handout for your committee titled, “Nevada State Board of Medical Examiners Profit & Loss Budget vs. Actual” (Exhibit F). On page 1, the left corner shows the date 4/10/03. The first column of numbers shows where we were versus budget on 4/10/03. We project we will come close to the figures in the second column, leaving us with about the same amount of reserve as we ended with last year, according to the audited financial statement, of $3.3 million.
Chairman Townsend:
Without referencing the handout, about how much a year does it cost you to operate in hard costs, not including reserves or contingent liability?
Mr. Lee:
It costs us about $2 million a year to operate. We project next year’s budget to be around $2.8 million, which will include additional staff. We will have approximately a $400,000 to $500,000 reduction in revenue based on a reduction in fees each year, resulting in close to $1,000,000 less in fees over the biennium.
We project that our current $3.3 million budget for next year will be reduced by $1.3 for a total of $2 million.
By June 2005, we should have about $780,000 in the reserve fund, not including any money taken out for a subsidy fund. I misstated this number in my testimony last week.
Senator O’Connell:
I believe the national recommendation is that a board should operate on $1 million. Why do you require $2 million?
Dr. Hug-English:
We received a letter stating we should have at least $1 million in reserve, which is a bit less than a year’s operating expense for the board. You may be referring to the federation, which says we should have a substantial amount in reserve. Our reserves have been depleted by previous lengthy litigation, which occurred before I was associated with the board.
We reached our goal for the reserve, and now want to decrease fees to our physicians. Our goal is to no longer have large amounts of reserve. As we decrease in fee structure, this becomes possible. If we take money from our subsidy, we will not have enough to operate in the next couple of years.
Senator O’Connell:
Are you saying you need the $2 million in reserve for these pending lawsuits?
Dr. Hug-English:
No. I am saying the reserve will be decreased over the next biennium. The fund, which will be reduced to about $700,000, would not exist if we take money from it now for the subsidy.
Senator O’Connell:
Is the reason for the reduction additional costs to hire new people?
Mr. Lee:
There are two factors involved. First, there is a cost of between $800,000 and $1,000,000 in relicensing fees. Also, we have an increase in our operational budget for adding staff, opening our Las Vegas office, and for other projects. We see our expenses increasing while our revenues are reduced by a significant amount from the lowering of licensing fees.
Senator O’Connell:
Is it only the costs of the audit, adding staff, and opening the Las Vegas office that are impacting your reserves?
Mr. Lee:
We are considering regulations, which would impose post-licensure competency testing. We have budgeted $100,000 for this program if it is passed. We have increased the drug and alcohol diversion program by $60,000, and increased our advertising and public relations costs by $40,000. These are increases we feel are necessary.
Senator O’Connell:
Your advertising budget is $260,660?
Mr. Lee:
We are budgeting $100,000 in each year of the coming biennium, for a total of $200,000.
Chairman Townsend:
Is your advertising strategy the same as it has been?
Mr. Lee:
Yes, we do public service announcements (PSAs).
Senator O’Connell:
Can you not get free public service announcements?
Mr. Lee:
My experience is PSAs normally run between 1 a.m. and 3 a.m. to satisfy the Federal Communications Commission requirements. Even if the airtime is free, the production costs are not. If we want to get appropriate coverage to the general public, we cannot rely on PSAs.
Senator Carlton:
I have looked into PSAs. The dollars spent on these can sometimes obtain tripled benefits. Prime-time exposure costs more, but PSAs can offer more value for the money.
Chairman Townsend:
Did you say you wish to increase your advertising budget by 40 percent?
Mr. Lee:
Correct, for each year of the biennium.
Chairman Townsend:
I have heard the radio ads, but have never seen the television ads. Is it the same message, that you can call the board to find the qualifications of a doctor?
Dr. Hug-English:
Yes, but in a different format. We increased the budget based on feedback that we should offer the public more information on how we operate and how the public can notify us. We have gotten a significant amount of positive feedback from callers. We wish to serve the public. This ad has been running for 2 years. At some point we need to update our ad, which will be an additional cost.
Chairman Townsend:
We would like a copy of the television spot. Rent is listed at almost $55,000 a year. When does the Reno facility lease expire, and from whom do you lease?
Dr. Hug-English:
It expires in 2006. I do not know our lessor. I do not believe it is a government agency.
Chairman Townsend:
Have you talked to your lessor about abandoning the facility?
Mr. Lee:
I believe there are 4 years remaining on the lease. It is a commercial building on Terminal Way, and I do not believe we rent from a governmental agency.
Chairman Townsend:
I was under the impression the government either owned or subleased the building.
Dr. Hug-English:
I do not believe that is the case. And I was wrong; we do have 4 years remaining on the lease.
Chairman Townsend:
If you add a facility in Las Vegas, you will have to double your rent. Our goal is for you to close the Reno facility, to keep that from happening.
Dr. Hug-English:
I have concerns about closing the Reno office. We have significant staff, investigators, and computer systems in our Reno office. The costs to move these would be extensive.
Chairman Townsend:
Let me be very clear on this. You had an office in Las Vegas. You closed it and located it in the north, which may have been ill-advised. Dr. Hug-English, you may not have been a part of that decision. About 70 percent of the population, as well as your licensees, are in the Las Vegas area. That is where the office needs to be, to serve that public. Your licensees should not be paying the costs of two offices. You need a plan to transition to that area. Do you agree?
Dr. Hug-English:
I understand the point you are making. I do think that this office has functioned extremely well. I think we have managed for both parts of the State. If we are talking about a transition, I would suggest that … I think our rent in the lease is almost $100,000 a year, so if we are looking at another 4 years of that with our contract, that is quite high to close this office, continue to pay that lease and open another one. I think if we are talking about having a satellite office, which we have done in the past, then that might be a good transition step for the next several years, or at least something to look at.
Chairman Townsend:
I must be confused. In reading from category 538 for rent on the first page of your handout, it states your rent to be $54,900. Are you paying $100,000 a year, or $55,000 a year?
Mr. Lee:
You are looking at the budget for 2002 to 2003. If you look on page 3, the budget for 2003 to 2004, our rent is stated at $95,000, escalating to $100,000 for the next year.
Chairman Townsend:
You are proposing to double your rent?
Mr. Lee:
No. The actual rent for this year ending June 2003 was $75,000. It increases to $95,000 next year. I am relying on the budget for these numbers. I have never seen the lease agreement.
Chairman Townsend:
I am reading off of your handout, which states July 2002 to June 2003, rent is $54,900. Is that what you paid?
Mr. Lee:
Yes.
Chairman Townsend:
Yet you have budgeted $75,000 for the year.
Mr. Lee:
Correct.
Chairman Townsend:
For the next year, you have budgeted $95,000. Is the reason for the increase in rent adding a satellite office?
Dr. Hug-English:
I think part of the increase is more office space for additional investigators.
Chairman Townsend:
Fine. I see on your 2002 to 2003 budget, you budgeted $95,500 for legal. What does this include? Would this pay for outside legal counsel?
Dr. Hug-English:
I believe it relates to outside legal counsel, including the attorney general who sits on the board. The board has its own attorney, in addition to the deputy attorney general who attends the meetings.
Chairman Townsend:
Does the $95,500 go to outside legal counsel, or to the deputy attorney general?
Dr. Hug-English:
I think that would encompass both.
Chairman Townsend:
For this year, you have personnel costs at $1,263,000. Is there any legal staff included in personnel?
Dr. Hug-English:
I believe it includes the salary for the deputy attorney general and outside counsel, as well as our own legal counsel. I believe that category of legal expense is related to the attorney general’s office and other legal expenses for hearings.
Chairman Townsend:
What is the current salary for the executive director?
Dr. Hug-English:
I am not sure.
Chairman Townsend:
Is it over $100,000? Is it over $150,000? Is it over $200,000?
Dr. Hug-English:
I think it is over $100,000 and under $200,000, but I will have to check.
Chairman Townsend:
I want that salary figure, along with job benefits, contract expiration date, and a copy of the contract.
Can you tell me why we have a deputy attorney general and an independent legal counsel? Why do we need two? Is the workload this big?
Mr. Lee:
As I have said, the only role the deputy attorney general plays is to advise the board at their meetings, mostly on open meeting law situations. The deputy attorney general is not involved in any other function of the board, I do not believe.
Chairman Townsend:
Do you have your own in-house counsel who is not a deputy attorney general? And do you have outside counsel in addition?
Mr. Lee:
No.
Chairman Townsend:
Do you only pay for inside counsel?
Dr. Hug-English:
Correct.
Chairman Townsend:
I would like you to break down all the legal costs for us.
Senator O’Connell:
In your break out of costs, please include a breakdown of the staff and retirement categories. As I look at the budget, I think of the bigger problem of how to retain our doctors. The priorities shown in the budget, in view of our crises, seem insignificant. Are these budget items truly necessary? Instead, should you not be trying to get the message to our doctors that we will do everything within our power to help them remain in this State?
Dr. Hug-English:
I agree there is a crisis. We want to keep our doctors in Nevada. The medical board exists to license and discipline physicians. It is not appropriate to think our role should include work to keep our doctors here. I am a physician, and have strong concerns about keeping doctors here. However, it is not the proper use of this State board’s money to give towards that purpose. I think it creates a possible conflict between physicians by getting involved. I have heard physicians say, “Why should I, as a family practitioner, help subsidize obstetric doctors who make three times the salary I do?” I believe there is a potential for skewing north/south issues and creating controversy between the areas. Physicians in the north, who have contributed money for licensing fees, feel it is not appropriate to use those funds for specific subgroups of physicians in the south. These are tough issues. Using this board’s money for retention creates conflict.
Senator O’Connell:
It is like a form of insurance. Some say, “Why do I have to pay mandated insurance to cover someone who is unemployed?” The real issue is, how do we care for our residents? The solutions we are contemplating are found in other states. These are not new solutions.
I realize what you consider to be the functions of the board. I would like to hear your solution to the problem. You are the board that regulates and oversees the doctors. You do not seem to be a part of the solution, and this concerns me.
We are dealing with life and death problems in southern Nevada. Anything you can do to become part of the solution would be welcomed.
Chairman Townsend:
Returning to the budget, why do you have $30,000 budgeted for in-State travel? How many airline tickets between Las Vegas and Reno are you using?
Dr. Hug-English:
I believe that includes board members traveling to Las Vegas and investigators traveling throughout the State for investigations.
Chairman Townsend:
You have budgeted $75,000 for diversion. What is the purpose of this?
Dr. Hug-English:
The board contributes funds to the diversion program to run the program, monitor the physicians, and educate the hospitals and clinics throughout the State. The board feels this is a valuable program.
Chairman Townsend:
It seems you would pool the licensee’s money to promote the activity. Are you actually paying for the program? What about the person participating in the program?
Dr. Hug-English:
The person in the program contributes for meeting and drug-screen testing costs.
Chairman Townsend:
They contribute? The diversion program should be operating at a zero cost because the participants should be paying for it, as well as for the promotion of the program.
Dr. Hug-English:
Sometimes these people are without resources. They are jobless. We try to set up payment plans. We do expect them to contribute, but we are flexible.
Chairman Townsend:
If you disagree with the concept of using the board’s money to deal with insurance problems facing some of our physicians in need of help, I can respect that opinion.
How much money will you have next year? According to your proposed budget for 2003 to 2004, you will be left with $1.3 million. For 2004 to 2005, you will be left with $1.2 million. Your current reserve is $3.3 million. It leaves you with reserves of $786,000. What about revenue?
Mr. Lee:
That number includes revenues. If you look at category 401 for registration fees for medical doctors, you will see we drop $400,000 from year ending June 2003 to year ending June 2004, and another drop of $400,000 for the next year. This puts us at $800,000 less in revenue.
Chairman Townsend:
It is not adding up. You itemize expenses and reserves, but not revenues.
Mr. Lee:
We have revenue other than registration of physicians.
Chairman Townsend:
We do not seem to be on the same page. It looks to me like you would be about $3.9 million over budget, minus any reserves you may need. You say your current reserve is $3.3 million minus $1.3 million for the year 2003 to 2004, minus $1.2 million for 2004 to 2005. These are your figures, which leave a reserve of $786,000. Yet you have no income reported.
Mr. Lee:
We do show income of $1,528,100 for 2003 to 2004. We show personnel expenses of $1,675,000. We show other operating expenses of $1,009,000, for a total expense of $2,850,000. If you take the $1,500,000 in revenue from this figure, it leaves a deficit of $1,326,000.
Chairman Townsend:
Your budget, then, is not $1.5 million a year. Your budget is $2.8 million a year.
Mr. Lee:
Correct.
Chairman Townsend:
That is not what you said. Earlier, I asked you for the budget. You answered $1.5 million.
Mr. Lee:
I believe I said it was $2 million this year, and $2.8 million next year.
Chairman Townsend:
Under tab A of the handout, Mr. Craigie asks the Board of Medical Examiners to open their meeting to members of the general public who wish to watch, listen, and/or participate from locations around the State. The Internet is available from this building. Other buildings are available for teleconferencing, but not for Internet access. If we want the public to have teleconferencing access, there are a few options of locations.
Dr. Hug-English:
Correct. Our issue is the addition of the Internet. Teleconferencing is not a problem. We have the capability to do this from a number of locations.
Chairman Townsend:
I understand your licensees are not always able to go to the Grant Sawyer State Office Building in Las Vegas to watch these meetings. They wish to watch the meetings from their office or clinic via Internet.
Mr. Lee:
I doubt most physicians can take time away from patients to watch a meeting over the Internet. We have some Saturday meetings to accommodate their busy schedules, as well as the schedules of board members.
This building is the only one available for Internet access. We have teleconferencing access available for a reasonable fee.
Chairman Townsend:
Is cost the issue?
Dr. Hug-English:
The issue is the mechanics of setting up the meetings for public access. If this committee requires us to hold meetings in this building with Internet access, we will do so. Our concern is the limit of where we could hold meetings. I thought the intent was to make the meetings more accessible. Teleconferencing is a good option. I agree with Mr. Lee, many doctors will not have time to access meetings over the Internet from their computers. They may, however, go to a teleconference site to make a presentation.
Chairman Townsend:
You are in Reno. I am in Reno. The problem is not in Reno. I am trying to find a solution for the problem.
Senator O’Connell:
I think we can take the Internet requirement out of the bill. It would be helpful as a goal to work toward, but teleconferencing is the most important step we can take now. I feel strongly that we are rearranging the chairs on the Titanic.
Chairman Townsend:
Dr. Hug-English, I want the exact date of your lease termination date put into the bill, as the latest date the new office in Las Vegas will open. We encourage you to get a satellite office open soon. By the time you open the Las Vegas office, we ask that you have all hearings on the Internet, possibly from the Grant Sawyer building. I suggest, by giving your employees several years’ notice that you will be moving your office, they will have a chance to prepare. We are trying to deal with the problem of Las Vegas doctors feeling isolated from the board. Someone, perhaps not you, signed a lease 2 years ago for 6 years knowing about the current problem. Is this transitional deadline fair?
Dr. Hug-English:
Chairman Townsend, I think this is reasonable. I think that transitional period is reasonable. I appreciate, Senator O’Connell, your willingness on the Internet [issue] to change that. I am not suggesting that we cannot do it in the future. I am just suggesting that right now it would be really difficult to get that in place. I think we should look towards it. I would imagine that over the next few years it might become far more accessible than it is now. So, I think it is a reasonable compromise.
Chairman Townsend:
I understand the difficulty for your board. It is not easy for our staff in Carson City to commute to Reno and board a plane to fly to Las Vegas. I have yet to hear any of them complain about the inconvenience. Are there other questions about the bill?
Senator O’Connell:
Is there any problem in section 27, subsection 4, with keeping the language, “The commission of repeated acts of malpractice or gross malpractice, but only if such acts are established by clear and convincing evidence?” Or in section 12, requiring the medical board to maintain a Web site?
Chairman Townsend:
I have no problem with the addition to section 27. How will you handle the Web site?
Dr. Hug-English:
We are currently working to improve our Web site. It is a work in progress, and we are trying to make it more user-friendly.
Senator O’Connell:
Regarding the provision that states the executive director should serve at the pleasure of the Governor; can the board dismiss that person?
Chairman Townsend:
The board hired this individual; they should be able to fire them.
Senator O’Connell:
That just leaves the major issue of what to do about subsidy.
Chairman Townsend:
I suggest Mr. Powers draw an amendment to S.B. 250, at which time we can add or delete language as the committee chooses. We will adjourn the meeting at 9:59 a.m.
RESPECTFULLY SUBMITTED:
Makita Schichtel,
Committee Secretary
APPROVED BY:
Senator Randolph J. Townsend, Chairman
DATE: