Less than a month after Gov. Joe Lombardo’s office sent a letter to the Patient Protection Commission telling members not to advance two of its three proposed bills, lawmakers gave each bill a hearing Wednesday.

The measures centered around ambiguity in state law about whether hospitals could hire physicians, as well as lowering health care cost growth: 

• AB6 would establish into law an executive order that former Gov. Steve Sisolak signed in 2021 requiring a health care cost benchmark; the state’s goal is to keep growth under 3 percent in 2023. There are no penalties for not meeting the benchmark and proponents say the benchmark is aimed at measuring and understanding health care cost increases in the state. The 2021 order remains in effect unless Lombardo issues a separate executive order rescinding it.
• AB11 seeks to prohibit a hospital or psychiatric hospital from employing a full-time physician for the purpose of practicing medicine. Many doctors practice as independent contractors. The law would not apply to community hospitals or academic institutions.

The bills were sponsored by the state’s Patient Protection Commission, which was created during the 2019 legislative session after Sisolak promised on the 2018 campaign trail to create a board charged with a top-to-bottom review of health care. It exists within the Department of Health and Human Services and reviews issues related to the health care needs of Nevada residents and the accessibility, affordability and quality of health care. Under Nevada law, the commission — composed of nearly a dozen industry representatives and patient advocates — may request the drafting of three bills in a legislative session.

The commission’s third bill, AB7, looks to require health care providers to use interoperable electronic health records, making them easily accessible to patients and capable of being shared between providers by 2028. Lombardo’s office said it’s still reviewing AB7.

The measure would also allocate funding for smaller providers to implement the program and expand immunity from certain liability for health care providers who use a health information exchange or an exchange allowing health care professionals and patients to securely share and access a patient’s medical record.

Representatives of the health care industry indicated they largely support interoperability for patients and providers, but they stood in firm opposition to the commission’s other two bills — cost benchmark legislation and the prohibition on hospitals employing physicians.

The commission’s bills were presented by former legislator Maggie Carlton, who was intimately involved in establishing the commission. She said she was asked to help present the bills because there is no acting director of the commission. The most recent director, Malinda Southard, resigned March 24 and now works as the deputy administrator of the Nevada Division of Health Care Financing and Policy. Lombardo has not yet appointed a replacement. 

Carlton said the Patient Protection Commission’s bills were forwarded to the Legislature for drafting before the change in administration.

“The current administration is not looking at this commission in the same light as the previous administration," Carlton said.

Though neither Lombardo nor his staff testified during the hearing, the governor’s spokesperson, Elizabeth Ray, said staff have been in contact with the chair of the Assembly Health and Human Services Committee and made Lombardo’s position on the measures “very clear.”

“We have significant concerns about the implications of these bills,” Ray wrote in an email to The Nevada Independent. “We’ll continue to monitor the bills as they work through the legislative process.”

Ray did not elaborate on the specific issues or concerns the governor has surrounding the bills.

Only three of the commission's 12 members joined Carlton to present the bill: William Mason Van Houweling, CEO of the University Medical Center; Bobbette Bond, the Culinary Union’s public policy director and a representative of the health services coalition’ and Sara Cholhagian Ralston, the former executive director of the commission now serving as patient advocate.

However, Bond made it clear she was presenting in her capacity as the Culinary Union’s policy director, not as a commission member and all three members testified as policy experts.

Prohibiting hospitals from employing doctors

Long before Wednesday’s hearing, Patient Protection Commission members settled on the three bills after much (and heated) discussion.

Moving forward with a measure to prohibit a hospital or psychiatric hospital from employing a full-time physician took the longest, and was only chosen after the committee decided not to go forward with its first-choice proposal. 

The committee originally wanted to put forward a bill to expand Medicaid coverage for children and adults up to the age of 26, regardless of immigration status, but decided not to because of an anticipated fiscal note. Commissioners voted instead to place it as an item for special consideration in the commission’s budget.

Commissioners also considered a bill that would have established a prescription drug affordability board but eventually chose the prohibition of hospitals hiring full-time doctors via a split vote.

Supporters of the prohibition on hospitals hiring doctors said it would address a need for clarity in state law and align with three opinions from past attorneys general, including a 2010 opinion from now Sen. Catherine Cortez Masto (D-NV).

“It has been the longstanding practice in Nevada that physicians only work as contractors for private hospitals, and not as employees,” Cortez Masto wrote in the opinion. “To depart from this practice would mark a significant change that would be tantamount to a change in state public policy, best accomplished by either statutory or regulatory revision.”

Proponents also said that the law would ensure patients had access to doctors regardless of what hospital they visited and hospitals did not have a monopoly on a specialty physician.

But organizations such as the Nevada State Medical Association (NSMA) and the Nevada Hospital Association (NHA) pushed back, warning that the bill would likely harm the development of the health care workforce because hospitals are significant recruiters of doctors. They also said it would create unfair carve outs for public hospitals.

“Nevada competes with other states to recruit and retain physicians,” NHA President and CEO Pat Kelly wrote in an opposition letter. “We should not remove tools other states are using to recruit and retain physicians from our toolbox. If we do, physicians will choose to work and live elsewhere.”

Kelly also cited Cortez Masto’s opinion, noting that she quoted a Kansas Supreme Court decision that said a hospital is unable to treat patients without physicians, nurses and medical technicians and to not allow a hospital to employ physicians is “illogical.”

Health care cost benchmark

Ralston said the Patient Protection Commission brought the health care cost benchmark bill forward to address unsustainable growth in health care costs that outstripped the rate of inflation. 

“More than half of Nevadans have reported delaying or going without health care due to this cost,” Ralston, the commission’s patient advocate, said. “Health spending is expected to increase and this measure helps to address the unsustainability of this by establishing a cost growth benchmark which opens a window into what is driving cost growth in the state.”

She added that a cost growth target does not impose a cap on spending, provider prices or workforce investments. Instead, Ralston described it as a cost-containment effort that focuses on driving a discussion by creating a measurable target to limit health care spending.

The bill would make permanent an executive order issued by Sisolak, and the policy was designed through participation with the Peterson-Millbank Program for Sustainable Health Care Costs. The program helped fund and provided data and resources to aid in development of the benchmarks.

However, presenters indicated that Lombardo’s administration declined to participate in the program. They did not expand upon why that took place, but said the data gained through the benchmark program would increase health care transparency and help policymakers better understand the needs of Nevadans when it came to developing health care policies.

In a joint letter, the Nevada Association of Health Plans (NvAHP), the Nevada Hospital Association and the Nevada State Medical Association wrote they were opposed to the measure and warned that the benchmark program does not take inflation into account, takes resources away from patient care and creates burdensome data reporting requirements.

“We urge members to forego the passage of AB 6 and refocus efforts on healthcare solutions that make sense and address our more pressing issues such as provider and other healthcare workforce shortages,” representatives for the entities wrote.

Ralston pushed back against those arguments, saying that the benchmark program would help gather data and intel that could inform policy and does not include penalties for costs exceeding the benchmark. She warned that the debate was missing an important voice — those of patients.

“Industry is at the table,” Ralston said. “But who is speaking for the patients? I've become a very, very strong patient advocate. But you don't hear a lot of patient testimony.”

(Disclosure: Sara Cholhagian Ralston is the wife of Nevada Independent CEO Jon Ralston. He was not involved in the editing of this story)

This story was updated on Friday, March 31, 2023, at 9:30 a.m. to clarify that AB6 doesn't contain any penalties for not meeting the benchmark.