Fees increased to pay for frequent health facility inspections

CARSON CITY -- Nevada legislators finally got around to boosting fees to pay for more frequent health facility inspections Thursday.

The action was aimed at preventing another medical crisis like the 2008 hepatitis C outbreak in Las Vegas, which infected at least nine people with the debilitating and sometimes deadly disease and brought about what a federal health official called the biggest health notification of its kind in U.S. history.

But more frequently inspecting hospitals, nursing homes and ambulatory care centers while preventing the feared layoffs of more than a dozen inspectors is coming with a substantial price tag:fee increases of as much as 600 percent.

Some members of the legislative Subcommittee to Review Regulations balked at placing an additional financial burden on health care providers but decided that the risk was too great, that the inspection improvements approved by the 2009 Legislature had to be adequately funded.

The new regulation and fee increases start immediately.

Before approval, state Health and Human Services Director Mike Willden reminded committee members that the fee increases had been approved by the Legislature as part of the effort to protect the public better after the hepatitis C outbreak.

"These were budget closing decisions made at the 2009 legislative session," he said. "The new staff were to be funded through a change in the fee structure."

State health officials in February 2008 discovered hepatitis C in patients who had colonoscopies at Endoscopy Centers of Southern Nevada, owned Dr. Dipak Desai. About 50,000 residents were notified that they might have been exposed to the disease because workers at the centers improperly reused syringes and vials of propofol, an anesthesia drug.

In the two years since the outbreak, nine cases of hepatitis C have been scientifically linked to Desai clinics, and health officials now say there is a high probability that 106 other cases developed from treatment there.

The outbreak spawned Desai's arrest, the closure of the centers and many lawsuits, including one that resulted in a $505 million verdict.

The state increased its inspections after the outbreak, but Willden said Thursday that if the fees increases were not approved, then he would have to lay off 13 health facility inspectors on Monday.

He said there are 11 vacancies in the Bureau of Health Care Quality and Compliance, so the staff would be operating at 50 percent of its authorized force without such approval.

He said the OK had to be given Thursday, so Gov. Brian Sandoval can plug the fee structure revenue into his state budget plan. The governor will release his two-year budget plan to the Legislature on Jan. 24.

But Sen. John Lee, D-North Las Vegas, questioned the amount of fee increases, saying health care facilities might have to lay off people because of them.

"These rates are so extremely high," he said. "I know patient safety is the total overall purpose of what we are doing. But in Nevada how do you spell tax? ... F-E-E."

Willden said he did not want to sound "alarmist" but said that the state had a tough time of dealing with the hepatitis C outbreak and that his agency wants to prevent future incidents through more frequent inspections of health care facilities.

With the full staff of inspectors, ambulatory care centers and other medical facilities can be inspected every 12 months to 18 months.

"Inspections are appropriate and are needed," he said. "Nobody wants to go into a place that isn't safe."

Lee questioned whether safety had been a problem in health care facilities before the hepatitis C outbreak.

"Maybe we are overreacting over this one incident?" he asked.

Before the outbreak, Willden said, inspectors seldom checked ambulatory care centers but instead focused on nursing homes.

"It wasn't one incident," he said. "After hepatitis C, we continued to find safety issues for a year. It was shocking to me. Today we still find patient safety issues almost every time we are out."

Assemblyman Lynn Stewart, R-Henderson, noted that the fee paid to operate a rural hospital will increase to $9,530, up from $1,500, plus $62 per bed.

For urban hospitals, the fee would be $14,606, up from $10,000, plus $110 per bed.

Fees to operate an ambulatory surgery center would be $9,784, up from $3,570.

Stewart said the Legislature in the coming session needs to review how frequently inspections must be done. Inspections might be done every two years without reducing public safety, he said.

"I know the bind we have put on Director Willden," Stewart said. "We complain about unfunded mandates from the federal government, and we have put an unfunded mandate on (him)."

Willden said legislators could consider changing to two years the frequency of inspections, but he added, "I don't want to be in a situation where we were when facilities weren't inspected."

Reporter Paul Harasim contributed to this report. Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.