Nevada lawmakers consider slashing millions in Medicaid services

Years of efforts to build up Nevada’s lackluster health care are being readied for a systematic dismantling, necessitated by an unprecedented budget shortfall caused by the coronavirus pandemic.

The Nevada Legislature convened the state’s 31st Special Session on Wednesday to address an estimated $1.2 billion shortfall for Fiscal Year 2021, which began July 1. That shortfall represents a quarter of the general fund appropriations.

For the Nevada Senate, much of day one was spent diving into the particulars of $233 million in proposed budget reductions within the Department of Health and Human Services. DHHS makes up approximately one third of the state’s budget.

DHHS Director Richard Whitley painted a bleak picture.

“I know we will have impacts on people,” said Whitley, who at times was clearly pained by the prospect of the budget reductions. “Their lives may be worsened by these services being eliminated. I can’t quantify them for you today.”

Medicaid by law requires states to provide certain services (such as inpatient hospital services and diagnostic treatments) and deems other services optional. DHHS is preparing to eliminate more than a dozen optional services, including optometry, prosthetic devices, occupational therapy, dental and psychosocial rehabilitation services for adults.

Additionally, they would limit the dental services available to pregnant women and children, limit the number of sessions of physical therapy and eliminate some services of hospice care.

Whitley said that using the term “optional” to describe such services was “almost an embarrassment” because such services aren’t considered optional by the individuals who need them. He added that not receiving such care could lead to individuals having worse health problems down the road and potentially more costs to the state.

The $137 million in cuts from the state general fund to Nevada Medicaid is actually equivalent to a loss of $497 million in health care costs once you factor in the federal matching dollars.

Whitley added that because of federal laws, the options for budget reductions in Medicaid are limited, but he stressed that the department had tried to minimize harm by using the tools they do have. Cutting the optional services is one thing the department can control. Another is changing reimbursement rates. DHHS is proposing deferring rate increases for providers that were approved by the 2019 Legislature and went into effect in January 2020.

Many of those reimbursement rates had not been raised in years.

“We were set on a path to improve,” said Whitley of the advances made in recent legislative sessions.

Beyond cuts to Nevada Medicaid, DHHS is proposing capping its existing caseloads in autism treatment, supported living arrangements and jobs training programs. Whitley and program administrators acknowledged this may lead to longer wait lists for programs that pre-pandemic were actively working to reduce wait lists.

State Sen. Julia Ratti told her peers she is concerned Nevada is sliding backwards: “We’re reverting to a place where if you really need behavioral health services, you almost have to be part of the criminal justice system to get access to them.”

DHHS Public and Behavioral Health Administrator Lisa Sherych agreed, adding that their focus would be those involved in the justice system.

Whitley told lawmakers that some of the losses detailed in the budget proposal could be offset if the federal administration opts to extend emergency orders that are currently in place to assist Medicaid. Similarly, additional federal coronavirus packages passed by Congress — like the proposed HEROES Act — could provide an influx of replacement dollars.

As for the prospect of new revenue coming in at the state level, Democratic leadership was noncommittal during a press briefing late Wednesday.

“I think it is incumbent upon us to look at any resolution that we can find to address (cuts) without putting a burden on everyday Nevadans,” said Senate Leader Nicole Cannizzaro. “That said, we cannot do this alone. We need bipartisan support if we are going to talk about any revenue.”

Votes to raise taxes must be passed by a two-thirds majority, which Democrats are one vote short of in the Senate. Leading up to the session, the Nevada Republicans have sent email blasts to supporters warning that Democrats would be looking to raise taxes.

Cannizzaro’s comment echoed the position taken by Gov. Steve Sisolak. The document outlining his proposal for shoring up the budget states that “considering any new revenue streams would require substantial time to setup, administer, and implement, they are not viable as an immediate option to address this emergency situation.” It furthers that the best options are “augmenting existing major revenue sources or augmenting multiple smaller existing revenue sources.”

That has not stopped advocates from pushing lawmakers to embrace new revenue streams. The Nevada State Education Association, which organized a demonstration outside the closed-to-the-public legislative building on Wednesday, is calling for a commitment that every dollar cut be matched with one dollar of new revenue. Organizations like Battle Born Progress and Progressive Leadership Alliance of Nevada are calling to reduce tax deductions available to mining companies.

When asked specifically about mining taxes, Cannizzaro again said legislators need to consider “any possible way” to shore the budget and avoid the most devastating cuts.

“Conversations are ongoing,” she said.

State Sen. Ben Kieckhefer, one of the eight Republicans in the Nevada Senate, told the Current nobody has approached him with any suggestions for tax increases but that “the line of communication is open.”

He added that the immediate issue before lawmakers is the vetting of proposed cuts: “There is still a lot to digest and understand.” He has said previously that before new revenue can be discussed lawmakers must know what programs and services are at stake.

State Sen. Heidi Seevers Gansert via text message noted the high unemployment rate and said businesses are struggling: “There’s no room to raise taxes. We need to support Nevadans getting back to work.”

The Nevada Senate is expected to receive a presentation on budget cut proposals from K-12 and higher education administrators on Thursday. K-12 and higher education make up 35 and 15 percent of the general fund budget, respectively, and like health care are slated for significant reductions.

The Nevada Assembly, which heard from education officials on Wednesday, will receive a presentation from DHHS.