Fees and licenses for operators of medical facilities, group homes and other residential services have been dramatically increased by the State Health Board - for many of the smallest operations, by several hundred percent.
Among the hardest hit by the increases: Rural hospitals, many of which are teetering on the brink of financial crisis anyway. The annual renewal fee for a rural hospital rises from $750 to $4,765 this coming year - plus $31 for each bed in the hospital. That is an increase of 635 percent.
Urban and large hospitals also will see an increase. The 46 percent boost will take their annual charge to $14,606.
A center providing modified medical detoxification to patients in Nevada would see its annual rate rise from $782 to $9,960 - more than 1,270 percent. Hospices will see a 255 percent increase to $1,990 a year plus a doubling of their per-bed fee to $176.
Nancy Hunter, who operates Conestoga House in Carson City, said the increases seem to disproportionately single out the very small, intensive service providers such as her two-person individual care home. Her annual fee will more than triple from $500 to $1,599 plus a $39 increase in the annual per bed charge to $133.
She said she has just a couple of months to come up with the $1,865 to renew.
"It's due mid-November if you want to still have a license Jan. 1," she said. "I'll have to take it out of savings."
Hunter said the new rates will drive some small homes out of business.
"This is a big step toward eliminating some choices," she said.
Paul Shubert of the Health Division said the methodology used in developing the rates is to charge each category of provider for the investigative and inspection workload associated with that type of facility. In part because their costs are spread across just 15 facilities, he said Nevada's 15 rural hospitals got a much larger fee increase than the 44 large hospitals in the state.
Bill Welch of the Nevada Hospital Association said the hospitals pushed for that rule a decade ago after discovering they were paying two-thirds or so of the health bureau's costs while other types of facilities were generating most of the investigation and inspection work.
He said the size of the increases approved last week for rural hospitals will hurt.
"They're having a hard time meeting payroll every two weeks," he said.
He said he told the Health Board another solution is needed, specifically an infusion of state funding.
"We understand our fees might have to go up to some degree," said Welch. "At the same time, the bureau's role and responsibility isn't just to those who are sick. It's to protect all of us."
He said Nevada's fees are among the highest in the nation in part because, unlike most states, there is no state money in the pot.
"Shouldn't there be some responsibility for the general fund to help?" he asked.
Shubert said the regulated industries have suggested requesting general fund money to help pay the cost of licensing and inspecting the facilities and providers.
"The problem right now is anybody requesting general fund, that's not going to happen," he said.
Welch said rising prices and inflation coupled with decisions to hold down what Medicaid, Medicare and other public programs pay are forcing hospitals to consider service cuts - further restricting choices for those who need services.
He said more than half of Nevada's acute care centers are losing money and hospitals are looking at eliminating such things as emergency rooms.
Another factor driving up costs, both men said, is the legislative changes mandating more frequent inspections of all types of health care and supported living centers. In the wake of the Hepatitis C outbreak at two Las Vegas surgery centers, lawmakers ordered those facilities inspected annually instead of every six years.
When they did that in the 2009 session, they also ordered all other types of providers regulated by the health division inspected every 18 months instead of six years.
"We now have a much higher workload for our agency," Shubert said.
To handle the load, additional staff was hired to conduct inspections and investigations. The 2009 Legislature approved 11 new positions. The Interim Finance Committee has since added an additional seven positions.
Shubert said higher fees are necessary to pay those positions.
"We have no objection to and support the bureau and its role but there's got to be a more equitable way to fund that role," said Welch. "The bureau gets increased responsibility and they're told by the Legislature they have to fund it through their fees."
For operators of small group homes and residential services, the system has another seemingly unfair component. Part of what they have to bear is the cost of investigating unlicensed operations.
While an unlicensed hospital would be practically impossible to hide, Shubert said there are numerous residential care operations in the state without proper licensing and that they make up a large part of the investigation workload.