Blue Cross settlement money won't help deficit

The state of Nevada has received more than $2 million in settlement money from the Colorado company that bought out Blue Cross/Blue Shield of Nevada.

But the money won't be going to help out the state's shortfall. Instead, Attorney General Frankie Sue Del Papa has diverted the cash to the Public Health Trust Fund rather than the general fund.

First Assistant Attorney General Tom Patton said part of the settlement agreement directs the money be used for health related programs and it would be inappropriate to put the money back in the general fund to offset the state's shortfall.

Asked if the money would be used to help fund health programs passed by the 2001 Legislature which might be in danger because of the shortfall, he said instead Del Papa has asked the money be spent on an education program for doctors to teach them how to better identify cases of domestic violence.

Del Papa has long made domestic violence programs one of her top priorities.

Asked about the proposed expenditure, Gov. Kenny Guinn agreed the money could be used to offset the costs of some of the health programs he proposed and won approval for in the 2001 Legislature. He is working to find the money to start them as planned in the face of a growing shortfall. Between the recession and damage to the tourism industry after Sept. 11, the state could end up more than $200 million in the red by the end of the two-year budget cycle.

Between a hiring freeze and budgetary hold-downs, delaying new programs and reverting as much money as possible to the general fund, Guinn hopes to hold the red ink to a minimum.

The state received a settlement of nearly $2.2 million for the Blue Cross/Blue Shield deal. After paying the lawyers involved, there is still more than $2 million left.

Guinn said he was told the settlement agreement requires the money be used for health. He agreed putting the money in the general fund and allocating it to health programs caught in the shortfall would meet the requirement. But he said he agrees Del Papa's plan is a valid use for the money.

"My statement was, certainly, I'd like to see it go into the trust fund for health for domestic violence or health programs. That would be fine with me," he said.

Guinn and Patton both said the final decision on how the money will be spent hasn't been made. Patton said the trust fund, which was created to administer a portion of the tobacco settlement money, asked for more information on the proposal before voting to commit the money to it.