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F I S C A L I M P A C T R E P O R T

SPONSOR:	Robinson		DATE TYPED:	01/25/02		HB
SHORT TITLE:		Increase Medicaid Physician Payments				SB	9
					ANALYST:		Dunbar

APPROPRIATION

Appropriation Contained		Estimated Additional Impact		Recurring or Non-Rec	Fund Affected
FY02	FY03	FY02	FY03
	$50,000.0			Recurring	General Fund
	*($193,650.0)			Recurring	Federal Funds

(Parenthesis ( ) Indicate Expenditure Decreases)

*See narrative

REVENUE

Estimated Revenue		Subsequent Years Impact	Recurring or Non-Rec	Fund Affected
FY02	FY03
	$193,000.0		Recurring	Federal Funds

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

Responses Received

Human Services Department (HSD)

SUMMARY

Synopsis of Bill

Senate Bill 9 appropriates $50,000.0 from the general fund to the Human Services Department (HSD) Medical Assistance (MAD) for an increase in health services ($46,000.0) to eligible Medicaid recipients and for increasing physician reimbursement rates($4,000.0).

HSD reports that the New Mexico Medical Society has contacted MAD regarding a physician fee rate increase. This rate would equal the rate of ninety-five percent of the Medicare Part B fee schedule. Because the Medical Society proposes that this increase become effective July 1, 2004, the intent of SB 9 does not appear to correspond with the recommendations.

HSD observes that the fee-for-service physician reimbursement rates would need to be adjusted, but the MCO contracts would not require amending, because of 27-2-12.3 NMSA 1978, which excludes managed care from HSD’s reimbursement rates.

Significant Issues

PERFORMANCE IMPLICATIONS

By increasing the physicians and doctors of osteopathy index to the Medicare Part B fee schedule, there would be an increase in retention of these providers for the State of New Mexico. MAD has been informed that the Medical Society is proposing a bill to be indexed into the Medicare Part B fee schedule that would go into effect 2004. This would impact the performance measures relating to provision of Early Periodic Screening and Diagnostic Treatment (EPSDT) services and breast and cervical cancer screenings because access to care would increase.

FISCAL IMPLICATIONS

The appropriation of $50,000.0 contained in this bill is a recurring expense to the general fund. Any unexpended or unencumbered balance remaining at the end of FY 03 shall revert to the general fund. The federal Medicaid match for this appropriation would generate $193,650.0.

HSD did not provide information on the amount of funds necessary to increase the Medicaid physician payments to 100% of the Medicare rate effective July 1,2002.

TECHNICAL ISSUES

The sponsor of the bill may wish to define “health services” in the bill.

POSSIBLE QUESTIONS

What is the cost of increasing the physician’s payments to 100% of the Medicare rate effective July 1, 2002?

BD/ar