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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:

1/31/02

 

HB

 

 

SHORT TITLE:

Medicaid Services Reimbursements

 

SB

241

 

 

ANALYST:

Dunbar

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY02

FY03

FY02

FY04

 

 

 

 

 

$2,600.0

Recurring

General Fund

 

 

 

$7,800.0

Recurring

Medicaid

Federal Funds

(Parenthesis ( ) Indicate Expenditure Decreases)

 

Relates to HB 269 and SB 9

 

 

SOURCES OF INFORMATION

 

Responses Received From

   

Human Services Department (HSD)

 

SUMMARY

 

     Synopsis of Bill

 

Senate Bill 241 amends a section of the NMSA 1978 to allow the Human Services Department to set the reimbursement rates for services rendered by physicians, dentists, optometrists, podiatrists and psychologists to Medicaid patients at not less than 95% of the corresponding rates reimbursable under Part B of Title 18 of the federal Social Security Act.  The bill also amends the exclusions of Managed Care Organizations from the reimbursement rate.  The effective date of implementation is July, 1,2004.

 

     Significant Issues

 

The reimbursement rate will be pegged to Part B of Title 18 of the federal Social Security Act and may need to be adjusted on a yearly basis effective July 1 2004.

 

HSD, reports that Medicaid’s ability to control managed care costs would be significantly weakened because SB 241 would affect Medicaid’s capacity to negotiate contracts with providers MCOs.  HSD further states that existing market conditions in the New Mexico healthcare industry presently force MCOs to maintain fairly comparable reimbursement rates to the rate Medicaid pays fee-for-service providers and programs.

 

FISCAL IMPLICATIONS

 

Although there is no appropriation in SB 241, the projected appropriation needed from the General Fund would be increased by a minimum of $2.6 million.  Federal fiscal year 2004 revenues from the federal Medicaid program would be increased by a minimum of $7.800.0.  HSD indicates that SB 241 would increase costs to Medicaid automatically every year and could adversely affect cost containing efforts in the Medicaid program.  Medicaid expenditures for physician services in state fiscal year 2003 are estimated to be at $196 million.  Dental service expenditures on the fee-for-service side are estimated to be at $10.3 million in state fiscal year 2003.  Medicare rate increases or decreases for healthcare professionals since 2000 are unknown.

 

ADMINISTRATIVE IMPLICATIONS

 

Recalculating reimbursement rates annually would add an administrative function to the Medical Assistance Division, Benefit Services Bureau (fee for service programs) and for the MCOs.

 

RELATIONSHIP

 

SB 241 is a companion to HB 269.  SB 241 differs only in that the rates would be set at the beginning of each state fiscal year.  SB 241 relates to SB 9  which would appropriate $4,000.0 to increase Medicaid physician payments to 100% of the Medicare rate, beginning July 1, 2002.

 

BD/prr

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