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

SPONSOR Vaughn

DATE TYPED 1/31/05

HB 264

SHORT TITLE Rural Primary Health Care Clinic Funding

SB

ANALYST Collard

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

$2,000.0

Recurring General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates SB 110

Relates to SB 8 and SB 11

Relates to Appropriation in the General Appropriation Act

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Health (DOH)

Health Policy Commission (HPC)

New Mexico Finance Authority (NMFA)

SUMMARY

Synopsis of Bill

House Bill 264 appropriates $2 million from the general fund to the Department of Health for the

purpose of increasing the capacity of rural primary health care clinics under the Rural Primary

Health Care Act to increase access to uninsured patients in New Mexico and maintain the pri-

mary care safety net.

Significant Issues

DOH notes despite significant progress over the years there are still gaps in access to dental and

primary care services for many New Mexicans who reside in underserved areas of the state. The

Federal government has designated all or part of 28 New Mexico counties as either medical or

dental Health Professional Shortage Areas. Dental services are inadequate due to a shortage of

House Bill 264 -- Page 2

licensed dentists, especially in rural and remote areas of the state.

PERFORMANCE IMPLICATIONS

HPC notes this bill does not establish baseline measurement criteria to determine how primary

care clinics will increase access. It is unclear whether more staff would be hired, or more clients

will be treated, or more equipment will be purchased, or the services hours would be extended,

etc. Additionally, the bill does not define what “cost-effective” health care services could entail.

FISCAL IMPLICATIONS

The appropriation of $2 million contained in this bill is a recurring expense to the general fund.

Any unexpended or unencumbered balance remaining at the end of FY06 shall revert to the gen-

eral fund.

ADMINISTRATIVE IMPLICATIONS

DOH indicates this bill would have some administrative impact upon the department. The addi-

tional appropriation would add additional procurement, contracting and monitoring activities to

existing workloads under the Rural Primary Health Care Act (RPHCA) Program. DOH could

administer this additional appropriation with current staff.

The New Mexico Finance Authority notes this bill would not have a fiscal or administrative im-

pact on the Primary Care Capital Fund administered by the NM Finance Authority.

DUPLICATION and RELATIONSHIP

House Bill 264 is related to Senate Bill 8, which would appropriate $1.2 million for similar pur-

poses and Senate Bill 11, which would provide financial support for pharmacy services at clinics

supported by RPHCA.

House Bill 264 duplicates Senate Bill 110.

OTHER SUBSTANTIVE ISSUES

DOH indicates the needs of underserved New Mexicans are met, in part, by a network of com-

munity-based primary care centers. This network provides basic services to more than 230 thou-

sand patients each year. The Rural Primary Health Care Act (RPHCA) Program, administered

by DOH, provides financial support to more than 80 clinics in the network. The majority of pa-

tients at community-based primary care centers are either indigent or Medicaid program partici-

pants. Indigent patients receive services according to sliding fee schedules, based upon their

ability to pay. It is estimated that an additional 200 thousand New Mexicans statewide could

benefit from the services of new or expanded health centers.

The President has established a Community Health Center Initiative for the nation aiming to

double the number of new or expanded community-based primary care centers nationwide by

2006. All new centers receiving this funding are required to provide both medical and dental

services to their patients. Primary care centers in New Mexico have competed successfully for

this funding over the last few years. New or expanded centers in Silver City, Edgewood, Mora,

House Bill 264 -- Page 3

Santa Fe, East Mesa (Dona Ana County), Fort Sumner, Socorro and Alamogordo have all bene-

fited from this Initiative. In the current fiscal year, federal applications are pending, or to be

submitted, for new or expanded centers in Bernalillo and Hobbs. In addition, there have been

numerous supplemental grants given to existing health centers to expand the comprehensiveness

of their services to include dental and basic behavioral health care. During the next year it is an-

ticipated that at least 5 applications could be developed for new or expanded health centers in

New Mexico. This would permit a significant expansion of our health care safety net. The ap-

propriation proposed in this bill could be used to supplement these federal grants and substan-

tially improve access to primary medical, dental and basic behavioral health care.

HPC notes the bill supports RPHCA’s priority of sustaining critical infrastructure of the ap-

proximately 70 medical and dental sites in 31 New Mexico counties.

According to the NM Primary Care Association, individual and community health primary care

clinics provide access to migrant workers, homeless persons and uninsured and underinsured

persons. Sixty-nine percent of all patients served by the association are below 200 percent of the

federal poverty level and 117 thousand are uninsured patients.

According to HPC, an estimated 23 percent of New Mexicans lack access to primary care, and

NM is ranked 4

th

in the nation for lacking access. (2003, Morgan Quitno Press citing US Dept. of

Health and Human Services, Div. Of Shortage Designation “Selected Statistics of Health Profes-

sional Shortage Areas”)

HPC also notes research published and cited in various literatures has estimated that 20 percent

of Americans live in rural areas, 18 percent of rural residents are elderly, 22 percent of Medicare

beneficiaries live in rural areas, rural square miles have low population densities, and medical

facilities are less likely to be found in a sparsely populated rural setting.

ALTERNATIVES

HPC proposes the alternative of implement telemedicine capability and capacity for consultation

and treatment, which will decrease the need to hire FTEs, purchase medical equipment, extend

clinic hours, etc.

KBC/yr