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

SPONSOR Heaton

DATE TYPED 3/18/05

HB 938/aHGUAC/aSFC

SHORT TITLE Medicaid Waiver Program Funding

SB

ANALYST Hanika-Ortiz

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

$0.1

Recurring

County Indigent

Hospital Claims

Fund

REVENUE

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY05

FY06

$0.1

Federal Medicaid

Recurring County-supported

Medicaid Fund

NFI

Sole Community

Provider Fund

SOURCES OF INFORMATION

LFC Files

Responses Received From

Human Services Department (HSD)

Department of Health (DOH)

SUMMARY

Synopsis of SFC Amendment

The Senate Finance Committee amendment clarifies that the Board shall not be prevented from

transferring money from the County Indigent Hospital Claims Fund to the County-Supported

Medicaid Fund for support of Health Insurance Flexibility and Accountability (HIFA) waiver

programs for expenditures in the waiver programs. Any funds transferred or any income earned

from investment shall only be used for residents of the County making the transfer. The percent-

age of money appropriated from the County-Supported Medicaid Fund to support health care

services or administrative costs will not consider amounts appropriated for a HIFA waiver pro-

House Bill 938/aHGUAC/aSFC-- Page 2

gram in the calculation.

Synopsis of HGUAC Amendment

The House Government and Urban Affairs Committee Amendment clarifies that the Health In-

surance Flexibility and Accountability (HIFA) waiver programs be able to receive funding from

the County-Supported Medicaid Fund for support of the state Medicaid program, as defined in

the Indigent Hospital and County Health Care Act.

Significant Issues

The federal Health Insurance Flexibility and Accountability Demonstration initiative is a newly

developed Medicaid and State Children’s Health Insurance Program (SCHIP). The primary goal

of the initiative is to encourage new comprehensive state approaches that will increase the num-

ber of individuals with health insurance coverage within current-level Medicaid and SCHIP re-

sources. There is a particular emphasis on approaches that maximize private health insurance

coverage options and target Medicaid and SCHIP resources to populations with income below

200 percent of the Federal poverty level (FLP).

New Mexico will continue to need to demonstrate success by tracking the impact of the HIFA

demonstration initiative on the uninsured rate for individuals with incomes under 200 percent of

the FLP.

Synopsis of Original Bill

HB 938 amends language to Section 27-5-3, NMSA 1978, Public Assistance Provisions, to add

language that includes waiver programs approved by the federal Health and Human Services

Department (DHHS). The counties would not be prohibited from transferring money to support

any Medicaid waiver program, the sole community provider fund or the county-supported Medi-

caid fund. The use of county funds for Medicaid programs may increase the funding available for

health care costs in the state, as these funds would become eligible for federal Medicaid match-

ing funds.

Significant Issues

Under the Public Assistance Provisions, expenses shall not be paid for indigent patient care ser-

vices that have been determined to be eligible for Medicaid reimbursement.

At the present time, the Indigent Hospital and County Health Care Act allows for money to

transfer to the sole community provider fund or the county-supported Medicaid fund for support

of the state Medicaid program. The Indigent Hospital and County Health Care Act establishes

that individual counties are responsible for health care to indigent patients as well as providing

revenues for match with federal funds for state Medicaid programs. The sole community pro-

vider fund consists of funds provided by counties to match federal funds for Medicaid sole

community provider hospital payments. Money in the sole community provider fund is remitted

back to the individual counties if federal Medicaid matching funds are not received. The County

indigent hospital fund is used to meet the county’s contribution for support of sole community

provider payments, pay for burial or cremation of an indigent person, and/or pay all claims that

are not matched with federal funds under the state Medicaid program.

House Bill 938/aHGUAC/aSFC-- Page 3

PERFORMANCE IMPLICATIONS

The DOH reports that the DHHS permits states to apply for waivers of the federal rules for

Medicaid programs to allow for innovative home and community-based services and extensions

of the core Medicaid program. The State of New Mexico has been approved by DHHS for sev-

eral Medicaid waivers, and management is coordinated with the Medicaid program. Waivers

may include services not covered through the state plan such as respite care, environmental

modifications, or family training.

FISCAL IMPLICATIONS

The use of county funds for Medicaid programs would increase the funding available for health

care costs in the state, as these funds would become eligible for federal Medicaid matching

funds. The issue here is whether county medically indigent funds can be matched under Medi-

caid without adversely affecting the counties ability to fund health care for indigents.

The exact fiscal implications are dependent on the amount of funds provided by the counties. If

funds were used for a specific waiver, such as the State Coverage Initiative, funds provided by

the counties would be eligible for federal match at the Federal Medical Assistance Percentage

(FMAP) rate applicable at the time of the expenditure.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Duplicates SB 943

OTHER SUBSTANTIVE ISSUES

The State Coverage Initiatives (SCI) program is a new national initiative of The Robert Wood

Johnson Foundation that works with states to plan, execute, and maintain health insurance ex-

pansions, as well as to improve the availability and affordability of health care coverage. SCI's

team of policy experts works with states to help them expand coverage to working families, build

on employer-based health insurance, and foster collaboration among stakeholders.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL.

It would continue to be permissible for money from the fund under the Indigent Hospital and

County Health Care Act to be transferred to the sole community provider fund or the county-

supported Medicaid fund for support of state Medicaid programs.

AHO/lg:yr