Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance

committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports

if they are used for other purposes.

Current FIRs (in HTML & Adobe PDF formats) are a vailable on the NM Legislative Website (legis.state.nm.us).

Adobe PDF versions include all attachments, whereas HTML versions may not. Previously issued FIRs and

attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

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

SPONSOR Luna

DATE TYPED 3/3/05

HB HJM 65

SHORT TITLE Health Care Business Management Study

SB

ANALYST Hanika-Ortiz

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

None

SOURCES OF INFORMATION

LFC Files

Responses Received From

Health Policy Commission (HPC)

Department of Health (DOH)

SUMMARY

Synopsis of Bill

House Joint Memorial 65 requests the New Mexico HPC to form a task force to review the busi-

ness management and quality aspects of providing health care by practitioners and facilities. The

task force would include representatives of statewide organizations representing hospitals, health

care clinics, physicians, long-term care providers, consumers, the Department of Health (DOH),

and insurers. The goal of the memorial is to have more informed consumers and policy makers

with a better understanding of how healthcare providers meet the challenges of providing health-

care and how best to determine cost-beneficial quality indicators, including patient safety proto-

cols. The HPC would report the findings and any recommendations of the task force to the ap-

propriate legislative committee no later than December 1, 2005.

Significant Issues

The HPC has the following comment:

The business of providing health care, as a practitioner or a facility, involves complicated billing

procedures, multiple private and public payers, constantly changing legal compliance considera-

House Joint Memorial 65 -- Page 2

tions and can be an on going challenge to be profitable while at the same time provide quality

care.

A typical family physician may see between 5000 to 7500 patients during the year, bill under one

of 14000 current procedural terminology codes to one of hundreds of different insurance carriers,

comply with HIPAA privacy requirements, get approval or pre-approval from HMOs for the

work they do for patients, be subject to utilization review, hospital peer review committees,

comply with various Medicare fraud and abuse regulations, met Clinical Laboratory Improve-

ment Act requirements, employ and train a staff who has their own set of regulatory require-

ments, meet payroll, meet cash flow concerns rather than patient flow, reimbursement reductions

and operating expense increases, and ensure high quality care to sick patients.

Patients may come in who have restrictions on whether a particular test or diagnostic study can

be done. Office staff, or physicians themselves, may have to negotiate with a carrier before pro-

ceeding in a workup. That's a dramatic change from twenty years ago. The “hassle factor” has

long been discussed by many physicians in New Mexico as being detrimental to high quality

care.

In spite of the “hassle factor,” physicians and other providers can deliver high quality care and

the focus of the memorial should be to try to identify those benchmark business processes that

can provide high quality care.

PERFORMANCE IMPLICATIONS

The HPC reports the residency program at University New Mexico School of Medicine could

participate in this Memorial as they have a curriculum component dealing with the business as-

pects of medical practice that promotes financial viability as well as high quality care.

FISCAL IMPLICATIONS

Identifying barriers that hinder access to high quality care could have a positive impact on health

care outcomes in the state.

The HPC could implement the memorial with existing staff and resources. Any additional costs

to procure information, per diem and travel for agencies should be minimal.

ADMINISTRATIVE IMPLICATIONS

The HPC would lead the memorial which is an important part of the role of the HPC in identify-

ing barriers that hinder access to high quality care. The DOH is listed as a task force member,

and would be involved in meetings and task force report development.

The HPC currently does not issue a report relating to business management and quality aspects

of providing health care as outlined in HJM 65. The DOH notes the business management and

quality aspects of providing health care information obtained from the task force could prove

beneficial to New Mexico health planning efforts.

House Joint Memorial 65 -- Page 3

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Relates to HB 876, requiring the HPC to issue a biennial health care financing report on the cost,

expenditures, trends and economic factors related to the public and private health care industry

.

Relates to HB 869, Small Business Regulatory Relief Act

OTHER SUBSTANTIVE ISSUES

The HPC is an independent State agency whose mission is to improve access and quality health

care for all New Mexicans by providing timely, relevant health care information and analysis on

health policy research and planning issues. The HPC was established by statute in 1991 to pro-

vide a forum for the discussion of complex and controversial health policy issues. The HPC is to

develop a plan for and monitor the implementation of the State’s health policy. As expressed in

statue, "it is the policy of the state of New Mexico to promote optimal health; prevent disease,

disability and premature death; to improve the quality of life; and to assure that basic health ser-

vices are available, accessible, acceptable and culturally appropriate, regardless of financial

status".

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL.

If HJM 65 is not enacted, the HPC would not be required to form a task force to review the busi-

ness management and quality aspects of providing health care.

ANA/yr