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

SPONSOR Jennings

DATE TYPED 1/31/05

HB

SHORT TITLE Developmental Disabilities Waiver Program

SB 259

ANALYST Collard

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

$6,400.0

Recurring General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to SB 423

Relates to Appropriation in the General Appropriation Act

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Health (DOH)

Human Services Department (HSD)

Developmental Disabilities Planning Council (DDPC)

SUMMARY

Synopsis of Bill

Senate Bill 259 appropriates $6.4 million from the general fund to the Department of Health for

the purpose of providing services to the developmental disabilities Medicaid waiver program to

approximately 400 additional clients.

Significant Issues

According to DOH, as of January 2005, 3,057 applicants are listed on the Central Registry wait-

ing for services. This bill would provide funding to serve approximately 300 of these individuals,

depending upon the age and level of care characteristics of the next 300 applicants. The current

average length of wait for services through the developmental disabilities Medicaid waiver is 47

months, although this varies by region.

Senate Bill 259 -- Page 2

DOH notes, of the total appropriation, 8.6 percent will be needed for program administration and

participant support services, leaving $5,849,600 in for direct services. This amount will generate

funding of $22,857,000 for approximately 300 individuals at the anticipated FY06 federal Medi-

caid blended match rate of approximately 28 percent. (This calculation assumes that pending

federal legislation does not provide any relief from anticipated match rate changes.)

FISCAL IMPLICATIONS

The appropriation of $6.4 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 notes this bill does not address the additional FTE (approximately 6) or other administra-

tive costs related to serving the additional individuals. As allowed under federal guidelines, 8.6

percent of the appropriation, of $550.4 thousand would need to be used by DOH for program

administration and participant support services.

If the bill passes, DOH indicates the impact will be significant. In FY05, additional FTE were

created which enable the Department to ensure that the management standards mandated by fed-

eral law for the Central Registry and the Medicaid processes are upheld. In FY06, administrative

funds may be used for three additional staff needed to assure compliance with the new stipulated

agreement in the Jackson litigation. These FTE will provide training/technical assistance to indi-

viduals served and community service agencies.

In FY06, DOH estimates it would require an additional three FTE to maintain current caseloads

and to handle a larger sample size for its current provider program audits and to address a possi-

ble increase in the number of providers. It has been established that for each individual receiving

developmental disabilities Medicaid waiver services, DOH will receive 1 incident report per

year. This would mean an additional 300 incidents to be investigated by DOH.

These additional FTE’s would help DOH assure it is meeting Medicaid management standards;

monitor clients funded via DOH and meet obligations with the plan of action of the Jackson law-

suit.

HSD indicates there is also an administrative impact for: 1) Income Support Division staff to

conduct additional determinations for initial and annual Medicaid eligibility; and 2) the Medicaid

UR contractor to review client level of care and individualized service plan budgets.

Additionally, HSD notes the Medical Assistance Division (MAD) programmatic oversight of the

developmental disabilities waiver policies may entail amending the waiver approved by the Cen-

ters of Medicaid and Medicare Services to accommodate the higher expenditures and recipient

count. MAD will need to attend to changes necessary in the NM UR contract budget to assure

coverage of the cost of additional reviews. Program oversight and NM UR contract oversight

would also be impacted to the extent that additional consumers entail a proportionate increase in

problem-resolution incidents.

Senate Bill 259 -- Page 3

RELATIONSHIP

Senate Bill 259 relates to Senate Bill 423. Senate Bill 423 appropriates $3.54 million for the

same purpose.

TECHNICAL ISSUES

DOH requests changes as indicated on parenthesis:

Lines 19 and 20 – (…2006 to provide New Mexico Medicaid Waiver services to approximately

300 persons with Developmental Disabilities.)

Line 22 – delete (…balance remaining at the end of the fiscal year shall not revert)

Line 23 – (to the general fund, but shall remain available in the subsequent fiscal year for this

purpose.)

OTHER SUBSTANTIVE ISSUES

DOH indicates, under New Mexico’s developmental disabilities Medicaid waiver agreement

with the U.S. Department of Health and Human Services, in FY05 the developmental disabilities

Medicaid waiver program is authorized to serve up to 4,300 unduplicated individuals or the

number of individuals allowed by legislative appropriation, whichever number is less. The ap-

propriation contained in the bill is sufficient to expand the numbers of individuals served well

within federal authorization limits on the size of the developmental disabilities Medicaid waiver

population. The number that can be served depends on the level of care and age characteristics

of the clients on the Central Registry.

DOH notes once the bill is enacted, aggressive recruitment and training initiatives will be needed

to qualify providers, permit entry of persons into the system, and ensure their health and safety.

Historically, the provider system (case management and direct service providers) has been able

to sustain growth at a maximum of 300 to 400 individuals entering into service within any fiscal

year.

KBC/yr:lg