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

SPONSOR Ingle

DATE TYPED 2/16/05

HB

SHORT TITLE Special Hospital District Agreements

SB 541

ANALYST Hanika-Ortiz

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

See Narrative

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Health (DOH)

Human Services Department (HSD)

General Services Department (GSD)

Aging and Long-Term Services Department (ALTSD)

SUMMARY

Synopsis of Bill

Senate Bill 541 adds a new provision to Section 4-48A-9 NMSA 1978 allowing a Special Hospi-

tal District to enter into an agreement with any state or federal agency, county, municipality, or

other political subdivision or person to own or operate a Common Health Care Service. Any

agreement entered into will be subject to the provisions of the Procurement Code under the Act.

Significant Issues

A Special Hospital District is a legal entity governed by an elected Board and coordinates and

provides hospital, physician, laboratory, home health and nursing home services, etc. to a spe-

cific region and population.

Examples of Common Health Care Services are:

*Prescriptions *Doctor Visits *Dental services *Laboratory tests

*Private duty nursing *Speech/language therapy *Physical therapy *Occupational therapy

Senate Bill 541-- Page 2

*Hearing services *X-rays *Podiatry services

*Psychological/mental health services

PERFORMANCE IMPLICATIONS

The DOH believes the uncertainty regarding application of the Procurement Code to legal

entities jointly formed under the proposed amendment raises administrative and procurement

issues.

FISCAL IMPLICATIONS

The creating of partnerships as proposed in the amendment may be evidence of a more aggres-

sive marketing strategy in an effort to preserve a Special Hospital District’s market share. If this

is so, then there is the potential for conflict of interest issues that may restrict a consumer’s free-

dom of choice when health care referrals are indicated.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

None

TECHNICAL ISSUES

The DOH seeks a definition as to what a “Common Health Care Service” is under the Act, as the

proposed amendment may be outside the intended scope and purpose of the Special Hospital

District Act.

The DOH further questions to what extent, if any, a state entity and Special Hospital District

would be subject to the Procurement Code.

ALTERNATIVES

The Special Hospital District Act, Section 4-48A-9 NMSA 1978, would remain unchanged.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL.

A special hospital district would not have the ability to partner with a governmental entity or in-

dividual to own or operate a common health care service.

AHO/yr