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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 3-7-05

HB

SHORT TITLE Prohibit Denial of Medical Staff Privileges

SB 776/aSPAC

ANALYST Collard

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

Minimal

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Health (DOH)

Human Services Department (HSD)

Aging and Long-Term Services Department (ALTSD)

SUMMARY

Synopsis of SPAC Amendment

The Senate Public Affairs Committee amendment to Senate Bill 776 deletes language defining a

Class A county. The bill originally exempted only hospitals in Bernalillo County. HSD notes,

based on a review of the current population levels reported on the Association of Counties web-

site, the amended bill will also exempt hospitals in Santa Fe, Dona Ana and San Juan counties.

Synopsis of Original Bill

Senate Bill 776 prohibits certain hospitals from denying medical staff privileges for reasons

other than a physician’s individual qualifications. Hospitals included are those licensed by

DOH, certified for participation in Medicare and Medicaid, or those receiving funding from local

or state sources, with the exception of those hospitals located in class A counties with popula-

tions exceeding five hundred thousand.

Physicians who are denied membership or privileges by a hospital may appeal the decision to the

New Mexico Medical Board. If the physician is found professionally competent and the hospital

Senate Bill 776/aSPAC -- Page 2

continues to deny staff membership or clinical privileges, DOH shall suspend the Medicare and

Medicaid certification and deny additional state or local funding disbursements to the hospital.

Significant Issues

DOH indicates its Division of Health Improvement’s Health Facility Licensing and Certification

Bureau (HFLC) has the authority to certify hospitals pursuant to its agreement with the federal

Centers for Medicare and Medicaid Services (CMS) and CMS regulations. HFLC does not have

the authority to suspend certification based on state regulations or statute. HFLC can take action

on certification under federal authority and approval. DOH has no authority over state and local

funding to hospitals. Hospitals receive Medicaid and Medicare payments through HSD.

HSD believes that hospitals should make physician-credentialing decisions based upon quality of

care and professional competence. However, automatically suspending a non-compliant hospital

from participating in the Medicaid program may unduly affect Medicaid clients who need access

to that institution. Moreover, the bill does not define the period of such suspensions and they

may be permanent.

FISCAL IMPLICATIONS

There is no appropriation associated with this bill. The fiscal implications appear to be minimal

for administering and carrying out the provisions of the bill.

TECHNICAL ISSUES

HSD suggests the bill be amended to make the decision to suspend a non-compliant hospital

from serving Medicaid clients to be discretionary rather than mandatory and allow HSD to make

the determination to suspend the hospital.

The bill does not define the period of the hospital’s suspension from serving Medicaid clients

and other related sanctions in the event that it found to be noncompliant. The bill should define

the period of any suspension or sanction.

KBC/yr:lg