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 Grubesic

DATE TYPED 3/10/05

HB

SHORT TITLE Medicaid Waiver Program Funding

SB 943/aSFC

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

Federal-Medicaid

Recurring County-Supported

Medicaid 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-

gram in the calculation.

Senate Bill 943/aSFC-- Page 2

Significant Issues

The HIFA program’s goal is to expand Medicaid coverage to populations with incomes above

current income eligibility levels. States must show their intention to cover newly eligible indi-

viduals in the Medicaid program. Under HIFA, states are allowed to cap enrollment, reduce

benefits, increase cost-sharing for “optional” Medicaid beneficiaries and to redirect federal

SCHIP funds to pay for services for additional populations.

Medicaid is growing at astronomical rates, and Congressional Budget Office projections estimate

total Federal spending on Medicaid to double over the next ten years to $360 billion. This is an

average growth rate of eight percent, outpacing inflation.

Synopsis of Original Bill

SB 943 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. The counties would not be prohibited from transferring money to support any Medi-

caid waiver program, the sole community provider fund or the county-supported Medicaid 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 matching

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.

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.

Senate Bill 943/aSFC-- Page 3

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 HB 938

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