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

SPONSOR Picraux

ORIGINAL DATE

LAST UPDATED

01/26/2006

01/30/2006

HB 214/aHCPAC

SHORT TITLE

UNM Hospital Out-Of-County Indigent Care

SB

ANALYST Moser

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

$31,000.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates,Relates to,Conflicts with, Companion to SB 187

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Health (DH)

Health Policy Commission (HPC)

SUMMARY

Synopsis of HCPAC amendment

The House Consumer and Public Affairs Committee amendment removes the word “indigent”

and replaces it with “uncompensated care”.

Synopsis of Original Bill

House Bill 214, UNM Hospital Out-Of-County Indigent Care, appropriates thirty-one million

dollars ($31,000,000) from the general fund to the board of regents of the University of New

Mexico for the purpose of providing funding for care provided to indigent patients from outside

of Bernalillo County.

FISCAL IMPLICATIONS

The appropriation of thirty-one million dollars ($31,000,000) contained in this bill is a recurring

expense to the general fund. Any unexpended or unencumbered balance remaining at the end of

fiscal year 2007 shall revert to the general fund.

House Bill 214/aHCPAC – Page

2

From UNMH information, in fiscal year 2005, the Health Sciences Center “provided $131.3 mil-

lion in uncompensated care at cost. Of that amount, $31.3 million of uncompensated care was

provided to patients residing out of Bernalillo County.” The UNMH has no revenue stream to

fund that level of uncompensated care.

SIGNIFICANT ISSUES

From UNMH information, in fiscal year 2005, the Health Sciences Center “provided $131.3 mil-

lion in uncompensated care at cost. Of that amount, $31.3 million of uncompensated care was

provided to patients residing out of Bernalillo County.” UNMH has no revenue stream to fund

that level of uncompensated care and has been subsidizing this out of operational revenue.

The

level of uncompensated care at UNMH has risen from $110 million in fiscal year 2003 to $131

million in fiscal year 2005.

UNMH receives a mill levy from the residents of Bernalillo County. This accounted for almost

$65 million of the hospital’s budget. The university is charged with using “the revenues of the

hospital mill levy and mental health center mill levy solely to the operation, maintenance, im-

provement and conduct of the hospital and mental health center and their services.” UNM addi-

tionally received $1.2 million in state support from the out of county indigent fund in fiscal year

2005.

UNM officials have indicated that the additional resources are needed to pay physicians and

health care professionals in order to effectively staff and maintain the hospital.The Health Policy

Commission indicates that Bernalillo County residents effectively subsidize care for indigents

from other counties throughout the state. There is inequity relative to access to services being

unrestricted simultaneous to funds for indigent care restricted from one county. However, at the

same time, the state has an interest in ensuring access to needed services for all residents of the

state irrespective of county residency. HB 214 attempts to acknowledge that interest and amelio-

rate a situation in which UNMH decided to restrict elective access to services for uncompensated

patients. UNMH information indicates that the trend involved with continuation of the status quo

of unrestricted access would eventually lead to service changes for all patients.

The Health Policy Commission additionally points out that UNMH is not the only county owned

and leased hospital in New Mexico that provides indigent care to out of county residents. The

situation that UNMH has is not unique with respect to providing services to out of county indi-

gents. There are numerous public hospitals in New Mexico- Miners Colfax in Raton, Gila Re-

gional in Silver City, Nor Lea General in Lovington, Roosevelt General in Portales, and Sierra

Vista in Truth or Consequences. There are also other publicly owned hospitals that contract with

non-profit 501(c) 3 organizations or for profit organizations to lease the hospital -Dr. Dan C

Trigg in Tucumcari, Lincoln County Medical Center in Ruidoso, Cibola General in Grants, Holy

Cross in Taos, Artesia General, Guadalupe County in Santa Rosa, Rehoboth McKinley in

Gallup, and Memorial Medical Center in Las Cruces. Each of these facilities can also make the

claim that they serve out of county indigent residents as well. In one case, many non-covered

residents of Otero County living proximate to Ruidoso received services at Lincoln County

Medical center in 2004 which very significantly impacted that hospital’s financial position as

well.

House Bill 214/aHCPAC – Page

3

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

HB 214 duplicates SB 187.

ALTERNATIVES

The Health Policy Commission indicates that by using state monies as called for in HB 214 it

would appear that Bernalillo County taxpayers are paying twice for indigent care if HB214 as

written passes. First residents would pay through their mill levy sent to the County which is sent

to UNMH and then again with tax dollars Bernalillo County residents sent to the state.

An alternative suggested by the Health Policy Commission would be to develop a mechanism for

other counties to provide reimbursement for only their share of indigent residents who receive

care at UNMH from their county rather than a blanket approach. There are some counties in New

Mexico who have very few indigent patients that receive services from UNMH with their medi-

cal service locations being Amarillo, Lubbock, El Paso, Tucson, and Pueblo. For example, Union

County’s total amount of uncompensated indigent care for FY2005 at UNMH was $12,192.00.

This might require modification of the Indigent Hospital and County Health Care Act (27-5-1

NMSA) to allow UNMH to have direct contracting with the counties to access their county indi-

gent funds.

Another option suggested would be the creation of a Special Hospital District that would have

taxing authority for indigent care. For example, a district composed of Valencia County, Tor-

rance County, the southern part of Santa Fe County, and Sandoval County could be created. This

would resolve a part of the UNMH indigent care shortfall. Another option would be to have the

district encompass the entire state except Bernalillo County.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

Eventually there will be service reductions and further access restrictions at UNMH unless solu-

tions to uncompensated care issues are found.

EM/nt:mt