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 Heaton

ORIGINAL DATE

LAST UPDATED

2/06/06

HB 704

SHORT TITLE

NURSING CARE FOR MENTALLY

RETARDED

SB

ANALYST Weber

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

$3,200.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates SB 666

Relates to SB 734

Relates to Appropriation in the General Appropriation Act

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

FY08

$8,200.0

Recurring

Federal

Medicaid

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Human Services Department (HSD)

SUMMARY

Synopsis of Bill

House Bill 704 appropriates $3.2 million from the general fund to the Human Services

Department for the purpose of providing monthly supplemental reimbursement to Medicaid

certified nursing facilities and intermediate care facilities for the mentally retarded to cover the

cost of staffing recruitment, retention, wages and benefits and other operating expenses.

Supplemental reimbursement amounts per facility shall be based on a rate that is equivalent to

House Bill 704 – Page 2

five percent of the monthly Medicaid payment per facility.

FISCAL IMPLICATIONS

The appropriation of $3.2 million contained in this bill is a recurring expense to the general fund.

Any unexpended or unencumbered balance remaining at the end of FY07 shall revert to the

general fund.

SIGNIFICANT ISSUES

During each month of FY07, each NF and ICF MR would be reimbursed their current rate and

the monthly supplemental amount. HSD indicates that at the end of FY07 these facilities are

already scheduled to have their rates rebased. The rebasing of rates is determined in part by the

amounts being reimbursed during the months of FY07. This regularly scheduled rebasing of the

facility rates for FY08 would normally result in some increase to the facility rates. However, the

monthly supplemental amounts that HB 704 proposes to pay the facilities during the months of

FY07 could be considered in the FY08 rebasing of rates. Consequently, the monthly

supplemental payments would likely result in an additional increase in the facility rates for FY08

beyond the increase the facilities would normally receive in the rebasing already scheduled for

FY08.

The appropriation will be matched with federal funds to make available an additional $8.2

million for a total of $11.4 million. The appropriation will result in a corresponding budget

increase in succeeding years in the base Medicaid budget.

POSSIBLE QUESTIONS

Why is only this particular set of providers singled out for an increase when almost no Medicaid

provider has had an increase for the past several years.

MW/yr:mt