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

SPONSOR Altamirano

ORIGINAL DATE

LAST UPDATED

2/08/06 HB

SHORT TITLE

MEDICAID BEHAVIORAL HEALTH FEE-

FOR-SERVICE

SB 508

ANALYST Weber

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

$2,000.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to Appropriation in the General Appropriation Act

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

FY08

$5,100.0

$5,100.0 Recurring

Federal

Medicaid

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Human Services Department (HSD)

Children Youth and Families Department (CYFD)

Department of Health (DOH)

Health Policy commission

SUMMARY

Synopsis of Bill

Senate Bill 508 appropriates $2 million from the general fund to the Human Services Department

Senate Bill 508 – Page 2

for the purpose of increasing Medicaid behavioral health fee-for-service payments.

FISCAL IMPLICATIONS

The appropriation of $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

The total funding available including the Medicaid match will be $7.2 million. HSD indicates

that specifying the funding can only be used to increase fee-for-service rates may result an

inequity in reimbursement for services provided to recipients through a managed care

arrangement versus those in fee-for-service. This is in spite of the fact that all reimbursements

are made by a single entity contractor under the Behavioral Health Collaborative. Failure to

increase the Medicaid rates equally, regardless of the managed care or fee-for service status of

the recipient, may cause providers to feel they are being reimbursed unfairly and result in

unequal recipient access to services.

The Health Policy Commission contributes:

According the New Mexico Health Resources (NMHR), a private, non-profit agency organized

to support efforts to recruit and retain healthcare personnel in New Mexico, Medicaid

reimbursement rates have not been adjusted in several years and are the lowest rates in the state

for health services. Low reimbursement rates effect behavioral health professionals particularly

psychiatrists. NMHR noted that in 2005 there were only 34 licensed psychiatrists practicing in

the state and all but four were in the Albuquerque and Santa Fe areas.

The 2002 Health Policy Commission’s Physician Survey indicated that one of the top three

reasons given for leaving the state is due to the Medicaid reimbursement rate.

New Mexico’s prevalence of substance abuse/mental disorders is statewide and behavioral health

professionals are needed in rural areas, maybe more so than in urban areas. Medicaid’s low

reimbursement rates impact professionals statewide.

MW/yr