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

SPONSOR Wirth

ORIGINAL DATE

LAST UPDATED

1/29/07

HB 262/HHGACS

SHORT TITLE

Santa Fe Sole Community Provider Program

SB

ANALYST Weber

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

$3,700.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates SB 503

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

FY09

$9,500.0

Recurring

Federal

Medicaid

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Human Services Department (HSD)

Department of Finance and Administration (DFA)

SUMMARY

Synopsis of Bill

House Health Government Affairs Committee Substitute for House Bill 262 appropriates $3.7

million from the general fund to the Local Government of the Department of Finance and

Administration for use in Fiscal Years 2007 and 2008 to match the Sole Community Provider

House Bill 262/HHGACS – Page

2

Fund in Santa Fe County.

The bill contains an Emergency Clause.

FISCAL IMPLICATIONS

The appropriation of $3.7 million contained in this bill is a recurring expense to the general fund.

Any unexpended or unencumbered balance remaining at the end of Fiscal Year 2008 shall revert

to the general fund.

SIGNIFICANT ISSUES

A Medicaid-related revenue source for hospitals is the Sole Community Provider Program. For

FY06, this program had a total of $98.3 million available for participating New Mexico

hospitals. Of this total $27.6 million is generated at the county and $70.7 million is federal

match. The federal government is the final arbiter for hospital participation, but the basic

criterion is being the only hospital in a 35 mile radius. For that reason, no Albuquerque hospitals

are included. A formula in federal regulations determines the maximum each hospital may

receive and the maximum for the state. The county funding source is the indigent fund raised

through gross receipts tax. In New Mexico 27 hospitals and 27 counties participate. For FY06

St. Vincent will receive almost $22 million from the program. This amounts to almost 12

percent of the facility’s total revenue.

A “sister" program to sole community provider program is the Upper Payment Limit Program

and essentially allows through a formula a payment that partially compensates for the lower

reimbursements for hospital patient care paid by state Medicaid. St. Vincent receives another

$5.3 million under this program boosting total payments for the two programs to almost $27

million.

The federal funds are made available through the Medicaid program and typically the county or

counties served by the particular hospital provide the government match. Santa Fe County did

not provide the entire match required for St. Vincent in Santa Fe County to receive the maximum

available under the Upper Payment Limit Program and ultimately Human Services provided

$661.6 thousand to allow the total reimbursement. For FY07 Santa Fe County again reports an

inability to provide the match needed to maximize the federal reimbursement to St. Vincent and

HSD has prepaid $1.2 million from the general fund for this purpose. DFA reports the funds are

to be “repaid" by April 2007. If Santa Fe County does not have the funds or refuses to fully

participate in the program it is uncertain how the funds can be returned since only government

entities are allowed to participate precluding St. Vincent from reimbursing HSD.

The 2006 County Financing of Healthcare published annually by the Health Policy Commission

reports on indigent fund revenues and expenditures for all New Mexico counties. For FY06

Santa Fe County contributed approximately $6.5 million toward the Sole Community Fund for

St. Vincent. This amounted to 36.7 percent of the revenues related to County Indigent Fund and

County Financing of Healthcare. In addition, the report notes Santa Fe County expended $3.2

million in emergency medical services. The disposition of all funds is not detailed in the report

but implies additional expenditures are for other medical services. However, the Sole

Community Provider Program is matched at approximately 22 percent state to 78 percent federal.

House Bill 262/HHGACS – Page

3

For 2005 the County Financing of Healthcare shows $5.7 million, 35 percent of the revenues

noted above. The emergency services were $3 million in this year.

Since most New Mexico counties participate in the program many others may request the same

consideration. With the total county share at over $30 million the potential liability to the

general fund is a consideration.

MW/mt