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 Silva
ORIGINAL DATE
LAST UPDATED
2/18/07
HB 903
SHORT TITLE Medicaid Reimbursement for Hearing Aids
SB
ANALYST Weber
APPROPRIATION (dollars in thousands)
Appropriation
Recurring
or Non-Rec
Fund
Affected
FY07
FY08
$289.0
Recurring
General
(Parenthesis ( ) Indicate Expenditure Decreases)
Relates to Appropriation in the General Appropriation Act
REVENUE (dollars in thousands)
Estimated Revenue
Recurring
or Non-Rec
Fund
Affected
FY07
FY08
FY09
$716.0
Recurring Recurring
Federal
Medicaid
(Parenthesis ( ) Indicate Revenue Decreases)
SOURCES OF INFORMATION
LFC Files
Responses Received From
Commission for the Deaf and Hard-of-Hearing
Human Services Department (HSD)
Governor’s Commission on Disability
Department of Health (DOH)
SUMMARY
Synopsis of Bill
House Bill 903 appropriates $289 thousand from the general fund to the Human Services
pg_0002
House Bill 903 – Page
2
Department to increase reimbursement for hearing aids for Medicaid-eligible individuals up to
$1,400 and to increase the dispensing fee up to $300.
HSD is required to maintain data on the claims and report to the LFC and Medicaid Advisory
Committee.
FISCAL IMPLICATIONS
The appropriation of $289 thousand 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
HSD reports the bill would increase the maximum amount that Medicaid pays for a hearing aid
from $400 to $1400 and would increase the maximum amount paid for hearing aid dispensing
from $239 to $300.
The appropriation is sufficient to allow Medicaid to make payments at the amount specified in
the bill. The $289 thousand leverages an additional $716,600 in federal matching funds.
The Department of Health offers the following background on hearing issues.
House Memorial 16 in 2006 requested extensive investigation into this issue. Significant
hearing loss is one of the most common birth defects in the United States. Every day in
the United States, 33 infants are born with permanent hearing loss. Approximately 1 in
1,000 newborns are profoundly deaf, and another 2 to 3 have partial hearing loss. Each
year, approximately 80 New Mexico infants are born with significant hearing loss. These
estimates do not include children who are born with normal hearing but have hearing loss
that develops after birth and/or worsens over time, which, by age 5, is estimated to be
about 3 times the newborn prevalence rate.
The consequences of hearing loss of any severity or type are profound for children, their
families, and society. In 2000, the Joint Committee on Infant Hearing stated that without
auditory input and the opportunity to learn language, children with hearing loss almost
always fall behind their peers in language, cognition, and social-emotional development.
Several studies have shown that deaf children by age 8 are already 1.5 years behind their
hearing peers in reading comprehension scores, and half of deaf children graduate from
high school with a 4
th
grade reading level or less. Hearing loss in only one ear can also
have substantial negative consequences for academic achievement. Children with
unilateral hearing loss are 10 times as likely to repeat at least one grade compared to
children with normal hearing. The costs to society are also significant in terms of direct
medical costs, special education expenditures, and lost productivity. In 2000, the annual
average per student education expenditure for a child who was deaf or hard of hearing
child was more than twice the expenditure for a child without a disability -- $15,992 vs.
$6,556 (
www.jcih.org
).
Early identification of hearing loss, fitting of high-quality hearing aids, cochlear implants
and comprehensive early intervention services can improve school performance,
pg_0003
House Bill 903 – Page
3
communication skills, speech-language development, social skills and emotional health,
decrease family stress; and improve quality of life. (
www.jcih.org
)
Medicaid and SCHIP cover more than half of New Mexico’s children and cover hearing
aids at a minimal rate. The 2006 cost for an appropriate hearing aid for a child,
accessories, and related professional services is estimated at $3000 per aid. A hearing aid
and the necessary accessories account for 60% ($1800) of this total cost, and the related
professional services account for the balance. Infants and young children will require
more frequent professional services than adults because of the complexity of and
variation in their hearing loss over time. As young children undergo repeated diagnostic
evaluations, and as more reliable and detailed information is obtained regarding their
hearing loss, their hearing aids will require repeated re-programming.
MW/mt