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

SPONSOR Rodriguez

ORIGINAL DATE

LAST UPDATED

2/12/07 HB

SHORT TITLE Care For Mentally Retarded Staff Salaries

SB 818

ANALYST Weber

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

$230.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates HB 894

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

FY09

$570.3

$560.0 Recurring

Federal

Medicaid Fund

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Human Services Department

SUMMARY

Synopsis of Bill

Senate Bill 818 appropriates $230 thousand from the general fund to the Human Services

Department for the purpose of giving a cost-of-living increase to the staff of intermediate care

Senate Bill 818 – Page

2

facilities for the mentally retarded. The funds are to improve staff recruitment and retention and

to meet increased costs of employee benefits and rising programmatic and operations costs to

maintain quality services to recipients

.

FISCAL IMPLICATIONS

The appropriation of $230 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 that ICF/MR facilities are currently reimbursed on a Prospective Payment Services

(PPS). Rates are rebased every three years based on the previous year's cost. Therefore, a cost

of living increase to a provider for their staff salaries would be included in that provider's cost

report. This will cause the costs to increase, leading to increased rates for that provider.

The next rebasing date for the ICF/MR program is September 1, 2008 (during State FY09).

ICF\MR rates have historically increased by 10% during rebasing years. The FY09 rebasing may

be higher than this historical average due to the additional staff wages that would come with this

appropriation.

HSD uses the following criteria in its decision making process for provider increases.

•

Historical increases;

•

Promoting preventive care;

•

Establishing parity among rates paid for similar services;

•

Provider costs;

•

Providers’ dependence on Medicaid as a funding stream;

•

Rates relative value compared to Medicare.

•

The ICF/MR providers received a 1.5% rate increase during FY07.

MW/mt