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

SPONSOR Sanchez, B

ORIGINAL DATE

LAST UPDATED

2/15/07

HB

SHORT TITLE Medicaid Managed Care Behavioral Health

SB 879

ANALYST Weber

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

$7,000.0

$20,000.0

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

$17,800.0

$49,590

Recurring

Federal

Medicaid

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Human Services Department (HSD)

SUMMARY

Synopsis of Bill

Senate Bill 879 appropriates $27 million from the general fund to the Human Services

Department for the Medicaid behavioral health managed care program. Seven million is for

FY07 and $20 million for FY08.

Senate Bill 879 – Page

2

The bill contains an emergency clause.

FISCAL IMPLICATIONS

The appropriation of $27 million contained in this bill is an expense to the general fund. Any

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

the general fund.

HSD notes that rates for Medicaid managed care must be actuarially sound, negotiated and

approved by the state and federal entities. The new rates would need to be re-negotiated and re-

approved between the passing of this bill and the end of the SFY07, which is June 30, 2007. If

required to add nearly $25 million new money this year, which amounts to more than 12% of

anticipated costs, it will not be possible to stay within the actuarially-sound ranges that have been

established. The federal Centers for Medicare and Medicaid Services (CMS) would need to

approve this increase

SIGNIFICANT ISSUES

The bill is unclear as to how the funds in FY 07 and FY08 should be spent. Increased rates are

typically tied to additional services or provider rate increases. SB 879 does not mention any

additional services to be added to the Medicaid benefit package; nor is there a mention of

additional members that would receive services with the new appropriation.

MW/mt