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F I S C A L I M P A C T R E P O R T
SPONSOR Papen
ORIGINAL DATE
LAST UPDATED
2/20/07
2/24/07 HB
SHORT TITLE Personal Care Single Rate of Reimbursement
SB 940/aSPAC
ANALYST Weber
APPROPRIATION (dollars in thousands)
Appropriation
Recurring
or Non-Rec
Fund
Affected
FY07
FY08
$3,900.0
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
FY07
FY08
FY09
$9,670.0
Recurring
Federal
Medicaid
(Parenthesis ( ) Indicate Revenue Decreases)
Duplicates HB 614
SOURCES OF INFORMATION
LFC Files
Responses Received From
Human Services Department (HSD)
Aging and Long Term Services Department (ALTSD)
SUMMARY
Synopsis of SPA Amendment
The Senate Public Affairs Committee makes the following amendment.
1.
On page 1, line 20, strike the second "of" and strike line 21 in its entirety.
pg_0002
Senate Bill 940/aSPAC – Page
2
This change removes the specific rate of pay increase but leaves the appropriation. This would
allow for more flexibility in the increase to help maintain budgetary integrity. Including a
mandated $13.94 per hour could create a situation making the $3.9 million appropriation
insufficient to pay for the additional expenditures.
Synopsis of Original Bill
Senate Bill 940 appropriates $3.9 million from the general fund to the Human Services
Department for to implement a single reimbursement rate of $13.94 per hour for Personal Care
Option (PCO) services.
FISCAL IMPLICATIONS
The appropriation of $3.9 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
The PCO program has two service delivery models, Consumer-Delegated and Consumer-
Directed. The Consumer-Delegated model is the only model which has a tiered reimbursement
rate structure. Providers offering services under the Consumer-Delegated model bill $13.50 per
hour for the first 100 hours of personal care services provided to a consumer in a month, and
$11.50 per hour for 101 + hours of personal care services provided to a consumer in a month.
SB 940 proposes eliminating this tiered reimbursement rate structure and reimbursing providers
at a rate of $13.94 per hour for services under the Personal Care Option (PCO) program.
Providers under the Consumer-Directed model bill at a rate of $12.50 per hour for personal care
services provided to consumers.
It is assumed the single rate of reimbursement would apply to both the Consumer-Delegated and
Consumer-Directed models.
The appropriation would be federally matched at 71.26% for a total of program increase of
approximately $13.6 million.
The PCO program currently enrolls about 114 new consumers per month. This equates to
slightly more than a 1% program growth rate per month. The $3,900.0 may not be adequate to
re-price the per-hour basis for both models if the growth of PCO continues at the present rate.
PCO is a Medicaid benefit for individuals that are Medicaid eligible and meet the nursing home
level of care by requiring assistance with two or more activities of daily living. As with any
other Medicaid benefit that is medically necessary, the individual is entitled to receive that
benefit. SB 940 appropriates a specified amount of funding for a single provider rate increase
may not fully take into account the growing number of recipients that are entitled to utilize PCO
program benefits.
Currently in FY 07, 10,325 unduplicated persons have received PCO services. Approximately
9,000 persons are served each month. The average annual "Plan of Care" cost for PCO services
is $20,412. The aggregate budget projection for FY 07 is approximately $205.0 million.
MW/mt