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

SPONSOR Campos

ORIGINAL DATE

LAST UPDATED

2/21/07

HB

SHORT TITLE Oriental Medicine Medicaid Reimbursement

SB 966

ANALYST Weber

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY07

FY08

FY09 3 Year

Total Cost

Recurring

or Non-Rec

Fund

Affected

Total

$1,769.1 $1,769.1 $3,538.2 Recurring General

$2,030.9 $2,030.9 $4,061.8 Recurring Federal

Medicaid

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Human Services Department (HSD)

SUMMARY

Synopsis of Bill

Senate Bill 966 requires the Human Services Department Medical Assistance Division to by rule

provide medical assistance, including the services of licensed doctors of oriental medicine,

licensed chiropractic physicians and licensed dental hygienists in collaborating practice, to

persons eligible for public assistance programs under the federal act.

FISCAL IMPLICATIONS

No appropriation is included to accomplish the intent of the bill but HSD indicates there would

be a requirement of $1.8 million form the general fund.

HSD indicates that including chiropractors and doctors of oriental medicine in Medicaid’s

eligible providers and health care benefits, would create a need for approximately $3.1 million to

support these new providers and services. Most of the Medicaid services provided by a

chiropractor would be eligible for federal match funds. However, acupuncture costs could only

be paid out of state general fund.

The cost estimates are based on the assumption that (1) approximately 2% of all Medicaid

recipients (both fee-for-service and managed care) would use twelve (12) visits to a chiropractor

Senate Bill 966 – Page

2

OR doctor of oriental medicine

on an annual basis; and (2) federal funding would not be

available for 25% of the services – primarily those provided by doctors of oriental medicine.

The total estimated expenditure is estimated to be $3.8 million ($1,769.1 from the state General

Fund and $2,030.9 from federal Medicaid leveraged funds.) The funds would have to be

recurring.

Medicaid currently reimburses licensed dental hygienists. Therefore, there would be no fiscal

impact for inclusion of these services.

The Medicaid Management Information System would require changes to accommodate a new

provider type and specialty, and new procedure codes. These changes would be completed using

existing resources

.

SIGNIFICANT ISSUES

HSD also adds that Medicaid does not currently reimburse for services provided by licensed

chiropractors except for paying the co-insurance and deductible following Medicare payment.

States do have the option under federal law to cover chiropractic spinal manipulation in their

Medicaid programs.

Medicaid does not currently reimburse for services provided by licensed doctors of oriental

medicine. Generally, a state Medicaid program is not allowed to cover acupuncture with federal

matching funds. The federally government is still studying acupuncture to determine if it should

be added to the list of services that Medicaid can opt to cover. Therefore, acupuncture costs

could only be paid out of state General Fund.

MW/mt